FORM OF SUBSCRIPTION AGREEMENT
This
SUBSCRIPTION AGREEMENT (“Agreement”) made as of this __day of ____2007 for the
benefit of Asia Special Situation Acquisition Corp., a Cayman Islands
corporation (the “Company”), having its principal place of business at X.X. Xxx
000XX, Xxxxxx Xxxxx, Xxxxx Church Street, Xxxxxx Town, Grand Cayman, Cayman
Islands, by the persons or entities listed on the signature page hereto under
the heading “Subscriber” (each a “Subscriber” and collectively, the
“Subscribers”).
WHEREAS,
the Company desires to sell on a private placement basis (the “Offering”) an
aggregate of 5,725,000 warrants (the “Warrants”) of the Company for a purchase
price of $1.00 per Warrant. Each Warrant is exercisable to purchase one Ordinary
Share at an exercise price of $7.50 per share
(the
“Warrant Exercise Price”) during
the period commencing on the later of: (i) one year from the date of the
prospectus relating to the Company’s IPO (as defined below), or (ii) the
completion of a Business Combination (as defined below), and expiring on the
fourth anniversary of the date of the prospectus relating to the Company’s IPO
(as defined below).
WHEREAS,
each Subscriber wishes to purchase the number of Warrants set forth opposite
his
name on Schedule A attached hereto, and the Company wishes to accept such
subscriptions.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the Company and each Subscriber, severally
and
not jointly, hereby agree as follows:
1.
Agreement
to Subscribe.
1.1. Purchase
and Issuance of the Warrants.
Upon
the terms and subject to the conditions of this Agreement, the Subscribers
hereby agree to purchase from the Company, and the Company hereby agrees to
sell
to the Subscriber, on the Closing Date (as defined below), the number of
Warrants indicated on Schedule A hereto by the caption, “Number of Warrants
Being Purchased.” The aggregate purchase price for such Subscribers’ Warrants
(the “Purchase Price”) is indicated on Schedule A hereto by the caption,
“Aggregate Purchase Price Paid.”
1.2. Delivery
of the Purchase Price.
Upon
execution of this Agreement, each of the undersigned is hereby bound to fulfill
his obligations hereunder and hereby irrevocably commits to deliver into a
trust
account at Wachovia
Securities LLC,
maintained by Continental Stock Transfer & Trust Company, acting as Trustee,
on the date of Closing (as hereinafter defined), the Purchase Price in
immediately available funds by certified bank check, wire transfer or such
other
form of payment as shall be acceptable to the Trustee, in its sole and absolute
discretion, at the Closing.
1.3. Closing.
The
closing (the “Closing”) of the Offering shall take place at the offices of the
Company at least one (1) business day prior to the effective date of the
registration statement pursuant to which the Company proposes to register its
initial public offering (the “IPO”) of 10,000,000 units consisting of Ordinary
Shares and Warrants (the “Closing Date”).
2.
Representations
and Warranties of the Subscriber.
Each
Subscriber, severally and not jointly, represents and warrants to the Company
that:
2.1. No
Government Recommendation or Approval.
The
Subscriber understands that no United States federal or state agency has passed
upon or made any recommendation or endorsement of the Company or the Offering
of
the Warrants or the Ordinary Shares underlying the Warrants (the “Warrant
Shares” and, collectively with the Warrants, the “Securities”).
2.2. Regulation
D Offering.
The
Subscriber represents that it is an “accredited investor” as such term is
defined in Rule 501(a) of Regulation D promulgated under the Securities Act
of
1933, as amended (the “Securities Act”) and acknowledges the sale contemplated
hereby is being made in reliance on a private placement exemption to “Accredited
Investors” within the meaning of Section 501(a) of Regulation D under the
Securities Act or similar exemptions under state law.
2.3. Intent.
The
Subscriber is purchasing the Warrants solely for investment purposes, for the
Subscriber’s own account and not for the account or benefit of any U.S. Person,
and not with a view towards the distribution thereof and the Subscriber has
no
present arrangement to sell the securities to or through any person or entity.
2.4. Restrictions
on Transfer.
