WARRANT AGREEMENT
THIS WARRANT AGREEMENT
is
made as of __, 2008 between Korea Milestone Acquisition Corporation, a Cayman
Islands corporation, with offices at 000-0 Xxxxxxxxx, Xxxxxxx, Xxxxx, Xxxxx
135-170 (the “Company”),
and
Continental Stock Transfer & Trust Company, a New York corporation, with
offices at 00 Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the “Warrant
Agent”).
WHEREAS,
the
Company is engaged in an initial public offering (“Public
Offering”)
and,
in connection therewith, has determined to issue and deliver: (i) up to
5,750,000 units (“Public Units”),
each
Public Unit consisting of two of the Company’s ordinary shares, par value
$0.0001 per share (“Ordinary
Shares”)
and
one warrant (“Public
Warrants”),
each
of such Public Warrants evidencing the right of the holder thereof to purchase
one Ordinary Share for $6.00, subject to adjustment as described herein and
(ii)
375,000 warrants issuable pursuant to the Unit Purchase Option issued to
Broadband Capital Management, LLC (the “Representative”)
or its
designees (the “Representative’s
Warrants”);
WHEREAS,
immediately prior to the completion of the Public Offering, the Company shall
sell and issue (i) 2,692,308 (the “Private
Warrants”)
to
Sang-Xxxx Xxx, each of such Private Warrants evidencing the right of the
holder
thereof to purchase one Ordinary Share for $6.00, subject to adjustment as
described herein, (the Public Warrants, the Representative’s Warrants and the
Private Warrants are together referred herein as “Warrants”);
WHEREAS,
the
Company has filed with the Securities and Exchange Commission a Registration
Statement, No. 333-153155, on Form F-1 (“Registration
Statement”)
for
the registration under the Securities Act of 1933, as amended (“Act”),
of,
among other securities, the Public Warrants, the Representative’s Warrants and
the Ordinary Shares issuable upon exercise of the Public Warrants and the
Representative’s Warrants;
WHEREAS,
the
Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, redemption, exercise and cancellation of
the
Warrants;
WHEREAS,
the
Company desires to provide for the form and provisions of the Warrants, the
terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and
the
holders of the Warrants; and
WHEREAS,
all
acts and things have been done and performed that are necessary to make the
Warrants, when executed on behalf of the Company and countersigned by or
on
behalf of the Warrant Agent, as provided herein, the valid, binding and legal
obligations of the Company, and to authorize the execution and delivery of
this
Agreement.
NOW,
THEREFORE,
in
consideration of the mutual agreements herein contained, the parties hereto
agree as follows:
1. Appointment
of Warrant Agent.
The
Company hereby appoints the Warrant Agent to act as agent for the Company
with
respect to the Warrants, and the Warrant Agent hereby accepts such appointment
and agrees to perform the same in accordance with the terms and conditions
set
forth in this Agreement.
2. Warrants.
2.1 Form
of Warrant.
Each
Warrant shall be issued in registered form only, shall be in substantially
the
form of Exhibit
A
hereto,
the provisions of which are incorporated herein and shall be signed by, or
bear
the facsimile signature of, the Chairman of the Board, Chief Executive Officer,
President, Chief Financial Officer, Vice President or Secretary of the Company
and shall bear a facsimile of the Company’s seal. In the event the person whose
facsimile signature has been placed upon any Warrant shall have ceased to
serve
in the capacity in which such person signed the Warrant before such Warrant
is
issued, it may be issued with the same effect as if he or she had not ceased
to
be such at the date of issuance. All of the Warrants shall initially be
represented by one or more book-entry certificates (each a “Book
Entry Warrant Certificate”).
2.2 Effect
of Countersignature.
Unless
and until countersigned by the Warrant Agent pursuant to this Agreement,
a
Warrant shall be invalid and of no effect and may not be exercised by the
holder
thereof.
2.3 Detachability
of Warrants.
The
securities comprising the Units will not be separately transferable until
the
90th day after the date of the prospectus relating to the Company’s Public
Offering (unless the Representative determines that an earlier date is
acceptable) (the “Detachment
Date”),
but
in no event will separate trading of the securities comprising the Units
be
allowed until the Company files a Report of Foreign Private Issuer on Form
6-K
that includes an audited balance sheet reflecting the receipt by the Company
of
the gross proceeds of the Public Offering including the proceeds received
by the
Company from the exercise of the Underwriter’s over-allotment option if the
over-allotment option is exercised prior to the filing of the Form 6-K.
2.4 Registration.
2.4.1 Warrant
Register.
