GRASSMERE ACQUISITION Corp - FORM S-1/A - EX-10.2 - EXHIBIT 10.2 FORM OF LETTER AGREEMENT - July 28, 2011

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EX-3.2 - EXHIBIT 3.2 FORM OF AMENDED AND RESTATED CERTIFICATE OF INC. - GRASSMERE ACQUISITION Corpv229833_ex3-2.htm
EX-1.1 - EXHIBIT 1.1 FORM OF UNDERWRITING AGREEMENT - GRASSMERE ACQUISITION Corpv229833_ex1-1.htm
EX-5.1 - EXHIBIT 5.1 FORM OF OPINION - GRASSMERE ACQUISITION Corpv229833_ex5-1.htm
EX-4.4 - EXHIBIT 4.4 FORM OF WARRANT AGREEMENT - GRASSMERE ACQUISITION Corpv229833_ex4-4.htm
EX-23.1 - EXHIBIT 23.1 CONSENT - GRASSMERE ACQUISITION Corpv229833_ex23-1.htm
EX-10.6 - EXHIBIT 10.6 FORM OF REGISTRATION RIGHTS AGREEMENT - GRASSMERE ACQUISITION Corpv229833_ex10-6.htm
EX-10.3 - EXHIBIT 10.3 FORM OF LETTER AGREEMENT - GRASSMERE ACQUISITION Corpv229833_ex10-3.htm
EX-10.4 - EXHIBIT 10.4 FORM OF INVESTMENT MANAGEMENT TRUST AGREEMENT - GRASSMERE ACQUISITION Corpv229833_ex10-4.htm
EX-10.8A - EXHIBIT 10.8A AMENDED AND RESTATED WARRANT SUBSCRIPTION AGRMT - GRASSMERE ACQUISITION Corpv229833_ex10-8a.htm
S-1/A - GRASSMERE ACQUISITION Corpv229833_s1a.htm
 
Exhibit 10.2
 
__________, 2011
 
Grassmere Acquisition Corporation
801 W. 47th Street
Suite 400
Kansas City, Missouri 64112
 
 
Re: 
Initial Public Offering
 
Gentlemen:
 
This letter (“Letter Agreement”) is being delivered to you in accordance with the Underwriting Agreement (the “Underwriting Agreement”) entered into by and between Grassmere Acquisition Corporation, a Delaware corporation (the “Company”) and Lazard Capital Markets LLC, as representative of the several underwriters (the “Underwriters”), relating to an underwritten initial public offering (the “Public Offering”), of 7,500,000 of the Company’s units (the “Units”), each comprised of one share of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), and one warrant exercisable for one share of the Common Stock (each, a “Warrant”).  The Units sold in the Public Offering shall be quoted and traded on the Over-the-Counter Bulletin Board quotation system pursuant to a registration statement on Form S-1 and prospectus (the “Prospectus”) filed by the Company with the Securities and Exchange Commission (the “Commission”).  Certain capitalized terms used herein are defined in paragraph 11 hereof.
 
In order to induce the Company and the Underwriters to enter into the Underwriting Agreement and to proceed with the Public Offering and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grassmere Acquisition Holdings, LLC (the “Sponsor”) and each of the officers of the Company who are signatories hereto (each, an “Officer” and collectively, the “Officers”), hereby agrees with the Company as follows:
 
1.           The Sponsor and the Officers hereby agree that if the Company seeks stockholder approval of a proposed Business Combination, then in connection with such proposed Business Combination, they shall vote all the Founder Shares and any shares acquired by them in the Public Offering or the secondary public market in favor of such proposed Business Combination.
 
