EXHIBIT 10.1
August 29, 2005
Viceroy Acquisition Corporation
8235 Forsyth Boulevard, Suite 400
Clayton, Missouri 63105
The Shemano Group, Inc.
As representative of the several Underwriters
601 California Street, Suite 1150
San Francisco, California 94108
Re: Initial Public Offering
Ladies and Gentlemen:
The undersigned stockholder, officer and director of Viceroy Acquisition
Corporation ("Company"), in consideration of The Shemano Group, Inc. (the
"Shemano Group") agreeing to underwrite an initial public offering ("IPO") of
the Company's units ("Units"), each comprised of one share of the Company's
common stock, par value $.0001 per share ("Common Stock"), and one warrant
exercisable for one share of Common Stock ("Warrant") and embarking on the IPO
process, hereby agrees as follows (certain capitalized terms used herein are
defined in Schedule 1 hereto):
1. If the Company solicits approval of its stockholders of a Business
Combination, the undersigned shall (i) vote all Insider Shares owned by such
person in accordance with the majority of the votes cast by the holders of the
IPO Shares and (ii) vote any shares of Common Stock acquired following the IPO
in favor of the Business Combination.
2. If a Transaction Failure occurs, the undersigned shall take all
reasonable actions within such person's power to cause (i) the Trust Fund to be
liquidated and distributed to the holders of the IPO shares as soon as
reasonably practicable and in any event no later than the Termination Date, and
(ii) the Company to dissolve and liquidate as soon as practicable (the earliest
date on which the conditions in clauses (i) and (ii) are both satisfied being
the "Liquidation Date"). The undersigned hereby waives any and all right, title,
interest or claim of any kind in or to any liquidating distributions by the
Company, including, without limitation, any distribution of the Trust Fund as a
result of such liquidation with respect to such person's Insider Shares
("Claim") and hereby further waives any Claim the undersigned may have in the
future as a result of, or arising out of, any contracts or agreements with the
Company and agrees to not seek recourse against the Trust Fund for any reason
whatsoever. The undersigned hereby agrees that the Company shall be entitled to
a reimbursement from the undersigned for any distribution of the Trust Fund
received by the undersigned in respect of such person's Insider Shares.
3. In order to minimize potential conflicts of interest which may arise
from multiple affiliations, the undersigned agrees to present to the Company for
its consideration, prior to the undersigned's exploitation of that opportunity
in any way or the presentation to any other person or entity, any suitable
opportunity to acquire all or substantially all of the outstanding equity
securities of, or otherwise acquire (through merger, capital stock exchange,
asset acquisition or other business combination) an operating business in the
business services sector until the earlier of the consummation by the Company of
a Business Combination, the distribution of the Trust Fund or until such time as
the undersigned ceases to be an officer or director of the Company; provided,
however, that the presentation of such opportunities to the Company shall in
each case be subject to any pre-existing fiduciary and/or contractual
obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not
consummate any Business Combination which involves a company which is affiliated
with any of the Insiders unless the Company obtains an opinion from an
independent investment banking firm that is a member of the National Association
of Securities Dealers, Inc. that the business combination is fair to the
Company's stockholders from a financial perspective.
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5. Neither the undersigned, any member of the Immediate Family of the
undersigned, nor any affiliate of the undersigned ("Affiliate") will be entitled
to receive and will not accept any compensation for services rendered to the
Company prior to, or in connection with, the consummation of the Business
Combination; provided that, commencing on the Effective Date, Apex Oil Company,
Inc. ("Related Party"), shall be allowed to charge the Company up to $3,750 per
month, representing an allocable share of Related Party's overhead, to
compensate it for the Company's use of Related Party's offices, utilities and
personnel. The Related Party and the undersigned shall also be entitled to
reimbursement from the Company for their reasonable out-of-pocket expenses
incurred in connection with seeking and consummating a Business Combination.
6. The undersigned agrees that neither the undersigned, any member of
the Immediate Family of the undersigned, or any Affiliate of the undersigned
will be entitled to receive or accept, and the undersigned, on behalf of the
undersigned and the aforementioned parties, hereby waives any rights to, a
finder's fee or any other compensation in the event the undersigned, any member
of the Immediate Family of the undersigned or any Affiliate of the undersigned
originates a Business Combination.
