REGISTRATION RIGHTS AGREEMENT
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is
entered into as of [___],
2008,
by and among Korea Milestone Acquisition Corporation, a Cayman Islands
corporation (the “Company”)
and
Sang-Xxxx Xxx (“SC
Xxx”),
Yong
Xxxx Xxxx (“Xxxx”),
Jhong
Xxxx Xxx (“XX
Xxx”),
Soo-Xxxxx Xxx (“Xxx”),
and
Moon Youl Ban (“Ban”)
(each,
an “Investor”
and
collectively, the “Investors”).
WHEREAS,
SC Kim, Kang, XX Xxx, Xxx and Ban currently hold all 2,875,000 of the issued
and
outstanding Ordinary Shares of the Company (the “Sponsor
Shares”),
375,000 of which are subject to forfeiture on a pro rata basis if and to the
extent the Underwriters’ over-allotment option is not fully exercised;
WHEREAS,
immediately prior to the pricing of the Company’s initial public offering, the
Company will issue, pursuant to a binding agreement with SC Xxx, an aggregate
of
2,692,308 warrants (the “Sponsor
Warrants”),
each
exercisable to purchase one Ordinary Share of the Company (the “Sponsor
Warrant Shares”);
WHEREAS,
Sang-Xxxx Xxx (or
his
affiliate) has agreed to place “good till cancel” limit orders for up to
5,375,000 (or up to $10,750,000) of the Company’s issued and outstanding
warrants (the “Aftermarket
Warrants”)
during
the Aftermarket Period (defined below);
WHEREAS,
the Investors and the Company desire to enter into this Agreement to provide
the
Investors with certain rights relating to the Registration of (i) the Sponsor
Shares, (ii) the Sponsor Warrants, (iii) the Sponsor Warrant Shares and (iv)
the
Aftermarket Warrants.
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.
DEFINITIONS.
The
following capitalized terms used herein have the following
meanings:
“Agreement”
means
this Agreement, as amended, restated, supplemented, or otherwise modified from
time to time.
“Aftermarket
Period”
means,
in relation to the Aftermarket Warrants, the period commencing on the later
of
(1) the completion of the initial public offering, and (2) 60 days after the
termination of the “restricted period” in connection with the Company’s initial
public offering under Regulation M of the Exchange Act, and ending the earlier
of the Company's initial business combination and fifteen (15) months following
the consummation of the initial public offering.
“Aftermarket
Warrants”
is
defined in the recitals to this Agreement.
“Commission”
means
the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“Company”
is
defined in the preamble to this Agreement.
“Demand
Registration”
is
defined in Section 2.1.1.
“Demanding
Holder”
is
defined in Section 2.1.1.
“Escrow
Agreement”
means
that certain Escrow Agreement, dated as of [__],
2008,
by and among the parties hereto and Continental Stock Transfer & Trust
Company.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect
at
the time.
“Form
F-3”
is
defined in Section 2.3.
“Indemnified
Party”
is
defined in Section 4.3.
“Indemnifying
Party”
is
defined in Section 4.3.
“Investor”
is
defined in the preamble to this Agreement.
“Investor
Indemnified Party”
is
defined in Section 4.1.
“Maximum
Threshold”
is
defined in Section 2.1.4.
“Notices”
is
defined in Section 6.3.
“Ordinary
Shares”
means
the ordinary shares, par value $0.0001 per share, of the Company.
“Piggy-Back
Registration”
is
defined in Section 2.2.1.
“Register,”
“Registered”
and
“Registration”
mean
a
registration effected by preparing and filing a registration statement or
similar document in compliance with the requirements of the Securities Act,
and
the applicable rules and regulations promulgated thereunder, and such
registration statement becoming effective.
“Registrable
Securities”
mean
all of (i) the Sponsor Shares, (ii) the Sponsor Warrants, (iii) the Sponsor
Warrant Shares, and (iv) the Aftermarket Warrants, and any securities of the
Company issued as a dividend or other distribution with respect to or in
exchange for or in replacement of such Registrable Securities. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when: (a) a Registration Statement with respect to the sale of such
securities shall have become effective under the Securities Act and such
securities shall have been sold, transferred, disposed of or exchanged in
accordance with such Registration Statement; (b) such securities shall have
been
otherwise transferred, new certificates for them not bearing a legend
restricting further transfer shall have been delivered by the Company and
subsequent public distribution of them shall not require registration under
the
Securities Act; (c) such securities shall have ceased to be outstanding, or
(d)
the Registrable Securities are saleable under Rule 144.
“Registration
Statement”
means
a
registration statement filed by the Company with the Commission in compliance
with the Securities Act and the rules and regulations promulgated thereunder
for
a public offering and sale of Registrable Securities (other than a registration
statement on Form F-4 or Form S-8, or their successors, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another entity).
“Release
Date”
means
the respective dates on which the Sponsor Shares and the Sponsor Warrants are
disbursed from escrow pursuant to Section 3 of the Escrow Agreement.
2
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Sponsor
Shares”
is
defined in the recitals to this Agreement.
“Sponsor
Warrants”
is
defined in the recitals to this Agreement.
“Sponsor
Warrant Shares”
is
defined in the recitals to this Agreement.
“Warrant
Agreement”
means
that certain Warrant Agreement, dated as of [•],
2008,
by and between the Company and Continental Stock Transfer & Trust
Company.
