Document:

Unassociated Document

    WAIVER
AGREEMENT

    
 

    This
Waiver Agreement (the “Agreement”) is made and
entered into, effective as of November 12, 2010 (the “Effective Date”), by and among
American Defense Systems, Inc., a Delaware corporation (the “Company”), and the
stockholders of the Company parties hereto (individually, a “Holder” and collectively, the
“Holders”).  Unless
otherwise specified herein, capitalized terms used and not otherwise defined
herein shall have the meanings assigned to such terms in the Certificate of
Designations (as defined below).

    
 

    RECITALS

    
 

    A.       
    The Company and the Holders are parties to the
Securities Purchase Agreement, dated as of March 7, 2008 (as may be amended,
modified, restated or supplemented from time to time, the “Securities Purchase
Agreement”), pursuant to which the Holders purchased from the Company
shares of the Company’s Series A Convertible Preferred Stock, par value $0.001
per share (the “Series A
Preferred Stock”), the terms of which are set forth in Exhibit A
(Certificate of Designations, Preferences and Rights of Series A Convertible
Preferred Stock) to the Company’s Third Amended and Restated Certificate of
Incorporation, as amended (the “Certificate of
Designations”).

    

    B.          
 Under the Certificate of Designations, if any share of the Series A
Preferred Stock remains outstanding on December 31, 2010 (the “Maturity Date”), the Company
is required to redeem all of the then outstanding shares of the Series A
Preferred Stock on such date (such provision of the Certificate of Designations
is herein referred to as the “Mandatory Redemption
Provision”).

    

    C.           
Pursuant to a Waiver Agreement by and among the parties hereto, dated April 8,
2010 (the “April Waiver
Agreement”), the Holders agreed to extend the Maturity Date to April 1,
2011.

    

    D.        
   Pursuant to a Waiver Agreement by and among the parties
hereto, dated August 13, 2010 (the “August Waiver Agreement”), the
Holders agreed to extend the Maturity Date to July 1, 2011.

    

    E.          
 The Holders are willing to extend the Maturity Date to October 1, 2011, on
the terms and conditions hereinafter provided.

    
 

    TERMS OF
AGREEMENTS

    
 

    In
consideration of the premises and further valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

    

    1.           Extension
of Maturity Date.  As of the Effective Date, notwithstanding
any provision of the Certificate of Designations, any of the other Transaction
Documents (as defined in the Securities Purchase Agreement, the “Transaction Documents”), the
April Waiver Agreement or the August Waiver Agreement to the contrary, the
parties hereto hereby agree to extend the Maturity Date from July 1, 2011 to
October 1, 2011 (the period from December 31, 2010 to October 1, 2011,
inclusive, the “Extension
Period”).

    

    2.           Waiver.            As
of the Effective Date, the Holders hereby agree that, during the Extension
Period: (i) the Holders hereby waive any right to the redemption of the Series A
Preferred Stock under the Mandatory Redemption Provision until the last day of
the Extension Period; (ii) the Company’s failure to comply with the Mandatory
Redemption Provision prior to the last day of the Extension Period shall be
deemed not to be a breach of such provision or the terms and conditions of, or
applicable to, the Series A Preferred Stock; (iii) and the Holders shall and do
hereby waive (A) all rights and remedies that would otherwise be available to
the Holders under the Certificate of Designations or any of the other
Transaction Documents as a result of the Company’s failure to comply with the
Mandatory Redemption Provision during the Extension Period to the extent that
such rights or remedies arise as a result of the existence or continuation of
the Company’s failure to comply with the Mandatory Redemption Provision,
including, without limitation, the remedies available to the Holders pursuant to
Section (4)(a)(ii) of the Certificate of Designations and (B) any Equity
Conditions Failure and any Triggering Event otherwise arising under the
Certificate of Designations as a result of any such failure to comply with the
Mandatory Redemption Provision prior to the last day of the Extension
Period.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    3.           Agreements
of the Company.   The Company
hereby (a) agrees that except as expressly provided in Sections 1 and 2 hereof,
nothing in this Agreement shall constitute a waiver by the Holders of any
Triggering Event or Equity Condition Failure which may be continuing on the date
hereof or may occur after the date hereof and (b) affirms that the Company's
obligation to comply with the Mandatory Redemption Provision arises upon the
last day of the Extension Period, with respect to all then outstanding shares of
the Series A Preferred Stock.  Except as provided herein, each Holder
reserves the right, in its discretion, to exercise any or all rights or remedies
under the Certificate of Designation, the other Transaction Documents,
applicable law and otherwise as a result of any Triggering Event or Equity
Condition Failure that may be continuing on the date hereof or any Triggering
Event that may occur after the date hereof, and each Holder has not waived any
of such rights or remedies.  Except as expressly provided in this
Agreement, no delay on the Holder’s part in exercising such rights or remedies,
should be construed as a waiver of any such rights or remedies.  Upon
the last day of the Extension Period, the agreement of the Holders to waive any
of its remedies and rights pursuant to Section 2 hereof shall automatically and
without further action terminate and be of no force and effect, it being
understood and agreed that the effect of such termination will be to permit the
Holders to seek to exercise any and all of its rights and remedies at any time
and from time to time thereafter, including, without limitation, the right to
require redemption of all or any portion of Series A Preferred Stock and
exercise any other rights and remedies set forth in the Certificate of
Designation, the other Transaction Documents, applicable law or otherwise, in
each case, without any notice, passage of time or forbearance of any
kind.

    
 

    4.           Miscellaneous.

    

    (a)           Governing Law; Jurisdiction;
Jury Trial.  All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
the internal laws of the State of Delaware, without giving effect to any choice
of law or conflict of law provision or rule (whether of the State of Delaware or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of Delaware.  Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal
courts sitting in Wilmington, Delaware, for the adjudication of any dispute
under or in connection with this Agreement or the other documents or agreements
contemplated hereby (including the Securities Purchase Agreement and the
documents and agreements executed in connection therewith, notwithstanding any
provision therein to the contrary) or with any transaction contemplated hereby
or thereby or discussed herein or therein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is brought in an inconvenient forum or that the venue of such
suit, action or proceeding is improper. EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

     

    (b)           Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to the other party;
provided that a facsimile signature and a signature delivered electronically
(including by delivery via electronic mail of a signature page in “pdf” format)
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile or electronic signature.

     

    (c)           Headings.  The
headings of this Agreement are for convenience of reference and shall not form
part of, or affect the interpretation of, this Agreement.

     

    (d)           Severability.  If
any provision of this Agreement is prohibited by law or otherwise determined to
be invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this Agreement
as so modified continues to express, without material change, the original
intentions of the parties as to the subject matter hereof and the prohibited
nature, invalidity or unenforceability of the provision(s) in question does not
substantially impair the respective expectations or reciprocal obligations of
the parties or the practical realization of the benefits that would otherwise be
conferred upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited, invalid or unenforceable provision(s)
with a valid provision(s), the effect of which comes as close as possible to
that of the prohibited, invalid or unenforceable provision(s).

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    (e)           Entire Agreement;
Amendments.  This Agreement and the other Transaction Documents
supersede all other prior oral or written agreements between or among the
Holders, the Company, their affiliates and Persons acting on their behalf with
respect to the matters discussed herein, and this Agreement, the other
Transaction Documents and the instruments referenced herein and therein contain
the entire understanding of the parties with respect to the matters covered
herein and therein and, except as specifically set forth herein or therein,
neither the Company nor any Holder makes any representation, warranty, covenant
or undertaking with respect to such matters.  No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the Required Holders, and any amendment to this Agreement made in
conformity with the provisions of this Section 4(e) shall be binding on all
Holders and holders of Securities (as such term is defined in the Securities
Purchase Agreement), as applicable.  No provision hereof may be waived
other than by an instrument in writing signed by the party against whom
enforcement is sought.  No such amendment shall be effective to the
extent that it applies to less than all of the holders of the applicable
Securities then outstanding.

