THE REGISTERED HOLDER OF THIS PURCHASE OPTION, BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION, EXCEPT AS HEREIN PROVIDED, AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL NOT SELL,...
THE
REGISTERED HOLDER OF THIS PURCHASE OPTION, BY ITS ACCEPTANCE HEREOF, AGREES
THAT
IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION, EXCEPT AS HEREIN
PROVIDED, AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT
WILL
NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR
A
PERIOD OF SIX MONTHS FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE
OTHER THAN (I) BROADBAND CAPITAL MANAGEMENT LLC (“BROADBAND”) OR ITS AFFILIATES
OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING (DEFINED
HEREIN), OR (II) A BONA FIDE OFFICER, PARTNER OR EMPLOYEE OF BROADBAND OR OF
ANY
SUCH UNDERWRITER OR SELECTED DEALER.
THIS
PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF: (I)
___________________, 2008 AND (II) THE CONSUMMATION BY KOREA MILESTONE
ACQUISITION CORP. (THE “COMPANY”) OF A MERGER, CAPITAL STOCK EXCHANGE, ASSET
ACQUISITION OR OTHER SIMILAR BUSINESS COMBINATION (A “BUSINESS COMBINATION”) (AS
DESCRIBED MORE FULLY IN THE COMPANY’S REGISTRATION STATEMENT (AS DEFINED
HEREIN)). THIS PURCHASE OPTION SHALL BE VOID AFTER 5:00 P.M, NEW YORK CITY
LOCAL
TIME, ON ______________, 2013.
UNIT
PURCHASE OPTION
FOR
THE PURCHASE OF
375,000
UNITS
OF
1. Purchase
Option.
THIS
CERTIFIES THAT, in consideration of $100 duly paid by or on behalf of
Broadband
Capital Management LLC (collectively, with its successors and permitted assigns
and/or transferees, the “Holder”
or
“Broadband”),
as
registered owner of this Purchase Option, to Korea Milestone Acquisition Corp.,
a company formed under the laws of the Cayman Islands (the “Company”),
Holder is entitled, at any time or from time to time after the closing of the
Offering (as defined below) and during the period commencing (the “Commencement
Date”)
on the
later of: (i) the consummation of a Business Combination and (ii) ____________
__, 2008, and expiring (the “Expiration
Date”)
at or
before 5:00 p.m., New York City local time, _______ __, 2013, but not
thereafter, to subscribe for, purchase and receive, in whole or in part, up
to
Three Hundred Seventy-Five Thousand (375,000) units (the “Units”)
of the
Company, each Unit consisting of two ordinary shares of the Company, par value
$.0001 per share (the “Ordinary
Shares”),
and
one warrant (the “Warrant”)
to
purchase one Ordinary Share expiring five years from the effective date (the
“Effective
Date”)
of the
registration statement (the “Registration
Statement”)
pursuant to which Units are offered for sale to the public (the “Offering”).
Each
Warrant is on the same terms and conditions as the warrants underlying the
Units
being registered for sale to the public by way of the Registration
Statement.
If the
Expiration Date is a day on which banking institutions are authorized by law
to
close, then this Purchase Option shall expire on the next succeeding day that
is
not such a day in accordance with the terms herein. During the period ending
on
the Expiration Date, the Company agrees not to take any action that would
terminate the Purchase Option. This Purchase Option is initially exercisable
at
$25.00 per Unit (the “Exercise
Price”).
The
number of Units purchasable hereunder and the Exercise Price are subject to
adjustment as provided in this Purchase Option.
2. Exercise.
2.1 Exercise.
This
Purchase Option may be exercised by the Holder in whole or in part at any time
or in part from time to time on or after the Commencement Date and before the
Expiration Date by: (x) surrendering this Purchase Option to the Company, (y)
delivering a subscription form in the attached hereto as Annex I (duly executed
by the Holder) and (z) making payment of the Exercise Price in cash, certified
or official bank check payable to the order of the Company or wire transfer
of
immediately available funds (to an account designated by the Company), in any
case in an amount obtained by multiplying (a) the number of Units designated
by
the Holder in the subscription form by (b) the Exercise Price then in effect.
In
the event of a partial exercise or assignment hereof, the Company shall issue
and deliver to or upon the order of the Holder a new Purchase Option of like
tenor, in the name of the Holder or as the Holder (upon payment by the Holder
of
applicable transfer taxes) may request, evidencing the right to purchase the
aggregate number of Units for which such Purchase Option may still be exercised.
If the subscription rights represented hereby shall not be exercised at or
before 5:00 p.m., New York City local time on the Expiration Date, this Purchase
Option automatically shall become and be void, without further force or effect,
and all rights represented hereby shall cease and expire.
2.2 Legend.
Each
certificate for the Units issued upon exercise of this Purchase Option and
each
certificate representing the underlying Ordinary Shares and Warrants and the
Ordinary Shares issuable upon exercise of the underlying Warrants (the
“Warrant
Shares”)
shall
bear a legend as follows, unless such Units, Ordinary Shares, Warrants and/or
Warrant Shares (collectively, the “Securities”)
have
been registered under the Securities Act of 1933, as amended (the “Act”):
“THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION
OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.”