“Underwriter”
means
a
securities dealer who purchases any Registrable Securities as principal in
an
underwritten offering and not as part of such dealer’s market-making
activities.
2.
REGISTRATION RIGHTS.
2.1.
Demand Registration.
2.1.1.
Request for Registration.
At any
time and from time to time on or after the applicable Release Date, the holders
of a majority-in-interest of such Registrable Securities, on an as-converted
Ordinary Shares basis, as have been released from escrow pursuant to the Escrow
Agreement and held by an Investor or its permitted transferees may make a
written demand for Registration under the Securities Act of all or part of
their
Registrable Securities (a “Demand
Registration”). Any
demand for a Demand Registration shall specify the number and type of
Registrable Securities proposed to be sold and the intended method(s) of
distribution thereof. The Company will notify all holders of Registrable
Securities of the demand, and each holder of Registrable Securities who wishes
to include all or a portion of such holder’s Registrable Securities in the
Demand Registration (each such holder including shares of Registrable Securities
in such Registration, a “Demanding
Holder”)
shall
so notify the Company within fifteen (15) days after the receipt by the holder
of the notice from the Company. Upon receipt by the Company of any such notice,
the Demanding Holders shall be entitled to have their Registrable Securities
included in the Demand Registration, subject to Section 2.1.4 and the provisos
set forth in Section 3.1.1. The Company shall not be obligated to effect more
than an aggregate of three (3) Demand Registrations under this Section 2.1.1
in
respect of all Registrable Securities.
2.1.2.
Effective Registration.
A
Registration will not count as a Demand Registration until the Registration
Statement filed with the Commission with respect to such Demand Registration
has
been declared effective and the Company has complied with all of its obligations
under this Agreement with respect thereto; provided,
however,
that
if, after such Registration Statement has been declared effective, the offering
of Registrable Securities pursuant to a Demand Registration is interfered with
by any stop order or injunction of the Commission or any other governmental
agency or court, the Registration Statement with respect to such Demand
Registration will be deemed not to have been declared effective, unless and
until (i) such stop order or injunction is removed, rescinded or otherwise
terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter
elect to continue the offering; provided,
further,
that
the Company shall not be obligated to file an additional Registration Statement
until a Registration Statement that has been filed is counted as a Demand
Registration or is terminated.
2.1.3.
Underwritten Offering.
If a
majority-in-interest of the Demanding Holders so elect and such holders so
advise the Company as part of their written demand for a Demand Registration,
the offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. In such event, the right
of
any holder to include its Registrable Securities in such Registration shall
be
conditioned upon such holder’s participation in such underwriting and the
inclusion of such holder’s Registrable Securities in the underwriting to the
extent provided herein. All Demanding Holders proposing to distribute their
securities through such underwriting shall enter into an underwriting agreement
in customary form with the Underwriter or Underwriters (or the representatives
thereof) selected for such underwriting by a majority-in-interest of the holders
initiating the Demand Registration.
3
2.1.4.
Reduction of Offering.
If the
managing Underwriter or Underwriters for a Demand Registration that is to be
an
underwritten offering advises the Company and the Demanding Holders in writing
that the dollar amount or number of shares of Registrable Securities that the
Demanding Holders desire to sell, taken together with all other Ordinary Shares
or other securities that the Company desires in any material respect to sell
and
the Ordinary Shares, if any, as to which Registration has been requested
pursuant to written contractual piggy-back registration rights held by other
shareholders of the Company who desire to sell, exceeds the maximum dollar
amount or maximum number of shares that can be sold in such offering without
adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar
amount or maximum number of securities, as applicable, the “Maximum
Threshold”),
then
the Company shall include in such Registration: (i) first, the Registrable
Securities as to which Demand Registration has been requested by the Demanding
Holders (pro rata in accordance with the number of shares (including Sponsor
Shares and Sponsor Warrants, on an as-converted to Ordinary Shares basis) that
each such person has requested be included in such Registration, regardless
of
the number of shares held by each such person (such proportion is referred
to
herein as “Pro
Rata”))
that
can be sold without exceeding the Maximum Threshold; (ii) second, to the extent
that the Maximum Threshold has not been reached under the foregoing clause
(i),
the Ordinary Shares or other securities that the Company desires to sell that
can be sold without exceeding the Maximum Threshold; (iii) third, to the extent
that the Maximum Threshold has not been reached under the foregoing clauses
(i)
and (ii) collectively, the Ordinary Shares or other securities for the account
of other persons that the Company is obligated to register pursuant to written
contractual arrangements with such persons and that can be sold without
exceeding the Maximum Threshold.
2.1.5.
Withdrawal.
If a
majority-in-interest of the Demanding Holders, on an as-converted to Ordinary
Shares basis, disapprove of the terms of any underwriting or are not entitled
to
include all of their Registrable Securities in any offering, such
majority-in-interest of the Demanding Holders may elect to withdraw from such
offering by giving written notice to the Company and the Underwriter or
Underwriters of their request to withdraw prior to the effectiveness of the
Registration Statement filed with the Commission with respect to such Demand
Registration. If the majority-in-interest of the Demanding Holders, on an
as-converted to Ordinary Shares basis, withdraws from a proposed offering
relating to a Demand Registration, then such Registration shall not count as
a
Demand Registration provided for in Section 2.1.
2.2
Piggy-Back Registration.
2.2.1.
Piggy-Back Rights.
