ANNEX J
CLARIFICATION AGREEMENT (UPO)
This Clarification Agreement (UPO) (this" Agreement"), dated December __,
2006, is to the Unit Purchase Option, dated as of April 19, 2006 (the "UPO"),
issued by Asia Automotive Acquisition Corporation, a Delaware corporation
("Company") to Xxxxxx & Xxxxxxx LLC and Chardan Capital Markets LLC ("Holders").
WHEREAS, Sections 5.1 and 5.2 of the UPO impose obligations to register the
securities underlying the UPO, which obligation includes a "best efforts"
obligation; and
WHEREAS, as a result of certain questions that have arisen regarding the
accounting treatment applicable to the UPO, the parties hereto deem it necessary
and desirable to amend the UPO to clarify that the Holder does not have the
right to receive a net cash settlement (and there will be no liability on the
part of the Company) in the event the Company does not maintain a current
prospectus relating to the securities underlying the UPO.
NOW, THEREFORE, in consideration of the mutual agreements contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree to amend the UPO as set forth herein.
1. UPO. The UPO is hereby clarified by adding the following sentence as the
last sentence of Section 5.3:
"Notwithstanding anything to the contrary set forth herein, if the
Company is unable to (i) deliver any securities pursuant to the exercise of
This UPO (including the exercise of any Warrants) or (ii) maintain an
effective registration statement and current prospectus covering the
securities underlying the UPO, the Company will have no obligation to pay
such Holder(s) any cash or other consideration or otherwise "net cash
settle" any portion of the UPO (including any Warrants). The Holder
acknowledges and agrees that the UPO may expire unexercised or unredeemed
if there is no effective registration event."
2. Miscellaneous.
(a) Governing Law. The validity, interpretation, and performance of this
Agreement and of the UPO shall be governed in all respects by the laws of the
State of New York, without giving effect to conflicts of law principles that
would result in the application of the substantive laws of another jurisdiction.
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(b) Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns.
(c) Entire Agreement. This Agreement sets forth the entire agreement and
understanding between the parties as to the subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of any and every
nature among them. Except as set forth in the Agreement, provisions of the UPO
which are not inconsistent with this Agreement shall remain in full force and
effect. This Agreement may be executed in counterparts.
IN WITNESS WHEREOF, the parties hereto have executed this Clarification
Agreement (UPO) as of the date first written above.
ASIA AUTOMOTIVE ACQUISITION CORPORATION
By:
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By:
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