Korea Milestone Acquisition Corporation SoftForum Building, 8th Floor Gangnam, Seoul, Korea, 135-170 Broadband Capital Management New York, NY 10019 Re: Initial Public Offering Ladies and Gentlemen:
_________,
2008
SoftForum
Building, 8th Floor
545-7
Dogokdong
Gangnam,
Seoul, Korea, 135-170
Broadband
Capital Management
000
Xxxxx
Xxxxxx, 49th Floor
New
York,
NY 10019
Re:
Initial
Public Offering
Ladies
and Gentlemen:
This
letter agreement (this “Letter
Agreement”)
is
being delivered to you in accordance with the Underwriting Agreement (the
“Underwriting
Agreement”)
entered into by and between Korea Milestone Acquisition Corporation, a Cayman
Islands company (the “Company”),
and
Broadband Capital Management LLC, as representative of the several underwriters
(the “Underwriters”),
relating to an underwritten initial public offering (the “Offering”)
of the
Company’s units (the “Units”),
each
Unit comprised of two ordinary shares of the Company, par value $0.0001 per
share (the “Ordinary
Shares”),
and
one warrant exercisable for one Ordinary Share (each, a “Warrant”).
Certain capitalized terms used herein are defined in Section 13
hereof.
In
order
to induce the Company and the Underwriters to enter into the Underwriting
Agreement and to proceed with the Offering and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
undersigned hereby agrees with the Company and the Underwriters as
follows:
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1.
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If
the Company solicits the approval of its shareholders of a Business
Combination or an Extended Period, the undersigned will (i) vote all
Initial Ordinary Shares beneficially owned by him or it in accordance
with
the majority of the votes cast by the holders of the IPO Shares with
respect to a Business Combination or the Extended Period and
(ii) vote all IPO Shares that may be acquired by him or it in the IPO
or in the aftermarket in favor of a Business Combination and the
Extended
Period.
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2.
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In
the event that the Company fails to consummate a Business Combination
within (x) 21 months of the closing date of the IPO or (y) 33 months
from the closing date of the IPO if the Company’s shareholders approve a
proposal to extend the period of time to consummate a Business Combination
by an additional 12 months and public shareholders owning less than
40% of
the shares sold in the IPO exercise their conversion rights, the
undersigned will, as promptly as possible, (i) cause the Trust Account
to
be liquidated and distributed to the holders of IPO Shares and (ii)
cause
the Company to liquidate as soon as reasonably practicable. The
undersigned hereby waives any and all right, title, interest or claim
of
any kind in or to any distribution of the Trust Account and any remaining
net assets of the Company held outside of the Trust Account as a
result of
such liquidation with respect to the Initial Ordinary Shares beneficially
owned by him. The undersigned further waives any and all right, title,
interest or claim in or to the Trust Account the undersigned may
have in
the future as a result of, or arising out of, any contracts or agreements
with the Company and will not seek recourse against the Trust Account
for
any reason whatsoever; provided, however, that in the event that
the
Company fails to consummate a Business Combination and the Trust
Account
is liquidated and distributed, nothing herein shall prevent the
undersigned from participating in the Trust Account pro rata with
the
other holders of IPO Shares with respect to any IPO Shares purchased
by
the undersigned as part of the IPO or in the aftermarket. In the
event of
the liquidation of the Trust Account, the undersigned agrees to indemnify
and hold harmless the Company, pro rata based on the undersigned’s
beneficial ownership of the Initial Ordinary Shares, against any
and all
loss, liability, claims, damage and expense whatsoever (including,
but not
limited to, any and all legal or other expenses reasonably incurred
in
investigating, preparing or defending against any litigation, whether
pending or threatened, or any claim whatsoever) which the Company
may
become subject as a result of any claim by any vendor or other person
or
entity who is owed money by the Company for services rendered or
contracted for, products sold or contracted for, or by any target
business, but only to the extent necessary to ensure that such loss,
liability, claim, damage or expense does not reduce the amount of
funds in
the Trust Account; provided that such indemnity shall not apply (i)
if
such vendor, person or entity or prospective target business executed
an
agreement waiving any claims against the Trust Account (even if such
waiver is subsequently found to be invalid or unenforceable), or
(ii) as
to any claims under the Company’s obligation to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities
Act of 1933, as amended (the “Securities Act”). The undersigned
acknowledges and agrees that there will be no distribution from the
Trust
Account with respect to any warrants or Sponsors’ Warrants, all rights
under which will terminate upon the Company’s liquidation. If
the remaining assets outside the Trust Account are insufficient to
pay the
costs of liquidation, the undersigned agrees to advance to the Company
the
funds necessary to complete such liquidation and agrees not to seek
repayment for such expenses.