If at
any time on or after the Release Date, as applicable, the Company proposes
to
file a Registration Statement under the Securities Act with respect to an
offering of equity securities, or securities or other obligations exercisable
or
exchangeable for, or convertible into, equity securities, by the Company for
its
own account or for shareholders of the Company for their account (or by the
Company and by shareholders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement (i) filed in
connection with any employee stock option or other benefit plan, (ii) for an
exchange offer or offering of securities solely to the Company’s existing
shareholders or debt holders, (iii) for an offering of debt that is convertible
into equity securities of the Company, (iv) for a dividend reinvestment plan,
or
(v) for the acquisition or purchase by or combination by merger or otherwise
of
the Company of, with or into another company or business entity or partnership,
then the Company shall (x) give written notice of such proposed filing to the
holders of Registrable Securities at least ten (10) days before the anticipated
date on which the preliminary prospectus will be printed, which notice shall
describe the amount and type of securities to be included in such offering,
the
intended method(s) of distribution, and the name of the proposed managing
Underwriter or Underwriters, if any, of the offering, and (y) offer to the
holders of Registrable Securities in such notice the opportunity to register
the
sale of such number and type of Registrable Securities as have been released
from escrow under the Escrow Agreement and requested by such holders in writing
within five (5) days following receipt of such notice (a “Piggy-Back
Registration”).
The
Company shall cause such Registrable Securities to be included in such
Registration and shall use its reasonable best efforts to cause the managing
Underwriter or Underwriters of a proposed underwritten offering to permit the
Registrable Securities requested to be included in a Piggy-Back Registration
on
the same terms and conditions as any similar securities of the Company and
to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. All holders
of
Registrable Securities proposing to distribute their securities through a
Piggy-Back Registration that involves an Underwriter or Underwriters shall
enter
into an underwriting agreement in customary form with the Underwriter or
Underwriters (or the representatives thereof) selected for such Piggy-Back
Registration.
4
2.2.2.
Reduction of Offering.
If the
managing Underwriter or Underwriters for a Piggy-Back Registration that is
to be
an underwritten offering advises the Company and the holders of Registrable
Securities in writing that the dollar amount or number or amount of securities
that the Company desires to sell, taken together with Ordinary Shares or other
securities, if any, as to which Registration has been demanded pursuant to
written contractual arrangements with persons other than the holders of
Registrable Securities hereunder, the Registrable Securities as to which
Registration has been requested under this Section 2.2, and the securities,
if
any, as to which Registration has been requested pursuant to the written
contractual piggy-back registration rights of other shareholders of the Company,
exceeds the Maximum Threshold, then the Company shall include in any such
Registration:
i)
If the
Registration is undertaken for the Company’s account: (a) first, the Ordinary
Shares or other securities that the Company desires to sell that can be sold
without exceeding the Maximum Threshold; (b) second, to the extent that the
Maximum Threshold has not been reached under the foregoing clause (a), the
Ordinary Shares or other securities, if any, comprised of Registrable
Securities, as to which Registration has been requested pursuant to the
applicable written contractual piggy-back registration rights of such security
holders, Pro Rata, that can be sold without exceeding the Maximum Threshold;
and
(c) third, to the extent that the Maximum Threshold has not been reached under
the foregoing clauses (a) and (b), the Ordinary Shares or other securities
for
the account of other persons that the Company is obligated to register pursuant
to written contractual piggy-back registration rights with such persons and
that
can be sold without exceeding the Maximum Threshold;
ii)
If
the Registration is a “demand” Registration undertaken at the demand of persons
other than the holders of Registrable Securities, (a) first, the Ordinary Shares
or other securities for the account of the demanding persons that can be sold
without exceeding the Maximum Threshold; (b) second, to the extent that the
Maximum Threshold has not been reached under the foregoing clause (a), the
Ordinary Shares or other securities that the Company desires to sell that can
be
sold without exceeding the Maximum Threshold; (c) third, to the extent that
the
Maximum Threshold has not been reached under the foregoing clauses (a) and
(b),
collectively the Ordinary Shares or other securities comprised (on an
as-converted to Ordinary Shares basis) of Registrable Securities, Pro Rata,
as
to which Registration has been requested pursuant to the terms hereof, that
can
be sold without exceeding the Maximum Threshold; and (d) fourth, to the extent
that the Maximum Threshold has not been reached under the foregoing clauses
(a),
(b) and (c), the Ordinary Shares or other securities (on an as-converted to
Ordinary Shares basis) for the account of other persons that the Company is
obligated to register pursuant to written contractual arrangements with such
persons, that can be sold without exceeding the Maximum Threshold.
5
2.2.3.
Withdrawal.
Any
holder of Registrable Securities may elect to withdraw such holder’s request for
inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement. The Company (whether on its own
determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a registration
statement at any time prior to the effectiveness of the Registration Statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses incurred
by the holders of Registrable Securities in connection with such Piggy-Back
Registration as provided in Section 3.3.
2.3.
Registrations on Form F-3.