The
Warrant Agent shall maintain books (“Warrant
Register”)
for
registration of original issuance and the registration of transfer of the
Warrants. Upon the initial issuance of the Warrants, the Warrant Agent shall
issue and register the Warrants in the names of the respective holders thereof
in such denominations and otherwise in accordance with instructions delivered
to
the Warrant Agent by the Company. All of the Public Warrants shall initially
be
represented by one or more Book-Entry Warrant Certificates deposited with
the
Depository Trust Company (the “Depository”)
and
registered in the name of Cede & Co., a nominee of the Depository. Ownership
of beneficial interests in the Public Warrants shall be shown on, and the
transfer of such ownership shall be effected through, records maintained
by (i)
the Depository or its nominee for each Book-Entry Warrant Certificate, or
(ii)
institutions that have accounts with the Depository (such institution, with
respect to a Warrant in its account, a “Participant”).
-2-
If
the
Depository subsequently ceases to make its book-entry settlement system
available for the Public Warrants, the Company may instruct the Warrant Agent
regarding making other arrangements for book-entry settlement. In the event
that
the Public Warrants are not eligible for, or it is no longer necessary to
have
the Public Warrants available in, book-entry form, the Warrant Agent shall
provide written instructions to the Depository to deliver to the Warrant
Agent
for cancellation each Book-Entry Warrant Certificate, and the Company shall
instruct the Warrant Agent to deliver to the Depository definitive Warrant
Certificates in physical form evidencing such Public Warrants. Such definitive
Warrant Certificates shall be in the form annexed hereto as Exhibit
A
with
appropriate insertions, modifications and omissions, as provided above.
2.4.2 Beneficial
Owner; Registered Holder.
The
term “beneficial
owner”
shall
mean, on or after the Detachment Date, any person in whose name ownership
of a
beneficial interest in the Warrants evidenced by a Book-Entry Warrant
Certificate is recorded in the records maintained by the Depository or its
nominee, and prior to the Detachment Date, the person in whose name the Unit
to
which such Warrant Certificate was initially attached as registered upon
the
register relating to such Units. Prior to due presentment for registration
of
transfer of any Warrant, the Company and the Warrant Agent may deem and treat
the person in whose name such Warrant shall be registered upon the Warrant
Register (a “Registered
Holder”)
as the
absolute owner of such Warrant and of each Warrant represented thereby
(notwithstanding any notation of ownership or other writing on the Warrant
Certificate made by anyone other than the Company or the Warrant Agent) for
the
purpose of any exercise thereof, and for all other purposes, and neither
the
Company nor the Warrant Agent shall be affected by any notice to the contrary.
3. Terms
and Exercise of Warrants
3.1 Warrant
Price.
Each
Warrant shall, when countersigned by the Warrant Agent, entitle the Registered
Holder thereof, subject to the provisions of (a) such Public Warrant, Private
Warrant or Representative’s Warrant, as the case may be, and (b) this Warrant
Agreement, to purchase from the Company the number of Ordinary Shares stated
therein, at the price of $6.00 per whole share, subject to the adjustments
provided in Section 4 hereof and in the last sentence of this Section 3.1.
The
term “Warrant
Price”
as
used
in this Warrant Agreement refers to the price per share at which Ordinary
Shares
may be purchased at the time a Warrant is exercised. The Company in its sole
discretion may lower the Warrant Price at any time prior to the Expiration
Date.
3.2 Duration
of Warrants.
A
Warrant may be exercised only during the period (“Exercise
Period”)
commencing on the later of the consummation by the Company of a merger, capital
stock exchange, stock purchase, asset acquisition or other similar business
combination or a combination of any of the foregoing, of one or more operating
businesses having collectively, a fair market value (as calculated in accordance
with the requirements as set forth in the Company’s Memorandum and Articles of
Incorporation) of at least 80% of the balance in the trust account at the
time
of the execution of a definitive agreement for the business combination (a
“Business
Combination”),
or
___________ 2008, and terminating at 5:00 p.m., New York City time on the
earlier to occur of (i) ____________, 2012, or (ii) the date fixed for
redemption of the Warrants as provided in Section 6 of this Agreement
(“Expiration
Date”).
Except with respect to the right to receive the Redemption Price (as set
forth
in Section 6 hereunder), each Warrant not exercised on or before the Expiration
Date shall become void, and all rights thereunder and all rights in respect
thereof under this Agreement shall cease at the close of business on the
Expiration Date. The Company in its sole discretion may extend the duration
of
the Warrants by delaying the Expiration Date.
-3-
3.3 Exercise
of Warrants.