The
Subscriber understands the Warrants are being offered in a transaction not
involving a public offering in the United States within the meaning of the
Securities Act. The Securities have not been registered under the Securities
Act, and, if in the future the Subscriber decides to offer, resell, pledge
or
otherwise transfer the Securities, such Securities may be offered, resold,
pledged or otherwise transferred only (A) pursuant to an effective registration
statement filed under the Securities Act, (B) pursuant to an exemption from
registration under the Securities Act provided by Rule 144 thereunder (if
available) or (C) pursuant to any other exemption from the registration
requirements of the Securities Act, and in each case in accordance with any
applicable securities laws of any state of the United States or any other
jurisdiction. The Subscriber agrees that if any transfer of its Securities
or
any interest therein is proposed to be made, as a condition precedent to any
such transfer, the Subscriber may be required to deliver to the Company an
opinion of counsel satisfactory to the Company. Absent registration or another
exemption from registration, the Subscriber agrees that it will not resell
the
securities constituting the Subscriber’s Warrants The Subscriber explicitly
understands and acknowledges that the Securities and Exchange Commission (the
“SEC”) has taken the position that the Subscriber is considered a promoter under
the Securities Act and that promoters or affiliates of a blank check company
and
their transferees, both before and after a Business Combination, would act
as an
“underwriter” under the Securities Act when reselling the securities of that
blank check company. Accordingly, Rule 144 promulgated under the Securities
Act
would not be available for the resale of the Securities despite technical
compliance with the requirements of Rule 144, in which event the resale
transactions would need to be made through a registered offering.
2
2.5. Sophisticated
Investor.
(i)
The
Subscriber is sophisticated in financial matters and is able to evaluate the
risks and benefits of the investment in the Securities.
(ii)
The
Subscriber is able to bear the economic risk of his investment in the Securities
for an indefinite period of time because none of the Securities have been
registered under the Securities Act and therefore cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is available.
2.6.
Independent
Investigation.
The
Subscriber, in making the decision to purchase the Warrants, has relied upon
an
independent investigation of the Company and has not relied upon any information
or representations made by any third parties or upon any oral or written
representations or assurances from the Company, its officers, directors or
employees or any other representatives or agents of the Company, other than
as
set forth in this Agreement. The Subscriber is familiar with the business,
operations and financial condition of the Company and has had an opportunity
to
ask questions of, and receive answers from, the Company’s officers and directors
concerning the Company and the terms and conditions of the offering of the
Warrants and has had full access to such other information concerning the
Company as the Subscriber has requested.
2.7. Authority.
This
Agreement has been validly authorized, executed and delivered by the Subscriber
and is a valid and binding agreement enforceable in accordance with its terms,
subject to the general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors’ rights generally. The execution,
delivery and performance of this Agreement by the Subscriber does not and will
not conflict with, violate or cause a breach of any agreement, contract or
instrument to which the Subscriber is a party.
2.8. No
Legal Advice from Company.
The
Subscriber acknowledges that he has had the opportunity to review this Agreement
and the transactions contemplated by this Agreement and the other agreements
entered into between the parties hereto with the Subscriber’s own legal counsel
and investment and tax advisors. Except for any statements or representations
of
the Company made in this Agreement and the other agreements entered into between
the parties hereto, the Subscriber is relying solely on such counsel and
advisors and not on any statements or representations by the Company or any
of
its representatives or agents for legal, tax or investment advice with respect
to this investment, the transactions contemplated by this Agreement or the
securities laws of any jurisdiction.
2.9.
Reliance
on Representations and Warranties.
The
Subscriber understands that the Warrants are being offered and sold to the
Subscriber in reliance on exemptions from the registration requirements under
the Securities Act, and analogous provisions in the laws and regulations of
various states, and that the Company is relying upon the truth and accuracy
of
the representations, warranties, agreements, acknowledgments and understandings
of the Subscriber set forth in this Agreement in order to determine the
applicability of such provisions.
3
2.10. No
Advertisements.
The
undersigned is not subscribing for the Warrants as a result of, or subsequent
to, any advertisement, article, notice or other communication published in
any
newspaper, magazine, or similar media or broadcast over television or radio,
or
presented at any seminar or meeting.
2.11. Legend.
The
Subscriber acknowledges and agrees that the certificates evidencing the Warrants
and the Warrant Shares shall bear a restrictive legend (the “Legend”), in form
and substance as set forth in Section 4 hereof, prohibiting the offer, sale,
pledge or transfer of the securities, except (i) in accordance with the
provisions of Regulation S promulgated under the Securities Act, (ii) pursuant
to an effective registration statement covering these securities under the
Securities Act or (iii) pursuant to any other exemptions from the registration
requirements under the Securities Act and such laws which, in the opinion of
counsel for this Company, is available.
3.
Representations
and Warranties of the Company.
The
Company represents and warrants to each Subscriber that:
3.1.