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3.
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The
undersigned hereby (a) waives the undersigned’s right to exercise
redemption rights with respect to any Ordinary Shares owned or to
be owned
by the undersigned, directly or indirectly, and (b) agrees that the
undersigned will not seek redemption with respect to such Ordinary
Shares
in connection with any vote to approve (i) the Extended Period, or
(ii) a
Business Combination.
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4.
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The
undersigned hereby agrees and consents to (i) escrow all of the
undersigned’s Initial Ordinary Shares until one (1) year after the date of
the consummation of a Business Combination, subject to the terms
of an
Escrow Agreement, which the Company will enter into with the undersigned
and an escrow agent acceptable to the Company, and (ii) execute said
Escrow Agreement, in a form acceptable to the Company.
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5.
(a) Subject
to the pre-existing fiduciary duties of the undersigned, the undersigned agrees
that, from the date of the Prospectus until the earliest of the Company’s
consummation of its initial Business Combination, the Company’s liquidation, or
until such time as the undersigned ceases to be an executive officer or director
(as applicable), the undersigned will, and will cause companies or entities
under the undersigned’s control to offer to the Company, before pursuing for
himself or offering to others, any business combination opportunity presented
to
the undersigned with a target business (i) that has a fair market value between
$79.2 million and $400 million, (ii) whose primary operations are located in
the
Republic of Korea, and (iii) where the opportunity is to acquire at least a
controlling interest in the target business (which would be at least a majority
of the voting securities of the target business and/or control through
contractual arrangements of the target business or the majority of any governing
body of the target business). Subject to the pre-existing fiduciary duties
of
the undersigned, the undersigned has agreed that the undersigned will not,
and
will cause each other company or entity under the undersigned’s control not to,
pursue any such business opportunity other than on the Company’s behalf unless
and until the Company’s board of directors, including a majority of the
Company’s disinterested independent directors, has determined that the Company
will not pursue such opportunity.
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(b) The
undersigned agrees that the undersigned will not organize or become involved
in
any other blank check company with a focus on acquiring a target business in
Korea until the Company has entered into a definitive agreement regarding its
initial Business Combination and filed a Report of Foreign Private Issuer on
Form 6-K relating to the initial Business Combination, it being agreed and
understood that the undersigned may, however, organize or become involved in
other blank check companies with a focus other than acquiring a target business
in Korea.
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6.
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The
undersigned agrees to serve as Chief Executive Officer and Chairman
of the
Board of Directors of the Company until the earlier of the consummation
by
the Company of its initial Business Combination or the liquidation
of the
Company; provided,
however,
that nothing herein shall be construed as providing a right of the
undersigned to maintain any position if removed by proper corporate
action. If for any reason, or for no reason, the undersigned no longer
serves in each of the positions set forth opposite the undersigned's
name
in the Prospectus under the heading “Management” at the closing of the
initial Business Combination or any time prior thereto, the undersigned
will immediately forfeit all of his Initial Ordinary Shares, and
such
Initial Ordinary Shares will be reallocated among the remaining officers
and directors or to any replacement officer or director, as determined
by
the Chairman of the Board of Directors. The undersigned's sole right
with
respect to any Initial Ordinary Shares so forfeited shall be to receive
the amount originally paid by the undersigned for such shares, which
amount shall be due and payable promptly after the consummation of
the
Initial Business Combination. The undersigned’s biographical information
furnished to the Company and the Underwriters and attached hereto
as
Exhibit
A
is
true and accurate in all material 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, as
amended.