2
2.3 Cashless
Exercise.
In lieu
of the payment of the Exercise Price multiplied by the number of Units for
which
this Purchase Option is exercisable (and in lieu of being entitled to receive
Ordinary Shares and Warrants) in the manner required by Section 2.1, the Holder
shall have the right (but not the obligation) to convert any exercisable but
unexercised portion of this Purchase Option into Units (the “Conversion
Right”)
as
follows: upon exercise of the Conversion Right, the Company shall deliver to
the
Holder (without payment by the Holder of any of the Exercise Price in cash)
that
number of Ordinary Shares and Warrants comprising that number of Units equal
to
the quotient obtained by dividing (x) the Value (as defined below) of the
portion of the Purchase Option being converted by (y) the Current Market Value
(as defined below) of the portion of the Purchase Option being converted. The
“Value”
of
the
portion of the Purchase Option being converted shall equal the remainder derived
from subtracting (a) (i) the Exercise Price multiplied by (ii) the number of
Units underlying the portion of this Purchase Option being converted from (b)
the Current Market Value (as defined below) of a Unit multiplied by the number
of Units underlying the portion of the Purchase Option being converted. As
used
herein, the term “Current
Market Value”
per
Unit at any date means: (A) in the event that neither the Units nor Warrants
are
still trading, the remainder derived from subtracting (x) the exercise price
of
the Warrants multiplied by the number of Ordinary Shares issuable upon exercise
of the Warrants underlying one Unit from (y) (i) the Current Market Price of
the
Ordinary Shares multiplied by (ii) the number of Ordinary Shares underlying
one
Unit, which shall include the Ordinary Shares underlying the Warrants included
in such Unit less the Exercise Price for the Unit plus the current Market Price
of the Ordinary Shares underlying the Unit; (B) in the event the Units, Ordinary
Shares and Warrants are still trading, (i) if the Units are listed on a national
securities exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market
or FINRA OTC Bulletin Board (or successor), the average of the last sale price
of the Units in the principal trading market for the Units as reported by the
exchange, Nasdaq or FINRA, as the case may be, for the ten trading days ending
on the third business day prior to exercise; or (ii) if the Units are not listed
on a national securities exchange or quoted on the Nasdaq Global Market, Nasdaq
Capital Market or the FINRA OTC Bulletin Board (or successor exchange), but
is
traded in the residual over-the-counter market, the average of the closing
bid
price for Units for the ten trading days ending on the third business day prior
to exercise for which such quotations are reported by the Pink Sheets, LLC
or
similar publisher of such quotations; and (C) in the event that the Units are
not still trading but the Ordinary Shares and Warrants underlying the Units
are
still trading, the Current Market Price of the Ordinary Shares plus the product
of (x) the Current Market Price of the Warrants and (y) the number of Ordinary
Shares underlying the Warrants included in one Unit. The “Current
Market Price”
shall
mean (i) if the Ordinary Shares (or Warrants, as the case may be) is listed
on a
national securities exchange or quoted on the Nasdaq Global Market, Nasdaq
Capital Market or FINRA OTC Bulletin Board (or successor such as the Bulletin
Board Exchange), the average of the sale price of the Ordinary Shares (or
Warrants) in the principal trading market for the Ordinary Shares as reported
by
the exchange, Nasdaq or the FINRA, as the case may be, for the ten trading
days
ending on the third business day prior to exercise; (ii) if the Ordinary Shares
(or Warrants, as the case may be) is not listed on a national securities
exchange or quoted on the Nasdaq Global Market, Nasdaq Capital Market or the
FINRA OTC Bulletin Board (or successor exchange), but is traded in the residual
over-the-counter market, the closing bid price for the Ordinary Shares (or
Warrants) on the last trading day preceding the date in question for which
such
quotations are reported by the Pink Sheets, LLC or similar publisher of such
quotations; and (iii) if the fair market value of the Ordinary Shares cannot
be
determined pursuant to clause (i) or (ii) above, such price as the Board of
Directors of the Company shall determine, in good faith.
3
2.4
Mechanics
of Cashless Exercise.
The
cashless exercise right set forth herein may be exercised by the Holder on
any
business day on or after the Commencement Date and not later than the Expiration
Date by delivering the Purchase Option with the duly executed exercise form
attached hereto with the cashless exercise section completed to the Company,
exercising the cashless exercise right and specifying the total number of Units
the Holder will purchase pursuant to such right.
2.5 No
Cash Settlement. Notwithstanding
anything to the contrary contained in this Purchase Option, under no
circumstances will the Company be required to net cash settle the exercise
of
the Purchase Option or the Warrants underlying the Purchase Option.
2.6 Effective
Registration Statement.
The
Warrants underlying this Purchase Option are exercisable only during those
periods of time in which the Company maintains the effectiveness of the
Registration Statement. If the Company fails to maintain the effectiveness
of
the Registration Statement, the Warrants underlying this Purchase Option may
expire worthless.