     

    (f)           Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one Business Day after deposit with an overnight courier
service, in each case properly addressed to the party to receive the
same.  The addresses and facsimile numbers for such communications
shall be:

     

    If to the
Company:

    American
Defense Systems, Inc.

    230 Duffy
Avenue

    Hicksville,
NY 11801

    
      	
            	
              Telephone:

            	
              (516)
      390-5300

            

    

    
      	
            	
              Facsimile:

            	
              (516)
      390-5308

            

    

    
      	
            	
              Attention:

            	
              Chief
      Financial Officer

            

    

    With a
copy (for informational purposes only) to:

     

    DLA Piper
LLP (US)

    500
Eighth Street, NW

    Washington,
DC 20004

    
      	
            	
              Telephone:

            	
              (202)799-4208

            

    

    
      	
            	
              Facsimile:

            	
              (202)799-5208

            

    

    
      	
            	
              Attention:

            	
              Jeffrey
      R. Houle, Esq.

            

    

    

    If to a
Holder, to its address and facsimile number set forth on the Schedule of Buyers
attached to the Securities Purchase Agreement, with copies to such Holder's
representatives as set forth on such Schedule of Buyers,

     

    with a
copy (for informational purposes only) to:

     

    Reicker,
Pfau, Pyle & McRoy LLP

    1421
State Street, Suite B

    Santa
Barbara, CA 93101

    
      	
            	
              Telephone:

            	
              (805)
      966-2440

            

    

    
      	
            	
              Facsimile:

            	
              (805)
      966-3320

            

    

    
      	
            	
              Attention:

            	
              Michael
      E. Pfau, Esq.

            

    

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    or to
such other address and/or facsimile number and/or to the attention of such other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.

     

    (g)          Successors and
Assigns.  This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and assigns, including
any purchasers of shares of the Series A Preferred Stock.  The Company
shall not assign this Agreement or any rights or obligations hereunder without
the prior written consent of the Required Holders.  No Holder shall
assign or otherwise transfer any shares of Series A Preferred Stock without the
written agreement of the assignee or transferee of such stock to be bound by
this Agreement in all respects as a Holder hereunder.

     

    (h)          No Third Party
Beneficiaries.  This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

     

    (i)          
Further
Assurances.  Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby, including, without limitation, to vote all of
such Holder’s capital stock of the Company in favor of any amendments to the
Company’s certificate of incorporation and Certificate of Designations to change
the Maturity Date to October 1, 2011.

     

    (j)           No Strict
Construction.  The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any
party.

     

    (k)          Independent Nature of
Holders’ Obligations and Rights.  The obligations of each
Holder under this Agreement are several and not joint with the obligations of
any other Holder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder under this
Agreement.  Nothing contained herein, and no action taken by any
Holder pursuant hereto, shall be deemed to constitute the Holders as, and the
Company acknowledges that the Holders do not so constitute, a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holders are in any way acting in concert or as a group, and
the Company will not assert any such claim with respect to such obligations or
the transactions contemplated by this Agreement and the Company acknowledges
that the Holders are not acting in concert or as a group with respect to such
obligations or the transactions contemplated hereby.  The Company
acknowledges and each Holder confirms that it has independently participated in
the negotiation of the transaction contemplated hereby with the advice of its
own counsel and advisors.  Each Holder shall be entitled to
independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement, and it shall not be necessary for any
other Holder to be joined as an additional party in any proceeding for such
purpose.

     

    IN WITNESS WHEREOF, each
Holder and the Company have caused their respective signature page to this
Waiver Agreement to be duly executed as of the date first written
above.

     

    
      
        
          	
                  COMPANY:

                
	 
      
	
                  AMERICAN
      DEFENSE SYSTEMS, INC.

                
	 
      
	
                  By:

                	
                     

                
	 
      	
                  Name:
      Gary Sidorsky

                
	 
      	
                  Title:
      Chief Financial Officer

                

        

      

    

     

    [Signature
Page to Waiver Agreement]

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, each
Holder and the Company have caused their respective signature page to this
Waiver Agreement to be duly executed as of the date first written
above.

     

    
      
        
          	 
      	
                  HOLDERS:

                
	 
      	 
      
	 
      	
                  WEST
      COAST OPPORTUNITY FUND, LLC

                
	 
      	 
      
	 
      	
                  By:

                	
                  ________________________, its Managing
      Member

                
	 
      	 
      
	 
      	 
      	
                  By:

                
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title:

                

        

      

    

     

    [Signature
Page to Waiver Agreement]

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    IN WITNESS WHEREOF, each
Holder and the Company have caused their respective signature page to this
Waiver Agreement to be duly executed as of the date first written
above.

     

    
      
        	 
      	
                HOLDERS:

              
	 
      	 
      
	 
      	
                CENTAUR
      VALUE FUND, LP

              
	 
      	 
      
	 
      	
                By:

              	
                   

              
	 
      	 
      	
                Name:

              
	 
      	 
      	
                Title:

              

      

    

    
 

    [Signature
Page to Waiver Agreement]WARRANT
AGREEMENT

    

    between

    

    RLJ
ACQUISITION, INC.

    

    and

    

    CONTINENTAL
STOCK TRANSFER & TRUST COMPANY, as Warrant Agent

    

    Dated as
of                     ,
2011

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    THIS
WARRANT AGREEMENT (this “Agreement”),
dated as of                     ,
2011, is by and between RLJ Acquisition, Inc., a Nevada corporation (the “Company”),
and Continental Stock Transfer & Trust Company, a New York corporation, as
Warrant Agent (the “Warrant
Agent”).

    

              WHEREAS,
the Company has entered into that certain Subscription Agreement, dated as of
December 2, 2010 (the “Sponsor Warrants
Purchase Agreement”), with RLJ SPAC Acquisition, LLC, a Delaware limited
liability company (the “Sponsor”),
an entity controlled by Robert L. Johnson, the Company’s Chairman of the Board
of Directors (the “Founder”),
pursuant to which the Sponsor will purchase an aggregate of 6,166,667 Warrants
bearing the legend set forth in Exhibit B hereto
(the “Sponsor
Warrants”) at a purchase price of $0.75 per Sponsor Warrant, to be sold
to the Sponsor simultaneously with the closing of the Offering (as defined
below); and

    

              WHEREAS,
the Company is engaged in an initial public offering (the “Offering”)
of units of the Company’s equity securities, each such unit comprised of one
share of the Common Stock (as defined below) and one Offering Warrant (as
defined below) (the “Units”)
and, in connection therewith, has determined to issue and deliver up to
12,500,000 warrants to public investors in the Offering (the “Offering
Warrants” and, together with the Sponsor Warrants, the “Warrants”),
each such Warrant evidencing the right of the holder thereof to purchase one
share of the common stock of the Company, par value $0.001 per share (the “Common
Stock”), for $12.00 per share, subject to adjustment as described herein;
and

    

              WHEREAS,
the Company has filed with the Securities and Exchange Commission (the “Commission”)
a registration statement on Form S-1, No. 333-170947 (the “Registration
Statement”) and prospectus (the “Prospectus”),
for the registration, under the Securities Act of 1933, as amended (the “Securities
Act”), of the Units, the Offering Warrants and the Common Stock included
in the Units; and

    

              WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, redemption and exercise of the Warrants;
and

    

              WHEREAS,
the Company desires to provide for the form and provisions of the Warrants, the
terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and the
holders of the Warrants; and

    

              WHEREAS,
all acts and things have been done and performed which are necessary to make the
Warrants, when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding and legal
obligations of the Company, and to authorize the execution and delivery of this
Agreement.

    

              NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

    1.           Appointment of Warrant
Agent. The Company hereby appoints the Warrant Agent to act as agent for
the Company for the Warrants, and the Warrant Agent hereby accepts such
appointment and agrees to perform the same in accordance with the terms and
conditions set forth in this Agreement.