The
holders of Registrable Securities that have been released from escrow under
the
Escrow Agreement may at any time after the date the Company consummates a
business combination, request in writing that the Company register the resale
of
any or all of such Registrable Securities on Form F-3 or any similar short-form
Registration that may be available at such time (“Form
F-3”);
provided,
however,
that
the Company shall not be obligated to effect such request through an
underwritten offering (other than pursuant to Section 2.1). Upon receipt of
such
written request, the Company will promptly give written notice of the proposed
Registration to all other holders of Registrable Securities, and, as soon as
practicable thereafter, effect the Registration of all or such portion of such
holder’s or holders’ Registrable Securities as are specified in such request,
together with all or such portion of the Registrable Securities or other
securities of the Company, if any, of any other holder or holders joining in
such request as are specified in a written request given within fifteen (15)
days after receipt of such written notice from the Company; provided further,
that
the Company shall not be obligated to effect any such Registration pursuant
to
this Section 2.3 (i) if Form F-3 is not available for such offering; or (ii)
if
the holders of the Registrable Securities, together with the holders of any
other securities of the Company entitled to inclusion in such Registration,
propose to sell Registrable Securities and such other securities (if any) at
any
aggregate price to the public of less than $500,000. Registrations effected
pursuant to this Section 2.3 shall not be counted as Demand Registrations
effected pursuant to Section 2.1.
3.
REGISTRATION PROCEDURES.
3.1.
Filings; Information.
Whenever the Company is required to effect the Registration of any Registrable
Securities pursuant to Section 2, the Company shall use its best efforts to
effect the Registration and sale of such Registrable Securities in accordance
with the intended method(s) of distribution thereof as expeditiously as
practicable, and in connection with any such request:
3.1.1.
Filing Registration Statement.
The
Company shall, within ninety (90) days after receipt of a request for a Demand
Registration pursuant to Section 2.1, prepare and file with the Commission
a
Registration Statement on any form for which the Company then qualifies or
which
counsel for the Company shall deem appropriate and which form shall be available
for the sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use
its best efforts to cause such Registration Statement to become effective and
use its best efforts to keep it effective for the period required by Section
3.1.3; provided,
however,
that
the Company shall have the right to defer any Demand Registration for up to
thirty (30) days, and any Piggy-Back Registration for such period as may be
applicable to deferment of any demand Registration to which such Piggy-Back
Registration relates, in each case if the Company shall furnish to the holders
a
certificate signed by a Chief Executive Officer of the Company stating that,
in
the good faith judgment of the board of directors of the Company, it would
be
materially detrimental to the Company and its shareholders for such Registration
Statement to be effected at such time; provided further,
however,
that
the Company shall not have the right to exercise the right set forth in the
immediately preceding proviso more than once in any 365-day period in respect
of
a Demand Registration hereunder.
6
3.1.2.
Copies.
The
Company shall, prior to filing a Registration Statement or prospectus, or any
amendment or supplement thereto, furnish without charge to the holders of
Registrable Securities included in such Registration, and such holders’ legal
counsel, copies of such Registration Statement as proposed to be filed, each
amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the
prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities
included in such Registration or legal counsel for any such holders may request
in order to facilitate the disposition of the Registrable Securities owned
by
such holders.
3.1.3.
Amendments and Supplements.
The
Company shall prepare and file with the Commission such amendments, including
post-effective amendments, and supplements to such Registration Statement and
the prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective and in compliance with the provisions of the
Securities Act until all Registrable Securities and other securities covered
by
such Registration Statement have been disposed of in accordance with the
intended method(s) of distribution set forth in such Registration Statement
(which period shall not exceed the sum of one hundred eighty (180) days plus
any
period during which any such disposition is interfered with by any stop order
or
injunction of the Commission or any governmental agency or court) or such
securities have been withdrawn.
3.1.4.
Notification.
After
the filing of a Registration Statement, the Company shall promptly, and in
no
event more than two (2) business days after such filing, notify the holders
of
Registrable Securities included in such Registration Statement of such filing,
and shall further notify such holders promptly and confirm such advice in
writing in all events within two (2) business days of the occurrence of any
of
the following: (i) when such Registration Statement becomes effective; (ii)
when
any post-effective amendment to such Registration Statement becomes effective;
(iii) the issuance or threatened issuance by the Commission of any stop order
(and the Company shall take all actions required to prevent the entry of such
stop order or to remove it if entered); or (iv) any request by the Commission
for any amendment or supplement to such Registration Statement or any prospectus
relating thereto, or for additional information, or of the occurrence of an
event requiring the preparation of a supplement or amendment to such prospectus
so that, as thereafter delivered to the purchasers of the securities covered
by
such Registration Statement, such prospectus will not contain an untrue
statement of a material fact or fail to state any material fact required to
be
stated therein or necessary to make the statements therein not misleading,
and
promptly make available to the holders of Registrable Securities included in
such Registration Statement any such supplement or amendment; except that before
filing with the Commission a Registration Statement or prospectus or any
amendment or supplement thereto, including documents incorporated by reference,
the Company shall furnish to the holders of Registrable Securities included
in
such Registration Statement and to the legal counsel for any such holders,
copies of all such documents proposed to be filed sufficiently in advance of
filing to provide such holders and legal counsel with a reasonable opportunity
to review such documents and comment thereon, and the Company shall not file
any
Registration Statement or prospectus or amendment or supplement thereto,
including documents incorporated by reference, to which such holders or their
legal counsel shall reasonably object.
7
3.1.5.
State Securities Laws Compliance.