3. Transfer.
3.1 General
Restrictions.
Holder
agrees that, pursuant to FINRA Rule 2710(g)(1), it will not sell this Purchase
Option during the Company’s Offering, nor shall such Holder sell, transfer,
assign, pledge, hypothecate or otherwise dispose of this Purchase Option
(including the Securities hereunder) or cause this Purchase Option or the
Securities hereunder to be the subject of any hedging, short sale, derivative,
put or call transaction that would result in the effective economic disposition
of this Purchase Option or the Securities hereunder, except as provided for
in
FINRA Rule 2710(g)(2).
3.2 Restrictions
Imposed by the Act.
The
Securities evidenced by this Purchase Option shall not be transferred unless
and
until (i) the Company has received the opinion of counsel for the Holder that
the Securities may be transferred pursuant to an exemption from registration
under the Act and applicable state securities laws, the availability of which
is
established to the reasonable satisfaction of the Company (the Company hereby
agreeing that the opinion of Ellenoff, Xxxxxxxx & Schole LLP shall be deemed
satisfactory evidence of the availability of an exemption), or (ii) a
registration statement or a post-effective amendment to the Registration
Statement relating to such Securities has been filed by the Company and declared
effective by the Securities and Exchange Commission (the “SEC”)
and
compliance with applicable state securities law has been
established.
4
4. New
Purchase Options to be Issued.
4.1 Partial
Exercise or Transfer.
Subject
to the restrictions in Section 3 hereof, this Purchase Option may be exercised
or assigned in whole or in part. In order to make any permitted assignment
or
transfer, the Holder must deliver to the Company the assignment form attached
hereto as Xxxxx XX duly executed and completed, together with the Purchase
Option and payment of all transfer taxes, if any, payable in connection
therewith. The Company shall within five (5) business days transfer this
Purchase Option on the books of the Company and shall execute and deliver a
new
Purchase Option or Purchase Options of like tenor to the appropriate assignee(s)
expressly evidencing the right to purchase the aggregate number of Units
purchasable hereunder or such portion of such number as shall be contemplated
by
any such assignment or transfer.
4.2 Lost
Certificate.
Upon
receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Purchase Option and of reasonably satisfactory
indemnification or the posting of a bond, the Company shall execute and deliver
a new Purchase Option of like tenor and date. Any such new Purchase Option
executed and delivered as a result of such loss, theft, mutilation or
destruction shall constitute a substitute contractual obligation on the part
of
the Company.
5. Registration
Rights.
5.1 Demand
Registration.
5.1.1 Grant
of Right.
The
Company, upon written demand (an “Demand
Notice”)
of the
Holder(s) of at least a majority (the “Majority
Holders”)
of the
Purchase Options and/or the underlying Units and/or the underlying Securities,
agrees to register all or any portion of the Purchase Option and the underlying
Securities (collectively, the “Registrable
Securities”)
as
requested by the Majority Holders. The Company will file a registration
statement or a post-effective amendment to the Registration Statement covering
the Registrable Securities within sixty (60) days after receipt of the Initial
Demand Notice and use its commercially reasonable efforts to have such
registration statement or post-effective amendment declared effective as soon
as
possible thereafter, subject to compliance with review by the SEC. The demand
for registration may be made at any time beginning six (6) months prior to
the
Commencement Date. The Company covenants and agrees to give written notice
of
its receipt of any Demand Notice by any Holder(s) to all other registered
Holders of the Purchase Options and/or the Registrable Securities within ten
(10) days from the date of the receipt of any such Demand Notice.
5.1.2 Terms.
The
Company shall bear all fees and expenses attendant to registering the
Registrable Securities, including the expenses of one legal counsel selected
by
the Holders to represent them in connection with the registration of the
Registrable Securities, but the Holders shall pay any and all underwriting
commissions. The Company agrees to use its reasonable best efforts to qualify
or
register the Registrable Securities in such States as are reasonably requested
by the Majority Holder(s); provided,
however,
that in
no event shall the Company be required to register the Registrable Securities
in
a State in which such registration would cause (i) the Company to be obligated
to qualify to do business in such State, or would subject the Company to
taxation as a foreign corporation doing business in such jurisdiction or (ii)
the principal stockholders of the Company to be obligated to escrow their shares
of capital stock of the Company. The Company shall cause any registration
statement or post-effective amendment filed pursuant to the demand rights
granted under Section 5.1.1 to remain effective for a period of two (2) years
from the effective date of such registration statement or post-effective
amendment.
5
5.2 “Piggy-Back”
Registration.
5.2.1 Grant
of Right.