 
 
 
 
2.           The Sponsor and Officers hereby agree that in the event that the Company fails to consummate a Business Combination (as defined in the Underwriting Agreement) within 21 months from the date of the Prospectus, the Sponsor and each Officer shall take all reasonable steps to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than ten business days thereafter, redeem 100% of the Common Stock sold as part of the Units in the Public Offering (the “Offering Shares”), at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest but net of franchise and income taxes payable (less up to $100,000 of such net interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish Public Stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), subject to applicable law, and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, dissolve and liquidate, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and other requirements of applicable law.  The Sponsor and Officers agree that they will not propose any amendment to the Company’s amended and restated certificate of incorporation that would affect the substance or timing of the Company’s obligation to redeem 100% of its public shares if the Company does not complete a Business Combination within 21 months from the date of the Prospectus, unless the Company provides the Public Stockholders with the opportunity to redeem their shares of Common Stock upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the trust account, including interest but net of franchise and income taxes payable and less any interest the Company may withdraw for working capital requirements, divided by the number of then outstanding Offering Shares.
 
Each of the Officers and the Sponsor acknowledges that they have no right, title, interest or claim of any kind in or to any monies held in the Trust Account or any other asset of the Company as a result of any liquidation of the Company with respect to the Founder Shares.  The Sponsor and each of the Officers hereby further waive, with respect to any shares of the Common Stock held by it, any redemption rights it may have in connection with the consummation of a Business Combination, including, without limitation, any such rights available in the context of a stockholder vote to approve such Business Combination or in the context of a tender offer made by the Company to purchase shares of the Common Stock (although the Sponsor and the Officers shall be entitled to redemption and liquidation rights with respect to any shares of the Common Stock (other than the Founder Shares) they hold if the Company fails to consummate a Business Combination within 21 months from the date of the Prospectus).
 
3.           During the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the Sponsor and the Officers shall not (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, with respect to any Units, shares of Common Stock, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by him, her or it, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Units, shares of Common Stock, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by him, her or it, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii).
 
 
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4.           In the event of the liquidation of the Trust Account, Peter C. Brown (the “Indemnitor”) agrees to indemnify and hold harmless the Company against any and all loss, liability, claim, damage and expense whatsoever (including, but not limited to, any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, whether pending or threatened, or any claim whatsoever) to which the Company may become subject as a result of any claim by (i) any vendor for services rendered or products sold to the Company or (ii) a prospective target business with which the Company has entered into an acquisition agreement (a “Target”); provided, however, that such indemnification of the Company by the Indemnitor shall apply only to the extent necessary to ensure that such claims by a vendor for services rendered (other than the Company’s independent public accountants) or products sold to the Company or a Target do not reduce the amount of funds in the Trust Account to below $10.10 per Offering Share (or approximately $10.06 per Offering Share if the underwriters’ over-allotment option, as described in the Prospectus, is exercised in full, or such pro rata amount in between $10.06 and $10.10 per Offering Share that corresponds to the portion of the over-allotment option that is exercised), and provided, further, that only if such vendor or Target has not executed an agreement waiving claims against and all rights to seek access to the Trust Account whether or not such agreement is enforceable.  In the event that any such executed waiver is deemed to be unenforceable against such third party, the Indemnitor shall not be responsible for any liability as a result of any such third party claims.  Notwithstanding any of the foregoing, such indemnification of the Company by the Indemnitor shall not apply as to any claims under the Company’s obligation to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended.  The Indemnitor shall have the right to defend against any such claim with counsel of his choice reasonably satisfactory to the Company if, within 15 days following written receipt of notice of the claim to the Indemnitor, the Indemnitor notify the Company in writing that it shall undertake such defense.
 