A
Registered Holder may exercise a Warrant by delivering, not later than 5:00
P.M., New York time, on any Business Day during the Exercise Period (the
“Exercise
Date”)
to the
Warrant Agent at its corporate trust department (i) the Warrant Certificate
evidencing the Warrants to be exercised, or, in the case of a Book-Entry
Warrant
Certificate, the Warrants to be exercised (the “Book-Entry
Warrants”)
free
on the records of the Depository to an account of the Warrant Agent at the
Depository designated for such purpose in writing by the Warrant Agent to
the
Depository from time to time, (ii) an election to purchase the Shares underlying
the Warrants to be exercised (“Election
to Purchase”),
properly completed and executed by the Registered Holder on the reverse of
the
Warrant Certificate or, in the case of a Book-Entry Warrant Certificate,
properly delivered by the Participant in accordance with the Depository’s
procedures, and (iii) the Warrant Price for each Warrant to be exercised
as
follows:
(a)
in cash, good certified check or good bank draft payable to the order of
the
Company (or as otherwise agreed to by the Company);
(b)
in the event of redemption pursuant to Section 6 hereof in which the Company’s
management has elected to require all holders of Public Warrants to exercise
such Public Warrants on a “cashless basis,” by surrendering the Public Warrants
for that number of Ordinary Shares equal to the quotient obtained by dividing
(x) the product of the number of Ordinary Shares underlying the Public Warrants,
multiplied by the difference between the Warrant Price and the “Fair Market
Value” (defined below) by (y) the Fair Market Value. Solely for purposes of this
Section 3.3, the “Fair Market Value” shall mean the average reported last sale
price of the Ordinary Shares for the 10 trading days ending on the third
trading
day prior to the date on which the notice of redemption is sent to holders
of
Warrant pursuant to Section 6 hereof; or
(c)
with respect to any Private Warrants, in the event of redemption pursuant
to
Section 6 hereof in which the Company’s management has not elected to require
all holders of Private Warrants to exercise such Private Warrants on a “cashless
basis” or at any time other than in connection with a redemption pursuant to
Section 6 hereof, in any case so long as such Private Warrants are held by
Sang-Xxxx Xxx or his permitted transferees, by surrendering such Private
Warrants for that number of Ordinary Shares equal to the quotient obtained
by
dividing (x) the product of the number of Ordinary Shares underlying the
Private
Warrants, multiplied by the difference between the exercise price of the
Private
Warrants and the “Fair Market Value” by (y) the Fair Market Value. Solely for
purposes of this Section 3.3, the “Fair Market Value” shall mean the average
reported last sale price of the Ordinary Shares for the five trading days
ending
on the trading day preceding the date the Private Warrants are
exercised.
If
any of
(A) the Warrant Certificate or the Book-Entry Warrants, (B) the Election
to
Purchase, or (C) the Warrant Price therefor, is received by the Warrant Agent
after 5:00 P.M., New York time, on the specified Exercise Date, the Warrants
will be deemed to be received and exercised on the Business Day next succeeding
the Exercise Date. If the date specified as the Exercise Date is not a Business
Day, the Warrants will be deemed to be received and exercised on the next
succeeding day that is a Business Day. If the Warrants are received or deemed
to
be received after the Expiration Date, the exercise thereof will be null
and
void and any funds delivered to the Warrant Agent will be returned to the
Holder
or Participant, as the case may be, as soon as practicable. In no event will
interest accrue on funds deposited with the Warrant Agent in respect of an
exercise or attempted exercise of Warrants. The validity of any exercise
of
Warrants will be determined by the Company in its sole discretion and such
determination will be final and binding upon the Holder and the Warrant Agent.
Neither the Company nor the Warrant Agent shall have any obligation to inform
a
Holder of the invalidity of any exercise of Warrants.
-4-
The
Warrant Agent shall deposit all funds received by it in payment of the Warrant
Price in the account of the Company maintained with the Warrant Agent for
such
purpose and shall advise the Company at the end of each day on which funds
for
the exercise of the Warrants are received of the amount so deposited to its
account. The Warrant Agent shall promptly confirm such telephonic advice
to the
Company in writing.
(i) The
Warrant Agent shall, by 11:00 A.M. Eastern Time on the Business Day following
the Exercise Date of any Warrant, advise the Company and the transfer agent
and
registrar in respect of (a) the Ordinary Shares issuable upon such exercise
as
to the number of Warrants exercised in accordance with the terms and conditions
of this Agreement, (b) the instructions of each Registered Holder or
Participant, as the case may be, with respect to delivery of the Ordinary
Shares
issuable upon such exercise, and the delivery of definitive Warrant
Certificates, as appropriate, evidencing the balance, if any, of the Warrants
remaining after such exercise, (c) in case of a Book-Entry Warrant Certificate,
the notation that shall be made to the records maintained by the Depository,
its
nominee for each Book-Entry Warrant Certificate, or a Participant, as
appropriate, evidencing the balance, if any, of the Warrants remaining after
such exercise and (d) such other information as the Company or such transfer
agent and registrar shall reasonably require.
