Jamba Juice 2006 Annual Report Download - page 8

Opportunity for stockholder approval of business combination
Prior to the completion of a business combination, we will submit the transaction to our stockholders for approval, even if the nature of the
acquisition is such as would not ordinarily require stockholder approval under applicable state law. In connection with seeking stockholder approval of a
business combination, we will furnish our stockholders with proxy solicitation materials prepared in accordance with the Securities Exchange Act of 1934,
which, among other matters, will include a description of the operations of the target business and audited historical financial statements of the target business
based on United States generally accepted accounting principles.
In connection with the vote required for any business combination, all of our initial stockholders, including all of our officers and directors, have
agreed to vote their respective shares of common stock owned by them immediately prior to the initial public offering in accordance with the majority of the
shares of common stock voted by the public stockholders. This voting arrangement shall not apply to shares included in units purchased in the initial public
offering or purchased following our initial public offering in the open market by any of our initial stockholders, officers and directors. Accordingly, they may
vote on a proposed business combination with respect to shares of common stock acquired in the aftermarket any way they so choose. We will proceed with
the business combination only if a majority of the shares of common stock voted by the public stockholders are voted in favor of the business combination
and public stockholders owning less than 20% of the shares sold in the initial public offering exercise their conversion rights.
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Conversion rights
At the time we seek stockholder approval of any business combination, we will offer each public stockholder the right to have such stockholder’s
shares of common stock converted to cash if the stockholder votes against the business combination and the business combination is approved and
completed. The actual per-share conversion price will be equal to the amount in the trust fund, inclusive of any interest (calculated as of two business days
prior to the consummation of the proposed business combination), divided by the number of shares sold in our initial public offering. Without taking into any
account interest earned on the trust fund, the initial per-share conversion price would be approximately $7.35 per share sold in the initial public offering, or
$0.65 less than the per-unit offering price of $8.00. An eligible stockholder may request conversion at any time after the mailing to our stockholders of the
proxy statement and prior to the vote taken with respect to a proposed business combination at a meeting held for that purpose, but the request will not be
granted unless the stockholder votes against the business combination and the business combination is approved and completed. If a stockholder votes against
the business combination but fails to properly exercise its conversion rights, such stockholder will not have its shares of common stock converted to its pro
rata distribution of the trust fund. Any request for conversion, once made, may be withdrawn at any time up to the date of the meeting. It is anticipated that the
funds to be distributed to stockholders entitled to convert their shares who elect conversion will be distributed promptly after completion of a business
combination. Public stockholders who convert their stock into their share of the trust fund still have the right to exercise the warrants that they received as part
of the units. We will not complete any business combination if public stockholders, owning 20% or more of the shares sold in the initial public offering,
exercise their conversion rights.
Liquidation if no business combination
If we do not complete a business combination within 18 months after July 6, 2005, the date we consummated our initial public offering, or within
24 months if the extension criteria described below have been satisfied, we will be dissolved and will distribute to all of our public stockholders, in proportion
to their respective equity interests, an aggregate sum equal to the amount in the trust fund, inclusive of any interest, plus any remaining net assets. Our initial
stockholders, including all of our officers and directors, have waived their rights to participate in any liquidation distribution with respect to shares of
common stock owned by them immediately prior to the initial public offering. There will be no distribution from the trust fund with respect to our warrants,
which will expire worthless.
If we were to expend all of the net proceeds of our initial public offering, other than the proceeds deposited in the trust fund, per-share liquidation
price as of December 31, 2005 would be approximately $7.43 per share sold in the initial public offering, or $0.57 less than the per-unit offering price of
$8.00. The proceeds in the trust fund could, however, become subject to the claims of our creditors which could be prior to the claims of our public
stockholders. Certain members of our board of directors have agreed pursuant to agreements with us and Broadband Capital Management LLC, if we
liquidate prior to the consummation of a business combination, they will be personally liable to pay debts and obligations to vendors that are owed money by
us for services rendered or products sold to us in excess of the net proceeds of the initial public offering not held in the trust account at that time. We cannot
assure you, however, that they would be able to satisfy those obligations. Further, they will not be personally liable to pay debts and obligations to prospective
target businesses if a business combination is not consummated with such prospective target businesses, or for claims from any other entity other than
vendors. Accordingly, we cannot assure you that the actual per-share liquidation price will not be less than the $7.43 per share sold in the initial public
offering held in trust as of December 31, 2005, plus interest, due to claims of creditors.
If we enter into either a letter of intent, an agreement in principle or a definitive agreement to complete a business combination prior to January 6, 2007
(18 months after the consummation of our initial public offering), but are unable to complete the business combination within the 18-month period, then we
will have an additional six months, until July 6, 2007, in which to complete the business combination contemplated by the letter of intent, agreement in
principle or definitive agreement. If we are unable to do so by the expiration of the 24-month period from the consummation of our initial public offering, we
will then liquidate. Upon notice from us, the trustee of the trust fund will commence liquidating the investments constituting the trust fund and will turn over
the proceeds to our transfer agent for distribution to our public stockholders. We anticipate that our instruction to the trustee would be given promptly after the
expiration of the applicable 18-month or 24-month period.
Our public stockholders shall be entitled to receive funds from the trust fund only in the event of our liquidation or if the stockholders seek to
convert their respective shares into cash upon a business combination
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