UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

______________

 

FORM 8-K

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

 

Date of Report (Date of earliest event reported): August 17, 2013

 

 

ANDINA ACQUISITION CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

Cayman Islands  001-35436  N/A
(State or Other Jurisdiction  (Commission  (IRS Employer
of Incorporation)  File Number)  Identification No.)

 

Carrera 10 No. 28-49, Torre A. Oficina 20-05, Bogota, Colombia

(Address of Principal Executive Offices) (Zip Code)

 

(646) 684-3045

(Registrant’s Telephone Number, Including Area Code)

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

xSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))

 

 
 

 

COMMENCING SHORTLY AFTER THE FILING OF THIS CURRENT REPORT ON FORM 8-K, ANDINA ACQUISITION CORPORATION (“ANDINA”) INTENDS TO HOLD PRESENTATIONS FOR CERTAIN OF ITS SHAREHOLDERS, AS WELL AS OTHER PERSONS WHO MIGHT BE INTERESTED IN PURCHASING ANDINA SECURITIES, REGARDING ITS MERGER WITH TECNOGLASS S.A. (“TECNOGLASS”) AND C.I. ENERGIA SOLAR S.A. E.S. WINDOWS (“ES”, COLLECTIVELY WITH TECNOGLASS, THE “COMPANY”), AS DESCRIBED IN THIS REPORT. THIS CURRENT REPORT ON FORM 8-K, INCLUDING SOME OR ALL OF THE EXHIBITS HERETO, WILL BE DISTRIBUTED TO PARTICIPANTS AT SUCH PRESENTATIONS.

 

EARLYBIRDCAPITAL, INC. (“EBC”), THE MANAGING UNDERWRITER OF ANDINA’S INITIAL PUBLIC OFFERING (“IPO”) CONSUMMATED IN MARCH 2012, AND MORGAN JOSEPH TRIARTISAN (“MJTA”) ARE ACTING AS ANDINA’S INVESTMENT BANKERS IN THESE EFFORTS, FOR WHICH EBC WILL RECEIVE A FEE OF $1,610,000 AND MJTA WILL RECEIVE A FEE OF $500,000. ANDINA, ITS DIRECTORS AND EXECUTIVE OFFICERS, EBC AND MJTA MAY BE DEEMED TO BE PARTICIPANTS IN THE SOLICITATION OF PROXIES FOR THE EXTRAORDINARY GENERAL MEETING OF ANDINA SHAREHOLDERS TO BE HELD TO APPROVE THE MERGER.

 

SHAREHOLDERS OF ANDINA AND OTHER INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, ANDINA’S PRELIMINARY PROXY STATEMENT AND DEFINITIVE PROXY STATEMENT IN CONNECTION WITH ANDINA’S SOLICITATION OF PROXIES FOR THE EXTRAORDINARY GENERAL MEETING BECAUSE THESE PROXY STATEMENTS WILL CONTAIN IMPORTANT INFORMATION. SUCH PERSONS CAN ALSO READ ANDINA’S FINAL PROSPECTUS, DATED MARCH 16, 2012, AND ANDINA’S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED FEBRUARY 28, 2013, AS AMENDED, FOR A DESCRIPTION OF THE SECURITY HOLDINGS OF THE ANDINA OFFICERS AND DIRECTORS AND OF EBC AND MJTA AND THEIR RESPECTIVE INTERESTS IN THE SUCCESSFUL CONSUMMATION OF THE MERGER. THE DEFINITIVE PROXY STATEMENT WILL BE MAILED TO SHAREHOLDERS AS OF A RECORD DATE TO BE ESTABLISHED FOR VOTING ON THE MERGER. SHAREHOLDERS WILL ALSO BE ABLE TO OBTAIN A COPY OF THE DEFINITIVE PROXY STATEMENT, WITHOUT CHARGE, BY DIRECTING A REQUEST TO: THE EQUITY GROUP INC., 800 THIRD AVENUE, 36TH FLOOR, NEW YORK, NEW YORK 10022. THE PRELIMINARY PROXY STATEMENT AND THE DEFINITIVE PROXY STATEMENT, ONCE AVAILABLE, AND THE FINAL PROSPECTUS AND ANNUAL REPORT ON FORM 10-K CAN ALSO BE OBTAINED, WITHOUT CHARGE, AT THE SECURITIES AND EXCHANGE COMMISSION’S INTERNET SITE (http://www.sec.gov).

 

CERTAIN OF THE COMPANY’S FINANCIAL INFORMATION AND DATA CONTAINED HEREIN AND IN THE EXHIBITS HERETO ARE UNAUDITED AND/OR WERE PREPARED BY THE COMPANY AS A PRIVATE COMPANY AND DO NOT CONFORM TO SEC REGULATION S-X. FURTHERMORE, THEY INCLUDE CERTAIN FINANCIAL INFORMATION (EBITDA) NOT DERIVED IN ACCORDANCE WITH UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (“GAAP”). ACCORDINGLY, SUCH INFORMATION AND DATA WILL BE ADJUSTED AND PRESENTED DIFFERENTLY IN ANDINA’S PRELIMINARY AND DEFINITIVE PROXY STATEMENTS TO SOLICIT SHAREHOLDER APPROVAL OF THE MERGER. ANDINA AND THE COMPANY BELIEVE THAT THE PRESENTATION OF NON-GAAP MEASURES PROVIDES INFORMATION THAT IS USEFUL TO INVESTORS AS IT INDICATES MORE CLEARLY THE ABILITY OF THE COMPANY TO MEET CAPITAL EXPENDITURES AND WORKING CAPITAL REQUIREMENTS AND OTHERWISE MEET ITS OBLIGATIONS AS THEY BECOME DUE.

 

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ADDITIONAL INFORMATION AND FORWARD-LOOKING STATEMENTS

 

This report and the exhibits hereto are not a proxy statement or solicitation of a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of andina or THE COMPANY, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

 

This report and the exhibits hereto include “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. COMPANY’s actual results may differ from its expectations, estimates and projections and, consequently, you should not rely on these forward looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, andina’s and THE COMPANY’s expectations with respect to future performance, anticipated financial impacts of the merger and related transactions; approval of the merger and related transactions by security holders; the satisfaction of the closing conditions to the merger and related transactions; and the timing of the completion of the merger and related transactions.

 

These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside the parties’ control and difficult to predict. Factors that may cause such differences include: business conditions; weather and natural disasters; changing interpretations of GAAP; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory environments, requirements or changes adversely affecting the business in which THE COMPANY is engaged; fluctuations in customer demand; management of rapid growth; intensity of competition from other providers of SERVICES THAT THE COMPANY PROVIDES; general economic conditions; and geopolitical events and regulatory changes. Other factors include the possibility that the merger does not close, including due to the failure to receive required security holder approvals, or the failure of other closing conditions.

 

The foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in ANDINA’s most recent filings with the SEC. All subsequent written and oral forward-looking statements concerning ANDINA and THE COMPANY, the merger, the related transactions or other matters and attributable to andina and THE COMPANY or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Readers are cautioned not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Neither ANDINA nor THE COMPANY undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in their expectations or any change in events, conditions or circumstances on which any such statement is based.

 

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Item 1.01Entry into a Material Definitive Agreement.

 

General; Structure of Merger

 

On August 17, 2013, Andina Acquisition Corporation, a Cayman Islands exempted company (“Andina”), entered into an Agreement and Plan of Reorganization (the “Merger Agreement”) by and among Andina, Andina Merger Sub, Inc., a Cayman Islands exempted company and a wholly-owned subsidiary of Andina (“Merger Sub”), Tecnoglass S.A., a Colombian company (“Tecnoglass”), and C.I. Energia Solar S.A. E.S. Windows, a Colombian company (“ES”). Prior to the closing of the transactions contemplated by the Merger Agreement, Tecnoglass and ES will effect a corporate reorganization such that the shareholders of Tecnoglass and/or ES shall cease being shareholders of Tecnoglass and/or ES and shall become shareholders of a newly formed Cayman Islands exempted company. Tecnoglass and ES will each then become direct or indirect wholly-owned subsidiaries of such newly formed entity. References to the “Company” in this Form 8-K are references to this newly formed entity, including the operations of Tecnoglass and ES, as applicable. Upon the consummation of the transactions contemplated by the Merger Agreement, Merger Sub will be merged with and into the Company, with the Company surviving the merger and becoming a wholly-owned subsidiary of Andina. Upon the consummation of the merger contemplated by the Merger Agreement, Andina will change its name to “Tecnoglass Inc.”

 

The Company is a leading manufacturer of hi-spec, architectural glass and windows for the western hemisphere residential and commercial construction industries. Headquartered in Barranquilla, Colombia, the Company operates out of a 1.2 million square foot vertically-integrated, state-of-the-art manufacturing complex that provides easy access to the Americas, the Caribbean, and the Pacific. The Company exports 43% of its production to foreign countries and sells to more than 300 customers in North, Central and South America. The United States accounted for approximately 30% of its revenues in 2012. The Company’s tailored, high-end products are found on some of the world’s most distinctive properties, including the El Dorado Airport (Bogota), Imbanaco Medical Center (Cali), Trump Plaza (Panama), Trump Tower (Miami), and The Woodlands (Houston).

 

The merger is expected to be consummated after the required approval by the shareholders of Andina and the fulfillment of certain other conditions, as described herein and in the Merger Agreement.

 

The following summaries of the merger and related transactions, the Merger Agreement and the other agreements to be entered into by the parties are qualified in their entirety by reference to the text of the agreements, certain of which are attached as exhibits hereto and are incorporated herein by reference.

 

Merger Consideration

 

Closing Merger Consideration. The Company shareholders, in exchange for all of the ordinary shares of Company outstanding immediately prior to the merger, will receive from Andina:

 

·An aggregate of 17,525,000 ordinary shares of Andina, subject to adjustment upon certain events; and
·an aggregate of 3,000,000 ordinary shares (the “Earnout Shares”) to be released upon the achievement of certain targets described below.

 

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Earnout Shares. The Earnout Shares have been issued and placed in escrow to be released to the Company shareholders upon the Company’s achievement of specified share price targets or targets based on the Company’s net earnings before interest income or expense, income taxes, depreciation, amortization and any expenses arising solely from the merger charged to income (“EBITDA”) in the fiscal years ending February 28, 2014, February 28, 2015 or February 29, 2016.

 

The following table sets forth the targets and the number of Earnout Shares issuable to Company shareholders upon the achievement of such targets:

 

   Ordinary Share
Price Target
  EBITDA Target   Number of Earnout Shares 
      Minimum   Maximum   Minimum   Maximum 
Fiscal year ending 2/28/14  $12.00 per share  $30,000,000   $36,000,000    416,667    500,000 
Fiscal year ending 2/28/15  $13.00 per share  $35,000,000   $40,000,000    875,000    1,000,000 
Fiscal year ending 2/29/16  $14.00 per share  $40,000,000   $45,000,000    1,333,333    1,500,000 

 

If either the ordinary share target or the maximum EBITDA target is met in any fiscal year, Company shareholders receive the maximum number of Earnout Shares indicated for the year.

 

In the event the ordinary share target is not met but the combined company’s EBITDA falls within the minimum and maximum EBITDA target for a specified year, the number of Earnout Shares to be issued will be interpolated between such targets.

 

In the event neither the ordinary share target nor the minimum EBITDA target is met in a particular year, but a subsequent year’s share price or EBITDA target is met, the Company shareholders will earn the Earnout Shares for the previous year as if the prior year’s target had been met.

 

Lock-Up

 

The shareholders of the Company will not be able to sell any of the ordinary shares of Andina that they receive for one year after the closing, subject to certain exceptions.

 

Registration Rights

 

The Company shareholders will be granted the right to demand that Andina register for resale under the Securities Act of 1933, as amended (the “Securities Act”), all of the ordinary shares of Andina to be issued to them in the transaction following the closing. In addition, such shareholders will be granted certain “piggyback” registration rights with respect to such shares.

 

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Indemnification of Andina and Company Shareholders

 

Andina and the Company shareholders have agreed to indemnify and hold harmless the other for their inaccuracies or breaches of the representations and warranties or for the non-fulfillment or breach of any covenant or agreement contained in the Merger Agreement and for certain other matters.

 

To provide a fund for payment to Andina with respect to its post-closing rights to indemnification under the Merger Agreement, there will be placed in escrow (with an independent escrow agent) an aggregate of 890,000 of the ordinary shares issuable to the Company shareholders at closing (“Indemnity Escrow Fund”). The escrow will be the sole remedy for Andina for its rights to indemnification under the Merger Agreement. On the date that is the earlier of (i) 30 days after the date on which Andina has filed its Annual Report on Form 10-K for its fiscal year ending February 28, 2015 or (ii) June 30, 2015, the shares remaining in the Indemnity Escrow Fund will be released to the Company holders except for any shares subject to pending claims and certain other matters.

 

No amount for indemnification shall be payable to either Andina on the one hand or the Company’s shareholders on the other unless and until the aggregate amount of all indemnifiable losses otherwise payable exceed a set deductible amount. The aggregate liability for losses of Andina on the one hand or the Company’s shareholders on the other shall not in any event exceed the value of the Escrow Fund. Andina shall have no claim for indemnity against the Company’s shareholders other than for any of the shares placed in escrow and the Company’s shareholders shall have no claim for indemnity against Andina other than for the issuance of additional ordinary shares of Andina.

 

Representations and Warranties

 

The Merger Agreement contains representations and warranties of the Company, Andina and Merger Sub relating to, among other things, (a) proper organization and similar corporate matters, (b) capital structure of each constituent company, (c) the authorization, performance and enforceability of the Merger Agreement, (d) licenses and permits, (e) taxes, (f) financial information and absence of undisclosed liabilities, (g) holding of leases and ownership of real property and other properties, including intellectual property, (h) accounts receivable, (i) contracts, (j) title to, and condition of, properties and environmental condition thereof, (k) absence of certain changes, (l) employee matters, (m) compliance with laws, (n) litigation and (o) regulatory matters.

 

Covenants

 

Andina and the Company have each agreed to take such actions as are necessary, proper or advisable to consummate the merger. They have also agreed to continue to operate their respective businesses in the ordinary course prior to the closing and not to take certain specified actions without the prior written consent of the other party.

 

The Merger Agreement also contains additional covenants of the parties, including, among others, covenants providing for:

 

(i)The parties to use commercially reasonable efforts to obtain all necessary approvals from governmental agencies and other third parties that are required for the consummation of the transactions contemplated by the Merger Agreement;

 

(ii)The protection of confidential information of the parties and, subject to the confidentiality requirements, the provision of reasonable access to information;

 

(iii)The preparation and filing by Andina of a proxy statement to solicit proxies from the Andina shareholders regarding, among other things, the approval of the merger, approval of amendments to Andina’s Amended and Restated Memorandum and Articles of Association (“Charter Documents”), including the change of Andina’s name to “Tecnoglass Inc.,” adoption of a share option plan, approval of the convertibility of certain promissory notes issued (or to be issued) by Andina to its officers, directors, stockholders or affiliates for Andina’s working capital needs and election of directors to Andina’s board of directors.

 

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(iv)Andina and the Company to use their commercially reasonable efforts to obtain the listing of Andina’s ordinary shares and warrants on the New York Stock Exchange or Nasdaq;

 

(v)The Company to waive its rights to make claims against Andina to collect from the trust fund established for the benefit of the holders of the shares sold in Andina’s IPO (“Public Shares”) for any monies that may be owed to them by Andina; and

 

(vi)The Company to provide periodic financial information to Andina through the closing.

 

Conditions to Closing

 

General Conditions

 

Consummation of the transactions is conditioned on (i) the Andina shareholders, at a meeting called for these purposes, approving the merger and (ii) the holders of not more than 87.5% of the Public Shares exercising their right to convert their Public Shares into a pro-rata portion of the trust fund.

 

In addition, the consummation of the transactions contemplated by the Merger Agreement is conditioned upon, among other things, (i) no order, injunction, judgment or decree being issued by any governmental authority or enactment of any statute, rule, regulation or other order which would prohibit in whole or in part, the consummation of such transactions, (ii) the execution by and delivery to each party of each of the various transaction documents, (iii) the delivery by each party to the other party of a certificate to the effect that the representations and warranties of each party are true and correct in all material respects as of the closing and all covenants contained in the Merger Agreement have been materially complied with by each party and (iv) the receipt of all necessary consents and approvals by third parties and the completion of necessary proceedings.

 

Andina’s Conditions to Closing

 

The obligations of Andina to consummate the transactions contemplated by the Merger Agreement, in addition to the conditions described above, are conditioned upon each of the following, among other things:

 

·there being no material adverse effect affecting the Company that has occurred since the signing of the Merger Agreement;

 

·employment agreements with certain of the Company’s employees shall have been executed and delivered by the Company and such individuals;

 

·(i) all outstanding indebtedness owned by any insider of the Company shall have been repaid in full; (ii) all guaranteed or similar arrangements pursuant to which the Company has guaranteed the payment or performance of any obligations of any Company insider to a third party shall have been terminated; and (iii) no Company insider shall own any direct equity interests in any subsidiary of the Company; and

 

·receipt by Andina of opinions of Company’s counsel in agreed form.

 

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Company’s Conditions to Closing

 

The obligations of the Company to consummate the transactions contemplated by the Merger Agreement also are conditioned upon, among other things:

 

·there being no material adverse effect affecting Andina that has occurred since the signing of the Merger Agreement;

 

·certain officers and directors of Andina shall have resigned effective on the closing of the merger and certain directors shall have been elected by Andina’s shareholders to serve on Andina’s board of directors; 

 

·after giving effect to the election of shareholders of Andina to have their Public Shares converted to cash and after payment of transaction costs incurred by Andina and the Company not to exceed $5,000,000 in the aggregate, Andina shall have an aggregate of at least $33,500,000 of cash held either in or outside of the trust fund and shall have made arrangements to have such amount disbursed to Andina upon the closing;

 

·receipt by Company of opinions of Andina’s counsel in agreed form;

 

·Andina shall have delivered to the Company shareholder lists evidencing at least 300 Round Lot Holders (as such term is defined in Rule 5005(a)(37) of the Nasdaq Listing Rules) of Andina’s ordinary shares, prior to the redemption of any ordinary shares of Andina upon consummation of the merger; and

 

·Andina shall have caused public trading in its units (issued in connection with its initial public offering) to cease and for such units to be mandatorily separated into their component parts of ordinary shares and warrants.

 

Waivers

 

If permitted under applicable law, either Andina or the Company may waive any inaccuracies in the representations and warranties made to such party contained in the Merger Agreement and waive compliance with any agreements or conditions for the benefit of itself or such party contained in the Merger Agreement. The condition requiring that the holders of not more than 87.5% of the Public Shares have exercised their right to convert their Public Shares into a pro-rata portion of the trust fund may not be waived. There can be no assurance that all of the conditions will be satisfied or waived.

 

Termination

 

The Merger Agreement may be terminated at any time, but not later than the closing, as follows:

 

(i)by mutual written consent of Andina and the Company;

 

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(ii)by either Andina or the Company if the merger is not consummated on or before December 16, 2013;

 

(iii)by either Andina or the Company if a governmental entity shall have issued an order, decree, judgment or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the merger, which order, decree, ruling or other action is final and nonappealable;

 

(iv)by either Andina or the Company if the other party has breached any of its covenants or representations and warranties in any material respect and has not cured its breach within 30 days of the notice of an intent to terminate, provided that the terminating party is itself not in breach;

 

(v)by either Andina or the Company if, at the Andina stockholder meeting, the merger shall fail to be approved by holders of Andina’s ordinary shares as required by Andina’s Charter Documents or the holders of more than 87.5% of the Public Shares exercise conversion rights; or,

 

(vi)by Company if, immediately after the merger, Andina will not have cash on hand of $33,500,000 after payment of amounts that Andina may pay to converting shareholders and after payment of transaction costs incurred by Andina and Company not to exceed $5,000,000 in the aggregate, all as described in the Merger Agreement.

 

Post-Merger Ownership of Andina

 

As a result of the merger, assuming that no shareholders of Andina elect to convert their Public Shares into cash as permitted by Andina’s Charter Documents, the Company shareholders will own approximately 76.9% of the ordinary shares of Andina to be outstanding immediately after the merger and the other Andina shareholders will own approximately 23.1% of Andina’s outstanding ordinary shares, in each case based on the Andina ordinary shares outstanding as of July 31, 2013. If the maximum number of Public Shares are converted into cash as permitted under the Merger Agreement leaving $33,500,000 in trust (after taking into account the payment of transaction costs incurred by Andina and the Company of up to $5,000,000 in the aggregate), such percentages will be approximately 78.4% and 21.6%, respectively. If the maximum number of Public Shares are converted into cash as permitted by Andina’s Charter Documents, such percentages will be approximately 91.9% and 8.1%, respectively. The foregoing does not take into account shares that would be released to the Company’s shareholders upon achievement of the Earnout Targets.

 

At the closing of the merger, subject to shareholder approval, Andina will create a share option plan for the benefit of employees of the Company and its subsidiaries, and shall allocate to the share option plan for issuance thereunder the number of shares equal to six percent (6%) of the ordinary shares outstanding immediately after the closing of the merger.

 

Investor Presentation

 

Andina is filing the attached investor presentation (Exhibit 99.3 to this Form 8-K) as Regulation FD Disclosure material.

 

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Press Release

 

Andina is filing the attached press releases (Exhibits 99.1 and 99.2 to this Form 8-K) as Regulation FD Disclosure material.

 

Item 7.01Regulation FD Disclosure.

 

Business

 

Overview

 

The Company is a leading Colombian manufacturer of glass and windows for architectural and industrial use. Through Tecnoglass, the Company offers a comprehensive line of glass and aluminum products, such as tempered glass, laminated glass, acoustic glass, curved glass and other glass products. This glass is then either sold to outside customers or used by ES to manufacture glass and windows for western hemisphere residential and commercial construction industries.

 

The Company exports 43% of its production to foreign countries and sells to over 300 customers in North, Central and South America. The United States accounted for approximately 30% of its revenues in 2012. The Company’s tailored, high-end products are found on some of the world’s most distinctive properties, including the El Dorado Airport (Bogota), Imbanaco Medical Center (Cali), Trump Plaza (Panama), Trump Tower (Miami) and The Woodlands (Houston).

 

The Company’s headquarters are located in Barranquilla, Colombia, where it operates a 1.2 million square foot, vertically-integrated manufacturing complex. The Company’s location allows it to access Latin America, Caribbean, North America and Pacific markets through nearby Caribbean ports, including the ports at Barranquilla, Cartagena and Santa Maria.

 

Among its many designations and certifications, Tecnoglass has earned The Miami-Dade County Notice of Acceptance, one of the most demanding certificates in the industry and a requirement to market hurricane-resistant glass in Florida. Tecnoglass is the only company in Latin America authorized by Pennsylvania Plate Glass Industries and Guardian Industries in the manufacture of floating glass. The Company’s products comply with Miami-Dade county’s safety code standards as its laminated anti-hurricane glass resists impact, pressure, water and wind. The Company has received a number of other certifications from other national and international standard-setting bodies.

 

Glass Magazine has ranked Tecnoglass as the second largest glass fabricator serving the U.S. market in 2012. The Company believes that Tecnoglass is the leading glass transformation company in Colombia, capturing 40% of the market share in the country.

 

The Company’s consolidated revenues in 2012 were $158 million and its consolidated revenues in 2011 were $113 million.

 

History

 

ES was founded in 1984 and has become a leader in the design, manufacture, marketing and installation of architectural glass for commercial and large-scale residential construction. ES’ products include glass and aluminum windows and doors, office dividers and interiors, floating facades and commercial display windows.

 

Tecnoglass was founded in 1994 and has become a leader in transforming glass into a number of finished varieties including tempered, laminated, acoustic, thermo-acoustic, curved, silk-screened and digital print. These glass products are used in a variety of settings including construction and remodeling of hotels, residential dwellings, commercial and corporate centers, universities, airports and hospitals and in different applications such as floating facades, windows, doors, handrails, interior and bathroom products.

 

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In 2007, Tecnoglass established its aluminum plant, Alutions, to conduct aluminum extrusion, smelter, paint and anodizing processes. Various products such as aluminum profiles, rods, bars, plates and other hardware used to manufacture windows and doors are produced at Alutions. Alutions operates its own smelter plant, which supplies more than 90% of its aluminum consumption and has a capacity of 1,000 tons of aluminum per month.

 

Industry

 

According to Global Construction 2020 by Global Construction Perspectives and Oxford Economics, the global construction industry is expected to grow from an estimated $7.2 trillion (or 13% of global GDP) currently to over $10 trillion (15% of global GDP) by 2020. The Company generated approximately 70% of its 2012 revenues from the Latin American construction market which is estimated to be $550 billion with an annual growth rate of 6% as of 2012 (KHL Group, 2012). The U.S. construction market, which represented approximately 30% of the Company’s 2012 revenues, is estimated at $830 billion with a projected annual growth rate of 6% as of 2012 KHL Group, 2012). The U.S. window and doors market is estimated at $21 billion in 2012 and is projected to grow at a rate of 9% per year through 2016 (The Freedonia Group Inc., 2012). The Company hopes to capitalize on the significant growth opportunities due to extreme weather conditions in the impact-resistant window and door industry in the Southeast U.S., including Florida.

 

Competitive Strengths

 

Vertical Integration

 

The Company believes it is unique in vertically integrating the purchasing of raw materials, the manufacture of glass and aluminum products and the subsequent production of customized glass and windows for architectural and industrial settings. By vertically integrating these functions, the Company is able to price its products competitively while maintaining strict quality control measures to guarantee the high quality of its products.

 

Innovation

 

The Company has made significant investments in machinery and equipment to ensure it is using the latest technology on its production lines. In 2012, the Company made approximately $27 million in capital investments to expand its manufacturing capacity and to update its machinery. For certain of the Company’s products, it offers DuPont Sentryglas® laminated glass interlayers which are recognized as industry-leading laminated glass solutions with five times the resistance strength of other materials available on the market. The Company also uses a laminator and jumbo temperer, with which it can produce large-sized laminates which are sought after in the high-end window market. These investments in machinery and equipment, together with the Company’s rigorously trained labor force, allow it to offer state-of-the-art custom designed products quickly modified to meet customer demands. The Company has a staff of specialists dedicated to product design in order to meet its customer’s specifications.

 

Location

 

The Company’s headquarters and manufacturing campus located in Barranquilla, Colombia is strategically located near three major ports in Barranquilla, Cartagena and Santa Maria. These ports, which are only two hours’ drive from each other, provide the Company with sea access to all major markets throughout the world.

 

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Products

 

Tecnoglass offers the following products:

 

Glass Products  Description
    

Laminated /
Thermo-
Laminated

  Produced by bonding two glass sheets with an intermediate film between.
As a safety feature, this product fractures into small pieces if it breaks.
    
Thermo-Acoustic  Manufactured with two or more glass sheets separated by an aluminum or micro-perforated steel profile. Has a double-seal system that ensures the unit’s tightness, buffering noise and improving thermal control.  Serves as an excellent noise barrier, which is used especially in zones close to airports, traffic or wherever there are unpleasant sounds.
    
Tempered  Glass subject to a tempering process through elevated temperatures resulting in greater superficial elasticity and resistance than conventional glass.
    
Silk-Screened  Special paint is applied to glass using automatic machinery and numerical control which ensures paint homogeneity and an excellent finish.
    
Curved  Produced by bending a flat glass sheet over a mold, using an automated heat process, which maintains the glass’ physical properties.
    
Digital Print  Digital printing allows any kind of appearance required by the client, offering versatility to projects.

 

 

ES offers the following products: windows, floating facades, commercial display windows, hurricane-proof windows, automatic doors and bathroom dividers.

 

The Company’s aluminum products include bars, plates, profiles, rods and tubes.

 

Customers

 

The Company has over 300 customers primarily located in North, Central and South America. The Company estimates that 80 to 85% of its glass and aluminum sales are to the architectural market and 15 to 20% of its sales are to the industrial market. Excluding intercompany revenue, no customer accounted for 10% or more of the Company’s net sales during 2011 and 2012.

 

Suppliers

 

The Company sources product from a variety of domestic and foreign suppliers ensuring a stable pipeline for the raw materials and glass necessary to manufacture its products. The Company’s main supplier of glass is PPG Industries located in Pittsburgh, one of the world’s leading producers of glass products. The Company’s main suppliers of aluminum are Danostro S.A.S., a Colombian firm, and Mitsubishi International Corporation.

 

12
 

 

Government Regulations

 

The Company is subject to extensive and varied federal, state and local government regulation in the jurisdictions in which it operates, including laws and regulations relating to its relationships with its employees, public health and safety and fire codes. Additionally, certain of the jurisdictions in which the Company operates require that installation of doors and windows be approved by competent authorities that grant distribution licenses.

 

Legal Proceedings

 

Tecnoglass and its U.S. subsidiary, Tecnoglass USA, Inc., are being sued for wrongful death, negligence and negligent infliction of emotional distress arising out of a workplace accident where a crate of glass fell and fatally crushed a worker during the unloading process. The falling crate also injured his son who claims personal and emotional injuries. The widow and minor children also have claims. Tecnoglass denies liability. Because the plaintiff is suing for non-economic damages (purely pain and suffering and loss of enjoyment of husband/father), the total maximum exposure is difficult to predict. The Company’s insurance carrier, AIG, is providing coverage to the Company under a $3 million wasting policy, meaning the attorneys’ fees and expenses incurred during the defense of the claim reduce the amount of coverage available. The case is scheduled for trial beginning in February 2014.

 

Competitors

 

The Company has local competitors in Colombia as well as competitors in the markets it sells to abroad, in each of the glass, aluminum and finished products categories. Glass Technologia en Vidrios y Ventanas S.A., Arquicentro S.A., Industrias Lehner and Aluminum Estructural S.A. compete with the Company locally in the finished products market. Apogee Enterprises, Inc., PGT, Inc. and WinDoor Inc. compete with the Company in the U.S. in the finished products market. Golden Glass Security, Vid-plex Universal S.A., Aluace Ltda and Laminados y Blindados compete with the Company locally in the glass and aluminum markets. Oldcastle, Inc., Trulite Inc., and PRL Glass Systems among others compete with the Company in the U.S. in the glass and aluminum products markets.

 

Property/Facilities

 

The Company operates a 1.2 million square foot manufacturing complex located in Barranquilla, Colombia. The Company’s glass production plant, aluminum plant and window and façade assembly plant are all located on these premises. The Company’s glass plant has four lamination machines with independent assembly rooms; six specialized tempering furnaces and glass molding furnaces; a computer numerical controlled profile bending machine; as well as five silk-screening machines. The Company’s aluminum plant has an effective installed capacity of 1,000 tons per month and can create a variety of shapes and forms for the door and window industries. The smelter furnace at the aluminum plant provides 90% of the raw materials used in aluminum production. The Company also owns three natural gas power generation plants with a capacity of 1750 kilowatts each which supply the electric requirements of its entire industrial complex and are supported by three emergency generators. In the Company’s efforts to promote sustainability development, 30% of all of its waste is recycled.

 

Employees

 

The Company currently has approximately 2,700 employees and an additional 300 installers. Most operating personnel of the Company are hired through seven temporary staffing companies and are employed under one-year fixed-term employment contracts. The Company believes it has good relations with its employees and provides ongoing training programs to its employees through its self-established E.S. Windows University. Colombian law requires companies to pay transportation subsidy or provide transportation to employees, both of which are provided by the Company to its employees.

 

13
 

 

Item 9.01Financial Statements, Pro Forma Financial Information and Exhibits.

 

 

(d) Exhibits:  

 

Exhibit Description
2.1 Agreement and Plan of Reorganization, dated as of August 17, 2013, by and among Andina Acquisition Corporation, Andina Merger Sub, Inc., Tecnoglass S.A. and C.I. Energia Solar S.A. E.S. Windows.*
10.1 Form of Indemnity Escrow Agreement among Andina Acquisition Corporation, the Committee (as described in the Agreement and Plan of Reorganization), the Representative (as defined in the Agreement and Plan of Reorganization), and Continental Stock Transfer & Trust Company, as Escrow Agent.
10.2 Form of Additional Shares Escrow Agreement among Andina Acquisition Corporation, the Committee (as described in the Agreement and Plan of Reorganization), the Representative (as defined in the Agreement and Plan of Reorganization), and Continental Stock Transfer & Trust Company, as Escrow Agent.
10.3 Form of Lock-Up Agreement.
10.4 Form of Amended and Restated Registration Rights Agreement between Andina Acquisition Corporation and certain Investors.
99.1 Press release dated August 17, 2013.
99.2 Press release dated August 19, 2013
99.3 Investor Presentation.

 

 

 

* Certain exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(b)(2). Andina agrees to furnish supplementally a copy of all omitted exhibits and schedules to the Securities and Exchange Commission upon its request.

 

 

14
 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Dated: August 22, 2013

 

  ANDINA ACQUISITION CORPORATION
     
  By: /s/ B. Luke Weil
    Name: B. Luke Weil
    Title:Chief Executive Officer

 

15

 

 

AGREEMENT AND PLAN OF REORGANIZATION

 

BY AND AMONG

 

ANDINA ACQUISITION CORPORATION,

 

ANDINA MERGER SUB, INC.,

 

TECNOGLASS S.A.

 

AND

 

C.I. ENERGIA SOLAR S.A. E.S. WINDOWS

 

DATED AS OF AUGUST 17, 2013

 

 
 

 

TABLE OF CONTENTS

 

  Page
   
ARTICLE I. THE MERGER 4
   
1.1. The Merger. 4
1.2. Effective Time; Closing. 5
1.3. Effect of the Merger. 5
1.4. Governing Documents; Officers and Directors 5
1.5. Merger Consideration; Effect on Share Capital. 5
1.6. Exchange Procedures. 9
1.7. No Distributions Until Surrender of Company Certificates. 10
1.8. Lost, Stolen or Destroyed Certificates 10
1.9. Taking of Necessary Action; Further Action 10
1.10. Escrow 11
1.11. Committee 11
1.12. Shares Subject to Appraisal Rights 11
1.13. Treatment of the Company Derivative Securities 12
1.14. EBITDA/Ordinary Share Price Shares 12
1.15. Sale Restriction 13
   
ARTICLE II. REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY 13
   
2.1. Organization and Qualification. 14
2.2. Subsidiaries. 15
2.3. Capitalization. 16
2.4. Authority Relative to this Agreement 17
2.5. No Conflict; Required Filings and Consents. 17
2.6. Compliance 18
2.7. Financial Statements. 19
2.8. No Undisclosed Liabilities. 20
2.9. Absence of Certain Changes or Events 20
2.10. Litigation. 20
2.11. Employee Benefit Plans. 20
2.12. Labor Matters. 21
2.13. Restrictions on Business Activities. 22
2.14. Title to Property. 22
2.15. Taxes 23
2.16. Environmental Matters. 24
2.17. Brokers; Third Party Expenses 24
2.18. Intellectual Property. 24
2.19. Agreements, Contracts and Commitments. 25
2.20. Insurance 27
2.21. Governmental Actions/Filings 27
2.22. Affiliate Transactions 27
2.23. Board Approval. 27
2.24. No Illegal or Improper Transactions 28
2.25. United States Assets and Sales 28
   
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB 28
   
3.1. Organization and Qualification. 28
3.2. Subsidiaries and Other Interests. 29
3.3. Capitalization. 30

 

 
 

 

3.4. Authority Relative to this Agreement. 31
3.5. No Conflict; Required Filings and Consents. 31
3.6. Compliance. 32
3.7. SEC Filings; Financial Statements. 32
3.8. No Undisclosed Liabilities 33
3.9. Absence of Certain Changes or Events 34
3.10. Litigation. 34
3.11. Employee Benefit Plans 34
3.12. Labor Matters 34
3.13. Business Activities 34
3.14. Title to Property 34
3.15. Taxes. 34
3.16. Environmental Matters 35
3.17. Brokers 36
3.18. Intellectual Property 36
3.19. Agreements, Contracts and Commitments. 36
3.20. Insurance. 36
3.21. Affiliate Transactions 36
3.22. Indebtedness. 36
3.23. Listing of Securities 36
3.24. Board Approval. 37
3.25. Trust Fund 37
3.26. Governmental Filings. 37
3.27. Investment Company Act. 37
   
ARTICLE IV. CONDUCT PRIOR TO THE EFFECTIVE TIME 37
   
4.1. Conduct of Business 37
4.2. Company Negative Covenants 38
4.3. Parent Negative Covenants 40
   
ARTICLE V. ADDITIONAL AGREEMENTS 43
   
5.1. Proxy Statement; Special Meeting. 43
5.2. HSR Act 44
5.3. Other Actions. 44
5.4. Required Information. 45
5.5. Confidentiality; Access to Information. 46
5.6. Commercially Reasonable Efforts 47
5.7. No Parent Ordinary Shares Transactions. 47
5.8. No Claim Against Trust Fund. 47
5.9. Disclosure of Certain Matters 48
5.10. Securities Listing. 48
5.11. Further Actions.. 48
5.12. No Solicitation 48
5.13. Liability Insurance. 49
5.14. Insider Loans. 49
5.15. Access to Financial Information. 49
5.16. Parent Borrowings. 49
5.17. Trust Fund Disbursement. 50
5.18. Employment Agreements. 50
5.19. Option Plan 50
   
ARTICLE VI. CONDITIONS TO THE TRANSACTION 50
   
6.1. Conditions to Obligations of Each Party to Effect the Merger 50
6.2. Additional Conditions to Obligations of the Company. 50
6.3. Additional Conditions to the Obligations of Parent 53

 

2
 

 

ARTICLE VII. INDEMNIFICATION 54
   
7.1. Indemnification. 54
7.2. Indemnification of Third Party Claims. 55
7.3. Insurance Effect 57
7.4. Limitations on Indemnification. 57
7.5. Exclusive Remedy. 58
7.6. Adjustment to Merger Consideration 58
7.7. Representative Capacities; Application of Escrow Shares 59
7.8. Mitigation 59
7.9. No Consequential Damages 59
   
ARTICLE VIII. TERMINATION 59
   
8.1. Termination. 59
8.2. Notice of Termination; Effect of Termination 61
8.3. Fees and Expenses 61
   
ARTICLE IX. DEFINED TERMS 61
   
9.1. Defined Terms 61
9.2. Glossary of Other Defined Terms 66
   
ARTICLE X. GENERAL PROVISIONS 70
   
10.1. Notices 70
10.2. Interpretation 71
10.3. Counterparts; Facsimile Signatures 71
10.4. Entire Agreement; Third Party Beneficiaries 72
10.5. Severability 72
10.6. Other Remedies; Specific Performance 72
10.7. Governing Law 72
10.8. Rules of Construction 72
10.9. Assignment 73
10.10. Amendment 73
10.11. Extension; Waiver 73
10.12. Submission to Jurisdiction; Waivers; Consent to Service of Process. 73
10.13. WAIVER OF JURY TRIAL 74
10.14. Currency 74

 

3
 

 

AGREEMENT AND PLAN OF REORGANIZATION 

 

THIS AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of August 17, 2013, by and among Andina Acquisition Corporation, a Cayman Islands exempted company (“Parent”), Andina Merger Sub, Inc., a Cayman Islands exempted company and wholly owned subsidiary of Parent (“Merger Sub”), Tecnoglass S.A., a Colombian company (“Tecnoglass”) and C.I. Energia Solar S.A. E.S. Windows, a Colombian company (“ES”, and together with Tecnoglass, the “Company”).