(ii) The
Company shall, by 5:00 P.M., New York time, on the third Business Day next
succeeding the Exercise Date of any Warrant and the clearance of the funds
in
payment of the Warrant Price, execute, issue and deliver to the Warrant Agent,
the Ordinary Shares to which such Registered Holder or Participant, as the
case
may be, is entitled, in fully registered form, registered in such name or
names
as may be directed by such Registered Holder or the Participant, as the case
may
be. Upon receipt of such Ordinary Shares, the Warrant Agent shall, by 5:00
P.M.,
New York time, on the fifth Business Day next succeeding such Exercise Date,
transmit such Ordinary Shares to or upon the order of the Registered Holder
or
Participant, as the case may be.
In
lieu
of delivering physical certificates representing the Ordinary Shares issuable
upon exercise, provided the Company’s transfer agent is participating in the
Depository Fast Automated Securities Transfer program, the Company shall
use its
reasonable best efforts to cause its transfer agent to electronically transmit
the Ordinary Shares issuable upon exercise to the Registered Holder or
Participant by crediting the account of Registered Holder’s prime broker with
Depository or of the Participant through its Deposit Withdrawal Agent Commission
system. The time periods for delivery described in the immediately preceding
paragraph shall apply to the electronic transmittals described herein.
Notwithstanding the foregoing, the Company shall not be obligated to deliver
any
securities pursuant to the exercise of a Warrant unless a registration statement
under the Act with respect to the Ordinary Shares is effective. In no event
will
the Company be required to net cash settle the warrant exercise. Warrants
may
not be exercised by, or securities issued to, any Registered Holder in any
state
in which such exercise would be unlawful.
-5-
(iii) The
accrual of dividends, if any, on the Ordinary Shares issued upon the valid
exercise of any Warrant will be governed by the terms generally applicable
to
the Ordinary Shares. From and after the issuance of such Ordinary Shares,
the
former Holder of the Warrants exercised will be entitled to the benefits
generally available to other holders of Ordinary Shares and such former Holder’s
right to receive payments of dividends and any other amounts payable in respect
of the Ordinary Shares shall be governed by, and shall be subject to, the
terms
and provisions generally applicable to such Ordinary Shares.
(iv) Warrants
may be exercised only in whole numbers of Ordinary Shares. No fractional
Ordinary Shares are to be issued upon the exercise of the Warrant, but rather
the number of Ordinary Shares to be issued shall be rounded up to the nearest
whole number. If fewer than all of the Warrants evidenced by a Warrant
Certificate are exercised, a new Warrant Certificate for the number of
unexercised Warrants remaining shall be executed by the Company and
countersigned by the Warrant Agent as provided in Section 2 hereof, and
delivered to the holder of this Warrant Certificate at the address specified
on
the books of the Warrant Agent or as otherwise specified by such Registered
Holder. If fewer than all the Warrants evidenced by a Book-Entry Warrant
Certificate are exercised, a notation shall be made to the records maintained
by
the Depository, its nominee for each Book-Entry Warrant Certificate, or a
Participant, as appropriate, evidencing the balance of the Warrants remaining
after such exercise.
(v) The
Company shall not be required to pay any stamp or other tax or governmental
charge required to be paid in connection with any transfer involved in the
issue
of the Ordinary Shares upon the exercise of Warrants; and in the event that
any
such transfer is involved, the Company shall not be required to issue or
deliver
any Ordinary Shares until such tax or other charge shall have been paid or
it
has been established to the Company’s satisfaction that no such tax or other
charge is due.
3.4 Valid
Issuance.
All
Ordinary Shares issued upon the proper exercise of a Warrant in conformity
with
this Agreement shall be validly issued, fully paid and nonassessable.
3.5 Date
of Issuance.
Each
person in whose name any such certificate for Ordinary Shares is issued shall
for all purposes be deemed to have become the holder of record of such shares
on
the date on which the Warrant was surrendered and payment of the Warrant
Price
was made, irrespective of the date of delivery of such certificate, except
that,
if the date of such surrender and payment is a date when the stock transfer
books of the Company are closed, such person shall be deemed to have become
the
holder of such Ordinary Shares at the close of business on the next succeeding
date on which the stock transfer books are open.
-6-
4. Adjustments.
4.1 Stock
Dividends - Split-Ups.
If
after the date hereof, and subject to the provisions of Section 4.6 below,
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 of such stock dividend, split-up or similar event,
the number of Ordinary Shares issuable on exercise of each Warrant shall
be
increased in proportion to such increase in outstanding Ordinary Shares.
4.2 Aggregation
of Shares.
If,
after the date hereof, and subject to the provisions of Section 4.6, the
number
of outstanding Ordinary Shares is decreased by a consolidation, combination,
reverse stock split or reclassification of Ordinary Shares or other similar
event, then, on the effective date of such consolidation, combination, reverse
stock split, reclassification or similar event, the number of Ordinary Shares
issuable on exercise of each Warrant shall be decreased in proportion to
such
decrease in outstanding Ordinary Shares.