     

    2.           Warrants.

     

    2.1.        Form of Warrant. Each
Warrant shall be issued in registered form only and shall be in substantially
the form of Exhibit A
hereto, the provisions of which are incorporated herein and shall be signed by,
or bear the facsimile signature of, the Chairman of the Board, President, Chief
Executive Officer, Secretary or other principal officer of the Company. In the
event the person whose facsimile signature has been placed upon any Warrant
shall have ceased to serve in the capacity in which such person signed the
Warrant before such Warrant is issued, it may be issued with the same effect as
if he or she had not ceased to be such at the date of issuance.

     

    2.2.        Effect of
Countersignature. Unless and until countersigned by the Warrant Agent
pursuant to this Agreement, a Warrant shall be invalid and of no effect and may
not be exercised by the holder thereof.

     

    2.3.        Registration.

     

    2.3.1.    Warrant Register. The
Warrant Agent shall maintain books (the “Warrant
Register”), for the registration of original issuance and the
registration of transfer of the Warrants. Upon the initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names
of the respective holders thereof in such denominations and otherwise in
accordance with instructions delivered to the Warrant Agent by the
Company.

    

    2.3.2.    Registered Holder.
Prior to due presentment for registration of transfer of any Warrant, the
Company and the Warrant Agent may deem and treat the person in whose name such
Warrant is registered in the Warrant Register (the “Registered
Holder”) as the absolute owner of such Warrant and of each Warrant
represented thereby (notwithstanding any notation of ownership or other writing
on the Warrant Certificate (as defined below) made by anyone other than the
Company or the Warrant Agent), for the purpose of any exercise thereof, and for
all other purposes, and neither the Company nor the Warrant Agent shall be
affected by any notice to the contrary.

    

    2.4.        Detachability of
Warrants. The Common Stock and Offering Warrants comprising the Units
shall begin separate trading on the 52nd day following the date of the
Prospectus or, if such 52nd day is
not on a day, other than a Saturday, Sunday or federal holiday, on which banks
in New York City are generally open for normal business (a “Business
Day”), then on the immediately succeeding Business Day following such
date, or earlier (the “Detachment
Date”) with the consent of Lazard Capital Markets, LLC (“Lazard”),
as representative of the several underwriters, but in no event shall the Common
Stock and the Offering Warrants comprising the Units be separately traded until
(A) the Company has filed a current report on Form 8-K with the Commission
containing an audited balance sheet reflecting the receipt by the Company of the
gross proceeds of the Offering, including the proceeds received by the Company
from the exercise by the underwriters of their right to purchase additional
shares of the Common Stock in the Offering (the “Over-allotment
Option”), if the Over-allotment Option is exercised prior to the filing
of the Form 8-K and (y) the Company issues a press release and files with
the Commission a current report on Form 8-K announcing when such separate
trading shall begin.

    
      
         

      

      
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    2.5.        Warrant
Attributes.

    

    2.5.1.    Sponsor Warrants. The
Sponsor Warrants shall be identical to the Offering Warrants, except that so
long as they are held by the Sponsor, the Founder or any of their Permitted
Transferees (as defined below) the Sponsor Warrants: (i) may be exercised
for cash or on a cashless basis, pursuant to subsection 3.3.1(c)
hereof, (ii) may not be transferred, assigned or sold until thirty
(30) days after the completion by the Company of an initial Business
Combination (as defined below), and (iii) shall not be redeemable by the
Company; provided, however, that in the
case of (ii), the Sponsor Warrants and any shares of the Common Stock held by
the Sponsor and issued upon exercise of the Sponsor Warrants may be transferred
by the Sponsor: (a) to the Company’s officers or directors, any affiliate
or family member of any of the Company’s officers or directors or any affiliate
of the Sponsor or to any limited partner(s) of the Sponsor; (b) in the case
of the Founder, by gift to a member of the Founder’s immediate family or to a
trust, the beneficiary of which is a member of the Founder’s immediate family,
an affiliate of the Founder or to a charitable organization; (c) in the
case of the Founder, by virtue of the laws of descent and distribution upon
death of the Founder; (d) in the case of the Founder, pursuant to a
qualified domestic relations order; (e) by virtue of the laws of the state
of Delaware or the Sponsor’s limited liability agreement upon dissolution of the
Sponsor; (f) in the event of the Company’s liquidation prior to the
completion of the Company’s initial Business Combination; or (g) in the
event that the Company consummates a subsequent liquidation, merger, stock
exchange or other similar transaction that results in all of the holders of the
Company’s equity securities issued in the Offering having the right to exchange
their shares of the Common Stock for cash, securities or other property
subsequent to the consummation of the Company’s initial Business Combination;
provided, however, that, in the
case of clauses (a) through (d), these transferees (the “Permitted
Transferees”) enter into a written agreement with the Company agreeing to
be bound by the transfer restrictions in this Agreement.

    

    3.           Terms and Exercise of
Warrants.

    

    3.1.        Warrant Price. Each
Warrant shall, when countersigned by the Warrant Agent, entitle the Registered
Holder thereof, subject to the provisions of such Warrant and of this Warrant
Agreement, to purchase from the Company the number of shares of the Common Stock
stated therein, at the price of $12.00 per share, subject to the adjustments
provided in Section 4 hereof
and in the last sentence of this Section 3.1. The
term “Warrant Price” as used in this Warrant Agreement shall mean the price per
share at which shares of the Common Stock may be purchased at the time a Warrant
is exercised. The Company in its sole discretion may lower the Warrant Price at
any time prior to the Expiration Date (as defined below) for a period of not
less than twenty (20) Business Days, provided, that the Company shall
provide at least twenty (20) days prior written notice of such reduction to
Registered Holders of the Warrants and, provided further that any such reduction
shall be identical among all of the Warrants.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    

    3.2.        Duration of Warrants.
A Warrant may be exercised only during the period (the “Exercise
Period”) commencing on the later of: (i) the date that is thirty
(30) days after the first date on which the Company completes a merger,
capital stock exchange, asset acquisition, stock purchase, reorganization or
similar business combination, involving the Company and one or more businesses
(a “Business
Combination”), or (ii) the date that is twelve (12) months from
the date of the closing of the Offering, and terminating at 5:00 p.m., New York
City time on the earlier to occur of: (x) the date that is five
(5) years after the date on which the Company completes its initial
Business Combination, (y) the liquidation of the Company, or (z) other
than with respect to the Sponsor Warrants, the Redemption Date (as defined
below) as provided in Section 6.2
hereof (the “Expiration
Date”); provided, however, that the
exercise of any Warrant shall be subject to the satisfaction of any applicable
conditions, as set forth in subsection 3.3.2
below with respect to an effective registration statement. Except with respect
to the right to receive the Redemption Price (other than with respect to a
Sponsor Warrant) in the event of a redemption (as set forth in Section 6
hereof), each Warrant (other than a Sponsor Warrant in the event of a
redemption) not exercised on or before the Expiration Date shall become void,
and all rights thereunder and all rights in respect thereof under this Agreement
shall cease at 5:00 p.m. New York City time on the Expiration Date. The Company
in its sole discretion may extend the duration of the Warrants by delaying the
Expiration Date; provided, that the Company shall provide at least twenty
(20) days prior written notice of any such extension to Registered Holders
of the Warrants and, provided further that any such extension shall be identical
in duration among all the Warrants.