 

RECITALS

 

A.           Upon the terms and subject to the conditions of this Agreement and in accordance with the Companies Law (2012 Revision) of the Cayman Islands (the “Companies Law”) and other applicable law, Parent and the Company intend to enter into a business combination transaction by means of a merger of Merger Sub with and into the Company, with the Company being the surviving entity and becoming a wholly owned subsidiary of Parent (the “Merger”).

 

B.           The board of directors of each of Parent and the Company has determined that the Merger is fair to, and in the best interests of, its respective company and shareholders.

 

C.           Following the execution of this Agreement (but in any event prior to the Closing Date), each of Tecnoglass and ES shall affect a corporate reorganization (the “Reorganization”) pursuant to which each shareholder of Tecnoglass and/or ES shall cease being shareholders of Tecnoglass and/or ES and shall become holders of equity interests in a newly formed entity that will own, directly or indirectly, 100% of the outstanding equity interests of Tecnoglass and ES and all such references to the Company contained herein shall be deemed to refer to such newly formed entity, as applicable, and to include all assets, property, rights, privileges, powers, permits, approvals and franchises of Tecnoglass and ES.

 

D.           Defined terms used in this Agreement are listed alphabetically in Article IX, together with the Section and, if applicable, paragraph number in which the definition of each such term is located.

 

NOW, THEREFORE, in consideration of the covenants, promises and representations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I.
THE MERGER

 

1.1.          The Merger. At the Effective Time and subject to and upon the terms and conditions of this Agreement and the applicable provisions of the Companies Law, Merger Sub shall be merged with and into the Company, the separate corporate existence of Merger Sub shall cease and the Company shall continue as the surviving corporation in the Merger (“Surviving Corp”).

 

4
 

 

1.2.        Effective Time; Closing. Subject to the terms and conditions of this Agreement, as soon as practicable on or after the Closing Date, the parties hereto shall cause the Merger to be consummated by filing a plan of merger (the “Plan of Merger”) with the Cayman Islands Registrar of Companies in accordance with the applicable provisions of the Companies Law (the time of such filing, or such later time as may be agreed in writing by the Company and Parent and specified in the Plan of Merger being the “Effective Time”). Unless this Agreement shall have been terminated pursuant to Section 8.1, the consummation of the transactions contemplated by this Agreement (the “Closing”), other than the filing of the Plan of Merger, shall take place at the offices of Graubard Miller, counsel to Parent, 405 Lexington Avenue, New York, New York 10174 at a time and date to be specified by the parties, which shall be no later than the third (3rd) business day after the satisfaction or waiver of the conditions set forth in Article VI, or at such other time, date and location as the parties hereto agree in writing (the “Closing Date”). Closing signatures may be transmitted by facsimile or by emailed PDF file.

 

1.3.        Effect of the Merger. At the Effective Time, the effect of the Merger shall be as provided in this Agreement and the applicable provisions of the Companies Law and other applicable provisions of law (collectively, the “Applicable Law”). Without limiting the generality of the foregoing, and subject thereto, at the Effective Time, (i) all the property, rights, privileges, powers and franchises of the Merger Sub and the Company shall vest in Surviving Corp, and all debts, liabilities and duties of the Merger Sub and the Company shall become the debts, liabilities and duties of Surviving Corp. and (ii) the share capital of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one (1) fully paid and validly issued ordinary share of the Surviving Corp.

 

1.4.        Governing Documents; Officers and Directors. At the Effective Time, (i) the Memorandum and Articles of Association of the Parent and the Surviving Corp shall be in the forms annexed hereto as Exhibits A and B, respectively, (ii) the board of directors of Parent shall consist of the directors identified on Schedule 1.4 hereto and set forth in the Proxy Statement, (iii) the officers of the Parent from and after the Effective Time shall consist of the officers identified on Schedule 1.4 hereto and (iv) the directors and officers of the Surviving Corp. shall consist of the officers and directors identified on Schedule 1.4 hereto.

 

1.5.        Merger Consideration; Effect on Share Capital.

 

(a)          Merger Consideration. The aggregate consideration to be paid to the holders of ordinary shares of the Company (“Company Ordinary Shares”) issued and outstanding immediately prior to the Effective Time in exchange for the cancellation of their ordinary shares and their rights as such holders (the “Merger Consideration”), subject to adjustment as provided for in Sections 1.5(c) and 1.5(d), is:

 

(i)          17,525,000 ordinary shares, par value $0.0001, of Parent (“Parent Ordinary Shares”) to be issued at the Closing; and

 

(ii)         3,000,000 Parent Ordinary Shares to be issued in accordance with Section 1.14.

 

5
 

 

Schedule 1.5(a) sets forth fully diluted ownership examples of the Company’s shareholders at various given times.

 

(b)          Conversion of Company Ordinary Shares. Subject to the terms and conditions of this Agreement, at the Effective Time, by virtue of the Merger and this Agreement and without any action on the part of Parent or the Company, each Company Ordinary Share issued and outstanding immediately prior to the Effective Time will be canceled and the rights pertaining thereto will be automatically converted (subject to Sections 1.5(f) and 1.5(g)) into the following portions of the Merger Consideration:

 

(i)          the number of Parent Ordinary Shares equal to (A) 17,525,000 divided by (B) the Outstanding Company Ordinary Shares Number; plus

 

(ii)         the right to receive that number of additional Parent Ordinary Shares pursuant to Section 1.14 equal to (A) the number of additional Parent Ordinary Shares released upon satisfaction of any target set forth in Section 1.14 divided by (B) the Outstanding Company Ordinary Shares Number.

 

(iii)        The number of Parent Ordinary Shares issued at Closing and rights to receive additional Parent Ordinary Shares pursuant to Section 1.14 that would otherwise be issuable pursuant to this Section 1.5(b) to Persons who hold Dissenting Shares and exercise their dissenters’ rights pursuant to Applicable Law shall not be issued to such Persons and shall be canceled.

 

(iv)        Immediately following the conversion contemplated by this Section 1.5(b), 100% of the outstanding Company Ordinary Shares, as the Surviving Corp, shall be issued to the Parent.

 

(c)          LTM Adjusted EBITDA and Adjustments of Parent Ordinary Shares.

 

(i)          If the Company’s LTM Adjusted EBITDA as of June 30, 2013 (“Actual LTM EBITDA Amount”), as determined in accordance with this Agreement, is greater than or less than the Estimated LTM EBITDA Amount, the aggregate number of Parent Ordinary Shares to be issued at Closing shall be increased or decreased, as the case may be, by an amount equal to a fraction the numerator of which is the product of (A) the LTM EBITDA Variance and (B) 9.0, and the denominator of which is $10.18. The Company shall deliver to Parent and Parent’s auditors a written statement of the Actual LTM EBITDA Amount by August 30, 2013, which shall (1) provide such detailed information as may be reasonably requested by the Parent prior to such date with respect to the Actual LTM EBITDA Amount, (2) be derived utilizing generally accepted accounting principles, consistent with the Company’s historical practice and (3) be certified as being true and complete by an executive officer of the Company.

 

6
 

 

(ii)         If Parent disagrees with the Actual LTM EBITDA Amount or the LTM EBITDA Variance, it shall notify the Company of such disagreement in writing specifying in reasonable detail any and all items of disagreement (each, an “Item of Dispute”) within ten (10) calendar days after its receipt of the written statement of the Actual LTM EBITDA Amount. Parent and the Company shall use their commercially reasonable best efforts for a period of ten (10) calendar days after the Parent’s delivery of such notice (or such longer period as Parent and Company may mutually agree upon) to resolve any Items of Dispute raised by Parent. If, at the end of such period, Parent and Company do not resolve any such Item of Dispute, either party may submit the matter to a mutually acceptable independent accounting firm of recognized national standing to review and resolve the Item of Dispute. In the event Parent and the Company cannot agree upon an accounting firm within five (5) days after notice from a party to the other party, they shall choose an accounting firm by lot from those accounting firms of recognized national standing practicing in the State of New York having no material relationship to Parent, the Company or their respective Affiliates and having offices in locations suitable to conduct such review (the accounting firm selected in accordance with the preceding two sentences is referred to herein as the “Accounting Firm”). Parent and the Company shall request that the Accounting Firm render a determination on each Item of Dispute, solely based on whether such Item of Dispute was prepared accurately and in accordance with U.S. GAAP and consistent with past practice. The determination by the Accounting Firm shall be final, binding and conclusive on the parties. Parent and the Company shall make their respective submissions to the Accounting Firm within ten (10) business days after selecting such firm pursuant to this Section 1.5(c). Parent and the Company shall use their commercially reasonable best efforts to cause the Accounting Firm to make its determination within fifteen (15) calendar days after accepting its selection. All of the fees and expenses of the Accounting Firm shall be borne by Parent and the Company in equal amounts.

 

(iii)        All currency conversions made in connection with the determination of the Actual LTM EBITDA Amount or the LTM EBITDA Variance shall be done on a twelve (12) month trailing average basis.

 

(d)          Net Debt, Working Capital and Adjustments of Parent Ordinary Shares

 

(i)          As soon as practicable after the Closing, but not later than seventy five (75) days after the Closing, Parent shall deliver to the Representative a statement (the “Closing Net Debt/Working Capital Statement”) showing, in reasonable detail, the calculation of the Company’s Actual Net Debt Amount and Actual Working Capital Amount as of the Closing. Such Closing Net Debt/Working Capital Statement shall be derived utilizing generally accepted accounting principles consistent with the Company’s historical practice and be certified as being true and complete by the Parent’s independent registered public accounting firm. Such Net Debt/Working Capital Statement shall be final and binding on the parties.

 

7
 

 

(ii)         If the Company’s Adjusted Net Debt at Closing (“Actual Net Debt Amount”), as determined in accordance with this Agreement, is greater than approximately $65.0 million (“Estimated Net Debt Amount”), the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time shall surrender (pro rata) to Parent for cancellation such number of Parent Ordinary Shares equal to the Net Debt Overage divided by $10.18. If the Actual Net Debt Amount, as determined in accordance with this Agreement, is less than the Estimated Net Debt Amount, Parent shall issue and cause to be delivered to the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time (pro rata) such additional number of Parent Ordinary Shares equal to the Net Debt Underage divided by $10.18.

 

(iii)        If the Company’s Normalized Working Capital at Closing (“Actual Working Capital Amount”), as determined in accordance with this Agreement, is less than $48.3 million (“Estimated Working Capital Amount”), the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time shall, at the Company’s option, deliver (pro rata) to Parent an amount of cash equal to the Working Capital Shortfall or surrender (pro rata) to Parent for cancellation such number of Parent Ordinary Shares equal to the Working Capital Shortfall divided by $10.18. If the Actual Working Capital Amount, as determined in accordance with this Agreement, is greater than the Estimated Working Capital Amount, Parent shall issue and cause to be delivered to the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time (pro rata) such additional number of Parent Ordinary Shares equal to the Working Capital Excess divided by $10.18; provided, however, that if the Actual Working Capital Amount, as determined in accordance with this Agreement, exceeds the Estimated Working Capital Amount by $5,000,000, at the Company’s sole option, the Company shall be permitted to distribute such amount of cash in excess to its shareholders in lieu of receipt of such additional number of Parent Ordinary Shares equal to such amount in excess of $5,000,000.

 

(iv)        Notwithstanding anything herein to the contrary, any downward adjustment of Parent Ordinary Shares to be issued in the transaction pursuant to Section 1.5(d) shall serve to reduce the Escrow Shares and that any such reduction shall be limited to the number of Escrow Shares actually remaining in the Escrow Account.

 

(e)          Exceptions. The conversion contemplated by Section 1.5(b) shall not apply to or occur with respect to any Company Ordinary Shares to be canceled pursuant to Section 1.5(g) or the Dissenting Shares.

 

(f)          Surrender of Company Certificates. Subject to Section 1.10, the Merger Consideration shall be issued or paid to the holders of certificates representing the Company Ordinary Shares (the “Company Certificates”) upon surrender of their respective Company Certificates in the manner provided in Section 1.5 (or in the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit (and indemnity, if required) in the manner provided in Section 1.8, or in the case of an uncertificated share, by delivery of a copy of the register of members of the Company indicating such holder as entitled to the shares).

 

8
 

  

(g)          Cancellation of Treasury and Parent-Owned Shares. Each Company Ordinary Share held by Parent or owned by the Company or any direct or indirect wholly owned subsidiary of Parent or the Company immediately prior to the Effective Time shall be canceled and extinguished without any conversion or payment in respect thereof.

 

(h)          Adjustments to Exchange Ratios. The number of Parent Ordinary Shares that the holders of Company Ordinary Shares are entitled to receive as a result of the Merger shall be equitably adjusted to reflect appropriately the effect of any share split, reverse share split, share dividend (including any dividend or distribution of securities convertible into Company Ordinary Shares or Parent Ordinary Shares), cash dividends, reorganization, recapitalization, reclassification, combination, exchange of shares or other like change with respect to the Company Ordinary Shares or Parent Ordinary Shares occurring on or after the date hereof and prior to the Effective Time.

 

(i)          No Fractional Shares. No fraction of a share of Parent Ordinary Shares will be issued by virtue of the Merger or the transactions contemplated hereby, and each Person who would otherwise be entitled to a fraction of a share of Parent Ordinary Shares (after aggregating all fractional Parent Ordinary Shares that otherwise would be received by such holder) shall receive, in lieu of such fractional share, one (1) Parent Ordinary Share.

 

(j)          No Further Ownership Rights in Company Shares. All the Parent Ordinary Shares issued to the holders of Company Ordinary Shares upon consummation of the Merger or, in the case of the additional Parent Ordinary Shares that may be issued pursuant to Section 1.14, thereafter delivered, shall be deemed to have been issued in full satisfaction of all rights pertaining to the outstanding Company Ordinary Shares and there shall be no further registration of transfers on the records of Surviving Corp of the Company Ordinary Shares that were outstanding immediately prior to the Effective Time.

 

1.6.        Exchange Procedures.

 

(a)          Prior to the Effective Time, Parent shall appoint a reputable bank or trust company designated by Parent and reasonably satisfactory to the Company to act as exchange agent (the “Exchange Agent”) for the issuance of the Merger Consideration to be issued in the Merger pursuant to an exchange agent agreement in form and substance mutually agreeable to Parent and the Company (the “Exchange Agent Agreement”). It is hereby acknowledged and agreed by the Company that Continental Stock Transfer & Trust Company (“Continental”) is acceptable as Exchange Agent.

 

9
 

 

(b)          Prior to the Effective Time, the Exchange Agent and Parent shall deliver to each holder of Company Ordinary Shares a letter of transmittal (“Letter of Transmittal”) in customary form (and any instructions related thereto) with respect to the surrender and delivery by each such holder of his, her or its Company Certificates (or in the case of a lost, stolen or destroyed certificate, upon delivery of an affidavit (and indemnity, if required) in the manner provided in Section 1.8, or in the case of an uncertificated share, by delivery of a copy of the register of members of the Company indicating such holder as entitled to the shares) in exchange for Parent Ordinary Shares and right to receive additional Parent Ordinary Shares as contemplated by Section 1.5. Upon delivery to the Exchange Agent of a validly executed and delivered Letter of Transmittal, the Exchange Agent shall issue to the corresponding recipient the number of Parent Ordinary Shares (less the applicable Escrow Shares), and the Company Certificates shall forthwith be cancelled. Until so surrendered, outstanding Company Certificates will be deemed, from and after the Effective Time, to evidence only the right to receive the applicable Parent Ordinary Shares pursuant to Section 1.5. Separate certificates shall be issued for each recipient’s Escrow Shares and for the balance of the Parent Ordinary Shares to which such recipient is entitled.

 

(c)          If payment is to be made to a recipient other than the Person in whose name a surrendered Company Certificate is registered, it shall be a condition of payment that the Company Certificate so surrendered must be properly endorsed or otherwise be in proper form for transfer, and the Person who surrenders the Company Certificate must provide funds for payment of any transfer or other Taxes required by reason of the payment to a Person other than the registered holder of the surrendered Company Certificate or establish to the satisfaction of Parent that the Tax has been paid or is not applicable.

 

1.7.        No Distributions Until Surrender of Company Certificates. No dividends or other distributions declared or made after the date of this Agreement with respect to Parent Ordinary Shares with a record date after the Effective Time will be paid to the holders of any Company Certificates that have not yet been surrendered with respect to the Parent Ordinary Shares to be issued upon surrender thereof until the holders of record of such Company Certificates shall surrender such certificates. Subject to Applicable Law, following surrender of any such Company Certificates, Parent shall promptly deliver to the record holders thereof, without interest, the certificates representing the Parent Ordinary Shares issued in exchange therefor and the amount of any such dividends or other distributions with a record date after the Effective Time theretofore paid with respect to such Parent Ordinary Shares.

 

1.8.        Lost, Stolen or Destroyed Certificates. In the event that any Company Certificates shall have been lost, stolen or destroyed, Parent shall issue in exchange for such lost, stolen or destroyed Company Certificates, upon the making of an affidavit of that fact by the holder thereof, the certificates representing the Parent Ordinary Shares that the Company Ordinary Shares formerly represented by such Company Certificates were converted into and any dividends or distributions payable pursuant to Section 1.7; provided, however, that, as a condition precedent to the issuance of such certificates representing Parent Ordinary Shares and other distributions, the owner of such lost, stolen or destroyed Company Certificates shall indemnify Parent against any claim that may be made against Parent or Surviving Corp with respect to the Company Certificates alleged to have been lost, stolen or destroyed.

 

1.9.        Taking of Necessary Action; Further Action. If, at any time after the Effective Time, any further action is necessary or desirable to carry out the purposes of this Agreement and to vest Surviving Corp with full right, title and possession to all assets, property, rights, privileges, powers and franchises of the Company, the then current officers and directors of Parent and Merger Sub and the officers and directors of the Company shall take all such lawful and necessary action.

 

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1.10.      Escrow. As the sole remedy for the indemnification obligations set forth in Article VII of this Agreement, and for downward adjustments (if any) pursuant to Section 1.5(d) to the number of Parent Ordinary Shares issued hereunder, 890,000 of the Parent Ordinary Shares to be issued in the Merger (the “Escrow Shares”) shall be deposited in escrow (the “Indemnity Escrow Account”), which shall be allocated among the recipients in the same proportion as their proportionate share of the total Company Ordinary Shares outstanding immediately prior to the Effective Time, all in accordance with the terms and conditions of the escrow agreement to be entered into at the Closing between Parent, the Representative, the Committee and Continental (or such other Person as may be agreed by Parent and the Representative), as escrow agent (“Escrow Agent”), substantially in the form of Exhibit C-1 hereto (the “Indemnity Escrow Agreement”). The Indemnity Escrow Agreement shall provide that on the earlier of (A) the 30th day after the date Parent has filed with the SEC its Annual Report for the year ending February 28, 2015 or (B) June 30, 2015 (the “Escrow Release Date”), the Escrow Agent shall release all Escrow Shares then remaining in escrow, less (i) 300,000 Escrow Shares (the “Litigation Escrow Shares”), (ii) that portion of the Escrow Shares applied in satisfaction of any downward adjustments made to the Merger Consideration provided for in Section 1.5(d) above and (iii) that portion of the Escrow Shares applied or reserved with respect to Escrow Claims. Any Escrow Shares that continue to be held after the Escrow Release Date with respect to any unresolved Escrow Claim shall be delivered to the recipients in the same proportions as originally deposited into escrow, promptly upon such resolution, subject to reduction, if any, for the indemnification obligation associated with such resolved Escrow Claim. The Litigation Escrow Shares shall not be released until final resolution of the litigation listed in Schedule 2.8.

 

1.11.      Committee. Prior to the Closing, the Board of Directors of Parent shall appoint a committee (the “Committee”) consisting of one or more of its then members to act on behalf of Parent to take all necessary actions and make all decisions pursuant to the Escrow Agreements. In the event of a vacancy in such committee, the board of directors of Parent shall appoint as a successor a Person who was a director of Parent prior to the Closing Date or, in the event of an inability to appoint same, another Person who would qualify as an “independent” director of Parent and who has not had any material relationship with the Company prior to the Closing. Such committee is intended to be the “Committee” referred to in Article VII and the Escrow Agreements.

 

1.12.      Shares Subject to Appraisal Rights. Notwithstanding Section 1.5 hereof, Dissenting Shares shall not be converted into a right to receive Merger Consideration. The holders thereof shall be entitled only to such rights as are granted by the Companies Law. Each holder of Dissenting Shares who becomes entitled to payment for his Dissenting Shares pursuant to the Companies Law shall receive payment therefor from Surviving Corp in accordance with the Companies Law, provided, however, that (i) if any shareholder of the Company who asserts dissenter rights in connection with the Merger (a “Dissenter”) shall have failed to establish his entitlement to such rights as provided in the Companies Law, or (ii) if any such Dissenter shall have effectively withdrawn his demand for payment for his Dissenting Shares or waived or lost his right to payment for his Dissenting Shares under the appraisal rights process under the Companies Law, the Company Ordinary Shares held by such Dissenter shall be treated as if they had been converted, as of the Effective Time, into a right to receive Merger Consideration as provided in Section 1.5. The Company shall give Parent prompt notice of any demands for payment received by the Company from a person asserting dissenter rights, and Parent shall have the right to participate in all negotiations and proceedings with respect to such demands. The Company shall not, except in accordance with the Companies Law and with the prior written consent of Parent which consent shall not be unreasonably withheld, conditioned or delayed, make any payment with respect to, or settle or offer to settle, any such demands or negotiate or enter into any agreement with respect to any demands for payment received by the Company from a person asserting dissenter rights.

 

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1.13.      Treatment of the Company Derivative Securities. The Company shall arrange that the holders of all outstanding Company Options and other Company Derivative Securities shall exercise or exchange such securities prior to the Effective Time without the payment of any consideration therefor by the Company other than the issuance of Company Ordinary Shares. Such exercise or exchange may be made contingent upon the occurrence of the Closing.

 

1.14.      EBITDA/Ordinary Share Price Shares. On the Closing Date, Parent shall issue an aggregate of 3,000,000 Parent Ordinary Shares to be held in escrow in accordance with the terms and conditions of the escrow agreement to be entered into at the Closing between Parent, the Representative, the Committee and the Escrow Agent, substantially in the form of Exhibit C-2 annexed hereto (the “Additional Share Escrow Agreement”, and together with the Indemnity Escrow Agreement, the “Escrow Agreements”) and the following:

 

(a)          If (1) Future EBITDA for the fiscal year of Parent ending February 28, 2014 equals or exceeds $36.0 million or (2) Parent’s Ordinary Shares have traded at $12.00 or above for 20 trading days during a 30-consecutive trading day period during the fiscal year of Parent ending February 28, 2014, Parent shall cause the Escrow Agent, in accordance with the Additional Share Escrow Agreement, to release to the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time, in the aggregate, 500,000 Parent Ordinary Shares.

 

(b)          If Future EBITDA for the fiscal year of Parent ending February 28, 2014 is less than $36.0 million but exceeds $30.0 million, then Parent shall cause the Escrow Agent, in accordance with the Additional Share Escrow Agreement, to release to the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time a pro rata number of Parent Ordinary Shares equal to an amount determined by taking 500,000 Parent Ordinary Shares and multiplying it by a fraction the numerator of which is the Future EBITDA for this period and the denominator of which is $36.0 million.

 

(c)          If (1) Future EBITDA for the fiscal year of Parent ending February 28, 2015 equals or exceeds $40.0 million or (2) Parent’s Ordinary Shares have traded at $13.00 or above for 20 trading days during a 30-consecutive trading day period during the fiscal year of Parent ending February 28, 2015, Parent shall cause the Escrow Agent, in accordance with the Additional Share Escrow Agreement, to release to the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time, in the aggregate, 1,000,000 Parent Ordinary Shares.

 

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(d)          If Future EBITDA for the fiscal year of Parent ending February 28, 2015 is less than $40.0 million but exceeds $35.0 million, then Parent shall cause the Escrow Agent, in accordance with the Additional Share Escrow Agreement, to release to the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time a pro rata number of Parent Ordinary Shares equal to an amount determined by taking 1,000,000 Parent Ordinary Shares and multiplying it by a fraction the numerator of which is the Future EBITDA for this period and the denominator of which is $40.0 million.

 

(e)          If (1) Future EBITDA for the fiscal year of Parent ending February 29, 2016 equals or exceeds $45.0 million or (2) Parent’s Ordinary Shares have traded at $15.00 or above for 20 trading days during a 30-consecutive trading day period during the fiscal year of Parent ending February 29, 2016, Parent shall cause the Escrow Agent, in accordance with the Additional Share Escrow Agreement, to release to the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time, in the aggregate, 1,500,000 Parent Ordinary Shares.

 

(f)          If Future EBITDA for the fiscal year of Parent ending February 29, 2016 is less than $45.0 million but exceeds $40.0 million, then Parent shall cause the Escrow Agent, in accordance with the Additional Share Escrow Agreement, to release to the holders of Company Ordinary Shares outstanding immediately prior to the Effective Time a pro rata number of Parent Ordinary Shares equal to an amount determined by taking 1,500,000 Parent Ordinary Shares and multiplying it by a fraction the numerator of which is the Future EBITDA for this period and the denominator of which is $45.0 million.

 

(g)          In the event that Parent fails to satisfy an Earnout Target but subsequently satisfies another Earnout Target, in addition to Parent causing the Escrow Agent to deliver the applicable number of Parent Ordinary Shares as a result of Parent satisfying such subsequent Earnout Target, Parent shall also cause the Escrow Agent to deliver any shares not previously delivered to the holders of Company Ordinary Shares as a result of Parent’s initial failure to satisfy such prior Earnout Target.

 

1.15.      Sale Restriction. Each of the Parent Ordinary Shares issued to holders of Company Ordinary Shares as part of the Merger Consideration shall be subject to certain transfer restrictions, in accordance with the terms of the Lock-Up Agreement (the “Lock-Up Agreement”) in the form of Exhibit D annexed hereto to be executed and delivered to Parent by the holders of the Company Ordinary Shares. Certificates representing Parent Ordinary Shares issued as a result of the Merger shall bear a prominent legend to such effect.

 

ARTICLE II.
REPRESENTATIONS AND WARRANTIES REGARDING THE COMPANY        

 

Subject to the exceptions set forth in Schedule 2 attached hereto (the “Company Disclosure Schedule”), the Company hereby represents and warrants to Parent as follows:

 

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2.1.        Organization and Qualification.

 

(a)          Tecnoglass is a corporation duly incorporated, validly existing and in good standing under the laws of the Republic of Colombia and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted, ES is a corporation duly incorporated, validly existing and in good standing under the laws of the Republic of Colombia and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted, and the Company will be a corporation duly incorporated, validly existing and in good standing under the laws of the Cayman Islands and will have the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted by Tecnoglass and ES.

 

(b)          The Company is in possession of all franchises, grants, authorizations, licenses, permits, easements, consents, certificates, approvals and orders (“Approvals”) necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole. Complete and correct copies of the memorandum and articles of association or certificate of incorporation and bylaws (or other comparable governing instruments with different names) (collectively referred to herein as “Charter Documents”) of the Company, as amended and currently in effect, have been heretofore made available to Parent or Parent’s counsel. The Company is not in violation of any of the provisions of the Company’s Charter Documents.

 

(c)          The Company is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole. Each jurisdiction in which the Company is so qualified or licensed is listed in Schedule 2.1.

 

(d)          Except as set forth on Schedule 2.1, the minute books of the Company contain true, complete and accurate records of all written minutes for meetings and written consents in lieu of meetings of its Board of Directors (and any committees thereof), similar governing bodies and shareholders (“Corporate Records”) since the time of the Company’s incorporation. Copies of such Corporate Records of the Company have been made available to Parent or Parent’s counsel.

 

(e)          Except as set forth on Schedule 2.1, the share capital transfer, warrant and option transfer and ownership records of the Company contain true, complete and accurate records of the securities ownership as of the date of such records and the transfers involving the share capital and other securities of the Company since the time of the Company’s incorporation. Copies of such records of the Company have been made available to Parent or Parent’s counsel.

 

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2.2.        Subsidiaries.

 

(a)          The Company has no direct or indirect subsidiaries or participations in joint ventures or other entities other than those listed in Schedule 2.2 hereto (the “Subsidiaries”). Except as set forth in Schedule 2.2 hereto, the Company owns, directly or indirectly, all of the outstanding equity securities of the Subsidiaries, free and clear of all Liens other than Permitted Liens. Except for the Subsidiaries, the Company does not own, directly or indirectly, any ownership, equity, profits or voting interest in any Person or has any agreement or commitment to purchase any such interest, and has not agreed and is not obligated to make nor is bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature, as of the date hereof or as may hereafter be in effect under which it may become obligated to make, any future investment in or capital contribution to any other entity.

 

(b)          Each Subsidiary that is a corporation is duly incorporated, validly existing and in good standing under the laws of its jurisdiction of incorporation (as listed in Schedule 2.2) and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. Each Subsidiary that is a limited liability company is duly organized or formed, validly existing and in good standing under the laws of its state of organization or formation (as listed in Schedule 2.2) and has the requisite power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being conducted. Each Subsidiary is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole. Complete and correct copies of the Charter Documents of each Subsidiary, as amended and currently in effect, have been heretofore delivered to Parent or Parent’s counsel. No Subsidiary is in violation of any of the provisions of its Charter Documents.

 

(c)          Each Subsidiary is duly qualified or licensed to do business as a foreign corporation or foreign limited liability company and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole. Each jurisdiction in which each Subsidiary is so qualified or licensed is listed in Schedule 2.2.

 

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(d)          Except as set forth on Schedule 2.2, the minute books of each Subsidiary contain true, complete and accurate records of all written minutes for meetings and written consents in lieu of meetings of its Board of Directors (and any committees thereof), similar governing bodies and shareholders. Copies of the Corporate Records of each Subsidiary have been heretofore made available to Parent or Parent’s counsel.

 

2.3.        Capitalization.

 

(a)          The authorized capital of Tecnoglass consists of 20,000,000 shares, of which 15,392,681 shares are issued and outstanding as of the date of this Agreement, all of which shares are validly issued, fully paid and nonassessable. The authorized capital of ES consists of 18,500,000 shares, of which 14,385,661 shares are issued and outstanding as of the date of this Agreement, all of which shares are validly issued, fully paid and nonassessable. Immediately prior to the Effective Time, the only Company Ordinary Shares that will be issued and outstanding will be those issued to the holders of the 15,392,681 shares of Tecnoglass and 14,385,661 shares of ES issued and outstanding as of the date hereof which will be issued to such holders upon the Reorganization, all of which shares will be validly issued, fully paid and nonassessable. Other than Company Ordinary Shares, the Company has no class or series of securities authorized by its Charter Documents. Schedule 2.3(a) hereto contains a list of all of the shareholders of the Company, the number of Company Ordinary Shares owned, or to be owned at the time of the Closing, by each shareholder and each shareholder’s state or province of residence. Except as set forth in Schedule 2.3(a) hereto, as of the date of this Agreement, no Company Ordinary Shares are reserved for issuance upon the exercise of outstanding options to purchase Company Ordinary Shares granted to employees of Company or other parties (“Company Options”). Except as set forth in Schedule 2.3(a) hereto, no Company Ordinary Shares are reserved for issuance upon the exercise of outstanding warrants or other rights or derivative securities (other than Company Options) to purchase Company Ordinary Shares (“Company Derivative Securities”). All Company Ordinary Shares subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. There are no commitments or agreements of any character to which the Company is bound obligating the Company to accelerate the vesting of any Company Option as a result of the Merger. All outstanding Company Ordinary Shares and all outstanding Company Options have been issued and granted in compliance with (x) all applicable securities laws and (in all material respects) other Applicable Laws and regulations, and (y) all requirements set forth in any applicable Material Company Contracts. The Company has heretofore delivered to Parent or Parent’s counsel true and accurate copies of the forms of documents used for the issuance of Company Options and a true and complete list of the holders thereof, including their names and the numbers of Company Ordinary Shares underlying such holders’ Company Options.

 

(b)          Except as set forth in Schedule 2.3(b) hereto or as described in Section 2.3(a) hereof, there are no subscriptions, options, warrants, equity securities, partnership interests or similar ownership interests, calls, rights (including preemptive rights), commitments or agreements of any character to which the Company is a party or by which it is bound obligating the Company to issue, deliver or sell, or cause to be issued, delivered or sold, or repurchase, redeem or otherwise acquire, or cause the repurchase, redemption or acquisition of, any share capital, partnership interests or similar ownership interests of the Company or obligating the Company to grant, extend, accelerate the vesting of or enter into any such subscription, option, warrant, equity security, call, right, commitment or agreement.

 

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(c)          Except as contemplated by this Agreement and except as set forth in Schedule 2.3(c) hereto, there are no registration rights, and there is no voting trust, proxy, rights plan, antitakeover plan or other agreement or understanding to which the Company is a party or by which the Company is bound with respect to any equity security of any class of the Company.

 

(d)          Except as set forth in Schedule 2.3(d) hereto, no outstanding Company Ordinary Shares are unvested or subjected to a repurchase option, risk of forfeiture or other condition under any applicable agreement with the Company.

 

(e)          The authorized and outstanding share capital or membership interests of each Subsidiary are set forth in Schedule 2.3(e) hereto. Except as set forth in Schedule 2.3(e) hereto, the Company owns all of the outstanding equity securities of each Subsidiary, free and clear of all Liens other than Permitted Liens, either directly or indirectly through one or more other Subsidiaries. There are no outstanding options, warrants or other rights to purchase securities of any Subsidiary.

 

2.4.        Authority Relative to this Agreement. The Company has all necessary corporate power and authority to execute and deliver this Agreement and to perform its obligations hereunder and, to consummate the transactions contemplated hereby (including the Merger). The execution and delivery of this Agreement and the consummation by the Company of the transactions contemplated hereby (including the Merger) have been duly and validly authorized by all necessary corporate action on the part of the Company (including the approval by its Board of Directors, subject in all cases to the satisfaction of the terms and conditions of this Agreement, including the conditions set forth in Article VI but excluding the Written Consent, which is being delivered simultaneously with the execution and delivery hereof), and no other corporate proceedings on the part of the Company are necessary (other than the Written Consent) to authorize this Agreement or to consummate the transactions contemplated hereby pursuant to Applicable Law and the terms and conditions of this Agreement. This Agreement has been duly and validly executed and delivered by the Company and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes the legal and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity. The action by written consent of the shareholders of the Company (the “Written Consent”) to approve and adopt this Agreement and the transactions contemplated hereby is the only consent or approval by, or vote of, the holders of any class or series of share capital of the Company necessary for the Company to adopt this Agreement and the transactions contemplated hereby.

 

2.5.        No Conflict; Required Filings and Consents. Except as set forth in Schedule 2.5 hereto:

 

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(a)          The execution and delivery of this Agreement by the Company does not, and the performance of this Agreement by the Company shall not, (i) conflict with or violate the Company’s Charter Documents, (ii) subject to obtaining the adoption of this Agreement and the Merger by the shareholders of the Company, conflict with or violate any Legal Requirements, (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair the Company’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any of the properties or assets of the Company pursuant to, any Material Company Contracts or (iv) result in the triggering, acceleration or increase of any payment to any Person pursuant to any Material Company Contract, including any “change in control” or similar provision of any Material Company Contract, except, with respect to clauses (ii), (iii) or (iv), for any such conflicts, violations, breaches, defaults, triggerings, accelerations, increases or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.

 

(b)          The execution and delivery of this Agreement by the Company does not, and the performance of its obligations hereunder will not, require any Approval from, or filing with or notification to, any Governmental Entity or other third party (including, without limitation, lenders and lessors), except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act or Blue Sky Laws, and the rules and regulations thereunder, and appropriate documents received from or filed with the relevant authorities of other jurisdictions in which the Company is licensed or qualified to do business, (ii) the Approvals described in Schedule 2.5 hereto, and (iii) where the failure to obtain such Approvals, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole or, after the Closing, Parent or the Surviving Corp, or prevent consummation of the Merger or otherwise prevent the parties hereto from performing their obligations under this Agreement.

 

2.6.        Compliance. Except as disclosed in Schedule 2.6 hereto, during the five (5) year period prior to the date hereof, the Company has complied with and is not in violation of any Legal Requirements with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole. The Company is not in default or violation of any term, condition or provision of any applicable Charter Documents. Except as set forth in Schedule 2.6 hereto, during the five (5) year period prior to the date of the Closing no written notice of non-compliance with any Legal Requirements has been received by the Company (and the Company has no Knowledge of any such notice delivered to any other Person). The Company is not in violation of any term of any Company Contract, except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.

 

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2.7.        Financial Statements.

 

(a)          The Company has provided to Parent a correct and complete copy of the audited consolidated financial statements (including any related notes thereto) of the Company for the fiscal years ended December 31, 2012 and December 31, 2011 (the “Audited Financial Statements”). The Audited Financial Statements were prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto), and each fairly presents in all material respects the financial position of the Company at the respective dates thereof and the results of its operations and cash flows for the periods indicated.

 

(b)          The Company has provided to Parent a correct and complete copy of the unaudited consolidated financial statements of the Company for the six month period ended June 30, 2013 (including any notes related thereto) (the “Unaudited Financial Statements”). The Unaudited Financial Statements comply as to form in all material respects, and were prepared in accordance with U.S. GAAP applied on a consistent basis throughout the period involved and in a manner consistent with the preparation of the Audited Financial Statements, and fairly present in all material respects the financial position of the Company at the date thereof and the results of its operations and cash flows for the period indicated, except that such statements are subject to normal audit adjustments that are not expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole and do not include all footnotes.

 

(c)          Except as set forth in Schedule 2.7 hereto, the books of account, minute books, share certificate books and share transfer ledgers and other similar books and records of the Company have been maintained in accordance with good business practice, are complete and correct in all material respects and there have been no material transactions that are required to be set forth therein and which have not been so set forth.

 

(d)          Except as otherwise noted in the Audited Financial Statements or the Unaudited Financial Statements, the accounts and notes receivable of the Company reflected on the balance sheets included in the Audited Financial Statements and the Unaudited Financial Statements: (i) arose from bona fide sales transactions in the ordinary course of business and are payable on ordinary trade terms, (ii) are legal, valid and binding obligations of the respective debtors enforceable in accordance with their terms, except as such may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting creditors’ rights generally, and by general equitable principles, (iii) are not subject to any valid set-off or counterclaim except to the extent set forth in such balance sheet contained therein other than possible back charges which to the Company’s knowledge do not exist at this time, which back charges, to the Company’s knowledge, either individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect upon the Company and its Subsidiaries taken as a whole, (iv) are collectible in the ordinary course of business consistent with past practice in the aggregate recorded amounts thereof, net of any applicable reserve reflected in such balance sheet referenced above, and (v) are not the subject of any actions or proceedings brought by or on behalf of the Company.

 

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2.8.        No Undisclosed Liabilities. Except as set forth in Schedule 2.8 hereto, the Company and its Subsidiaries have no liabilities (absolute, accrued, contingent or otherwise) of a nature required to be disclosed on a balance sheet or in the related notes to financial statements that are, individually or in the aggregate, material to the business, results of operations or financial condition of the Company and its Subsidiaries, except: (i) liabilities provided for in, reserved against or otherwise disclosed in the interim balance sheet included in the Unaudited Financial Statements, (ii) such liabilities arising in the ordinary course of the Company’s business since June 30, 2013, none of which, individually or in the aggregate, would have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole or (iii) liabilities incurred in connection with the transactions contemplated by this Agreement.

 

2.9.        Absence of Certain Changes or Events. Except as set forth in Schedule 2.9 hereto, between June 30, 2013 and the date of this Agreement, there has not been: (i) any Material Adverse Effect on the Company and its Subsidiaries taken as a whole or (ii) any circumstance, action or activity which, if taken by the Company and its Subsidiaries after the date hereof, would require the consent of Parent under Section 4.2.

