RIGHT OF FIRST REFUSAL AND CORPORATE OPPORTUNITIES AGREEMENT
Exhibit
10.12.1
RIGHT
OF FIRST REFUSAL AND
CORPORATE
OPPORTUNITIES AGREEMENT
This
RIGHT
OF FIRST REFUSAL AND CORPORATE OPPORTUNITIES AGREEMENT
(this
“Agreement”)
is
entered into as of the __th day of August, 2008, by and between Chardan 2008
China Acquisition Corp., a British Virgin Islands business company with limited
liability (the “Company”),
with
offices x/x Xxxxxxx Xxxxxxx, XXX, xx Xxxxx 00X, Xxxxx X, Oriental Kenzo Plaza,
00 Xxxxxxxxxxxxx Xxxxxx, Xxxxxxx, 000000, Xxxxx, and Chardan Capital Markets,
LLC (“Chardan
Capital Markets”).
WHEREAS,
Xxxxx
Xxxxxx, Carret & Co., LLC, Maxim Group LLC and Xxxx Capital Partners, LLC,
acting as representatives (the “Representatives”)
of the
underwriters (the “Underwriters”),
have
entered into an underwriting agreement, dated _____ __, 2008, to underwrite
an
initial public offering (“IPO”)
of the
securities of the Company and embark on, undertake and continuing to participate
in the IPO process;
WHEREAS,
in
connection with the IPO, the Company has filed a Registration Statement,
No.
333-152623 on Form F-1, as amended (the “Registration
Statement”),
with
the Securities and Exchange Commission for the registration, under the
Securities Act of 1933, as amended, of 6,875,000 units (“Units”)
of the
Company, each Unit consisting of one ordinary share, par value $0.0001 per
share
(an “Ordinary
Share”)
and
one warrant to purchase one Ordinary Share (“Warrant”);
WHEREAS,
Chardan
Capital Markets and the Company share certain officers and directors (the
“Affiliates”);
and
WHEREAS,
because
each of the Company and Chardan
Capital Markets will be seeking business opportunities in the People’s Republic
of China, the parties have made this Agreement to clarify the business
opportunities for which each party shall have the right of first
refusal.
NOW,
THEREFORE,
in
consideration of the mutual covenants and agreements set forth herein, and
for
other good and valuable consideration, the receipt and sufficiency of which
are
hereby acknowledged, the parties hereto agree as follows:
1 Right
of First Refusal.
(a) For
the
term specified in Section 2 hereof, Chardan Capital Markets agrees to grant
to
the Company (i) in its certificate of incorporation or equivalent document,
or
(ii) by action of its board of directors and/or shareholders, as may be required
under applicable law governing Chardan Capital Markets, as applicable, a
right
of first refusal for corporate opportunities with respect to any prospective
target business or businesses operating within any industry or sector in
the
People’s Republic of China as well as the Hong Kong Special Administrative
Region and the Macau Special Administrative Region, but not Taiwan, that
have a
fair market value reasonably estimated to be $42 million or more (a
“Suitable
Target Business”).
(b) Decisions
by the Company to release Chardan Capital Markets to pursue a Suitable Target
Business must be made by unanimous consent of the Company’s disinterested
directors.
(c) Any
directors, officers or employees of Chardan Capital Markets who become aware
of
a Suitable Target Business shall provide written notice to the Company within
five (5) business days.
(d) Any
right
of
first refusal granted pursuant to this Agreement shall expire ninety
(90)
days
from the date of the written notice (the “Expiration
Date”).
(e) Chardan
Capital Markets further agrees that it will not enter into any agreement
with a
Suitable Target Business until the earlier of (i) its receipt of written
notification of the Company’s determine not to pursue a Business Combination (as
hereinafter defined) with the Suitable Target Business, or (ii) the Expiration
Date. Notwithstanding the foregoing, the term “Business Combination” shall not
include any company with respect to which Chardan Capital Markets has initiated
any contacts or entered into any discussions, formal or informal, or
negotiations regarding a company being acquired by Chardan Capital Markets
prior
to the date hereof.
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2. Term. This
Agreement shall commence upon the effective date of the Company’s Registration
Statement and extend until the earlier of: (i) the consummation of the
Company’s
initial Business Combination, (ii) the Company’s liquidation, or (iii) until
such time as the Affiliate ceases to be an officer or director of the Company,
each in the circumstances and manner as more fully described in the Registration
Statement (the “Term”).
3. Miscellaneous.
(a) As
used
herein, the term “Business
Combination”
shall
mean the initial acquisition by the Company, by capital merger, share exchange,
assets or share acquisition, exchangeable share transaction, contractual
control
arrangement or any other similar business combination, of a business or
businesses having its primary operations in the People’s Republic of China,
including the Hong Kong Special Administrative Region and the Macau Special
Administrative Region, but not Taiwan.