If at
any time during a period of seven (7) years commencing on the Effective Date
when there is not an effective registration statement covering all of the
Registrable Securities, the Company shall determine to prepare and file with
the
SEC a registration statement relating to an offering under the Act of any of
its
securities, other than pursuant to SEC Form S-4 or S-8 or any equivalent form,
the Company, upon the request of any Holder, as described below, shall cause
the
registration under the Act of the Registrable Securities as part of any such
registration statement filed by the Company; provided,
however,
that
if, in the written opinion of the Company’s managing underwriter or
underwriters, if any, for such offering, the inclusion of the Registrable
Securities, when added to the securities being registered by the Company or
the
selling stockholder(s), will exceed the maximum amount of the Company’s
securities (the “Maximum
Number of Shares”)
which
can be marketed (i) at a price reasonably related to their then current market
value, and (ii) without materially and adversely affecting the entire offering,
then the Company shall include in any such registration:
(i) If
the
registration is undertaken for the Company’s account: (A) first, the Ordinary
Shares or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Number of Shares; (B) second, to the extent that
the Maximum Number of Shares has not been reached under the foregoing clause
(A), the Ordinary Shares, if any, including the Registrable Securities, as
to
which registration has been requested pursuant to written contractual piggy-back
registration rights of security holders (pro rata in accordance with the number
of Ordinary Shares which each such person has actually requested to be included
in such registration, regardless of the number of Ordinary Shares with respect
to which such persons have the right to request such inclusion) that can be
sold
without exceeding the Maximum Number of Shares; and
(ii) If
the
registration is a “demand” registration undertaken at the demand of persons
other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (A) first, the Ordinary Shares for the account
of the demanding persons that can be sold without exceeding the Maximum Number
of Shares; (B) second, to the extent that the Maximum Number of Shares has
not
been reached under the foregoing clause (A), the Ordinary Shares or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Shares; and (C) third, to the extent that the Maximum
Number of Shares has not been reached under the foregoing clauses (A) and (B),
the Registrable Securities as to which registration has been requested under
this Section 5.2 (pro rata in accordance with the number of shares of
Registrable Securities held by each such holder); and (D) fourth, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clauses (A), (B) and (C), the Ordinary Shares, if any, as to which registration
has been requested pursuant to written contractual piggy-back registration
rights which other shareholders desire to sell that can be sold without
exceeding the Maximum Number of Shares.
6
5.2.2 Terms.
The
Company shall bear all fees and expenses attendant to registering the
Registrable Securities, including the reasonable expenses of one legal counsel
selected by the Holders to represent them in connection with the registration
of
the Registrable Securities but the Holders shall pay any and all underwriting
commissions related to the Registrable Securities. In the event of such a
proposed registration, the Company shall furnish the then Holders of outstanding
Registrable Securities with not less than fifteen (15) days’ written notice
prior to the proposed date of filing of such registration statement. Such notice
to the Holders shall continue to be given for each applicable registration
statement filed (during the period in which the Purchase Option is exercisable)
by the Company until such time as all of the Registrable Securities have been
registered and sold. The holders of the Registrable Securities shall exercise
the “piggy-back” rights provided for herein by giving written notice, within ten
days of the receipt of the Company’s notice of its intention to file a
registration statement. The Company shall cause any registration statement
filed
pursuant to the above “piggyback” rights to remain effective for at least nine
months from the date that the Holders of the Registrable Securities are first
given the opportunity to sell all of such securities. The
Company agrees, at its sole expense, to use its reasonable best efforts to
qualify or register the Registrable Securities in such States as are reasonably
requested by the Majority Holder(s); provided, however, that in no event shall
the Company be required to register the Registrable Securities in a State in
which such registration would cause (i) the Company to be obligated to qualify
to do business in such State, or would subject the Company to taxation as a
foreign corporation doing business in such jurisdiction or (ii) the principal
stockholders of the Company to be obligated to escrow their shares of capital
stock of the Company.
5.3 General
Terms.
5.3.1 Indemnification.
The
Company shall, notwithstanding any termination of this Purchase Option,
indemnify and hold harmless each Holder, the officers, directors, agents,
brokers, investment advisors and employees of each of them and each person,
if
any, who controls such Holders within the meaning of Section 15 of the Act
or
Section 20(a) of the Securities Exchange Act of 1934, as amended (the
“Exchange
Act”),
and the
officers, directors, agents and employees of such controlling person, to the
fullest extent permitted by applicable law, from and against
all loss, claim, damage, expense or liability (including all reasonable
attorneys’ fees and other expenses reasonably incurred in investigating,
preparing or defending against litigation, commenced or threatened, or any
claim
whatsoever whether arising out of any action between the underwriter and the
Company or between the underwriter and any third party or otherwise) to which
any of them may become subject under the Act, the Exchange Act or otherwise,
arising out of or relating to such registration statement filed pursuant to
this
Section 5 and any prospectus contained in the registration statement or in
any
amendment or supplement thereto, except only to the same extent and with the
same effect as the provisions pursuant to which the Company has agreed to
indemnify the underwriters contained in Section 5.1 of the Underwriting
Agreement between the Company, Broadband and the other underwriters named
therein dated the Effective Date. Each Holder of the Registrable Securities
to
be sold pursuant to such registration statement, and their successors and
assigns, shall severally, and not jointly, indemnify the Company, its officers
and directors and each person, if any, who controls the Company within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, against
all loss, claim, damage, expense or liability (including all reasonable
attorneys’ fees and other expenses reasonably incurred in investigating,
preparing or defending against any claim whatsoever) to which they may become
subject under the Act, the Exchange Act or otherwise, arising from information
furnished by or on behalf of such Holders, or their successors or assigns,
in
writing, for specific inclusion in such registration statement to the same
extent and with the same effect as the provisions contained in Section 5.2
of
the Underwriting Agreement pursuant to which the underwriters have agreed to
indemnify the Company.