 

2.10.      Litigation. Except as disclosed in Schedule 2.10 hereto, there are no claims, suits, actions or proceedings pending or, to the Knowledge of the Company, threatened against the Company or any of its Subsidiaries before any Governmental Entity.

 

2.11.      Employee Benefit Plans.

 

(a)          Schedule 2.11(a) lists all employee compensation, incentive, fringe or benefit plans, programs, policies, commitments or other arrangements (whether or not set forth in a written document) covering any active or former employee, director or consultant of the Company or any of its Subsidiaries, with respect to which the Company has liability (individually, a “Plan,” and, collectively, the “Plans”). All Plans have been maintained and administered in all material respects in compliance with their respective terms and with the requirements prescribed by any and all Applicable Law, and all liabilities with respect to the Plans have been properly reflected in the financial statements and records of the Company or any of its Subsidiaries. No suit, action or other litigation (excluding claims for benefits incurred in the ordinary course of Plan activities) has been brought, or, to the Knowledge of the Company, is threatened, against or with respect to any Plan. There are no audits, inquiries or proceedings pending or, to the Knowledge of the Company, threatened by any Governmental Entity with respect to any Plan. To the Knowledge of the Company, all contributions, reserves or premium payments required to be made or accrued as of the date hereof to the Plans have been timely made or accrued.

 

(b)          Except as disclosed in Schedule 2.11(b) hereto, neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any shareholder, director or employee of the Company and its Subsidiaries under any Plan or otherwise, (ii) materially increase any benefits otherwise payable under any Plan, or (iii) result in the acceleration of the time of payment or vesting of any such benefits.

 

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2.12.      Labor Matters.

 

(a)          Except as set forth on Schedule 2.12, the Company and its Subsidiaries are not a party to any collective bargaining agreement or other labor union contract applicable to persons employed by the Company and its Subsidiaries nor, to the Company’s Knowledge, are there any activities or proceedings of any labor union to organize any such employees. There are no pending grievance or similar proceedings involving the Company and its Subsidiaries and any of its employees subject to a collective bargaining agreement or other labor union contract.

 

(b)          Except as provided for in the collective bargaining agreements and labor union contracts set forth on Schedule 2.12, (i) each employee and consultant of the Company and its Subsidiaries is terminable “at will” subject to applicable notice periods as set forth by law or in an employment agreement, but in any event not more than ninety (90) days, and (ii) there are no agreements or understandings between the Company and its Subsidiaries and any of their employees or consultants that their employment or services will be for any particular period. To the Knowledge of the Company none of its officers or key employees intends to terminate his or her employment with the Company or any of its Subsidiaries. The Company and any of its Subsidiaries are in compliance in all material respects and, to the Knowledge of the Company, each of the Company’s and its Subsidiaries’ employees and consultants is in compliance in all material respects, with the terms of the respective employment and consulting agreements between the Company or its Subsidiaries and such individuals. Except as otherwise disclosed in Schedule 2.12, there are not, and there have not been, any oral or informal arrangements, commitments or promises between the Company or its Subsidiaries and any employees or consultants of the Company or its Subsidiaries that have not been documented as part of the formal written agreements between any such individuals and the Company or its Subsidiaries that have been made available to Parent.

 

(c)          The Company and its Subsidiaries are in compliance in all material respects with all Legal Requirements applicable to its employees, respecting employment, employment practices, terms and conditions of employment and wages and hours and is not liable for any arrears of wages or penalties with respect thereto. The Company’s and its Subsidiaries’ obligations to provide statutory severance pay to their employees are fully funded or accrued on the Unaudited Financial Statements and to the Knowledge of the Company there are no circumstances that could give rise to any valid claim by a current or former employee for compensation on termination of employment (beyond the statutory severance pay to which employees are entitled). All amounts that the Company is legally or contractually required either (x) to deduct from its employees’ salaries or to transfer to such employees’ pension or life insurance, incapacity insurance, continuing education fund or other similar funds or (y) to withhold from its employees’ salaries and benefits and to pay to any Governmental Entity as required by applicable Legal Requirements have, in each case, been duly deducted, transferred, withheld and paid, and the Company and its Subsidiaries do not have any outstanding obligation to make any such deduction, transfer, withholding or payment. Except as set forth in Schedule 2.12, there are no pending, or to the Knowledge of the Company, threatened or reasonably anticipated claims or actions against the Company or any of its Subsidiaries by any employee in connection with such employee’s employment or termination of employment by the Company or any of its Subsidiaries.

 

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(d)          No employee or former employee of the Company or any of its Subsidiaries is owed any wages, benefits or other compensation for past services (other than wages, benefits and compensation accrued in the ordinary course of business during the current pay period and any accrued benefits for services, which by their terms or under applicable law, are payable in the future, such as accrued vacation, recreation leave and severance pay).

 

2.13.      Restrictions on Business Activities. Except as disclosed in Schedule 2.13 hereto, there is no agreement, commitment, judgment, injunction, order or decree binding upon the Company or its Subsidiaries or their assets or to which the Company or its Subsidiaries is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of the Company or its Subsidiaries, any acquisition of property by the Company or its Subsidiaries or the conduct of business by the Company or its Subsidiaries as currently conducted other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.

 

2.14.      Title to Property.

 

(a)          All real property owned by the Company and its Subsidiaries is listed on Schedule 2.14(a) hereto. The Company and its Subsidiaries have good, valid and marketable fee simple title to the real property respectively owned by each such entity, and except as set forth in the Audited Financial Statements or on Schedule 2.14(a) hereto, all of such real property is held free and clear of (i) all leases, licenses and other rights to occupy or use such real property and (ii) all Liens, rights of way, easements, restrictions, exceptions, variances, reservations, covenants or other title defects or limitations of any kind, other than Permitted Liens. Schedule 2.14(a) hereto also contains a list of all options or other contracts under which the Company and its Subsidiaries have a right to acquire or the obligation to sell any interest in real property.

 

(b)          Schedule 2.14(b) hereto contains a list of all leases of real property held by the Company and its Subsidiaries. All leases pursuant to which the Company and/or its Subsidiaries lease from others material real property are valid and effective in accordance with their respective terms, and there is not, under any of such leases, any existing material default or event of default of the Company or its Subsidiaries or, to the Company’s Knowledge, any other party (or any event which with notice or lapse of time, or both, would constitute a material default), except where the lack of such validity and effectiveness or the existence of such default or event of default could not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.

 

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(c)          The Company and its Subsidiaries are in possession of, or have valid and effective rights to, all material properties, assets and rights (including Intellectual Property) required, in all material respects for the effective conduct of its business, as it is currently operated, in the ordinary course, free and clear of all Liens, except for Liens disclosed in the Audited Financial Statements, Permitted Liens or in Schedule 2.14(c) hereto.

 

2.15.      Taxes. Except as set forth in Schedule 2.15 hereto:

 

(i)          The Company and its Subsidiaries have timely filed all Tax Returns required to be filed by the Company or its Subsidiaries with any Tax authority prior to the date hereof, except such Tax Returns that are not material to the Company or its Subsidiaries. All such Tax Returns are true, correct and complete in all material respects. The Company and its Subsidiaries have paid all Taxes shown to be due and payable on such Tax Returns.

 

(ii)         All Taxes that the Company and its Subsidiaries are required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to the proper governmental authorities to the extent due and payable.

 

(iii)        The Company and its Subsidiaries have not been delinquent in the payment of any material Tax nor is there any material Tax deficiency outstanding, proposed or assessed against the Company or its Subsidiaries, nor have the Company or its Subsidiaries executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax. The Company and its Subsidiaries have complied with all Legal Requirements with respect to payments made to third parties and the withholding of any payment of withheld Taxes and has timely withheld from employee wages and other payments and timely paid over in full to the proper taxing authorities all amounts required to be so withheld and paid over for all periods.

 

(iv)        To the Knowledge of the Company, no audit or other examination of any Tax Return of the Company and its Subsidiaries by any Tax authority is presently in progress, nor has the Company or any Subsidiary been notified of any request for such an audit or other examination.

 

(v)         No adjustment relating to any Tax Returns filed by the Company or any Subsidiary has been proposed in writing, formally or informally, by any Tax authority to the Company or any Subsidiary or any representative thereof.

 

(vi)        The Company and its Subsidiaries have no liability for any unpaid Taxes which have not been accrued for or reserved on the Company’s balance sheets included in the Audited Financial Statements or the Unaudited Financial Statements, whether asserted or unasserted, contingent or otherwise, other than any liability for unpaid Taxes that may have accrued since the end of the most recent fiscal year in connection with the operation of the business of the Company in the ordinary course of business.

 

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2.16.      Environmental Matters.

 

(a)          Except as disclosed in Schedule 2.16(a) hereto and except for such matters that, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole: (i) the Company and/or its Subsidiaries have complied with all applicable Environmental Laws for the past five (5) years; (ii) the properties currently operated or being constructed by the Company or its Subsidiaries (including soils, groundwater, surface water, air, buildings or other structures), including properties owned or leased by third parties upon which the Company and/or its Subsidiaries have performed or are performing services or other operations, are not contaminated with any Hazardous Substances as a result of the actions or omissions of the Company and its Subsidiaries; (iii) the properties formerly owned, operated or constructed by the Company and/or its Subsidiaries, including properties owned or leased by third parties upon which the Company and/or its Subsidiaries performed services or other operations, were not contaminated with Hazardous Substances by the Company and/or its Subsidiaries during the period of ownership, operation or construction by the Company or its Subsidiaries or, to the Company’s Knowledge, during any prior period; (iv) the Company and/or its Subsidiaries are not subject to liability for any Hazardous Substance disposal or contamination on any third party or public property (whether above, on or below ground or in the atmosphere or water); (vi) neither the Company nor its Subsidiaries have received any notice, demand, letter, claim or request for information alleging that the Company and/or its Subsidiaries may be in violation of or liable under any Environmental Law; and (vii) the Company and/or its Subsidiaries are not subject to any orders, decrees, injunctions or other arrangements with any Governmental Entity or subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances.

 

(b)          Schedule 2.16(b) sets forth all environmental studies and investigations completed within the last five (5) years or in process with respect to the Company and/or its Subsidiaries or their respective properties, assets or operation. All such written reports and material documentation relating to any such study or investigation have been made available to Parent.

 

2.17.      Brokers; Third Party Expenses. Except as set forth in Schedule 2.17 hereto, the Company has not incurred, nor will it incur, directly or indirectly, any liability for brokerage fees, investment banking fees, finders’ fees, agent’s commissions or any similar charges in connection with this Agreement or any transactions contemplated hereby. Except as disclosed in Schedule 2.17 hereto or as contemplated by this Agreement, no ordinary shares, options, warrants or other securities are payable to any third party as a result of this Merger pursuant to any agreement which the Company, or any shareholder of the Company, is a party.

 

2.18.      Intellectual Property.

 

(a)          Schedule 2.18 hereto contains a description of all material Registered Intellectual Property of the Company and its Subsidiaries.

 

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(b)          Except as disclosed in Schedule 2.18 hereto, no Company Intellectual Property is subject to any material proceeding or outstanding decree, order, judgment, contract, license, agreement or stipulation restricting in any manner the use, transfer or licensing thereof by the Company or any of its Subsidiaries, or which may affect the validity, use or enforceability of such Company Intellectual Property, which in any such case could reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.

 

(c)          Except as disclosed in Schedule 2.18 hereto, the Company and its Subsidiaries own and have good and exclusive title to each material item of Company Intellectual Property owned by them free and clear of any Liens (excluding non-exclusive licenses and related restrictions granted by it in the ordinary course of business and Permitted Liens); and the Company and its Subsidiaries are the exclusive owners of all material registered Trademarks and Copyrights used in connection with the operation or conduct of the business of the Company and its Subsidiaries including the sale of any products or the provision of any services by the Company and its Subsidiaries.

 

(d)          The operation of the business of the Company and its Subsidiaries as such business currently is conducted, including the Company’s and its Subsidiaries’ use of any product, device or process, does not infringe or misappropriate the Intellectual Property of any third party or constitute unfair competition or trade practices under the laws of any jurisdiction in any material respect and the Company and its Subsidiaries have not received any claims or to the Knowledge of the Company, threats from third parties alleging any such infringement, misappropriation or unfair competition or trade practices.

 

2.19.      Agreements, Contracts and Commitments.

 

(a)          Schedule 2.19 hereto sets forth a complete and accurate list of the following Contracts to which the Company or any of its Subsidiaries is a party or by which any of them is bound (each, a “Material Company Contract” and collectively, the Material Company Contracts”):

 

(i)          any Contract providing for payments (present or future) to the Company or any of its Subsidiaries in excess of $1,000,000 in the aggregate;

 

(ii)         any Contract under or in respect of which the Company or any of its Subsidiaries presently have any liability or obligation of any nature whatsoever (absolute, contingent or otherwise) in excess of $500,000 in the aggregate;

 

(iii)        any Contract for or relating to any borrowing of money by or from the Company or any of its Subsidiaries and by or to any officer, director, employee or shareholder of the Company or any of its Subsidiaries (“Insider”);

 

(iv)        any Contract for or relating to any borrowing of money from an Insider by the Company;

 

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(v)         any guaranty, direct or indirect, by the Company, a Subsidiary or any Insider of the Company of any obligation for borrowings, or otherwise, excluding endorsements made for collection in the ordinary course of business;

 

(vi)        any Contract of employment or management;

 

(vii)       any Contract made other than in the ordinary course of business or (x) providing for the grant of any preferential rights to purchase or lease any asset of the Company or any of its Subsidiaries or (y) providing for any right (exclusive or non-exclusive) to sell or distribute, or otherwise relating to the sale or distribution of, any product or service of the Company or any of its Subsidiaries;

 

(viii)      any Contract providing for the obligation to register any share capital or other securities of the Company or any of its Subsidiaries with any Governmental Entity;

 

(ix)         any Contract providing for the obligation to make payments, contingent or otherwise, arising out of the prior acquisition of the business, assets or shares of other Persons;

 

(x)          any collective bargaining agreement with any labor union;

 

(xi)         any lease or similar arrangement for the use by the Company or any of its Subsidiaries of real property or personal property where the annual lease payments are greater than $100,000 (other than any lease of vehicles, office equipment or operating equipment made in the ordinary course of business);

 

(xii)        any Contract granting or purporting to grant, or otherwise in any way relating to, any mineral rights or any other interest (including, without limitation, a leasehold interest) in real property; and

 

(xiii)       any Contract to which any Insider of the Company or any of its Subsidiaries, or any entity owned or controlled by an Insider, is a party.

 

(b)          Each Material Company Contract was entered into in the ordinary course, is in full force and effect and, to the Company’s Knowledge, is valid and binding upon and enforceable against each of the parties thereto, except insofar as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally or by principles governing the availability of equitable remedies. True, correct and complete copies of all Material Company Contracts (or written summaries in the case of oral Material Company Contracts) have been made available to Parent or Parent’s counsel.

 

(c)          Except as set forth in Schedule 2.19, neither the Company nor, to the best of the Company’s Knowledge, any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Material Company Contract, and no party to any Material Company Contract has given any written notice of any claim of any such breach, default or event, which, individually or in the aggregate, are reasonably likely to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.

 

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2.20.      Insurance. Schedule 2.20 sets forth the Company’s and its Subsidiaries’ insurance policies and fidelity and surety bonds covering the assets, business, equipment, properties, operations, employees, officers and directors (collectively, the “Insurance Policies”). The insurances provided by such Insurance Policies are adequate in amount and scope for the Company’s and its Subsidiaries’ business and operations, including any insurance required to be maintained by Company Contracts.

 

2.21.      Governmental Actions/Filings. The Company and its Subsidiaries have been granted and hold, and have made, all Governmental Actions/Filings necessary to the conduct by the Company and its Subsidiaries of their business (as presently conducted and as presently proposed to be conducted) or used or held for use by the Company and its Subsidiaries except for any thereof that if not granted, held or made, would not have, individually or in the aggregate, a Material Adverse Effect upon the Company and its Subsidiaries taken as a whole. Each such Governmental Action/Filing is in full force and effect and will be renewed in the ordinary course of the Company’s business and the Company and its Subsidiaries are in substantial compliance with all of their obligations with respect thereto. No event has occurred and is continuing which requires or permits, or after notice or lapse of time or both would require or permit, and consummation of the transactions contemplated by this Agreement or any ancillary documents will not require or permit (with or without notice or lapse of time, or both), any modification or termination of any such Governmental Actions/Filings except such events which, either individually or in the aggregate, would not have a Material Adverse Effect upon the Company or any of its Subsidiaries taken as a whole. No Governmental Action/Filing is necessary to be obtained, secured or made by the Company or any of its Subsidiaries to enable any of them to continue to conduct its business and operations and use its properties after the Closing in a manner that is consistent with current practice except for any of such that, if not obtained, secured or made, would not, either individually or in the aggregate, have a Material Adverse Effect upon the Company or any of its Subsidiaries taken as a whole.

 

2.22.      Affiliate Transactions. Except as set forth in Schedule 2.22 hereto, to the Knowledge of the Company, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of the Company or any of its Subsidiaries, (iii) for other employee benefits made generally available to all employees or (iv) with respect to any Person’s ownership of membership interests, share capital or other securities of the Company or any of its Subsidiaries or such Person’s employment with the Company or any of its Subsidiaries, there are no Contracts under which there are any material existing or future liabilities or obligations between the Company or any of its Subsidiaries, on the one hand, and, on the other hand, any present or former Insider of either the Company or any of its Subsidiaries or a member of his or her immediate family (each a “Company Affiliate Transaction”).

 

2.23.      Board Approval. The board of directors of the Company (including any required committee or subgroup thereof) has, as of the date of this Agreement, duly approved this Agreement and the transactions contemplated hereby.

 

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2.24.      No Illegal or Improper Transactions. Since January 1, 2008, neither the Company nor any of its Subsidiaries nor any officer, director, employee, agent or Affiliate of the Company or its Subsidiaries on its behalf has offered, paid or agreed to pay to any person or entity (including any governmental official) or solicited, received or agreed to receive from any such person or entity, directly or indirectly, any money or anything of value for the purpose or with the intent of (a) obtaining or maintaining business for the Company or any of its Subsidiaries, (b) facilitating the purchase or sale of any product or service, or (c) avoiding the imposition of any fine or penalty, in any manner which is in violation of Applicable Law, the effect of which, individually or in the aggregate, would reasonably be expected have a Material Adverse Effect upon the Company or any of its Subsidiaries taken as a whole. To the Company’s Knowledge, no employee of the Company or any of its Subsidiaries has provided or is providing information to any law enforcement agency regarding the commission or possible commission of any crime or the violation or possible violation of any Applicable Law by the Company or its Subsidiaries.

 

2.25.      United States Assets and Sales. The Company (including all entities controlled by it) does not hold assets located in the United States having an aggregate total value in excess of $70.9 million and, in the fiscal year ended December 31, 2012, did not make sales in or into the United States of over $70.9 million.

 

ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB    

 

Subject to the exceptions set forth in Schedule 3 attached hereto (the “Parent Disclosure Schedule”), Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:

 

3.1.        Organization and Qualification.

 

(a)          Parent is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Parent to be conducted. Parent is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being or currently planned by Parent to be conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent. Complete and correct copies of the Charter Documents of Parent, as amended and currently in effect, have been heretofore delivered to the Company or the Company’s counsel. Parent is not in violation of any of the provisions of Parent’s Charter Documents.

 

(b)          Parent is duly qualified or licensed to do business as a foreign corporation and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent.

 

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3.2.        Subsidiaries and Other Interests.

 

(a)          Parent has no subsidiaries, except for Merger Sub. Except for Merger Sub, Parent does not own, directly or indirectly, any ownership, equity, profits or voting interest in any Person or have any agreement or commitment to purchase any such interest, and Parent has not agreed and is not obligated to make nor is bound by any written, oral or other agreement, contract, subcontract, lease, binding understanding, instrument, note, option, warranty, purchase order, license, sublicense, insurance policy, benefit plan, commitment or undertaking of any nature, as of the date hereof or as may hereafter be in effect under which it may become obligated to make, any future investment in or capital contribution to any other entity.

 

(b)          Except for Merger Sub, Parent does not own directly or indirectly any interest or investment (whether equity or debt) in any corporation, partnership, joint venture, business, trust or other entity (other than investments in short term investment securities).

 

(c)          Merger Sub is an exempted company duly incorporated, validly existing and in good standing under the laws of the Cayman Islands and has the requisite corporate power and authority to own, lease and operate its assets and properties and to carry on its business as it is now being or currently planned by Merger Sub to be conducted. Merger Sub is in possession of all Approvals necessary to own, lease and operate the properties it purports to own, operate or lease and to carry on its business as it is now being or currently planned by Merger Sub to be conducted, except where the failure to have such Approvals could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Merger Sub. Complete and correct copies of the Charter Documents of the Merger Sub, as amended and currently in effect, have been heretofore delivered to the Company or the Company’s counsel. Merger Sub is not in violation of any of the provisions of its Charter Documents.

 

(d)          Merger Sub is duly qualified or licensed to do business as a foreign corporation or foreign limited liability company and is in good standing in each jurisdiction where the character of the properties owned, leased or operated by it or the nature of its activities makes such qualification or licensing necessary, except for such failures to be so duly qualified or licensed and in good standing that could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Merger Sub. Each jurisdiction in which each the Merger Sub is so qualified or licensed is listed in Schedule 3.2.

 

(e)          Merger Sub does not have any assets or properties of any kind, does not now conduct and has never conducted any business, and has and will have at the Closing no obligations or liabilities of any nature whatsoever, except for such obligations as are imposed under this Agreement

 

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3.3.        Capitalization.

 

(a)          As of the date of this Agreement, the authorized share capital of Parent consists of 100,000,000 Parent Ordinary Shares and 1,000,000 preferred shares, par value $0.0001 per share (“Parent Preferred Shares”), of which 5,250,000 Parent Ordinary Shares and no Parent Preferred Shares are issued and outstanding. Except as set forth in Schedule 3.3(a), all of such securities are validly issued, fully paid and nonassessable and free of preemptive rights or rights of first refusal created by statute, the Charter Documents of Parent or any agreement to which Parent is a party or by which it is bound, and free of any Liens other than Permitted Liens or under applicable federal or state securities or “blue sky” laws. Except as set forth in Schedule 3.3(a), Parent has no outstanding bonds, debentures, notes or other obligations the holders of which have or upon the happening of certain events would have the right to vote (or which are convertible into or exercisable or exchangeable for securities having the right to vote) with the shareholders of Parent on any matter.

 

(b)          Except as set forth in Schedule 3.3(b), there are no existing options, warrants, calls, subscriptions, convertible securities, or other rights, agreements, share appreciation rights or similar derivative securities or instruments or commitments which obligate Parent to issue, transfer or sell any Parent Ordinary Shares or Parent Preferred Shares or make any payments in lieu thereof. Other than as set forth in Schedule 3.3(b), there are no agreements or understandings to which Parent is a party with respect to the voting of any Parent Ordinary Shares or Parent Preferred Shares or which restrict the transfer of any such shares, nor does Parent have Knowledge of any such agreements or understandings with respect to the voting of any such shares or which restrict the transfer of any such shares. Other than as set forth in Schedule 3.3(b), there are no outstanding contractual obligations of Parent to repurchase, redeem or otherwise acquire any Parent Ordinary Shares or any other securities of Parent. Other than as set forth in Schedule 3.3(b), no Parent Ordinary Shares or Parent Preferred Shares are reserved for issuance upon the exercise of outstanding options to purchase Parent Ordinary Shares or Parent Preferred Shares granted to employees of Parent or other parties (“Parent Options”) and there are no outstanding Parent Options. Other than as set forth in Schedule 3.3(b), no Parent Ordinary Shares or Parent Preferred Shares are reserved for issuance upon the exercise of outstanding warrants to purchase Parent Ordinary Shares or Parent Preferred Shares (“Parent Warrants”). Other than as set forth in Schedule 3.3(b), no Parent Ordinary Shares or Parent Preferred Shares are reserved for issuance upon the conversion of the Parent Preferred Shares or any outstanding convertible notes, debentures or securities (“Parent Convertible Securities”). All Parent Ordinary Shares and Parent Preferred Shares subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instrument pursuant to which they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. All outstanding Parent Ordinary Shares and all outstanding Parent Warrants have been issued and granted in compliance with (x) all applicable securities laws and (in all material respects) other applicable laws and regulations, and (y) all requirements set forth in any applicable Parent Contracts. Parent has heretofore delivered to the Company true, complete and accurate copies of the Parent Warrants, including any and all documents and agreements relating thereto.

 

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(c)          The Parent Ordinary Shares to be issued by Parent in connection with the Merger, upon issuance in accordance with the terms of this Agreement, will be duly authorized and validly issued and such Parent Ordinary Shares will be fully paid and nonassessable.

 

(d)          Except as set forth in Schedule 3.3(d), there are no registrations rights, and there is no voting trust, proxy, rights plan, antitakeover plan or other agreements or understandings to which Parent is a party or by which Parent is bound with respect to any security of any class of Parent.

 

(e)          Except as provided for in this Agreement or as set forth in Schedule 3.3(e), as a result of the consummation of the transactions contemplated hereby, no share capital, warrants, options or other securities of Parent are issuable and no rights in connection with any shares, warrants, options or other securities of Parent accelerate or otherwise become triggered (whether as to vesting, exercisability, convertibility or otherwise).

 

(f)          The authorized and outstanding share capital of the Merger Sub is 100 ordinary shares, par value $0.0001 per share. Parent owns all of the outstanding equity securities of Merger Sub, free and clear of all Liens.

 

3.4.        Authority Relative to this Agreement. Each of Parent and Merger Sub has full corporate power and authority to: (i) execute, deliver and perform this Agreement, and each ancillary document that Parent or Merger Sub has executed or delivered or is to execute or deliver pursuant to this Agreement, and (ii) carry out Parent’s and Merger Sub’s obligations hereunder and thereunder and, to consummate the transactions contemplated hereby (including the Merger). The execution and delivery of this Agreement by Parent and Merger Sub and the consummation by Parent and Merger Sub of the transactions contemplated hereby (including the Merger) have been duly and validly authorized by all necessary corporate action on the part of Parent and Merger Sub (including the approval by their respective Board of Directors), and no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize this Agreement or to consummate the transactions contemplated hereby, other than the Parent Shareholder Approval. This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming the due authorization, execution and delivery thereof by the other parties hereto, constitutes the legal and binding obligation of Parent and Merger Sub, enforceable against Parent and Merger Sub in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

 

3.5.        No Conflict; Required Filings and Consents.

 

(a)          The execution and delivery of this Agreement by Parent and Merger Sub does not, and the performance of this Agreement by Parent and Merger Sub shall not: (i) conflict with or violate Parent’s or Merger Sub’s Charter Documents, (ii) conflict with or violate any Legal Requirements, or (iii) result in any breach of or constitute a default (or an event that with notice or lapse of time or both would become a default) under, or materially impair Parent’s or Merger Sub’s rights or alter the rights or obligations of any third party under, or give to others any rights of termination, amendment, acceleration or cancellation of, or result in the creation of a Lien on any of the properties or assets of Parent pursuant to, any Parent Contracts, except, with respect to clauses (ii) or (iii), for any such conflicts, violations, breaches, defaults or other occurrences that would not, individually and in the aggregate, have a Material Adverse Effect on Parent.

 

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(b)          The execution and delivery of this Agreement by Parent and Merger Sub does not, and the performance of it hereunder will not, require any Approval of, or filing with or notification to, any Governmental Entity, except (i) for applicable requirements, if any, of the Securities Act, the Exchange Act, Blue Sky Laws, and the rules and regulations thereunder, and appropriate documents with the relevant authorities of other jurisdictions in which Parent or Merger Sub is qualified to do business, (ii) the qualification of Parent or Merger Sub as a foreign corporation in those jurisdictions in which the business of the Company makes such qualification necessary, and (iii) where the failure to obtain such Approval, or to make such filings or notifications, would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on Parent, or prevent consummation of the Merger or otherwise prevent the parties hereto from performing their obligations under this Agreement.

 

3.6.        Compliance. Each of Parent and Merger Sub has complied with, and is not in violation of, any Legal Requirements with respect to the conduct of its business, or the ownership or operation of its business, except for failures to comply or violations which, individually or in the aggregate, have not had and are not reasonably likely to have a Material Adverse Effect on Parent. The business and activities of Parent and Merger Sub have not been and are not being conducted in violation of any Legal Requirements. Neither Parent nor Merger Sub is in default or violation of any term, condition or provision of any applicable Charter Documents. No written notice of non-compliance with any Legal Requirements has been received by Parent or Merger Sub.

 

3.7.        SEC Filings; Financial Statements.

 

(a)          Parent has made available to the Company a correct and complete copy of each report, registration statement and definitive proxy statement filed by Parent with the SEC (the “Parent SEC Reports”), which are all the forms, reports and documents required to be filed by Parent with the SEC prior to the date of this Agreement. All Parent SEC Reports required to be filed by Parent with the SEC prior to the date of this Agreement were filed in a timely manner. As of their respective dates the Parent SEC Reports: (i) were prepared in accordance and complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder applicable to such Parent SEC Reports, and (ii) did not at the time they were filed (and if amended or superseded by a filing prior to the date of this Agreement then on the date of such filing and as so amended or superseded) contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Except to the extent set forth in the preceding sentence, Parent makes no representation or warranty whatsoever concerning any Parent SEC Report as of any time other than the date or period with respect to which it was filed. The certifications and statements required by (A) Rule 13a-14 or 15d-14 under the Exchange Act and (B) 18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley Act) relating to the Parent SEC Documents are accurate and complete and comply as to form and content with all applicable laws or rules of applicable governmental and regulatory authorities in all material respects. Parent has also made available to the Company and its shareholders a correct and complete copy of all such certifications and statements and any correspondence from or to the SEC or the NASDAQ Stock Market, Inc. As used in this Section 3.7, the term “file” shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.

 

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(b)          Except as set forth in Schedule 3.7(b), each set of financial statements (including, in each case, any related notes thereto) contained in Parent SEC Reports, including each Parent SEC Report filed after the date hereof until the Closing, complied or will comply as to form in all material respects with the published rules and regulations of the SEC with respect thereto, was or will be prepared in accordance with U.S. GAAP applied on a consistent basis throughout the periods involved (except as may be indicated in the notes thereto or, in the case of unaudited statements, do not contain footnotes as permitted by Form 10-Q of the Exchange Act) and each fairly presents or will fairly present in all material respects the financial position of Parent at the respective dates thereof and the results of its operations and cash flows for the periods indicated, except that the unaudited interim financial statements were, are or will be subject to normal adjustments which were not or are not expected to have a Material Adverse Effect on Parent taken as a whole.

 

(c)          Parent maintains disclosure controls and procedures that satisfy the requirements of Rule 13a-15 under the Exchange Act, and such disclosure controls and procedures are designed to ensure that all material information concerning Parent is made known on a timely basis to the individuals responsible for the preparation of Parent’s filings with the SEC and other public disclosure documents.

 

(d)          To the Knowledge of Parent, Parent’s auditor has at all required times since the date of enactment of the Sarbanes-Oxley Act been: (i) a registered public accounting firm (as defined in Section 2(a)(12) of the Sarbanes-Oxley Act); (ii) “independent” with respect to Parent within the meaning of Regulation S-X under the Exchange Act; and (iii) in compliance with subsections (g) through (l) of Section 10A of the Exchange Act and the rules and regulations promulgated by the SEC and the Public Company Accounting Oversight Board thereunder.

 

3.8.        No Undisclosed Liabilities. Neither Parent nor Merger Sub has any liabilities of any nature, except for (i) liabilities incurred in connection with the transactions contemplated by this Agreement and (ii) liabilities that would not reasonably be expected to have a material impact on Parent or Merger Sub. Neither Parent nor Merger Sub is or has been a party to any securitization transactions or “off-balance sheet arrangements” (as defined in Item 303(c) of Regulation S-K under the Exchange Act).

 

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3.9.        Absence of Certain Changes or Events. Except as set forth in Schedule 3.9 hereto, since the date of Parent’s incorporation: (i) there has not been any Material Adverse Effect on Parent or Merger Sub, (ii) each of Parent and Merger Sub has conducted its business only in the ordinary course of business consistent with past practice or (iii) there has not been any circumstance, action or activity which, if taken by Parent or Merger Sub after the date hereof, would require the consent of the Company under Section 4.3.

 

3.10.      Litigation. There are no claims, suits, actions or proceedings pending or to Parent’s Knowledge, threatened against Parent or Merger Sub, before any Governmental Entity.

 

3.11.      Employee Benefit Plans. Except as may be contemplated by the Parent Plan, Parent does not maintain, and has no liability under, any Plan, and neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any payment (including severance, unemployment compensation, golden parachute, bonus or otherwise) becoming due to any shareholder, director or employee of Parent or Merger Sub, or (ii) result in the acceleration of the time of payment or vesting of any such benefits.

 

3.12.      Labor Matters. Other than the current and former officers of Parent and Merger Sub set forth on Schedule 3.12 hereto, neither Parent nor Merger Sub has ever had any employees. Neither Parent nor Merger Sub is a party to any collective bargaining agreement or other labor union contract applicable to persons employed by Parent or Merger Sub and neither Parent nor Merger Sub knows of any activities or proceedings of any labor union to organize any such employees.

 

3.13.      Business Activities. Since its organization, neither Parent nor Merger Sub has conducted any business activities other than activities directed toward the accomplishment of a business combination. Except as set forth in the Parent Charter Documents, there is no agreement, commitment, judgment, injunction, order or decree binding upon Parent or Merger Sub or to which Parent or Merger Sub is a party which has or could reasonably be expected to have the effect of prohibiting or materially impairing any business practice of Parent or Merger Sub, any acquisition of property by Parent or Merger Sub or the conduct of business by Parent or Merger Sub as currently conducted, other than such effects, individually or in the aggregate, which have not had and could not reasonably be expected to have, a Material Adverse Effect on Parent or Merger Sub.

 

3.14.      Title to Property. Neither Parent nor Merger Sub owns or leases any real property or personal property. Except as set forth in Schedule 3.14, there are no options or other contracts under which Parent or Merger Sub has a right or obligation to acquire or lease any interest in real property or personal property.

 

3.15.      Taxes. Except as set forth in Schedule 3.15 hereto:

 

(a)          Each of Parent and Merger Sub has timely filed all Tax Returns required to be filed by Parent and Merger Sub with any Tax authority prior to the date hereof, except such Tax Returns which are not material to Parent or Merger Sub. All such Tax Returns are true, correct and complete in all material respects. Each of Parent and Merger Sub has paid or accrued for in Parent’s or Merger Sub’s books and records of account all Taxes shown to be due on such Tax Returns.

 

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(b)          All Taxes that Parent or Merger Sub is required by law to withhold or collect have been duly withheld or collected, and have been timely paid over to the proper governmental authorities to the extent due and payable.

 

(c)          Neither Parent nor Merger Sub has been delinquent in the payment of any material Tax that has not been accrued for in Parent’s or Merger Sub’s books and records of account for the period for which such Tax relates nor is there any material Tax deficiency outstanding, proposed or assessed against Parent or Merger Sub, nor has Parent or Merger Sub executed any unexpired waiver of any statute of limitations on or extending the period for the assessment or collection of any Tax.

 

(d)          No audit or other examination of any Tax Return of Parent or Merger Sub by any Tax authority is presently in progress, nor has Parent or Merger Sub been notified of any request for such an audit or other examination.

 

(e)          No adjustment relating to any Tax Returns filed by Parent or Merger Sub has been proposed in writing, formally or informally, by any Tax authority to Parent, Merger Sub or any representative thereof.

 

(f)          Neither Parent nor Merger Sub has any liability for any unpaid Taxes which have not been accrued for or reserved on Parent’s or Merger Sub’s balance sheets included in the audited financial statements for the most recent fiscal year ended, whether asserted or unasserted, contingent or otherwise, other than any liability for unpaid Taxes that may have accrued since the end of the most recent fiscal year in connection with the operation of the business of Parent or Merger Sub in the ordinary course of business, none of which is material to the business, results of operations or financial condition of Parent or Merger Sub.

 

3.16.      Environmental Matters. Except for such matters that, individually or in the aggregate, are not reasonably likely to have a Material Adverse Effect on Parent or Merger Sub, each of Parent and Merger Sub has complied with all applicable Environmental Laws; (ii) neither Parent nor Merger Sub is subject to liability for any Hazardous Substance disposal or contamination on any third party property; (iii) neither Parent nor Merger Sub has been associated with any release or threat of release of any Hazardous Substance; (iv) neither Parent nor Merger Sub has received any notice, demand, letter, claim or request for information alleging that Parent or Merger Sub may be in violation of or liable under any Environmental Law; and (v) neither Parent nor Merger Sub is subject to any orders, decrees, injunctions or other arrangements with any Governmental Entity or subject to any indemnity or other agreement with any third party relating to liability under any Environmental Law or relating to Hazardous Substances.

 

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3.17.      Brokers. Except as set forth in Schedule 3.17, neither Parent nor Merger Sub has incurred, nor will it incur, directly or indirectly, any liability for brokerage fees, investment banking fees, finders’ fees or agent’s commissions or any similar charges in connection with this Agreement or any transaction contemplated hereby. Except as disclosed in Schedule 3.17 hereto, no ordinary shares, options, warrants or other securities of Parent are payable to any third party by Parent as a result of this Merger.

 

3.18.      Intellectual Property. Neither Parent nor Merger Sub owns, licenses or otherwise has any right, title or interest in any Intellectual Property.

 

3.19.      Agreements, Contracts and Commitments.

 

(a)          Except as set forth in Schedule 3.19, other than confidentiality and non-disclosure agreements, there are no Contracts to which either Parent or Merger Sub is a party (“Parent Contracts”).

 

(b)          Each Parent Contract was entered into at arms’ length and in the ordinary course, is in full force and effect and is valid and binding upon and enforceable against each of the parties thereto. True, correct and complete copies of all Parent Contracts (or written summaries in the case of oral Parent Contracts) have been made available to the Company or the Company’s counsel.

 

(c)          Neither Parent nor Merger Sub, nor, to the Knowledge of Parent, any other party thereto is in breach of or in default under, and no event has occurred which with notice or lapse of time or both would become a breach of or default under, any Parent Contract, and no party to any Parent Contract has given any written notice of any claim of any such breach, default or event.

 

3.20.      Insurance. Except for directors’ and officers’ liability insurance, neither Parent nor Merger Sub maintains any Insurance Policies.

 

3.21.      Affiliate Transactions. Except as set forth in Schedule 3.21 hereto, other than (i) for payment of salary for services rendered, (ii) reimbursement for reasonable expenses incurred on behalf of Parent or Merger Sub, (iii) for other employee benefits made generally available to all employees or (iv) with respect to any Person’s ownership of membership interests, share capital or other securities of Parent or Merger Sub or such Person’s employment with Parent or Merger Sub, there are no Contracts under which there are any material existing or future liabilities or obligations between Parent or Merger Sub, on the one hand, and, on the other hand, any present or former Insider of either Parent or Merger Sub or a member of his or her immediate family (each a “Parent Affiliate Transaction”).

 

3.22.      Indebtedness. Except as set forth in the Parent SEC Reports filed prior to the date of this Agreement, Parent has no indebtedness for borrowed money.