    

    3.3.        Exercise of
Warrants.

    

    3.3.1.    Payment. Subject to
the provisions of the Warrant and this Warrant Agreement, a Warrant, when
countersigned by the Warrant Agent, may be exercised by the Registered Holder
thereof by surrendering it, at the office of the Warrant Agent, or at the office
of its successor as Warrant Agent, in the Borough of Manhattan, City and State
of New York, with the subscription form, as set forth in the Warrant, duly
executed, and by paying in full the Warrant Price for each full share of the
Common Stock as to which the Warrant is exercised and any and all
applicable taxes due in connection with the exercise of the Warrant, the
exchange of the Warrant for the shares of the Common Stock and the issuance of
such Common Stock, as follows:

    (a)           in
lawful money of the United States, in good certified check or good bank draft
payable to the order of the Company;

    

    (b)           in
the event of a redemption pursuant to Section 6 hereof
in which the Company’s board of directors (the “Board”)
has elected to require all holders of the Warrants to exercise such Warrants on
a “cashless basis,” by surrendering the Warrants for that number of shares of
the Common Stock equal to the quotient obtained by dividing (x) the product
of the number of shares of the Common Stock underlying the Warrants, multiplied
by the difference between the Warrant Price and the “Fair Market Value”, as
defined in this subsection 3.3.1(b)
by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(b)
and Section 6.3, the
“Fair Market Value” shall mean the average last sale price of the Common Stock
for the ten (10) trading days ending on the third trading day prior to the date
on which the notice of redemption is sent to the holders of the Warrants,
pursuant to Section 6
hereof;

    
      
         

      

      
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    (c)           with
respect to any Sponsor Warrant, so long as such Sponsor Warrant is held by the
Sponsor or its Permitted Transferees, by surrendering the Warrants for that
number of shares of the Common Stock equal to the quotient obtained by dividing
(x) the product of the number of shares of the Common Stock underlying the
Warrants, multiplied by the difference between the Warrant Price and the “Fair
Market Value”, as defined in this subsection 3.3.1(c),
by (y) the Fair Market Value. Solely for purposes of this subsection 3.3.1(c),
the “Fair Market Value” shall mean the average last sale price of the Common
Stock for the ten (10) trading days ending on the third trading day prior
to the date on which notice of exercise of the Warrant is sent to the Warrant
Agent; or

    

    (d)           as
provided in Section
7.4 hereof.

    

    3.3.2.    Issuance of Shares of Common Stock on
Exercise. As soon as practicable after the exercise of any Warrant and
the clearance of the funds in payment of the Warrant Price (if payment is
pursuant to subsection
3.3.1(a)), the Company shall issue to the Registered Holder of such
Warrant a certificate or certificates for the number of full shares of the
Common Stock to which he, she or it is entitled, registered in such name or
names as may be directed by him, her or it, and if such Warrant shall not have
been exercised in full, a new countersigned Warrant for the number of shares as
to which such Warrant shall not have been exercised. Notwithstanding the
foregoing, the Company shall not be obligated to deliver any shares of the
Common Stock pursuant to the exercise of a Warrant and shall have no obligation
to settle such Warrant exercise unless a registration statement under the
Securities Act with respect to the shares of the Common Stock underlying the
Offering Warrants is then effective and a prospectus relating thereto is
current, subject to the Company’s satisfying its obligations under Section 7.4. No
Warrant shall be exercisable and the Company shall not be obligated to issue
shares of the Common Stock upon exercise of a Warrant unless the Common Stock
issuable upon such Warrant exercise has been registered, qualified or deemed to
be exempt under the securities laws of the state of residence of the Registered
Holder of the Warrants. In the event that the conditions in the two immediately
preceding sentence are not satisfied with respect to a Warrant, the holder of
such Warrant shall not be entitled to exercise such Warrant and such Warrant may
have no value and expire worthless. In no event shall the Company be required to
net cash settle any Warrant. In the event that a registration statement is
not effective for the exercised Offering Warrants, the purchaser of a Unit
containing such Offering Warrant shall have paid the full purchase price for the
Unit solely for the shares of the Common Stock underlying such
Unit.

    

    3.3.3.    Valid Issuance. All
shares of the Common Stock issued or issuable upon the proper exercise of a
Warrant in conformity with this Agreement shall be validly issued, fully paid
and nonassessable.

    

    3.3.4.    Date of Issuance.
Each person in whose name any certificate for shares of the Common Stock is
issued shall for all purposes be deemed to have become the holder of record of
such shares of the Common Stock on the date on which the Warrant was surrendered
and payment of the Warrant Price was made, irrespective of the date of
delivery of such certificate, except that, if the date of such surrender and
payment is a date when the share transfer books of the Company are closed, such
person shall be deemed to have become the holder of such shares at the close of
business on the next succeeding date on which the share transfer books are
open.

    
      
         

      

      
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    3.3.5.    Maximum Percentage. A
holder of a Warrant may notify the Company in writing in the event it elects to
be subject to the provisions contained in this subsection 3.3.5;
however, no holder of a Warrant shall be subject to this subsection 3.3.5
unless he, she or it makes such election. If the election is made by a holder,
the Warrant Agent shall not effect the exercise of the holder’s Warrant, and
such holder shall not have the right to exercise such Warrant, to the extent
that after giving effect to such exercise, such person (together with such
person’s affiliates), to the Warrant Agent’s actual knowledge, would
beneficially own in excess of 9.8% (the “Maximum
Percentage”) of the shares of the Common Stock outstanding immediately
after giving effect to such exercise. For purposes of the foregoing sentence,
the aggregate number of shares of the Common Stock beneficially owned by such
person and its affiliates shall include the number of shares of the Common
Stock issuable upon exercise of the Warrant with respect to which the
determination of such sentence is being made, but shall exclude shares of the
Common Stock that would be issuable upon (x) exercise of the remaining,
unexercised portion of the Warrant beneficially owned by such person and its
affiliates and (y) exercise or conversion of the unexercised or unconverted
portion of any other securities of the Company beneficially owned by such person
and its affiliates (including, without limitation, any convertible notes or
convertible preferred stock or warrants) subject to a limitation on conversion
or exercise analogous to the limitation contained herein. Except as set forth in
the preceding sentence, for purposes of this paragraph,
beneficial ownership shall be calculated in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”). For purposes of the Warrant, in determining the number of
outstanding shares of the Common Stock, the holder may rely on the number of
outstanding shares of the Common Stock as reflected in (1) the Company’s
most recent Form 10-K, Form 10-Q, current report on Form 8-K or other public
filing with the Commission as the case may be, (2) a more recent public
announcement by the Company or (3) any other notice by the Company or
Continental Stock Transfer & Trust Company (the “Transfer
Agent”) setting forth the number of shares of the Common Stock
outstanding. For any reason at any time, upon the written request of the holder
of the Warrant, the Company shall, within two (2) Business Days, confirm
orally and in writing to such holder the number of shares of the Common Stock
then outstanding. In any case, the number of outstanding shares of the Common
Stock shall be determined after giving effect to the conversion or exercise of
equity securities of the Company by the holder and its affiliates since the date
as of which such number of outstanding shares of the Common Stock was reported.
By written notice to the Company, the holder of a Warrant may from time to time
increase or decrease the Maximum Percentage applicable to such holder to any
other percentage specified in such notice; provided, however, that any
such increase shall not be effective until the sixty-first (61st) day
after such notice is delivered to the Company.

    
      
         

      

      
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    4.           Adjustments.

    

    4.1.        Stock
Dividends.

    

    4.1.1.    Split-Ups. If after
the date hereof, and subject to the provisions of Section 4.6
below, the number of outstanding shares of the Common Stock is increased by a
stock dividend payable in shares of the Common Stock, or by a split-up of shares
of the Common Stock or other similar event, then, on the effective date of such
stock dividend, split-up or similar event, the number of shares of the Common
Stock issuable on exercise of each Warrant shall be increased in proportion to
such increase in the outstanding shares of the Common Stock. A rights offering
to holders of the Common Stock entitling holders to purchase shares of the
Common Stock at a price less than the “Fair Market Value” (as defined below)
shall be deemed a stock dividend of a number of shares of the Common Stock equal
to the product of (i) the number of shares of the Common Stock actually
sold in such rights offering (or issuable under any other equity securities sold
in such rights offering that are convertible into or exercisable for the Common
Stock) multiplied by (ii) the quotient of (x) the price per share of
the Common Stock paid in such rights offering divided by (y) the Fair
Market Value. For purposes of this subsection 4.1.1, (i) if
the rights offering is for securities convertible into or exercisable for the
Common Stock, in determining the price payable for the Common Stock, there shall
be taken into account any consideration received for such rights, as well as any
additional amount payable upon exercise or conversion and (ii) “Fair Market
Value” means the volume weighted average price of the Common Stock as reported
during the ten (10) trading day period ending on the trading day prior to
the first date on which the shares of the Common Stock trade on the applicable
exchange or in the applicable market, regular way, without the right to receive
such rights.

