Initial Public Offering (IPO): Registration Statement of a Foreign Private Issuer — Form F-1 Filing Table of Contents
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1: F-1 Registration Statement of a Foreign Private Issuer HTML 812K
2: EX-1.1 Underwriting Agreement HTML 297K
3: EX-3.1 Articles of Incorporation/Organization or By-Laws HTML 14K
4: EX-3.2 Articles of Incorporation/Organization or By-Laws HTML 9K
5: EX-3.3 Articles of Incorporation/Organization or By-Laws HTML 364K
6: EX-4.1 Instrument Defining the Rights of Security Holders HTML 27K
7: EX-4.2 Instrument Defining the Rights of Security Holders HTML 29K
8: EX-4.3 Instrument Defining the Rights of Security Holders HTML 33K
9: EX-4.4 Instrument Defining the Rights of Security Holders HTML 32K
10: EX-4.5 Instrument Defining the Rights of Security Holders HTML 93K
11: EX-5.1 Opinion re: Legality HTML 29K
12: EX-5.2 Opinion re: Legality HTML 26K
13: EX-10.1 Material Contract HTML 60K
22: EX-10.10 Material Contract HTML 46K
23: EX-10.11 Material Contract HTML 41K
24: EX-10.12 Material Contract HTML 32K
25: EX-10.13 Material Contract HTML 28K
26: EX-10.14 Material Contract HTML 28K
27: EX-10.15 Material Contract HTML 28K
28: EX-10.16 Material Contract HTML 28K
29: EX-10.17 Material Contract HTML 29K
30: EX-10.18 Material Contract HTML 28K
14: EX-10.2 Material Contract HTML 82K
15: EX-10.3 Material Contract HTML 15K
16: EX-10.4 Material Contract HTML 111K
17: EX-10.5 Material Contract HTML 46K
18: EX-10.6 Material Contract HTML 25K
19: EX-10.7 Material Contract HTML 25K
20: EX-10.8 Material Contract HTML 118K
21: EX-10.9 Material Contract HTML 45K
31: EX-23.1 Consent of Experts or Counsel HTML 12K
China
Fundamental Acquisition Corporation, a Cayman Islands corporation (“Company”),
hereby confirms its agreement with Chardan Capital Markets, LLC (“Chardan”
or
the
“Representative”)
and
with the other underwriters named on Schedule
A
hereto
for which Chardan is acting as representative (the Representative and the other
underwriters being collectively referred to herein as the “Underwriters”
or,
individually, an “Underwriter”)
as
follows:
1.Purchase
and Sale of Securities.
1.1.Firm
Securities.
1.1.1.Purchase
of Firm Units.
On the
basis of the representations and warranties herein contained, but subject to
the
terms and conditions herein set forth, the Company agrees to issue and sell
to
the several Underwriters, severally and not jointly, an aggregate of 3,750,000
units (“Firm
Units”)
of the
Company’s securities at a purchase price (net of discounts and commissions) of
$7.44 per Firm Unit subject to the payment to the Representative of the Deferred
Discount (as defined in Section 1.5 hereof) of $0.28 per Firm Unit. The
Underwriters, severally and not jointly, agree to purchase from the Company
the
number of Firm Units set forth opposite their respective names on Schedule
A
at a
purchase price (net of discounts and commissions) of $7.44 per Firm Unit subject
to the payment to the Representative of the Deferred Discount of $0.28 per
Firm
Unit pursuant to Section 1.5 hereof. The Firm Units are to be offered initially
to the public (“Offering”)
at the
offering price of $8.00 per Firm Unit. Each Firm Unit consists of one ordinary
share of the Company, par value $.001 per share (“Ordinary
Share”),
and
one warrant to purchase one Ordinary Share (“Warrant(s)”).
The
terms of the Warrants are provided for in the form of a Warrant Agreement (as
defined in Section 2.24 hereof.)
1.1.2.Separate
Trading.
The
Ordinary Shares and the Warrants included in the Firm Units will not be
separately transferable until the 90th business day following the Effective
Date
subject to (i) the preparation of an audited balance sheet of the Company
reflecting receipt by the Company of the proceeds of the Offering and the filing
of such audited balance sheet with the Securities and Exchange Commission
(“Commission”)
on a
Form 6-K or similar form by the Company which includes such balance sheet;
and
(ii) the Company issues a press release and files the same with the Commission
in a Current Report on Form 6-K announcing when such separate trading will
begin.
Chardan
Capital Markets, LLC
________
__, 2008
Page
2
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46
1.1.3.Payment
and Delivery.
Delivery and payment for the Firm Units shall be made at 10:00 A.M., New York
time, on the third business day following commencement of trading of the Firm
Units or at such earlier time as shall be agreed upon by the Representative
and
the Company at the offices of the Representative or at such other place as
shall
be agreed upon by the Representative and the Company. The hour and date of
delivery and payment for the Firm Units is referred to herein as the
“Closing
Date.”
Payment for the Firm Units shall be made on the Closing Date at the
Representative’s election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds, payable
as follows: $28,250,000 ($32,592,500 if the Over-allotment Option (as defined
in
Section 1.2) is exercised in full) of the proceeds received by the Company
for
the Firm Units shall be deposited into the trust account (“Trust
Account”)
established by the Company for the benefit of the public shareholders and the
Underwriters, as described in the Registration Statement and pursuant to the
terms of a Trust Agreement (as defined in Section 2.26 hereof) and $700,000
shall be paid to the order of the Company upon delivery to you of certificates
(in form and substance satisfactory to the Underwriters) representing the Firm
Units (or through the facilities of the Depository Trust Company (“DTC”))
for
the account of the Underwriters. The Firm Units shall be registered in such
name
or names and in such authorized denominations as the Representative may request
in writing at least two business days prior to the Closing Date. The Company
will permit the Representative to examine and package the Firm Units for
delivery, at least one full business day prior to the Closing Date. The Company
shall not be obligated to sell or deliver the Firm Units except upon tender
of
payment by the Representative for all the Firm Units.
1.2.Over-Allotment
Option.
1.2.1.Option
Units.
For the
purposes of covering any over-allotments in connection with the distribution
and
sale of the Firm Units, the Underwriters are hereby granted, severally and
not
jointly, an option to purchase up to an additional 562,500 units from the
Company (“Over-allotment
Option”).
Such
additional 562,500 units shall be identical in all respects to the Firm Units
and are hereinafter referred to as “Option
Units.”
The
Firm Units and the Option Units are hereinafter collectively referred to as
the
“Units”
and
the
Units, the Ordinary Shares and the Warrants included in the Units and the
Ordinary Shares issuable upon exercise of the Warrants are hereinafter referred
to collectively as the “Public
Securities.”
The
purchase price to be paid for each Option Unit (net of discounts and
commissions) will be $7.44 per Firm Unit subject to the payment to the
Representative of the Deferred Discount of $0.28 per Firm Unit pursuant to
Section 1.5 hereof. The Option Units are to be offered initially to the public
at the offering price of $8.00 per Option Unit.
Chardan
Capital Markets, LLC
________
__, 2008
Page
3
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46
1.2.2.Exercise
of Option.
The
Over-allotment Option granted pursuant to Section 1.2 hereof may be exercised
by
the Representative as to all (at any time) or any part (from time to time)
of
the Option Units within 45 days after the Effective Date (hereinafter defined).
The Underwriters will not be under any obligation to purchase any Option Units
prior to the exercise of the Over-allotment Option. The Over-allotment Option
granted hereby may be exercised by the giving of oral notice to the Company
from
the Representative, which must be confirmed in writing by overnight mail or
facsimile transmission setting forth the number of Option Units to be purchased
and the date and time for delivery of, and payment for, the Option Units, which
will not be later than five (5)business
days after the date of the notice or such other time as shall be agreed upon
by
the Company and the Representative, at the offices of the Representative or
at
such other place and in such other manner as shall be agreed upon by the Company
and the Representative. If such delivery and payment for the Option Units does
not occur on the Closing Date, the date and time of the closing for such Option
Units will be as set forth in the notice (hereinafter the “Option
Closing Date”).
Upon
exercise of the Over-allotment Option, the Company will become obligated to
convey to the Underwriters, and, subject to the terms and conditions set forth
herein, the Underwriters will become obligated to purchase, the number of Option
Units specified in such notice. If any Option Units are to be purchased each
Underwriter agrees, severally and not jointly, to purchase the number of Option
Units that bears the same proportion to the total number of Firm Units set
forth
in Schedule
A
opposite
the name of such Underwriter. The date that the registration statement for
the
Offering is declared effective by the Securities and Exchange Commission is
hereinafter referred to as the “Effective
Date”.
1.2.3.Payment
and Delivery.
Payment
for the Option Units shall be made on the Option Closing Date at the
Representative’s election by wire transfer in Federal (same day) funds or by
certified or bank cashier’s check(s) in New York Clearing House funds, by
deposit of the sum of $7.44 per Option Unit (subject to the payment to the
Representative of the Deferred Discount of $0.28 per Option Unit pursuant to
Section 1.5 hereof) upon delivery to the Representative of certificates (in
form
and substance satisfactory to the Underwriters) representing the Option Units
(or through the facilities of DTC) for the account of the Underwriters. The
certificates representing the Option Units to be delivered will be in such
denominations and registered in such
names as the Representative requests not less than two business days prior
to
the Closing Date or the Option Closing Date, as the case may be, and will be
made available to the Representative for inspection, checking and packaging
at
the aforesaid office of the Company’s transfer agent or correspondent not less
than one full business day prior to such Closing Date or Option Closing
Date.
1.3.Representative’s
Purchase Option.
1.3.1.Purchase
Option.
The
Company hereby agrees to issue and sell to the Representative (and/or their
designees) on the Effective Date an option (“Representative’s
Purchase Option”)
to
purchase up to an aggregate of 225,000 units (“Representative’s
Units”)
for an
aggregate purchase price of $100.00. Each of the Representative’s Units is
identical to the Firm Units. The Representative’s Purchase Option shall be
exercisable, in whole or in part, commencing on the later of the consummation
of
a Business Combination and the twelve month anniversary of the Effective Date
and terminating on the five year anniversary of the Effective Date at an initial
exercise price per Representative’s Unit of $10.00, which is equal to one
hundred and twenty-five percent (125%) of the initial public offering price
of a
Unit. The Representative’s Purchase Option, the Representative’s Units, the
Ordinary Shares (“Representative’s
Shares”)
and
the Warrants (“Representative’s
Warrants”)
included in the Representative’s Units and the Ordinary Shares issuable upon
exercise of the Representative’s Warrants are hereinafter referred to
collectively as the “Representative’s
Securities.”
The
Public Securities and the Representative’s Securities are hereinafter referred
to collectively as the “Securities.”
The
Representative understands and agrees that there are significant restrictions
against transferring the Representative’s Purchase Option and underlying
securities, as set forth in Section 3 of the Representative’s Purchase Option.
Specifically, the Representative’s Securities are subject to a 180-day lock-up
pursuant to Rule 2710(g)(1) of the NASD Conduct Rules of the Financial Industry
Regulatory Authority (“FINRA”).