The
Company shall use its best efforts to (i) register or qualify the Registrable
Securities covered by the Registration Statement under such securities or “blue
sky” laws of such jurisdictions in the United States as the holders of
Registrable Securities included in such Registration Statement (in light of
their intended plan of distribution) may request, and (ii) take such action
necessary to cause such Registrable Securities covered by the Registration
Statement to be registered with or approved by such other Governmental
Authorities as may be necessary by virtue of the business and operations of
the
Company and do any and all other acts and things that may be necessary or
advisable to enable the holders of Registrable Securities included in such
Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided,
however,
that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph or subject itself to taxation in any such jurisdiction.
3.1.6
Agreements for Disposition.
The
Company shall enter into customary agreements (including, if applicable, an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities. The representations, warranties and covenants of the
Company in any underwriting agreement which are made to or for the benefit
of
any Underwriters, to the extent applicable, shall also be made to and for the
benefit of the holders of Registrable Securities included in such Registration
Statement. No holder of Registrable Securities included in such Registration
Statement shall be required to make any representations or warranties in the
underwriting agreement except, if applicable, with respect to such holder’s
organization, good standing, authority, title to Registrable Securities, lack
of
conflict of such sale with such holder’s material agreements and organizational
documents, and with respect to written information relating to such holder
that
such holder has furnished in writing expressly for inclusion in such
Registration Statement. Holders of Registrable Securities shall agree to such
covenants and indemnification and contribution obligations for selling
shareholders as are customarily contained in agreements of that type. Further,
such holders shall cooperate fully in the preparation of the Registration
Statement and other documents relating to any offering in which they include
securities pursuant to Section 2 hereof. Each holder shall also furnish to
the
Company such information regarding itself, the Registrable Securities held
by
such holder and the intended method of disposition of such securities as shall
be reasonably required to effect the registration of the Registrable
Securities
3.1.7.
Cooperation.
The
principal executive officer of the Company, the principal financial officer
of
the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully
in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement
with
respect to such offering and all other offering materials and related documents
(including road show materials), and participation in meetings with
Underwriters, attorneys, accountants and potential investors.
3.1.8.
Records.
The
Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such Registration Statement and
any
attorney, accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of
the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information requested by any of them in connection with such
Registration Statement.
8
3.1.9.
Opinions and Comfort Letters.
The
Company shall furnish to each holder of Registrable Securities included in
any
Registration Statement a signed counterpart, addressed to such holder, of (i)
any opinion of counsel to the Company delivered to any Underwriter, and (ii)
any
comfort letter from the Company’s independent public accountants delivered to
any Underwriter. In the event no legal opinion is delivered to any Underwriter,
the Company shall furnish to each holder of Registrable Securities included
in
such Registration Statement, at any time that such holder elects to use a
prospectus, an opinion of counsel to the Company (which may be based solely
on
the oral advice of the Commission staff) to the effect that the Registration
Statement containing such prospectus has been declared effective and that no
stop order is in effect.
3.1.10.
Earnings Statement.
The
Company shall comply with all applicable rules and regulations of the Commission
and the Securities Act, and make available to its shareholders, as soon as
practicable, an earnings statement covering a period of twelve (12) months,
beginning within three (3) months after the effective date of the Registration
Statement, which earnings statement shall satisfy the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder.
3.1.11.
Listing.
The
Company shall use its best efforts to cause all Registrable Securities included
in any Registration to be listed on such exchanges or otherwise designated
for
trading in the same manner as similar securities issued by the Company are
then
listed or designated or, if no such similar securities are then listed or
designated, in a manner satisfactory to the holders of a majority of the
Registrable Securities included in such Registration.
3.2.
Obligation to Suspend Distribution.
Upon
receipt of any notice from the Company of the happening of any event of the
kind
described in Section 3.1.4(iv), or, in the case of a resale Registration on
Form
F-3 pursuant to Section 2.3 hereof, upon any suspension by the Company, pursuant
to a written xxxxxxx xxxxxxx compliance program adopted by the Company’s board
of directors, of the ability of all “insiders” covered by such program to
transact in the Company’s securities because of the existence of material
non-public information, each holder of Registrable Securities included in any
Registration shall immediately discontinue disposition of such Registrable
Securities pursuant to the Registration Statement covering such Registrable
Securities until such holder receives the supplemented or amended prospectus
contemplated by Section 3.1.4(iv) or the restriction on the ability of
“insiders” to transact in the Company’s securities is removed, as applicable,
and, if so directed by the Company, each such holder will deliver to the Company
all copies, other than permanent file copies then in such holder’s possession,
of the most recent prospectus covering such Registrable Securities at the time
of receipt of such notice.
3.3.
Registration Expenses.
The
Company shall bear all costs and expenses incurred in connection with any Demand
Registration pursuant to Section 2.1, any Piggy-Back Registration pursuant
to
Section 2.2, and any Registration on Form F-3 effected pursuant to Section
2.3,
and all expenses incurred in performing or complying with its other obligations
under this Agreement, whether or not the Registration Statement becomes
effective, including, without limitation: (i) all registration and filing fees;
(ii) fees and expenses of compliance with securities or “blue sky” laws
(including fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities); (iii) printing expenses; (iv)
the
Company’s internal expenses (including, without limitation, all salaries and
expenses of its officers and employees); (v) the fees and expenses incurred
in
connection with the listing of the Registrable Securities as required by Section
3.1.11; (vi) Financial Industry Regulatory Authority, Inc. fees; (vii) fees
and
disbursements of counsel for the Company and fees and expenses for independent
certified public accountants retained by the Company (including the expenses
or
costs associated with the delivery of any opinions or comfort letters requested
pursuant to Section 3.1.9); (viii) the fees and expenses of any special experts
retained by the Company in connection with such Registration and (ix) the fees
and expenses of one legal counsel selected by the holders of a
majority-in-interest (on an as-converted to Ordinary Shares basis) of the
Registrable Securities included in such Registration. The Company shall have
no
obligation to pay any underwriting discounts or selling commissions attributable
to the Registrable Securities being sold by the holders thereof, which
underwriting discounts or selling commissions shall be borne by such holders.