 

3.23.      Listing of Securities. Parent Ordinary Shares and Parent Warrants are listed for trading on the Nasdaq Capital Market (“Nasdaq”). Except as set forth in the Parent SEC Reports filed prior to the date of this Agreement, there is no action or proceeding pending or, to Parent's Knowledge, threatened against Parent by Nasdaq with respect to any intention by such entity to prohibit or terminate the listing of Parent Ordinary Shares or Parent Warrants on Nasdaq.

 

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3.24.      Board Approval. The Board of Directors of Parent (including any required committee or subgroup of the Board of Directors of Parent) has, as of the date of this Agreement, unanimously (i) declared the advisability of the Merger and approved this Agreement and the transactions contemplated hereby, (ii) determined that the Merger is in the best interests of the shareholders of Parent, and (iii) determined that the fair market value of the Company is equal to at least 80% of the balance in the Trust Fund.

 

3.25.      Trust Fund. As of the date hereof, Parent has and will have no less than $42,700,000 invested in United States treasuries having a maturity of 180 days or less in a trust account administered by Continental (the “Trust Fund”).

 

3.26.      Governmental Filings. Except as set forth in Schedule 3.26, each of Parent and Merger Sub has been granted and holds, and has made, all Governmental Actions/Filings necessary to the conduct by Parent and Merger Sub of its business (as presently conducted) or used or held for use by Parent and Merger Sub, and true, complete and correct copies of which have heretofore been delivered to the Company. Each such Governmental Action/Filing is in full force and effect and, except as disclosed in Schedule 3.26, will not expire prior to February 28, 2014, and each of Parent and Merger Sub is in compliance with all of its obligations with respect thereto. No event has occurred and is continuing which requires or permits, or after notice or lapse of time or both would require or permit, and consummation of the transactions contemplated by this Agreement or any ancillary documents will not require or permit (with or without notice or lapse of time, or both), any modification or termination of any such Governmental Actions/Filings except such events which, either individually or in the aggregate, would not have a Material Adverse Effect upon Parent or Merger Sub.

 

3.27.      Investment Company Act. Parent is not an “investment company” or a person directly or indirectly “controlled” by or acting on behalf of an “investment company,” in each case within the meaning of the Investment Company Act of 1940, as amended.

 

ARTICLE IV.
CONDUCT PRIOR TO THE EFFECTIVE TIME        

 

4.1.        Conduct of Business. Except as set forth in Schedule 4.1 hereto, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, its Subsidiaries, and Parent and Merger Sub shall, except to the extent that the other party shall otherwise consent in writing, carry on its business in the usual, regular and ordinary course consistent with past practices, in substantially the same manner as heretofore conducted and in compliance with all applicable laws and regulations (except where noncompliance would not have a Material Adverse Effect), pay its debts and taxes when due subject to good faith disputes over such debts or taxes, pay or perform other material obligations when due, and use its commercially reasonable efforts consistent with past practices and policies to (i) preserve substantially intact its present business organization and (ii) preserve its relationships with material customers, suppliers, distributors, licensors, licensees, and others with which it has significant business dealings. In addition, except as required or permitted by the terms of this Agreement or set forth in Schedule 4.1 hereto, without the prior written consent of the other party, during the period from the date of this Agreement and continuing until the earlier of the termination of this Agreement pursuant to its terms or the Closing, each of the Company, its Subsidiaries and Parent and Merger Sub shall not do any of the following:

 

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4.2.        Company Negative Covenants. Without limiting the generality of Section 4.1, during the period from the date of this Agreement and continuing until the earlier of (x) the termination of this Agreement and (y) the Closing Date, except (i) as expressly required or permitted by the terms of this Agreement or any ancillary document executed or delivered pursuant to this Agreement, (ii) as set forth in Schedule 4.2 hereto or (iii) to the extent required by applicable law, the Company shall not, nor shall it permit any of its Subsidiaries to, without the prior written consent of Parent, do any of the following:

 

(a)         Waive any share repurchase rights, accelerate, amend or change the period of exercisability of options or restricted share capital, reprice options granted under any employee, consultant, director or other share plans or authorize cash payments in exchange for any options granted under any of such plans;

 

(b)         Materially increase the compensation or benefits payable to, or to become payable to, any officer or employee, or pay any material amounts or benefits (including severance) to, or materially increase the salaries or wage rates or fringe benefits payable to, its directors, officers, employees or consultants, in each case except (i) to the extent required by any Plan existing on the date hereof, (ii) in the ordinary course of business consistent with past practice or (iii) pursuant to written agreements or policies existing on the date hereof;

 

(c)         Transfer or license to any Person or otherwise extend, amend or modify any material rights to any Intellectual Property of the Company or its Subsidiaries, or enter into grants to transfer or license to any Person material future patent rights, other than in the ordinary course of business consistent with past practices;

 

(d)         Declare, set aside or pay any dividend on or make any other distribution (whether in cash, share capital, equity securities or property) with respect to any share capital or split, combine or reclassify any share capital or issue or authorize the issuance of any other securities with respect to, in lieu of or in substitution for any share capital, other than with respect to such items declared, set aside or paid or made by Subsidiaries of the Company to other wholly-owned Subsidiaries of the Company or the Company;

 

(e)         Purchase, redeem or otherwise acquire, directly or indirectly, any share capital of the Company or its Subsidiaries, other than repurchases of Company Ordinary Shares or Company Options from employees to former employees;

 

(f)          Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any share capital or any securities convertible into or exchangeable for share capital, or subscriptions, rights, warrants or options to acquire any share capital or any securities convertible into or exchangeable for share capital, or enter into other agreements obligating it to issue any such shares or convertible or exchangeable securities;

 

(g)         Amend its Charter Documents;

 

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(h)         Create any subsidiary or acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict the Company’s or any of its Subsidiaries’ ability to compete or to offer or sell any products or services;

 

(i)          Sell, lease, license, encumber or otherwise dispose of any material properties or assets, except (A) sales of inventory, property, plant and equipment or other assets in the ordinary course of business consistent with past practice, and (B) the sale, lease, license or disposition of property or assets that are not material, individually or in the aggregate, to the business of the Company and its Subsidiaries;

 

(j)          Incur any Indebtedness, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Company or its Subsidiaries, or enter into any “keep well” or other agreement to maintain any financial statement condition;

 

(k)         Waive the benefits of, agree to modify in any manner, terminate, release any Person from or knowingly fail to enforce any confidentiality or similar agreement to which the Company or its Subsidiaries is a party or of which the Company or its Subsidiaries is a beneficiary;

 

(l)          Modify, amend or terminate any Material Company Contract other than in an immaterial manner, or waive, delay the exercise of, release or assign any material rights or claims thereunder;

 

(m)        Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;

 

(n)         Incur or enter into any agreement, contract or commitment requiring the Company or its Subsidiaries to pay in excess of $1,000,000 in any 12 month period;

 

(o)         Make any material change to its method of accounting for Tax purposes except as required by applicable law or in compliance with U.S. GAAP;

 

(p)         Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such Plans;

 

(q)         Make capital expenditures in excess of $1,000,000 in the aggregate;

 

(r)          Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole;

 

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(s)         Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, shareholders or other Affiliates other than the payment of salary and benefits in the ordinary course of business consistent with prior practice;

 

(t)          Engage in any Company Affiliate Transaction; and

 

(u)         Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.2(a) through Section 4.2(t) above.

 

4.3.        Parent Negative Covenants. Without limiting the generality of Section 4.1, during the period from the date of this Agreement and continuing until the earlier of (x) the termination of this Agreement and (y) the Closing Date, except (i) as expressly required or permitted by the terms of this Agreement or any ancillary document executed or delivered pursuant to this Agreement, (ii) as set forth in Schedule 4.3 hereto or (iii) to the extent required by applicable law, Parent shall not, nor shall it permit any of its subsidiaries to, without the prior written consent of the Company, do any of the following:

 

(a)         Waive any share repurchase rights, accelerate, amend or change the period of exercisability of options or restricted share capital, or reprice options granted under any employee, consultant, director or other share plans or authorize cash payments in exchange for any options granted under any of such plans;

 

(b)         Materially increase the compensation or benefits payable to, or to become payable to, any officer or employee, or pay any material amounts or benefits (including severance) to, or materially increase the salaries or wage rates or fringe benefits payable to, its directors, officers, employees or consultants, in each case except (i) to the extent required by any Plan existing on the date hereof, (ii) in the ordinary course of business consistent with past practice or (iii) pursuant to written agreements or policies existing on the date hereof;

 

(c)         Transfer or license to any Person or otherwise extend, amend or modify any material rights to any Intellectual Property of Parent or its subsidiaries, or enter into grants to transfer or license to any Person material future patent rights, other than in the ordinary course of business consistent with past practices;

 

(d)         Declare, set aside or pay any dividend on or make any other distribution (whether in cash, share capital, equity securities or property) with respect to any share capital or split, combine or reclassify any capital shares or issue or authorize the issuance of any other securities with respect to, in lieu of or in substitution for any share capital;

 

(e)         Purchase, redeem or otherwise acquire, directly or indirectly, any share capital or other securities of Parent and any of its subsidiaries;

 

(f)          Issue, deliver, sell, authorize, pledge or otherwise encumber, or agree to any of the foregoing with respect to, any share capital or any securities convertible into or exchangeable for share capital, or subscriptions, rights, warrants or options to acquire any share capital or any securities convertible into or exchangeable for share capital, or enter into other agreements obligating it to issue any such shares or convertible or exchangeable securities;

 

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(g)         Amend its Charter Documents;

 

(h)         Acquire or agree to acquire by merging or consolidating with, or by purchasing any equity interest in or a portion of the assets of, or by any other manner, any business or any corporation, partnership, association or other business organization or division thereof, or otherwise acquire or agree to acquire any assets which are material to the business of Parent and its subsidiaries, or enter into any joint ventures, strategic partnerships or alliances or other arrangements that provide for exclusivity of territory or otherwise restrict such party’s ability to compete or to offer or sell any products or services;

 

(i)          Sell, lease, license, encumber or otherwise dispose of any properties or assets, except (A) sales of inventory and property, plant and equipment in the ordinary course of business consistent with past practice, and (B) the sale, lease or disposition of property or assets that are not material, individually or in the aggregate, to the business of such party;

 

(j)          Incur any Indebtedness, issue or sell any debt securities or options, warrants, calls or other rights to acquire any debt securities of Parent or its subsidiaries, or enter into any “keep well” or other agreement to maintain any financial statement condition;

 

(k)         Pay, discharge, settle or satisfy any claims, liabilities or obligations (absolute, accrued, asserted or unasserted, contingent or otherwise), or litigation (whether or not commenced prior to the date of this Agreement);

 

(l)          Waive the benefits of, agree to modify in any manner, terminate, release any Person from or knowingly fail to enforce any confidentiality or similar agreement to which Parent or its subsidiaries is a party or of which Parent or its subsidiaries is a beneficiary;

 

(m)        Modify, amend or terminate any Parent Contract, or waive, delay the exercise of, release or assign any material rights or claims thereunder;

 

(n)         Except as required by U.S. GAAP, revalue any of its assets or make any change in accounting methods, principles or practices;

 

(o)         Incur or enter into any agreement, contract or commitment requiring such party to pay in excess of $250,000 in any 12 month period;

 

(p)         Make or rescind any Tax elections that, individually or in the aggregate, could be reasonably likely to adversely affect in any material respect the Tax liability or Tax attributes of such party, settle or compromise any material income Tax liability materially change any method of accounting for Tax purposes or prepare or file any Return in a manner inconsistent with past practice, in each case except as required by applicable law or in compliance with U.S. GAAP;

 

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(q)         Form, establish or acquire any subsidiary except as contemplated by this Agreement;

 

(r)          Permit any Person to exercise any of its discretionary rights under any Plan to provide for the automatic acceleration of any outstanding options, the termination of any outstanding repurchase rights or the termination of any cancellation rights issued pursuant to such Plans;

 

(s)         Make capital expenditures in excess of $250,000 in the aggregate;

 

(t)          Make or omit to take any action which would be reasonably anticipated to have a Material Adverse Effect;

 

(u)         Enter into any transaction with or distribute or advance any assets or property to any of its officers, directors, partners, shareholders or other Affiliates other than the payment of salary and benefits in the ordinary course of business consistent with prior practice or advancement or reimbursement of expenses in connection with Parent’s search for a business combination;

 

(v)         Engage in any Parent Affiliate Transaction; and

 

(w)        Agree in writing or otherwise agree, commit or resolve to take any of the actions described in Section 4.3(a) through Section 4.3(v) above.

 

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ARTICLE V.
ADDITIONAL AGREEMENTS           

 

5.1.        Proxy Statement; Special Meeting.

  

(a)          As soon as is reasonably practicable after receipt by Parent from the Company of all financial and other information relating to the Company as Parent may reasonably request for its preparation, Parent shall prepare proxy materials, with the assistance of the Company and file with the SEC under the Exchange Act, and with all other applicable regulatory bodies, for the purpose of soliciting proxies from holders of Parent Ordinary Shares to vote, at a meeting of holders of Parent Ordinary Shares to be called and held for such purpose (the “Special Meeting”), in favor of (A) the adoption of this Agreement and the approval of the Merger (“Parent Shareholder Approval”), (B) amending and restating Parent’s Memorandum and Articles of Association, effective upon the Closing, to be substantially in the form of Exhibit A annexed hereto, providing for, among other things, (I) the change of the name of Parent to “Tecnoglass Inc.;” (II) the existence of Parent to be perpetual; and (III) the removal of various provisions no longer applicable to Parent following consummation of the transactions contemplated herein (the “Charter Amendment”); (C) the adoption of an option plan (the “Parent Plan”); (D) the election to the board of directors of Parent of the individuals identified in the Proxy Statement; (E) the approval of the convertibility of outstanding promissory notes issued to Parent’s Affiliates in connection with loans made by such Affiliates to Parent to satisfy its working capital needs into Parent Warrants; (F) any other proposals Parent and the Company deem necessary or desirable to effectuate the transactions contemplated herein; and (G) an adjournment proposal, if necessary, to adjourn the Special Meeting if, based on the tabulated vote count, Parent is not authorized to proceed with the Merger. Such proxy materials shall be in the form of a proxy statement to be used for the purposes of soliciting such proxies from holders of Parent Ordinary Shares for the matters to be acted upon at the Special Meeting (the “Proxy Statement”). Parent, with the assistance of the Company, shall promptly respond to any SEC comments on the Proxy Statement and shall otherwise use reasonable best efforts to cause the Proxy Statement to be approved by the SEC for mailing to the holders of Parent Ordinary Shares as promptly as practicable. Parent will advise the Company promptly after it receives notice thereof, of the time when the Proxy Statement has been approved by the SEC or any supplement or amendment has been filed, or the issuance of any stop order, or of any request by the SEC for amendment of the Proxy Statement or comments thereon and responses thereto or requests by the SEC for additional information.

 

(b)          As soon as practicable following approval by the SEC, Parent shall distribute the Proxy Statement to the holders of Parent Ordinary Shares and, pursuant thereto, shall call the Special Meeting in accordance with the Companies Law for a date no later than thirty (30) days following the approval of the Proxy Statement by the SEC and, subject to the other provisions of this Agreement, solicit proxies from the holders of Parent Ordinary Shares to vote in favor of the adoption of this Agreement and the approval of the Merger and the other matters presented to the shareholders of Parent for approval or adoption at the Special Meeting, including, without limitation, the matters described in Section 5.1(a).

 

(c)          Parent shall comply with all applicable provisions of and rules under the Exchange Act and all applicable provisions of the Companies Law in the preparation, filing and distribution of the Proxy Statement, the solicitation of proxies thereunder, and the calling and holding of the Special Meeting.

 

(d)          Parent, acting through its board of directors, shall include in the Proxy Statement the recommendation of its board of directors that the holders of Parent Ordinary Shares vote in favor of the adoption of this Agreement and the approval of the Merger, and shall otherwise use reasonable best efforts to obtain the Parent Shareholder Approval.

 

(e)          No amendment or supplement to the Proxy Statement will be made by Parent without the approval of the Company which shall not be unreasonably withheld and Parent shall promptly transmit any such amendment or supplement to its shareholders, if at any time prior to the Special Meeting there shall be discovered any information that should be set forth in an amendment or supplement to the Proxy Statement.

 

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5.2.        HSR Act. Each of the Company and Parent will file any Notification and Report Forms and related material that it may be required to file with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice under the HSR Act in connection with the transactions contemplated hereby, will use its reasonable best efforts to obtain an early termination of the applicable waiting period, and will make any further filings pursuant thereto that may be necessary, proper, or advisable. The parties shall share equally in all expenses necessary in connection with such filings.

 

5.3.        Other Actions.

 

(a)          As promptly as practicable after execution of this Agreement, Parent will prepare and file a Current Report on Form 8-K pursuant to the Exchange Act to report the execution of this Agreement (“Signing Form 8-K”). Promptly after the execution of this Agreement, Parent and the Company shall also issue a mutually agreeable press release announcing the execution of this Agreement (the “Signing Press Release”).

 

(b)          At least five (5) days prior to Closing, Parent shall prepare together with Company a draft Form 8-K announcing the Closing, together with, or incorporating by reference, the financial statements prepared by the Company and its accountant, and such other information that may be required to be disclosed with respect to the Merger in any report or form to be filed with the SEC (“Closing Form 8-K”). Prior to Closing, Parent and the Company shall prepare a mutually agreeable press release announcing the consummation of the Merger hereunder (“Closing Press Release”). Concurrently with the Closing, Parent shall distribute the Closing Press Release. Concurrently with the Closing, or as soon as practicable thereafter, Parent shall file the Closing Form 8-K with the SEC.

 

(c)          Parent shall file all such forms, reports and documents required to be filed by Parent with the SEC subsequent to the date of this Agreement through the Closing Date (the “Additional Parent SEC Reports”) and such Additional Parent SEC Reports shall be prepared in accordance and comply in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations of the SEC thereunder. The Additional Parent SEC Reports will not, at the time they are filed, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. As used in this Section 5.2, the term "file" shall be broadly construed to include any manner in which a document or information is furnished, supplied or otherwise made available to the SEC.

 

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5.4.        Required Information.

 

(a)          In connection with the preparation of the Signing Form 8-K, the Signing Press Release, the Proxy Statement, the Closing Form 8-K and the Closing Press Release, or any other statement, filing, notice, release or application required to be made by or on behalf of Parent and/or the Company to any Governmental Entity in connection with the Merger and the other transactions contemplated hereby (each, a “Reviewable Document”), and for such other reasonable purposes, the Company and Parent each shall, upon request by the other, promptly furnish the other with all information concerning themselves, their respective directors, officers, shareholders and Affiliates and such other matters as may be reasonably necessary or advisable in connection with the Merger and the preparation of such document. Each party represents and warrants to the others that all such information shall be true and correct in all material respects as of the date of filing, issuance or other submission or public disclosure of such document and the Closing Date and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements contained therein, in light of the circumstances under which they were made, not misleading (provided that each party shall not be responsible for the accuracy or completeness of any information relating to the other party or any other information furnished by the other party for inclusion in any such document).

 

(b)          At a reasonable time prior to the filing, issuance or other submission or public disclosure of a Reviewable Document by either Parent or the Company, the other party shall be given an opportunity to review and comment upon such Reviewable Document and give its consent to the form thereof, such consent not to be unreasonably withheld, provided that a party may file, issue or otherwise submit a Reviewable Document without the consent of the other party if it is advised by counsel that such Reviewable Document must be filed, issued or submitted in the form objected to by the other party so that the filing, issuing or submitting party is in compliance with Applicable Law.

 

(c)          Any language included in a Reviewable Document that reflects the comments of the reviewing party, as well as any text as to which the reviewing party has not commented upon after being given a reasonable opportunity to comment, shall be deemed to have been approved by the reviewing party and may henceforth be used by the other party in other Reviewable Documents and in other documents distributed by the other party in connection with the transactions contemplated by this Agreement without further review or consent of the reviewing party

 

(d)          Prior to the Effective Time (i) the Company and Parent shall notify each other as promptly as reasonably practicable upon becoming aware of any event or circumstance which should be described in an amendment of, or supplement to, a Reviewable Document that has been filed with the SEC, and (ii) the Company and Parent shall each notify the other as promptly as practicable after the receipt by it of any written or oral comments of the SEC on, or of any written or oral request by the SEC for amendments or supplements to, any such Reviewable Document, and shall promptly supply the other with copies of all correspondence between it or any of its representatives and the SEC with respect to any of the foregoing filings. All correspondence and communications to the SEC made by the Company or Parent with respect to the transactions contemplated by this Agreement or any agreement ancillary hereto shall be considered to be Reviewable Documents subject to the provisions of this Section 5.4.

 

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5.5.        Confidentiality; Access to Information.

 

(a)          Confidentiality. Any confidentiality agreement previously executed by the parties shall be superseded in its entirety by the provisions of this Agreement. Each party agrees to maintain in confidence any non-public information received from the other party, and to use such non-public information only for purposes of consummating the transactions contemplated by this Agreement. Such confidentiality obligations will not apply to (i) information which was known to the one party or their respective agents prior to receipt from the other party; (ii) information which is or becomes generally known; (iii) information acquired by a party or their respective agents from a third party who was not bound to an obligation of confidentiality; (iv) disclosure required by law, regulation or stock exchange rule; or (v) disclosure consented to by the other party. In the event this Agreement is terminated as provided in Article VIII hereof, each party will destroy or return or cause to be destroyed or returned to the other all documents and other material obtained from the other in connection with the Merger contemplated hereby.

 

(b)          Access to Information.

 

(i)          The Company will afford Parent and its financial advisors, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of the Company during the period prior to the Closing to obtain all information concerning the business, including the status of business development efforts, properties, results of operations and personnel of the Company, as Parent may reasonably request. No information or knowledge obtained by Parent in any investigation pursuant to this Section 5.5 will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Merger.

 

(ii)         Parent will afford the Company and its financial advisors, underwriters, accountants, counsel and other representatives reasonable access during normal business hours, upon reasonable notice, to the properties, books, records and personnel of Parent and Merger Sub during the period prior to the Closing to obtain all information concerning the business, including properties, results of operations and personnel of Parent and Merger Sub, as the Company may reasonably request. No information or knowledge obtained by the Company in any investigation pursuant to this Section 5.5 will affect or be deemed to modify any representation or warranty contained herein or the conditions to the obligations of the parties to consummate the Merger.

 

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5.6.        Commercially Reasonable Efforts. Upon the terms and subject to the conditions set forth in this Agreement, each of the parties agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Merger and the other transactions contemplated by this Agreement, including using commercially reasonable efforts to accomplish the following: (i) the taking of all reasonable acts necessary to cause the conditions precedent set forth in Article VI to be satisfied (but specifically excluding the waiver or compromise of any condition to such party’s obligations under Article VI), (ii) the obtaining of all necessary Approvals from Governmental Entities and the making of all necessary registrations, declarations and filings (including registrations, declarations and filings with Governmental Entities, if any) and the taking of all reasonable steps as may be necessary to avoid any suit, claim, action, investigation or proceeding by any Governmental Entity, (iii) the obtaining of all Approvals from third parties required as a result of the transactions contemplated in this Agreement, including the consents referred to in Schedule 2.5 of the Company Schedule, (iv) providing suitably knowledgeable directors, officers, employees and other Persons to attend “road shows” that are to be presented to Parent’s security holders, (v) the defending of any suits, claims, actions, investigations or proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the transactions contemplated hereby, including seeking to have any stay or temporary restraining order entered by any court or other Governmental Entity vacated or reversed and (vi) the execution or delivery of any additional instruments reasonably necessary to consummate the transactions contemplated by, and to fully carry out the purposes of, this Agreement. In connection with and without limiting the foregoing, Parent and its board of directors and the Company and its board of directors shall, if any state takeover statute or similar statute or regulation is or becomes applicable to the Merger, this Agreement or any of the transactions contemplated by this Agreement, use its commercially reasonable efforts to enable the Merger and the other transactions contemplated by this Agreement to be consummated as promptly as practicable on the terms contemplated by this Agreement. Notwithstanding anything herein to the contrary, nothing in this Agreement shall be deemed to require Parent or the Company to agree to any divestiture by itself or any of its Affiliates of capital shares or of any business, assets or property, or the imposition of any material limitation on the ability of any of them to conduct their business or to own or exercise control of such assets, properties and shares.

 

5.7.        No Parent Ordinary Shares Transactions. Neither the Company nor its Affiliates shall, directly or indirectly, engage in any transactions involving the securities of Parent prior to the time of the making of a public announcement of the transactions contemplated by this Agreement. The Company shall use commercially reasonable efforts to require each of its officers, directors, employees and agents to comply with the foregoing requirement.

 

5.8.        No Claim Against Trust Fund. Notwithstanding anything else in this Agreement, the Company acknowledges that it has read Parent’s final prospectus dated March 16, 2012 and understands that Parent has established the Trust Fund for the benefit of Parent’s public shareholders and that Parent may disburse monies from the Trust Fund only (a) to Parent’s public shareholders in the event they elect to convert their shares into cash in accordance with Parent’s Charter Documents and/or the liquidation of Parent, (b) to Parent after, or concurrently with, the consummation of a business combination, and (c) to Parent in limited amounts for its working capital requirements and tax obligations. The Company further acknowledges that, if the transactions contemplated by this Agreement, or, upon termination of this Agreement, another business combination, are not consummated by December 16, 2013, Parent will be obligated to return to its shareholders the amounts being held in the Trust Fund. Accordingly, the Company, for itself and its Subsidiaries, directors, officers, employees, shareholders and Affiliates, hereby waives all rights, title, interest or claim of any kind against Parent to collect from the Trust Fund any monies that may be owed to them by Parent for any reason whatsoever, including but not limited to a breach of this Agreement by Parent or any negotiations, contracts, agreements or understandings with Parent, and will not seek recourse against the Trust Fund at any time for any reason whatsoever; provided, however, that, nothing herein shall serve to limit or prohibit the Company’s right to pursue a claim against Parent for legal relief against monies or other assets held outside the Trust Fund or for specific performance or other equitable relief in connection with the consummation of the transactions contemplated by this Agreement (including a claim for Parent to specifically perform its obligations under this Agreement). This paragraph will survive the termination of this Agreement for any reason.

 

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5.9.        Disclosure of Certain Matters. Each of Parent, Merger Sub and the Company will provide the other parties with prompt written notice of any event, development or condition that (a) would cause any of such party’s representations and warranties to become untrue or misleading or which may affect its ability to consummate the transactions contemplated by this Agreement, (b) had it existed or been known on the date hereof would have been required to be disclosed under this Agreement, (c) gives such party any reason to believe that any of the conditions set forth in Article VI will not be satisfied, (d) is of a nature that is or may be materially adverse to the operations, prospects or condition (financial or otherwise) of the Company, or (e) would require any amendment or supplement to the Proxy Statement/Information Statement.

 

5.10.      Securities Listing. Parent shall use commercially reasonable best efforts to obtain the listing for trading on the New York Stock Exchange or Nasdaq of the Parent Ordinary Shares and Parent Warrants.

 

5.11.      Further Actions. Each of the parties shall use its commercially reasonable efforts to take such actions as are necessary to fulfill its obligations under this Agreement and to enable the other to fulfill its obligations hereunder.

 

5.12.      No Solicitation. The Company will not, and will cause its respective Affiliates, employees, agents and representatives not to, directly or indirectly, solicit or enter into discussions or transactions with, or encourage, or provide any information to, any corporation, partnership or other entity or group (other than Parent and its designees) concerning any merger, sale of ownership interests and/or assets of the Company, recapitalization or similar transaction and (ii) each of Parent and Merger Sub will not, and will cause its respective Affiliates, employees, agents and representatives not to, directly or indirectly, solicit or enter into discussions or transactions with, or encourage, or provide any information to, any corporation, partnership or other entity or group (other than the Company and its designees) concerning any merger, purchase of ownership interests and/or assets, recapitalization or similar business combination transaction. In addition, (i) the Company will, and will cause its Affiliates, employees, agents and representatives to, immediately cease any and all existing discussions or negotiations with any Person conducted heretofore with respect to any alternative merger, sale of ownership interests and/or assets of the Company, recapitalization or similar transaction and (ii) each of Parent and Merger Sub will, and will cause its respective Affiliates, employees, agents and representatives to, immediately cease any and all existing discussions or negotiations with any Person conducted heretofore with respect to any alternative merger, purchase of ownership interests and/or assets, recapitalization or similar business combination transaction.

 

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5.13.      Liability Insurance.

 

(a)          All rights to indemnification for acts or omissions occurring through the Closing Date now existing in favor of the current directors and officers of Parent as provided in the Charter Documents of Parent shall continue in full force and effect in accordance with their terms.

 

(b)          For a period of six (6) years after the Closing Date, each of Parent and the Surviving Corp shall cause to be maintained in effect the current policies of directors’ and officers’ liability insurance maintained by Parent and the Company, respectively (or policies of at least the same coverage and amounts containing terms and conditions which are no less advantageous), with respect to claims arising from facts and events that occurred prior to the Closing Date.

 

(c)          If Parent or any of its successors or assigns (i) consolidates with or merges into any other Person and shall not be the continuing or surviving entity of such consolidation or merger, or (ii) transfers or conveys all or substantially all of its properties and assets to any Person, then, in each such case, to the extent necessary, proper provision shall be made so that the successors and assigns of Parent assume the obligations set forth in this Section 5.13.

 

(d)          The provisions of this Section 5.13 are intended to be for the benefit of, and shall be enforceable by, each Person who will have been a director or officer of Parent for all periods ending on or before the Closing Date and may not be changed without the consent of the Committee referred to in Section 1.11.

 

5.14.      Insider Loans. At or prior to Closing, the Company shall (i) cause any loan by the Company to its shareholders to be repaid; (ii) cause any guaranty or similar arrangement pursuant to which the Company has guaranteed the payment or performance of any obligations of such shareholders to a third party to be terminated; and (iii) cause any of its shareholders to cease utilizing the name “Tecnoglass” unless otherwise authorized by the Company and consented to by Parent.

 

5.15.      Access to Financial Information. The Company will, and will cause its auditors to, (a) continue to provide Parent and its advisors full access to all of the Company’s financial information used in the preparation of its Audited Financial Statements and Unaudited Financial Statements and (b) cooperate fully with any reviews performed by Parent or its advisors of any such financial statements or information.

 

5.16.      Parent Borrowings. Through the Closing, Parent shall be allowed to borrow funds from its directors, officers, shareholders and/or their respective Affiliates to meet its reasonable capital requirements in an amount not to exceed $225,000, with any such loans to be made only as reasonably required by the operation of Parent in due course on a non-interest bearing basis and repayable at Closing in cash, or solely with the prior written consent of the Company respecting any loans made after the date hereof, convertible at Closing into Parent Warrants in accordance with the terms of the promissory notes issued to evidence the borrowing (it being agreed that the loan made prior to the date hereof in an amount of $100,000 may be convertible at Closing into Parent Warrants without the prior written consent of the Company in accordance with the terms of the promissory note issued to evidence such borrowing). The proceeds of such loans shall not be used for the payment of salaries, bonuses or other compensation to any of Parent’s directors, officers or shareholders.

 

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5.17.       Trust Fund Disbursement. Parent shall cause the Trust Fund to be disbursed to Parent and as otherwise contemplated by this Section 5.17 immediately upon the Closing. All liabilities and obligations of Parent due and owing or incurred at or prior to the Effective Time shall be paid as and when due, including all amounts payable (i) to shareholders who elect to have their shares converted to cash in accordance with the provisions of Parent’s Charter Documents, (ii) for income tax or other tax obligations of Parent prior to Closing, (iii) as repayment of loans and reimbursement of expenses to directors, officers, shareholders of Parent and/or their respective Affiliates, and (iv) to third parties (e.g., professionals, printers, etc.) who have rendered services to Parent in connection with its operations and efforts to effect a business combination, including the Merger.

 

5.18.       Employment Agreements. As soon as practicable after the execution of this Agreement, the Company shall execute employment agreements reasonably satisfactory to the Company and Parent to be effective upon the Closing with each of the individuals listed in Schedule 6.3(f) (collectively, the “Employment Agreements”).

 

5.19.       Option Plan. Immediately prior to Closing, Parent will create the Parent Plan for the benefit of employees of Surviving Corp and its Subsidiaries mutually acceptable to Parent and the Company.

 

ARTICLE VI.
CONDITIONS TO THE TRANSACTION

 

6.1.        Conditions to Obligations of Each Party to Effect the Merger. The respective obligations of each party to this Agreement to effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of the following conditions:

 

(a)          Parent Shareholder Approval. The Parent Shareholder Approval and the Charter Amendment each shall have been duly approved and adopted by the shareholders of Parent by the requisite vote under the laws of the Cayman Islands and the Parent Charter Documents.

 

(b)          Parent Ordinary Shares. Holders of 87.5% or more of the Parent Ordinary Shares issued in Parent’s initial public offering of securities and outstanding immediately before the Closing shall not have exercised their rights to convert their shares into a pro rata share of the Trust Fund in accordance with Parent’s Charter Documents.

 

(c)          No Order. No Governmental Entity shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, executive order, decree, injunction or other order (whether temporary, preliminary or permanent) which is in effect and which has the effect of making the Merger illegal or otherwise prohibiting consummation of the Merger, substantially on the terms contemplated by this Agreement.

 

6.2.        Additional Conditions to Obligations of the Company. The obligations of the Company to consummate and effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by the Company:

 

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(a)          Representations and Warranties. The representations and warranties contained in Article III of this Agreement shall be true and correct (without regard to any materiality or Material Adverse Effect qualifier contained therein), on and as of the date hereof and as of the Closing Date as if made at and as of the Closing Date (except for any representations and warranties made as of a specified date, which shall be so true and correct as of the specified date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Material Adverse Effect on Parent and Merger Sub taken as a whole. The Company shall have received a certificate with respect to the foregoing signed on behalf of Parent and Merger Sub by an authorized officer of Parent and Merger Sub (“Parent Closing Certificate”).

 

(b)          Agreements and Covenants. Parent and Merger Sub shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by them on or prior to the Closing Date except to the extent that any failure to perform or comply (other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within the control of Parent) does not, or will not, constitute a Material Adverse Effect with respect to Parent or Merger Sub, and the Parent Closing Certificate shall include a provision to such effect.

 

(c)          No Litigation. No action, suit or proceeding shall be pending or threatened before any Governmental Entity which is reasonably likely to (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation or (iii) affect materially and adversely or otherwise encumber the title of the Parent Ordinary Shares to be issued by Parent in connection with the Merger and no order, judgment, decree, stipulation or injunction to any such effect shall be in effect.

 

(d)          Consents. Parent shall have obtained all Approvals required to be obtained by Parent in connection with the consummation of the transactions contemplated hereby, other than Approvals the absence of which, either alone or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on Parent or Merger Sub and the Parent Closing Certificate shall include a provision to such effect.

 

(e)          Material Adverse Effect. No Material Adverse Effect with respect to Parent shall have occurred since the date of this Agreement and the Parent Closing Certificate shall include a provision to such effect.

 

(f)          SEC Compliance. Immediately prior to Closing, Parent shall be in compliance with the reporting requirements under the Exchange Act.

 

(g)          Resignations. The persons listed in Schedule 6.2(g) shall have resigned from all of their positions and offices with Parent.

 

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(h)          Available Cash. After giving effect to the election of shareholders of Parent to have their Parent Ordinary Shares converted to cash in accordance with the provisions of Parent’s Charter Documents and after payment of transaction costs incurred by Parent and the Company not to exceed $5,000,000 in the aggregate, Parent shall have an aggregate of at least $33,500,000 of cash held either in or outside of the Trust Fund and Parent shall have made appropriate arrangements to have such amount disbursed to Parent immediately upon the Closing.

 

(i)          Exchange Agent Agreement. The Exchange Agent Agreement shall be executed by the parties thereto and delivered to the Company.

 

(j)          Registration Rights Agreement. The Registration Rights Agreement in the form attached as Exhibit E annexed hereto shall be executed by the parties thereto and delivered to the Company.

 

(k)         Opinion of Counsel. The Company shall have received from Graubard Miller an opinion of counsel in substantially the form of Exhibit F annexed hereto and from Maples and Calder an opinion of counsel in substantially the form of Exhibit G annexed hereto.

 

(l)          Round Lot Holders. Parent shall have delivered to the Company shareholder lists evidencing at least 300 Round Lot Holders (as such term is defined in Rule 5005(a)(37) of the Nasdaq Listing Rules) of Parent Ordinary Shares, prior to the redemption of any Parent Ordinary Shares in accordance with Parent’s Charter Documents.

 

(m)        Election of Directors. The individuals identified in the Proxy Statement shall have been appointed or elected to serve on the board of directors of Parent.

 

(n)          Merger Consideration. Parent shall have delivered to the Exchange Agent, prior to or at the Closing, certificates representing the Merger Consideration in form and substance reasonably acceptable to the Company.

 

(o)          Secretary’s Certificate. At or prior to Closing, Parent shall have delivered to the Company a certificate of the Secretary of Parent certifying to (i) the incumbency and specimen signature of each officer of Parent or Merger Sub executing this Agreement and any other document executed on behalf of Parent or Merger Sub, (ii) the Charter Documents of Parent, (iii) the resolutions of the board of directors of Parent and Merger Sub approving and adopting this Agreement and the transactions contemplated hereby, in each case, which shall not have been modified, revoked or rescinded as of the Closing and (iv) the Parent Shareholder Approval, which shall not have been modified, revoked or rescinded as of the Closing.

 

(p)          Affiliated Transactions. Parent shall cause all of the Contracts which are required to be set forth in Schedule 3.21 (regardless of whether they are, in fact, so listed) to be terminated at or prior to the Closing, other than those documents set forth on Schedule 6.2(p).

 

(q)          Separation of Parent Units. At or prior to the Closing, Parent shall cause the public trading of its units to cease and each such unit to be mandatorily separated into its component parts of Parent Ordinary Shares and Parent Warrants.

 

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6.3.        Additional Conditions to the Obligations of Parent. The obligations of Parent to consummate and effect the Merger shall be subject to the satisfaction at or prior to the Closing Date of each of the following conditions, any of which may be waived, in writing, exclusively by Parent:

 

(a)          Representations and Warranties. The representations and warranties contained in Article II of this Agreement shall be true and correct (without regard to any materiality or Material Adverse Effect qualifier contained therein), on and as of the date hereof and on and as of the Closing Date as if made at and as of the Closing Date (except for any representations and warranties made as of a specified date, which shall be so true and correct as of the specified date), except where the failure of such representations and warranties to be true and correct would not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole. Parent shall have received a certificate with respect to the foregoing signed on behalf of the Company by an authorized officer of the Company (“Company Closing Certificate”).

 

(b)          Agreements and Covenants. The Company shall have performed or complied with all agreements and covenants required by this Agreement to be performed or complied with by it at or prior to the Closing Date except to the extent that any failure to perform or comply (other than a willful failure to perform or comply or failure to perform or comply with an agreement or covenant reasonably within the control of the Company) does not, or will not, constitute a Material Adverse Effect on the Company and its Subsidiaries taken as a whole, and the Company Closing Certificate shall include a provision to such effect.

 

(c)          No Litigation. No action, suit or proceeding shall be pending or threatened before any Governmental Entity which is reasonably likely to (i) prevent consummation of any of the transactions contemplated by this Agreement, (ii) cause any of the transactions contemplated by this Agreement to be rescinded following consummation or (iii) affect materially and adversely the right of Parent to own, operate or control any of the assets and operations of the Surviving Corp following the Merger and no order, judgment, decree, stipulation or injunction to any such effect shall be in effect (other than with respect to this clause (iii), any action, suit or proceeding pending or threatened before any Governmental Entity against Parent).