4.3 Adjustments
in Warrant Price.
Whenever the number of Ordinary Shares purchasable upon the exercise of the
Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant
Price shall be adjusted (to the nearest cent) by multiplying such Warrant
Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of Ordinary Shares purchasable upon the exercise of the
Warrants immediately prior to such adjustment, and (y) the denominator of
which
shall be the number of Ordinary Shares so purchasable immediately thereafter.
4.4 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 4.1 or 4.2 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 assets or other property of the Company
as
an entirety or substantially as an entirety in connection with which the
Company
is dissolved, the Warrant holders shall thereafter have the right to purchase
and receive, upon the basis and upon the terms and conditions specified in
the
Warrants and in lieu of the Ordinary Shares of the Company immediately
theretofore purchasable and receivable upon the exercise of the rights
represented thereby, 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, that the Warrant holder would have received if such
Warrant holder had exercised his, her or its Warrant(s) immediately prior
to
such event; and if any reclassification also results in a change in Ordinary
Shares covered by Section 4.1 or 4.2, then such adjustment shall be made
pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of
this
Section 4.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
4.5 Notices
of Changes in Warrant.
Upon
every adjustment of the Warrant Price or the number of Ordinary Shares issuable
upon exercise of a Warrant, the Company shall give written notice thereof
to the
Warrant Agent, which notice shall state the Warrant Price resulting from
such
adjustment and the increase or decrease, if any, in the number of Ordinary
Shares purchasable at such price upon the exercise of a Warrant, setting
forth
in reasonable detail the method of calculation and the facts upon which such
calculation is based. Upon the occurrence of any event specified in Sections
4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written
notice to the Warrant holder, at the last address set forth for such holder
in
the Warrant Register, of the record date or the effective date of the event.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such event.
-7-
4.6 No
Fractional Shares.
Notwithstanding any provision contained in this Agreement to the contrary,
the
Company shall not issue fractional Ordinary Shares upon exercise of Warrants.
If, by reason of any adjustment made pursuant to this Section 4, the holder
of
any Warrant would be entitled, upon the exercise of such Warrant, to receive
a
fractional interest in an Ordinary Share, the Company shall, upon such exercise,
round up to the nearest whole number the number of the Ordinary Shares to
be
issued to the Warrant holder.
4.7 Form
of Warrant.
The
form of Warrant need not be changed because of any adjustment pursuant to
this
Section 4, and Warrants issued after such adjustment may state the same Warrant
Price and the same number of Ordinary Shares as is stated in the Warrants
initially issued pursuant to this Agreement. However, the Company may at
any
time in its sole discretion make any change in the form of Warrant that the
Company may deem appropriate and that does not affect the substance thereof,
and
any Warrant thereafter issued or countersigned, whether in exchange or
substitution for an outstanding Warrant or otherwise, may be in the form
as so
changed.
5. Transfer
and Exchange of Warrants.
5.1 Transfer
of Warrants.
Prior
to the Detachment Date, the Public Warrants may be transferred or exchanged
only
together with the Unit in which such Warrant is included, and only for the
purpose of effecting, or in conjunction with, a transfer or exchange of such
Unit. Furthermore, each transfer of a Public Unit or a Private Unit on the
register relating to such Units shall operate also to transfer the Warrants
included in such Unit.
5.2 Registration
of Transfer.
The
Warrant Agent shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of such Warrant for transfer,
properly endorsed with signatures properly guaranteed and accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the
old
Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled
shall
be delivered by the Warrant Agent to the Company from time to time upon request.
5.3 Procedure
for Surrender of Warrants.
Warrants may be surrendered to the Warrant Agent, together with a written
request for exchange or transfer, and thereupon the Warrant Agent shall issue
in
exchange therefor one or more new Warrants as requested by the Registered
Holder
of the Warrants so surrendered, representing an equal aggregate number of
Warrants; provided,
however,
that
except as otherwise provided herein or in any Book-Entry Warrant Certificate,
each Book-Entry Warrant Certificate may be transferred only in whole and
only to
the Depository, to another nominee of the Depository, to a successor depository,
or to a nominee of a successor depository; provided
further,
however,
that in
the event that a Warrant surrendered for transfer bears a restrictive legend,
the Warrant Agent shall not cancel such Warrant and issue new Warrants in
exchange therefor until the Warrant Agent has received an opinion of counsel
for
the Company stating that such transfer may be made and indicating whether
the
new Warrants must also bear a restrictive legend. Upon any such registration
of
transfer, the Company shall execute, and the Warrant Agent shall countersign
and
deliver, in the name of the designated transferee a new Warrant Certificate
or
Warrant Certificates of any authorized denomination evidencing in the aggregate
a like number of unexercised Warrants.