Valid
Issuance of Capital Stock.
The
total number of shares of all classes of capital stock which the Company has
authority to issue is 50,000,000 Ordinary Shares and 1,000,000 shares of
Preferred Stock. As of the date hereof, the Company has 2,500,000 Ordinary
Shares and zero (0) shares of Preferred Stock issued and outstanding. All of
the
issued shares of capital stock of the Company have been duly authorized, validly
issued, and are fully paid and non-assessable.
3.2.
Organization
and Qualification.
The
Company is a corporation duly incorporated and existing in good standing under
the laws of the Cayman Islands and has the requisite corporate power to own
its
properties and assets and to carry on its business as now being
conducted.
3.3.
Authorization;
Enforcement.
(i) The
Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement and to issue the Warrants and
the
underlying securities in accordance with the terms hereof, (ii) the execution,
delivery and performance of this Agreement by the Company and the consummation
by it of the transactions contemplated hereby have been duly authorized by
all
necessary corporate action, and no further consent or authorization of the
Company or its Board of Directors or stockholders is required, and (iii) this
Agreement constitutes valid and binding obligations of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by applicable bankruptcy, insolvency, fraudulent conveyance,
moratorium, reorganization, or similar laws relating to, or affecting generally
the enforcement of, creditors’ rights and remedies or by equitable principles of
general application and except as enforcement of rights to indemnity and
contribution may be limited by federal and state securities laws or principles
of public policy.
3.4.
No
Conflicts.
The
execution, delivery and performance of this Agreement and the consummation
by
the Company of the transactions contemplated herein do not (i) result in a
violation of the Company’s Certificate of Incorporation or Bylaws or (ii)
conflict with, or constitute a default under any agreement, indenture or
instrument to which the Company is a party. Other than any SEC or state
securities filings which may be required to be made by the Company subsequent
to
the Closing, and any registration statement which may be filed pursuant thereto,
the Company is not required under federal, state or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency or self-regulatory entity
in order for it to perform any of its obligations under this Agreement or issue
the Ordinary Shares in accordance with the terms hereof.
4
4. Legends;
Denominations.
4.1.
Legend.
The
Company will issue the Warrants, and, when issued, the Warrant Shares, purchased
by the Subscribers will be in the name of each Subscriber and in such
denominations to be specified by each Subscriber prior to the Closing. The
Warrants and Warrant Shares will bear the following Legend and appropriate
“stop
transfer” instructions:
“THE
SECURITIES REPRESENTED
BY THIS CERTIFICATE 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 (A) IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER
THE SECURITIES ACT, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT COVERING
THESE SECURITIES UNDER THE SECURITIES ACT OR (C) PURSUANT TO ANY OTHER
EXEMPTIONS FROM REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND SUCH
LAWS
WHICH, IN THE OPINION OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT
BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
4.2.
Subscriber’s
Compliance.
Nothing
in this Section 4 shall in any way affect the Subscribers’ obligations and
agreements to comply with all applicable securities laws upon resale of the
Securities.
4.3.
Company’s
Refusal to Register Transfer of the Securities.
The
Company shall refuse to register any transfer of the Warrants or the Warrant
Shares if, in the sole judgment of the Company, such purported transfer would
not be made (i) pursuant to an effective registration statement filed under
the
Securities Act, or (ii) pursuant to an available exemption from the registration
requirements of the Securities Act.
5. Escrow.
Upon
consummation of the IPO, the holders of the Warrants shall enter into a
securities escrow agreement with Continental Stock Transfer & Trust Company,
whereby the Warrants shall be held in escrow until the earlier of (i) one year
after the consummation of a Business Combination (as defined below) or (ii)
liquidation of the Company. As used herein, a “Business Combination” shall mean
a capital stock exchange, asset acquisition, stock purchase or other similar
transaction with one or more target businesses that are located
in
or providing products or services to customers located in Asia.
5
6. Lock-Up.
The
Subscribers, and their designees which specifically include Xxxxxx Xx and
Xxxxx Investment
Fund Ltd.,
shall
not sell, assign, hypothecate or transfer any of the Securities until the
consummation of a Business Combination except (i) by gift to a member of
Subscriber’s immediate family or to a trust or other entity, the beneficiary of
which is Subscriber or a member of Subscriber’s immediate family, (ii) by virtue
of the laws of descent and distribution upon death of any Subscriber, or (iii)
pursuant to a qualified domestic relations order; provided however, that no
such
sale, assignment, hypothecation or transfer may be effected unless, in each
case, it is made in accordance with transfer restrictions set forth in
Regulation D and the Securities Act.