Chardan
Capital Markets, LLC
________
__, 2008
Page 4
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46
1.3.2.Delivery
and Payment.
Delivery and payment for the Representative’s Purchase Option shall be made on
the Closing Date. The Company shall deliver to the Representative, upon payment
therefor, certificates for the Representative’s Purchase Option in the name or
names and in such authorized denominations as the Representative may
request.
1.4.Private
Placement.
Prior
to the Effective Date, Ralco Capital Limited, Rising Year Group Limited,
Oliveria Capital, LLC, Globis International Investments LLC, Globis Capital
Partners, L.P., Globis Overseas Fund Ltd. and Chardan Capital Markets, LLC
(“Placement
Investors”),
will
purchase from the Company pursuant to the Warrant Purchase Agreements (as
defined in Section 2.25.2 hereof) an aggregate of 1,944,444 warrants
(“Private
Placement Warrants”)
at a
purchase price of $0.90 per Private Placement Warrant in a private placement
(“Private
Placement”).
The
Private Placement Warrants and the Ordinary Shares issuable upon exercise of
the
Warrants are hereinafter referred to collectively as the “Placement
Securities.”
No
underwriting discounts, commissions or placement fees have been or will be
payable in connection with the Private Placement. None of the Placement
Securities may be sold, assigned or transferred by the Placement Investors
until
after consummation of a Business Combination (as defined in Section 2.17
hereof). The Placement Investors shall have no right to any liquidation
distributions with respect to any portion of the Placement Securities in the
event the Company fails to consummate a Business Combination, whereupon the
Private Placement Warrants will expire worthless.
1.5.Underwriters’
Deferred Discount.
The
Representative, on behalf of itself and the other Underwriters, agrees that
3.5%
of the gross proceeds from the sale of the Units ($1,050,000) (or $1,207,500
if
the Over-allotment Option is exercised in full) (collectively, such amounts
are
the “Deferred
Discount “)
will
be deposited in and held in the Trust Account and payable to the Representative
with respect to any Ordinary Shares that have not been converted upon the
consummation of a Business Combination. The Representative, on behalf of itself
and the other Underwriters, agrees that the several Underwriters shall forfeit
any rights or claims to the Deferred Discount in respect of any IPO Shares
that
are redeemed pursuant to Section 7.6 hereof. Concurrently with the closing
of
the Business Combination, the Company shall pay the Representative by wire
transfer $0.28 per Unit sold in the Offering that has not been converted into
cash in accordance with the terms of the Trust Agreement. In addition, in the
event that the Company is unable to consummate a Business Combination and
Continental Stock Transfer & Trust Company (“Trustee”), the trustee of the
Trust Account, commences liquidation of the Trust Account as provided in the
Trust Agreement, the Representative, on behalf of itself and the other
Underwriters, agrees that (i) the several Underwriters shall forfeit any rights
or claims to the Deferred Discount; and (ii) the Deferred Discount shall be
distributed on a pro-rata basis among the holders of the IPO Shares (defined
in
Section 7.6 hereof).
Chardan
Capital Markets, LLC
________
__, 2008
Page
5
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2.Representations
and Warranties of the Company.
The Company represents and warrants to the Underwriters as follows:
2.1. Filing
of
Registration Statement.
2.1.1.Pursuant
to the Act.
The
Company has filed with the Commission a registration statement and an amendment
or amendments thereto, on Form F-1 (File No. 333-______________), including
any
related preliminary prospectus (“Preliminary
Prospectus”),
for
the registration of the Public Securities and the Representative’s Securities
under the Securities Act of 1933, as amended (“Act”), which registration
statement and amendment or amendments have been prepared by the Company in
conformity with the requirements of the Act, and the rules and regulations
(“Regulations”)
of the
Commission under the Act. The conditions for use of Form F-1 to register the
Offering under the Act, as set forth in the General Instructions to such Form,
have been satisfied. Except as the context may otherwise require, such
registration statement, as amended, on file with the Commission at the time
the
registration statement becomes effective (including the prospectus, financial
statements, schedules, exhibits and all other documents filed as a part thereof
or incorporated therein and all information deemed to be a part thereof as
of
such time pursuant to Rule 430A of the Regulations), is hereinafter called
the
“Registration
Statement,”
and
the form of the final prospectus dated the Effective Date included in the
Registration Statement (or, if applicable, the form of final prospectus
containing information permitted to be omitted at the time of effectiveness
by
Rule 430A of the Regulations filed with the Commission pursuant to Rule 424
of
the Regulations), is hereinafter called the “Prospectus.”
For
purposes of this Agreement, “Time
of Sale”,
as
used in the Act, means 5:00 p.m., New York City time, on the date of this
Agreement. Prior to the Time of Sale, the Company prepared a preliminary
prospectus, dated _________, 2008, for distribution by the Underwriters
(“Sale
Preliminary Prospectus”).
If
the
Company has filed, or is required pursuant to the terms hereof to file, a
registration statement pursuant to Rule 462(b) under the Act registering
additional Securities of any type (a “Rule
462(b) Registration Statement”),
then,
unless otherwise specified, any reference herein to the term “Registration
Statement”
shall
be deemed to include such Rule 462(b) Registration Statement. Other than a
Rule
462(b) Registration Statement, which, if filed, becomes effective upon filing,
no other document with respect to the Registration Statement has heretofore
been
filed with the Commission. All of the Public Securities have been registered
under the Act pursuant to the Registration Statement or, if any Rule 462(b)
Registration Statement is filed, will be duly registered under the Securities
Act with the filing of such Rule 462(b) Registration Statement. The
Registration Statement has been declared effective by the Commission on the
date
hereof. If, subsequent to the date of this Agreement, the Company or the
Representative has determined that at the Time of Sale the Sale Preliminary
Prospectus included an untrue statement of a material fact or omitted a
statement of material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading and have
agreed to provide an opportunity to purchasers of the Firm Units to terminate
their old purchase contracts and enter into new purchase contracts, then the
Sale Preliminary Prospectus will be deemed to include any additional information
available to purchasers at the time of entry into the first such new purchase
contract.
Chardan
Capital Markets, LLC
________
__, 2008
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2.1.2.Pursuant
to the Exchange Act.
The Company has filed with the Commission a Form 8-A (File Number )
providing for the registration under the Securities Exchange Act of 1934, as
amended (“Exchange
Act”),
of
the Units, the Ordinary Shares and the Warrants. The registration of the
Units, Ordinary Shares and Warrants under the Exchange Act has been declared
effective by the Commission on the date hereof.
2.2.No
Stop Orders, etc.
Neither the Commission nor, to the Company’s knowledge, any foreign or state
regulatory authority has issued any order or threatened to issue any order
preventing or suspending the use of any Sale Preliminary Prospectus or
Prospectus or has instituted or, to the best of the Company’s knowledge,
threatened to institute any proceedings with respect to such an
order.
2.3.Disclosures
in Registration Statement.
2.3.1.10b-5
Representation.
At the time of effectiveness of the Registration Statement (or at the time
any
post-effective amendment to the Registration Statement) and at all times
subsequent thereto up to the Closing Date and the Option Closing Date, if any,
the Registration Statement, the Sale Preliminary Prospectus and the Prospectus
contained or will contain all material statements that are required to be stated
therein in accordance with the Act and the Regulations, and did or will, in
all
material respects, conform to the requirements of the Act and the Regulations.
Neither the Registration Statement, the Sale Preliminary Prospectus nor any
Preliminary Prospectus or the Prospectus contained therein, nor any amendment
or
supplement thereto, on their respective dates, nor the Sale Preliminary
Prospectus as of the Time of Sale did or will contain any untrue statement
of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein (in light of the circumstances
under
which they were made), not misleading. When any Preliminary Prospectus or
Sale Preliminary Prospectus was first filed with the Commission (whether filed
as part of the Registration Statement for the registration of the Securities
or
any amendment thereto or pursuant to Rule 424(a) of the Regulations) and when
any amendment thereof or supplement thereto was first filed with the Commission,
such Preliminary Prospectus or Sale Preliminary Prospectus and any amendments
thereof and supplements thereto complied or will have been corrected in the
Sale
Preliminary Prospectus and the Prospectus to comply in all material respects
with the applicable provisions of the Act and the Regulations and did not and
will not contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The representation and warranty made in this Section 2.3.1
does not apply to statements made or statements omitted in reliance upon and
in
conformity with written information furnished to the Company with respect to
the
Underwriters by the Representative expressly for use in the Registration
Statement, the Sale Preliminary Prospectus or Prospectus or any amendment
thereof or supplement thereto,
which
information, it is agreed, shall consist solely of the names of the several
Underwriters and the subsections captioned “Pricing
of Securities”
and
“Foreign
Regulatory Restrictions on Purchase of the Units” contained
in the section of the Prospectus entitled “Underwriting.”The Company has not
prepared or used and will not prepare or use a “free writing prospectus” as
defined in Rule 405 under the Act, in connection with the offering of the
Securities.
Chardan
Capital Markets, LLC
________
__, 2008
Page 7
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2.3.2.Disclosure
of Agreements.
The agreements and documents described in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus conform to the descriptions thereof
contained therein and there are no agreements or other documents required to
be
described in the Registration Statement, the Sale Preliminary Prospectus or
the
Prospectus or to be filed with the Commission as exhibits to the Registration
Statement, that have not been so described or filed. Each agreement or
other instrument (however characterized or described) to which the Company
is a
party or by which its property or business is or may be bound or affected and
(i) that is referred to in the Registration Statement or attached as an exhibit
thereto, or (ii) is material to the Company’s business, has been duly and
validly executed by the Company, is in full force and effect in all material
respects and is enforceable against the Company and, to the Company’s knowledge,
the other parties thereto, in accordance with its terms, except (x) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally, (y) as enforceability of any
indemnification or contribution provision may be limited under the foreign,
federal and state securities laws, and (z) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought, and none of such agreements or instruments
has been assigned by the Company, and neither the Company nor, to the Company’s
knowledge, any other party is in breach or default thereunder and, to the
Company’s knowledge, no event has occurred that, with the lapse of time or the
giving of notice, or both, would constitute a breach or default
thereunder. To the Company’s knowledge, performance by the Company of the
material provisions of such agreements or instruments will not result in a
violation of any existing applicable law, rule, regulation, judgment, order
or
decree of any governmental agency or court, domestic or foreign, having
jurisdiction over the Company or any of its assets or businesses, including,
without limitation, those relating to environmental laws and
regulations.
Chardan
Capital Markets, LLC
________
__, 2008
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2.3.3.Prior
Securities Transactions.
No securities of the Company have been sold by the Company or by or on behalf
of, or for the benefit of, any person or persons controlling, controlled by,
or
under common control with the Company since the date of the Company’s formation,
except as disclosed in the Registration Statement.
2.3.4.Regulations.