5.           To the extent that the Underwriters do not exercise their over-allotment option to purchase an additional 1,125,000 shares of the Common Stock (as described in the Prospectus), the Sponsor agrees that it shall return to the Company for cancellation, at no cost, the number of Founder Shares held by the Sponsor determined by multiplying 254,076 by a fraction, (i) the numerator of which is 1,125,000 minus the number of shares of the Common Stock purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 1,125,000.  The Sponsor further agrees that to the extent that (a) the size of the Public Offering is increased or decreased and (b) the Sponsor has either purchased or sold shares of the Common Stock or an adjustment to the number of Founder Shares has been effected by way of a stock split, stock dividend, reverse stock split, contribution back to capital or otherwise, in each case in connection with such increase or decrease in the size of the Public Offering, then (i) the references to 1,125,000 in the numerator and denominator of the formula in the immediately preceding sentence shall be changed to a number equal to 15% of the number of shares included in the Units issued in the Public Offering and (ii) the reference to 254,076 in the formula set forth in the immediately preceding sentence shall be adjusted proportionately by the percentage increase or decrease in the size of the Public Offering.  In addition, a portion of the Founder Shares held by the Sponsor in an amount equal to 25% of the number of Founder Shares held by the Sponsor immediately after the Public Offering (the “Earnout Shares”), shall be returned to the Company for cancellation, at no cost, pursuant to the following schedule: (i) unless the last sales price of the Company’s stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period within twenty-four (24) months following the closing of the Company’s initial Business Combination or the Company completes a liquidation, merger, stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property which equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), 50% of the Earnout Shares shall be returned to the Company for cancellation, and (ii) unless the last sales price of the Company’s stock equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period within thirty-six (36) months following the closing of the Company’s initial Business Combination or the Company completes a liquidation, merger, stock exchange or other similar transaction that results in all of its stockholders having the right to exchange their shares of common stock for consideration in cash, securities or other property which equals or exceeds $13.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like), 50% of the Earnout Shares shall be returned to the Company for cancellation.
 
 
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6.           (a)           In order to minimize potential conflicts of interest that may arise from multiple corporate affiliations, each Officer agrees that until the earliest of: (i) the completion of the Company’s initial Business Combination, (ii) the Company's redemption of 100% of the Offering Shares if the Company does not complete a Business Combination within 21 months from the date of the Prospectus, or (iii) such time as he ceases to be an officer or director of the Company, to present to the Company for its consideration, prior to presentation to any other entity, any business combination opportunity with a target business having an enterprise value of $75,000,000 or more, subject to any fiduciary duties or contractual obligations he has, or in the future may have, in respect of the entities to which he currently has fiduciary duties or contractual obligations.
 
(b)           Each Officer understands that the Company may effect a Business Combination with a single target business or multiple target businesses simultaneously and agrees that he shall not participate in the formation of, or become an officer or director of, any blank check company until the Company has entered into a definitive agreement regarding its initial Business Combination or the Company has failed to complete an initial Business Combination within 21 months from the date of the Prospectus; provided, however, that nothing contained herein shall override any Officer’s fiduciary obligations to any entity with which he, she or it is currently directly or indirectly associated or affiliated or by whom he is currently employed.
 
(c)           Each Officer hereby agrees and acknowledges that (i) each of the Underwriters and the Company would be irreparably injured in the event of a breach by such Officer of his obligations under paragraphs 6(a) and/or 6(b) herein, (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such breach.
 
 
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7.           (a) Until one year after the completion of the Company’s initial Business Combination or earlier if, subsequent to the Company’s initial Business Combination (such applicable period being the “Founder Lock-Up Period”), the last sales price of the Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination, each Officer and the Sponsor shall not, except as described in the Prospectus, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder, with respect to, the Founder Shares, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Founder Shares, whether any such transaction is to be settled by delivery of the Common Stock or such other securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii).
 
(b) Until 30 days after the completion of the Company’s initial Business Combination (“Private Placement Warrant Lock-Up Period”), each Officer and the Sponsor shall not, except as described in the Prospectus, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and the rules and regulations of the SEC promulgated thereunder, with respect to, the Private Placement Warrants and the respective Common Stock underlying the Private Placement Warrants, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the Private Placement Warrants and the respective Common Stock underlying the Private Placement Warrants, whether any such transaction is to be settled by delivery of the Common Stock or such other securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction specified in clause (i) or (ii).
 