    

    4.1.2.    Extraordinary
Dividends. If the Company, at any time while the Warrants are outstanding
and unexpired, shall pay a dividend or make a distribution in cash, securities
or other assets to the holders of the Common Stock on account of such shares of
Common Stock (or other shares of the Company’s capital stock into which the
Warrants are convertible), other than (a) as described in subsection 4.1.1
above, (b) Ordinary Cash Dividends (as defined below), (c) to satisfy
the redemption rights of the holders of the Common Stock in connection with a
proposed initial Business Combination, (d) as a result of the repurchase of
shares of Common Stock by the Company if a proposed initial Business Combination
is presented to the stockholders of the Company for approval or (e) in
connection with the Company’s liquidation and the distribution of its assets
upon its failure to consummate a Business Combination (any such non-excluded
event being referred to herein as an “Extraordinary
Dividend”), then the Warrant Price shall be decreased, effective
immediately after the effective date of such Extraordinary Dividend, by the
amount of cash and/or the fair market value (as determined by the Board, in good
faith) of any securities or other assets paid on each share of the Common Stock
in respect of such Extraordinary Dividend. For purposes of this subsection 4.1.2,
“Ordinary
Cash Dividends” means any cash dividend or cash distribution which, when
combined on a per share of the Common Stock basis, with the per share amounts of
all other cash dividends and cash distributions paid on the Common Stock during
the 365-day period ending on the date of declaration of such dividend or
distribution (as adjusted to appropriately reflect any of the events referred to
in other subsections of this Section 4 and
excluding cash dividends or cash distributions that resulted in an adjustment to
the Warrant Price or to the number of shares of the Common Stock issuable on
exercise of each Warrant) does not exceed $0.50 (being 5% of the offering price
of the Units in the Company’s Offering).

    
      
         

      

      
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    4.2.        Aggregation of
Shares. If after the date hereof, and subject to the provisions of Section 4.6
hereof, the number of outstanding shares of the Common Stock is decreased by a
consolidation, combination, reverse stock split or reclassification of shares of
the Common Stock or other similar event, then, on the effective date of such
consolidation, combination, reverse stock split, reclassification or similar
event, the number of shares of the Common Stock issuable on exercise of each
Warrant shall be decreased in proportion to such decrease in outstanding shares
of Common Stock.

    

    4.3.        Adjustments in Exercise
Price. Whenever the number of shares of the Common Stock purchasable upon
the exercise of the Warrants is adjusted, as provided in subsection 4.1.1 or
4.2 above, the Warrant Price shall be adjusted (to the nearest cent) by
multiplying such Warrant Price immediately prior to such adjustment by a
fraction (x) the numerator of which shall be the number of shares of the
Common Stock purchasable upon the exercise of the Warrants immediately prior to
such adjustment, and (y) the denominator of which shall be the number of
shares of the Common Stock so purchasable immediately thereafter.

    

    4.4.        Replacement of Securities
upon Reorganization, etc. In case of any reclassification or
reorganization of the outstanding shares of the Common Stock (other than a
change under subsections 4.1.1 or
4.1.2 or Section 4.2
hereof or that solely affects the par value of such shares of the Common Stock),
or in the case of any merger or consolidation of the Company with or into
another corporation (other than a consolidation or merger in which the Company
is the continuing corporation and that does not result in any reclassification
or reorganization of the outstanding shares of the Common Stock), or in the case
of any sale or conveyance to another corporation or entity of the assets or
other property of the Company as an entirety or substantially as an entirety in
connection with which the Company is dissolved, the holders of the Warrants
shall thereafter have the right to purchase and receive, upon the basis and upon
the terms and conditions specified in the Warrants and in lieu of the shares of
the Common Stock of the Company immediately theretofore purchasable and
receivable upon the exercise of the rights represented thereby, the kind and
amount of shares of stock or other securities or property (including cash)
receivable upon such reclassification, reorganization, merger or consolidation,
or upon a dissolution following any such sale or transfer, that the holder of
the Warrants would have received if such holder had exercised his, her or its
Warrant(s) immediately prior to such event (the “Alternative
Issuance”); provided, however, that
(i) if the holders of the Common Stock were entitled to exercise a right of
election as to the kind or amount of securities, cash or other assets receivable
upon such consolidation or merger, then the kind and amount of securities, cash
or other assets constituting the Alternative Issuance for which each Warrant
shall become exercisable shall be deemed to be the weighted average of the kind
and amount received per share by the holders of the Common Stock in such
consolidation or merger that affirmatively make such election, and (ii) if
a tender, exchange or redemption offer shall have been made to and accepted by
the holders of the Common Stock (other than a tender, exchange or redemption
offer made by the Company in connection with redemption rights held by
stockholders of the Company as provided for in the Company’s certificate of
incorporation or as a result of the repurchase of shares of Common Stock by the
Company if a proposed initial Business Combination is presented to the
stockholders of the Company for approval) under circumstances in which, upon
completion of such tender or exchange offer, the maker thereof, together with
members of any group (within the meaning of Rule 13d-5(b)(1) under the
Exchange Act) of which such maker is a part, and together with any affiliate or
associate of such maker (within the meaning of Rule 12b-2 under the
Exchange Act) and any members of any such group of which any such affiliate or
associate is a part, own beneficially (within the meaning of Rule 13d-3
under the Exchange Act) more than 50% of the outstanding shares of the Common
Stock, the holder of a Warrant shall be entitled to receive as the Alternative
Issuance, the highest amount of cash, securities or other property to which such
holder would actually have been entitled as a stockholder if such Warrant holder
had exercised the Warrant prior to the expiration of such tender or exchange
offer, accepted such offer and all of the Common Stock held by such holder had
been purchased pursuant to such tender or exchange offer, subject to adjustments
(from and after the consummation of such tender or exchange offer) as nearly
equivalent as possible to the adjustments provided for in this Section 4; provided further,
however, that if more than 30% of the consideration receivable by the
holders of the Common Stock in the applicable event is payable in the form of
common stock in the successor entity that is not listed for trading on a
national securities exchange or on the OTC Bulletin Board, or is not to be so
listed for trading immediately following such event, then the Warrant Price
shall be reduced by an amount (in dollars) equal to the quotient of (x) $18
(subject to adjustment in accordance with Section 6.1
hereof) minus the Per Share Consideration (as defined below) (but in no event,
less than zero), and (y): if the applicable event is announced on or prior to
the third anniversary of the closing date of the initial Business Combination,
2; if the applicable event is announced after the third anniversary of the
closing date of the initial Business Combination and on or prior to the fourth
anniversary of the closing date of the initial Business Combination, 2.5; if the
applicable event is announced after the fourth anniversary of the closing date
of the initial Business Combination and on or prior to the Expiration Date, 3.
“Per Share
Consideration” means (i) if the consideration paid to holders of the
Common Stock consists exclusively of cash, the amount of such cash per share of
the Common Stock, and (ii) in all other cases, the volume weighted average
price of the Common Stock as reported during the ten (10) trading day
period ending on the trading day prior to the effective date of the applicable
event. If any reclassification or reorganization also results in a change in
shares of the Common Stock covered by subsection 4.1.1,
then such adjustment shall be made pursuant to subsection 4.1.1 or
Sections 4.2, 4.3 and this Section 4.4. The
provisions of this Section 4.4
shall similarly apply to successive reclassifications, reorganizations, mergers
or consolidations, sales or other transfers.