The
disclosures in the Registration Statement, the Sale Preliminary Prospectus
and
the Prospectus concerning the effects of foreign, federal, state and local
regulation on the Company’s business as currently contemplated are correct in
all material respects and do not omit to state a material fact necessary to
make
the statements therein, in light of the circumstances in which they were made,
not misleading.
2.4. Changes
After Dates in Registration Statement.
2.4.1.No
Material Adverse Change.
Since the respective dates as of which information is given in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, except as
otherwise specifically stated therein: (i) there has been no material adverse
change in the condition, financial or otherwise, or business prospects of the
Company; (ii) there have been no material transactions entered into by the
Company, other than as contemplated pursuant to this Agreement; (iii) no member
of the Company’s board of directors or management has resigned from any position
with the Company and (iv) no event or occurrence has taken place which
materially impairs, or would likely materially impair, with the passage of
time,
the ability of the members of the Company’s board of directors or management to
act in their capacities with the Company as described in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus.
2.4.2.Recent
Securities Transactions, etc.
Subsequent to the respective dates as of which information is given in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
and
except as may otherwise be indicated or contemplated herein or therein, the
Company has not: (i) issued any securities or incurred any liability or
obligation, direct or contingent, for borrowed money; or (ii) declared or
paid any dividend or made any other distribution on or in respect to its capital
stock.
2.5.Independent
Accountants.
BDO
Seidman, LLP (“BDO”), whose report is filed with the Commission as part of the
Registration Statement and included in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, are independent registered public
accountants as required by the Act, the Regulations and the Public Company
Accounting Oversight Board (including
the rules and regulations promulgated by such entity, “PCAOB”).
To
the Company’s knowledge, BDO is duly registered and in good standing with the
PCAOB. BDO
has
not, during the periods covered by the financial statements included in the
Registration Statement, the Sale Preliminary Prospectus and the Prospectus,
provided to the Company any non-audit services, as such term is used in
Section 10A(g) of the Exchange Act.
2.6.Financial
Statements; Statistical Data.
Chardan
Capital Markets, LLC
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__, 2008
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2.6.1.Financial
Statements.
The
financial statements, including the notes thereto and supporting schedules
included in the Registration Statement, the Sale Preliminary Prospectus and
the
Prospectus, fairly present the financial position and the results of operations
of the Company at the dates and for the periods to which they apply; and such
financial statements have been prepared in conformity with the Regulations,
consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein in conformity with the Regulations.
No
other
financial statements or supporting schedules are required to be included or
incorporated by reference in the Registration Statement, the
Sale
Preliminary Prospectus or the Prospectus.
The
Registration Statement, the Sale Preliminary Prospectus and the Prospectus
disclose all material off-balance sheet transactions, arrangements, obligations
(including contingent obligations), and other relationships of the Company
with
unconsolidated entities or other persons that may have a material current or
future effect on the Company’s financial condition, changes in financial
condition, results of operations, liquidity, capital expenditures, capital
resources, or significant components of revenues or expenses. There
are
no pro forma or as adjusted financial statements which are required to be
included in the Registration Statement, the
Sale
Preliminary Prospectus or the Prospectus
in
accordance with Regulation S-X of the Regulations which have not been included
as so required.
2.6.2.Statistical
Data.
The
statistical, industry-related and market-related data included in the
Registration Statement, the Sale Preliminary Prospectus and/or the Prospectus
are based on or derived from sources which the Company reasonably and in good
faith believes are reliable and accurate, and such data agree with the sources
from which they are derived.
2.7.Authorized
Capital; Options, etc.The Company had at the date or dates indicated in each of the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, as the case
may
be, duly authorized, issued and outstanding capitalization as set forth in
the
Registration Statement, the Sale Preliminary Prospectus and the
Prospectus. Based on the assumptions stated in the Registration Statement,
the Sale Preliminary Prospectus and the Prospectus, the Company will have on
the
Closing Date the adjusted stock capitalization set forth therein. Except
as set forth in, or contemplated by, the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, on the Effective Date and on the
Closing Date and the Option Closing Date, if any, there will be no options,
warrants, or other rights to purchase or otherwise acquire any authorized,
but
unissued Ordinary Shares or any security convertible into Ordinary Shares,
or
any contracts or commitments to issue or sell Ordinary Shares or any such
options, warrants, rights or convertible securities.
2.8.Valid
Issuance of Securities, etc.
2.8.1.Outstanding
Securities.
All issued and outstanding Ordinary Shares of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; the holders
thereof have no rights of rescission with respect thereto, and are not subject
to personal liability by reason of being such holders; and none of such
securities were issued in violation of the preemptive rights of any holders
of
any security of the Company or similar contractual rights granted by the
Company. The outstanding Ordinary Shares conform to the descriptions
thereof contained in the Registration Statement, the Sale Preliminary Prospectus
and the Prospectus. All offers and sales of the outstanding Ordinary Shares
of
the Company were at all relevant times either registered under the Act and
the
applicable state securities or Blue Sky laws or, based in part on the
representations and warranties of the purchasers of such Ordinary Shares, exempt
from such registration requirements.
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2.8.2.Securities
Sold.
The Securities have been duly authorized and reserved for issuance and when
issued and paid for, will be validly issued, fully paid and non-assessable;
the
holders thereof are not and will not be subject to personal liability by reason
of being such holders; the Securities are not and will not be subject to the
preemptive rights of any holders of any security of the Company or similar
contractual rights granted by the Company; and all corporate action required
to
be taken for the authorization, issuance and sale of the Securities has been
duly and validly taken. The Securities conform in all material respects to
the descriptions thereof contained in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus, as the case may be. When
issued, the Representative’s Purchase Option, the Representative’s Warrants and
the Warrants will constitute valid and binding obligations of the Company to
issue and sell, upon exercise thereof and payment of the respective exercise
prices therefor, the number and type of securities of the Company called for
thereby in accordance with the terms thereof and such Representative’s Purchase
Option, Representative’s Warrants and Warrants are enforceable against the
Company in accordance with their respective terms, except: (i) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally; (ii) as enforceability of
any indemnification or contribution provision may be limited under foreign,
federal and state securities laws; and (iii) that the remedy of specific
performance and injunctive and other forms of equitable relief may be subject
to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The Ordinary Shares issuable upon exercise
of the Representative’s Purchase Option, the Representative’s Warrants and the
Warrants have been reserved for issuance upon the exercise of the respective
Warrants upon payment of the consideration therefore, and when issued in
accordance with the terms thereof, will be duly and validly authorized, validly
issued, fully paid and non-assessable; the holders thereof are not and will
not
be subject to personal liability by reason of being such holders.
2.8.3.Private
Placement Warrants.
The
Private Placement Warrants constitute valid and binding obligations of the
Company to issue and sell, upon exercise thereof and payment of the respective
exercise prices therefor, the number and type of securities of the Company
called for thereby in accordance with the terms thereof, and such Private
Placement Warrants are enforceable against the Company in accordance with their
respective terms, except: (i) as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting creditors’
rights generally; (ii) as enforceability of any indemnification or contribution
provision may be limited under foreign, federal and state securities laws;
and
(iii) that the remedy of specific performance and injunctive and other forms
of
equitable relief may be subject to the equitable defenses and to the discretion
of the court before which any proceeding therefor may be brought. The Ordinary
Shares issuable upon exercise of the Private Placement Warrants have been
reserved and, when issued in accordance with the terms of the Private Placement
Warrants, will be duly and validly authorized, validly issued, fully paid and
non-assessable, and the holders thereof are not and will not be subject to
personal liability by reason of being such holders; the Private Placement
Warrants are not and will not be subject to the preemptive rights of any holders
of any security of the Company or similar contractual rights granted by the
Company; and all corporate action required to be taken for the authorization,
issuance and sale of the Private Placement Warrants has been duly and validly
taken.
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2.8.4.No
Integration.
Neither
the Company nor any of its affiliates has, prior to the date hereof, made any
offer or sale of any securities which are required to be “integrated” pursuant
to the Act or the Regulations with the offer and sale of the Securities pursuant
to the Registration Statement.
2.9.Registration
Rights of Third Parties.
Except as set forth in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus, no holders of any securities of the Company
or
any rights exercisable for or convertible or exchangeable into securities of
the
Company have the right to require the Company to register any such securities
of
the Company under the Act or to include any such securities in a registration
statement to be filed by the Company.
2.10.Validity
and Binding Effect of Agreements.
This Agreement, the Warrant Agreement, the Trust Agreement, the Services
Agreement (as defined in Section 2.27 hereof), the Warrant Purchase Agreements,
the Representative’s Purchase Option, the Escrow Agreement (as defined in
Section 2.25.3 hereof) and the Registration Rights Agreement by and among
the Company and the Initial Shareholders (“Registration
Rights Agreement”)
have
been duly and validly authorized, executed and delivered by the Company and
constitute valid and binding agreements of the Company, enforceable against
the
Company in accordance with their respective terms, except: (i) as such
enforceability may be limited by bankruptcy, insolvency, reorganization or
similar laws affecting creditors’ rights generally; (ii) as enforceability of
any indemnification or contribution provision may be limited under foreign,
federal and state laws; and (iii) that the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.
2.11.No
Conflicts, etc.
The execution, delivery, and performance by the Company of this Agreement,
the
Warrant Agreement, the Trust Agreement, the Services Agreement, the Warrant
Purchase Agreement, the Representative’s Purchase Option, the Escrow Agreement
and the Registration Rights Agreement, the consummation by the Company of the
transactions herein and therein contemplated and the compliance by the Company
with the terms hereof and thereof do not and will not, with or without the
giving of notice or the lapse of time or both: (i) result in a breach or
violation of, or conflict with any of the terms and provisions of, or constitute
a default under, or result in the creation, modification, termination or
imposition of any lien, charge or encumbrance upon any property or assets of
the
Company pursuant to the terms of any agreement, obligation, condition, covenant
or instrument to which the Company is a party or bound or to which its property
is subject except pursuant to the Trust Agreement; (ii) result in any violation
of the provisions of the Amended and Restated Articles of Association of the
Company; or (iii) violate any existing applicable statute, law, rule,
regulation, judgment, order or decree of any governmental agency or court,
domestic or foreign, having jurisdiction over the Company or any of its
properties or business.
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2.12.No
Defaults; Violations.
No material default or violation exists in the due performance and observance
of
any term, covenant or condition of any material license, contract, indenture,
mortgage, deed of trust, note, loan or credit agreement, or any other agreement
or instrument evidencing an obligation for borrowed money, or any other material
agreement or instrument to which the Company is a party or by which the Company
may be bound or to which any of the properties or assets of the Company is
subject. The Company is not in violation of any term or provision of its Amended
and Restated Articles of Association or in violation of any material franchise,
license, permit, applicable law, rule, regulation, judgment or decree of any
governmental agency or court, domestic or foreign, having jurisdiction over
the
Company or any of its properties or businesses.
2.13.Corporate
Power; Licenses; Consents.
2.13.1.Conduct
of Business.