7. The undersigned will escrow his Insider Shares for the three year
period commencing on the Effective Date, subject to the terms of a Stock Escrow
Agreement which the Company will enter into with the undersigned and an escrow
agent acceptable to the Company.
8. The undersigned agrees to be the Chairman and a member of the Board
of Directors of the Company until the earlier of the consummation by the Company
of a Business Combination or the liquidation of the Company. The undersigned's
biographical information furnished to the Company and the Shemano Group and
attached hereto as EXHIBIT A is true and accurate in all respects, does not omit
any material information with respect to the undersigned's background and
contains all of the information required to be disclosed pursuant to Section 401
of Regulation S-K, promulgated under the Securities Act of 1933. The
undersigned's Questionnaire furnished to the Company and the Shemano Group is
true and accurate in all respects. The undersigned further represents and
warrants to the Company and Shemano Group that:
(a) The undersigned is not subject to or a respondent in any legal
action for, any injunction, cease-and-desist order or order or stipulation to
desist or refrain from any act or practice relating to the offering of
securities in any jurisdiction;
(b) The undersigned has never been convicted of or pleaded guilty
to any crime (i) involving any fraud or (ii) relating to any financial
transaction or handling of funds of another person, or (iii) pertaining to any
dealings in any securities and such person is not currently a defendant in any
such criminal proceeding; and (c) The undersigned has never been suspended or
expelled from membership in any securities or commodities exchange or
association or had a securities or commodities license or registration denied,
suspended or revoked.
9. The undersigned has full right and power, without violating
any agreement by which the undersigned is bound, to enter into this letter
agreement and to serve as Chairman and a member of the Board of Directors of the
Company.
10. The undersigned acknowledges and understands that the Shemano Group
and the Company will rely upon the agreements, representations and warranties
set forth herein in proceeding with the IPO.
11. This letter agreement shall be binding on the undersigned and such
person's respective successors, heirs, personal representatives and assigns.
This letter agreement shall terminate on the earlier of (i) the Business
Combination Date or (ii) the Termination Date; provided, however, that any such
termination shall not relieve the undersigned from any liability resulting from
or arising out of any breach of any agreement or covenant hereunder occurring
prior to the termination of this letter agreement.
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12. The undersigned authorizes any employer, financial institution, or
consumer credit reporting agency to release to the Shemano Group and its legal
representatives or agents (including any investigative search firm retained by
the Shemano Group) any information they may have about the undersigned's
background and finances ("Information"). Neither the Shemano Group nor its
agents shall be violating the undersigned's right of privacy in any manner in
requesting and obtaining the Information and the undersigned hereby releases
them from liability for any damage whatsoever in that connection.
13. This letter agreement shall be governed by and interpreted and
construed in accordance with the laws of the State of New York applicable to
contracts formed and to be performed entirely within the State of New York,
without regard to the conflicts of law provisions thereof to the extent such
principles and rules would require or permit the application of the laws of
another jurisdiction. The undersigned hereby agrees that any action, proceeding
or claim against the undersigned arising out of or relating in any way to this
Agreement shall be brought and enforced in the courts of the State of New York
or the United States District Court for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The undersigned hereby waives any objection to such exclusive jurisdiction and
that such courts represent an inconvenience forum.
14. No term or provision of this letter agreement may be amended,
changed, waived, altered or modified except by written instrument executed and
delivered by the party against whom such amendment, change, waiver, alteration
or modification is to be enforced.
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Name: Paul Anthony Novelly
/s/ Paul Anthony Novelly
---------------------------------
Signature
Accepted and agreed:
THE SHEMANO GROUP, INC.
By:______________________________
Name:
Title:
Accepted and agreement:
VICEROY ACQUISITION CORPORATION
By: /s/ Lee E. Mikles
------------------------------
Name: Lee E. Mikles
Title: Chief Executive Officer
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SCHEDULE 1
SUPPLEMENTAL COMMON DEFINITIONS
Unless the contact shall otherwise require, the following terms shall the
following respective meanings for all purposes, and the following definitions
are equally applicable to both the singular and the plural forms and the
feminine, masculine and neuter forms of the terms defined.