 

(d)          Consents. The Company shall have obtained all Approvals required to be obtained by the Company in connection with the consummation of the transactions contemplated hereby, other than Approvals the absence of which, either alone or in the aggregate, could not reasonably be expected to have a Material Adverse Effect on the Company and its Subsidiaries taken as a whole.

 

(e)          Material Adverse Effect. No Material Adverse Effect with respect to the Company and its Subsidiaries taken as a whole shall have occurred since the date of this Agreement.

 

(f)          Employment Agreements. The Employment Agreements between Parent and, separately, each of the Persons listed in Schedule 6.3(f), in form and substance reasonably satisfactory to Parent and the Company, shall be in full force and effect.

 

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(g)          Opinion of Counsel. Parent shall have received from Cayman Island counsel to the Company an opinion of counsel reasonably satisfactory to Parent and an opinion of counsel from Gomez-Pinzon Zuleta Abogados S.A. an opinion of counsel in substantially the form of Exhibit H annexed hereto.

 

(h)          Lock-Up Agreement. The Lock-Up Agreement in the form of Exhibit D shall be executed by the Company shareholders and delivered to Parent.

 

(i)          Secretary’s Certificate. At or prior to Closing, the Company shall have delivered to Parent a certificate of the Secretary of the Company certifying to (i) the incumbency and specimen signature of each officer of the Company executing this Agreement and any other document executed on behalf of the Company, (ii) the Charter Documents of the Company, (iii) the resolutions of the board of directors of the Company approving and adopting this Agreement and the transactions contemplated hereby, which shall not have been modified, revoked or rescinded as of the Closing and (iv) the Written Consent, which shall not have been modified, revoked or rescinded as of the Closing.

 

(j)          Derivative Securities. There shall be outstanding no options, warrants or other derivative securities entitling the holders thereof to acquire Company Ordinary Shares or other securities of the Company.

 

(k)          Affiliated Transactions. The Company shall cause all of the Contracts which are required to be set forth in Schedule 2.22 (regardless of whether they are, in fact, so listed) to be terminated at or prior to the Closing, other than those documents set forth on Schedule 6.3(k).

 

(l)          Insider Loans; Equity Ownership in Subsidiaries. (i) All outstanding Indebtedness owed by Insiders to the Company shall have been repaid in full, including the Indebtedness described on Schedule 2.22 (if any); (ii) all outstanding guaranties and similar arrangements pursuant to which the Company has guaranteed the payment or performance of any obligations of any Insider to a third party shall have been terminated; and (iii) no Insider shall own any direct equity interests in any Subsidiary of the Company.

 

ARTICLE VII.
INDEMNIFICATION

 

7.1.        Indemnification.

 

(a)          Subject to the terms and conditions of this Article VII (including without limitation the limitations set forth in Section 7.4), from and after the Closing, Parent, the Surviving Corp and their respective representatives, successors and permitted assigns (the “Parent Indemnitees”) shall be severally, and not jointly, indemnified, defended and held harmless by those Persons who receive Parent Ordinary Shares from Parent upon consummation of the Merger, but only to the extent of the Escrow Shares, from and against all Losses asserted against, resulting to, imposed upon, or incurred by any Parent Indemnitee by reason of, arising out of or resulting from:

 

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(i)          the inaccuracy or breach of any representation or warranty of the Company contained in or made pursuant to this Agreement or any Schedule or certificate delivered by the Company to Parent pursuant to this Agreement with respect hereto or thereto in connection with the Closing;

 

(ii)         the non-fulfillment or breach of any covenant or agreement of the Company contained in this Agreement; and

 

(iii)        for any and all Litigation Damages incurred in connection with the litigation listed in Schedule 2.8.

 

(b)          Subject to the terms and conditions of this Article VII (including without limitation the limitations set forth in Section 7.4), from and after the Closing, Persons who receive Parent Ordinary Shares from Parent upon consummation of the Merger and their respective representatives, successors and permitted assigns (the “Company Indemnitees”) shall be indemnified, defended and held harmless by Parent from and against all Losses asserted against, resulting to, imposed upon, or incurred by any Company Indemnitee by reason of, arising out of or resulting from:

 

(i)          the inaccuracy or breach of any representation or warranty of Parent or Merger Sub contained in or made pursuant to this Agreement or any Schedule or certificate delivered by Parent or Merger Sub to the Company pursuant to this Agreement with respect hereto or thereto in connection with the Closing; and

 

(ii)         the non-fulfillment or breach of any covenant or agreement of Parent or Merger Sub contained in this Agreement.

 

(c)          Solely for the purpose of determining the amount of any Losses (and not for determining any breach) for which Parent Indemnitees or Company Indemnitees may be entitled to indemnification pursuant to this Article VII, any representation or warranty contained in this Agreement that is qualified by a term or terms such as “material,” “materially,” or “Material Adverse Effect” shall be deemed made or given without such qualification and without giving effect to such words.

 

7.2.        Indemnification of Third Party Claims. The indemnification obligations and liabilities under this Article VII with respect to actions, proceedings, lawsuits, investigations, demands or other claims brought against a Parent Indemnitee or a Company Indemnitee by a Person other than the Company or Parent, as applicable (a “Third Party Claim”), shall be subject to the following terms and conditions:

 

(a)          Notice of Claim. Such Parent Indemnitee or Company Indemnitee will give the Representative or Parent, as applicable, prompt written notice after receiving written notice of any Third Party Claim (a “Notice of Claim”) which Notice of Claim shall set forth (i) a brief description of the nature of the Third Party Claim, (ii) the total amount of the actual out-of-pocket Loss or the anticipated potential Loss (including any costs or expenses which have been or may be reasonably incurred in connection therewith), and (iii) whether such Loss may be covered (in whole or in part) under any insurance and the estimated amount of such Loss which may be covered under such insurance, and the Representative or Parent, as applicable, shall be entitled to participate in the defense of Third Party Claim at its expense.

 

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(b)          Defense. The Representative or Parent, as applicable, shall have the right, at its option (subject to the limitations set forth in Section 7.2(c)) and at its own expense, by written notice to Parent or the Representative, as applicable, to assume the entire control of, subject to the right of Parent to participate (at its expense and with counsel of its choice) in, the defense, compromise or settlement of the Third Party Claim as to which such Notice of Claim has been given. If the Representative or Parent, as applicable, is permitted and elects to assume the defense of a Third Party Claim:

 

(i)          the Representative or Parent, as applicable, shall diligently and in good faith defend such Third Party Claim and shall keep Parent or the Representative, as applicable, reasonably informed of the status of such defense; and

 

(ii)         Parent or the Representative, as applicable, shall cooperate fully in all respects with the Representative or Parent, as applicable, in any such defense, compromise or settlement thereof, including, without limitation, the selection of counsel, and Parent or the Representative, as applicable, shall make available to the Representative or Parent, as applicable, all pertinent information and documents under its control.

 

(c)          Limitations of Right to Assume Defense. The Representative shall not be entitled to assume control of such defense and shall pay the fees and expenses of counsel retained by Parent if (i) the Third Party Claim relates to or arises in connection with any criminal proceeding, action, indictment, allegation or investigation; or (ii) the Third Party Claim seeks an injunction or equitable relief against Parent which is not merely incidental to a primary damage claim or claims for monetary damages.

 

(d)          Other Limitations. Failure to give prompt Notice of Claim or to provide copies of relevant available documents or to furnish relevant available data shall not constitute a defense (in whole or in part) to any claim for indemnification under this Article VII, except to the extent (and only to the extent that) such failure shall have adversely affected the ability of the Representative or Parent, as applicable, to defend against or reduce its liability or caused or increased such liability or otherwise caused the damages for which the Representative or Parent, as applicable, is obligated to be greater than such damages would have been had Parent or the Representative, as applicable, given the Representative or Parent, as applicable, prompt notice hereunder. So long as the Representative is defending any such action actively and in good faith, Parent shall not settle such action.

 

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(e)          Failure to Defend. If the Representative or Parent, as applicable, promptly after receiving a Notice of Claim, fails to defend such Third Party Claim actively and in good faith, Parent or the Representative, as applicable, at the reasonable cost and expense of the Representative or Parent, as applicable, will (upon further written notice) have the right to undertake the defense, compromise or settlement of such Third Party Claim as it may determine in its reasonable discretion, provided that the Representative or Parent, as applicable, shall have the right to approve any settlement, which approval will not be unreasonably withheld, delayed or conditioned.

 

(f)          Releases. Anything in this Section 7.2 to the contrary notwithstanding, the Representative or Parent, as applicable, shall not, without the written consent of Parent or the Representative, as applicable, settle or compromise any action or consent to the entry of any judgment which does not include as an unconditional term thereof the giving by the claimant or the plaintiff to Parent or the Representative, as applicable, of a full and unconditional release from all liability and obligation in respect of such action without any payment by Parent or the Representative, as applicable.

 

(g)          Representative Consent. Unless the Representative has consented to a settlement of a Third Party Claim, the amount of the settlement shall not be a binding determination of the amount of the Loss and such amount shall be determined in accordance with the provisions of the Escrow Agreement.

 

7.3.        Insurance Effect. Notwithstanding any provision in this Agreement to the contrary, all Losses for which a Parent Indemnitee or a Company Indemnitee would otherwise be entitled to indemnification under this Article VII shall be reduced by the amount of insurance proceeds (net of premium, deductible, future premium increases and any other increased insurance costs as a result of such payment of proceeds), indemnification payments and other third-party recoveries actually received by such Parent Indemnitee or Company Indemnitee in respect of any Losses.  In the event that any such insurance proceeds, indemnity payments or other third-party recoveries are realized by a Parent Indemnitee or a Company Indemnitee subsequent to receipt by such Parent Indemnitee or Company Indemnitee of any indemnification payment hereunder in respect of the claims to which such insurance proceeds, indemnity payments or other third-party recoveries relate, appropriate refunds shall be made promptly by such Parent Indemnitee or Company Indemnitee of all or the relevant portion of such indemnification payment.

 

7.4.        Limitations on Indemnification.

 

(a)          Survival. The representations, warranties, covenants and agreements in this Agreement or in any Schedule or certificate delivered in connection with this Agreement shall survive the Closing until the Escrow Release Date (the “Survival Period”); provided, however, that any indemnification claim made in writing prior to the termination of the Survival Period shall be preserved despite the subsequent termination of the Survival Period and any claim set forth in a Notice of Claim sent prior to the expiration of such Survival Period shall survive until final resolution thereof. Except as set forth in the immediately preceding sentence, (i) no claim for indemnification shall be brought after the end of the Survival Period, and (ii) the indemnification rights of Parent Indemnitees under this Article VII shall terminate and be of no further force or effect as of the termination of the Survival Period.

 

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(b)          Deductible. No amount shall be payable under Article VII unless and until the aggregate amount of all indemnifiable Losses otherwise payable exceeds $1,000,000 (the “Deductible”), in which event the amount payable shall be only the amount in excess of the amount of the Deductible. Notwithstanding the foregoing, the Deductible with respect to an indemnification claim made pursuant to Section 7.1(a)(iii) shall be $2,500,000.

 

(c)          Aggregate Amount Limitation. The aggregate liability for Losses of Parent on the one hand or the Company's shareholders on the other pursuant to Section 7.1 shall not in any event exceed the value of the Escrow Shares and Parent shall have no claim against the Company’s shareholders other than for any of such Escrow Shares and the Company's shareholders shall have no claim against Parent other than for the issuance of additional Parent Ordinary Shares.

 

(d)          Duplication of Recovery. Any Losses for which a Person is entitled to indemnification under this Agreement shall be determined without duplication of recovery by reason of the state of facts giving rise to such Losses constituting a breach of more than one representation, warranty, covenant or agreement.

 

7.5.        Exclusive Remedy.

 

(a)          The sole remedy of the Parent Indemnitees with respect to any and all claims for money damages arising out of or relating to this Agreement shall be pursuant and subject to the requirements of the indemnification provisions set forth in this Article VII (including Section 7.4(c)). Notwithstanding any of the foregoing, nothing contained in this Article VII shall in any way impair, modify or otherwise limit a Parent Indemnitee’s right to bring any claim, demand or suit against the other party based upon such other party’s actual fraud or intentional or willful misconduct, it being understood that a mere breach of a representation and warranty does not constitute fraud and that a Parent Indemnitee may not pursue such claim, demand or suit unless and only to the extent that all of the Escrow Shares have been released.

 

(b)          The sole remedy of the Company Indemnitees with respect to any and all claims for money damages arising out of or relating to this Agreement shall be pursuant and subject to the requirements of the indemnification provisions set forth in this Article VII (including Section 7.4(c)). Notwithstanding any of the foregoing, nothing contained in this Article VII shall in any way impair, modify or otherwise limit a Company Indemnitee’s right to bring any claim, demand or suit against the other party based upon such other party’s actual fraud or intentional or willful misconduct, it being understood that a mere breach of a representation and warranty does not constitute fraud.

 

7.6.        Adjustment to Merger Consideration. Amounts paid for indemnification under Article VII shall be deemed to be an adjustment to the value of the Parent Ordinary Shares issued by Parent as a result of the Merger, except as otherwise required by Law.

 

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7.7.        Representative Capacities; Application of Escrow Shares. The parties acknowledge that the Representative’s obligations under this Article VII are solely as a representative of the Company’s shareholders in the manner set forth in the Escrow Agreement with respect to the obligations to indemnify Parent under this Article VII and that the Representative shall have no personal responsibility for any expenses incurred by him in such capacity and that all payments to Parent as a result of such indemnification obligations shall be made solely from, and to the extent of, the Escrow Shares. Out-of-pocket expenses of the Representative for attorneys’ fees and other costs shall be borne in the first instance by Parent. The parties further acknowledge that all actions to be taken by Parent pursuant to this Article VII shall be taken on its behalf by the Committee in accordance with the provisions of the Escrow Agreement. The Escrow Agent, pursuant to the Escrow Agreement after the Closing, may apply all or a portion of the Escrow Shares to satisfy any claim for indemnification pursuant to this Article VII. The Escrow Agent will hold the remaining portion of the Escrow Shares until final resolution of all claims for indemnification or disputes relating thereto.

 

7.8.        Mitigation. A Parent Indemnitee or a Company Indemnitee shall use commercially reasonably efforts to mitigate Losses suffered, incurred or sustained by it arising out of any matter for which it is entitled to indemnification hereunder; provided that no Parent Indemnitee or Company Indemnitee shall be required to (i) take any action or refrain from taking any action that is contrary to any applicable Contract, order or law binding on it or any Affiliate thereof or (ii) incur any out-of-pocket expense in connection with such mitigation (other than de minimis incidental expenses).

 

7.9.        No Consequential Damages. No party shall have any liability for any special, exemplary, punitive or consequential damages (including lost profits or revenue or diminution of value) suffered or incurred by any other party.

 

ARTICLE VIII.
TERMINATION

 

8.1.        Termination. This Agreement may be terminated at any time prior to the Closing:

 

(a)          by mutual written agreement of Parent and the Company at any time;

 

(b)          by either Parent or the Company if the Merger shall not have been consummated by December 16, 2013 for any reason; provided, however, that the right to terminate this Agreement under this Section 8.1(b) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in the failure of the Merger to occur on or before such date;

 

(c)          by either Parent or the Company if a Governmental Entity shall have issued an order, decree, judgment or ruling or taken any other action, in any case having the effect of permanently restraining, enjoining or otherwise prohibiting the Merger, which order, decree, judgment, ruling or other action is final and nonappealable; provided, however, that the right to terminate this Agreement under this Section 8.1(c) shall not be available to any party whose action or failure to act has been a principal cause of or resulted in such order, decree, judgment, ruling or other action being final and nonappealable;

 

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(d)          by the Company, upon a material breach of any representation, warranty, covenant or agreement on the part of Parent or Merger Sub set forth in this Agreement, or if any representation or warranty of Parent or Merger Sub shall have become untrue, in either case such that the conditions set forth in Article VI would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such breach by Parent is curable by Parent prior to the Closing Date, then the Company may not terminate this Agreement under this Section 8.1(d) for thirty (30) days after delivery of written notice from the Company to Parent of such breach, provided Parent continues to exercise commercially reasonable efforts to cure such breach (it being understood that the Company may not terminate this Agreement pursuant to this Section 8.1(d) if it shall have materially breached this Agreement or if such breach by Parent is cured during such thirty (30)-day period);

 

(e)          by Parent, upon a material breach of any representation, warranty, covenant or agreement on the part of the Company set forth in this Agreement, or if any representation or warranty of the Company shall have become untrue, in either case such that the conditions set forth in Article VI would not be satisfied as of the time of such breach or as of the time such representation or warranty shall have become untrue, provided, that if such breach is curable by the Company prior to the Closing Date, then Parent may not terminate this Agreement under this Section 8.1(e) for thirty (30) days after delivery of written notice from Parent to the Company of such breach, provided the Company continues to exercise commercially reasonable efforts to cure such breach (it being understood that Parent may not terminate this Agreement pursuant to this Section 8.1(e) if it or Merger Sub shall have materially breached this Agreement or if such breach by the Company is cured during such thirty (30)-day period);

 

(f)          by either Parent or the Company, if, at the Special Meeting (including any adjournments thereof), this Agreement and the transactions contemplated thereby shall fail to be approved and adopted by the affirmative vote of the holders of Parent Ordinary Shares required under Parent’s Charter Documents, or the holders of more than 87.5% of the Parent Ordinary Shares issued in Parent’s initial public offering and outstanding as of the date of the record date of the Special Meeting shall exercise their rights to convert the Parent Ordinary Shares held by them into cash in accordance with Parent’s Charter Documents; or

 

(g)          by the Company, if immediately after the Merger, Parent will not have cash on hand of at least $33,500,000 after payment of amounts that Parent may pay to shareholders who elect to have their shares converted to cash in accordance with the provisions of Parent’s Charter Documents and after payment of transaction costs incurred by Parent and the Company not to exceed $5,000,000 in the aggregate.

 

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8.2.        Notice of Termination; Effect of Termination. Any termination of this Agreement under Section 8.1 above will be effective immediately upon (or, if the termination is pursuant to Section 8.1(d) or Section 8.1(e) and the proviso therein is applicable, thirty (30) days after) the delivery of written notice of the terminating party to the other parties hereto. In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall be of no further force or effect and the Merger shall be abandoned, except for and subject to the following: (i) Sections 5.5, 5.8, 8.2 and 8.3 and Article X (General Provisions) shall survive the termination of this Agreement, and (ii) nothing herein shall relieve any party from liability for any breach of this Agreement prior to the termination hereof, including a breach by a party electing to terminate this Agreement pursuant to Section 8.1(b) caused by the action or failure to act of such party constituting a principal cause of or resulting in the failure of the Merger to occur on or before the date stated therein.

 

8.3.        Fees and Expenses. All fees and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such expenses; provided, however, that the expenses of the audits for the Company’s financial statements necessary to complete the Merger shall be paid by Parent and the Company in equal amounts regardless of whether or not the Merger is consummated; provided further, however, that if this Agreement is terminated by Parent for any reason other than pursuant to Section 8.1(f), then the full expenses of the audits for the Company’s financial statements necessary to complete the Merger shall be paid by Parent and Parent shall reimburse Company for any amounts the Company has previously paid for such audits.

 

ARTICLE IX.
DEFINED TERMS

 

9.1.        Defined Terms. For purposes of this Agreement, the term:

 

Adjusted Net Debt” means the sum of the Indebtedness of the Company and its Subsidiaries less the cash of the Company and its Subsidiaries.

 

Affiliate” means, as applied to any Person, any other Person directly or indirectly controlling, controlled by or under direct or indirect common control with, such Person. For purposes of this definition, “control” (including with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

 

Agreement” means this Agreement and Plan of Reorganization, as the same may be amended from time to time, and all Exhibits and Schedules hereto (including the Company Disclosure Schedule and the Parent Disclosure Schedule).

 

Blue Sky Laws” means state securities laws.

 

Company Intellectual Property” means any Intellectual Property that is owned by, or exclusively licensed to, the Company or any of its Subsidiaries, including software and software programs developed by or exclusively licensed to the Company or any of its Subsidiaries (specifically excluding any off the shelf or shrink-wrap software).

 

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Contracts” means all contracts, agreements, leases, mortgages, indentures, notes, bonds, licenses, permits, franchises and other understandings, commitments and obligations of any kind, whether written or oral.

 

Copyrights” means all copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world.

 

Current Assets” means the sum of the Company’s and its Subsidiaries’ current assets, including accounts receivable, inventory and prepaid expenses, in each case determined in accordance with U.S. GAAP.

 

Current Liabilities” means the sum of the Company’s and its Subsidiaries’ current liabilities, including accrued liabilities and ordinary trade payables, less any current portion of long term Indebtedness of the Company, in each case determined in accordance with U.S. GAAP.

 

Dissenting Shares” means any Company Ordinary Shares held by Persons who are entitled to dissenter rights under the Companies Law, and who have properly exercised, perfected and not subsequently withdrawn or lost or waived their rights to demand payment with respect to those shares in accordance with the Companies Law.

 

Earnout Target” means any of the performance targets set forth in Section 1.14.

 

Environmental Law” means any federal, state, local or foreign law, regulation, order, decree, permit, authorization, opinion, common law or agency requirement relating to: (A) the protection, investigation or restoration of the environment or natural resources; (B) the handling, use, presence, disposal, release or threatened release of any Hazardous Substance or (C) noise, odor, wetlands, pollution, contamination or any injury or threat of injury to Persons or property.

 

Escrow Claims” means claims made pursuant to the Escrow Agreements.

 

Estimated LTM EBITDA Amount” means $27.0 million.

 

Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

Future EBITDA” means, with respect to any future period, as determined in accordance with U.S. GAAP, the consolidated net earnings of the Parent, including net earnings attributable to any non-controlling interest, before interest income or expense, income taxes, depreciation, amortization and any expenses arising solely from the Merger charged to income in such future period.

 

Governmental Action/Filing” means any franchise, license, certificate of compliance, authorization, consent, order, permit, approval, consent or other action of, or any filing, registration or qualification with, any federal, state, municipal, foreign or other Governmental Entity.

 

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Governmental Entity” means any court, administrative agency, commission, governmental or regulatory authority or judicial body, whether domestic or foreign.

 

Hazardous Substance” means any substance that is: (i) listed, classified or regulated pursuant to any Environmental Law; (ii) any petroleum product or by-product, asbestos-containing material, lead-containing paint or plumbing, polychlorinated biphenyls, radioactive materials or radon; (iii) explosive or (iv) any other substance which is the subject of regulatory action by any Governmental Entity pursuant to any Environmental Law.

 

HSR Act” means the Hart–Scott–Rodino Antitrust Improvements Act of 1976.

 

Indebtedness” means, with respect to any Person, without duplication, any obligations, contingent or otherwise, in respect of (a) the principal of and premium (if any) in respect of all indebtedness for borrowed money, including accrued interest and any cost associated with prepaying any such debt, (b) the principal component of capitalized lease obligations, (c) net obligations under interest rate agreements and currency agreements, (d) amounts drawn on letters of credit, (e) the principal amount of and premium (if any) in respect of obligations evidenced by bonds, debentures, notes and similar instruments and all other obligations of a Person upon which interest is paid by such Person, including accrued interest, (f) the principal component of all obligations to pay the deferred and unpaid purchase price of property and equipment which have been delivered, (g) net cash payment obligations under swaps, options, derivatives and other hedging agreements or arrangements that will be payable upon termination thereof (assuming they were terminated on the date of determination), (h) all liabilities relating to securitization or factoring programs or arrangements, and (i) all Indebtedness of another Person referred to in clauses (a) through (h) above guaranteed (including keep well arrangements), in any manner; provided, however, that for purposes of Section 1.5(d), “Indebtedness” shall not include any Current Liabilities.

 

Intellectual Property” means any or all of the following and all worldwide common law and statutory rights in, arising out of, or associated therewith: (i) patents and applications therefor and all reissues, divisions, renewals, extensions, provisionals, continuations and continuations-in-part thereof; (ii) inventions (whether patentable or not), invention disclosures, improvements, trade secrets, proprietary information, know how, technology, technical data and customer lists, and all documentation relating to any of the foregoing; (iii) all Copyrights; (iv) software and software programs; (v) domain names, uniform resource locators and other names and locators associated with the Internet; (vi) industrial designs and any registrations and applications therefor; (vii) all Trademarks; (viii) all databases and data collections and all rights therein; (ix) all moral and economic rights of authors and inventors, however denominated; and (x) any similar or equivalent rights to any of the foregoing (as applicable).

 

Knowledge” means with respect to (a) the Company, the actual knowledge or awareness as to a specified fact or event of any of those individuals listed on Schedule 9.1(a) of the Company Disclosure Schedule, and (b) Parent, the actual knowledge or awareness as to a specified fact or event of any of those individuals listed on Schedule 9.1(a) of the Parent Disclosure Schedule.

 

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Legal Requirements” means any federal, state, local, municipal, foreign or other law, statute, constitution, principle of common law, resolution, ordinance, code, edict, decree, rule, regulation, ruling or requirement issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Entity.

 

Lien” means any mortgage, pledge, security interest, encumbrance, lien, restriction or charge of any kind (including, without limitation, any conditional sale or other title retention agreement or lease in the nature thereof, any sale with recourse against the seller or any Affiliate of the seller, or any agreement to give any security interest).

 

Litigation Damages” is the amount the Company pays in a settlement or pursuant to a judgment or verdict, plus all expenses incurred by the Company in defending the case, less what the Company is paid or reimbursed through its insurance policies.

 

Losses” means all losses, liabilities, damages, judgments, awards, orders, penalties, settlements, costs and expenses (including, without limitation, interest, penalties, court costs and reasonable legal fees and expenses) including those arising from any demands, claims, suits, actions, costs of investigation, notices of violation or noncompliance, causes of action, proceedings and assessments whether or not made by third parties.

 

LTM Adjusted EBITDA” means, as determined in accordance with U.S. GAAP, the consolidated net earnings of the Company, including net earnings attributable to any non-controlling interest before interest income or expense, income taxes, depreciation, amortization, and any expenses arising solely from the Merger charged to income in such period.

 

LTM EBITDA Variance” means the amount by which the Estimated LTM EBITDA Amount is greater than or less than the Actual LTM EBITDA Amount.

 

Material Adverse Effect” means any change, event, effect or occurrence, individually or when aggregated with other changes, events, effects or occurrences, that is materially adverse to the business, assets (including intangible assets), financial condition, or results of operations of such entity which has continued or is reasonably expected to continue over a period of not less than eighteen (18) months, it being understood that none of the following alone or in combination shall be deemed, in and of itself, to constitute a Material Adverse Effect: (i) any economic, credit, capital, securities or financial markets or any social, regulatory or political conditions in the United States or elsewhere in the world, including with respect to interest rates or currency exchange rates, (ii) any outbreak or any development, change, worsening or escalation of hostilities (whether or not armed), acts of war (whether or not declared), sabotage or terrorism, (iii) any act of God, hurricane, tornado, flood, volcano, earthquake or other natural or man-made disaster, (iv) any proposal, enactment or change in interpretation of, or other change in, applicable law, U.S. GAAP (or equivalent accounting practice in any other jurisdiction) or governmental policy, (v) general conditions in the industries in which a Person operates, (vi) the price or availability of any products, equipment or supply used or sold by a Person, (vii) the failure, in and of itself, of a Person to meet any internal or published projections, forecasts, estimates or predictions in respect of revenue, earnings or other financial or operating metrics before, on or after the date of this Agreement, or changes in the credit rating of a Person, (viii) the announcement and pendency of this Agreement and/or other transactions contemplated hereby (including any employee departures), (ix) any action taken or omitted to be taken by a party hereto at the other party’s direction or written request or otherwise required or permitted to be taken or omitted to be taken by this Agreement, (x) the identity of, or any facts or circumstances relating to, another party hereto, and (xi) the effect of any matters specifically disclosed in Schedules to this Agreement, provided further, that the exceptions in clauses (i)-(v) above shall not apply to the extent (if any) that the impact of such change, event, circumstance or effect is disproportionately adverse to such Person, relative to other companies in any industry in which such Person operates.

 

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Net Debt Overage” means the amount by which the Actual Net Debt Amount exceeds the Estimated Net Debt Amount.

 

Net Debt Underage” means the amount by which the Estimated Net Debt Amount exceeds the Actual Net Debt Amount.

 

Normalized Working Capital” means (a) Current Assets of the Company and its Subsidiaries as of the Closing Date less (b) Current Liabilities of the Company and its Subsidiaries, less any current portion of Indebtedness of the Company and its Subsidiaries, each as determined in accordance with U.S. GAAP.

 

Outstanding Company Ordinary Shares Number” means the number of Company Ordinary Shares outstanding immediately prior to the Effective Time, excluding treasury shares and Company Ordinary Shares held by Parent, the Company or any direct or indirect wholly owned subsidiary of Parent or the Company immediately prior to the Effective Time.

 

Permitted Lien” means any and all Liens (a) which result from all statutory or other liens for Taxes or assessments and are not yet due and payable or delinquent or the validity of which is being contested in good faith by appropriate proceedings along with the posting of any security or bond required under applicable law in connection with such contest, (b) imposed or promulgated by applicable law or any Governmental Entity, including (i) zoning ordinances, building codes, regulations, permits and similar enactments which are not violated by the current use of the real property subject to such enactments or (ii) other restrictions, variations, covenants, conditions, rights of way, easements and other minor irregularities in title, (c) arising in connection with any cashiers’, landlords’, workers’, mechanics’, carriers’, repairers’ or other similar lien imposed by applicable law and arising out of obligations incurred in the ordinary course of business, (d) that are expressly listed as exceptions in insurance policies, (e) listed on Schedule 9.1(b) of the Company Disclosure Schedule, (f) listed on Schedule 9.1(b) of the Parent Disclosure Schedule, (g) under any Material Company Contract (but excluding Encumbrances arising out of the violation of any such Material Company Contracts), and (h) which individually or in the aggregate do not materially detract from the value of or materially interfere with the present use of the property subject thereto or affected thereby.

 

Person” means any individual, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any limited liability company or joint stock company), firm or other enterprise, association, organization, entity or Governmental Entity.

 

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Registered Intellectual Property” means all Intellectual Property that is the subject of an application, certificate, filing, registration or other document issued, filed with, or recorded by any government or other legal authority.

 

Representative” means the representative of the recipients of the Parent Ordinary Shares under this Agreement to be appointed by such recipients.

 

Securities Act” means the Securities Act of 1933, as amended.

 

Tax” (including, with correlative meaning, the terms “Taxes” and “Taxable”) means all federal, state, local and foreign income, profits, franchise, gross receipts, environmental, customs duty, capital share, severance, stamp, payroll, sales, employment, occupation, ad valorem, transfer, recapture, unemployment, disability, use, property, withholding, excise, production, value added, occupancy and other taxes, duties or assessments of any nature whatsoever, together will all interest, penalties and additions.

 

Tax Return” means all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns) required to be supplied to a Tax authority relating to Taxes.

 

Trademarks” means trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor.

 

U.S. GAAP” means generally accepted accounting principles of the United States.

 

Working Capital Excess” means the amount by which the Actual Working Capital Amount exceeds the Estimated Working Capital Amount.

 

Working Capital Shortfall” means the amount by which the Estimated Working Capital Amount exceeds the Actual Working Capital Amount.

 

9.2.        Glossary of Other Defined Terms. Terms defined in this Agreement are organized alphabetically as follows, together with the Section and, where applicable, paragraph, number in which definition of each such term is located:

 

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Accounting Firm   Section 1.5(c)(ii)
     
Actual LTM EBITDA Amount   Section 1.5(c)(i)
     
Actual Net Debt Amount   Section 1.5(d)(ii)
     
Actual Working Capital Amount   Section 1.5(d)(iii)
     
Additional Parent SEC Reports   Section 5.3(c)
     
Additional Share Escrow Agreement   Section 1.14
     
Applicable Law   Section 1.3
     
Approvals   Section 2.1(b)
     
Audited Financial Statements   Section 2.7(a)
     
Charter Amendment   Section 5.1(a)
     
Charter Documents   Section 2.1(b)
     
Closing   Section 1.2
     
Closing Date   Section 1.2
     
Closing Form 8-K   Section 5.3(b)
     
Closing Net Debt/Working Capital Statement   Section 1.5(d)(i)
     
Closing Press Release   Section 5.3(b)
     
Committee   Section 1.11
     
Companies Law   Recital A
     
Company   Heading
     
Company Affiliate Transaction   Section 2.22
     
Company Certificates   Section 1.5(f)
     
Company Closing Certificate   Section 6.3(a)
     
Company Derivative Securities   Section 2.3(a)
     
Company Disclosure Schedule   Article II

 

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Company Indemnitees   Section 7.1(b)
     
Company Ordinary Shares   Section 1.5(a)
     
Company Options   Section 2.3(a)
     
Continental   Section 1.6(a)
     
Corporate Records   Section 2.1(d)
     
Deductible   Section 7.4(b)
     
Dissenter   Section 1.12
     
Effective Time   Section 1.2
     
Employment Agreements   Section 5.18
     
ES   Heading
     
Escrow Agent   Section 1.10
     
Escrow Agreements   Section 1.14
     
Escrow Release Date   Section 1.10
     
Escrow Shares   Section 1.10
     
Estimated Net Debt Amount   Section 1.5(d)(ii)
     
Estimated Working Capital Amount   Section 1.5(d)(iii)
     
Exchange Agent Agreement   Section 1.6(a)
     
Exchange Agent   Section 1.6(a)
     
Indemnity Escrow Account   Section 1.10
     
Indemnity Escrow Agreement   Section 1.10
     
Insider   Section 2.19(a)(iii)
     
Insurance Policies   Section 2.20
     
Item of Dispute   Section 1.5(c)(ii)
     
Letter of Transmittal   Section 1.6(b)
     
Litigation Escrow Shares   Section 1.10

 

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Lock-Up Agreement   Section 1.15
     
Material Company Contract(s)   Section 2.19(a)
     
Merger Consideration   Section 1.5(a)
     
Merger   Recital A
     
Merger Sub   Heading
     
Nasdaq   Section 3.23
     
Notice of Claim   Section 7.2(a)
     
Parent   Heading
     
Parent Affiliate Transaction   Section 3.21
     
Parent Closing Certificate   Section 6.2(a)
     
Parent Contracts   Section 3.19(a)
     
Parent Convertible Securities   Section 3.3(b)
     
Parent Disclosure Schedule   Article III
     
Parent Indemnitees   Section 7.1(a)
     
Parent Ordinary Shares   Section 1.5(a)(i)
     
Parent Plan   Section 5.1(a)
     
Parent Preferred Shares   Section 3.3(a)
     
Parent SEC Reports   Section 3.7(a)
     
Parent Shareholder Approval   Section 5.1(a)
     
Parent Options   Section 3.3(b)
     
Parent Warrants   Section 3.3(b)
     
Plan of Merger   Section 1.2
     
Plan(s)   Section 2.11(a)
     
Proxy Statement   Section 5.1(a)
     
Reviewable Document   Section 5.4(a)

 

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Reorganization   Recital C
     
Signing Form 8-K   Section 5.3(a)
     
Signing Press Release   Section 5.3(a)
     
Special Meeting   Section 5.1(a)
     
Subsidiaries   Section 2.2(a)
     
Survival Period   Section 7.4(a)
     
Surviving Corp   Section 1.1
     
Tecnoglass   Heading
     
Third Party Claim   Section 7.2
     
Trust Fund   Section 3.25
     
Unaudited Financial Statements   Section 2.7(b)
     
Written Consent   Section 2.4

 

ARTICLE X.
GENERAL PROVISIONS

 

10.1.        Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally or by commercial delivery service, or sent via email or telecopy to the parties at the following addresses or telecopy numbers (or at such other address or telecopy numbers for a party as shall be specified by like notice):

 

if to Parent or Merger Sub    
prior to the Closing, to:   Andina Acquisition Corporation
    Carrera 10 No. 28-49
    Torre A. Oficina 20-05
    Bogota, Colombia
    Attention:  A. Lorne Weil
    Telephone: [________]
    Telecopy: [________]
    E-mail: [________]

 

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with a copy (which shall    
not constitute notice) to:   David Alan Miller, Esq.
    Graubard Miller
    405 Lexington Avenue
    New York, New York 10174-1901
    Telephone:  212-818-8880
    Telecopy:    212-818-8881
    Email: dmiller@graubard.com
if to Parent or    
Merger Sub    
following the Closing,    
or the Company, to:   Tecnoglass S.A.
    Avenida Circunvalar a 100 mts de la Via 40
    Barrio Las Flores Barranquilla, Colombia
    Attention: Jose Manuel Daes
    Telephone: [________]
    Telecopy: [________]
    E-mail: [________]
     
with a copy (which    
shall not constitute    
notice) to:   Phillip M. Hudson III, Esq.
    Arnstein & Lehr LLP
    200 South Biscayne Boulevard, Suite 3600
    Miami, Florida 33131
    Telephone: 305-428-4502
    Telecopy: [________]
    E-mail: pmhudson@arnstein.com

 

10.2.        Interpretation. The definitions of the terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context shall require, any pronoun shall include the corresponding masculine, feminine and neuter forms. When a reference is made in this Agreement to an Exhibit or Schedule, such reference shall be to an Exhibit or Schedule to this Agreement unless otherwise indicated. When a reference is made in this Agreement to Sections or subsections, such reference shall be to a Section or subsection of this Agreement. Unless otherwise indicated the words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The table of contents and headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. When reference is made herein to “the business of” an entity, such reference shall be deemed to include the business of all direct and indirect Subsidiaries of such entity.

 

10.3.        Counterparts; Facsimile Signatures. This Agreement and each other document executed in connection with the transactions contemplated hereby, and the consummation thereof, may be executed in one or more counterparts, all of which shall be considered one and the same document and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it being understood that all parties need not sign the same counterpart. Delivery by email or facsimile to counsel for the other party of a counterpart executed by a party shall be deemed to meet the requirements of the previous sentence.

 

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10.4.        Entire Agreement; Third Party Beneficiaries. This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Exhibits and Schedules hereto (a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof, it being understood that the letter of intent between Parent and the Company dated May 13, 2013 is hereby terminated in its entirety and shall be of no further force and effect (except to the extent expressly stated to survive the execution of this Agreement and the consummation of the transactions contemplated hereby); and (b) are not intended to confer upon any other Person any rights or remedies hereunder (except as specifically provided in this Agreement).

 

10.5.        Severability. In the event that any provision of this Agreement, or the application thereof, becomes or is declared by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this Agreement will continue in full force and effect and the application of such provision to other persons or circumstances will be interpreted so as reasonably to effect the intent of the parties hereto. The parties further agree to replace such void or unenforceable provision of this Agreement with a valid and enforceable provision that will achieve, to the extent possible, the economic, business and other purposes of such void or unenforceable provision.

 

10.6.        Other Remedies; Specific Performance. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity.

 

10.7.        Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York regardless of the law that might otherwise govern under applicable principles of conflicts of law thereof.

 

10.8.        Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

 

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10.9.        Assignment. No party may assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other parties. Subject to the first sentence of this Section 10.9, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns.

 

10.10.      Amendment. This Agreement may be amended by the parties hereto at any time prior to the Closing Date by execution of an instrument in writing signed on behalf of each of the parties. After the Closing Date, this Agreement may be amended only with the consent of Parent and the Committee.

 

10.11.      Extension; Waiver. At any time prior to the Closing, any party hereto may, to the extent legally allowed, (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties made to such party contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party. Delay in exercising any right under this Agreement shall not constitute a waiver of such right.