The Company has all requisite corporate power and authority, and has all
necessary authorizations, approvals, orders, licenses, certificates and permits
of and from all governmental regulatory officials and bodies that it needs
as of
the date hereof to conduct its business for the purposes described in the
Registration Statement, the Sale Preliminary Prospectus and the
Prospectus. The disclosures in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus concerning the effects of foreign,
federal, state and local regulation on this Offering and the Company’s business
purpose as currently contemplated are correct in all material respects and
do
not omit to state a material fact required to be stated therein or necessary
in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. Since its formation, the Company has conducted
no business and has incurred no liabilities other than in connection with and
in
furtherance of the Offering.
2.13.2.Transactions
Contemplated Herein.
The Company has all corporate power and authority to enter into this Agreement,
the Warrant Agreement, the Trust Agreement, the Warrant Purchase Agreement,
the
Services Agreement, the Representative’s Purchase Option, the Registration
Rights Agreement and the Escrow Agreement, to carry out the provisions and
conditions hereof, and all consents, authorizations, approvals and orders
required in connection therewith have been obtained. No consent,
authorization or order of, and no filing with, any court, government agency
or
other body, foreign or domestic, is required for the valid issuance, sale and
delivery, of the Securities and the consummation of the transactions and
agreements contemplated by this Agreement, the Warrant Agreement, the Trust
Agreement, the Warrant Purchase Agreement, the Services Agreement, the
Representative’s Purchase Option, the Registration Rights Agreement and the
Escrow Agreement and as contemplated by the Registration Statement, the Sale
Preliminary Prospectus and Prospectus, except with respect to applicable
foreign, federal and state securities laws and the rules and regulations
promulgated by the FINRA.
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2.14.D&O
Questionnaires.
To the best of the Company’s knowledge, all information contained in the
questionnaires (“Questionnaires”)
completed by each of the Company’s officers and directors (“Directors/Officers”)
and
Initial Shareholders (as defined below) immediately prior to the Offering and
provided to the Underwriters as well as the biographies attached as exhibits
to
each person’s Insider Letter (as defined in Section 2.25.1) is true and
correct as of its date and the Company has not become aware of any information
which would cause the information disclosed in the questionnaires completed
by
the Directors/Officers and Initial Shareholders to become inaccurate and
incorrect.
2.15.Litigation;
Governmental Proceedings.
There is no action, suit, proceeding, inquiry, arbitration, investigation,
litigation or governmental proceeding pending or, to the best of the Company’s
knowledge, threatened against, or involving the Company or, to the best of
the
Company’s knowledge, any of the Directors/Officers or any of the shareholders of
the Company immediately prior to the Offering (“Initial
Shareholders”)
which
has not been disclosed in the Registration Statement, the Questionnaires, the
Sale Preliminary Prospectus and the Prospectus.
2.16.Good
Standing.
The Company has been duly organized and is validly existing as a corporation
and
is in good standing under the laws of its jurisdiction of incorporation and
is
duly qualified to do business and is in good standing as a foreign corporation
in each jurisdiction in which its ownership or lease of property or the conduct
of business requires such qualification, except where the failure to qualify
would not have a material adverse effect on the Company, its business, assets
or
operations.
2.17.No
Contemplation of a Business Combination.
Prior
to the date hereof, no Company Affiliate (as hereinafter defined) has, and
as of
the Closing, the Company and such Company Affiliates will not have: (i) had
any
specific Business Combination under consideration or contemplation; (ii)
directly or indirectly, contacted any potential target business or their
representatives or had any discussions, formal or otherwise, with respect to
effecting any potential Business Combination with the Company or taken any
measure, directly or indirectly to locate a target business; or (iii) engaged
or
retained any agent or other representative to identify or locate any suitable
acquisition candidate for the Company. As used herein, the term “Business
Combination”
shall
mean any acquisition of, through a merger, capital stock exchange, asset
acquisition or other similar business combination, one or more operating
businesses.
2.18.Transactions
Affecting Disclosure to FINRA.
2.18.1.Finder’s
Fees.
Except
as described in the Registration Statement, the Sale Preliminary Prospectus
and
the Prospectus, there are no claims, payments, arrangements, agreements or
understandings relating to the payment of a finder’s, consulting or origination
fee by the Company or any Company Affiliate with respect to the sale of the
Securities hereunder or any other arrangements, agreements or understandings
of
the Company or, to the Company’s knowledge, any Initial Shareholder that may
affect the Underwriters’ compensation, as determined by the FINRA.
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2.18.2.Payments
Within Twelve Months.
The
Company has not made any direct or indirect payments (in cash, securities or
otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise,
in consideration of such person raising capital for the Company or introducing
to the Company persons who raised or provided capital to the Company; (ii)
any
FINRA member; or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member, within the twelve months
prior
to the Effective Date, other than payments to Chardan in connection with the
Offering.
2.18.3.Use
of
Proceeds.
No
proceeds from the sale of the Public Securities (excluding underwriting
compensation), the Representative’s Securities or Placement Securities will be
paid to any FINRA member, or any persons associated or affiliated with a member
of the FINRA, except as specifically authorized herein.
2.18.4.Insiders’
FINRA Affiliation.
No
Directors/Officers, or any direct or indirect beneficial owner of any class
of
the Company’s securities including the Initial Shareholders and holders of
securities purchased in the Private Placement (whether debt or equity,
registered or unregistered, regardless of the time acquired or the source from
which derived) (any such individual or entity, a “Company
Affiliate”)
is a
member, a person associated, or affiliated with a member of the FINRA. No
Company Affiliate (i) is an owner of stock or other securities of any member
of
the FINRA (other than securities purchased on the open market); or (ii) has
made
a subordinated loan to any member of the FINRA.
2.18.5.Issuance
of Securities.
Except
with respect to Chardan, the Company has not issued any warrants or other
securities, or granted any options, directly or indirectly to anyone who is
a
potential underwriter in the Offering or a related person (as defined by FINRA
rules) of such an underwriter within the 180-day period prior to the initial
filing date of the Registration Statement. No person to whom securities of
the
Company have been privately issued within the 180-day period prior to the
initial filing date of the Registration Statement has any relationship or
affiliation or association with any member of the FINRA.
2.18.6.Conflict
of Interest.
No
FINRA member intending to participate in the Offering has a conflict of interest
with the Company. For this purpose, a “conflict of interest” exists when a
member of FINRA and/or its associated persons, parent or affiliates in the
aggregate beneficially own 10% or more of the Company’s outstanding subordinated
debt or common equity, or 10% or more of the Company’s preferred equity.
“Members participating in the Offering” include managing agents, syndicate group
members and all dealers which are members of FINRA.
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2.18.7.Other
Agreements or Arrangements.
Except
with respect to Chardan in connection with the Offering, the Company has not
entered into any agreement or arrangement (including, without limitation, any
consulting agreement or any other type of agreement) during the 180-day period
prior to the initial filing date of the Registration Statement, which
arrangement or agreement provides for the receipt of any item of value and/or
the transfer or issuance of any warrants, options, or other securities from
the
Company to a FINRA member, any person associated with a member (as defined
by
FINRA rules), any potential underwriters in the Offering and/or any related
persons.
2.19.Taxes.
2.19.1.Transfer
Taxes.
There
are no transfer taxes or other similar fees or charges under Cayman Islands
law,
U.S. federal law or the laws of any U.S. state or any political subdivision
thereof, required to be paid in connection with the execution and delivery
of
this Agreement or the issuance or sale by the Company of the
Securities.
2.19.2.Tax
Returns.
The
Company has filed all non-U.S., U.S. federal, state and local tax returns that
are required to be a filed or has requested extensions thereof, except in any
case in which the failure to so file would not have a material adverse effect
on
the condition (financial or otherwise), prospects, earnings, business or
properties of the Company, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Registration Statement, the Sale Preliminary Prospectus
or
Prospectus and has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of the
foregoing in due and payable, except for any such assessment, fine or penalty
that is currently being contested in good faith or as would not have a material
adverse effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, whether or not arising from transactions
in the ordinary course of business, except as set forth in or contemplated
by
the Registration Statement, the Sale Preliminary Prospectus or
Prospectus.
2.20.Foreign
Corrupt Practices Act.
Neither the Company nor any of the Company Affiliates or any other person acting
on behalf of the Company is aware of or has taken any action, directly or
indirectly, that: (i) would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (“FCPA”)
or
otherwise subject the Company to any damage or penalty in any civil, criminal
or
governmental litigation or proceeding; (ii) if not done in the past, might
have
had a material adverse effect on the Company or the assets, business or
operations of the Company as reflected in any of the financial statements
contained in the Registration Statement and the Prospectus or (iii) if not
continued in the future, might adversely affect the assets, business, operations
or prospects of the Company, including, without limitation, given or agreed
to
give any money, gift or similar benefit (other than legal price concessions
to
customers in the ordinary course of business) to any customer, supplier,
employee or agent of a customer or supplier, or official or employee of any
governmental agency or instrumentality of any government (domestic or foreign)
or any political party or candidate for office (domestic or foreign) or any
political party or candidate for office (domestic or foreign) or other person
who was, is, or may be in a position to help or hinder the business of the
Company (or assist it in connection with any actual or proposed transaction).
The Company’s internal accounting controls and procedures are sufficient to
cause the Company to comply with the Foreign Corrupt Practices Act of 1977,
as
amended.
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2.21.Currency
and Foreign Transactions Reporting Act.
The
operations of the Company are and have been conducted at all times in compliance
with applicable financial recordkeeping and reporting requirements of the
Currency and Foreign Transaction Reporting Act of 1970, as amended, the money
laundering statutes of all jurisdictions, the rules and regulations thereunder
and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the
“Money
Laundering Laws”)
and no
action, suit or proceeding by or before any court or governmental agency,
authority or body or any arbitrator involving the Company with respect to the
Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
2.22.Patriot
Act.
Neither
the Company
nor any Company Affiliate has violated: (i) the Bank Secrecy Act, as amended,
or
(iii) the Uniting and Strengthening of America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA Patriot Act) Act of 2001,
and/or the rules and regulations promulgated under any such law, or any
successor law.
2.23.Officers’
Certificate.
Any certificate signed by any duly authorized officer of the Company and
delivered to the Representative or to its counsel shall be deemed a
representation and warranty by the Company to the Underwriters as to the matters
covered thereby.
2.24.Warrant
Agreement.
The Company has entered into a warrant agreement with respect to the Warrants
and the Private Placement Warrants with Continental Stock Transfer & Trust
Company substantially in the form filed as an exhibit to the Registration
Statement (“Warrant
Agreement”).
2.25. Agreements
With Company Affiliates.
2.25.1.Insider
Letters.
The Company has caused to be duly executed legally binding and enforceable
agreements (except (i) as such enforceability may be limited by bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally, (ii) as enforceability of any indemnification, contribution or
noncompete provision may be limited under foreign, federal and state securities
laws, and (iii) that the remedy of specific performance and injunctive and
other
forms of equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be brought)
annexed as exhibits to the Registration Statement (“Insider
Letter”),
pursuant to which each of the Company Affiliates agrees to certain matters,
including but not limited to, the voting of Ordinary Shares held by them and
certain matters described as being agreed to by them under the “Proposed
Business” Section of the Registration Statement, the Sale Preliminary
Prospectus and Prospectus.