-8-
5.4 Fractional
Warrants.
The
Warrant Agent shall not be required to effect any registration of transfer
or
exchange that will result in the issuance of a Warrant Certificate for a
fraction of a Warrant.
5.5 Service
Charges.
No
service charge shall be made for any exchange or registration of transfer
of
Warrants.
5.6 Warrant
Execution and Countersignature.
The
Warrant Agent is hereby authorized to countersign and to deliver, in accordance
with the terms of this Agreement, the Warrants required to be issued pursuant
to
the provisions of this Section 5, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrants duly executed
on
behalf of the Company for such purpose.
6. Redemption.
6.1 Redemption.
Subject
to Section 6.4 hereof, not less than all of the outstanding Warrants may
be
redeemed, at the option of the Company, at any time after they become
exercisable and so long as an effective registration statement covering the
Ordinary Shares issuable upon exercise of the Warrants is current and available
throughout the 30-day notice of redemption period and prior to their expiration,
at the office of the Warrant Agent, upon the notice referred to in Section
6.2,
at the price of $0.01 per Warrant (“Redemption
Price”),
provided that the last sales price of the Ordinary Shares has been at least
$14.25 per Ordinary Share for any twenty (20) trading days within a thirty
(30)
trading-day period ending on the third business day prior to the date on
which
notice of redemption is given.
6.2 Date
Fixed for, and Notice of, Redemption.
In the
event the Company shall elect to redeem all of the Warrants, the Company
shall
fix a date for the redemption (the “Redemption
Date”).
Notice of redemption shall be mailed by first class mail, postage prepaid,
by
the Company not less than 30 days prior to the date fixed for redemption
to the
Registered Holders of the Warrants to be redeemed at their last addresses
as
they shall appear on the Warrant Register (the “Redemption
Notice”).
Any
notice mailed in the manner herein provided shall be conclusively presumed
to
have been duly given on the date sent whether or not the Registered Holder
received such notice.
6.3 Exercise
After Notice of Redemption.
The
Warrants may be exercised in accordance with Section 3 of this Agreement
at any
time after the Redemption Notice shall have been given by the Company pursuant
to Section 6.2 hereof and prior to the time and date fixed for redemption.
On
and after the Redemption Date, the record holder of the Warrants shall have
no
further rights except to receive, upon surrender of the Warrants, the Redemption
Price.
-9-
6.4 Exclusion
of Certain Warrants.
The Company understands that the redemption rights provided for by this Section
6 apply only to outstanding Warrants. To the extent a person holds rights
to
purchase Warrants, such purchase rights shall not be extinguished by redemption.
However, once such purchase rights are exercised, the Company may redeem
the
Warrants issued upon such exercise provided that the criteria for redemption
is
met. Additionally, any of the Private Warrants shall not be redeemable by
the
Company as long as such Private Warrants continue to be held by Sang-Xxxx
Xxx or
his permitted transferees. However, once such individuals or their permitted
transferee otherwise transfer such Private Warrants, such Private Warrants
shall
then be redeemable by the Company pursuant to Section 6 hereof.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1 No
Rights as Shareholder.
A
Warrant does not entitle the Registered Holder thereof to any of the rights
of a
shareholder of the Company, including, without limitation, the right to receive
dividends, or other distributions, exercise any preemptive rights to vote
or to
consent or to receive notice as shareholders in respect of the meetings of
shareholders or the election of directors of the Company or any other matter.
7.2 Lost,
Stolen, Mutilated, or Destroyed Warrants.
If any
Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
Agent may on such terms as to indemnity or otherwise as they may in their
discretion impose (which shall, in the case of a mutilated Warrant, include
the
surrender thereof), issue a new Warrant of like denomination, tenor, and
date as
the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant
shall
constitute a substitute contractual obligation of the Company, whether or
not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
time
enforceable by anyone.
7.3 Reservation
of Ordinary Shares.
The
Company shall at all times reserve and keep available a number of its authorized
but unissued Ordinary Shares that will be sufficient to permit the exercise
in
full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration
of Ordinary Shares.
The
Company agrees that prior to the commencement of the Exercise Period, it
shall
use its best efforts to file with the Securities and Exchange Commission
a
post-effective amendment to the Registration Statement, or a new registration
statement, for the registration under the Act of, and it shall take such
action
as is necessary to qualify for sale in those states in which the Warrants
were
initially offered by the Company, the Ordinary Shares issuable upon exercise
of
the Warrants. In either case, the Company will use its reasonable best efforts
to cause the same to become effective and to maintain the effectiveness of
such
registration statement until the expiration of the Warrants in accordance
with
the provisions of this Agreement. The provisions of this Section 7.4 may
not be
modified, amended or deleted without the prior written consent of the
Representative.
-10-
8. Concerning
the Warrant Agent and Other Matters.