 

10.12.      Submission to Jurisdiction; Waivers; Consent to Service of Process. Each of the parties irrevocably agrees that any action, proceeding or claim with respect to this Agreement or for recognition and enforcement of any judgment in respect hereof brought by another party hereto or its successors or permitted assigns shall be brought and determined exclusively in any state court or Federal court sitting in New York, New York and each of the parties hereto hereby (i) irrevocably submits with regard to any such action, proceeding or claim for itself and in respect to its property, generally and unconditionally, to the exclusive personal jurisdiction of the aforesaid courts in the event any dispute arises out or relates to of this Agreement or any transaction contemplated hereby, (ii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court and (iii) agrees that it will not bring any action arising out of or relating to this Agreement or any transaction contemplated hereby in any court other than any state court or Federal court sitting in New York, New York. It is understood and agreed that any other court or arbiter in any other jurisdiction shall be entitled to enforce any judgment of any state court or Federal court sitting in New York, New York. Any writs, process or summonses to be served on any other party in such action or proceeding may be made by delivery of process in accordance with the notice provisions contained in Section 10.1 or as otherwise permitted by applicable law. Each of the parties hereto irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (i) any claim that it is not personally subject to the jurisdiction of the above-named courts for any reason other than the failure to serve process in accordance with this Section 10.12 or (ii) to the fullest extent permitted by applicable law that (A) the suit, action or proceeding in any such court is brought in an inconvenient forum, (B) the venue of such suit, action or proceeding is improper or (C) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

 

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10.13.      WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

 

10.14.      Currency. All references to currency amounts in this Agreement shall mean United States dollars unless otherwise noted.

 

[The Signature Page is the following page.]

 

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

 

  ANDINA ACQUISITION CORPORATION
     
  By: /s/ B. Luke Weil
      Name: B. Luke Weil
      Title: CEO
     
  ANDINA MERGER SUB, INC.
     
  By:  /s/ B. Luke Weil
      Name: B. Luke Weil
      Title: CEO
     
  TECNOGLASS S.A.
     
  By: /s/ Jose M. Daes
      Name: Jose M. Daes
      Title: Authorized Agent
     
  C.I. ENERGIA SOLAR S.A. E.S. WINDOWS
     
  By:  /s/ Jose M. Daes
      Name: Jose M. Daes
      Title: Authorized Agent

 

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INDEMNITY ESCROW AGREEMENT

 

INDEMNITY ESCROW AGREEMENT (“Agreement”) dated [_________], 2013 by and among [Andina Acquisition Corporation]1, a Cayman Islands corporation (“Parent”), [_________], acting as the representative of the recipients of the Parent Ordinary Shares (the “Representative”), [_________], acting as the committee (the “Committee”) representing the interests of Parent, and Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”). Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement (as defined below).

 

Parent is party to that certain Agreement and Plan of Reorganization, dated as of [____], 2013 (the “Merger Agreement”). Pursuant to the Merger Agreement, Parent is to be indemnified in certain respects by the recipients of the Parent Ordinary Shares issued thereunder (“Stockholders”). The parties desire to establish an escrow fund as collateral security for the foregoing indemnification obligations. The Representative has been designated pursuant to Letters of Transmittal executed and delivered to Parent by each Stockholder to represent the Stockholders and each Permitted Transferee (as hereinafter defined) of the Stockholders (the Stockholders and all such Permitted Transferees are hereinafter referred to collectively as the “Owners”), and to act on their behalf for purposes of this Agreement. The Committee has been designated pursuant to the Merger Agreement to represent Parent and to act on its behalf for purposes of this Agreement

 

The parties hereby agree as follows:

 

1.            (a)          Concurrently with the execution hereof, an aggregate of 890,000 Parent Ordinary Shares issued to the Stockholders at the Closing pursuant to the Merger Agreement, which shall be allocated among the Stockholders in accordance with the allocation set forth on Schedule 1(a) attached hereto, together with five (5) stock powers signature medallion guaranteed (or in lieu of such stock powers being medallion guaranteed, accompanied by an appropriate waiver form addressed to Escrow Agent) from each Stockholder separate from the share certificates executed in blank by each such Stockholder, shall be delivered to the Escrow Agent to be held in escrow pursuant to the terms of this Agreement and Section 1.10 and Article VII of the Merger Agreement. The Parent Ordinary Shares represented by the stock certificates so delivered to the Escrow Agent are herein referred to in the aggregate as the “Escrow Fund.” The Escrow Fund shall represent the sole remedy of Parent and any Parent Indemnitees for Indemnification Claims (as hereinafter defined). The Escrow Agent shall maintain a separate account for each Stockholder, and, subsequent to any transfer permitted pursuant to Section 1(e) hereof, each Owner’s, portion of the Escrow Fund.

 

(b)          The parties hereby appoint the Escrow Agent to act, and the Escrow Agent hereby agrees to act, as escrow agent and to hold, safeguard and disburse the Escrow Fund solely pursuant to the terms and conditions hereof. The Escrow Agent shall treat the Escrow Fund as a trust fund in accordance with the terms of this Agreement and not as the property of Parent. The Escrow Agent’s duties hereunder shall terminate upon its distribution of the entire Escrow Fund in accordance with this Agreement.

 

 

1 [Name to be changed at closing.]

 

 
 

 

(c)          Except as herein provided, the Owners shall retain all of their rights as stockholders of Parent with respect to the Parent Ordinary Shares constituting the Escrow Fund during the period the Escrow Fund is held by the Escrow Agent (the “Escrow Period”), including, without limitation, the right to vote their Parent Ordinary Shares included in the Escrow Fund.

 

(d)          During the Escrow Period, all dividends payable in cash with respect to the Parent Ordinary Shares then contained in the Escrow Fund shall be paid to the Owners, but all dividends payable in shares or other non-cash property (“Non-Cash Dividends”) shall be delivered to the Escrow Agent to hold in accordance with the terms hereof. As used herein, the term “Escrow Fund” shall be deemed to include the Non-Cash Dividends distributed thereon, if any.

 

(e)          During the Escrow Period, no sale, transfer or other disposition may be made of any of the Parent Ordinary Shares in the Escrow Fund except:

 

(i)           to any Affiliate of such Stockholder;

 

(ii)         by gift, will, intestate succession, judicial decree or other transfer to the Family Members of such Stockholder or to a trust, corporation, partnership or limited liability company, the beneficiaries, stockholders, partners or members of which are Family Members of such Stockholder or a charitable organization;

 

(iii)        by virtue of the laws of descent and distribution upon the death of such stockholder;

 

(iv)         pursuant to a qualified domestic relations order; or

 

(v)          to any partner, stockholder, or member of such Stockholder (any Person to whom such sale, transfer or disposition is made, a “Permitted Transferee”);

 

provided, however, that in each and any such event it shall be a condition thereto that the Permitted Transferee becomes bound by the terms and conditions of this Agreement. In addition, in connection with and as a condition to any transfer permitted above, the Permitted Transferee shall deliver to the Escrow Agent a stock power signature medallion guaranteed (or in lieu of such stock power being medallion guaranteed, accompanied by an appropriate waiver form addressed to Escrow Agent), separate from the stock certificate executed in blank by the Permitted Transferee with respect to the shares transferred to the Permitted Transferee. Upon receipt of such documents, the Escrow Agent shall deliver to Parent’s transfer agent the original share certificate out of which the assigned shares are to be transferred, together with the executed stock power signature medallion guaranteed (or in lieu of such stock powers being medallion guaranteed, accompanied by an appropriate waiver form addressed to Escrow Agent) separate from the share certificate executed by the transferring stockholder, or a copy of the applicable court order, and shall request that Parent issue new certificates representing (m) the number of shares, if any, that continue to be owned by the transferring Stockholder, and (n) the number of shares owned by the Permitted Transferee as the result of such transfer. Parent, the transferring Stockholder and the Permitted Transferee shall cooperate in all respects with the Escrow Agent in documenting each such transfer and in effectuating the result intended to be accomplished thereby. During the Escrow Period, no Owner shall pledge or grant a security interest in such Owner’s Parent Ordinary Shares included in the Escrow Fund or grant a security interest in such Owner’s rights under this Agreement. For purposes of this Agreement, “Family Member” shall mean the spouse, lineal descendants, stepchildren, father, mother, brother or sister of a Stockholder or of such Stockholder’s spouse.

 

2
 

 

2.            (a)          Parent, acting through the Committee, which has been appointed by Parent to take all necessary actions and make all decisions on behalf of Parent with respect to its rights to indemnification under Article VII of the Merger Agreement may make a claim for indemnification pursuant to the Merger Agreement (“Indemnification Claim”) against the Escrow Fund by giving notice (a “Notice”) to the Representative (the party against whom a claim is being made the “Indemnifying Party”) (with a copy to the Escrow Agent), specifying (i) a brief description of the nature of the Indemnification Claim, (ii) the total amount of the actual out-of-pocket Loss or the anticipated potential Loss (including any costs or expenses which have been or may be reasonably incurred in connection therewith), and (iii) whether such Loss may be covered (in whole or in part) under any insurance and the estimated amount of such Loss which may be covered under such insurance. The party giving Notice (the “Claimant”) also shall deliver to the Escrow Agent (with a copy to the Indemnifying Party), concurrently with its delivery to the Escrow Agent of the Notice, a certification as to the date on which the Notice was delivered to the Indemnifying Party.

 

(b)          If the Indemnifying Party shall give a notice to the Claimant (with a copy to the Escrow Agent) (a “Counter Notice”), within 30 days following the date of receipt (as specified in the Claimant’s certification) by Indemnifying Party of a copy of the Notice, disputing (i) the amount of actual out-of-pocket or anticipated potential Loss specified in the Notice, (ii) whether the Indemnification Claim is indemnifiable under the Merger Agreement, or (iii) whether such Loss is covered (in whole or in part) under any insurance and the estimated amount of such Loss which is covered, the Committee and the Representative shall attempt to resolve such dispute by voluntary settlement as provided in Section 2(c) below. If no Counter Notice with respect to an Indemnification Claim is received by the Escrow Agent from the Indemnifying Party within such 30-day period, the Indemnification Claim shall be deemed to be an Established Claim (as hereinafter defined) for purposes of this Agreement.

 

(c)          If the Indemnifying Party delivers a Counter Notice to the Escrow Agent, the Claimant and the Indemnifying Party shall, during the period of 60 days following the delivery of such Counter Notice or such greater period of time as the parties may agree to in writing (with a copy to the Escrow Agent), attempt to resolve the dispute with respect to which the Counter Notice was given. If the Claimant and the Indemnifying Party shall reach a settlement with respect to any such dispute, they shall jointly deliver written notice of such settlement to the Escrow Agent specifying the terms thereof. If the Claimant and the Indemnifying Party shall be unable to reach a settlement with respect to a dispute, such dispute shall be resolved in accordance with the provisions of Section 10.12 of the Merger Agreement.

 

3
 

 

(d)          As used in this Agreement, “Established Claim” means any (i) Indemnification Claim deemed established pursuant to the last sentence of Section 2(b) above, (ii) Indemnification Claim resolved in favor of a Claimant by joint settlement pursuant to Section 2(c) above, resulting in a dollar award to the Claimant or (iii) Indemnification Claim established that has been sustained by a final determination (after exhaustion of any appeals) of a court of competent jurisdiction; provided that, subject to the terms of the Merger Agreement, notwithstanding anything herein, no Indemnification Claim by Parent shall become an Established Claim unless and until the aggregate amount of indemnification Losses exceeds (i) $1,000,000 in the case of Indemnification Claims other than an Indemnification Claim made pursuant to Section 7.1(a)(iii) of the Merger Agreement (“Litigation Indemnification Claim”) and (ii) $2,500,000, in the case of the Litigation Indemnification Claim (each such amount, the applicable “Deductible”), in which event only the amount of such Established Claim(s) in excess of the applicable Deductible shall be payable.

 

(e)          (i)          Promptly after an Indemnification Claim becomes an Established Claim, the Committee and the Representative shall jointly deliver a notice to the Escrow Agent (a “Joint Notice”) directing the Escrow Agent to pay to the Claimant, and the Escrow Agent promptly shall pay to such Claimant, an amount of Escrow Shares, subject to the provisions of Sections 2(e)(ii) and (iii) below, equal to (subject to the Deductible described in Section 2(d) above and Section 7.4(b) of the Merger Agreement) the aggregate dollar amount of the Established Claim (or, if at such time there remains in the Escrow Fund less than the full amount payable by any Owner to Parent, the full amount remaining in the Escrow Fund attributable to such Owner).

 

(ii)         Payment of an Established Claim to Parent shall be made from Escrow Shares pro rata from the accounts maintained on behalf of each Owner. For purposes of each payment, such shares shall be valued at the “Fair Market Value” (as defined below). However, in no event shall the Escrow Agent be required to calculate Fair Market Value or make a determination of the aggregate number of shares to be delivered or released in satisfaction of any Established Claim; rather, such calculation shall be included in and made part of the Joint Notice. The Escrow Agent shall transfer out of the Escrow Fund that number of Parent Ordinary Shares necessary to satisfy each Established Claim, as set out in the Joint Notice. Any dispute between the Committee and the Representative concerning the calculation of Fair Market Value, the number of shares necessary to satisfy any Established Claim, or any other dispute regarding a Joint Notice, shall be resolved between the Committee and the Representative in accordance with the procedures specified in Section 2(c) above, and shall not involve the Escrow Agent. Each transfer of shares in satisfaction of an Established Claim shall be made by the Escrow Agent delivering to Claimant one or more stock certificates held in each Owner’s account evidencing not less than such Owner’s pro rata portion of the aggregate number of shares specified in the Joint Notice, together with stock powers signature medallion guaranteed (or in lieu of such stock powers being medallion guaranteed, accompanied by an appropriate waiver form addressed to Escrow Agent) separate from the stock certificate executed in blank by such Owner and completed by the Escrow Agent in accordance with instructions included in the Joint Notice. Upon receipt of the stock certificates and stock powers, Parent shall deliver to the Escrow Agent new certificates representing the number of shares in the Escrow Fund owned by each Owner after such payment. The parties hereto (other than the Escrow Agent) agree that the foregoing right to make payments of Established Claims in Parent Ordinary Shares may be made notwithstanding any other agreements restricting or limiting the ability of any Owner to sell any Parent Ordinary Shares or otherwise. As used in this Section 2, “Fair Market Value” means the average reported closing price for the Parent Ordinary Shares for the ten trading days ending on the last trading day prior to (x) the day the Established Claim is paid with respect to Indemnification Claims paid on or before the Escrow Release Date, and (y) the Escrow Release Date with respect to shares constituting the Pending Claims Reserve (as hereinafter defined) on the Escrow Release Date.

 

4
 

 

(iii)        Notwithstanding anything herein to the contrary, at such time as an Indemnification Claim has become an Established Claim, each Owner shall have the right to substitute for his, her or its Escrow Shares that otherwise would be paid to Parent in satisfaction of such claim (the “Claim Shares”) with cash in an amount equal to the Fair Market Value of the Claim Shares (“Substituted Cash”). In such event (i) the Joint Notice shall include a statement describing the substitution of Substituted Cash for the Claim Shares, and (ii) substantially contemporaneously with the delivery of such Joint Notice, the Representative shall cause currently available funds to be delivered to the Escrow Agent in an amount equal to the Substituted Cash. Upon receipt of such Joint Notice and Substituted Cash, the Escrow Agent shall (y) in payment of the Established Claim described in the Joint Notice, deliver the Substituted Cash to Parent in lieu of the Claim Shares, and (z) cause the Claim Shares to be returned to the Representative identified in the Joint Notice on behalf of the applicable Owner.

 

3.          (a)          On the earlier of (A) the 30th day after the date Parent has filed with the SEC its Annual Report for the year ending February 28, 2015 or (B) June 30, 2015 (theEscrow Release Date”), the Escrow Agent shall distribute and deliver to each Owner share certificates representing the Parent Ordinary Shares then in such Owner’s account in the Escrow Fund, unless at such time (i) there are any Indemnification Claims, other than the Litigation Indemnification Claim, with respect to which Notices have been received but which have not been resolved pursuant to Section 2 hereof or with to which the Escrow Agent has not been notified of, and received a copy of, a final determination (after exhaustion of any appeals) by a court of competent jurisdiction, as the case may be, or (ii) the Litigation Indemnification Claims have not been finally resolved. If, on the Escrow Release Date, there exist Indemnification Claims other than the Litigation Indemnification Claim (“Pending Claims”) the resolution or final determination of which could result in a payment to Parent and/or the Litigation Indemnification Claim has not been finally resolved, the Escrow Agent shall retain, and the total amount of such distributions to such Owner shall be reduced by, as applicable, the Pending Claims Reserve (as hereinafter defined) and/or the Litigation Claim Reserve (as hereinafter defined). The Committee and the Representative shall certify to the Escrow Agent the number of Parent Ordinary Shares to be retained therefor.

 

(b)          If, after the Escrow Release Date, a Pending Claim on behalf of Parent becomes an Established Claim, the Committee and the Representative shall deliver to the Escrow Agent a Joint Notice directing the Escrow Agent to pay to Parent an amount in respect thereof determined in accordance with Section 2(e). If a Pending Claim is resolved against Parent, the Committee and the Representative shall deliver to the Escrow Agent a Joint Notice directing the Escrow Agent to pay to each Owner the amount by which the remaining portion of his account in the Escrow Fund exceeds the sum of the then Pending Claims Reserve and Litigation Claim Reserve.

 

5
 

 

(c)          If, after the Escrow Released Date, the Litigation Indemnification Claim is finally resolved in a manner that results in it becoming an Established Claim, the Committee and the Representative shall deliver to the Escrow Agent a Joint Notice directing the Escrow Agent to pay to Parent an amount in respect thereof determined in accordance with Section 2(e). If the Litigation Indemnification Claim is resolved against Parent, the Committee and the Representative shall deliver to the Escrow Agent a Joint Notice directing the Escrow Agent to pay to each Owner the remaining portion of his account in the Escrow Fund attributable to the Litigation Claim Reserve.

 

(d)          Upon resolution of all Pending Claims and the Litigation Indemnification Claim, the Escrow Agent shall pay to such owner the remaining portion of his or her account in the Pending Claims Reserve and the Litigation Claim Reserve.

 

(e)          For purposes of this Agreement (i), “Pending Claims Reserve” shall mean, at the time any such determination is made, that number of Parent Ordinary Shares in the Escrow Fund having a Fair Market Value equal to the sum of the aggregate dollar amounts claimed to be due with respect to all Pending Claims and (ii) “Litigation Claim Reserve” shall mean 300,000 Parent Ordinary Shares

 

4.            The Escrow Agent, the Committee and the Representative shall cooperate in all respects with one another in the calculation of any amounts determined to be payable to Parent and the Owners in accordance with this Agreement and in implementing the procedures necessary to effect such payments.

 

5.            (a)         The Escrow Agent undertakes to perform only such duties as are expressly set forth herein. It is understood that the Escrow Agent is not a trustee or fiduciary and is acting hereunder merely in a ministerial capacity.

 

(b)          The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

 

(c)          The Escrow Agent’s sole responsibility upon receipt of any notice requiring any payment to Parent pursuant to the terms of this Agreement or, if such notice is disputed, the settlement with respect to any such dispute, whether by virtue of joint resolution or determination of a court of competent jurisdiction, is to pay to Parent the amount specified in such notice, if any, and the Escrow Agent shall have no duty to determine the validity, authenticity or enforceability of any specification or certification made in such notice.

 

6
 

 

(d)          The Escrow Agent shall not be liable for any action taken by it in good faith, and may consult with counsel of its own choice and shall have full and complete authorization and indemnification under Section 5(f), below, for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.

 

(e)          The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by giving the other parties hereto thirty (30) days’ written notice of such resignation. Such resignation or removal shall become effective at such time that the Escrow Agent shall turn over the Escrow Fund to the successor escrow agent appointed jointly by the Committee and the Representative. If no new escrow agent is so appointed within the sixty (60) day period following the giving of such notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and deposit the Escrow Fund with such successor escrow agent appointed thereby.

 

(f)           (i)          From and at all times after the date of this Agreement, Parent shall, to the fullest extent permitted by law and to the extent provided herein, indemnify and hold harmless the Escrow Agent and each director, officer, employee, attorney, agent and affiliate of the Escrow Agent (collectively, the “Escrow Agent Parties”) against any and all actions, claims, losses, damages, liabilities, costs and expenses of any kind or nature whatsoever (including without limitation reasonable fees, costs and expenses of one outside counsel (but not internal counsel)) (collectively for purposes of this Section 5(f), “Losses”) actually incurred by any of the Escrow Agent Parties from and after the date hereof, as a result of or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including, without limitation, Parent or the Stockholders, asserting a claim for any legal or equitable remedy against any person under any statute or regulation, including, but not limited to, any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Agreement or any transactions contemplated herein, whether or not any such Escrow Agent Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation; provided, however, that no Escrow Agent Party shall have the right to be indemnified hereunder for (i) any Losses to the extent they are finally determined by a court of competent jurisdiction, subject to no further appeal, to be attributable to the gross negligence or willful misconduct of such Escrow Agent Party or (ii) any settlements entered into by an Escrow Agent Party without Parent’s written consent which shall not be unreasonably withheld.

 

7
 

 

(ii)         If any such action or claim shall be brought or asserted against any Escrow Agent Party, such Escrow Agent Party shall promptly notify the Representative, Parent and the Committee in writing, and Parent shall assume the defense thereof, including the employment of counsel and the payment of all reasonable expenses. Such Escrow Agent Party shall, in its sole discretion, have the right to employ separate counsel (who may be selected by such Escrow Agent Party in its sole discretion) in any such action and to participate in the defense thereof, and the reasonable fees and expenses of such counsel shall be paid by such Escrow Agent Party, except that Parent shall be required to pay such reasonable fees and expenses if (i) Parent agrees to pay such reasonable fees and expenses, (ii) Parent shall fail to assume the defense of such action or proceeding or shall fail, in the reasonable determination of such Escrow Agent Party, to employ counsel satisfactory to the Escrow Agent Party in any such action or proceeding, (iii) Parent or the Stockholders are the plaintiff(s) in any such action or proceeding or (iv) the named or potential parties to any such action or proceeding (including any potentially impleaded parties) include both the Escrow Agent Party and any of Parent, Company, or the Stockholders, and the Escrow Agent Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to Parent, Company, or the Stockholders. All such reasonable fees and expenses payable by Parent pursuant to the immediately preceding sentence shall be paid from time to time as incurred, both in advance of and after the final disposition of such action or claim. The obligations of Parent under this Section 5(f) shall survive any termination of this Agreement and the resignation or removal of the Escrow Agent.

 

(iii)       Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own willful misconduct.

 

(g)          The Escrow Agent shall be entitled to reasonable compensation from Parent for all services rendered by it hereunder as set forth on Schedule 5(g) hereto. The Escrow Agent shall also be entitled to reimbursement from Parent for all reasonable, documented out-of-pocket expenses paid or incurred by it in the administration of its duties hereunder including, but not limited to, all reasonable counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges.

 

(h)          From time to time on and after the date hereof, the Committee and the Representative shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

 

6.          This Agreement expressly sets forth all the duties of the Escrow Agent with respect to any and all matters pertinent hereto. No implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the provisions of any agreement among the parties hereto except this Agreement and shall have no duty to inquire into the terms and conditions of any agreement made or entered into in connection with this Agreement, including, without limitation, the Merger Agreement.

 

7.          This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, successors, assigns and legal representatives and shall be governed by and construed in accordance with the law of New York applicable to contracts made and to be performed therein. This Agreement cannot be changed or terminated except by a writing signed by the Committee, the Representative and the Escrow Agent.

 

8.          All disputes arising under this Agreement between the Committee and the Representative, including a dispute arising from a party’s failure or refusal to sign a Joint Notice or to deliver any notice or other document required hereunder, shall be resolved in the same manner as disputes under the Merger Agreement are to be resolved pursuant to Section 10.12 thereof. The Committee and the Representative each hereby consent to the exclusive jurisdiction of the federal and state courts sitting in New York County, New York, with respect to any claim or controversy arising out of this Agreement. Service of process in any action or proceeding brought against the Committee, the Representative in respect of any such claim or controversy may be made upon it pursuant to Section 9.

 

8
 

 

9.          All notices and other communications under this Agreement shall be in writing and shall be deemed given if given by hand or delivered by nationally recognized overnight carrier, or if given by telecopier and confirmed by mail (registered or certified mail, postage prepaid, return receipt requested), to the respective parties as follows:

 

A. If to the Committee, to it at:
   
  [___________]
  [___________]
  Attention: [___________]
  Facsimile: [___________]
   
  with a copy to:
   
  Graubard Miller
  The Chrysler Building
  405 Lexington Avenue
  New York, New York  10174-1901
  Attention:  David Alan Miller, Esq.
  Facsimile: (888) 225-1565
   
B. If to the Representative, to [him/her] at:
   
  [___________]
  [___________]
  Attention: [___________]
  Facsimile: [___________]
   
  with a copy to:
   
  Arnstein & Lehr LLP
  200 South Biscayne Boulevard, Suite 3600
  Miami, Florida 33131
  Attention: Phillip M. Hudson III, Esq.
  Facsimile: [___________]

 

9
 

   
C. If to the Escrow Agent, to it at:
   
  Continental Stock Transfer & Trust Company
  17 Battery Place
  New York, New York 10004
  Attention: Mark Zimkind
  Facsimile: (212) 509-5150
   
D. If to Parent, to it at:
   
  [Andina Acquisition Corporation]
  Avenida Circunvalar a 100 mts de la Via 40
  Barrio Las Flores Barranquilla, Colombia
  Attention: Jose Manuel Daes
  Facsimile: [___________]
   
  with a copy to:
   
  Arnstein & Lehr LLP
  200 South Biscayne Boulevard, Suite 3600
  Miami, Florida 33131
  Attention: Phillip M. Hudson III, Esq.
  Facsimile: [___________]

 

or to such other person or address as any of the parties hereto shall specify by notice in writing to all the other parties hereto.

 

10.         (a)          All notices delivered to the Escrow Agent shall refer to the provision of this Agreement under which such notice is being delivered and, if applicable, shall clearly specify the aggregate dollar amount due and payable to Parent.

 

(c)          This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute a single agreement.

 

(d)          When reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise specified.

 

[Signatures are on following page]

 

10
 

 

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement on the date first above written.

 

  [ANDINA ACQUISITION CORPORATION]
     
  By:  
  Name:  
  Title:  
     
  REPRESENTATIVE:
     
   
     
  COMMITTEE:
   
   
   
   
   
  ESCROW AGENT:
   
  CONTINENTAL STOCK TRANSFER &
  TRUST COMPANY
     
  By:  
  Name:  
  Title:  

 

11
 

 

Schedule 1(a)


ESCROW SHARES ALLOCATION

 

Name   Address  

No. of

Escrow Shares

[_______]   [_______]   [_______]
    [_______]    
         
[_______]   [_______]   [_______]
    [_______]    
         
Total       890,000

 

12
 

 

Schedule 5(g)

 

Amount   Description
     
$[300] per month   From the date hereof until the termination of the Escrow Agent’s duties pursuant to Section 1(b).

 

13

 

ADDITIONAL SHARES ESCROW AGREEMENT

 

ADDITIONAL SHARES ESCROW AGREEMENT (“Agreement”) dated [_________], 2013 by and among [Andina Acquisition Corporation]1, a Cayman Islands corporation (“Parent”), [______], acting as the representative of the recipients (the “Recipients”) of the Parent Ordinary Shares (the “Representative”), [                ], acting as the committee (the “Committee”) representing the interests of Parent, and Continental Stock Transfer & Trust Company, as escrow agent (the “Escrow Agent”). Capitalized terms used herein that are not otherwise defined herein shall have the meanings ascribed to them in the Merger Agreement (as defined below).

 

Parent is party to that certain Agreement and Plan of Reorganization, dated as of [____], 2013 (the “Merger Agreement”). Pursuant to Section 1.14 of the Merger Agreement, the Recipients shall be entitled to receive additional Parent Ordinary Shares (the “EBITDA Shares”) upon the occurrence of specified Earnout Targets. The parties desire to establish an escrow fund for the satisfaction of the foregoing obligation under the Merger Agreement. The Representative has been designated pursuant to Letters of Transmittal executed and delivered to Parent by each Recipient to represent all of the Recipients and to act on their behalf for purposes of this Agreement.

 

The parties agree as follows:

 

1.            (a)          Concurrently with the execution hereof, 3,000,000 Parent Ordinary Shares that may be released to the Recipients as a group in accordance with the Merger Agreement are being delivered to the Escrow Agent as the EBITDA Shares to be held and distributed in accordance with this Agreement and Section 1.14 of the Merger Agreement.

 

(b)          The Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard and disburse the EBITDA Shares solely pursuant to the terms and conditions hereof. The Escrow Agent’s duties hereunder shall terminate upon its distribution of the EBITDA Shares in accordance with this Agreement.

 

(c)          The EBITDA Shares shall not be deemed outstanding (and no dividends shall be payable with respect thereto) and no Recipient shall have any rights (including any ownership or voting rights) therein until such time, if ever, that the EBITDA Shares are released to the Recipients as provided herein and in accordance with Section 1.14 of the Merger Agreement; provided, however, that the EBITDA Shares shall be adjusted by Parent as follows:

 

(i)          if Parent shall change shares of its capital stock into the same or a different number of securities of any other class or classes (by way of merger, consolidation, reorganization, or any other transaction), the EBITDA Shares shall be converted into such kind and number of securities as they would have been changed into had they been deemed outstanding at the time of such change;

 

 

1 [Name to be changed at closing.]

 

 
 

 

(ii)         if Parent shall split, subdivide or combine any of its capital stock into a different number of securities, then the number of EBITDA Shares shall be proportionately adjusted; and

 

(iii)        if the holders of the type of securities comprising the EBITDA Shares shall have received, or, on or after the record date fixed for the determination of eligible holders, shall have become entitled to receive, without payment therefor, other or additional stock or other securities of Parent by way of a dividend or distribution, then and in each case, the EBITDA Shares shall represent the right to receive from Parent at the time they are released from the escrow hereunder, in addition to the EBITDA Shares themselves, and without payment of any additional consideration therefor, the amount of such other or additional stock or other securities of Parent that would have been payable in respect of the EBITDA Shares had they been deemed outstanding at the time of such dividend or distribution (and such dividend or distribution shall be deemed part of the EBITDA Shares for purposes of this Section 1(c)).

 

2.          Not later than [ten (10)] business days after the date Parent has filed with the SEC its Annual Report for each fiscal year for which an Earnout Target is identified in Section 1.14 of the Merger Agreement, the Committee and the Representative shall deliver a joint notice (the “EBITDA Shares Notice”) to the Escrow Agent (i) specifying whether the Earnout Target for that fiscal year has been met, and (ii) if such Earnout Target has been met, instructing the Escrow Agent to release an aggregate number of EBITDA Shares to the Recipients equal to the applicable number of EBITDA Shares set forth under Section 1.14 of the Merger Agreement, including any number of EBITDA Shares to be released in accordance with Section 1.14(g) of the Merger Agreement, or (iii) if the Earnout Target has not been met and the subject Fiscal Year is the year ended February 29, 2016, instructing the Escrow Agent to release all remaining EBITDA Shares to Parent for cancellation.

 

3.          Notwithstanding anything to the contrary contained in this Agreement, no portion of the EBITDA Shares shall be delivered to any Recipient until such time as same has delivered a properly executed Letter of Transmittal as provided by Section 1.6 of the Merger Agreement. In the event a distribution of a portion of the EBITDA Shares is to made to a Recipient who has not executed and delivered such Letter of Transmittal, the portion of the EBITDA Shares to which the Recipient is otherwise entitled shall be delivered in trust to Parent, which shall hold such portion of the EBITDA Shares pending delivery of such Letter of Transmittal or expiration of any period resulting in escheatment or forfeiture of same.

 

4.          Parent and the Representative shall cooperate in all respects with one another in the calculation of any amounts determined to be payable or issuable in accordance with this Agreement and in implementing the procedures necessary to effect such payments. For all purposes under this Agreement, Parent shall act through the Committee.

 

5.           (a)          The Escrow Agent undertakes to perform only such duties as are expressly set forth herein. It is understood that the Escrow Agent is not a trustee or fiduciary and is acting hereunder merely in a ministerial capacity.

 

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(b)          The Escrow Agent shall not be liable for any action taken or omitted by it in good faith and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person or persons. The Escrow Agent shall not be bound by any notice or demand, or any waiver, modification, termination or rescission of this Agreement unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall have given its prior written consent thereto.

 

(c)          The Escrow Agent’s sole responsibility upon receipt of any notice requiring any issuance of EBITDA Shares under the terms of this Agreement or the settlement with respect to any dispute, whether by virtue of joint resolution or determination of a court of competent jurisdiction, is to issue the number of EBITDA Shares specified in such notice to the party indicated, and the Escrow Agent shall have no duty to determine the validity, authenticity or enforceability of any specification or certification made in such notice.

 

(d)          The Escrow Agent shall not be liable for any action taken by it in good faith, and may consult with counsel of its own choice and shall have full and complete authorization and indemnification under Section 5(f), below, for any action taken or suffered by it hereunder in good faith and in accordance with the opinion of such counsel.

 

(e)          The Escrow Agent may resign at any time and be discharged from its duties as escrow agent hereunder by giving the other parties hereto thirty (30) days’ written notice of such resignation. Such resignation shall become effective at such time that the Escrow Agent shall turn over the EBITDA Shares to a successor escrow agent appointed jointly by the Committee and the Representative. If no new escrow agent is so appointed within the sixty (60) day period following the giving of such notice of resignation, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor escrow agent or for other appropriate relief, and deposit the Escrow Fund with such successor escrow agent appointed thereby.

 

(f)          (i)          From and at all times after the date of this Agreement, Parent shall, to the fullest extent permitted by law and to the extent provided herein, indemnify and hold harmless the Escrow Agent and each director, officer, employee, attorney, agent and affiliate of the Escrow Agent (collectively, the “Escrow Agent Parties”) against any and all actions, claims, losses, damages, liabilities, costs and expenses of any kind or nature whatsoever (including without limitation reasonable fees, costs and expenses of one outside counsel (but not internal counsel)) (collectively, for purposes of this Section 5(f), “Losses”) actually incurred by any of the Escrow Agent Parties from and after the date hereof as a result of or arising from or in any way relating to any claim, demand, suit, action or proceeding (including any inquiry or investigation) by any person, including, without limitation, Parent or the Recipients asserting a claim for any legal or equitable remedy against any person under any statute or regulation, including, but not limited to, any federal or state securities laws, or under any common law or equitable cause or otherwise, arising from or in connection with the negotiation, preparation, execution, performance or failure of performance of this Agreement or any transactions contemplated herein, whether or not any such Escrow Agent Party is a party to any such action, proceeding, suit or the target of any such inquiry or investigation; provided, however, that no Escrow Agent Party shall have the right to be indemnified hereunder for (i) any Losses to the extent they are finally determined by a court of competent jurisdiction, subject to no further appeal, to be attributable to the gross negligence or willful misconduct of such Escrow Agent Party or (ii) any settlements entered into by an Escrow Agent Party without Parent’s written consent which shall not be unreasonably withheld.

 

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(ii)         If any such action or claim shall be brought or asserted against any Escrow Agent Party, such Escrow Agent Party shall promptly notify the Representative and the Committee in writing, and Parent shall assume the defense thereof, including the employment of counsel and the payment of all reasonable expenses. Such Escrow Agent Party shall, in its sole discretion, have the right to employ separate counsel (who may be selected by such Escrow Agent Party in its sole discretion) in any such action and to participate in the defense thereof, and the reasonable fees and expenses of such counsel shall be paid by such Escrow Agent Party, except that Parent shall be required to pay such reasonable fees and expenses if (i) Parent agrees to pay such reasonable fees and expenses, (ii) Parent shall fail to assume the defense of such action or proceeding or shall fail, in the reasonable discretion of such Escrow Agent Party, to employ counsel satisfactory to the Escrow Agent Party in any such action or proceeding, (iii) Parent or the Recipients are the plaintiff in any such action or proceeding or (iv) the named or potential parties to any such action or proceeding (including any potentially impleaded parties) include both the Escrow Agent Party and Parent and/or the Recipients, and the Escrow Agent Party shall have been advised by counsel that there may be one or more legal defenses available to it which are different from or additional to those available to Parent or the Recipients. All such reasonable fees and expenses payable by Parent pursuant to the immediately preceding sentence shall be paid from time to time as incurred, both in advance of and after the final disposition of such action or claim. The obligations of Parent under this Section 5(f) shall survive any termination of this Agreement and the resignation or removal of the Escrow Agent.

 

(iii)        Notwithstanding anything herein to the contrary, the Escrow Agent shall not be relieved from liability hereunder for its own gross negligence or its own willful misconduct.

 

(g)          The Escrow Agent shall be entitled to reasonable compensation from Parent for all services rendered by it hereunder as set forth on Schedule 5(g) hereto. The Escrow Agent shall also be entitled to reimbursement from Parent for all reasonable, documented out-of-pocket expenses paid or incurred by it in the administration of its duties hereunder including, but not limited to, all reasonable counsel, advisors’ and agents’ fees and disbursements and all taxes or other governmental charges.

 

(h)          From time to time on and after the date hereof, the Committee and the Representative shall deliver or cause to be delivered to the Escrow Agent such further documents and instruments and shall do or cause to be done such further acts as the Escrow Agent shall reasonably request to carry out more effectively the provisions and purposes of this Agreement, to evidence compliance herewith or to assure itself that it is protected in acting hereunder.

 

-4-
 

 

 

6.          This Agreement expressly sets forth all the duties of the Escrow Agent with respect to any and all matters pertinent hereto. No implied duties or obligations shall be read into this Agreement against the Escrow Agent. The Escrow Agent shall not be bound by the provisions of any agreement among the parties hereto except this Agreement and shall have no duty to inquire into the terms and conditions of any agreement made or entered into in connection with this Agreement, including, without limitation, the Merger Agreement.

 

7.          This Agreement shall inure to the benefit of and be binding upon the parties and their respective heirs, successors, assigns and legal representatives and shall be governed by and construed in accordance with the law of New York applicable to contracts made and to be performed therein. This Agreement cannot be changed or terminated except by a writing signed by the Committee, the Representative and the Escrow Agent.

 

8.          All disputes arising under this Agreement between the Committee and the Representative, including a dispute arising from a party’s failure or refusal to sign a Joint Notice or to deliver any notice or other document required hereunder, shall be resolved in the same manner as disputes under the Merger Agreement are to be resolved pursuant to Section 10.12 thereof. The Committee and the Representative each hereby consent to the exclusive jurisdiction of the federal and state courts sitting in New York County, New York, with respect to any claim or controversy arising out of this Agreement. Service of process in any action or proceeding brought against the Committee or the Representative in respect of any such claim or controversy may be made upon it pursuant to Section 9.

 

9.          All notices and other communications under this Agreement shall be in writing and shall be deemed given if given by hand or delivered by nationally recognized overnight carrier, or if given by telecopier and confirmed by mail (registered or certified mail, postage prepaid, return receipt requested), to the respective parties as follows:

 

A.           If to the Committee, to it at:

 

[             ]

[             ]

Attention:

Facsimile: [               ]

 

with a copy to:

Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174-1901
Attention: David Alan Miller, Esq.
Facsimile: 212-818-8881

 

B.           If to the Representative, to [him/her] at:

 

[               ]

 

-5-
 

 

[                  ]

Attention:

Facsimile: [               ]

 

with a copy to:

Arnstein & Lehr LLP

200 South Biscayne Boulevard, Suite 3600

Miami, Florida 33131

Attention: Phillip M. Hudson III, Esq. 