7.
Waiver
of Liquidation Distributions.
In
connection with the Securities purchased pursuant to this Agreement or prior
to
the private placement, the Subscribers hereby waive any and all right, title,
interest or claim of any kind in or to any liquidating distributions by the
Company if a liquidation of the Company upon the Company’s failure to timely
complete a Business Combination. For purposes of clarity, if a Subscriber
purchases Ordinary Shares in the IPO or in the aftermarket, any additional
shares so purchased shall be eligible to receive any liquidating distributions
by the Company. In no event will a Subscriber have the right to exercise any
Warrants prior to the later of: (i) one year from the date of the prospectus
relating to the Company’s IPO, and (ii) the consummation of a Business
Combination. If
the
holders of the warrants included in the Units sold in the Company's IPO are
not
exercisable because of the Company's failure to have an effective registration
statement covering the resale of the Company's ordinary shares issuable upon
exercise of the warrants, the Subscriber, or any subsequent holder of the
Warrants, shall not be entitled to exercise the Warrants until there is an
effective registration statement as described above.
8.
Forfeiture
of Warrants.
8.1. Failure
to Consummate a Business Combination.
Subject
to the affirmative vote or consent of the holders of 95% of the Company’s
outstanding Ordinary Shares to amend the Company’s amended and restated
memorandum and articles of association, the Warrants shall be forfeited to
the
Company if the Company does not consummate a Business Combination within 18
months after consummation of the IPO, or within 24 months from the consummation
of the IPO if a letter of intent, agreement in principle or definitive agreement
has been executed within 18 months after consummation of the IPO and the
Business Combination has not yet been consummated within such 18 month time
period.
8.2. Termination
of Rights as holder; Escrow.
If the
Warrants are forfeited in accordance with this Section 8, then after such time,
the Subscribers (or successor-in-interest thereto), shall no longer have any
rights as a holder of such Warrants, and the Company shall take such action
as
is appropriate to cancel such Warrants. To effectuate the foregoing, all
certificates representing the Warrants shall be held in escrow as provided
in
Section 5 hereof. In addition, the Subscribers hereby irrevocably grant the
Company a limited power of attorney for the purpose of effectuating the
foregoing.
9. Rescission
Right Waiver and Indemnification.
9.1.
Each
of
the Subscribers understands and acknowledges that an exemption from the
registration requirements of the Securities Act requires that there be no
general solicitation of purchasers of the Warrants. In this regard, if the
IPO
were deemed to be a general solicitation with respect to the Warrants, the
offer
and sale of such Warrants may not be exempt from registration and, if not,
the
Subscribers may have a right to rescind their purchases of the Warrants. In
order to facilitate the completion of the Offering and to protect the Company,
its stockholders and the trust account from claims that may adversely affect
the
Company or the interests of its stockholders, each of the Subscribers hereby
agrees to waive, to the maximum extent permitted by applicable law, any claims,
right to xxx or rights in law or arbitration, as the case may be, to seek
rescission of his or its purchase of the Warrants. Each of the Subscribers
acknowledges and agrees that this waiver is being made in order to induce the
Company to sell the Warrants to the Subscribers. Each Subscriber agrees that
the
foregoing waiver of rescission rights shall apply to any and all known or
unknown actions, causes of action, suits, claims, or proceedings (collectively,
“Claims”) and related losses, costs, penalties, fees, liabilities and damages,
whether compensatory, consequential or exemplary, and expenses in connection
therewith, including reasonable attorneys’ and expert witness fees and
disbursements and all other expenses reasonably incurred in investigating,
preparing or defending against any Claims, whether pending or threatened, in
connection with any present or future actual or asserted right to rescind the
purchase of the Warrants hereunder or relating to the purchase of the Warrants
and the transactions contemplated hereby.
6
9.2. Each
Subscriber agrees not to seek recourse against the trust account for any reason
whatsoever in connection with his purchase of the Warrants or any Claim that
may
arise now or in the future.
9.3. Each
Subscriber acknowledges and agrees that the stockholders of the Company and
Maxim Group LLC are and shall be third-party beneficiaries of the foregoing
provisions of this Agreement.
9.4.
Each
Subscriber agrees that to the extent any waiver of rights under this Section
9
is ineffective as a matter of law, each Subscriber has offered such waiver
for
the benefit of the Company as an equitable right that shall survive any
statutory disqualification or bar that applies to a legal right. Each Subscriber
acknowledges the receipt and sufficiency of consideration received from the
Company hereunder in this regard.