7
5.3.2 Exercise
of Purchase Options.
Nothing
contained in this Purchase Option shall be construed as requiring any Holder
to
exercise their Purchase Options or Warrants underlying such Purchase Options
prior to or after the filing of any registration statement or the effectiveness
thereof.
5.3.3 Documents
Delivered to Holders.
The
Company shall furnish Broadband, as representative of the Holders participating
in any of the foregoing offerings, a signed counterpart, addressed to the
participating Holders, of (i) an opinion of counsel to the Company, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, an opinion dated the date of the
closing under any underwriting agreement related thereto), and (ii) a “cold
comfort” letter dated the effective date of such registration statement (and, if
such registration includes an underwritten public offering, a letter dated
the
date of the closing under the underwriting agreement) signed by the independent
public accountants who have issued a report on the Company’s financial
statements included in such registration statement, in each case covering
substantially the same matters with respect to such registration statement
(and
the prospectus included therein) and, in the case of such accountants’ letter,
with respect to events subsequent to the date of such financial statements,
as
are customarily covered in opinions of issuer’s counsel and in accountants’
letters delivered to underwriters in underwritten public offerings of
securities. The Company shall also deliver promptly to Broadband, as
representative of the Holders participating in the offering, the correspondence
and memoranda described below and copies of all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda relating
to discussions with the Commission or its staff with respect to the registration
statement and permit Broadband, as representative of the Holders, to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of the Financial
Industry Regulatory Authority, Inc. (“FINRA”).
Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable
times
and as often as Broadband, as representative of the Holders, shall reasonably
request. The Company shall not be required to disclose any confidential
information or other records to Broadband, as representative of the Holders,
or
to any other person, until and unless such persons shall have entered into
reasonable confidentiality agreements (in form and substance reasonably
satisfactory to the Company), with the Company with respect
thereto.
8
5.3.4 Documents
to be Delivered by Xxxxxx(s).
Each
Holder participating in any of the foregoing offerings shall furnish to the
Company a completed and executed questionnaire provided by the Company
requesting information customarily sought of selling
securityholders.
5.3.5 Underwriting
Agreement.
The
Company shall enter into an underwriting agreement with the managing
underwriter(s), if any, selected by any Holders, whose Registrable Securities
are being registered pursuant to this Section 5, which managing underwriter
shall be reasonably acceptable to the Company. Such agreement shall be
reasonably satisfactory in form and substance to the Company and its legal
counsel, each Holder and such managing underwriters, and shall contain such
representations, warranties and covenants by the Company and such other terms
as
are customarily contained in agreements of that type used by the managing
underwriter. The Holders shall be parties to any underwriting agreement relating
to an underwritten sale of their Registrable Securities and may, at their
option, require that any or all the representations, warranties and covenants
of
the Company to or for the benefit of such underwriters shall also be made to
and
for the benefit of such Holders. Such Holders shall not be required to make
any
representations or warranties to or agreements with the Company or the
underwriters except as they may relate to such Holders and their intended
methods of distribution. Such Holders, however, shall agree to such covenants
and indemnification and contribution obligations for selling stockholders as
are
customarily contained in agreements of that type used by the managing
underwriter. Further, such Holders shall execute appropriate custody agreements
and otherwise cooperate fully in the preparation of the registration statement
and other documents relating to any offering in which they include securities
pursuant to this Section 5. Each Holder shall also furnish to the Company such
information regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be reasonably
required to effect the registration of the Registrable Securities.
5.3.6 Rule
144 Sale. Notwithstanding
anything contained in this Section 5 to the contrary, the Company shall have
no
obligation pursuant to Sections 5.1 or 5.2 for the registration of Registrable
Securities held by any Holder (i) where such Holder would then be entitled
to
sell under Rule 144 within any three month period (or such other period
prescribed under Rule 144 as may be provided by amendment thereof) all of the
Registrable Securities held by such Holder, and (ii) where the number of
Registrable Securities held by such Holder is within the volume limitations
under paragraph (e) of Rule 144 (calculated as if such Holder were an affiliate
within the meaning of Rule 144).
5.3.7 Supplemental
Prospectus.
Each
Holder agrees, that upon receipt of any notice from the Company of the happening
of any event as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact
or
omits to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances then
existing, such Holder will immediately discontinue disposition of Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such Xxxxxx’s receipt of the copies of a supplemental or
amended prospectus, and, if so desired by the Company, such Holder shall deliver
to the Company (at the expense of the Company) or destroy (and deliver to the
Company a certificate of such destruction) all copies, other than permanent
file
copies then in such Holder’s possession, of the prospectus covering such
Registrable Securities current at the time of receipt of such
notice.