8.1 Payment
of Taxes.
The
Company will from time to time promptly pay all taxes and charges that may
be
imposed upon the Company or the Warrant Agent in respect of the issuance
or
delivery of Ordinary Shares upon the exercise of Warrants, but the Company
shall
not be obligated to pay any transfer taxes in respect of the Warrants or
such
Ordinary Shares.
8.2 Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment
of Successor Warrant Agent.
The
Warrant Agent, or any successor to it hereafter appointed, may resign its
duties
and be discharged from all further duties and liabilities hereunder after
giving
sixty (60) days’ prior written notice to the Company. If the office of the
Warrant Agent becomes vacant by resignation or incapacity to act or otherwise,
the Company shall appoint in writing a successor warrant agent in place of
the
Warrant Agent. If the Company shall fail to make such appointment within
a
period of 30 days after it has been notified in writing of such resignation
or
incapacity by the Warrant Agent or by the holder of the Warrant (who shall,
with
such notice, submit his Warrant for inspection by the Company), then the
holder
of any Warrant may apply to the Supreme Court of the State of New York for
the
County of New York for the appointment of a successor Warrant Agent at the
Company’s cost. Any successor warrant agent, whether appointed by the Company or
by such court, shall be a corporation organized and existing under the laws
of
the State of New York, in good standing and having its principal office in
the
Borough of Manhattan, City and State of New York, and authorized under such
laws
to exercise corporate trust powers and subject to supervision or examination
by
federal or state authority. After appointment, any successor warrant agent
shall
be vested with all the authority, powers, rights, immunities, duties, and
obligations of its predecessor warrant agent with like effect as if originally
named as warrant agent hereunder, without any further act or deed; but if
for
any reason it becomes necessary or appropriate, the predecessor warrant agent
shall execute and deliver, at the expense of the Company, an instrument
transferring to such successor warrant agent all the authority, powers, and
rights of such predecessor warrant agent hereunder; and upon request of any
successor warrant agent the Company shall make, execute, acknowledge, and
deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor warrant agent all such authority,
powers, rights, immunities, duties, and obligations.
8.2.2 Notice
of Successor Warrant Agent.
In the
event a successor warrant agent shall be appointed, the Company shall give
notice thereof to the predecessor warrant agent and the transfer agent for
the
Ordinary Shares not later than the effective date of any such appointment.
8.2.3 Merger
or Consolidation of Warrant Agent.
Any
corporation into which the Warrant Agent may be merged or with which it may
be
consolidated or any corporation resulting from any merger or consolidation
to
which the Warrant Agent shall be a party shall be the successor warrant agent
under this Agreement without any further act.
-11-
8.3 Fees
and Expenses of Warrant Agent.
8.3.1 Remuneration.
The
Company agrees to pay the Warrant Agent reasonable remuneration for its services
as Warrant Agent hereunder and will reimburse the Warrant Agent upon demand
for
all expenditures that the Warrant Agent may reasonably incur in the execution
of
its duties hereunder.
8.3.2 Further
Assurances.
The
Company agrees to perform, execute, acknowledge, and deliver or cause to
be
performed, executed, acknowledged, and delivered all such further acts,
instruments, and assurances as may reasonably be required by the Warrant
Agent
for the carrying out or performing of the provisions of this Agreement.
8.4 Liability
of Warrant Agent.
8.4.1 Reliance
on Company Statement.
Whenever in the performance of its duties under this Warrant Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter
be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof
be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a statement signed by the Chief Executive Officer, President
or
Chairman of the Board of the Company and delivered to the Warrant Agent.
The
Warrant Agent may rely upon such statement for any action taken or suffered
in
good faith by it pursuant to the provisions of this Agreement.
8.4.2 Indemnity.
The
Warrant Agent shall be liable hereunder only for its own negligence, willful
misconduct or bad faith. The Company agrees to indemnify the Warrant Agent
and
save it harmless against any and all liabilities, including judgments, costs
and
reasonable counsel fees, for anything done or omitted by the Warrant Agent
in
the execution of this Agreement except as a result of the Warrant Agent’s
negligence, willful misconduct, or bad faith.
8.4.3 Exclusions.
The
Warrant Agent shall have no responsibility with respect to the validity of
this
Agreement or with respect to the validity or execution of any Warrant (except
its countersignature thereof); nor shall it be responsible for any breach
by the
Company of any covenant or condition contained in this Agreement or in any
Warrant; nor shall it be responsible to make any adjustments required under
the
provisions of Section 4 hereof or responsible for the manner, method, or
amount
of any such adjustment or the ascertaining of the existence of facts that
would
require any such adjustment; nor shall it by any act hereunder be deemed
to make
any representation or warranty as to the authorization or reservation of
any
Ordinary Shares to be issued pursuant to this Agreement or any Warrant or
as to
whether any Ordinary Shares will when issued be valid and fully paid and
nonassessable.