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2.25.2.Warrant
Purchase Agreement.
Each of
the Placement Investors has executed and delivered a warrant purchase agreement,
annexed as an exhibit to the Registration Statement (collectively the
“Warrant
Purchase Agreements”),
pursuant to which the Placement Investors have, among other things, purchased
an
aggregate of 1,944,444 Private Placement Warrants in the Private Placement.
Pursuant to each of the Warrant Purchase Agreements, each of the Placement
Investors has waived any and all rights and claims that it may have to any
proceeds, and any interest thereon, held in the Trust Account in respect of
the
Placement Securities in the event that a Business Combination is not consummated
and the Trust Account is liquidated in accordance with the terms of the Trust
Agreement.
2.25.3.Escrow
Agreement.
The Company has caused the Initial Shareholders, to the extent they own Ordinary
Shares of the Company prior to the Offering (excluding securities contained
in
the Placement Securities), to enter into an escrow agreement (“Escrow
Agreement”)
with
Continental Stock Transfer & Trust Company (“Escrow
Agent”)
substantially in the form filed as an exhibit to the Registration Statement
whereby the Ordinary Shares owned by such parties prior to the Offering will
be
held in escrow by the Escrow Agent for a period (“Escrow
Period”)
commencing on the Effective Date and expiring on the earlier of (i) the two
and
a half year anniversary of the Effective Date; or (ii) the consummation of
the
Business Combination. In the event that the Company fails to consummate a
Business Combination, the Initial Shareholders will not be entitled to any
portion of the liquidation proceeds with respect to the shares held in escrow.
During the Escrow Period, such parties shall be prohibited from selling or
otherwise transferring such securities other than to Permitted Transferees.
To
the Company’s knowledge, the Escrow Agreement is enforceable against each of the
Initial Shareholders and will not, with or without the giving of notice or
the
lapse of time or both, result in a breach of, or conflict with, any of the
terms
and provisions of, or constitute a default under, and agreement or instrument
to
which any of the Initial Shareholders is a party. The Escrow Agreement shall
not
be amended, modified or otherwise changed without the prior written consent
of
Chardan, such consent not to be unreasonably withheld. For purposes of this
agreement, “Permitted
Transferees”
shall
include (a) transfers to an entity’s beneficiaries upon its liquidation, (b)
transfers to relatives and trusts for estate planning purposes, (c) transfers
pursuant to the laws of descent and distribution, (d) transfers pursuant to
a
qualified domestic relations order, (e) transfers to officers, directors and
employees of the Company and persons affiliated with the Initial Shareholders
or
(f) transfers by private sales with respect to up to 33% of the Initial
Shareholders’ ordinary shares made at or prior to the consummation of an initial
Business Combination at prices no greater than the price at which the shares
were originally purchased, so long as such Permitted Transferee shall agree
to
the terms set forth in the Escrow Agreement.
2.25.4.Registration
Rights Agreement.
The
Company and the Initial Shareholders have entered into a Registration Rights
Agreement substantially in the form filed as an exhibit to the Registration
Statement, whereby the Initial Shareholders will be entitled to certain
registration rights as set forth in such Registration Rights Agreement and
described more fully in the Registration Statement.
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2.26.Investment
Management Trust Agreement.
The Company has entered into an Investment Management Trust Agreement with
Continental Stock Transfer & Trust Company (“Trust
Agreement”)
with
respect to certain proceeds of the Offering and the Private Placement
substantially in the form filed as an exhibit to the Registration
Statement.
2.27.Administrative
Services.
The Company has entered into an agreement (“Services
Agreement”)
with
Olympic Spring Limited, in the form filed as an exhibit to the Registration
Statement pursuant to which Olympic Spring Limited will make available to the
Company general and administrative services including office space, utilities,
receptionist and secretarial support for the Company’s use for $7,500 per month,
which shall be payable out of the Company’s working capital.
2.28.Covenants
Not to Compete.
No Company Affiliate is subject to any noncompetition agreement or
non-solicitation agreement with any employer or prior employer which could
materially affect his ability to be a stockholder, director, officer or employee
of the Company.
2.29.Investments.
The Company has been advised concerning the Investment Company Act of 1940,
as
amended (the “Investment Company Act”), and the rules and regulations thereunder
and has in the past conducted, and intends in the future to conduct, its affairs
in such a manner as to ensure that it will not become an “investment company” or
a company “controlled” by an “investment company” within the meaning of the
Investment Company Act and such rules and regulations. The Company is not,
nor
will the Company become upon the sale of the Units and the application of the
proceeds therefore as described in the Prospectus under the caption “Use of
Proceeds”, an “investment company” or a person controlled by an “investment
company” within the meaning of the Investment Company Act. No more than 45% of
the “value” (as defined in Section 2(a)(41) of the Investment Company Act
of 1940 (“Investment
Company Act”))
of
the Company’s total assets (exclusive of cash items and “Government Securities,”
as defined in Section 2(a)(16) of the Investment Company Act) consist of, and
no
more than 45% of the Company’s net income after taxes is derived from,
securities other than Government Securities.
2.30.Subsidiaries.
The Company does not own an interest in any corporation, partnership, limited
liability company, joint venture, trust or other business entity.
2.31.Related
Party Transactions.
No relationship, direct or indirect, exists between or among any of the Company
or any Company Affiliate, on the one hand, and any director, officer,
shareholder, customer or supplier of the Company or any Company Affiliate,
on
the other hand, which is required by the Act, the Exchange Act or the
Regulations to be described in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus which is not so described and described as
required. There are no outstanding loans, advances (except normal advances
for
business expenses in the ordinary course of business) or guarantees of
indebtedness by the Company to or for the benefit of any of the officers or
directors of the Company or any of their respective family members, except
as
disclosed in the Registration Statement, the Sale Preliminary Prospectus and
the
Prospectus. The Company has not extended or maintained credit, arranged for
the
extension of credit, or renewed an extension of credit, in the form of a
personal loan to or for any director or officer of the Company.
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Capital Markets, LLC
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2.32.No
Influence.
The
Company has not offered, or caused the Underwriters to offer, the Firm Units
to
any person or entity with the intention of unlawfully influencing: (a) a
customer or supplier of the Company or any affiliate of the Company to alter
the
customer’s or supplier’s level or type of business with the Company or such
affiliate or (b) a journalist or publication to write or publish favorable
information about the Company or any such affiliate.
2.33.Sarbanes-Oxley.
Solely
to the extent that the Sarbanes-Oxley Act of 2002, as amended, and the rules
and
regulations of the Commission thereunder has been applicable to the Company,
there is and has been no failure on the part of the Company to comply in
material respects with any provision of the Sarbanes-Oxley Act.
2.34.Definition
of “Knowledge”.
As
used
in herein, the term “knowledge
of the Company”
(or
similar language) shall mean the knowledge of the officers and directors of
the
Company who are named in the Sale Preliminary Prospectus and Prospectus, with
the assumption that such officers and directors shall have made reasonable
and
diligent inquiry of the matters presented.
2.35.Private
Placement.
In
accordance with the terms of the Warrant Purchase Agreements, the Placement
Investors have paid the full purchase price of $1,750,000 for the Private
Placement Warrants into an account with The Hong Kong and Shanghai Banking
Corporation, established for the benefit of the Company.
3.1.Amendments
to Registration Statement.
The Company will deliver to the Representative, prior to filing, any amendment
or supplement to the Registration Statement or Prospectus proposed to be filed
after the Effective Date and shall not file any such amendment or supplement
to
which the Representative shall reasonably object in writing.
3.2.Federal
Securities Laws.
3.2.1.Compliance.
During the time when a prospectus is required to be delivered under the Act,
the
Company will use all reasonable efforts to comply with all requirements imposed
upon it by the Act, the Regulations and the Exchange Act and by the regulations
under the Exchange Act, as from time to time in force, so far as necessary
to
permit the continuance of sales of or dealings in the Public Securities in
accordance with the provisions hereof and the Prospectus. If at any time
when a Prospectus relating to the Public Securities is required to be delivered
under the Act, any event shall have occurred as a result of which, in the
opinion of counsel for the Company or counsel for the Underwriters, the Sale
Preliminary Prospectus and the Prospectus, as then amended or supplemented
includes an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading, or
if
it is necessary during such period to amend the Registration Statement or amend
or supplement the Sale Preliminary Prospectus and Prospectus to comply with
the
Act, the Company will notify the Representative promptly and prepare and file
with the Commission, subject to Section 3.1 hereof, an appropriate
amendment to the Registration Statement or amendment or supplement to the Sale
Preliminary Prospectus and Prospectus (at the expense of the Company) so as
to
correct such statement or omission or effect such compliance.
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3.2.2.Filing
of Final Prospectus.
The Company will file the Prospectus (in form and substance satisfactory to
the
Representative) with the Commission pursuant to the requirements of Rule 424
of
the Regulations.
3.2.3.Exchange
Act Registration.
For a period of five years from the Effective Date, or until such earlier time
upon which the Company is required to be liquidated and dissolved, the Company
will use its best efforts to maintain the registration of the Units, Ordinary
Shares and Warrants (in the case of the Warrants, until the Warrants expire
and
are no longer exercisable) under the provisions of the Exchange Act. The
Company will not deregister the Units, Ordinary Shares or Warrants under the
Exchange Act without the prior written consent of Chardan.
3.2.4.Exchange
Act Filings.
For so
long as the Units, Ordinary Shares and Warrants are registered under the
Exchange Act, the Company shall use its reasonable best efforts to timely file
with the Commission via the Electronic Data Gathering, Analysis and Retrieval
System (“EDGAR”)
such
statements and reports as are required to be filed by a company registered
under
Section 12(b) of the Exchange Act.
3.2.5.Sarbanes-Oxley
Compliance.
As soon
as it is legally required to do so, the
Company shall take all actions necessary to obtain and thereafter maintain
material compliance with each applicable provision of the Sarbanes-Oxley Act
of
2002 and the rules and regulations promulgated thereunder and related or similar
rules and regulations promulgated by any other governmental or self regulatory
entity or agency with jurisdiction over the Company.
3.3.Blue
Sky Filing.
Unless the Securities are listed or quoted, as the case may be, on the New
York
Stock Exchange, the Nasdaq Global Market or the American Stock Exchange
(“AMEX”), the Company will endeavor in good faith, in cooperation with the
Representative, at or prior to the time the Registration Statement becomes
effective, to qualify the Public Securities for offering and sale under the
securities laws of such jurisdictions as the Representative may reasonably
designate, provided that no such qualification shall be required in any
jurisdiction where, as a result thereof, the Company would be subject to service
of general process or to taxation as a foreign corporation doing business in
such jurisdiction. In each jurisdiction where such qualification shall be
effected, the Company will, unless the Representative agrees that such action
is
not at the time necessary or advisable, use all reasonable efforts to file
and
make such statements or reports at such times as are or may be required by
the
laws of such jurisdiction.