Facsimile: [___________]

 

C.           If to the Escrow Agent, to it at:

 

Continental Stock Transfer & Trust Company
17 Battery Place
New York, New York 10004
Attention: Compliance Department
Facsimile: 212-509-5150

 

D.           If to Parent, to it at:

 

[Andina Acquisition Corporation]

Avenida Circunvalar a 100 mts de la Via 40

Barrio Las Flores Barranquilla, Colombia

Attention: Jose Manuel Daes

Facsimile: [___________]

 

with a copy to:

 

Arnstein & Lehr LLP

200 South Biscayne Boulevard, Suite 3600

Miami, Florida 33131

Attention: Phillip M. Hudson III, Esq.

Facsimile: [___________]

 

or to such other person or address as any of the parties hereto shall specify by notice in writing to all the other parties hereto.

 

10.          (a)          All notices delivered to the Escrow Agent shall refer to the provision of this Agreement under which such notice is being delivered and, if applicable, shall clearly specify the aggregate dollar amount due and payable to Parent.

 

(b)          This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original instrument and all of which together shall constitute a single agreement.

 

-6-
 

  

(c)          When reference is made in this Agreement to Sections, such reference shall be to a Section of this Agreement unless otherwise specified.

 

-7-
 

 

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Agreement on the date first above written. 

 

  [ANDINA ACQUISITION CORPORATION]
     
  By:  
  Name:  
  Title:  
     
  REPRESENTATIVE:
     
   
     
  COMMITTEE:
     
   
      
   
     
  ESCROW AGENT:
   
  CONTINENTAL STOCK TRANSFER &
    TRUST COMPANY
     
  By:  
  Name:  
  Title:    

  

-8-
 

 

Schedule 5(g) 

 

Amount   Description
     
$[300] per month   From the date hereof until the termination of the Escrow Agent’s duties pursuant to Section 1(b).

 

-9-

 

 

EXHIBIT D

 

LOCK-UP AGREEMENT

 

[__________], 2013

 

[Andina Acquisition Corporation]1

[_________]

[_________]

[_________]

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of [____________], 2013, by and among Andina Acquisition Corporation (n/k/a [_________]) (“Parent”), Andina Merger Sub, Inc., Tecnoglass S.A. and C.I. Energia Solar S.A. E.S. Windows. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Merger Agreement.

 

As a condition to closing the transactions contemplated by the Merger Agreement, and for other good and valuable consideration the receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of the Committee, the undersigned will not, during the period beginning on the Closing Date and ending on the earlier of (a) one year after the Closing Date and (b) the date on which Parent consummates a liquidation, merger, stock exchange or other similar transaction that results in all of the holders of Parent Ordinary Shares having the right to exchange their shares of Parent Ordinary Shares for cash, securities or other property:

 

(1)sell or offer or contract to sell or offer, grant any option or warrant for the sale of, assign, transfer, pledge, hypothecate, or otherwise encumber or dispose of any legal or beneficial interest in any Parent Ordinary Shares, issued to the undersigned pursuant to the Merger Agreement (the “Restricted Securities”),

 

(2)enter into any swap or any other agreement or any transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of any of the Restricted Securities, whether such swap transaction is to be settled by delivery of any Restricted Securities or other securities of any person, in cash or otherwise, or

 

(3)publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any of the Restricted Securities (any of the foregoing actions all being referred to as a “Transfer”).

 

Notwithstanding the foregoing limitations, the undersigned may, either during the undersigned’s lifetime or on the undersigned’s death, Transfer any or all of the Restricted Securities:

 

(i)          to the officers or directors of Parent or the Family Members (as defined below) of any of Parent's officers or directors, or any Affiliate of the undersigned;

 

 

1 [Name to be changed at closing.]

 

 
 

 

(ii)          by gift, will, intestate succession, judicial decree or other transfer to the undersigned’s Family Members or to a trust, corporation, partnership or limited liability company, the beneficiaries, stockholders, partners or members of which are the undersigned’s Family Members or a charitable organization;

 

(iii)          by virtue of the laws of descent and distribution upon the death of the undersigned;

 

(iv)          pursuant to a qualified domestic relations order;

 

(v)          to any partner, stockholder, or member of the undersigned;

 

(vi)          by certain pledges to secure obligations incurred in connection with purchases of Parent’s securities; or

 

(vii)          in a transaction that does not involve a public offering (as such term is used in the Federal securities laws of the United States) and is not made through a securities exchange or an over-the-counter securities market;

 

provided, however, that in each and any such event it shall be a condition thereto that the transferee becomes bound by the provisions of this Lock-Up Agreement. For purposes of this Lock-Up Agreement, “Family Member” shall mean the spouse, lineal descendants, stepchildren, father, mother, brother or sister of the transferor or of the transferor’s spouse.

 

In furtherance of the foregoing, Parent, and any duly appointed transfer agent for the registration or Transfer of the Restricted Securities, are hereby authorized and instructed to apply to any certificates representing Restricted Securities issued to the undersigned and/or its permitted transferees the appropriate legend to reflect the existence and general terms of this Lock-Up Agreement and to decline to make any Transfer of Restricted Securities if such Transfer would constitute a violation or breach of this Lock-Up Agreement.

 

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement.

 

This Lock-Up Agreement and any claim, controversy or dispute arising under or related to this Lock-Up Agreement shall be governed by and construed in accordance with the laws of the State of New York regardless of the law that might otherwise govern under applicable principles of conflicts of law thereof.

 

[Signature page follows]

 

2
 

 

SIGNATURE PAGE TO THE LOCK-UP AGREEMENT

 

     
Signature    
     
Name:    
     
Address:    
     
     

 

 

 

 

EXHIBIT E

AMENDED AND RESTATED 

REGISTRATION RIGHTS AGREEMENT

 

THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of [__________], 2013, by and among [Andina Acquisition Corporation]1, a [company organized under the laws of the Cayman Islands] (the “Company”), and the parties named on the Schedule of Investors attached hereto.

 

WHEREAS, the Company and certain of the Holders (as defined below) are parties to that certain Registration Rights Agreement dated as of March 16, 2012 (the “Prior Agreement”);

 

WHEREAS, certain of the Holders are acquiring, on or about the date hereof, ordinary shares of the Company (the “Ordinary Shares”) pursuant to that certain Agreement and Plan of Reorganization (the “Merger Agreement”), dated as of [_________], 2013, by and among the Company, Andina Merger Sub, Inc., Tecnoglass S.A. and C.I. Energia Solar S.A. E.S. Windows; and

 

WHEREAS, the parties to the Prior Agreement desire to amend and restate the Prior Agreement to provide for the terms and conditions included herein and to include the recipients of Ordinary Shares pursuant to the Merger Agreement.

 

NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.        CERTAIN DEFINITIONS.

 

As used in this Agreement, in addition to the terms defined elsewhere in this Agreement, the following terms shall have the following respective meanings:

 

Affiliate” of any Person means any other Person controlled by, controlling or under common control with such Person; provided that the Company and its subsidiaries shall not be deemed to be Affiliates of any Holder of Registrable Securities. As used in this definition, “control” (including, with its correlative meanings, “controlling,” “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities, by contract or otherwise). With respect to any Person who is an individual, “Affiliates” shall also include, without limitation, any member of such individual’s Family Group.

 

Agreement” has the meaning specified in the Preamble.

 

Automatic Shelf Registration Statement” has the meaning specified in Section 2.1.

 

Business Day” means any day other than a day on which the SEC is closed.

 

 

 1 [Name to be changed at closing.]

 

 
 

 

Company” has the meaning specified in the Preamble.

 

Demand Registrations” has the meaning specified in Section 2.1.

 

Effectiveness Period” means the period commending on the date of the effectiveness of a Shelf Registration Statement and ending on the earliest of (A) the third anniversary of the date of the effectiveness of a Shelf Registration Statement, (B) the date on which all Registrable Securities covered by a Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement, and (C) the date as of which there are no longer any Registrable Securities covered by a Shelf Registration Statement in existence.

 

End of Suspension Notice” has the meaning specified in Section 2.7(b).

 

Family Group” means, with respect to a Person who is an individual, (i) such individual’s spouse and descendants (whether natural or adopted) (collectively, for purposes of this definition, “relatives”), (ii) such individual’s executor or personal representative, (iii) any trust, the trustee of which is such individual or such individual’s executor or personal representative and which at all times is and remains solely for the benefit of such individual and/or such individual’s relatives, (iv) any corporation, limited partnership, limited liability company or other tax flow-through entity the governing instruments of which provide that such individual or such individual’s executor or personal representative shall have the exclusive, nontransferable power to direct the management and policies of such entity and of which the sole owners of stock, partnership interests, membership interests or any other equity interests are limited to such individual, such individual’s relatives and/or the trusts described in clause (iii) above, and (v) any retirement plan for such individual.

 

Founder Registrable Securities” means the Registrable Securities purchased by the Founders in private placement transactions prior to or concurrently with the Company’s initial public offering.

 

Founders” means Child’s Trust F/B/O Francesca Weil U/A dated March 4, 2010, Child’s Trust F/B/O Alexander Weil U/A dated March 4, 2010, Child’s Trust F/B/O Benjamin Luke Weil U/A dated March 4, 2010, B. Luke Weil, Julio A. Torres, Martha L. Byorum, Capital Advisory Partners L.A., Eduardo Robayo, LWEH LLC, Robert Stevens, Eric Carrera, EarlyBirdCapital, Inc., Graubard Miller, A. Lorne Weil 2006 Irrevocable Trust - Family Investment Trust and Marjorie Hernandez.

 

Holder” means a holder of Registrable Securities.

 

Indemnified Party” has the meaning specified in Section 7.3.

 

Indemnifying Party” has the meaning specified in Section 7.3.

 

Lock-Up Period” has the meaning ascribed to such term in the Lock-Up Agreement, dated [__], 2013, by and between the Company and certain of the Holders.

 

 
 

 

Long-Form Registrations” has the meaning specified in Section 2.1.

 

Merger Agreement” has the meaning specified in the Recitals.

 

Ordinary Shares” has the meaning specified in the Recitals.

 

Person” means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.

 

Prior Agreement” has the meaning specified in the Recitals.

 

Prospectus” means the prospectus included in any Registration Statement (including, without limitation, a prospectus that discloses information previously omitted from a prospectus filed as part of an effective Registration Statement in reliance upon Rule 415 promulgated under the Securities Act), as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Prospectus.

 

Public Offering” means any sale or distribution by the Company and/or Holders of Registrable Securities to the public of Ordinary Shares pursuant to an offering registered under the Securities Act.

 

Registrable Securities” means (i) the Ordinary Shares, and the Ordinary Shares issuable upon exercise of the Company’s warrants to purchase Ordinary Shares or issuable upon exercise of the Unit Purchase Options or issuable upon exercise of the Company’s warrants to purchase Ordinary Shares included within the Unit Purchase Options, each as purchased by the Founders in private placement transactions prior to or concurrently with the Company’s initial public offering, (ii) the Ordinary Shares to be issued pursuant to the Merger Agreement, (iii) any Ordinary Shares issued or issuable upon the exercise of any equity security of the Company that is issuable upon conversion of any working capital loans in an amount up to $500,000 made to the Company by any Holder and (iv) all Ordinary Shares issued to any Holder with respect to the securities referred to in clauses (i), (ii) and (iii) above by way of any stock split, stock dividend, recapitalization, combination of shares, acquisition, consolidation, reorganization, share exchange, share reconstruction, amalgamation, contractual control arrangement or similar event; provided, however, that as to any particular Registrable Securities, such securities shall cease to be Registrable Securities when (a) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (b) such securities shall have been otherwise transferred, new certificates for such securities or uncertificated shares not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (c) such securities shall have ceased to be outstanding; or (d) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction; provided, that any Registrable Securities held by any Holder that may be sold under Rule 144(b)(1)(i) without limitation under any of the other requirements of Rule 144 (as confirmed by an opinion of the Company’s counsel) shall cease to be Registrable Securities.

 

 
 

 

Registration Expenses” means all expenses incurred by the Company in complying with Sections 2 and 3 hereof, including, without limitation, all registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, state “blue sky” fees and expenses, and accountants’ expenses but excluding any underwriting discounts and commissions or other fees of any broker, dealer or underwriter incurred in connection with a sale of Registrable Securities and any taxes applicable to any Holder with respect to any transfer or sale of Registrable Securities.

 

Registration Statement” means any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all materials incorporated by reference in such registration statement.

 

Rule 144”, “Rule 405” and “Rule 415” mean, in each case, such rule promulgated under the Securities Act (or any successor provision) by the SEC, as the same shall be amended from time to time, or any successor rule then in force.

 

SEC” means the U.S. Securities and Exchange Commission.

 

Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations promulgated by the SEC thereunder.

 

Securities Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated by the SEC thereunder.

 

Shelf Registration” has the meaning specified in Section 2.1.

 

Shelf Registrable Securities” has the meaning specified in Section 2.5(c).

 

Shelf Registration Statement” has the meaning specified in Section 2.1.

 

Shelf Takedown Notice” has the meaning specified in Section 2.5(c).

 

Shelf Takedown Request” has the meaning specified in Section 2.5(c).

 

Short-Form Registrations” has the meaning specified in Section 2.1.

 

Suspension Event” has the meaning specified in Section 2.7(b).

 

Suspension Notice” has the meaning specified in Section 2.7(b).

 

Suspension Period” has the meaning specified in Section 2.7(a).

 

 
 

 

Underwritten Takedown” shall mean an underwritten public offering of Registrable Securities pursuant to the Shelf Registration Statement as amended or supplemented.

 

Unit Purchase Options” shall mean the unit purchase options issued to the underwriters (and their designees) in the Company’s initial public offering pursuant to the First Unit Purchase Option dated as of March 22, 2012 and the Second Unit Purchase Option dated as of March 22, 2012.

 

WKSI” means a “well-known seasoned issuer” as defined under Rule 405.

 

2.       DEMAND REGISTRATIONS.

 

2.1.        Requests for Registration. Subject to the terms and conditions of this Agreement, Holders of Registrable Securities may request registration under the Securities Act of all or any portion of their Registrable Securities on Form S-1 or Form F-1 or any similar long-form registration (“Long-Form Registrations”), or, if then available, on Form S-3 or F-3 or any similar short-form registration (“Short-Form Registrations”), in each case to the extent provided in Section 2.2, Section 2.3 or Section 2.4, as applicable. All registrations requested pursuant to this Section 2.1 are referred to herein as “Demand Registrations.” The Holders of a majority of the Registrable Securities making a Demand Registration may request that the registration be made pursuant to Rule 415 under the Securities Act (a “Shelf Registration” and such registration statement, a “Shelf Registration Statement”) and, if the Company is a WKSI at the time any request for a Demand Registration is submitted to the Company, that such Shelf Registration be made pursuant to an automatic shelf registration statement (as defined in Rule 405 under the Securities Act) (an “Automatic Shelf Registration Statement”). Within ten Business Days after the receipt of a request relating to a Demand Registration, the Company shall give written notice of the Demand Registration to all other Holders of Registrable Securities and, subject to the terms of Section 2.5, shall include in such Demand Registration (and in all related registrations and qualifications under state blue sky laws and in any related underwritten offering) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within seven Business Days after the receipt of the Company’s notice; provided that, with the consent of the holders of at least a majority of the Registrable Securities requesting the Demand Registration, the Company may provide notice of such Demand Registration to all other holders of Registrable Securities within three Business Days following the non-confidential filing of the registration statement with respect to the Demand Registration so long as such registration statement is not an Automatic Shelf Registration Statement. Each Holder agrees that such Holder shall treat as confidential the receipt of the notice of Demand Registration and shall not disclose or use the information contained in such notice of Demand Registration without the prior written consent of the Company until such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by the Holder in breach of the terms of this Agreement.

 

2.2.        Long-Form Registrations. The Holders of a majority of the Registrable Securities shall be entitled to three Long-Form Registrations, whether or not any offering pursuant to such registration is consummated. A registration shall not count as one of the permitted Long-Form Registrations until it has become effective. All Long-Form Registrations shall be underwritten registrations.

 

 
 

 

2.3.        Short-Form Registrations. In addition to the Long-Form Registrations provided pursuant to Section 2.2, the Holders of a majority of the Registrable Securities shall be entitled to an unlimited number of Short-Form Registrations. Demand Registrations shall be Short-Form Registrations whenever the Company is permitted to use any applicable short form and if the managing underwriters (if any) agree to the use of a Short-Form Registration. The Company shall use its reasonable best efforts to make Short-Form Registrations available for the sale of Registrable Securities.

 

2.4.        Founder Demand Registration. The Holders of a majority of the Founder Registrable Securities shall be entitled to two Demand Registrations; provided, that the aggregate offering value of the Registrable Securities requested to be registered in any Long-Form Registration must equal at least $10,000,000 in the aggregate. A registration shall not count as one of the permitted Demand Registrations until it has become effective.

 

2.5        Shelf Registrations.

 

(a)

 

(i)       Subject to the availability of required financial information, as promptly as practicable after the Company receives written notice of a request for a Shelf Registration from holders of at least a majority of the Registrable Securities, the Company shall prepare and file with the SEC, a Registration Statement for an offering to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act registering the resale from time to time by Holders of all of the Registrable Securities held by the Holders (the “Shelf Registration Statement”). The Shelf Registration Statement shall be on Form S-3 or Form F-3 (if the Company is eligible to use Form S-3 or Form F-3) or another appropriate form permitting registration of such Registrable Securities for resale by such Holders. The Company shall use reasonable best efforts to cause the Shelf Registration Statement to be declared effective under the Securities Act as soon as possible after filing, and once effective, to keep the Shelf Registration Statement continuously effective under the Securities Act at all times for such time period as is specified in such request, or until the expiration of the Effectiveness Period, whichever is earlier.

 

(ii)      Notwithstanding the foregoing, unless the Holders of a majority of the Registrable Securities otherwise instruct the Company in writing, subject to the availability of required financial information, the Company shall use its reasonable best efforts to prepare a Shelf Registration Statement with respect to all of the Registrable Securities (or such other number of Registrable Securities specified in writing by the Holders of a majority of the Registrable Securities) and use its reasonable best efforts to file such Shelf Registration Statement with the SEC as soon as practicable following the Closing Date (as defined in the Merger Agreement) but in any event no later than the expiration of the Lock-Up Period.

 

 
 

 

(b)        A Shelf Registration Statement shall be on Form S-3 or Form F-3 (if the Company is eligible to use Form S-3 or Form F-3) or another appropriate form permitting registration of such Registrable Securities for resale by such Holders. The Company shall use reasonable best efforts to cause a Shelf Registration Statement to be declared effective under the Securities Act as soon as possible after filing, and once effective, to keep such Shelf Registration Statement continuously effective under the Securities Act at all times for such time period as is specified in such request, or until the expiration of the Effectiveness Period, whichever is earlier.

 

(c)      In the event that a Shelf Registration Statement is effective, the Holders of a majority of the Registrable Securities covered by such Shelf Registration Statement shall be entitled to an unlimited number of Underwritten Takedowns, so long as the Shelf Registration Statement remains in effect; provided, that the estimated market value of the Registrable Securities to be sold in any Underwritten Takedown is at least $10,000,000 in the aggregate. The requesting Holders shall make such election by delivering to the Company a written request (a “Shelf Takedown Request”) for such offering specifying the number of Registrable Securities available for sale pursuant to such Shelf Registration Statement (the “Shelf Registrable Securities”) that the requesting Holders desire to sell pursuant to such Underwritten Takedown. As promptly as practicable, but at least 10 Business Days prior to the anticipated filing date of the prospectus or prospectus supplement relating to such Underwritten Takedown, the Company shall give written notice (the “Shelf Takedown Notice”) of such Shelf Takedown Request to all other Holders of Shelf Registrable Securities. The Company, subject to Sections 2.6 and 11.1 hereof, shall include in such Underwritten Takedown the Shelf Registrable Securities of any Holder of Shelf Registrable Securities that shall have made a written request to the Company for inclusion in such Underwritten Takedown (which request shall specify the maximum number of Shelf Registrable Securities intended to be disposed of by such Holder) within seven Business Days after the receipt of the Shelf Takedown Notice. The Company shall, as expeditiously as possible, use its reasonable best efforts to facilitate such Underwritten Takedown, to the extent necessary to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities to be so offered. Each Holder agrees that such Holder shall treat as confidential the receipt of the Shelf Takedown Notice and shall not disclose or use the information contained in such Shelf Takedown Notice without the prior written consent of the Company until such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by the Holder in breach of the terms of this Agreement.

 

(d)        Promptly after the expiration of the seven-Business Day-period referred to in Section 2.5(c), the Company will notify all Holders of Shelf Registrable Securities participating in the Underwritten Takedown of the identities of the other participating Holders and the number of shares of Registrable Securities requested to be included therein.

 

 
 

 

(e)      Notwithstanding the foregoing, if the Holders of a majority of the Registrable Securities wish to engage in an underwritten block trade off of a Shelf Registration Statement (either through filing an Automatic Shelf Registration Statement or through a takedown from an already existing Shelf Registration Statement), then notwithstanding the foregoing time periods, such Holders only need to notify the Company of the block trade Underwritten Takedown five Business Days prior to the day such offering is to commence and the Company shall notify other Holders of Registrable Securities and such other Holders of Registrable Securities must elect whether or not to participate two Business Days prior to the day such offering is to commence, and the Company shall as expeditiously as possible use its reasonable best efforts to facilitate such offering (which may close as early as three Business Days after the date it commences); provided that the Holders of a majority of the Registrable Securities shall use reasonable best efforts to work with the Company and the underwriters prior to making such request in order to facilitate preparation of the registration statement, prospectus and other offering documentation related to the underwritten block trade; provided, further, that Holders of Registrable Securities (other than the Company’s executive officers and directors and Holders that beneficially own 1% or more of the Company’s Ordinary Shares then outstanding) shall be entitled to participate in a block trade Underwritten Takedown only with the consent of the holders of a majority of the Registrable Securities.

 

(f)       The Company shall, at the request of the Holders of a majority of the Registrable Securities covered by a Shelf Registration Statement, file any prospectus supplement or, if the applicable Shelf Registration Statement is an Automatic Shelf Registration Statement, any post-effective amendments and otherwise take any action necessary to include therein all disclosure and language deemed necessary or advisable by the Holders of a majority of the Registrable Securities, to effect such Underwritten Takedown.

 

2.6.        Priority on Demand Registrations and Underwritten Takedowns. If the managing underwriter in a Demand Registration (if it is an underwritten offering) or an Underwritten Takedown advises the Company and the Requesting Holder that, in its view, the number of shares of Registrable Securities requested to be included in such underwritten offering exceeds the largest number of shares that can be sold without having an adverse effect on such offering, including the price at which such shares can be sold (the “Maximum Offering Size”), the Company shall include in such underwritten offering, up to the Maximum Offering Size, Registrable Securities requested to be included in such Underwritten Takedown by all participating Holders and allocated pro rata among the Holders thereof on the basis of the relative number of Registrable Securities held by each such Holder at such time (it being understood that for the purposes of calculating the relative number of Registrable Securities held by any participating Holder, in the event such Holder owns any security of the Company that may be converted, exercised or exchanged into Registrable Securities, the relative number of Registrable Securities held by such Holder shall be determined as if such Holder exercised such equity security on a cashless exercise basis).

 

 
 

 

2.7.     Restrictions on Demand Registration and Shelf Offerings.

 

(a)      The Company shall not be obligated to effect any Demand Registration within six months after the effective date of a previous Demand Registration. The Company may postpone, for up to 60 days from the date of the request, the filing or the effectiveness of a registration statement for a Demand Registration or suspend, for a period of up to 60 days from the date of delivery of a Suspension Notice below (a “Suspension Period”), the use of a prospectus that is part of a Shelf Registration Statement (and therefore suspend sales of the Shelf Registrable Securities) by providing written notice to the Holders of Registrable Securities if the Company’s board of directors determines in its reasonable good faith judgment that the offer or sale of Registrable Securities would reasonably be expected to have a material adverse effect on any proposal or plan by the Company to engage in any material acquisition of assets or stock (other than in the ordinary course of business) or any material merger, consolidation, tender offer, recapitalization, reorganization or other transaction involving the Company; provided that in such event, the Holders of Registrable Securities shall be entitled to withdraw such request for a Demand Registration or Underwritten Takedown and the Company shall pay all Registration Expenses in connection with such Demand Registration or Underwritten Takedown (it being further understood that a withdrawn request for a Demand Registration or Underwritten Takedown shall not count as one of the permitted Demand Registrations). The Company may delay a Demand Registration hereunder only once in any twelve-month period. The Company may extend the Suspension Period of a Shelf Registration Statement for an additional consecutive 60 days with the consent of the Holders of a majority of the Registrable Securities registered under the applicable Shelf Registration Statement, which consent shall not be unreasonably withheld.

 

(b)      In the case of an event that causes the Company to suspend the use of a Shelf Registration Statement as set forth in paragraph (a) above or pursuant to Section 6.10 (a “Suspension Event”), the Company shall give a notice to the Holders of Registrable Securities registered pursuant to such Shelf Registration Statement (a “Suspension Notice”) to suspend sales of the Registrable Securities and such notice shall state generally the basis for the notice and that such suspension shall continue only for so long as the Suspension Event or its effect is continuing. A Holder shall not effect any sales of the Registrable Securities pursuant to such Shelf Registration Statement (or such filings) at any time after it has received a Suspension Notice from the Company and prior to receipt of an End of Suspension Notice. Each Holder agrees that such Holder shall treat as confidential the receipt of the Suspension Notice and shall not disclose or use the information contained in such Suspension Notice without the prior written consent of the Company until such time as the information contained therein is or becomes available to the public generally, other than as a result of disclosure by the Holder in breach of the terms of this Agreement. The Holders may recommence effecting sales of the Registrable Securities pursuant to the Shelf Registration Statement (or such filings) following further written notice to such effect (an “End of Suspension Notice”) from the Company, which End of Suspension Notice shall be given by the Company to the Holders and to the Holders’ counsel, if any, promptly following the conclusion of any Suspension Event and its effect.

 

(c)       Notwithstanding any provision herein to the contrary, if the Company shall give a Suspension Notice with respect to any Shelf Registration Statement pursuant to this Section 2.7, the Company agrees that it shall extend the period of time during which such Shelf Registration Statement shall be maintained effective pursuant to this Agreement by the number of days during the period from the date of receipt by the Holders of the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension Notice and provide copies of the supplemented or amended prospectus necessary to resume sales, with respect to each Suspension Event; provided that such period of time shall not be extended beyond the date that there are no longer Registrable Securities covered by such Shelf Registration Statement.

 

 
 

 

2.8.    Selection of Underwriters. Holders holding a majority of the Registrable Securities included in any Demand Registration shall have the right to select an underwriter or underwriters to administer the offering, which underwriter or underwriters shall be reasonably acceptable to the Company. In an Underwritten Takedown, the Holders of a majority of the Registrable Securities participating in such Underwritten Takedown shall have the right to select an underwriter or underwriters to administer the Underwritten Takedown, which underwriter or underwriters shall be reasonably acceptable to the Company. In connection with an underwritten offering (including an Underwritten Takedown), the Company shall enter into customary agreements (including an underwriting agreement in customary form) and take such other actions as are reasonably required in order to expedite or facilitate the disposition of the Registrable Securities in such underwritten offering, including, if necessary, the engagement of a “qualified independent underwriter” in connection with the qualification of the underwriting arrangements with the Financial Industry Regulatory Authority, Inc.

 

2.9.     Other Registration Rights. Except as provided in this Agreement, the Company shall not grant to any persons the right to request the Company or any subsidiary to register any capital stock of the Company or any subsidiary, or any securities convertible or exchangeable into or exercisable for such securities, without the prior written consent of the Holders of a majority of the Registrable Securities.

 

3.    PIGGYBACK RIGHTS.

 

3.1        Right to Piggyback. If the Company proposes to register any of its Ordinary Shares (other than in connection with a Demand Registration (which are covered by Section 2) or registrations on Form S-4 or S-8 (or similar forms) promulgated by the SEC and any successor or similar forms), and the registration form to be used may be used for the registration of Registrable Securities (a “Piggyback Registration”), the Company shall give prompt written notice to the Holders of Registrable Securities (in any event within three Business Days after the filing of the registration statement relating to the Piggyback Registration), and subject to the terms of Section 3.2 and Section 3.3, shall include in such Piggyback Registration (and in all related registrations or qualifications under blue sky laws and in any related underwritten offering) all Registrable Securities with respect to which the Company has received written requests for inclusion therein within 20 days after delivery of the Company’s notice.

 

 
 

 

3.2        Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary offering on behalf of the Company, and the managing underwriter informs the Company that the number of shares held by the Holders requested to be included exceeds the amount which can be sold in such offering without adversely affecting the distribution of the shares being offered, the Company shall include, (i) first, all of the shares the Company has proposed to register; (ii) second, as many of the Registrable Securities, allocated pro rata among the Holders thereof on the basis of the relative number of Registrable Securities held by each such Holder at such time, as can be included without adversely affecting such distribution (it being understood that for the purposes of calculating the relative number of Registrable Securities held by any participating Holder, in the event such Holder owns any security of the Company that may be converted, exercised or exchanged into Registrable Securities, the relative number of Registrable Securities held by such Holder shall be determined as if such Holder exercised such equity security on a cashless exercise basis); and (iii) third, any other Ordinary Shares proposed to be included in such offering. Registrable Securities beneficially owned by any executive officer of the Company shall not be eligible to be included in any primary offering of Ordinary Shares without the Company’s consent.

 

3.3        Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary offering on behalf of holders of the Company’s securities (for the avoidance of doubt, other than Holders hereunder), and the managing underwriter informs the Company that the number of shares required to be included in such registration exceeds the amount which can be sold in such offering without adversely affecting the distribution of the shares being offered, the Company shall include, (i) first, the securities requested to be included therein by the holders initially requesting such registration (for the avoidance of doubt, other than Holders hereunder) and the Registrable Securities requested to be included in such registration, allocated pro rata among the holders thereof on the basis of the relative number of securities held by each such holder at such time, as can be included without adversely affecting such distribution (it being understood that for the purposes of calculating the relative number of securities held by any participating holder, in the event such holder owns any security of the Company that may be converted, exercised or exchanged into Ordinary Shares, the relative number of Ordinary Shares held by such holder shall be determined as if such holder exercised such equity security on a cashless exercise basis); and (ii) second, any other Ordinary Shares proposed to be included in such offering.

 

4.    HOLDBACK AGREEMENT.

 

4.1.  Holders of Registrable Securities. In connection with any underwritten Public Offering of Registrable Securities, each Holder of Registrable Securities agrees to enter into any holdback, lockup or similar agreement requested by the underwriters managing such Public Offering in such form as agreed to by the Holders of a majority of Registrable Securities participating in such Public Offering.

 

4.2.   The Company. In connection with any underwritten Public Offering of Registrable Securities, the Company (i) shall not effect any public sale or distribution of its equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the period commencing on the earlier of the date on which the Company gives notice to the Holders of Registrable Securities that a preliminary prospectus has been circulated for such Public Offering or the “pricing” of such offering and continuing to the date that is 90 days following the date of the final prospectus for such Public Offering (the “Holdback Period”), unless the underwriters managing the Public Offering otherwise agree in writing and (ii) shall use its best efforts to cause (A) each holder of at least five percent (5%) (on a fully-diluted basis) of its Ordinary Shares, or any securities convertible into or exchangeable or exercisable for Ordinary Shares, purchased from the Company at any time after the date of this Agreement (other than in a Public Offering) and (B) each of its directors and executive officers to agree to not effect any public sale or distribution of the Company’s equity securities, or any securities convertible into or exchangeable or exercisable for such securities, during the Holdback Period, except as part of such underwritten registration, if otherwise permitted, unless the underwriters managing the Public Offering otherwise agree in writing.

 

 
 

 

5.    Expenses of Registration.

 

5.1      All Registration Expenses incurred in connection with the performance of the Company’s obligations under Sections 2 and 3 shall be borne by the Company.

 

5.2      In connection with each Demand Registration, each Piggyback Registration and each Underwritten Takedown, the Company shall reimburse the Holders of Registrable Securities included in such registration for the reasonable fees and disbursements of one counsel chosen by the Holders of a majority of the Registrable Securities included in such registration or participating in such Underwritten Takedown and disbursements of each additional counsel retained by any Holder of Registrable Securities for the purpose of rendering a legal opinion on behalf of such Holder in connection with any Demand Registration, Piggyback Registration or Underwritten Takedown.

 

6.    Registration Procedures.

 

The Company shall keep each Holder advised in writing as to the initiation of the registrations described in Sections 2 and 3 and as to the completion thereof. Whenever the Holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement or have initiated an Underwritten Takedown, the Company shall use its reasonable best efforts to effect the registration and the sale of such Registrable Securities in accordance with the intended method of disposition thereof held by a Holder of Registrable Securities requesting registration, and pursuant thereto the Company shall at its expense:

 

6.1      upon written request, before filing any Registration Statement or Prospectus or any amendments or supplements thereto with the SEC, furnish to the Holders copies of all such documents proposed to be filed and use reasonable efforts to reflect in each such document when so filed with the SEC such comments as the Holders reasonably shall propose within one Business Day of the delivery of such copies to the Holders;

 

6.2      subject to Section 2.7 and Section 6.10, prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement continuously effective for the Effectiveness Period; cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and use reasonable efforts to comply with the provisions of the Securities Act applicable to it;

 

 
 

 

6.3      prior to any public offering of Registrable Securities, use its reasonable best efforts to (i) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and (ii) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company and do any and all other acts and things that may be necessary or advisable to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;

 

6.4        cause all such Registrable Securities registered pursuant hereto to be listed on each securities exchange or over-the counter market on which similar securities issued by the Company are then listed or, if no securities are then listed, on the NASDAQ Stock Market;

 

6.5        provide a transfer agent and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;

 

6.6        as promptly as reasonably practicable, but within three (3) Business Days in any event, give notice to the Holders (1) when any Prospectus, Prospectus supplement, Registration Statement or post-effective amendment to a Registration Statement has been filed with the SEC and, with respect to a Registration Statement or any post-effective amendment, when the same has been declared effective (provided, however, that the Company shall not be required by this clause (1) to notify the Holders of the filing of a Prospectus supplement that does nothing more substantive than name one or more Holders as selling security holders), and (2) of any request, following the effectiveness of a Registration Statement under the Securities Act, by the SEC or any other federal or state governmental authority for amendments or supplements to such Registration Statement or related Prospectus or for additional information;

 

6.7        in the case of a Shelf Registration Statement, notify the Holders in writing of the effectiveness of the Shelf Registration Statement and furnish to the Holders, without charge, such number of copies of the Shelf Registration Statement (including any amendments, supplements and exhibits), the Prospectus contained therein (including each preliminary prospectus and all related amendments and supplements) and such other documents as the Holders may reasonably request in order to facilitate the sale of the Registrable Securities in the manner described in the Shelf Registration Statement;

 

6.8        in the case of a Shelf Registration Statement, subject to the provisions of Section 2.7 above and Section 6.10 below, the Company shall promptly prepare and file with the SEC from time to time such amendments and supplements to the Shelf Registration Statement and Prospectus used in connection therewith as may be necessary to keep the Shelf Registration Statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all the Registrable Securities during the Effectiveness Period;

 

 
 

 

6.9        give notice to the Holders within one (1) Business Day following notice to the Company (1) of the issuance by the SEC or any other federal or state governmental authority of any stop order or injunction suspending or enjoining the use of any Prospectus or the effectiveness of a Registration Statement or the initiation or threatening of any proceedings for that purpose, (2) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, and (3) of the happening of any event that makes any statement made in a Registration Statement or the related Prospectus untrue in any material respect or that requires changes in order to make the statements therein not misleading;

 

6.10      Subject to Section 2.7, at the request of any Holder of Registrable Securities included in such Registration Statement, prepare and file a post-effective amendment to such Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference, or file any other required document that would be incorporated by reference into such Registration Statement and Prospectus, so that such Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and, in the case of a post-effective amendment to a Registration Statement, subject to Section 2.7, use commercially reasonable efforts to cause it to be declared effective as promptly as is reasonably practicable, and give to the Holders listed as selling security holders in such Prospectus a Suspension Notice, and, upon receipt of any Suspension Notice, each such Holder agrees not to sell any Registrable Securities pursuant to the Registration Statement until such Holder’s receipt of copies of the supplemented or amended Prospectus or until it receives an End of Suspension Notice, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. The Company shall use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the Registration Statement as promptly as possible (and promptly notify in writing each Holder covered by such Registration Statement of the withdrawal of any such order), except to the extent provided in Section 2.7.

 

6.11      in the event of any underwritten public offering of Registrable Securities, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter(s) of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an underwriting agreement. The Company shall, if requested by the managing underwriter or underwriters or any Holder of Registrable Securities included in such offering, promptly incorporate in a prospectus supplement or post-effective amendment such information as such managing underwriter or underwriters or any Holder of Registrable Securities reasonably requests to be included therein, and which is reasonably related to the offering of such Registrable Securities, including, without limitation, with respect to the Registrable Securities being sold by such Holder to such underwriter or underwriters, the purchase price being paid therefor by such underwriter or underwriters and any other terms of an underwritten offering of the Registrable Securities to be sold in such offering, and the Company shall promptly make all required filings of such prospectus supplement or post-effective amendment;

 

 
 

 

6.12      furnish to each Holder of Registrable Securities included in any Registration Statement a signed counterpart, addressed to such Holder, of (1) any opinion of counsel to the Company delivered to any underwriter dated the effective date of the Registration Statement or, in the event of an underwritten offering, the date of the closing under the applicable underwriting agreement, in customary form, scope, and substance, at a minimum to the effect that the Registration Statement has been declared effective and that no stop order is in effect, which counsel and opinions shall be reasonably satisfactory to a majority of the Holders and their counsel and (2) any comfort letter from the Company’s independent public accountants delivered to any underwriter in customary form and covering such matters of the type customarily covered by comfort letters as the managing underwriter or underwriters reasonably request. In the event no legal opinion is delivered to any underwriter, the Company shall furnish to each Holder of Registrable Securities included in such Registration Statement, at any time that such Holder elects to use a Prospectus, an opinion of counsel to the Company to the effect that the Registration Statement containing such Prospectus has been declared effective and that no stop order is in effect;

 

6.13      fully cooperate, and cause each of its principal executive officer, principal financial officer, principal accounting officer, and all other officers and members of the management to fully cooperate in any offering of Registrable Securities hereunder, which cooperation shall include, without limitation, the preparation of the Registration Statement with respect to such offering and all other offering materials and related documents, and participation in meetings with underwriters, attorneys, accountants and potential stockholders;

 

6.14      make available for inspection by the Holders of Registrable Securities included in such Registration Statement, any underwriter participating in any disposition pursuant to such Registration Statement and any attorney, accountant, or other professional retained by any Holder of Registrable Securities included in such Registration Statement or any underwriter, all financial and other records, pertinent corporate documents and properties of the Company, and cause all of the Company’s officers, directors, and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of the Company and to supply all information reasonably requested by any such Holder, underwriter, attorney, accountant or agent in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility, and cause the Company’s officers, directors, and employees to supply all information requested by any of them in connection with such Registration Statement;

 

6.15      cooperate with each Holder of Registrable Securities and each underwriter or agent, if any, participating in the disposition of such Registrable Securities and their respective counsel in connection with any filings required to be made with the Financial Industry Regulatory Authority, Inc., and use its reasonable best efforts to make or cause to be made any filings required to be made by an issuer with the Financial Industry Regulatory Authority, Inc. in connection with the filing of any Registration Statement;

 

 
 

 

6.16      in the event of any underwritten public offering of Registrable Securities, cause senior executive officers of the Company to participate in customary “road show” presentations that may be reasonably requested by the managing underwriter in any such underwritten offering and otherwise to facilitate, cooperate with, and participate in each proposed offering contemplated herein and customary selling efforts related thereto;

 

6.17      if the Company files an Automatic Shelf Registration Statement covering any Registrable Securities, use its reasonable best efforts to remain a WKSI (and not become an ineligible issuer (as defined in Rule 405 under the Securities Act)) during the period during which such Automatic Shelf Registration Statement is required to remain effective;

 

6.18      if the Company does not pay the filing fee covering the Registrable Securities at the time an Automatic Shelf Registration Statement is filed, pay such fee at such time or times as the Registrable Securities are to be sold;

 

6.19      during the Effectiveness Period, if at any time when the Company is required to re-evaluate its WKSI status the Company determines that it is not a WKSI, use its reasonable best efforts to refile the Shelf Registration Statement on Form S-3 or Form F-3 and, if such form is not available, Form S-1 or Form F-1, and keep such registration statement effective during the Effectiveness Period; and

 

6.20      otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, in connection with such registration.