8.5 Acceptance
of Agency.
The
Warrant Agent hereby accepts the agency established by this Agreement and
agrees
to perform the same upon the terms and conditions herein set forth and among
other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys
received by the Warrant Agent for the purchase of shares of the Company’s
Ordinary Shares through the exercise of Warrants.
-12-
8.6 Waiver.
The
Warrant Agent hereby waives any and all right, title, interest or claim of
any
kind (“Claim”)
in or
to any distribution of the Trust Account (as defined in that certain Investment
Management Trust Agreement, dated as of the date hereof, by and between the
Company and the Warrant Agent as trustee thereunder), and hereby agrees not
to
seek recourse, reimbursement, payment or satisfaction for any Claim against
the
Trust Fund for any reason whatsoever.
9. Miscellaneous
Provisions.
9.1 Successors.
All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns.
9.2 Notices.
Any
notice, statement or demand authorized by this Warrant Agreement to be given
or
made by the Warrant Agent or by the holder of any Warrant to or on the Company
shall be sufficiently given when so delivered if by hand or overnight delivery
or if sent by certified mail or private courier service within five days
after
deposit of such notice, postage prepaid, addressed (until another address
is
filed in writing by the Company with the Warrant Agent), as follows:
SoftForum
Xxxxxxxx
0xx
Xxxxx
000-0
Xxxxxxxxx
Xxxxxxx,
Xxxxx, Xxxxx 135-170
Attn:
Sang-Xxxx Xxx, Chairman and Chief Executive Officer
with
a
copy in each case (which shall not constitute notice) to:
Xxxxx
Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx, P.C.
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx X. Xxxx, Esq.
And
Broadband
Capital Management, LLC
000
Xxxxx
Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx Xxxxxxxx
with
a
copy in each case (which shall not constitute notice) to:
Ellenoff
Xxxxxxxx & Schole LLP
000
X.
00xx
Xxxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxxxx X. Xxxxxxxx, Esq.
-13-
Any
notice, statement or demand authorized by this Agreement to be given or made
by
the holder of any Warrant or by the Company to or on the Warrant Agent shall
be
sufficiently given when so delivered if by hand or overnight delivery or
if sent
by certified mail or private courier service within five days after deposit
of
such notice, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company), as follows:
Continental
Stock Transfer & Trust Company
00
Xxxxxxx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn
:
Compliance Department
9.3 Applicable
Law.
The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflict of laws. The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this
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, which jurisdiction shall be exclusive.
The Company hereby waives any objection to such exclusive jurisdiction and
that
such courts represent an inconvenience forum. Any such 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 9.2 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the
Company
in any action, proceeding or claim.
9.4 Persons
Having Rights under this Agreement.
Nothing
in this Agreement expressed and nothing that may be implied from any of the
provisions hereof is intended, or shall be construed, to confer upon, or
give
to, any person or corporation other than the parties hereto and the Registered
Holders and, for the purposes of Sections 6.4 and 7.4 hereof, the
Representative, any right, remedy, or claim under or by reason of this Warrant
Agreement or of any covenant, condition, stipulation, promise, or agreement
hereof. The Representative shall be deemed to be a third-party beneficiary
of
this Agreement with respect to Sections 6.4 and 7.4 hereof. All covenants,
conditions, stipulations, promises, and agreements contained in this Warrant
Agreement shall be for the sole and exclusive benefit of the parties hereto
(and
the Representative with respect to the Sections 6.4 and 7.4 hereof) and their
successors and assigns and of the Registered Holders of the Warrants.
9.5 Examination
of the Warrant Agreement.
A copy
of this Agreement shall be available at all reasonable times at the office
of
the Warrant Agent in the Borough of Manhattan, City and State of New York,
for
inspection by the Registered Holder of any Warrant. The Warrant Agent may
require any such holder to submit his Warrant for inspection by it.
9.6 Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all
such
counterparts shall together constitute but one and the same instrument.
-14-
9.7 Effect
of Headings.
The
Section headings herein are for convenience only and are not part of this
Warrant Agreement and shall not affect the interpretation thereof.
[Remainder
of page intentionally left blank. Signature
page to follow.]
-15-
IN
WITNESS WHEREOF,
this
Agreement has been duly executed by the parties hereto as of the day and
year
first above written.
| KOREA MILESTONE ACQUISITION CORPORATION | ||
| |
|
|
| By: | ||
|
Name:
Sang-Xxxx Xxx
Title: Chairman
and Chief Executive Officer
|
||
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||
| |
|
|
| By: | ||
|
Name: Xxxxxx
Xxxxxx
Title: Chairman
|
||
-16-
EXHIBIT
A
Form
of Warrant