(c) Notwithstanding the provisions of paragraphs 7(a) and 7(b) herein, each of the Officers and the Sponsor may transfer the Founder Shares and/or Private Placement Warrants and the Common Stock underlying the Private Placement Warrants (i) 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 member(s) of the Sponsor; (ii) in the case of any Officer, by gift to a member of such Officer’s immediate family or to a trust, the beneficiary of which is a member of such Officer’s immediate family, an affiliate of such Officer or to a charitable organization; (iii) in the case of any Officer, by virtue of the laws of descent and distribution upon death of such Officer; (iv) in the case of any Officer, pursuant to a qualified domestic relations order; (v) in the event of the Company’s liquidation prior to the completion of the Company’s initial Business Combination; or (vi) in the event that, subsequent to the consummation of the Company’s initial Business Combination, the Company consummates a merger, stock exchange or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of the Common Stock for cash, securities or other property; provided, however, that, in the case of clauses (i) through (iv), these permitted transferees enter into a written agreement with the Company agreeing to be bound by the transfer restrictions in paragraphs 7(a) and 7(b) herein, as the case may be.
 
 
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(d) Further, each Officer and the Sponsor agrees that after the Founder Lock-Up Period or the Private Placement Lock-Up Period, as applicable, has elapsed, the Founder Shares and the Private Placement Warrants and the Common Stock underlying such Warrants, shall only be transferable or saleable pursuant to a sale registered under the Securities Act or pursuant to an available exemption from registration under the Securities Act. The Company, each Officer and the Sponsor each acknowledge that pursuant to that certain registration rights agreement to be entered into between the Company, the Sponsor and the Company’s independent director nominees, each of the holders of the Founder Shares and Private Placement Warrants may request that a registration statement relating to the Founder Shares, and the Private Placement Warrants and/or the shares of the Common Stock underlying the Private Placement Warrants be filed with the Commission prior to the end of the Founder Lock-Up Period or the Private Placement Warrant Lock-Up Period, as the case may be; provided, however, that such registration statement does not become effective prior to the end of the Founder Lock-Up Period or the Private Placement Warrant Lock-Up Period, as applicable.
 
8.           Each Officer’s biographical information furnished to the Company is true and accurate in all respects and does not omit any material information with respect to such Officer’s background.  The Officer’s questionnaire furnished to the Company is true and accurate in all respects.  Each Officer represents and warrants that: such Officer is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction; such Officer has never been convicted of, or pleaded guilty to, any crime (i) involving fraud, (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and such Officer is not currently a defendant in any such criminal proceeding; and neither such Officer nor the Sponsor has ever been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
 
9.           Except as disclosed in the Prospectus, neither the Sponsor, any Officer, nor any affiliate of the Sponsor or any Officer, nor any director or officer of the Company, shall receive any finder’s fee, reimbursement, consulting fee, monies in respect of any repayment of a loan or other compensation prior to, or in connection with any services rendered in order to effectuate the consummation of the Company’s initial Business Combination (regardless of the type of transaction that it is), other than the following: repayment of a loan of up to $376,527 made to the Company by the Sponsor and an affiliate of the Sponsor, pursuant to Promissory Notes dated April 21, 2011 and June 6, 2011; payment of an aggregate of $15,000 per month to Grassmere Partners, LLC, for office space, secretarial and administrative services, pursuant to an Administrative Support Agreement, dated _______, 2011; reimbursement for any reasonable out-of-pocket expenses related to identifying, investigating and completing an initial Business Combination, so long as no proceeds of the Public Offering held in the Trust Account may be applied to the payment of such expenses prior to the consummation of a Business Combination, except that the Company may, for purposes of funding its working capital requirements (including paying such expenses), receive from the Trust Account up to $1,500,000 in interest income (net of franchise and income taxes payable); and repayment of loans, if any, and on such terms as to be determined by the Company from time to time, made by the Sponsor or an affiliate of the Sponsor or certain of the Company’s officers and directors to finance transaction costs in connection with an intended initial Business Combination, provided, that, if the Company does not consummate an initial Business Combination, a portion of the working capital held outside the Trust Account may be used by the Company to repay such loaned amounts so long as no proceeds from the Trust Account are used for such repayment; provided, however, that the Company may, for purposes of funding its working capital requirements (including repaying such loans), receive from the Trust Account up to $1,500,000 in interest income (net of taxes payable on such interest).
 