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3.4.Delivery
of Materials to Underwriters.
The Company will deliver to each of the several Underwriters, without charge
and
from time to time during the period when a prospectus is required to be
delivered under the Act or the Exchange Act, such number of copies of each
Sale
Preliminary Prospectus, the Prospectus and all amendments and supplements to
such documents as such Underwriters may reasonably request and, as soon as
the
Registration Statement or any amendment or supplement thereto becomes effective,
deliver to the Representative two manually executed Registration Statements,
including exhibits, and all post-effective amendments thereto and copies of
all
exhibits filed therewith or incorporated therein by reference and all manually
executed consents of certified experts.
3.5.Effectiveness
and Events Requiring Notice to the Representative.
The Company will use its best efforts to cause the Registration Statement to
remain effective and will notify the Representative immediately and confirm
the
notice in writing: (i) of the effectiveness of the Registration Statement
and any amendment thereto; (ii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement, or any
post-effective amendment thereto or preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or of the initiation, or the
threatening, of any proceeding for that purpose; (iii) of the issuance by any
foreign or state securities commission of any proceedings for the suspension
of
the qualification of the Public Securities for offering or sale in any
jurisdiction or of the initiation, or the threatening, of any proceeding for
that purpose; (iv) of the mailing and delivery to the Commission for filing
of
any amendment or supplement to the Registration Statement or Prospectus; (v)
of
the receipt of any comments or request for any additional information from
the
Commission; and (vi) of the happening of any event during the period described
in Section 3.4 hereof that, in the judgment of the Company or its counsel,
makes any statement of a material fact made in the Registration Statement,
the
Sale Preliminary Prospectus or the Prospectus untrue or that requires the making
of any changes in the Registration Statement, the Sale Preliminary Prospectus
and Prospectus in order to make the statements therein, (with respect to the
Prospectus and the Sale Preliminary Prospectus and in light of the circumstances
under which they were made), not misleading. If the Commission or any
foreign or state securities commission shall enter a stop order or suspend
such
qualification at any time, the Company will make every reasonable effort to
obtain promptly the lifting of such order.
3.6.Review
of Financial Statements.
Until the earlier of five years from the Effective Date, or until such earlier
upon which the Company is required to be liquidated and dissolved, the Company,
at its expense, shall cause its regularly engaged independent certified public
accountants to review (but not audit) the Company’s financial statements for
each of the first three fiscal quarters prior to the announcement of quarterly
financial information, the submission of the Company’s quarterly report on Form
6-K and the mailing of quarterly financial information to shareholders, if
applicable.
3.7.Affiliated
Transactions.
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3.7.1.Business
Combinations.
The Company will not consummate a Business Combination with any entity which
is
affiliated with any Company Affiliate unless the Company obtains an opinion
from
an independent investment banking firm that the Business Combination is fair
to
the Company’s shareholders from a financial perspective.
3.7.2.Compensation.
Except as set forth in the Registration Statement, the Company shall not pay
any
Company Affiliate or any of their affiliates any fees or compensation from
the
Company, for services rendered to the Company prior to, or in connection with,
this Offering or the consummation of a Business Combination; provided
that
Company Affiliates shall be entitled to reimbursement from the Company for
their
out-of-pocket expenses incurred on the Company’s behalf, which includes an
aggregate of $70,000 in non-interest bearing unsecured loans which were made
to
the Company prior to the effective date of the Registration
Statement, $30,000 of which is due on the earlier of May 15, 2008 and
the date of the consummation of the Offering and $40,000 of which is due on
the
earlier to occur at July 15, 2008 and the consummation of the Offering, and
the
expenses incurred by them in connection with seeking and consummating a Business
Combination.
3.8.Secondary
Market Trading and Standard & Poor’s.
In the
event the Public Securities are not listed on the New York Stock Exchange or
AMEX or quoted on the Nasdaq Global Market: (a) the Company will apply to be
included in Standard and Poor’s Daily News and Corporation Records Corporate
Descriptions for a period commencing on the Effective Date and expiring on
the
fifth anniversary of the consummation of a Business Combination, (b) the Company
shall take such steps as may be necessary to obtain a secondary market trading
exemption for the Company’s securities in such jurisdictions within the U.S. as
may reasonably be requested by the Representative; provided, however, no
qualification shall be required in any jurisdiction where, as a result thereof,
the Company would be subject to service of general process or to taxation as
a
foreign corporation doing business in such jurisdiction. The Company shall
also
take such other action as may be reasonably requested by the Representative
to
obtain a secondary market trading exemption I such other states as may be
requested by the Representative.
3.9.Financial
Public Relations Firm.
Promptly after the execution of a definitive agreement for a Business
Combination, the Company shall retain a financial public relations firm
reasonably acceptable to the Representative for a term to be agreed upon by
the
Company and the Representative.
3.10.Reports
to the Representative.
3.10.1.Periodic
Reports, etc.
For a period of five years from the Effective Date or until such earlier time
upon which the Company is required to be liquidated and dissolved, the Company
will furnish to the Representative (Attn: Kerry Propper, Chief Executive
Officer) and its counsel copies of such financial statements and other periodic
and special reports as the Company from time to time furnishes generally to
holders of any class of its securities, and promptly furnish to the
Representative: (i) a copy of each periodic report the Company shall be required
to file with the Commission; (ii) a copy of every press release and every news
item and article with respect to the Company or its affairs which was
released by the Company; (iii) a copy of each Form 6-K or Schedules 13D,
13G, 14D-1 or 13E-4 received or prepared by the Company; (iv) five copies of
each registration statement filed by the Company with the Commission under
the
Securities Act; and (v) such additional documents and information with respect
to the Company and the affairs of any future subsidiaries of the Company as
the
Representative may from time to time reasonably request; provided that the
Representative shall sign, if requested by the Company, a Regulation FD
compliant confidentiality agreement which is reasonably acceptable to the
Representative and its counsel in connection with the Representative’s receipt
of such information. Documents filed with the Commission pursuant to its EDGAR
shall be deemed to have been delivered to the Representative pursuant to this
section.
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3.10.2.Transfer
and Warrant Agent.
For a
period of five years following the Effective Date or until such earlier time
upon which the Company is required to be liquidated, the Company shall retain
a
transfer and warrant agent acceptable to the Representative (“Transfer
Agent”).
3.10.3.Secondary
Market Trading Survey.
In the
event the Public Securities are no longer listed or quoted, as the case may
be,
on the New York Stock Exchange, AMEX or the Nasdaq Global Market, or until
such
earlier time upon which the Company is required to be liquidated, the Company
shall engage Loeb & Loeb LLP (“Loeb”),
for a
one-time fee of $5,000, to deliver and update to the Underwriters on a timely
basis, but in any event at the beginning of each fiscal quarter, a written
report detailing those states in which the Public Securities may be traded
in
non-issuer transaction under the Blue Sky laws of the fifty States
(“Secondary
Market Trading Survey”).
3.10.4.Proposed
Acquisitions.
Prior
to the consummation of its initial Business Combination, the Company hereby
agrees to give notice to the Representative with respect to any proposed
acquisitions, mergers, reorganizations or other similar
transactions.
3.11.Disqualification
of Form F-1 and F-3 or S-1 and S-3.
For a period equal toseven
years from the date hereof, the Company will use its reasonable best efforts
to
continue to qualify for use of Form F-1 or F-3 or Form S-1 and S-3 (or other
appropriate form) for the registration of the Warrants under the
Act.
3.12.Payment
of Expenses.
3.12.1.General
Expenses Related to the Offering.
The Company hereby agrees to pay on each of the Closing Date and the Option
Closing Date, if any, to the extent not paid at Closing Date, all fees,
disbursements and expenses incident to the performance of the obligations of
the
Company under this Agreement, including, but not limited to: (i) the
preparation, printing, filing and mailing (including the payment of postage
with
respect to such mailing) of the Registration Statement, the Sale Preliminary
Prospectus, and the final Prospectus and mailing of this Agreement and related
documents, including the cost of all copies thereof and any amendments thereof
or supplements thereto supplied to the Underwriters in quantities as may be
required by the Underwriters; (ii) the printing, engraving, issuance and
delivery of the Units, the Ordinary Shares and the Warrants included in the
Units, including any transfer or other taxes payable thereon; (iii) the
quotation of the Public Securities on FINRA OTC Bulletin Board; (iv) filing
fees, costs and expenses incurred in registering the Offering with the FINRA
(including all COBRADesk fees); (v) fees and disbursements of the transfer
and
warrant agent; (vi) the Company’s own expenses associated with “due diligence”
meetings; (vii) the preparation, binding and delivery of velo-bound volumes
in
quantity, form and style reasonably satisfactory to the Representative and
transaction lucite cubes or similar commemorative items in a style and quantity
as reasonably requested by the Representative; (viii) all Company costs and
expenses associated with “road show” marketing and “due diligence” trips for the
Company’s management to meet with prospective investors, including without
limitation, all travel, food and lodging expenses of the Company’s management
associated with such trips incurred by the Company. The Representative may
deduct from the net proceeds of the Offering payable to the Company on the
Closing Date, or the Option Closing Date, if any, the expenses set forth above
to be paid by the Company to the Representative and others.
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3.12.2.Fee
on
Business Combination.
Upon
consummation of a Business Combination, the Company further agrees that in
addition to the fees and expenses payable pursuant to Sections 3.12.1 and
3.12.2, it will pay to the Underwriters and the Representative the Deferred
Discount, subject to Section 1.5 hereof.
3.13.Application
of Net Proceeds.
The Company will apply the net proceeds from the Private Placement and this
Offering received by it in a manner substantially consistent with the
application described under the caption “Use Of Proceeds” in the
Prospectus.
3.14.Delivery
of Earnings Statements to Security Holders.
The Company will make generally available to its security holders as soon as
practicable, but not later than the first day of the fifteenth full calendar
month following the Effective Date, an earnings statement (which need not be
certified by independent public or independent certified public accountants
unless required by the Act or the Regulations, but which shall satisfy the
provisions of Rule 158(a) under Section 11(a) of the Act) covering a period
of at least twelve consecutive months beginning after the Effective
Date.
3.15.Notice
to FINRA.
3.16.1
Merger
Services.
In the
event any person or entity (regardless of any FINRA affiliation or association)
is engaged to assist the Company in its search for a merger candidate or to
provide any other merger and acquisition services, the Company will provide
the
following information (“Merger
Information”)
to the
FINRA and Representative prior to the consummation of the Business
Combination: (i) complete details of all services and copies of
agreements governing such services; and (ii) justification as to why the
person or entity providing the merger and acquisition services should not be
considered an “underwriter and related person” with respect to the Company’s
initial public offering, as such term is defined in Rule 2710 of the FINRA’s
Conduct Rules. The Company also agrees that proper disclosure of such
arrangement or potential arrangement will be made in the proxy statement which
the Company will file for purposes of soliciting shareholder approval for the
Business Combination. Upon the Company’s delivery of the Merger Information to
the Representative, the Company hereby expressly authorizes the Representative
to provide such information directly to the FINRA as a result of representations
the Representative has made to the FINRA in connection with the
Offering.