The undersigned’s completed questionnaires furnished to the Company and
the Underwriters and attached hereto as Exhibit
B
are true and accurate in all material respects.
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7.
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The
undersigned represents and warrants that the
undersigned:
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(a) 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) 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
entity, or (iii) pertaining to any dealings in any securities and the
undersigned is not currently a defendant in any such criminal proceeding; and
(c) has
never
been suspended or expelled from membership in any securities or commodities
exchange or association or had a securities or commodities license or
registrations denied, suspended or revoked.
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8.
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The
undersigned acknowledges and agrees that the Company will not consummate
any Business Combination with any entity that is affiliated with
any of
the Company’s officers, directors or Existing Shareholders, unless the
Company obtains an opinion from an independent investment banking
firm
indicating that the Business Combination is fair to the Company’s Public
Shareholders from a financial
perspective.
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9.
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Except
as disclosed in the Prospectus, neither the undersigned nor any family
member or affiliate of the undersigned will be entitled to receive,
and no
such person or entity will accept, any compensation, fee (finder’s or
otherwise), reimbursement or payment (a) from the Company for services
rendered to the Company prior to or in connection with the consummation
of
a Business Combination, other than reimbursement from the Company
for the
undersigned’s reasonable out-of-pocket expenses related to identifying,
investigating and consummating a Business Combination, or (b) in
the event
that the undersigned or any family member or affiliate of the undersigned
originates a Business Combination.
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10.
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The
undersigned has full right and power, without violating any agreement
by
which the undersigned is bound (including, without limitation, any
non-competition or non-solicitation agreement), to enter into this
Letter
Agreement and to serve as an officer, director and shareholder of
the
Company. The undersigned hereby consents to being named in the Prospectus
(as determined by the Company).
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11.
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The
undersigned agrees that until the consummation of a Business Combination,
the undersigned will not recommend or take any action to amend or
waive
any provisions of Article
49 of the Company’s second amended and restated memorandum and articles of
association.
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12.
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The
undersigned hereby agrees that, on a date that is within the five-day
period following the date that is 30 days after the date of the
Underwriting Agreement or, if earlier, the date the Underwriters
terminate
their option to purchase optional Units (i.e., their over-allotment
option, as described in the Underwriting Agreement) pursuant to the
terms
of the Underwriting Agreement, the undersigned will promptly sell
to the
Company, and the Company shall repurchase from the undersigned, at
the
price per share of $0.0001 in cash, the number of Ordinary Shares
determined by multiplying (a) the product of (i) 375,000, multiplied
by
(ii) a fraction, (x) the numerator of which is the number of Initial
Ordinary Shares held by the undersigned, and (y) the denominator
of which
is the number of Initial Ordinary Shares held by all Existing
Shareholders, by (b) a fraction, (i) the numerator of which is 750,000
minus the number of Ordinary Shares purchased by the Underwriters
upon the
exercise of their option to purchase optional Units, and (ii) the
denominator of which is 750,000.
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13.
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As
used herein, (a) a “Business
Combination”
shall mean the Company’s initial acquisition of, or acquisition of control
of, one or more operating businesses having its or their principal
place
of business in the Republic of Korea, through a merger, stock exchange,
stock purchase, asset acquisition, reorganization or other similar
business combination, or contractual arrangements, having an aggregate
fair market value of at least eighty percent (80%) of the balance
held in
the Trust Account (less the amount held in the Trust Account representing
the deferred underwriting discounts and commissions and taxes payable,
but
including any amounts paid to redeeming shareholders in connection
with
the approval of any proposed extension) at the time of the execution
of a
definitive agreement for the Business Combination; (b) “Existing
Shareholders”
shall mean the officers, directors and shareholders of the Company
prior
to the Offering; (c) “Initial
Ordinary Shares”
shall mean all of the Ordinary Shares owned by an Existing Shareholder
prior to the Offering (and shall include any Ordinary Shares issued
as
dividends with respect to such shares); (d) “Public
Shareholders”
shall mean the holders of securities issued in the Offering; (e)
“Trust
Account”
shall mean the trust account established for the benefit of the Public
Shareholders into which a portion of the net proceeds of the Offering
will
be deposited; and (f) the “Extended
Period”
shall mean the additional 12-month period to approve a Business
Combination as more specifically described in the Registration
Statement.