 
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10.           The Sponsor and each Officer have full right and power, without violating any agreement to which he or it is bound (including, without limitation, any non-competition or non-solicitation agreement with any employer or former employer), to enter into this Letter Agreement and each Officer hereby consents to being named in the Prospectus as an officer and/or director of the Company.
 
11.           The Company shall not, and each officer and director of the Company shall cause the Company not to, incur any indebtedness unless the Company has obtained from the lender of such indebtedness a waiver of such lender's right, title, interest or claim of any kind in or to any monies held in the Trust Account.
 
12.           As used herein, (i) “Business Combination” shall mean a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination, involving the Company and one or more businesses; (ii) “Founder Shares” shall mean the 2,156,250 shares of the Common Stock of the Company initially acquired by the Sponsor for an aggregate purchase price of $25,000, or approximately $0.01 per share, prior to the consummation of the Public Offering, of which 208,336 were subsequently transferred by the Sponsor; (iii) “Private Placement Warrants” shall mean the Warrants to purchase up to 4,816,667 shares of the Common Stock of the Company that are acquired by the Sponsor and independent directors of the Company for an aggregate purchase price of $3,612,500, or $0.75 per Warrant in a private placement that shall occur simultaneously with the consummation of the Public Offering; (iv) “Public Stockholders” shall mean the holders of securities issued in the Public Offering; and (v) “Trust Account” shall mean the trust fund into which a portion of the net proceeds of the Public Offering shall be deposited.
 
13.           This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersede all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby.  This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto.
 
14.           No party hereto may assign either this Letter Agreement or any of its rights, interests, or obligations hereunder without the prior written consent of the other party.  Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee.  This Letter Agreement shall be binding on the Sponsor, each of the Officers and each of their respective successors, heirs, personal representatives and assigns.
 
 
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15.           This Letter Agreement shall be governed by and construed and enforced in accordance with 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 parties hereto (i) all agree that any action, proceeding, claim or dispute arising out of, or relating in any way to, this Letter Agreement shall be brought and enforced in the courts of New York City, in the State of New York, and irrevocably submits to such jurisdiction and venue, which jurisdiction and venue shall be exclusive and (ii) waives any objection to such exclusive jurisdiction and venue or that such courts represent an inconvenient forum.
 
16.           Any notice, consent or request to be given in connection with any of the terms or provisions of this Letter Agreement shall be in writing and shall be sent by express mail or similar private courier service, by certified mail (return receipt requested), by hand delivery or facsimile transmission.
 
17.           This Letter Agreement shall terminate on the liquidation of the Company; provided, however, that this Letter Agreement shall earlier terminate in the event that the Public Offering is not consummated and closed by September 30, 2011, provided further that paragraph 4 of this Letter Agreement shall survive such liquidation.
 
[Signature page follows]

 
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Sincerely,
   
 
GRASSMERE ACQUISITION HOLDINGS, LLC
     
 
By: 
  
   
Name: 
Brian M. Hagenhoff
   
Title:
Chief Financial Officer
     
     
  Peter C. Brown
     
     
  Tristram E. Collins
     
     
  Brian M. Hagenhoff

   
Acknowledged and Agreed:
  
   
GRASSMERE ACQUISITION CORPORATION
  
     
By:
    
 
Name: 
Brian M. Hagenhoff
  
 
Title:
Chief Financial Officer
  
 
 
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