Rule 10b5-1 Stock Purchase Plan
This
Rule 10b5-1 Stock Purchase Plan (this “Purchase Plan”), is entered into on
___________, 2008 by and between Daewoo Securities Co., Ltd. (the “Broker”),
Korea Milestone Acquisition Corporation, a Cayman Islands company (the
“Company”) and Sang-Xxxx Xxx (the
“Purchaser”).
WHEREAS,
Purchaser desires to establish a plan that qualifies for the affirmative defense
and safe harbor provided by Rule 10b5-1 (“Rule 10b5-1”) under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) to purchase
warrants to purchase ordinary shares (the “Warrants”), of the Company, as
described in the Company’s Registration Statement on Form F-1 relating to the
initial public offering of the Company (the “IPO”).
WHEREAS,
Purchaser desires to engage Broker as its exclusive agent to purchase Warrants
on its behalf in accordance with this Purchase Plan;
WHEREAS,
Purchaser has established or, prior to effecting transactions under this
Purchase Plan will establish, an account (the “Account”) with Broker by
executing an account agreement and all other necessary ancillary documents
with
Broker; and
NOW,
THEREFORE,
Broker,
the Company and Purchaser hereby agree as follows:
1. Engagement
of Broker
During
the term of this Purchase Plan, Broker shall act as Purchaser’ exclusive agent
to purchase Warrants pursuant to this Purchase Plan. Subject to the terms and
conditions set forth herein, Broker hereby accepts such appointment and
engagement.
2. Trading
Instructions
(a) Broker
is authorized to begin purchasing up to 5,000,000 Warrants (and up to an
additional 375,000 Warrants in the event and to the extent that Broadband
Capital Management LLC, representative of the underwriters of the Company’s IPO
(the “Underwriter”) exercises its over-allotment option) as agent for Purchaser
as set forth herein pursuant to this Purchase Plan on the later of (i) the
date
separate trading of the Warrants commences (“Separation Date”) and (ii) 60
calendar days after termination of the “restricted period” in connection with
the Company’s IPO under Regulation M under the Securities Exchange Act of 1934,
as amended (the “Commencement Date”). Broker shall cease purchasing Warrants on
the Termination Date (as defined below). The period beginning on the
Commencement Date and ending on the Termination Date is referred to herein
as
the “Plan Period”.
(b) In
accordance with Broker’s customary procedures, Broker will deposit Warrants
purchased hereunder into the Account against payment to Broker of the purchase
price therefor and commissions and other fees in respect thereof.
(c) Broker
will notify Purchaser of all transactions executed under this Purchase Plan
pursuant to customary trade confirmations, which shall be provided within 24
hours of each transaction to Purchaser, SoftForum Building, 8th Floor, 000-0
Xxxxxxxxx, Xxxxxxx, Xxxxx, Xxxxx, 135-170, Attn: Sang-Xxxx Xxx, by facsimile
at
(82) (0) 0000-0000 and confirmed by telephone at (82) (0) 000-0000, with a
copy
to Xxxxxxx X. Xxxx at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
000
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(d) (i) On
each day on which the NASDAQ Stock Market (the “Exchange”) is open for trading
(each, a “Business Day”), Broker shall use commercially reasonable efforts to
purchase, as agent and for the account of Purchaser, up to 5,000,000
Warrants (and up to 5,375,000 Warrants in the event and to the extent that
the
Underwriter exercises its over-allotment option) at a price of $2.00 per
Warrant.
(ii) Purchaser shall
pay to Broker a commission of $0.03 per Warrant so purchased.
(e) Broker
will make, keep and produce promptly upon request a daily time-sequenced
schedule of all Warrant purchases made under this Purchase Plan, on a
transaction-by-transaction basis, including (i) size, time of execution and
price of purchase; and (ii) the exchange, quotation system, or other
facility through which the Warrant purchase occurred, which obligations are
set
forth under the heading “Daily Time-Sequenced Schedule Obligations” on
Appendix
A
hereto.
(f) Purchaser
agrees that this Purchase Plan constitutes an irrevocable “good till cancel”
limit order to purchase Warrants at $2.00 per Warrant pursuant to the terms
of
this Purchase Plan.
3. Funding
of Account
Purchaser
shall maintain an Account of no less than $10,750,000 to fund the purchase
of
the Warrants. Purchaser
agrees to fund the Account fully within fourteen (14) days following the
Effective Date of the Company’s Registration Statement on Form F-1 in connection
with the IPO. Other than for purposes of making Warrant purchases, no
funds may be withdrawn from the Account prior to the Termination
Date.
4. Broker’s
Discretion to Deviate from Trading Instructions
(a) Subject
to the Warrant Purchase Guidelines and other terms and conditions set forth
in
this Purchase Plan, Broker shall have full discretion with respect to the
execution of all purchases, and Purchaser acknowledges and agrees that Purchaser
does not have, and shall not attempt to exercise, any influence over how, when
or whether to effect such purchases of Warrants pursuant to this Purchase Plan.