9
6. Adjustments.
6.1 Adjustments
to Exercise Price and Number of Securities.
The
Exercise Price and the number of Units underlying the Purchase Option shall
be
subject to adjustment from time to time as hereinafter set forth:
6.1.1 Stock
Dividends - Split-Ups.
If
after the date hereof, the number of outstanding Ordinary Shares is increased
by
a stock dividend payable in Ordinary Shares or by a split-up of Ordinary Shares
or other similar event, then, on the effective date thereof, the number of
Ordinary Shares underlying each of the Units purchasable hereunder shall be
increased in proportion to such increase in outstanding shares. In such case,
the number of Ordinary Shares, and the exercise price applicable thereto,
underlying the Warrants underlying each of the Units purchasable hereunder
shall
be adjusted in accordance with the terms of the Warrants. For example, if the
Company declares a two-for-one stock dividend and at the time of such dividend
this Purchase Option is for the purchase of one Unit at $25.00 per whole Unit
(each Warrant underlying the Units is exercisable for $6.00 per share), upon
effectiveness of the dividend, this Purchase Option will be adjusted to allow
for the purchase of one Unit at $25.00 per Unit, each Unit entitling the holder
to receive four Ordinary Shares and two Warrants (each Warrant exercisable
for
$3.00 per share).
6.1.2 Aggregation
of Shares.
If
after the date hereof, the number of outstanding Ordinary Shares is decreased
by
a consolidation, combination or reclassification of Ordinary Shares or other
similar event, then, on the effective date thereof, the number of Ordinary
Shares underlying each of the Units purchasable hereunder shall be decreased
in
proportion to such decrease in outstanding shares. In such case, the number
of
Ordinary Shares, and the exercise price applicable thereto, underlying the
Warrants underlying each of the Units purchasable hereunder shall be adjusted
in
accordance with the terms of the Warrants.
6.1.3 Replacement
of Securities upon Reorganization, etc.
In case
of any reclassification or reorganization of the outstanding Ordinary Shares
other than a change covered by Section 6.1.1 or 6.1.2 hereof or that solely
affects the par value of such Ordinary Shares, or in the case of any merger
or
consolidation of the Company with or into another corporation (other than a
consolidation or merger in which the Company is the continuing corporation
and
that does not result in any reclassification or reorganization of the
outstanding Ordinary Shares), or in the case of any sale or conveyance to
another corporation or entity of the property of the Company as an entirety
or
substantially as an entirety in connection with which the Company is dissolved,
the Holder of this Purchase Option shall have the right thereafter (until the
expiration of the right of exercise of this Purchase Option) to receive upon
the
exercise hereof, for the same aggregate Exercise Price payable hereunder
immediately prior to such event, the kind and amount of shares of stock or
other
securities or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or transfer, by a Holder of the number of Ordinary Shares of the
Company obtainable upon exercise of this Purchase Option and the underlying
Warrants immediately prior to such event; and if any reclassification also
results in a change in Ordinary Shares covered by Section 6.1.1 or 6.1.2, then
such adjustment shall be made pursuant to Sections 6.1.1, 6.1.2 and this Section
6.1.3. The provisions of this Section 6.1.3 shall similarly apply to successive
reclassifications, reorganizations, mergers or consolidations, sales or other
transfers.
10
6.1.4 Changes
in Form of Purchase Option.
This
form of Purchase Option need not be changed because of any change pursuant
to
this Section, and the Purchase Options issued after such change may state the
same Exercise Price and the same number of Units as are stated in the Purchase
Options initially issued pursuant to this Agreement. The acceptance by any
Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to an adjustment
occurring after the Commencement Date or the computation thereof.
6.2 Substitute
Purchase Option.
In case
of any consolidation of the Company with, or merger of the Company with, or
merger of the Company into, another corporation (other than a consolidation
or
merger which does not result in any reclassification or change of the
outstanding Ordinary Shares), the corporation formed by such consolidation
or
merger shall execute and deliver to the Holder a supplemental Purchase Option
providing that the holder of each Purchase Option then outstanding or to be
outstanding shall have the right thereafter (until the stated expiration of
such
Purchase Option) to receive, upon exercise of such Purchase Option, the kind
and
amount of shares of stock and other securities and property receivable upon
such
consolidation or merger, by a holder of the number of Ordinary Shares of the
Company for which such Purchase Option might have been exercised immediately
prior to such consolidation, merger, sale or transfer. Such supplemental
Purchase Option shall provide for adjustments which shall be identical to the
adjustments provided in Section 6. The above provision of this Section shall
similarly apply to successive consolidations or mergers.
6.3 Elimination
of Fractional Interests.
The
Company shall not be required to issue certificates representing fractions
of
Ordinary Shares or Warrants upon the exercise of the Purchase Option, nor shall
it be required to issue scrip or pay cash in lieu of any fractional interests,
it being the intent of the parties that all fractional interests shall be
eliminated by rounding any fraction up or down to the nearest whole number
of
Warrants, Ordinary Shares or other securities, properties or
rights.