    
      
         

      

      
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    4.5.        Notices of Changes in
Warrant. Upon every adjustment of the Warrant Price or the number of
shares issuable upon exercise of a Warrant, the Company shall give written
notice thereof to the Warrant Agent, which notice shall state the Warrant Price
resulting from such adjustment and the increase or decrease, if any, in the
number of shares purchasable at such price upon the exercise of a Warrant,
setting forth in reasonable detail the method of calculation and the facts upon
which such calculation is based. Upon the occurrence of any event specified in
Sections 4.1,
4.2, 4.3 or 4.4, the Company
shall give written notice of the occurrence of such event to each holder of a
Warrant, at the last address set forth for such holder in the Warrant Register,
of the record date or the effective date of the event. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of such
event.

    

    4.6.        No Fractional Shares.
Notwithstanding any provision contained in this Warrant Agreement to the
contrary, the Company shall not issue fractional shares upon exercise of
Warrants. If, by reason of any adjustment made pursuant to this Section 4, the
holder of any Warrant would be entitled, upon the exercise of such Warrant, to
receive a fractional interest in a share, the Company shall, upon such exercise,
round up to the nearest whole number, the number of the shares of the Common
Stock to be issued to such holder.

    
      
         

      

      
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    4.7.        Form of Warrant. The
form of Warrant need not be changed because of any adjustment pursuant to this
Section 4,
and Warrants issued after such adjustment may state the same Warrant Price and
the same number of shares as is stated in the Warrants initially issued pursuant
to this Agreement; provided, however, that the
Company may at any time in its sole discretion make any change in the form of
Warrant that the Company may deem appropriate and that does not affect the
substance thereof, and any Warrant thereafter issued or countersigned, whether
in exchange or substitution for an outstanding Warrant or otherwise, may be in
the form as so changed.

    

    4.8.        Other Events. In case
any event shall occur affecting the Company as to which none of the provisions
of preceding subsections of this Section 4 are
strictly applicable, but which would require an adjustment to the terms of the
Warrants in order to (i) avoid an adverse impact on the Warrants and
(ii) effectuate the intent and purpose of this Section 4, then,
in each such case, the Company shall appoint a firm of independent public
accountants, investment banking or other appraisal firm of recognized national
standing, which shall give its opinion as to whether or not any adjustment to
the rights represented by the Warrants is necessary to effectuate the intent and
purpose of this Section 4 and,
if they determine that an adjustment is necessary, the terms of such adjustment.
The Company shall adjust the terms of the Warrants in a manner that is
consistent with any adjustment recommended in such opinion.

    

    5.           Transfer and Exchange of
Warrants.

    

    5.1.        Registration of
Transfer. The Warrant Agent shall register the transfer, from time to
time, of any outstanding Warrant upon the Warrant Register, upon surrender of
such Warrant for transfer, properly endorsed with signatures properly guaranteed
and accompanied by appropriate instructions for transfer. Upon any such
transfer, a new Warrant representing an equal aggregate number of Warrants shall
be issued and the old Warrant shall be cancelled by the Warrant Agent. The
Warrants so cancelled shall be delivered by the Warrant Agent to the Company
from time to time upon request.

    

    5.2.        Procedure for Surrender of Warrants.
Warrants may be surrendered to the Warrant Agent, together with a written
request for exchange or transfer, and thereupon the Warrant Agent shall issue in
exchange therefor one or more new Warrants as requested by the Registered Holder
of the Warrants so surrendered, representing an equal aggregate number of
Warrants; provided, however, that in the
event that a Warrant surrendered for transfer bears a restrictive legend (as in
the case of the Sponsor Warrants), the Warrant Agent shall not cancel such
Warrant and issue new Warrants in exchange thereof until the Warrant Agent has
received an opinion of counsel for the Company stating that such transfer may be
made and indicating whether the new Warrants must also bear a restrictive
legend.

    

    5.3.        Fractional Warrants.
The Warrant Agent shall not be required to effect any registration of transfer
or exchange which shall result in the issuance of a warrant certificate for a
fraction of a warrant.

    

    5.4.        Service Charges: No
service charge shall be made for any exchange or registration of transfer of
Warrants.

    
      
         

      

      
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    5.5.        Warrant Execution and
Countersignature. The Warrant Agent is hereby authorized to countersign
and to deliver, in accordance with the terms of this Agreement, the Warrants
required to be issued pursuant to the provisions of this Section 5, and
the Company, whenever required by the Warrant Agent, shall supply the Warrant
Agent with Warrants duly executed on behalf of the Company for such
purpose.

    

    5.6.        Transfer of Warrants.
Prior to the Detachment Date, the Offering Warrants may be transferred or
exchanged only together with the Unit in which such Warrant is included, and
only for the purpose of effecting, or in conjunction with, a transfer or
exchange of such Unit. Furthermore, each transfer of a Unit on the register
relating to such Units shall operate also to transfer the Warrants included in
such Unit. Notwithstanding the foregoing, the provisions of this Section 5.6
shall have no effect on any transfer of Warrants on and after the Detachment
Date.

    

    6.           Redemption.

    

    6.1.        Redemption. Subject
to Section 6.4
hereof, not less than all of the outstanding Warrants may be redeemed, at the
option of the Company, at any time while they are exercisable and prior to their
expiration, at the office of the Warrant Agent, upon notice to the Registered
Holders of the Warrants, as described in Section 6.2
below, at the price of $0.01 per Warrant (the “Redemption
Price”), provided that the last sales price of the Common Stock reported
has been at least $17.50 per share (subject to adjustment in compliance with
Section 4
hereof), on each of any twenty (20) trading days within the thirty
(30) trading-day period ending on the third Business Day prior to the date
on which notice of the redemption is given and provided that there is an
effective registration statement covering the shares of Common Stock issuable
upon exercise of the Warrants, and a current prospectus relating thereto,
available throughout the 30-day Redemption Period (as defined in Section 6.2
below).

    

    6.2.        Date Fixed for, and
Notice of,
Redemption. In the event that the Company elects to redeem all of the
Warrants, the Company shall fix a date for the redemption (the “Redemption
Date”). Notice of redemption shall be mailed by first class mail, postage
prepaid, by the Company not less than thirty (30) days prior to the
Redemption Date to the Registered Holders of the Warrants to be redeemed at
their last addresses as they shall appear on the registration books. Any notice
mailed in the manner herein provided shall be conclusively presumed to have been
duly given whether or not the Registered Holder received such
notice.

    

    6.3.        Exercise After Notice of
Redemption. The Warrants may be exercised, for cash (or on a “cashless
basis” in accordance with subsection 3.3.1(b)
of this Agreement) at any time after notice of redemption shall have been given
by the Company pursuant to Section 6.2
hereof and prior to the Redemption Date. In the event that the Company
determines to require all holders of Warrants to exercise their Warrants on a
“cashless basis” pursuant to subsection 3.3.1, the
notice of redemption shall contain the information necessary to calculate the
number of shares of the Common Stock to be received upon exercise of the
Warrants, including the “Fair Market Value” (as such term is defined in subsection 3.3.1(b)
hereof) in such case. On and after the Redemption Date, the record holder of the
Warrants shall have no further rights except to receive, upon surrender of the
Warrants, the Redemption Price.

    
      
         

      

      
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    6.4.        Exclusion of Sponsor
Warrants. The Company agrees that the redemption rights provided in this
Section 6
shall not apply to the Sponsor Warrants if at the time of the redemption such
Sponsor Warrants continue to be held by the Sponsor or its Permitted
Transferees. However, once such Sponsor Warrants are transferred (other than to
Permitted Transferees under subsection 2.5.1),
the Company may redeem the Sponsor Warrants, provided that the criteria for
redemption are met, including the opportunity of the holder of such Sponsor
Warrants to exercise the Sponsor Warrants prior to redemption pursuant to Section 6.3.
Sponsor Warrants that are transferred to persons other than Permitted
Transferees shall upon such transfer cease to be Sponsor Warrants and shall
become Offering Warrants under this Agreement.