Additionally, in an underwritten offering, all selling shareholders and the
Company shall bear the expenses of the underwriter pro rata in proportion to
the
respective amount of shares each is selling in such offering.
9
3.4.
Information.
The
holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any,
in
connection with the preparation of any Registration Statement, including
amendments and supplements thereto, in order to effect the Registration of
any
Registrable Securities under the Securities Act pursuant to Section 2 and in
connection with the Company’s obligation to comply with federal and applicable
state securities laws and applicable rules and regulations of governing
agencies.
3.5. Holder
Obligations.
No
holder of Registrable Securities may participate in any underwritten offering
pursuant to this Section 3 unless such holder (i) agrees to sell only such
holder’s Registrable Securities on the basis reasonably provided in any
underwriting agreement, and (ii) completes, executes and delivers any and all
questionnaires, powers of attorney, custody agreements, indemnities,
underwriting agreements and other documents reasonably required by or under
the
terms of any underwriting agreement or as reasonably requested by the
Company.
4.
INDEMNIFICATION AND CONTRIBUTION.
4.1.
Indemnification by the Company.
The
Company agrees to indemnify and hold harmless each of the Investors and each
other holder of Registrable Securities, and each of their respective officers,
employees, affiliates, directors, partners, members, attorneys and agents,
and
each person, if any, who controls an Investor and each other holder of
Registrable Securities (within the meaning of Section 15 of the Securities
Act
or Section 20 of the Exchange Act) (each, an “Investor
Indemnified Party”),
from
and against any expenses, losses, judgments, claims, damages or liabilities,
whether joint or several, arising out of or based upon any untrue statement
(or
allegedly untrue statement) of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment
or
supplement to such Registration Statement, or arising out of or based upon
any
omission (or alleged omission) to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder applicable to the Company and relating to action or
inaction required of the Company in connection with any such Registration;
and
the Company shall promptly reimburse the Investor Indemnified Party for any
legal and any other expenses reasonably incurred by such Investor Indemnified
Party in connection with investigating and defending any such expense, loss,
judgment, claim, damage, liability or action; provided,
however,
that
the Company will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon any
untrue statement or allegedly untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus,
or summary prospectus, or any such amendment or supplement, in reliance upon
and
in conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein. The Company also shall indemnify
any
Underwriter of the Registrable Securities, their officers, affiliates,
directors, partners, members and agents and each person who controls such
Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1, as may be reasonably required by such
Underwriter.
10
4.2.
Indemnification by Holders of Registrable Securities.
Each
selling holder of Registrable Securities will, in the event that any
Registration is being effected under the Securities Act pursuant to this
Agreement of any Registrable Securities held by such selling holder, indemnify
and hold harmless the Company, each of its directors and officers and each
underwriter (if any), and each other selling holder and each other person,
if
any, who controls another selling holder or such underwriter within the meaning
of the Securities Act, against any expenses, losses, claims, judgments, damages
or liabilities, whether joint or several, insofar as such expenses, losses,
claims, judgments, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or allegedly untrue statement
of a
material fact contained in any Registration Statement under which the sale
of
such Registrable Securities was registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained in
the
Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or the alleged
omission to state a material fact required to be stated therein or necessary
to
make the statement therein not misleading, if the statement or omission was
made
in reliance upon and in conformity with information furnished in writing to
the
Company by such selling holder expressly for use therein, and shall reimburse
the Company, its directors and officers, and each other selling holder or
controlling person for any legal or other expenses reasonably incurred by any
of
them in connection with investigation or defending any such expense, loss,
claim, damage, liability or action. Each selling holder’s indemnification
obligations hereunder shall be several and not joint and shall be limited to
the
amount of any net proceeds actually received by such selling
holder.
4.3.
Conduct of Indemnification Proceedings.
Promptly after receipt by any person of any notice of any loss, claim, damage
or
liability or any action in respect of which indemnity may be sought pursuant
to
Section 4.1 or 4.2, such person (the “Indemnified
Party”)
shall,
if a claim in respect thereof is to be made against any other person for
indemnification hereunder, notify such other person (the “Indemnifying
Party”)
in
writing of the loss, claim, judgment, damage, liability or action; provided,
however,
that
the failure by the Indemnified Party to notify the Indemnifying Party shall
not
relieve the Indemnifying Party from any liability that the Indemnifying Party
may have to such Indemnified Party hereunder, except and solely to the extent
the Indemnifying Party is actually prejudiced by such failure. If the
Indemnified Party is seeking indemnification with respect to any claim or action
brought against the Indemnified Party, then the Indemnifying Party shall be
entitled to participate in such claim or action, and, to the extent that it
wishes, jointly with all other Indemnifying Parties, to assume control of the
defense thereof with counsel satisfactory to the Indemnified Party. After notice
from the Indemnifying Party to the Indemnified Party of its election to assume
control of the defense of such claim or action, the Indemnifying Party shall
not
be liable to the Indemnified Party for any legal or other expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof other
than reasonable costs of investigation; provided,
however,
that in
any action in which both the Indemnified Party and the Indemnifying Party are
named as defendants, the Indemnified Party shall have the right to employ
separate counsel (but no more than one such separate counsel) to represent
the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses
of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties
by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, consent to entry of judgment or effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such judgment or
settlement includes an unconditional release of such Indemnified Party from all
liability arising out of such claim or proceeding.