10. Terms
of the Warrant. The
Warrants are similar to the warrants included in the units offered in the IPO,
except that: (i) they are not being registered in the Registration Statement;
(ii) they are not transferable until the consummation of a Business Combination;
and (iii) they are not redeemable so long as they are held by the initial holder
thereof (or any of their permitted transferees); and (iv) they may be exercised
on a “cashless” basis so long as they are held by the initial holder thereof (or
any of their permitted transferees). The Warrant Shares will be granted certain
registration rights. In no event will the Company be required to net cash settle
the Warrant exercise.
11. Voting
of Shares.
Each
Subscriber agrees to vote the Ordinary Shares owned by him immediately before
this private placement in accordance with the majority of the Ordinary Shares
voted by the public stockholders. Each Subscriber further agrees to vote the
Ordinary Shares acquired in the IPO or the aftermarket in favor of a Business
Combination that the Company negotiates and presents for approval to the
Company’s stockholders.
7
12.
Governing
Law; Jurisdiction;
Waiver
of Jury Trial.
This
Agreement shall be governed by and construed in accordance with the laws of
the
Cayman Islands for agreements made and to be wholly performed within such
country. The parties hereto hereby waive any right to a jury trial in connection
with any litigation pursuant to this Agreement and the transactions contemplated
hereby.
13. Assignment;
Entire Agreement; Amendment.
13.1. Assignment.
Neither
this Agreement nor any rights hereunder may be assigned by any party to any
other person other than by a Subscriber to a person agreeing to be bound by
the
terms hereof.
13.2. 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.
13.3. Amendment.
Except
as expressly provided in this Agreement, neither this Agreement nor any term
hereof may be amended, waived, discharged or terminated other than by a written
instrument signed by the party against whom enforcement of any such amendment,
waiver, discharge, or termination is sought.
13.4.
Binding
upon Successors.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and to each of their respective heirs, legal representatives, successors and
permitted assigns.
14.
Notices;
Indemnity.
14.1
Notices.
Unless
otherwise provided herein, any notice or other communication to a party
hereunder shall be sufficiently given if in writing and personally delivered
or
sent by facsimile or other electronic transmission with copy sent in another
manner herein provided or sent by courier (which for all purposes of this
Agreement shall include Federal Express or other recognized overnight courier)
or mailed to said party by certified mail, return receipt requested, at its
address provided for herein or such other address as either may designate for
itself in such notice to the other. Communications shall be deemed to have
been
received when delivered personally, on the scheduled arrival date when sent
by
next day or 2-day courier service, or if sent by facsimile upon receipt of
confirmation of transmittal or, if sent by mail, then three days after deposit
in the mail. If given by electronic transmission, such notice shall be deemed
to
be delivered (a) if by electronic mail, when directed to an electronic mail
address at which the stockholder has consented to receive notice; (b) if by
a
posting on an electronic network together with separate notice to the
stockholder of such specific posting, upon the later of (1) such posting and
(2)
the giving of such separate notice; and (c) if by any other form of electronic
transmission, when directed to the stockholder.
8
14.2
Indemnification.
Each
party shall indemnify the other against any loss, cost or damages (including
reasonable attorney’s fees and expenses) incurred as a result of such party’s
breach of any representation, warranty, covenant or agreement in this
Agreement.
15.
Counterparts. This
Agreement may be executed in one or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
16.
Survival;
Severability.
16.1. Survival.
The
representations, warranties, covenants and agreements of the parties hereto
shall survive the Closing.
16.2. Severability.
In the
event that any provision of this Agreement becomes or is declared by a court
of
competent jurisdiction to be illegal, unenforceable or void, this Agreement
shall continue in full force and effect without said provision; provided that
no
such severability shall be effective if it materially changes the economic
benefit of this Agreement to any party.
17. Headings.
The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this
Agreement.
9
This
subscription is accepted by the Company on the ___ day of_______,
2007.
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|
|
By: | ||
By:
Xx. Xxxx X. Xxxxx
Title:
President
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SUBSCRIBERS
HO
CAPITAL MANAGEMENT LLC
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||
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By: | ||
By:
Xxxxxx Xx
Title:
Sole Manager
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10
SCHEDULE
A
Name
of Subscriber
|
Number
of Warrants Purchased
|
Total
Purchase Price Paid
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Ho
Capital Management LLC
|
5,725,000
|
$
|
5,725,000
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