7. Reservation
and Listing.
The
Company shall at all times reserve and keep available out of its authorized
Ordinary Shares, solely for the purpose of issuance upon exercise of the
Purchase Options or the Warrants underlying the Purchase Option, such number
of
Ordinary Shares or other securities, properties or rights as shall be issuable
upon the exercise thereof. The Company covenants and agrees that, upon exercise
of the Purchase Options and payment of the Exercise Price therefor, all Ordinary
Shares and other securities issuable upon such exercise shall be duly and
validly issued, fully paid and non-assessable and not subject to preemptive
rights of any stockholder. The Company further covenants and agrees that upon
exercise of the Warrants underlying the Purchase Options and payment of the
respective Warrant exercise price therefor, all Ordinary Shares and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Purchase Options shall be outstanding, the Company shall use
its
best efforts to cause all (i) Units and Ordinary Shares issuable upon exercise
of the Purchase Options, (ii) Warrants issuable upon exercise of the Purchase
Options and (iii) Ordinary Shares issuable upon exercise of the Warrants
included in the Units issuable upon exercise of the Purchase Option to be listed
(subject to official notice of issuance) on all securities exchanges (or, if
applicable on the Nasdaq Global Market, Nasdaq Capital Market, FINRA OTC
Bulletin Board or any successor trading market) on which the Units, the Ordinary
Shares or the Warrants may then be listed and/or quoted.
11
8. Certain
Notice Requirements.
8.1 Holder’s
Right to Receive Notice.
Nothing
herein shall be construed as conferring upon the Holders the right to vote
or
consent as a stockholder for the election of directors or any other matter,
or
as having any rights whatsoever as a stockholder of the Company. If, however,
at
any time prior to the expiration of the Purchase Options and their exercise,
any
of the events described in Section 8.2 shall occur, then, in one or more of
said
events, the Company shall give written notice of such event at least fifteen
(15) days prior to the date fixed as a record date or the date of closing the
transfer books for the determination of the stockholders entitled to such
dividend, distribution, conversion or exchange of securities or subscription
rights, or entitled to vote on such proposed dissolution, liquidation, winding
up or sale. Such notice shall specify such record date or the date of the
closing of the transfer books, as the case may be. Notwithstanding the
foregoing, the Company shall deliver to each Holder a copy of each notice given
to the other stockholders of the Company at the same time and in the same manner
that such notice is given to the stockholders.
8.2 Events
Requiring Notice.
The
Company shall be required to give the notice described in this Section 8 upon
one or more of the following events: (i) if the Company shall take a record
of
the holders of its Ordinary Shares for the purpose of entitling them to receive
a dividend or distribution, or (ii) the Company shall offer to all the holders
of its Ordinary Shares any additional shares of capital stock of the Company
or
securities convertible into, exercisable for or exchangeable for shares of
capital stock of the Company, or any option, right or warrant to subscribe
therefor, or (iii) a dissolution, liquidation or winding up of the Company
(other than in connection with a consolidation or merger) or a sale of all
or
substantially all of its property, assets and business or a merger of the
Company wherein the separate existence of the Company shall cease shall be
proposed.
8.3 Notice
of Change in Exercise Price.
The
Company shall, promptly after an event requiring a change in the Exercise Price
pursuant to Section 6 hereof, send notice to the Holders of such event and
change (a “Price
Notice”).
The
Price Notice shall describe the event causing the change and the method of
calculating same and shall be certified as being true and accurate by the
Company’s President and Chief Financial Officer.
8.4 Transmittal
of Notices.
All
notices, requests, consents and other communications under this Purchase Option
shall be in writing and shall be deemed to have been duly made when hand
delivered, mailed by express mail or private courier service, or sent by
facsimile transmission, with confirmation of receipt: (i) If to the registered
Holder of the Purchase Option, to the address and/or fax number of such Holder
as shown on the books of the Company, or (ii) if to the Company, to the
following address or fax number or to such other address or and fax number
as
the Company may designate by notice to the Holders:
SoftForum
Building
8th
Floor
545-7
Dogokdong
Gangnam,
Seoul, Korea 135-170
Attn:
Xxxx-Xxxx Xxx
12
9.1 Amendments.
The
Company and Broadband may from time to time supplement or amend this Purchase
Option without the approval of any of the Holders in order to cure any
ambiguity, to correct or supplement any provision contained herein that may
be
defective or inconsistent with any other provisions herein, or to make any
other
provisions in regard to matters or questions arising hereunder that the Company
and Broadband may deem necessary or desirable and that the Company and Broadband
deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of and be signed
by the party against whom enforcement of the modification or amendment is
sought.
9.2 Headings.
The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any
of
the terms or provisions of this Purchase Option.
9.3. Entire
Agreement.
This
Purchase Option (together with the other agreements and documents being
delivered pursuant to or in connection with this Purchase Option) constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
9.4 Binding
Effect.