 

7.    INDEMNIFICATION.

 

7.1.    The Company agrees to indemnify and hold harmless each Holder, the partners, members, officers, directors, stockholders, legal counsel and accountants of each Holder and any other person, if any, who controls each Holder within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary in order to make the statements therein not misleading or arising out of any untrue statement or alleged untrue statement of a material fact included in any preliminary prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this Section 7 shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information about any Holder furnished to the Company by or on behalf of such Holder expressly for use in the Registration Statement (or any amendment thereto), or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto).

 

 
 

 

7.2    Each Holder agrees to indemnify and hold harmless the Company, and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act severally and not jointly against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 7.1, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendment thereto) or any preliminary prospectus or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with written information about such Holder furnished to the Company by or on behalf of such Holder expressly for use in the Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or supplement thereto).

 

7.3.    Each party entitled to indemnification under this Section 7 (the “Indemnified Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought and shall permit the Indemnifying Party to assume the defense of any such claim or any litigation resulting therefrom, provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the Indemnified Party (whose approval shall not be withheld unreasonably), and the Indemnified Party may participate in such defense at such Indemnified Party’s expense. The failure of any Indemnified Party to give notice as provided herein shall relieve the Indemnifying Party of its obligations under this Section 7 only if such failure is materially prejudicial to the ability of the Indemnifying Party to defend such action, and such failure shall in no event relieve the Indemnifying Party of any liability that he or it may have to any Indemnified Party otherwise than under this Section 7. No Indemnifying Party, in the defense of any such claim or litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability with respect to such claim or litigation.

 

7.4.    If the indemnification provided under this Section 7 hereof from the Indemnifying Party is unavailable or insufficient to hold harmless an Indemnified Party in respect of any loss, liability, claim, damage and expense referred to herein, then the Indemnifying Party, in lieu of indemnifying the Indemnified Party, shall contribute to the amount paid or payable by the Indemnified Party as a result of such loss, liability, claim, damage and expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified Party, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, was made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the Indemnifying Party’s and Indemnified Party’s relative intent, knowledge, access to information and opportunity to correct or prevent such action; provided, however, that the liability of any Holder under this Section 7.4 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in Sections 7.1, 7.2 and 7.3 above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7.4 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this Section 7.4. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this Section 7.4 from any person who was not guilty of such fraudulent misrepresentation.

 

 
 

 

7.5.    The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the Indemnified Party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities by such Indemnified Party.

 

8.    Information by Holders and Other Shareholders.

 

Each Holder shall furnish to the Company such information regarding such Holder and the distribution proposed by such Holder as the Company may reasonably request in writing and as shall be required in connection with any Registration Statement.

 

9.    Rule 144 Reporting.

 

With a view to making available the benefits of certain rules and regulations of the SEC that may permit the sale of the Ordinary Shares to the public without registration, the Company shall for so long as Registrable Securities are outstanding:

 

(a)         make and keep public information available as those terms are understood and defined in Rule 144;

 

(b)        file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Securities Exchange Act; and

 

(c)        so long as any Holder owns any securities constituting or representing Registrable Securities, furnish to such Holder upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Securities Act and the Securities Exchange Act.

 

10.  Removal of Legends.

 

If requested by a Holder, the Company shall cooperate with such Holder and the Company’s transfer agent to facilitate the timely preparation and delivery of certificates (or execution of a book entry transfer) representing Registrable Securities to be delivered to a transferee pursuant to the Registration Statement, which certificates or transfer shall be free, to the extent permitted by applicable law and permissible under the terms of the Merger Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holders may reasonably request.

 

 
 

 

11.  Underwritten Offerings.

 

11.1       Underwriting Arrangements. No Holder of Registrable Securities may participate in any offering hereunder which is underwritten unless such Holder (i) agrees to sell such Holder’s securities on the basis provided in any underwriting arrangements approved by the person or persons entitled hereunder to approve such arrangements (including, without limitation, pursuant to any over-allotment or “green shoe” option requested by the underwriters; provided that no Holder of Registrable Securities shall be required to sell more than the number of Registrable Securities such Holder has requested to include) and (ii) completes and executes all questionnaires, powers of attorney, custody agreements, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements. Each Holder of Registrable Securities shall execute and deliver such other agreements as may be reasonably requested by the Company and the lead managing underwriter(s) that are consistent with such Holder’s obligations under Section 4 and this Section 11.1 or that are necessary to give further effect thereto.

 

11.2       Price and Underwriting Discounts. In the case of an underwritten Demand Registration or Underwritten Takedown requested by Holders pursuant to this Agreement, the price, underwriting discount and other financial terms of the related underwriting agreement for the Registrable Securities shall be determined by the Holders of a majority of the Registrable Securities included in such underwritten offering.

 

12. MISCELLANEOUS.

 

12.1      Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, by electronic facsimile transfer or by courier guaranteeing overnight delivery, and shall be deemed given (i) when made, if made by hand delivery, (ii) upon confirmation, if made by electronic facsimile transfer, (iii) one (1) Business Day after being deposited with such courier, if made by overnight courier, to the parties as follows:

 

(a)            if to a Holder, at the address for such Holder then appearing in the books of the Company;

 

(b)            If to the Company, to:

 

[Andina Acquisition Corporation]

[____________]

[____________]

Facsimile: [____________]

Attention: [____________]

 

 
 

 

12.2   Governing Law. This Agreement shall be governed and construed under the laws of the State of Delaware, without regard to conflicts of laws and principles thereof.

 

12.3   Successors and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit and be enforceable by the Company and its successors and assigns and the Holders of Registrable Securities and their respective successors and permitted assigns (whether so expressed or not). In addition, whether or not any express assignment has been made, the provisions of this Agreement which are for the benefit of purchasers or Holders of Registrable Securities are also for the benefit of, and enforceable by, any subsequent Holder of Registrable Securities.

 

12.4   Additional Parties. Subject to the prior written consent of the Company and Holders of a majority of the Registrable Securities, the Company may permit any Person who acquires Ordinary Shares or rights to acquire Ordinary Shares from an existing Holder after the date hereof to become a party to this Agreement and to succeed to all of the rights and obligations of a “Holder of Registrable Securities” under this Agreement by obtaining an executed Addendum Agreement to this Agreement from such Person in the form of Exhibit A attached hereto (an “Addendum Agreement”). Upon the execution and delivery of an Addendum Agreement by such Person, the Ordinary Shares acquired by such Person shall constitute Registrable Securities and such Person shall be a Holder of Registrable Securities under this Agreement with respect to the acquired Ordinary Shares, and the Company shall add such Person’s name and address to the Schedule of Investors hereto and circulate such information to the parties to this Agreement.

 

12.5   Captions. The captions of the several sections and paragraphs of this Agreement are included for reference only and shall not limit or otherwise affect the meaning thereof.

 

12.6   Amendments and Waivers. Except as otherwise provided herein, the provisions of this Agreement may be amended, modified or waived only with the prior written consent of the Company and Holders of a majority of the Registrable Securities; provided that no such amendment, modification or waiver that would materially and adversely affect a Holder or group of Holders of Registrable Securities in a manner materially different than any other Holder or group of Holders of Registrable Securities (other than amendments and modifications required to implement the provisions of Section 12.4), shall be effective against such Holder or group of Holders of Registrable Securities without the consent of the Holders of a majority of the Registrable Securities that are held by the group of Holders that is materially and adversely affected thereby. The failure or delay of any Person to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such Person thereafter to enforce each and every provision of this Agreement in accordance with its terms. A waiver or consent to or of any breach or default by any Person in the performance by that Person of his, her or its obligations under this Agreement shall not be deemed to be a consent or waiver to or of any other breach or default in the performance by that Person of the same or any other obligations of that Person under this Agreement.

 

 
 

 

12.7   Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which taken together shall constitute but one and the same instrument.

 

12.8   Remedies. The parties to this Agreement shall be entitled to enforce their rights under this Agreement specifically (without posting a bond or other security), to recover damages caused by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that a breach of this Agreement would cause irreparable harm and money damages would not be an adequate remedy for any such breach and that, in addition to any other rights and remedies existing hereunder, any party shall be entitled to specific performance and/or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or other security) in order to enforce or prevent violation of the provisions of this Agreement.

 

12.9   Severability. If any term, provision, covenant or restriction of this Agreement is held to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby, and the parties hereto shall use their reasonable best efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction, it being intended that all of the rights and privileges of the parties hereto shall be enforceable to the fullest extent permitted by law.

 

12.10   No Recourse. Notwithstanding anything to the contrary in this Agreement, the Company and each Holder of Registrable Securities agrees and acknowledges that no recourse under this Agreement or any documents or instruments delivered in connection with this Agreement, shall be had against any current or future director, officer, employee, general or limited partner or member of any Holder of Registrable Securities or of any Affiliate or assignee thereof, whether by the enforcement of any assessment or by any legal or equitable proceeding, or by virtue of any statute, regulation or other applicable law, it being expressly agreed and acknowledged that no personal liability whatsoever shall attach to, be imposed on or otherwise be incurred by any current or future officer, agent or employee of any Holder of Registrable Securities or any current or future member of any Holder of Registrable Securities or any current or future director, officer, employee, partner or member of any Holder of Registrable Securities or of any Affiliate or assignee thereof, as such for any obligation of any Holder of Registrable Securities under this Agreement or any documents or instruments delivered in connection with this Agreement for any claim based on, in respect of or by reason of such obligations or their creation.

 

12.11   Entire Agreement. This Agreement is intended by the parties hereto as a final expression of their agreement and is intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and the registration rights granted by the Company with respect to the Registrable Securities.

 

 
 

 

12.12    Other Registration Rights. The Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any registration filed by the Company for the sale of securities for its own account or for the account of any other person. This Agreement supersedes any other registration rights agreement or similar agreement with any Holder, including, without limitation, the Prior Agreement, and the Prior Agreement is hereby terminated. After the date of this Agreement, the Company shall not enter into any agreement with any Holder or prospective Holder of any securities of the Company that would grant such Holder registration rights on a parity with or senior to those granted to the Holders hereunder without the prior written consent of the Holders at the time in question.

 

12.13   Further Assurances. At any time or from time to time after the date hereof, the parties hereto agree to cooperate with each other, and at the request of any other party, to execute and deliver any further instruments or documents and to take all such further action as the other party may reasonably request in order to evidence or effect the consummation of the transactions contemplated hereby and to otherwise carry out the intent of the parties hereunder.

 

12.14    No Inconsistent Agreements. The Company shall not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the Holders of Registrable Securities in this Agreement.

 

[SIGNATURES APPEAR ON SUCCEEDING PAGES]

 

 
 

 

IN WITNESS WHEREOF, the parties have executed this Amended and Restated Registration Rights Agreement on the date first written above.

 

  COMPANY:
   
  [ANDINA ACQUISITION CORPORATION]
   
  By:  
  Name:
  Title:
   
  HOLDERS:
   
  CHILD’S TRUST F/B/O FRANCESCA WEIL U/A DATED MARCH 4, 2010
   
  By:  
  Name:
  Title:
   
  CHILD’S TRUST F/B/O ALEXANDER WEIL U/A DATED MARCH 4, 2010
   
  By:  
  Name:
  Title:
   
  CHILD’S TRUST F/B/O BENJAMIN LUKE WEIL U/A DATED MARCH 4, 2010
   
  By:  
  Name:  
  Title:  
     
   
  Name: B. Luke Weil
     
   
  Name: Julio A. Torres

 

 
 

 

     
    Name: Martha L. Byorum  
     
    CAPITAL ADVISORY PARTNERS L.A.
     
    By:  
    Name:
    Title:
     
       
    Name: Eduardo Robayo
     
    LWEH LLC
     
    By:  
    Name:
    Title:
       
       
    Name: Robert Stevens
     
     
    Name: Eric Carrera
     
    EARLYBIRDCAPITAL, INC.
     
    By:  
    Name:
    Title:
     
    GRAUBARD MILLER
     
    By:  
    Name:
    Title:

 

 
 

  

    A. LORNE WEIL 2006 IRREVOCABLE TRUST – FAMILY INVESTMENT TRUST
     
    By:  
    Name:
    Title:
     
       
    Name: Marjorie Hernandez

 

 
 

 

  [_________], on behalf of itself and as Attorney-in-Fact for the Management Holders identified on the Schedule of Investors
     
  By:  
  Name:    
  Its:  

 

 
 

 

Schedule of Investors

 

Name:

Address:

Child Trust f/b/o Francesca Weil u/a dated March 4, 2010   [___________]
    [___________]
     
Child Trust f/b/o Alexander Weil u/a dated March 4, 2010   [___________]
    [___________]
     
Child Trust f/b/o Benjamin Luke Weil u/a dated March 4, 2010   [___________]
    [___________]
     
B. Luke Weil   [___________]
    [___________]
     
Julio A. Torres   [___________]
    [___________]
     
Martha L. Byorum   [___________]
    [___________]

 

 
 

 

Name:

Address:
Capital Advisory Partners L.A.   [___________]
    [___________]
     
Eduardo Robayo   [___________]
    [___________]
     
LWEH LLC   [___________]
    [___________]
     
Robert Stevens   [___________]
    [___________]
     
Eric Carrera   [___________]
    [___________]
     
EarlyBirdCapital, Inc.   [___________]
    [___________]
     
Graubard Miller   [___________]
    [___________]
     
A. Lorne Weil 2006 Irrevocable Trust – Family Investment Trust   [___________]
    [___________]
     
Marjorie Hernandez   [___________]
    [___________]
     
Management Holders:    
[___________]   [___________]
    [___________]
     
[___________]   [___________]
    [___________]
     
[___________]   [___________]
    [___________]
     
[___________]   [___________]
    [___________]

 

 
 

 

Name:

Address:
[___________]   [___________]
    [___________]
     
[___________]   [___________]
    [___________]

 

 
 

 

Exhibit A

 

Addendum Agreement

 

This Addendum Agreement (“Addendum Agreement”) is executed on _______, 20__, by the undersigned (the “New Holder”) pursuant to the terms of that certain Amended and Restated Registration Rights Agreement dated as of [__], 2013 (the “Agreement”), by and among the Company and the Holders identified therein, as such Agreement may be amended, supplemented or otherwise modified from time to time. Capitalized terms used but not defined in this Addendum Agreement shall have the respective meanings ascribed to such terms in the Agreement. By the execution of this Addendum Agreement, the New Holder agrees as follows:

 

1.1Acknowledgment. New Holder acknowledges that New Holder is acquiring certain Ordinary Shares of the Company (the “Stock”) [or other equity securities of the Company that are convertible, exercisable or exchangeable for Ordinary Shares of the Company (the “Convertible Securities”)] as a transferee of such Stock [or Convertible Securities] from a party in such party’s capacity as a “Holder” under the Agreement, and after such transfer, New Holder shall be considered a “Holder” for all purposes under the Agreement.

 

1.2Agreement. New Holder hereby (a) agrees that the Stock [or Convertible Securities] shall be bound by and subject to the terms of the Agreement and (b) adopts the Agreement with the same force and effect as if the New Holder were originally a party thereto.

 

1.3Notice. Any notice required or permitted by the Agreement shall be given to New Holder at the address or facsimile number listed below New Holder’s signature below.

 

NEW HOLDER:   ACCEPTED AND AGREED:
     
Print Name:     [ANDINA ACQUISITION CORPORATION]
         
By:     By:  
         
Name:     Name:  
         
Title:     Title:  
         
Address:        
         
         
         
Facsimile Number:        

 

 

 

 

 

ANDINA ACQUISITION CORPORATION SIGNS DEFINITIVE AGREEMENT TO ACQUIRE

TECNOGLASS S.A. AND C.I. ENERGIA SOLAR S.A. E.S. WINDOWS

 

New York, NY and Barranquilla, ColombiaAugust 17, 2013 – Andina Acquisition Corporation (NASDAQ: ANDA; ANDAW; ANDAU) (“Andina”) and privately-held Tecnoglass S.A. and C.I. Energia Solar S.A. E.S. Windows (sister companies under common management, collectively, “Tecnoglass”) today jointly announced the signing of a definitive agreement under which Tecnoglass will become a subsidiary of Andina.

 

Headquartered in Barranquilla, Colombia, Tecnoglass is a leading vertically-integrated manufacturer of hi-spec architectural and industrial glass and windows, and associated aluminum products for the global residential and commercial construction industries. Tecnoglass sells to more than 300 customers in North, Central and South America, and exports approximately 43% of its production to foreign countries, with the United States accounting for approximately 30% of Company revenues in 2012. Tecnoglass’s tailored, high-end products are found on some of the world’s most distinctive properties, including the El Dorado Airport (Bogota), Imbanaco Medical Center (Cali), Trump Plaza (Panama), Trump Tower (Miami), and Four Waterway Square (The Woodlands, TX).

 

Andina and Tecnoglass expect to provide additional information regarding this transaction on August 19, 2013.

 

EarlyBirdCapital, Inc. and Morgan Joseph TriArtisan LLC are acting as financial advisors to Andina. Graubard Miller and Maples and Calder are acting as legal advisors to Andina, and McDermott Will & Emery LLP, Arnstein & Lehr LLP and Gómez-Pinzón Zuleta Abogados S.A. are acting as legal advisors to Tecnoglass.

 

About Andina Acquisition Corporation

 

Andina Acquisition Corporation was incorporated in the Cayman Islands on September 21, 2011 as a blank check company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.

 

Andina’s initial public offering was declared effective March 16, 2012 and was consummated on March 22, 2012. Andina received net proceeds of $38.3 million through the sale of 4.0 million units, each consisting of one ordinary share and one warrant and certain private placements that were consummated simultaneously with the initial public offering. As of May 31, 2013, Andina held $42.74 million in a trust account maintained by an independent trustee, which will be released upon the consummation of the business combination.

 

 
 

 

Andina and its directors and executive officers, as well as EarlyBirdCapital, Inc. and Morgan Joseph TriArtisan LLP, who are acting as financial advisors to Andina, may be deemed to be participants in the solicitation of proxies for the extraordinary general meeting of Andina shareholders to be held to approve the business combination. Shareholders are advised to read, when available, Andina’s preliminary proxy statement and definitive proxy statement in connection with the solicitation of proxies for the extraordinary general meeting because these statements will contain important information. The definitive proxy statement will be mailed to shareholders as of a record date to be established for voting on the business combination. The preliminary proxy statement and definitive proxy statement, once available, can be obtained, without charge, at the Securities and Exchange Commission's internet site (http://www.sec.gov).

 

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Andina’s and Tecnoglass’s managements’ current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of Tecnoglass’ business. These risks, uncertainties and contingencies include: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement for the business combination (the “Merger Agreement”), (2) the outcome of any legal proceedings against Andina, Tecnoglass, ES; (3) the inability to complete the transaction contemplated by the Merger Agreement, including due to failure to obtain approval of the shareholders of Andina or other conditions to closing in the Merger Agreement; (4) delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regulator reviews required to complete the transactions contemplated by the Merger Agreement; (5) the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the transaction described therein and herein; (6) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with suppliers and obtain adequate supply of products and retain its key employees; (7) costs related to the proposed business combination; (8) changes in applicable laws or regulations; (9) the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors; and (10) other risks and uncertainties indicated from time to time in Andina’s filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Further, investors should keep in mind that certain of Tecnoglass’ financial results are unaudited and do not conform to SEC Regulation S-X and as a result such information may fluctuate materially depending on many factors. Accordingly, Tecnoglass’ financial results in any particular period may not be indicative of future results. Neither Andina nor Tecnoglass is under any obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

 

### #### ###

Contacts:

The Equity Group Inc.

Devin Sullivan, Senior Vice President

212-836-9608

dsullivan@equityny.com

 

Thomas Mei, Associate

212-836-9614

tmei@equityny.com

  

 

 

 

ANDINA ACQUISITION CORPORATION TO ACQUIRE

TECNOGLASS S.A. AND C.I. ENERGIA SOLAR S.A. E.S. WINDOWS

 

·Tecnoglass S.A. and C.I. Energia Solar S.A. E.S. Windows (collectively, “Tecnoglass”) form a vertically-integrated manufacturer of architectural and industrial glass and windows, and associated aluminum products.

 

·Tecnoglass is the #1 glass transformation company in Colombia, and has a 40% share of Colombia’s glass and aluminum structures market.

 

·LTM June 2013 total revenues of $180 million and adjusted EBITDA of $27 million.

 

·Approximately 30% of combined 2012 revenues were generated in the United States.

 

·2010 – 2014E revenue and adjusted EBITDA CAGR of 23% and 34%, respectively.

 

·Business combination valued at $243 million or approximately $279 million on a fully diluted (treasury method) basis.

 

·Compelling valuation: Approximately 10.3x LTM adjusted EBITDA of $27mm and 9.7x 2013 estimated adjusted EBITDA of $29mm, a significant discount to publicly-traded peers.

 

·Three million additional shares reserved as contingent consideration based on achieving pre-determined adjusted EBITDA or share price targets in 2014, 2015, and 2016.

  

New York, NY and Barranquilla, ColombiaAugust 19, 2013 – Andina Acquisition Corporation (NASDAQ: ANDA; ANDAW; ANDAU) (“Andina”) and privately-held Tecnoglass S.A. and C.I. Energia Solar S.A. E.S. Windows (collectively, “Tecnoglass”) today jointly announced a definitive agreement under which Tecnoglass will become a subsidiary of Andina.

 

Tecnoglass is a leading manufacturer of hi-spec, architectural glass and windows for the global residential and commercial construction industries. Headquartered in Barranquilla, Colombia, Tecnoglass operates out of a 1.2 million square foot vertically-integrated, state-of-the-art manufacturing complex that provides easy access to the Americas, the Caribbean, and the Pacific. Tecnoglass sells to more than 300 customers in North, Central and South America, and exports approximately 43% of its production to foreign countries, with the United States accounting for approximately 30% of Company revenues in 2012. Tecnoglass’s tailored, high-end products are found on some of the world’s most distinctive properties, including the El Dorado Airport (Bogota), Imbanaco Medical Center (Cali), Trump Plaza (Panama), Trump Tower (Miami), and The Woodlands (Houston).

 

Tecnoglass’s 2012 consolidated revenues rose 40% to $158 million from $114 million in 2011. During this same period, consolidated adjusted EBITDA rose at a faster rate, up 69% to $22 million from $13 million. Tecnoglass’ LTM June 30, 2013 revenue and adjusted EBITDA were $180 million and $27 million, respectively.

 

Please see accompanying summary unaudited financial tables for additional information.

 

 
 

 

Luke Weil, CEO of Andina, commented, “We embarked on our search for an acquisition target that possessed an attractive growth profile, a distinctive, in-demand product, and a management team committed to creating long-term value. From its operations in Colombia – the fourth largest economy in Latin America – Tecnoglass possesses a track record of growth and profitability in varying economic cycles, an enviable reputation for quality, service, and integrity, and a compelling valuation compared to its publicly-traded industry peers. Tecnoglass has also adopted best practices in the areas of sustainability and environmental responsibility, including recycling nearly 30% of manufacturing-related residues and self-supplying power.”

 

A. Lorne Weil, Non-Executive Chairman of Andina, said, “In our view, Tecnoglass is an attractive opportunity to participate in the growth of a robust industrial business in Latin America with an established and growing U.S. presence. We have been very impressed with what the management at Tecnoglass has achieved to date and believe the opportunity to complete this merger and be publicly-listed, including the expanded bonding capacity available to grow the U.S. business, will help further accelerate Tecnoglass’ growth. We look forward to being actively involved in assisting Tecnoglass to reach its goals.”

 

José Manuel Daes, President of Tecnoglass, stated, “We are excited about the opportunity to consummate this transaction with Andina. We believe our growing reputation as a high-quality global business over the past several years and the additional capital provided as a result of this acquisition will help drive our continued expansion and further elevate our industry profile. Key components of our growth strategy include the continued formation of corporate and industry alliances, expanding more rapidly in the United States, and entering new geographies, while maintaining our focus on quality and product innovation.”

 

The Transaction

 

Under the terms of the definitive agreement, the initial consideration to Tecnoglass will be approximately 17.5 million newly-issued ordinary shares of Andina valued at $10.18 per share, subject to adjustment as provided for in the definitive agreement, and the assumption of approximately $65.1 million of net debt, for aggregate consideration at closing of approximately $243 million. The stockholders of Tecnoglass will not be able to sell any of the Andina ordinary shares that they receive for twelve months after the closing, subject to certain exceptions.

 

In addition, Tecnoglass shareholders will be entitled to receive up to an aggregate of 3 million earn-out shares which shall be held in escrow at closing and released based on meeting certain EBITDA or share-price performance targets in 2014, 2015 and 2016.

 

The transaction is expected to close in the fourth quarter of 2013 and is subject to the approval of Andina’s public shareholders, a minimum of $33.5 million remaining in trust after shareholder redemptions and payment of transaction expenses and other customary closing conditions.

 

EarlyBirdCapital, Inc. (EBC) and Morgan Joseph TriArtisan LLC (MJTA) are acting as financial advisors to Andina. Graubard Miller and Maples and Calder are acting as legal advisors to Andina, and McDermott Will & Emery LLP, Arnstein & Lehr LLP and Gómez-Pinzón Zuleta Abogados S.A. are acting as legal advisors to Tecnoglass.

 

For additional information on the acquisition, see the Current Report on Form 8-K to be filed by Andina with the Securities and Exchange Commission on or before August 22, 2013. This filing can be obtained, without charge, at the Securities and Exchange Commission's website (http://www.sec.gov).

 

 
 

 

Financial Presentation

 

Certain of the financial information contained herein is unaudited and does not conform to SEC Regulation S-X. Furthermore, it includes EBITDA (earnings before interest, taxes depreciation and amortization) which is a non-GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933, as amended. Accordingly, such information may be materially different when presented in Andina’s filings with the Securities and Exchange Commission. Andina and Tecnoglass believe that the presentation of this non-GAAP financial measure provides information that is useful to investors as it indicates more clearly the ability of Tecnoglass to meet capital expenditures and working capital requirements and otherwise meet its obligations as they become due. EBITDA was derived by taking earnings before interest, taxes, depreciation and amortization as adjusted for certain one-time non-recurring items and exclusions.

 

About Tecnoglass and Its Markets

 

Tecnoglass S.A. and C.I. Energia Solar S.A E.S. Windows are sister companies under common management. The combined entity is a vertically-integrated, customer-centric provider of glass and aluminum products. Tecnoglass has grown into the #1 glass transformation company in Colombia, and has captured a 40% share of Colombia’s glass and aluminum structures market. Glass Magazine has ranked Tecnoglass as the second largest glass fabricator serving the US market in 2012. Tecnoglass has invested in state-of-the-art manufacturing and IT assets, and holds the necessary product certifications to compete internationally.

 

By way of background:

·C.I. Energia Solar S.A E.S. Windows was founded in 1984 and has become a leader in the design, manufacture, marketing, and installation of architectural systems for commercial and large-scale residential construction. The company’s portfolio includes glass and aluminum windows and doors, office dividers and interiors, floating facades, and commercial display windows. C.I. Energia Solar utilizes glass and aluminum produced by Tecnoglass to manufacture its products.
·Tecnoglass S.A., established in 1994, transforms glass into a number of varieties, including, tempered, laminated, acoustic, thermo-acoustic, curved, silk-screened, and digital print. This glass is used in a variety of settings, including construction and remodeling of hotels, residential dwellings, commercial and corporate centers, universities, airports, and, hospitals, and applications, such as floating facades, windows, doors, handrails, interior, and bathroom products. Additionally, Tecnoglass’ tempered products are used in appliances, such as ovens and refrigerators.
·In 2007, Tecnoglass S.A. established the Alutions business to conduct aluminum extrusion, smelter, paint, and anodizing processes. Alutions produces aluminum profiles, rods, bars, plates, and other hardware used to manufacture hi-spec windows and doors. Alutions has a combined installed capacity of 1,000 tons of aluminum per month. Alutions has its own smelter plant, which supplies more than 90% of its aluminum consumption.

 

Tecnoglass operates as part of the global construction industry, which is expected to grow from an estimated $7.2 trillion (13% of global GDP) currently to more than $10 trillion (15% of global GDP) by 2020. The Latin American construction market, from which Tecnoglass generated approximately 70% of its 2012 revenues, is estimated at $550 billion with an annual growth rate projected at 6% as of 2012. The United States construction market, which represented approximately 30% of Tecnoglass’s 2012 revenues, is estimated at $830 billion with a projected annual growth rate of 6% as of 2012, including the $21 billion United States windows and doors market, which is projected to grow 9% per year through 2016. The United States market includes significant growth in the niche Southeast / Florida impact-resistant window and door industry. Among its many designations and certifications, Tecnoglass has earned The Miami-Dade County Notice of Acceptance, one of the most demanding certificates in the industry and a requirement to market hurricane-resistant glass in Florida.

 

 
 

 

As illustrated in the table below, Tecnoglass’ strategy has delivered consistent growth:

 

USD, in mms; FY 2011-2012 audited; LTM 6/30/13 unaudited

Converted at historical exchange rates; projections converted at LTM 6/30/13 exchange rate of COP1,814.51/US

 

               LTM         
   2010   2011   2012   6/30/13   2013(E)   2014(E) 
                         
Revenue  $104   $114   $158   $180   $200   $234 
Adjusted EBITDA (1)  $11   $13   $22   $27   $29   $36 

  

(1)Derived by taking earnings before interest, taxes, depreciation and amortization as adjusted for certain one-time non-recurring items and exclusions.

 

Additional information regarding Tecnoglass may be found at http://www.tecnoglass.com

 

About Andina Acquisition Corporation

 

Andina Acquisition Corporation was incorporated in the Cayman Islands on September 21, 2011 as a blank check company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities.

 

Andina’s initial public offering was declared effective March 16, 2012 and was consummated on March 22, 2012. Andina received net proceeds of $38.3 million through the sale of 4.0 million units, each consisting of one ordinary share and one warrant and certain private placements that were consummated simultaneously with the initial public offering. As of May 31, 2013, Andina held $42.74 million in a trust account maintained by an independent trustee, which will be released upon the consummation of the business combination.

 

Andina and its directors and executive officers, as well as EarlyBirdCapital, Inc. and Morgan Joseph TriArtisan LLP, who are acting as investment bankers for Andina, may be deemed to be participants in the solicitation of proxies for the extraordinary general meeting of Andina shareholders to be held to approve the business combination. Shareholders are advised to read, when available, Andina’s preliminary proxy statement and definitive proxy statement in connection with the solicitation of proxies for the extraordinary general meeting because these statements will contain important information. Such persons can also read Andina’s final prospectus, dated March 16, 2012, and Andina’s annual report on Form 10-K for the fiscal year ended February 28, 2013 for a description of the security holdings of the Andina officers and directors and of EBC and MJTA and their respective interests in the successful consummation of the business combination. The definitive proxy statement will be mailed to shareholders as of a record date to be established for voting on the business combination. Shareholders will also be able to obtain a copy of the proxy statement, without charge, by directing a request to The Equity Group Inc., 800 Third Avenue, 36th Floor, New York, NY 10022. The preliminary proxy statement and definitive proxy statement, once available, can also be obtained, without charge, at the Securities and Exchange Commission's internet site (http://www.sec.gov).

 

Additional information regarding Andina Acquisition Corporation may be found at www.andinaacquisition.com.

 

The information in Andina’s website and Tecnoglass’ website is not, and shall not be deemed to be, a part of this notice or incorporated in filings Andina makes with the Securities and Exchange Commission.

 

 
 

 

This press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Andina’s and Tecnoglass’s managements’ current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of Tecnoglass’ business. These risks, uncertainties and contingencies include: (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement for the business combination (the “Merger Agreement”), (2) the outcome of any legal proceedings against Andina, Tecnoglass, ES; (3) the inability to complete the transaction contemplated by the Merger Agreement, including due to failure to obtain approval of the shareholders of Andina or other conditions to closing in the Merger Agreement; (4) delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regulator reviews required to complete the transactions contemplated by the Merger Agreement; (5) the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the transaction described therein and herein; (6) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with suppliers and obtain adequate supply of products and retain its key employees; (7) costs related to the proposed business combination; (8) changes in applicable laws or regulations; (9) the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors; and (10) other risks and uncertainties indicated from time to time in Andina’s filings with the Securities and Exchange Commission. The information set forth herein should be read in light of such risks. Further, investors should keep in mind that certain of Tecnoglass’ financial results are unaudited and do not conform to SEC Regulation S-X and as a result such information may fluctuate materially depending on many factors. Accordingly, Tecnoglass’ financial results in any particular period may not be indicative of future results. Neither Andina nor Tecnoglass is under any obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.

 

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Contacts:

The Equity Group Inc.

Devin Sullivan, Senior Vice President

212-836-9608

dsullivan@equityny.com

 

Thomas Mei, Associate

212-836-9614

tmei@equityny.com

  

 

 

A Leading Manufacturer of Architectural Glass & Windows Proposed Merger with Andina Acquisition Corporation (NASDAQ:ANDA/ANDAU/ANDAW) August 2013

 
 

2 This slide show was filed with the Securities and Exchange Commission on August 22 , 2013 as part of the Form 8 - K filed by Andina Acquisition Corporation (“ Andina ”) . Andina is holding presentations for certain of its shareholders, as well as other persons who might be interested in purchasing Andina’s securities, regarding its business combination with Tecnoglass S . A . (“ Tecnoglass ”) and C . I . Energia Solar S . A . E . S . Windows (“ES”) . This slide show will be distributed to attendees of these presentations . EarlyBirdCapital , Inc . (“EBC”), the managing underwriter of Andina’s initial public offering (“IPO”) consummated in March 2012 , and Morgan Joseph TriArtisan (“MJTA”) are acting as Andina’s investment bankers in these efforts . EBC will receive a fee of $ 1 , 610 , 000 and MJTA will receive a fee of $ 500 , 000 in connection with this engagement . Andina and its directors and executive officers, and EBC and MJTA may be deemed to be participants in the solicitation of proxies for the extraordinary general meeting of Andina’s shareholders to be held to approve the business combination . SHAREHOLDERS OF ANDINA AND OTHER INTERESTED PERSONS ARE ADVISED TO READ, WHEN AVAILABLE, ANDINA’S PROXY STATEMENT (“PROXY STATEMENT”) WHICH WILL CONTAIN IMPORTANT INFORMATION . Such persons may read Andina’s Proxy Statement, Andina’s final Prospectus for its IPO and its Annual Report on form 10 - K for the fiscal year ended February 28 , 2013 , as amended, for a description of the security holdings of Andina’s officers and directors and of EBC and MJTA and their respective interests in the successful consummation of the business combination . The Proxy Statement will be mailed to shareholders as of a record date to be established for voting on the business combination . Shareholders will also be able to obtain a copy of the Proxy Statement, without charge, by directing a request to : The Equity Group Inc . , 800 Third Avenue, 36 th Floor, New York, NY 10022 . The preliminary Proxy Statement and definitive Proxy Statement, once available, and final Prospectus can also be obtained, without charge, at the Securities and Exchange Commission’s internet site (http : //www . sec . gov) .

 
 

3 FORWARD LOOKING STATEMENTS This presentation may include “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995 . Forward - looking statements may be identified by the use of words such as “anticipate”, “believe”, “expect”, “estimate”, “plan”, “outlook”, and “project” and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters . Such forward looking statements with respect to the timing of the proposed business combination between Andina and Tecnoglass and ES, as well as the expected performance, strategies, prospects and other aspects of the business of Tecnoglass and ES and the combined company after completion of the proposed business combination, are based on current expectations that are subject to risks and uncertainties . A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward looking statements . These factors include, but are not limited to : ( 1 ) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement for the business combination (the “Merger Agreement”), ( 2 ) the outcome of any legal proceedings against Andina , Tecnoglass , ES ; ( 3 ) the inability to complete the transaction contemplated by the Merger Agreement, including due to failure to obtain approval of the shareholders of Andina or other conditions to closing in the Merger Agreement ; ( 4 ) delays in obtaining, adverse conditions contained in, or the inability to obtain necessary regulatory approvals or complete regulator reviews required to complete the transactions contemplated by the Merger Agreement ; ( 5 ) the risk that the proposed transaction disrupts current plans and operations as a result of the announcement and consummation of the transaction described therein and herein ; ( 6 ) the ability to recognize the anticipated benefits of the business combination, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with suppliers and obtain adequate supply of products and retain its key employees ; ( 7 ) costs related to the proposed business combination ; ( 8 ) changes in applicable laws or regulations ; ( 9 ) the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors ; and ( 10 ) other risks and uncertainties indicated from time to time in Andina’s filings with the SEC . Readers are cautioned not to place undue reliance upon any forward - looking statements, which speak only as of the date made, and Andina and Tecnoglass undertake no obligation to update or revise the forward - looking statements, whether as a result of new information, future events or otherwise .

 
 

4 FINANCIAL PRESENTATION Certain of the financial information contained herein is unaudited and does not conform to SEC Regulation S - X . Furthermore, it includes EBITDA (earnings before interest, taxes depreciation and amortization) which is a non - GAAP financial measure as defined by Regulation G promulgated by the SEC under the Securities Act of 1933 , as amended . Accordingly, such information may be materially different when presented in Andina’s filings with the Securities and Exchange Commission . Andina and Tecnoglass believe that the presentation of this non - GAAP financial measure provides information that is useful to investors as it indicates more clearly the ability of Tecnoglass to meet capital expenditures and working capital requirements and otherwise meet its obligations as they become due . EBITDA was derived by taking earnings before interest, taxes, depreciation and amortization as adjusted for certain one - time non - recurring items and exclusions .

 
 

• Tecnoglass S.A. and C.I. Energia Solar E.S Windows to go public via transaction with Andina Acquisition Corporation • Current owners of Tecnoglass will retain majority ownership and operational control • Proceeds devoted exclusively to funding growth; no selling shareholders • Combined entity: Tecnoglass Inc., a vertically - integrated manufacturer of architectural and industrial glass and windows, and associated aluminum products. Tecnoglass S.A. and C.I. Energia Solar E.S Windows are industry leaders operating under common management for over 20 years • Strategic location in Barranquilla, Colombia; easy access to the Americas, the Caribbean & the Pacific • Consistent growth in revenue and EBITDA; robust growth projected • Approximately 30% of sales into the U.S. • High barriers to entry • Would become only Colombian - headquartered company listed on NASDAQ 5 THE OPPORTUNITY A Leading, Global Manufacturer of Architectural Glass