"BUSINESS COMBINATION" shall mean the acquisition by the Company, whether
by merger, capital stock exchange, asset acquisition or other similar business
combination, of one or more operating businesses in the business services
sector, having, collectively, a fair market value equal to at least 80% of the
Company's net assets at the time of such merger, capital stock exchange, asset
acquisition or other similar business combination.
"BUSINESS COMBINATION DATE" shall mean the date upon which a Business
Combination is consummated.
"EFFECTIVE DATE" shall mean the date upon which the Registration Statement
is declared effective under the Securities Act of 1933, as amended, by the SEC.
"IMMEDIATE FAMILY" shall mean, with respect to any person, such person's
spouse, lineal descendents, father, mother, brothers or sisters (including any
such relatives by adoption or marriage).
"INSIDERS" shall mean all of the officers, directors and stockholders of
the Company immediately prior to the Company's IPO.
"INSIDER SHARES" shall mean all shares of Common Stock of the Company
owned by an Insider immediately prior to the Company's IPO. For the avoidance of
doubt, Insider Shares shall not include any IPO Shares purchased by Insiders in
connection with or subsequent to the Company's IPO.
"IPO SHARES" shall mean all shares of Common Stock issued by the Company
in its IPO, regardless of whether such shares were issued to an Insider or
otherwise.
"PROSPECTUS" shall mean the final prospectus filed pursuant to Rule 424(b)
under the Securities Act of 1933, as amended, and included in the Registration
Statement.
"REGISTRATION STATEMENT" shall mean the registration statement filed by
the Company on Form S-1 with the SEC, and any amendment or supplement thereto,
in connection with the Company's IPO.
"SEC" shall mean the United Stated Securities and Exchange Commission.
"TERMINATION DATE" shall mean the date that is sixty (60) calendar days
immediately following the Transaction Failure Date.
"TRANSACTION FAILURE" shall mean the earlier of (i) the failure to enter
into a letter of intent, definitive agreement or agreement in principal with
respect to a Business Combination on any day during the eighteen-month period
immediately following the Effective Date, and (ii) the failure to consummate a
Business Combination on any day during the twenty-four-month period immediately
following the Effective Date.
"TRANSACTION FAILURE DATE" shall mean if a Transaction Failure first
occurs as a result of the failure described in clause (i) of the definition of
"Transaction Failure", the eighteen-month anniversary of the Effective Date, and
if a Transaction Failure first occurs as a result of the failure described in
clause (ii) of the definition of "Transaction Failure", the second anniversary
of the Effective Date.
"TRUST FUND" shall mean that certain trust account established with
Continental Stock Transfer & Trust Company, as trustee, and in which the Company
deposited the "funds to be held in trust," as described in the Prospectus.
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EXHIBIT A
BIOGRAPHY
PAUL ANTHONY NOVELLY has been our chairman of the board since our
inception. Mr. Novelly has been chairman and chief executive officer of Apex Oil
Company, Inc., a privately-held company based in St. Louis engaged in wholesale
marketing, storage and distribution of petroleum products, since 1995 and was
president and chief executive officer from 1979 to 1994. Apex and its
subsidiaries are involved in the trading, refining, storage, marketing and
transportation of petroleum products, including an oil refinery in Long Beach,
California, liquid terminal facilities in the Midwest and Eastern United States,
and towboat and barge operations on the inland waterway system. Mr. Novelly is
president and a director of AIC Limited, a Bermuda-based oil trading company,
chairman of World Point Terminals Inc., a publicly-held Canadian company based
in Calgary, which owns and operates petroleum storage facilities in the
Netherlands, Bahamas and United States, and chief executive officer of St.
Albans Global Management LLLP, based in St. Thomas, U.S. Virgin Islands, which
provides corporate management services. He has served on boards of directors for
numerous public companies, including current directorships at The Bear Stearns
Companies Inc., Intrawest Corporation, a publicly-held company that is a world
leader in destination resorts and adventure travel, and Boss Holdings, Inc., a
publicly-held distributor of work gloves, boots and rainwear and other consumer
products.