    

    7.           Other Provisions Relating to
Rights of Holders of Warrants.

    

    7.1.        No Rights as
Stockholder. A Warrant does not entitle the Registered Holder thereof to
any of the rights of a stockholder of the Company, including, without
limitation, the right to receive dividends, or other distributions, exercise any
preemptive rights to vote or to consent or to receive notice as stockholders in
respect of the meetings of stockholders or the election of directors of the
Company or any other matter.

    

    7.2.        Lost, Stolen,
Mutilated, or
Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or
destroyed, the Company and the Warrant Agent may on such terms as to indemnity
or otherwise as they may in their discretion impose (which shall, in the case of
a mutilated Warrant, include the surrender thereof), issue a new Warrant of like
denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or
destroyed. Any such new Warrant shall constitute a substitute contractual
obligation of the Company, whether or not the allegedly lost, stolen, mutilated,
or destroyed Warrant shall be at any time enforceable by anyone.

    

    7.3.        Reservation of the Common
Stock. The Company shall at all times reserve and keep available a number
of its authorized but unissued shares of the Common Stock that shall be
sufficient to permit the exercise in full of all outstanding Warrants issued
pursuant to this Agreement.

    
      
         

      

      
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    7.4.        Registration of the Common
Stock. The Company agrees that as soon as practicable, but in no event
later than fifteen (15) Business Days after the closing of its initial
Business Combination, it shall use its best efforts to file with the Commission
a post-effective amendment to the Registration Statement, or a new registration
statement, for the registration, under the Securities Act, of the shares of the
Common Stock issuable upon exercise of the Warrants, and it shall use its best
efforts to take such action as is necessary to qualify for sale, in those states
in which the Warrants were initially offered by the Company, the shares of
the Common Stock issuable upon exercise of the Warrants. The Company shall
use its best efforts to cause the same to become effective and to maintain the
effectiveness of such registration statement, and a current prospectus relating
thereto, until the expiration of the Warrants in accordance with the provisions
of this Agreement. If any such post-effective amendment or registration
statement has not been declared effective by the 60th
Business Day following the closing of the Business Combination, holders of the
Warrants shall have the right, during the period beginning on the 61st
Business Day after the closing of the Business Combination and ending upon such
post-effective amendment or registration statement being declared effective by
the Commission, and during any other period when the Company shall fail to have
maintained an effective registration statement covering the shares of Common
Stock issuable upon exercise of the Warrants, to exercise such Warrants on a
“cashless basis,” by exchanging the Warrants (in accordance with
Section 3(a)(9) of the Act or another exemption) for that number of shares
of Common Stock equal to the quotient obtained by dividing (x) the product
of the number of shares of the Common Stock underlying the Warrants, multiplied
by the difference between the Warrant Price and the “Fair Market Value” (as
defined below) by (y) the Fair Market Value. Solely for purposes of this Section 7.4,
“Fair Market Value” shall mean the volume weighted average price of the Common
Stock as reported during the ten (10) trading day period ending on the
trading day prior to the date that notice of exercise is received by the Warrant
Agent from the holder of such Warrants or its securities broker or intermediary.
The date that notice of cashless exercise is received by the Warrant Agent shall
be conclusively determined by the Warrant Agent. The Company shall provide the
Warrant Agent with an opinion of counsel for the Company (which shall be an
outside law firm with securities law experience) stating that (i) the
exercise of the Warrants on a cashless basis in accordance with this Section 7.4 is
not required to be registered under the Securities Act and (ii) the shares
of the Common Stock issued upon such exercise shall be freely tradable under
United States federal securities laws by anyone who is not an affiliate (as such
term is defined in Rule 144 under the Securities Act) of the Company and,
accordingly, shall not be required to bear a restrictive legend. For the
avoidance of any doubt, unless and until all of the Warrants have been exercised
on a cashless basis, the Company shall continue to be obligated to comply with
its registration obligations under the first three sentences of this Section 7.4. In
addition, the Company agrees to use its best efforts to register the shares of
the Common Stock issuable upon exercise of a Warrant under the blue sky laws of
the states of residence of the exercising Warrant holder to the extent an
exemption is not available.

    

    8.           Concerning the Warrant Agent
and Other Matters.

    

    8.1.        Payment of Taxes. The
Company shall from time to time promptly pay all taxes and charges that may be
imposed upon the Company or the Warrant Agent in respect of the issuance or
delivery of shares of the Common Stock upon the exercise of the Warrants, but
the Company shall not be obligated to pay any transfer taxes in respect of the
Warrants or such shares.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

    

    8.2.        Resignation, Consolidation,
or Merger of Warrant Agent.

    

    8.2.1.    Appointment of Successor
Warrant Agent. The Warrant Agent, or any successor to it hereafter
appointed, may resign its duties and be discharged from all further duties and
liabilities hereunder after giving sixty (60) days’ notice in writing to
the Company. If the office of the Warrant Agent becomes vacant by resignation or
incapacity to act or otherwise, the Company shall appoint in writing a successor
Warrant Agent in place of the Warrant Agent. If the Company shall fail to make
such appointment within a period of thirty (30) days after it has been
notified in writing of such resignation or incapacity by the Warrant Agent or by
the holder of a Warrant (who shall, with such notice, submit his Warrant for
inspection by the Company), then the holder of any Warrant may apply to the
Supreme Court of the State of New York for the County of New York for the
appointment of a successor Warrant Agent at the Company’s cost. Any successor
Warrant Agent, whether appointed by the Company or by such court, shall be a
corporation organized and existing under the laws of the State of New York, in
good standing and having its principal office in the Borough of Manhattan, City
and State of New York, and authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authority. After appointment, any successor Warrant Agent shall be vested
with all the authority, powers, rights, immunities, duties, and obligations of
its predecessor Warrant Agent with like effect as if originally named as Warrant
Agent hereunder, without any further act or deed; but if for any reason it
becomes necessary or appropriate, the predecessor Warrant Agent shall execute
and deliver, at the expense of the Company, an instrument transferring to such
successor Warrant Agent all the authority, powers, and rights of such
predecessor Warrant Agent hereunder; and upon request of any successor
Warrant Agent the Company shall make, execute, acknowledge, and deliver any and
all instruments in writing for more fully and effectually vesting in and
confirming to such successor Warrant Agent all such authority, powers,
rights, immunities, duties, and obligations.

    

    8.2.2.    Notice of Successor Warrant
Agent. In the event a successor Warrant Agent shall be appointed, the
Company shall give notice thereof to the predecessor Warrant Agent and the
Transfer Agent for the Common Stock not later than the effective date of any
such appointment.

    

    8.2.3.    Merger or Consolidation of
Warrant Agent. Any corporation into which the Warrant Agent may be merged
or with which it may be consolidated or any corporation resulting from any
merger or consolidation to which the Warrant Agent shall be a party shall be the
successor Warrant Agent under this Agreement without any further
act.

    

    8.3.        Fees and Expenses of Warrant
Agent.

    

    8.3.1.    Remuneration. The
Company agrees to pay the Warrant Agent reasonable remuneration for its services
as such Warrant Agent hereunder and shall, pursuant to its obligations under
this Agreement, reimburse the Warrant Agent upon demand for all expenditures
that the Warrant Agent may reasonably incur in the execution of its duties
hereunder.

    8.3.2.    Further Assurances.
The Company agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other
acts, instruments, and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing of the provisions of this
Agreement.

    

    8.4.        Liability of Warrant
Agent.

    

    8.4.1.    Reliance on Company
Statement. Whenever in the performance of its duties under this Warrant
Agreement, the Warrant Agent shall deem it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a statement signed by the President or Chairman of the
Board of the Company and delivered to the Warrant Agent. The Warrant Agent may
rely upon such statement for any action taken or suffered in good faith by it
pursuant to the provisions of this Agreement.