This
Purchase Option shall inure solely to the benefit of and shall be binding upon,
the Holder and the Company and their permitted assignees, respective successors,
legal representative and assigns, and no other person shall have or be construed
to have any legal or equitable right, remedy or claim under or in respect of
or
by virtue of this Purchase Option or any provisions herein
contained.
9.5 Governing
Law; Submission to Jurisdiction.
This
Purchase Option shall be governed by and construed and enforced in accordance
with the laws of the State of New York, without giving effect to conflict of
laws. Each of the Company and Broadband agree that any action, proceeding or
claim against it arising out of, or relating in any way to this Purchase Option
shall be brought and enforced in the courts of the State of New York located
in
New York County or of the United States of America for the Southern District
of
New York, and irrevocably submits to such jurisdiction, which jurisdiction
shall
be exclusive. Each of the Company and Broadband hereby waives any objection
to
such exclusive jurisdiction and that such courts represent an inconvenient
forum. Any process or summons to be served upon the Company may be served by
transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
8 hereof. Such mailing shall be deemed personal service and shall be legal
and
binding upon the Company in any action, proceeding or claim. The Company and
the
Holder agree that the prevailing party(ies) in any such action shall be entitled
to recover from the other party(ies) all of its reasonable attorneys’ fees and
expenses relating to such action or proceeding and/or incurred in connection
with the preparation therefor.
13
9.6 Waiver,
Etc.
The
failure of the Company or the Holder to at any time enforce any of the
provisions of this Purchase Option shall not be deemed or construed to be a
waiver of any such provision, nor to in any way affect the validity of this
Purchase Option or any provision hereof or the right of the Company or any
Holder to thereafter enforce each and every provision of this Purchase Option.
No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Purchase Option shall be effective unless set forth in a
written instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non-fulfillment shall be construed or deemed to be a waiver
of
any other or subsequent breach, non-compliance or non-fulfillment.
9.7 Execution.
It is
agreed that deliver of the Company’s signature hereon by facsimile or other
electronic method of delivery shall constitute a valid signature and
delivery.
9.8
Exchange
Agreement.
As a
condition of the Holder’s receipt and acceptance of this Purchase Option, Xxxxxx
agrees that, at any time prior to the complete exercise of this Purchase Option
by Holder, if the Company and Broadband enter into an agreement (an
“Exchange
Agreement”)
pursuant to which they agree that all outstanding Purchase Options will be
exchanged for securities or cash or a combination of both, then Holder shall
agree to such exchange and become a party to the Exchange
Agreement.
9.9 Underlying
Warrants.
At any
time after exercise by the Holder of this Purchase Option, the Holder may
exchange his Warrants for Public Warrants upon payment to the Company of the
difference between the exercise price of his Warrant and the exercise price
of
the Public Warrants, if any.
14
IN
WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by
its
duly authorized officer as of the __th day of ___________, 2008.
By:
_________________________________
Name:
Title:
15
Annex
I
Form
to
be used to exercise Purchase Option
_________________________
_________________________
Date:_________________,
200__
The
undersigned hereby elects irrevocably to exercise all or a portion of the within
Purchase Option and to purchase ____ Units of Korea Milestone Acquisition Corp.
and hereby makes payment of $____________ (at the rate of $_________ per Unit)
in payment of the Exercise Price pursuant thereto. Please issue the Ordinary
Shares and Warrants as to which this Purchase Option is exercised in accordance
with the instructions given below.
or
The
undersigned hereby elects irrevocably to convert its right to purchase _________
Units purchasable under the within Purchase Option by surrender of the
unexercised portion of the attached Purchase Option (with a “Value” based of
$_______ based on a “Market Price” of $_______). Please issue the securities
comprising the Units as to which this Purchase Option is exercised in accordance
with the instructions given below.
________________________
Signature
________________________
Signature
Guaranteed
INSTRUCTIONS
FOR REGISTRATION OF SECURITIES
Name_____________________________________________________________
(Print
in
Block Letters)
Address__________________________________________________________
NOTICE:
THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP ON
A
REGISTERED NATIONAL SECURITIES EXCHANGE.
Xxxxx
XX
Form
to
be used to assign Purchase Option
ASSIGNMENT
(To
be
executed by the registered Holder to effect a transfer of the within Purchase
Option):
FOR
VALUE
RECEIVED,___________________________________________ does hereby sell, assign
and transfer unto______________________________________ the right to purchase
__________ Units of Korea Milestone Acquisition Corp. (the “Company”)
evidenced by the within Purchase Option and does hereby authorize the Company
to
transfer such right on the books of the Company.
Dated:___________________,
200_
______________________
Signature
______________________
Signature
Guaranteed
NOTICE:
THE SIGNATURE TO THIS FORM MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE
FACE OF THE WITHIN PURCHASE OPTION IN EVERY PARTICULAR WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATSOEVER, AND MUST BE GUARANTEED BY A BANK, OTHER
THAN A SAVINGS BANK, OR BY A TRUST COMPANY OR BY A FIRM HAVING MEMBERSHIP ON
A
REGISTERED NATIONAL SECURITIES EXCHANGE.