(b) Any
notice, consent or request to be given in connection with any of the terms
or
provisions of this Agreement shall be in writing and shall be sent by express
mail or similar private courier service, by certified mail (return receipt
requested), by hand delivery or by facsimile transmission:
if
to the
Company, to:
x/x
Xxxxxxx Xxxxxxx, XXX
Xxxxx
00X, Xxxxx X
Xxxxxxxx
Kenzo Plaza
00
Xxxxxxxxxxxxx Xxxxxx
Xxxxxxx,
000000, Xxxxx
Fax
No.:
00-00-00000000
Attn:
Xxxxxxxx Xxxxx, Chief Financial Officer
with
a
copy in each case to:
Xxxxxxxxxx
& Xxxxx LLP
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax
No.:
(000) 000-0000
Attn.:
Xxxx X. Xxxxxxx, Esq.
and
Xxxxx
Xxxxxx, Carret & Co., LLC
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax
No.:
(000) 000-0000
Attn.:
Xxxxxxx XxXxxxxx
and
Maxim
Group LLC
000
Xxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax
No.:
(000) 000-0000
Attn.:
Xxxxxxxx Xxxxxx
and
2
Xxxx
Capital Partners, LLC
00
Xxxxxxxxx Xxxxx
Xxxxxxx
Xxxxx, Xxxxxxxxxx 00000
Fax
No.:
(000) 000-0000
Attn.:
Xxxxx Xxxxxxxxxxxxxxx
and
Xxxxxxxx
Xxxxxxxx & Schole LLP
000
Xxxx
00xx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax
No.:
(000) 000-0000
Attn.:
Xxxxxxxx X. Xxxxxxxxxx, Esq.
if
to
Chardan Capital Markets, to:
Chardan
Capital Markets, LLC
00
Xxxxx
Xxxxxx
Xxxxx
0000
Xxx
Xxxx,
XX 00000
Fax
No.:
(000) 000-0000
Attn.:
Xxxxx Xxxxxxx
with
a
copy to:
Xxxxxxxxxx
& Xxxxx LLP
000
Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Fax
No.:
(000) 000-0000
Attn.:
Xxxx X. Xxxxxxx, Esq.
(c) If
any
provision of this Agreement shall be declared to be invalid or unenforceable,
in
whole or in part, such invalidity or unenforceability shall not affect the
remaining provisions hereof which shall remain in full force and
effect.
(d) Neither
this Agreement nor any rights or obligations hereunder shall be assignable
or
otherwise subject to hypothecation by either party hereto.
(e) This
Agreement may only be amended by a written instrument executed by each of
the
parties hereto. Notwithstanding the foregoing, this Agreement may not be
waived
or amended to provide for its termination prior to the expiration of the
Term
without the approval of the holders of 80% of the Company’s Ordinary Shares
purchased in the IPO.
(f) The
respective rights and obligations of the parties hereunder shall survive
any
termination of this Agreement to the extent necessary to the intended
preservation of such rights and obligations. The provisions of this Section
7
are in addition to the survivorship provisions of any other section of this
Agreement.
(g) Chardan
Capital Markets hereby (i) waives any and all right, title, interest or claim
of
any kind (a “Claim”)
in or
to all funds held in the trust account established for the benefit of the
public
shareholders of the Company (the “Trust
Account”)
and
any remaining net assets of the Company upon liquidation of the Trust Account
and dissolution of the Company, (ii) waives any Claim Chardan Capital Markets
may have in the future as a result of, or arising out of, any contracts or
agreements with the Company, and (iii) agrees it will not seek recourse against
the Trust Account for any reason.
3
(h) This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to conflicts of law
principles that would result in the application of the substantive laws of
another jurisdiction. The undersigned hereby (i) agrees that any action,
proceeding or claim against him arising out of or relating in any way to
this
letter agreement (a “Proceeding”)
shall
be brought and enforced in the federal courts of the United States of America
for the Southern District of New York, and irrevocably submits to the
jurisdiction of such courts, which jurisdiction shall be exclusive; (ii)
waives
any objection to the exclusive jurisdiction of such courts and any objection
that such courts represent an inconvenient forum; and (iii) irrevocably agrees
to appoint Xxxxxxxxxx & Xxxxx LLP (Attention: Xxxx X. Xxxxxxx) as agent for
the service of process in the State of New York to receive, for the undersigned
and on its behalf, service of process in any Proceeding. If for any reason
such
agent is unable to act as such, the undersigned will promptly notify the
Company
and the Underwriters and appoint a substitute agent acceptable to each of
the
Company and the Underwriters within thirty (30) days and nothing in this
Agreement will affect the right of either party to serve process in any other
manner permitted by law.
(i) THE
PARTIES HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM
BASED
UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTION
CONTEMPLATED BY THIS AGREEMENT.
(j) This
Agreement contains the entire understanding between the parties hereto and
supersedes in all respects any prior or other agreement or understanding
concerning the subject matter hereof between the Company and Chardan Capital
Markets
(k) This
Agreement may be executed in two or more counterparts, each of which will
be
deemed an original, but all of which, taken together, shall be deemed one
document.
(l) The
failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way effect the validity of this Agreement
or
any provision of this Agreement. No waiver of any breach, non-compliance
or
non-fulfillment of any of the provisions of this Agreement 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.
(m) The
parties hereto hereby acknowledge that the Underwriters, including, without
limitation the Representatives, are third party beneficiaries of this Agreement
and this Agreement may not be modified or changed without the prior written
consent of the Representatives.
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IN
WITNESS WHEREOF,
the
parties hereto have executed this Right of First Refusal and Corporate
Opportunities Agreement as of the date first specified above.
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By:
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Name:
Xxxxx Xxxxxxx
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Title:
Chief Executive Officer and
Director
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CHARDAN
CAPITAL MARKETS, LLC
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By:
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Name:
Xxxxx Xxxxxxx
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Title:
Chief Executive Officer
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