    
      
         

      

      
        14

        
          

        

      

      
         

      

    

    8.4.2.    Indemnity. The
Warrant Agent shall be liable hereunder only for its own gross negligence,
willful misconduct or bad faith. The Company agrees to indemnify the Warrant
Agent and save it harmless against any and all liabilities, including judgments,
costs and reasonable counsel fees, for anything done or omitted by the Warrant
Agent in the execution of this Agreement, except as a result of the Warrant
Agent’s gross negligence, willful misconduct or bad faith.

    

    8.4.3.    Exclusions. The Warrant Agent
shall have no responsibility with respect to the validity of this Agreement or
with respect to the validity or execution of any Warrant (except its
countersignature thereof). The Warrant Agent shall not be responsible for any
breach by the Company of any covenant or condition contained in this Agreement
or in any Warrant. The Warrant Agent shall not be responsible to make any
adjustments required under the provisions of Section 4 hereof
or responsible for the manner, method, or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment;
nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of the Common
Stock to be issued pursuant to this Agreement or any Warrant or as to whether
any shares of the Common Stock shall, when issued, be valid and fully paid and
nonassessable.

    

    8.5.        Acceptance of Agency.
The Warrant Agent hereby accepts the agency established by this Agreement and
agrees to perform the same upon the terms and conditions herein set forth and
among other things, shall account promptly to the Company with respect to
Warrants exercised and concurrently account for, and pay to the Company, all
monies received by the Warrant Agent for the purchase of shares of the Common
Stock through the exercise of the Warrants.

    

    8.6.        Waiver. The Warrant
Agent has no right of set-off or any other right, title, interest or claim of
any kind (“Claim”)
in, or to any distribution of, the Trust Account (as defined in that certain
Investment Management Trust Agreement, dated as of the date hereof, by and
between the Company and the Warrant Agent as trustee thereunder) and hereby
agrees not to seek recourse, reimbursement, payment or satisfaction for any
Claim against the Trust Account for any reason whatsoever. The Warrant Agent
hereby waives any and all Claims against the Trust Account and any and all
rights to seek access to the Trust Account.

    

    9.           Miscellaneous
Provisions.

    

    9.1.        Successors. All the covenants
and provisions of this Agreement by or for the benefit of the Company or the
Warrant Agent shall bind and inure to the benefit of their respective successors
and assigns.

    

    9.2.        Notices. Any notice,
statement or demand authorized by this Warrant Agreement to be given or made by
the Warrant Agent or by the holder of any Warrant to or on the Company shall be
sufficiently given when so delivered if by hand or overnight delivery or if sent
by certified mail or private courier service within five (5) days after
deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent), as
follows:

    
      
         

      

      
        15

        
          

        

      

      
         

      

    

    RLJ
Acquisition, Inc.

    3
Bethesda Metro Center, Suite 1100

    Bethesda,
Maryland 20814

    Attention:
Chief Executive Officer

    

    Any
notice, statement or demand authorized by this Agreement to be given or made by
the holder of any Warrant or by the Company to or on the Warrant Agent shall be
sufficiently given when so delivered if by hand or overnight delivery or if sent
by certified mail or private courier service within five (5) days after
deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Warrant Agent with the Company), as
follows:

    

    Continental
Stock Transfer & Trust Company

    17
Battery Place

    New York,
New York 10004

    Attention:
Compliance Department

    

    9.3.        Applicable Law. The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction. The Company hereby
agrees that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement shall be brought and enforced in the
courts of the State of New York or the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum.

    

    9.4.        Persons Having Rights under
this Agreement. Nothing in this Agreement shall be construed to confer
upon, or give to, any person or corporation other than the parties hereto and
the Registered Holders of the Warrants any right, remedy, or claim under or by
reason of this Warrant Agreement or of any covenant, condition, stipulation,
promise, or agreement hereof. All covenants, conditions, stipulations, promises,
and agreements contained in this Warrant Agreement shall be for the sole and
exclusive benefit of the parties hereto and their successors and assigns and of
the Registered Holders of the Warrants.

    

    9.5.        Examination of the Warrant
Agreement. A copy of
this Agreement shall be available at all reasonable times at the office of the
Warrant Agent in the Borough of Manhattan, City and State of New York, for
inspection by the Registered Holder of any Warrant. The Warrant Agent may
require any such holder to submit his Warrant for inspection by it.

    

    9.6.        Counterparts. This
Agreement may be executed in any number of original or facsimile counterparts
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the
same instrument.

    

    9.7.        Effect of Headings.
The section headings herein are for convenience only and are not part of this
Warrant Agreement and shall not affect the interpretation
thereof.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

    9.8.        Amendments. This
Agreement may be amended by the parties hereto without the consent of any
Registered Holder for the purpose of curing any ambiguity, or curing, correcting
or supplementing any defective provision contained herein or adding or changing
any other provisions with respect to matters or questions arising under this
Agreement as the parties may deem necessary or desirable and that the parties
deem shall not adversely affect the interest of the Registered Holders. All
other modifications or amendments, including any amendment to increase the
Warrant Price or shorten the Exercise Period and any amendment to the terms of
only the Sponsor Warrants, shall require the written consent of the Registered
Holders of 65% of the then outstanding Offering Warrants. Further, the Sponsor
shall not vote any Warrants owned or controlled by it in favor of such amendment
unless the Registered Holders of 65% of the Offering Warrants vote in favor of
such amendment. Notwithstanding the foregoing, the Company may lower the Warrant
Price or extend the duration of the Exercise Period pursuant to Sections 3.1 and
3.2,
respectively, without the consent of the Registered Holders.

    

    9.9.        Severability. This
Warrant Agreement shall be deemed severable, and the invalidity or
unenforceability of any term or provision hereof shall not affect the validity
or enforceability of this Warrant Agreement or of any other term or provision
hereof. Furthermore, in lieu of any such invalid or unenforceable term or
provision, the parties hereto intend that there shall be added as a part of this
Warrant Agreement a provision as similar in terms to such invalid or
unenforceable provision as may be possible and be valid and
enforceable.

    

    Exhibit A Form
of Warrant Certificate

    Exhibit B Legend
– Sponsor’s Warrants

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

    

    
      
        
          
            	 
      	
                    RLJ
      ACQUISITION, INC.

                  	 
      
	 
      	 
      	 
      
	 
      	
                         By:  

                  	 
      	 
      
	 
      	
                         Name:  

                  	 
      	 
      
	 
      	
                         Title:  

                  	 
      	 
      
	 
      
	 
      	
                    CONTINENTAL
      STOCK TRANSFER & 

                    TRUST
      COMPANY, as Warrant Agent

                  	 
      
	 
      	 
      	 
      
	 
      	
                         By:  

                  	 
      	 
      
	 
      	
                         Name:  

                  	 
      	 
      
	 
      	
                         Title:  

                  	 
      	 
      

          

        

      

    

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

    EXHIBIT
A

    

    WARRANT
CERTIFICATE

    

    [TO BE
INSERTED]

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    EXHIBIT
B

    

    LEGEND

    

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS, AND MAY NOT BE
OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR
AN EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED PRIOR TO THE DATE
THAT IS THIRTY (30) DAYS AFTER THE DATE UPON WHICH RLJ ACQUISITION, INC.
(THE “COMPANY”) COMPLETES ITS INITIAL BUSINESS COMBINATION (AS DEFINED IN
SECTION 3 OF THE WARRANT AGREEMENT REFERRED TO HEREIN) EXCEPT TO A PERMITTED
TRANSFEREE (AS DEFINED IN SECTION 2 OF THE WARRANT AGREEMENT) WHO AGREES IN
WRITING WITH THE COMPANY TO BE SUBJECT TO SUCH TRANSFER PROVISIONS.

    

    SECURITIES
EVIDENCED BY THIS CERTIFICATE AND SHARES OF THE COMMON STOCK OF THE COMPANY
ISSUED UPON EXERCISE OF SUCH SECURITIES SHALL BE ENTITLED TO REGISTRATION RIGHTS
UNDER A REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE
COMPANY.

    

    
      
        	
                No.
      _________                      

              	 
      	
                         
                 
       _______________  Warrants

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