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. 3.16.2
Shareholder
Status.
The
Company shall advise the FINRA if it is aware that any 5% or greater shareholder
of the Company becomes an affiliate or associated person of a FINRA member
participating in the distribution of the Securities.
3.16.Stabilization. Neither
the Company, nor, to its knowledge, any of its employees, directors or
shareholders (without the consent of Chardan) has taken or will take, directly
or indirectly, any action designed to or that has constituted or that might
reasonably be expected to cause or result in, under the Exchange Act, or
otherwise, stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Units.
3.17.Internal
Controls.
The Company will maintain a system of internal accounting controls sufficient
to
provide reasonable assurances that: (i) transactions are executed in accordance
with management’s general or specific authorization; (ii) transactions are
recorded as necessary in order to permit preparation of financial statements
in
accordance with generally accepted accounting principles and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
3.18.Accountants.
For a period of five years from the Effective Date or until such earlier time
upon which the Company is required to be liquidated, the Company shall retain
BDO or other independent public accountants reasonably acceptable to
Chardan.
3.19.Form
6-K’s.
The Company shall, on the date hereof, retain its independent public accountants
to audit the financial statements of the Company as of the Closing Date
(“Audited
Financial Statements”)
reflecting the receipt by the Company of the proceeds of the Offering and
Private Placement as well as the proceeds from the exercise of the
Over-allotment Option if such exercise has occurred on the date of the
Prospectus. Within three (3) days of the Effective Date, the Company shall
file a Current Report on Form 6-K with the Commission, which Report shall
contain the Company’s Audited Financial Statements. The Company shall make a
similar filing (without financial statements) upon the Underwriters’ exercise of
the Over-allotment Option, if any.
3.20.Corporate
Proceedings.
All
corporate proceedings and other legal matters necessary to carry out the
provisions of this Agreement and the transactions contemplated hereby shall
have
been done to the reasonable satisfaction to counsel for the
Underwriters.
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3.21.Investment
Company.
The
Company shall cause the proceeds of the Offering to be held in the Trust Account
to be invested only in “government securities” with specific maturity dates or
in money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act as set forth in the Trust Agreement and
disclosed in the Prospectus. The Company will otherwise conduct its business
in
a manner so that it will not become subject to the Investment Company Act.
Furthermore, once the Company consummates a Business Combination, it will be
engaged in a business other than that of investing, reinvesting, owning, holding
or trading securities.
3.22.Press
Releases.
The
Company agrees that it will not issue press releases or engage in any other
publicity, without Chardan’s prior written consent (not to be unreasonably
withheld), for a period of ninety (90) days after the Closing Date.
3.23.Electronic
Prospectus.
The
Company shall cause to be prepared and delivered to the Representative, at
its
expense, within one business day from the effective date of this Agreement,
an
Electronic Prospectus to be used by the Underwriters in connection with the
Offering. As used herein, the term “Electronic
Prospectus”
means
a
form of prospectus, and any amendment or supplement thereto, that meets each
of
the following conditions: (i) it shall be encoded in an electronic format,
satisfactory to the Representative, that may be transmitted electronically
by
the other Underwriters to offerees and purchasers of the Units for at least
the
period during which a Prospectus relating to the Units is required to be
delivered under the Securities Act; (ii) it shall disclose the same information
as the paper prospectus and prospectus filed pursuant to EDGAR, except to the
extent that graphic and image material cannot be disseminated electronically,
in
which case such graphic and image material shall be replaced in the electronic
prospectus with a fair and accurate narrative description or tabular
representation of such material, as appropriate; and (iii) it shall be in or
convertible into a paper format or an electronic format, satisfactory to the
Representative, that will allow recipients thereof to store and have
continuously ready access to the prospectus at any future time, without charge
to such recipients (other than any fee charged for subscription to the Internet
as a whole and for on-line time). The Company hereby confirms that it has
included or will include in the Prospectus filed pursuant to EDGAR or otherwise
with the Commission and in the Registration Statement at the time it was
declared effective an undertaking that, upon receipt of a request by an investor
or his or her representative within the period when a prospectus relating to
the
Units is required to be delivered under the Securities Act, the Company shall
transmit or cause to be transmitted promptly, without charge, a paper copy
of
the Prospectus.
3.24.Reservation
of Shares.
The
Company has reserved and will continue to reserve and keep available that
maximum number of its authorized but unissued securities which are issuable
upon
exercise of the Warrants, the Private Placement Warrants and the
Representative’s Securities outstanding from time to time.
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3.25.Private
Placement Proceeds.
Concurrently with the consummation of the IPO, the Company shall transfer
$1,750,000 of the proceeds from the Private Placement into the Trust Account
and
shall provide Chardan with evidence of the same.
3.26.No
Amendment to Charter.The
Company covenants and agrees that it will not seek to amend or modify article
170 of its Amended and Restated Articles of Association prior to a Business
Combination.
3.26.1.Third
Party Beneficiaries.
The
Company acknowledges that the purchasers of the Firm Units and the Option Units
in the Offering shall be deemed to be third party beneficiaries of this Section
3.26.
3.26.2.No
Amendment to Section 3.26.
The
Representative and the Company specifically agree that, except pursuant to
its
own terms, this Section 3.26 shall not be modified or amended in any
way.
3.27.OTC
Bulletin Board Quotation.
The
Company will use its reasonable best efforts to maintain the quotation of the
Public Securities on the OTC Bulletin Board or a national securities exchange
acceptable to the Representative for a period of at least five (5) years from
the date of this Agreement.
4.Conditions
of Underwriters’ Obligations.
The obligations of the several Underwriters to purchase and pay for the Units,
as provided herein, shall be subject to the continuing accuracy of the
representations and warranties of the Company as of the date hereof and as
of
each of the Closing Date and the Option Closing Date, if any, to the accuracy
of
the statements of officers of the Company made pursuant to the provisions hereof
and to the performance by the Company of its obligations hereunder and to the
following conditions:
4.1.Regulatory
Matters.
4.1.1.Effectiveness
of Registration Statement.
The Registration Statement shall have become effective not later than 5:00
p.m.,
New York time, on the date of this Agreement or such later date and time as
shall be consented to in writing by the Representative, and, at each of the
Closing Date and the Option Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for the purpose shall have been instituted or shall be pending
or
contemplated by the Commission and any request on the part of the Commission
for
additional information shall have been complied with to the reasonable
satisfaction of Loeb, as counsel to the Underwriters.
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4.1.2.FINRA
Clearance.
By the Effective Date, the Representative shall have received clearance from
the
FINRA as to the amount of compensation allowable or payable to the Underwriters
as described in the Registration Statement.
4.1.3.No
Commission Stop Order.
At each
of the Closing Date and the Option Closing Date, the Commission has not issued
any order or threatened to issue any order preventing or suspending the use
of
any Preliminary Prospectus, the Prospectus or any part thereof, and has not
instituted or threatened to institute any proceedings with respect to such
an
order.
4.1.4.No
Blue Sky Stop Orders.
No order suspending the sale of the Units in any jurisdiction designated by
the
Representative pursuant to Section 3.3 hereof shall have been issued on
either the Closing Date or the Option Closing Date, and no proceedings for
that
purpose shall have been instituted or shall be contemplated.
4.1.5.The
OTC Bulletin Board.
The
Securities shall have been admitted and approved for quotation on the OTC
Bulletin Board.
4.2. Company
Counsel Matters.
4.2.1.Closing
Date Opinion of Counsel.
On the
Closing Date, the Representative shall have received the opinion of Skadden,
Conyers and Broad & Bright, dated the Closing Date, addressed to the
Representative and in forms attached hereto as Exhibit
A,
Exhibit
B
and
Exhibit
C,
respectively.
The
opinion of counsel(s) shall further include a statement to the effect that
such
counsel(s) participated in conferences with officers and other representatives
of the Company, representatives of the independent public accountants for the
Company and representatives of the Underwriters at which the contents of the
Registration Statement, the Preliminary Prospectus, the Sale Preliminary
Prospectus, the Prospectus, and related matters were discussed and although
such
counsel is not passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Preliminary Prospectus, the Sale Preliminary
Prospectus or the Prospectus (except as otherwise set forth in this opinion),
no
facts have come to the attention of such counsel which lead it to believe that
the Registration Statement, the Preliminary Prospectus, the Sale Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, as of
the
date of such opinion or in the case of the Preliminary Prospectus or Sale
Preliminary Prospectus, as of the date thereof, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being understood
that such counsel need express no opinion with respect to the financial
statements and schedules and other financial and statistical data included
in
the Registration Statement, the Preliminary Prospectus, the Sale Preliminary
Prospectus or the Prospectus).
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4.2.2.Option
Closing Date Opinion of Counsel.
On the Option Closing Date, if any, the Representative shall have received
the
favorable opinion of Skadden, CD&P, and Broad & Bright dated the Option
Closing Date, addressed to the Representative and in form and substance
reasonably satisfactory to the counsel to the Representative, confirming as
of
the Option Closing Date, the statements made by Skadden, CD&P and Broad
& Bright in its opinion delivered on the Closing Date.
4.2.3Reliance.
In
rendering such opinion, such counsel may rely: (i) as to matters involving
the
application of the laws other than the laws of the United States and
jurisdictions in which they are admitted to the extent such counsel deems proper
and to the extent specified in such opinion, if at all, in form and substance
reasonably satisfactory to the Representative and (ii) as to matters of
fact, to the extent they deem proper, on certificates or other written
statements of officers of the Company and officers of departments of various
jurisdiction having custody of documents respecting the corporate existence
or
good standing of the Company, provided that copies of any such statements or
certificates shall be delivered to the Underwriters’ counsel if requested.
The opinion of counsel for the Company and any opinion relied upon by such
counsel for the Company shall include a statement to the effect that it may
be
relied upon by counsel for the Underwriters in its opinion delivered to the
Underwriters.
4.3.Cold
Comfort Letter.