(b) Notwithstanding
any provision herein to the contrary, including the provisions of Section
2(d)(i), in the event that, on any Business Day, in the opinion of Broker’s
counsel, effecting purchases hereunder would result in a violation of applicable
law or a breach of any contract to which Broker or its affiliates are a party
or
by which it or its affiliates are bound or such purchases would result in a
violation of applicable law by Purchaser (collectively, “Restrictions”), Broker
may refrain from purchasing Warrants or purchase fewer than the otherwise
applicable number of Warrants to be purchased set forth in the Warrant Purchase
Guidelines, as determined by Broker, in its discretion with regard to such
Restrictions, provided,
however,
that as
soon as such Restrictions are no longer in effect, Broker shall resume effecting
purchases hereunder. In this connection, Broker may receive a notice from the
Company indicating that Regulation M precludes purchases for a period of time
and Broker shall suspend purchasing once it has received such a notice until
such time as it receives an additional notice from the Company to the effect
that such Restrictions under Regulation M have terminated.
5. Termination
Date
This
Purchase Plan shall terminate upon the Termination Date. “Termination Date”
means the earliest of:
(a) the
date that is one year after the consummation of the IPO;
(b) the
date on which the Purchaser purchases 5,000,000 Warrants (or 5,375,000 Warrants
in the event and to the extent that the Underwriter exercises its over-allotment
option) pursuant to this Agreement;
(c) the
date that Broker receives notice that Purchaser has filed a petition for
bankruptcy or reorganization, or a petition for bankruptcy has been filed
against Purchaser and has not been dismissed within sixty (60) calendar
days of its filing; and
If
Broker
determines that any event specified in Paragraphs (a), (b) or (c) of this
Section 5 has occurred, Broker shall promptly notify Purchaser that this
Purchase Plan has terminated pursuant to the terms of this Section 5 and
the date of such termination.
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6. Representations,
Warranties and Covenants
(a) From
the date hereof until the Termination Date, each of the Company and Purchaser
agrees not to discuss with Broker the Company’s and/or a potential target
company’s (a “Target”) business, operations or prospects or any other
information likely to be related to the value of the Warrants or likely to
influence a decision to buy Warrants. Notwithstanding the preceding sentence,
with the approval of counsel to Broker, Purchaser and the Company may
communicate with Broker personnel who are not responsible for, and have no
ability to influence, the execution of this Purchase Plan. Notwithstanding
the
first sentence in this paragraph, the Company and Purchaser shall jointly
provide Broker with written notification of (i) the Commencement Date, and
(ii) the mailing of a proxy or other solicitation materials to shareholders
of the Target with respect to a vote on the Business Combination or any fact
that would make purchases under this Purchase Plan unlawful pursuant to
Regulation M or otherwise, as soon as such fact is known to the Company or
Purchaser.
(b)
Purchaser represents and warrants to Broker that it has duly authorized this
Purchase Plan and the transactions contemplated hereby.
(c)
Purchaser agrees that it will not, and the Company agrees with Broker that
neither it nor any “affiliated purchaser” as defined in Rule 10b-18 will,
make any purchases of blocks as described in the proviso in
Rule 10b-18(b)(4) during the four full calendar weeks immediately preceding
the Commencement Date.
(d)
Purchaser represents and warrants to Broker that it is not aware of any
material, nonpublic information concerning the Company or its securities
(“Material, Nonpublic Information”) and is entering into this Purchase Plan in
good faith and not as part of a plan or scheme to evade the prohibitions of
Rule 10b5-1.
(e) Broker
represents and warrants to the Company and Purchaser that it has implemented
reasonable policies and procedures, taking into consideration the nature of
Broker’s business, to ensure that individuals making investment decisions will
not violate the laws prohibiting trading on the basis of Material, Nonpublic
Information. These policies and procedures include those that restrict any
purchase or sale, or the causing of any purchase or sale, of any security as
to
which Broker has Material, Nonpublic Information, as well as those that prevent
such individuals from becoming aware of or being in possession of Material,
Nonpublic Information.
(f) From
the date hereof until the Termination Date, Purchaser agrees not to enter into
any hedging transaction with respect to any Warrants.
(g) Each
of the Company and Purchaser agrees that, during the period from the
Commencement Date to the date falling that number of days following the
Termination Date equal to the “restricted period” applicable to the Company, it
will not engage in any “distribution” with respect to which the Warrants are a
“covered security” (as such terms are defined in Regulation M) or any other
activity that would prohibit the purchase of Warrants by Broker.