11
4.4.
Contribution.
4.4.1.
If
the indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3
is
unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party,
in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid
or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
fault of the Indemnified Parties and the Indemnifying Parties in connection
with
the actions or omissions which resulted in such loss, claim, damage, liability
or action, as well as any other relevant equitable considerations. The relative
fault of any Indemnified Party and any Indemnifying Party shall be determined
by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material
fact
relates to information supplied by such Indemnified Party or such Indemnifying
Party and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
4.4.2.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by pro rata allocation or by any
other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding Section
4.4.1.
4.4.3.
The amount paid or payable by an Indemnified Party as a result of any loss,
claim, damage, liability or action referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses incurred by such Indemnified Party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.4, no holder of Registrable
Securities shall be required to contribute any amount in excess of the dollar
amount of the net proceeds (after payment of any underwriting fees, discounts,
commissions or taxes) actually received by such holder from the sale of
Registrable Securities which gave rise to such contribution obligation. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
5.
UNDERWRITING AND DISTRIBUTION.
5.1.
Rule 144.
The
Company covenants that it shall file any reports required to be filed by it
under the Securities Act and the Exchange Act and shall take such further action
as the holders of Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holders to sell Registrable
Securities without Registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such Rules
may be amended from time to time, or any similar Rule or regulation hereafter
adopted by the Commission.
6.
MISCELLANEOUS.
6.1.
Other Registration Rights.
Except
as set forth in the Warrant Agreement, the Company represents and warrants
that
no person, other than a holder of the Registrable Securities, has any right
to
require the Company to register any shares of the Company’s capital stock for
sale or to include shares of the Company’s capital stock in any Registration
filed by the Company for the sale of shares of capital stock for its own account
or for the account of any other person.
6.2.
Waiver of Claims against Trust Account.
Notwithstanding any other provision of this Agreement, each of the Investors
confirms its understanding that the Company has established a Trust Account
relating to the Units being sold in the Company’s initial public offering. Each
Investor acknowledges that the Trust Account will exist for the benefit of
the
Company’s public shareholders and the monies from the Trust Account may only be
disbursed upon the occurrence of certain events, as more fully described in
the
prospectus relating to the Units. Each Investor agrees that neither it nor
any
of its affiliates (with the exception of the Company, to the extent it is an
affiliate) have or will have any right, title, interest or claim in or to the
monies in the Trust Account, and each Investor hereby waives any and all right,
title, interest of claim of any kind in or to any distribution of any property
held in the Trust Account that it or its respective affiliates (with the
exception of the Company, to the extent it is an affiliate) may have now or
in
the future and hereby agrees not to seek recourse, reimbursement, payment or
satisfaction for any claim of any kind against the Trust Account in respect
of
the Company’s indemnification obligations set forth in this
Agreement.
12
6.3.
Assignment; Third Party Beneficiaries.
This
Agreement and the rights, duties and obligations of the Company hereunder may
not be assigned or delegated by the Company in whole or in part. This Agreement
and the rights, duties and obligations of the holders of Registrable Securities
hereunder may be, and shall be deemed to be, freely assigned or delegated by
such holder of Registrable Securities in conjunction with and to the extent
of
any permitted transfer of Registrable Securities by any such holder. This
Agreement and the provisions hereof shall be binding upon and shall inure to
the
benefit of each of the parties, to the Representative and its successors and
the
permitted assigns of each Investor or holder of Registrable Securities or of
any
respective assignee of the Investors or holder of Registrable Securities. This
Agreement is not intended to confer any rights or benefits on any persons that
are not party hereto other than as expressly set forth in Article 4 and this
Section 6.3. Notwithstanding the foregoing, the Representative, on behalf of
itself and the other Underwriters of the Company’s initial public offering,
shall be deemed to be an intended third party beneficiary of this Agreement.
6.4.
Notices.
All
notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”)
required or permitted to be given hereunder or which are given with respect
to
this Agreement shall be in writing and shall be personally served, delivered
by
reputable air courier service with charges prepaid, or transmitted by hand
delivery, telex or facsimile, addressed as set forth below, or to such other
address as such party shall have specified most recently by written notice.
Notice shall be deemed given on the date of service or transmission if
personally served or transmitted by telex or facsimile; provided, that if such
service or transmission is not on a business day or is after normal business
hours, then such notice shall be deemed given on the next business day. Notice
otherwise sent as provided herein shall be deemed given on the next business
day
following timely delivery of such notice to a reputable air courier service
with
an order for next-day delivery.
To
the
Company:
SoftForum
Xxxxxxxx
0xx
Xxxxx
000-0
Xxxxxxxxx
Xxxxxxx,
Xxxxx, Xxxxx 135-170
Attn:
Sang-Xxxx Xxx, Chairman and Chief Executive Officer
with
a
copy to:
Broadband
Capital Management, LLC
000
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
XX 00000
Fax
No.:
(000) 000-0000
Attention:
Xxxxx Xxxxxx
To
the
Investors, to
the
address for such Investor on file with the Company at such time.