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14.
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The
undersigned acknowledges and understands that the Company will rely
upon
the agreements, representations and warranties set forth herein in
proceeding with the Offering. Nothing contained herein shall be deemed
to
render the Underwriters a representative of, or a fiduciary with
respect
to, the Company, its shareholders, or any creditor or vendor of the
Company with respect to the subject matter
hereof.
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15.
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The
undersigned hereby agrees to take, or cause to be taken, all actions
(including, without limitation, executing all agreements and documents)
and to do, or cause to be done, all things necessary, proper or advisable
to fulfill the undersigned’s obligations under this Letter Agreement, or
as may otherwise be requested or required of the undersigned by the
Company.
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16.
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This
Letter Agreement constitutes the entire agreement and understanding
of the
parties hereto in respect of its subject matter and supersedes all
prior
understandings, agreements, or representations by or among the parties
hereto, written or oral, to the extent they relate in any way to
the
subject matter hereof or the transactions contemplated hereby. This
Letter
Agreement may not be amended, modified or waived as to any particular
provision, except by a written instrument executed by all parties
hereto.
No party hereto may assign either this Letter Agreement or any of
its
rights, interests, or obligations hereunder without the prior written
approval of the other parties hereto. Any purported assignment in
violation of this Section 16 shall be void and ineffectual and shall
not
operate to transfer or assign any interest or title to the purported
assignee. This Letter Agreement, the entire relationship of the parties
hereto, and any litigation between the parties (whether grounded
in
contract, tort, statute, law or equity) shall be governed by, construed
in
accordance with, and interpreted pursuant to the laws of the State
of New
York, without giving effect to its choice of laws principles. The
undersigned hereby agrees that any action, proceeding or claim against
the
undersigned arising out of, or relating in any way to this Letter
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. The undersigned
hereby
irrevocably and unconditionally waives the right to a trial by jury
in any
action, suit, counterclaim or other proceeding (whether based on
contract,
tort, or otherwise) arising out of, connected with or relating to
this
Letter Agreement. The undersigned hereby agrees to appoint Xxxxxx
Xxxxxx
at Mintz, Xxxxx, Xxxx, Xxxxxx, Xxxxxxx and Xxxxx, P.C., 000 Xxxxx
Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (the “Agent”)
for the service of process in the State of New York, which such Agent
shall be reasonably acceptable to the Company and Broadband Capital
Management ("Broadband"),
to receive, for the undersigned and on the undersigned's behalf,
service
of process in any proceeding. If for any reason such Agent is unable
to
act as such, the undersigned will promptly (i) notify the Company
and
Broadband and (ii) appoint a substitute agent reasonably acceptable
to
each of the Company and Broadband, and nothing in this Letter Agreement
will affect the right of either party to serve process in any other
manner
permitted by law. This
Letter Agreement shall be binding on the undersigned and the undersigned’s
respective heirs, personal representatives, successors and assigns.
This
Letter Agreement shall terminate on the earlier of (a) the expiration
of
the longest lock-up period applicable to the undersigned’s Initial
Ordinary Shares and (b) the liquidation of the Company; provided
that such
termination shall not relieve the undersigned from liability for
any
breach of this Letter Agreement prior to its
termination.
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(Remainder
of page intentionally left blank. Signature page to follow.)
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| Sincerely, | ||
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Xxxx-Xxxx Xxx |
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Accepted
and agreed:
By:_________________________________
Name:
Title:
BROADBAND
CAPITAL MANAGEMENT LLC
By:_________________________________
Name:
Title:
6
EXHIBIT
A
BIOGRAPHICAL
INFORMATION FURNISHED TO THE COMPANY
EXHIBIT
B
QUESTIONNAIRES