(h) Each
of the Company and Purchaser represents and warrants that as of the time of
execution of this Purchase Plan, it has not entered into any similar plan or
agreement with respect to Warrants or any security or interest convertible
into
or exchangeable for Warrants. Each of the Company and Purchaser agrees that
without the prior written consent of Broker, it shall not, during the Plan
Period, directly or indirectly (including, without limitation, by means of
a
cash-settled or other derivative instrument) purchase, offer to purchase, place
any bid or limit order that would effect a purchase of, any Warrants (or an
equivalent interest, including a unit of beneficial interest in a trust or
limited partnership or a depository share), or any security convertible into
or
exchangeable for Warrants.
(i) Each
of the Company and Purchaser agrees to inform Broker (i) of any purchases
made during the Plan Period by an “affiliated purchaser” as defined in
Rule 10b-18 promptly upon becoming aware of such purchases and (ii) if
any “affiliated purchaser” intends to make any such purchases, promptly upon
being informed of such intention.
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7. Compliance
with the Securities Laws
(a) It
is the intent of the parties that this Purchase Plan comply with the
requirements of Rule 10b5-1(c)(1)(i)(B), and the parties agree that this
Purchase Plan shall be interpreted to comply with the requirements of
Rule 10b5-1(c).
(b) Broker
agrees that the purchases of Warrants under this Purchase Plan shall comply
with
all applicable US federal securities laws.
8. Indemnification
(a) Purchaser
agrees to indemnify and hold harmless Broker (and its directors, officers,
employees and affiliates) from and against all claims, liabilities, losses,
damages and expenses (including reasonable attorney’s fees and costs) arising
out of or attributable to (i) any material breach by the Company or
Purchaser of this Purchase Plan (including the Company’s and Purchaser’
representations and warranties), and (ii) any violation by the Company or
Purchaser of applicable laws or regulations with respect to the transactions
contemplated by this Purchase Plan. This indemnification will survive the
termination of this Purchase Plan. Purchaser will have no indemnification
obligations hereunder in the case of gross negligence or willful misconduct
of
Broker or any other indemnified person or if Broker fails to comply with Section
7(b) hereof (unless such failure arises out of or is attributable to a breach
by
the Company or Purchaser of its representations, warranties or obligations
hereunder), as determined by a final, non-appealable judgment of a court of
competent jurisdiction.
(b) Notwithstanding
any other provision herein, no party hereto will be liable to the other for
(i) special, indirect, punitive, exemplary, or consequential damages, or
incidental losses or damages of any kind, including but not limited to lost
profits, lost savings, loss of use of facility or equipment, regardless of
whether arising from breach of contract, warranty, tort, strict liability or
otherwise, and even if advised of the possibility of such losses or damages
or
if such losses or damages could have been reasonably foreseen, or (ii) any
failure to perform or for any delay in performance that results from a cause
or
circumstance that is beyond its reasonable control, including but not limited
to
failure of electronic or mechanical equipment, strikes, failure of common
carrier or utility systems, severe weather, market disruptions or other causes
commonly known as “acts of God”.
(c) The
Company and Purchaser acknowledge and agree that Broker has not provided the
Company or Purchaser with any tax, accounting or legal advice with respect
to
this Purchase Plan, including whether Purchaser would be entitled to any of
the
affirmative defenses under Rule 10b5-1.
9. General
(a) This
Purchase Plan (including any Appendices, Annexes or Exhibits) constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof, and supersedes any previous or contemporaneous agreements,
understandings, proposals or promises with respect thereto, whether written
or
oral.
(b) This
Purchase Plan will be governed by, and construed in accordance with, the laws
of
the State of New York, without regard to such State’s conflict of laws rules.
(c) This
Purchase Plan and each party’s rights and obligations hereunder may not be
assigned or delegated without the written permission of the other party and
shall inure to the benefit of each party’s successors and permitted assigns,
whether by merger, consolidation or otherwise.
(d) This
Purchase Plan may be executed in two or more counterparts and by facsimile
signature.
(Remainder
of Page intentionally left blank. Signature page(s) to follow)
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IN
WITNESS WHEREOF,
the
undersigned have signed this Purchase Plan as of the date first written
above.
| DAEWOO SECURITIES CO., LTD. | ||
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| By: | ||
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Name: Xxx, Xxxx-Tae Title: President and Chief Executive Officer |
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| KOREA MILESTONE ACQUISITION CORPORATION | ||
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| By: | ||
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Name:
Title:
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Sang-Xxxx Xxx |
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APPENDIX
A
Daily
Time-Sequenced Schedule Obligations
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Obligor
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Obligation
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Broker
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Broker
is to make, keep and produce promptly upon request a daily time-sequenced
schedule of all Warrant purchases made under this Purchase Plan,
on a
transaction-by-transaction basis, including:
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•
size, time of execution, price of purchase; and
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•
the exchange, quotation system, or other facility through which the
Warrant purchase occurred.
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All
Warrant amounts and limit prices listed herein shall be increased or decreased
to reflect stock
splits
should they occur.
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