13
and
to:
Xxxxx
Xxxxx Xxxx Xxxxxx Xxxxxxx and Xxxxx, PC
000
Xxxxx
Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn: Xxxxxxx
X. Xxxx, Esq.
and:
Ellenoff
Xxxxxxxx & Schole LLP
000
Xxxx
00xx Xxxxxx, 00xx xxxxx
Xxx
Xxxx,
XX 00000
Attn:
Xxxxxxx X. Xxxxxxxx, Esq.
6.5.
Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible that is
valid and enforceable.
6.6.
Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original, and all of which taken together shall constitute one and
the
same instrument.
6.7.
Entire Agreement.
This
Agreement (including all agreements entered into pursuant hereto and all
certificates and instruments delivered pursuant hereto and thereto) constitute
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.
6.8.
Modifications and Amendments.
No
amendment, modification or termination of this Agreement shall be binding upon
any party unless executed in writing by such party. Notwithstanding the
foregoing, any and all parties must obtain the written consent of the
Representative and a majority-in-interest of the Demanding Holders to amend
or
modify this Agreement.
6.9.
Titles and Headings.
Titles
and headings of sections of this Agreement are for convenience only and shall
not affect the construction of any provision of this Agreement.
6.10.
Specific Performance.
Each of
the parties acknowledges and agrees that the other parties would be damaged
irreparably in the event any of the provisions of this Agreement are not
performed in accordance with their specific terms or otherwise are breached.
Accordingly, each of the parties agrees that the other parties shall be entitled
to an injunction or injunctions (without the necessity of posting a bond or
other security) to prevent breaches of the provisions of this Agreement and
to
enforce specifically this Agreement and the terms and provisions hereof in
any
action instituted in any court of the United States or any state or other
foreign court or governmental body having jurisdiction over the parties and
the
matter, in addition to any other remedy to which they may be entitled, at law
or
in equity.
6.11.
Waivers and Extensions.
Any
party to this Agreement may waive any right, breach or default which such party
has the right to waive, provided that such waiver will not be effective against
the waiving party unless it is in writing, is signed by such party, and
specifically refers to this Agreement. Waivers may be made in advance or after
the right waived has arisen or the breach or default waived has occurred. Any
waiver may be conditional. No waiver of any breach of any agreement or provision
herein contained shall be deemed a waiver of any preceding or succeeding breach
thereof nor of any other agreement or provision herein contained. No waiver
or
extension of time for performance of any obligations or acts shall be deemed
a
waiver or extension of the time for performance of any other obligations or
acts.
14
6.12.
Remedies Cumulative.
In the
event that the Company fails to observe or perform any covenant or agreement
to
be observed or performed under this Agreement, the Investors or any other holder
of Registrable Securities may proceed to protect and enforce its rights by
suit
in equity or action at law, whether for specific performance of any term
contained in this Agreement or for an injunction against the breach of any
such
term or in aid of the exercise of any power granted in this Agreement or to
enforce any other legal or equitable right, or to take any one or more of such
actions, without being required to post a bond. None of the rights, powers
or
remedies conferred under this Agreement shall be mutually exclusive, and each
such right, power or remedy shall be cumulative and in addition to any other
right, power or remedy, whether conferred by this Agreement or now or hereafter
available at law, in equity, by statute or otherwise.
6.13.
Governing Law.
This
Agreement shall be governed by, interpreted under, and construed in accordance
with the internal laws of the State of New York applicable to agreements made
and to be performed within the State of New York, without giving effect to
any
choice-of-law provisions thereof that would compel the application of the
substantive laws of any other jurisdiction. The parties hereto agree that any
action, proceeding or claim against the undersigned 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
parties
hereto
hereby
waive any objection to such exclusive jurisdiction and that such courts
represent an inconvenient
forum. The
Company hereby appoints, without power of revocation, Mintz, Levin, Cohn,
Ferris, Glovsky & Popeo, P.C.,
at the
address set forth in Section 6.4 hereto, as its agent to accept and acknowledge
on its behalf service of any and all process which may be served in any action,
proceeding or counterclaim in any way relating to or arising out of this letter
agreement.
6.14.
Waiver of Trial by Jury.
Each
party hereby irrevocably and unconditionally waives the right to a trial by
jury
in any action, suit, counterclaim or other proceeding (whether based on
contract, tort or otherwise) arising out of, connected with or relating to
this
Agreement, the transactions contemplated hereby, or the actions of the Investors
in the negotiation, administration, performance or enforcement
hereof.
[Remainder
of page intentionally left blank.
Signature
page to follow.]
15
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to
be executed and delivered by their duly authorized representatives as of the
date first written above.
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_______________________________________________
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By:
Sang-Xxxx Xxx, Chairman and Chief Executive Officer
|
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INVESTORS:
|
|
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_______________________________________________
|
|
|
Sang-Xxxx
Xxx
|
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_______________________________________________
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Yong
Xxxx Xxxx
|
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_______________________________________________
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Jhong
Xxxx Xxx
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_______________________________________________
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Soo
Xxxxx Xxx
|
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_______________________________________________
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Moon
Youl Ban
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[Signature
Page to Registration Rights Agreement]
16