At the time this Agreement is executed, and at each of the Closing Date and
the
Option Closing Date, if any, the Representative shall have received a letter,
addressed to the Representative and in form and substance satisfactory in all
respects (including the non-material nature of the changes or decreases, if
any,
referred to in clause (iii) below) to the Representative and to Loeb from BDO
dated, respectively, as of the date of this Agreement and as of the Closing
Date
and the Option Closing Date, if any:
(i) Confirming
that they are independent accountants with respect to the Company within the
meaning of the Act and the applicable Regulations and that they have not, during
the periods covered by the financial statements included in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, provided to
the
Company any non-audit services, as such term is used in Section 10A(g) of
the Exchange Act;
(ii) Stating
that in their opinion the financial statements of the Company included in the
Registration Statement and the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act and the
published Regulations thereunder;
(iii) Stating
that, on the basis of a reading of the latest available unaudited interim
financial statements of the Company (with an indication of the date of the
latest available unaudited interim financial statements), a reading of the
latest available minutes of the shareholders and board of directors and the
various committees of the board of directors, consultations with officers and
other employees of the Company responsible for financial and accounting matters
and other specified procedures and inquiries, nothing has come to their
attention which would lead them to believe that: (a) the unaudited financial
statements of the Company included in the Registration Statement, the Sale
Preliminary Prospectus and the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the Act and
the
Regulations or are not fairly presented in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that
of
the audited financial statements of the Company included in the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus; or (b) at a
date
not later than five days prior to the Effective Date, Closing Date or Option
Closing Date, as the case may be, there was any change in the capital stock
or
long-term debt of the Company, or any decrease in the shareholders’ equity of
the Company as compared with amounts shown in the January 8, 2008 balance sheet
included in the Registration Statement, the Sale Preliminary Prospectus and
the
Prospectus, other than as set forth in or contemplated by the Registration
Statement, the Sale Preliminary Prospectus and the Prospectus, or, if there
was
any decrease, setting forth the amount of such decrease, and (c) during the
period from January 9, 2008 to a specified date not later than two (2) days
prior to the Effective Date, Closing Date or Option Closing Date, as the case
may be, there was any decrease in revenues, net earnings or net earnings per
Ordinary Share, in each case as compared with the corresponding period in the
preceding year and as compared with the corresponding period in the preceding
quarter, other than as set forth in or contemplated by the Registration
Statement and the Prospectus, or, if there was any such decrease, setting forth
the amount of such decrease;
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(iv) Setting
forth, at a date not later than five days prior to the Effective Date, the
amount of liabilities of the Company;
(v) Stating
that they have compared specific dollar amounts, numbers of shares, percentages
of revenues and earnings, statements and other financial information pertaining
to the Company set forth in the Registration Statement, the Sale Preliminary
Prospectus and the Prospectus in each case to the extent that such amounts,
numbers, percentages, statements and information may be derived from the general
accounting records, including work sheets, of the Company and excluding any
questions requiring an interpretation by legal counsel, with the results
obtained from the application of specified readings, inquiries and other
appropriate procedures (which procedures do not constitute an examination in
accordance with generally accepted auditing standards) set forth in the letter
and found them to be in agreement;
(vi) Stating
that they have not during the immediately preceding five year period brought
to
the attention of the Company’s management any reportable condition related to
internal structure, design or operation as defined in the Statement on Auditing
Standards No. 60 “Communication of Internal Control Structure Related Matters
Noted in an Audit,” in the Company’s internal controls; and
(vii) Statements
as to such other matters incident to the transaction contemplated hereby as
the
Representative may reasonably request.
4.4.Officers’
Certificates.
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4.4.1.Officers’
Certificate.
At each of the Closing Date and the Option Closing Date, if any, the
Representative shall have received a certificate of the Company signed by the
Chairman of the Board or the President and the Secretary or Assistant Secretary
of the Company, dated the Closing Date or the Option Closing Date, as the case
may be, respectively, to the effect that the Company has performed all covenants
and complied with all conditions required by this Agreement to be performed
or
complied with by the Company prior to and as of the Closing Date, or the Option
Closing Date, as the case may be, and that the conditions set forth in
Section 4.5 hereof have been satisfied as of such date and that, as of
Closing Date and the Option Closing Date, as the case may be, the
representations and warranties of the Company set forth in Section 2 hereof
are true and correct. In addition, the Representative will have received
such other and further certificates of officers of the Company as the
Representative may reasonably request.
4.4.2.Secretary’s
Certificate.
At each of the Closing Date and the Option Closing Date, if any, the
Representative shall have received a certificate of the Company signed by the
Secretary or Assistant Secretary of the Company, dated the Closing Date or
the
Option Date, as the case may be, respectively, certifying: (i) that the By-Laws
and Amended and Restated Articles of Association of the Company are true and
complete, have not been modified and are in full force and effect; (ii) that
the
resolutions relating to the public offering contemplated by this Agreement
are
in full force and effect and have not been modified; (iii) all correspondence
between the Company or its counsel and the Commission; and (iv) as to the
incumbency of the officers of the Company. The documents referred to in
such certificate shall be attached to such certificate.
4.5.No
Material Changes.
Prior to and on each of the Closing Date and the Option Closing Date, if any:
(i) there shall have been no material adverse change or development involving
a
prospective material adverse change in the condition or prospects or the
business activities, financial or otherwise, of the Company from the latest
dates as of which such condition is set forth in the Registration Statement,
the
Sale Preliminary Prospectus and Prospectus; (ii) no action suit or proceeding,
at law or in equity, shall have been pending or threatened against the Company
or any Company Affiliate before or by any court or foreign, federal or state
commission, board or other administrative agency wherein an unfavorable
decision, ruling or finding may materially adversely affect the business,
operations, prospects or financial condition or income of the Company, except
as
set forth in the Registration Statement, the Sale Preliminary Prospectus and
Prospectus; (iii) no stop order shall have been issued under the Act and no
proceedings therefor shall have been initiated or threatened by the Commission;
and (iv) the Registration Statement, the Sale Preliminary Prospectus and the
Prospectus and any amendments or supplements thereto shall contain all material
statements which are required to be stated therein in accordance with the Act
and the Regulations and shall conform in all material respects to the
requirements of the Act and the Regulations, and none of the Registration
Statement, the Sale Preliminary Prospectus or the Prospectus, or any amendment
or supplement thereto shall contain any untrue statement of a material fact
or
omits to state any material fact required to be stated therein or necessary
to
make the statements therein (in the case of the , the Sale Preliminary
Prospectus and Prospectus, in light of the circumstances under which they were
made), not misleading.
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4.6.Delivery
of Agreements.
4.6.1.Effective
Date Deliveries.
On the Effective Date, the Company shall have delivered to the Representative
executed copies of the Escrow Agreement, the Trust Agreement, the Warrant
Agreement, the Services Agreement and all of the Insider Letters.
4.6.2.Closing
Date Deliveries.
On the Closing Date, the Company shall have delivered to the Representative,
the
Representative’s Purchase Option.
5.Indemnification.
5.1.Indemnification
of Underwriters.
5.1.1.General.
Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless each of the Underwriters and each dealer selected by the Representative
that participates in the offer and sale of the Units (each a “Selected
Dealer”)
and
each of their respective directors, officers and employees and each person,
if
any, who controls any such Underwriter or dealer (“controlling
person”)
within
the meaning of Section 15 of the Act or Section 20(a) of the Exchange Act
against any and all loss, liability, claim, damage and expense whatsoever
(including but not limited to any and all legal or other expenses reasonably
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, whether arising out of any
action between any of the Underwriters and the Company or between any of the
Underwriters and any third party or otherwise) to which they or any of them
may
become subject under the Act, the Exchange Act or any other foreign, federal,
state or local statute, law, rule, regulation or ordinance or at common law
or
otherwise or under the laws, rules and regulation of foreign countries, arising
out of or based upon any untrue statement or alleged untrue statement of a
material fact contained in (i) any Preliminary Prospectus, the Registration
Statement, or the Prospectus (as from time to time each may be amended and
supplemented); (ii) in any post-effective amendment or amendments or any new
registration statement and prospectus relating to any the securities of the
Company described herein; or (iii) any application or other document or written
communication (in this Section 5 collectively called “application”)
executed by the Company or based upon written information furnished by the
Company in any jurisdiction in order to qualify the Units under the securities
laws thereof or filed with the Commission, any foreign or state securities
commission or agency, the American Stock Exchange, the OTC Bulletin Board or
Nasdaq or any securities exchange; or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, unless such statement or omission was made in reliance
upon and in conformity with written information furnished to the Company with
respect to an Underwriter by or on behalf of such Underwriter expressly for
use
in any Preliminary Prospectus, the Registration Statement the Prospectus or
any
amendment or supplement thereof, or in any application, as the case may be,
which furnished written information, it is expressly agreed, consists solely
of
the information described in the last sentence of Section 2.3.1. The Company
agrees promptly to notify the Representative of the commencement of any
litigation or proceedings against the Company or any of its officers, directors
or controlling persons in connection with the issue and sale of the Securities
or in connection with the Preliminary Prospectus, the Registration Statement
or
the Prospectus.
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5.1.2.Procedure.
If any
action is brought against an Underwriter or controlling person in respect of
which indemnity may be sought against the Company pursuant to Section 5.1.1,
such Underwriter shall promptly notify the Company in writing of the institution
of such action and the Company shall assume the defense of such action,
including the employment and fees of counsel (subject to the reasonable approval
of such Underwriter) and payment of actual expenses. Such Underwriter or
controlling person shall have the right to employ its or their own counsel
in
any such case, but the fees and expenses of such counsel shall be at the expense
of such Underwriter or such controlling person unless: (i) the employment of
such counsel at the expense of the Company shall have been authorized in writing
by the Company in connection with the defense of such action; (ii) the Company
shall not have employed counsel to have charge of the defense of such action;
or
(iii) such indemnified party or parties shall have reasonably concluded that
there may be defenses available to it or them which are different from or
additional to those available to the Company (in which case the Company shall
not have the right to direct the defense of such action on behalf of the
indemnified party or parties), in any of which events the reasonable fees and
expenses of not more than one additional firm of attorneys selected by the
Underwriter and/or controlling person shall be borne by the Company.
Notwithstanding anything to the contrary contained herein, if the Underwriter
or
controlling person shall assume the defense of such action as provided above,
the Company shall have the right to approve the terms of any settlement of
such
action which approval shall not be unreasonably withheld.
5.2.Indemnification
of the Company.
Each
Underwriter, severally and not jointly, agrees to indemnify and hold harmless
the Company, its directors, officers, and employees and agents who control
the
Company within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and its counsel, against any and all loss, liability, claim,
damage and expense described in the foregoing indemnity from the Company to
the
several Underwriters, as incurred, but only with respect to untrue statements
or
omissions, or alleged untrue statements or omissions made in the Registration
Statement, any Preliminary Prospectus, the Prospectus or any amendment or
supplement thereto, or in any application, in reliance upon, and in strict
conformity with, written information furnished to the Company with respect
to
such Underwriter by or on behalf of the Underwriter expressly for use in such
Registration Statement, Preliminary Prospectus, the Prospectus or any amendment
or supplement thereto or in any such application, which furnished written
information, it is expressly agreed, consists solely of the information
described in the last sentence of Section 2.3.1. In case any action shall be
brought against the Company or any other person so indemnified based on any
Preliminary Prospectus, the Registration Statement, the Prospectus or any
amendment or supplement thereto or any application, and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have
the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the several Underwriters
by the provisions of Section 5.1.2.
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5.3.Contribution.
5.3.1.Contribution
Rights.
In order to provide for just and equitable contribution under the Act in any
case in which (i) any person entitled to indemnification under this
Section 5 makes claim for indemnification pursuant hereto but it is
judicially determined (by the entry of a final judgment or decree by a court
of
competent jurisdiction and the expiration of time to appeal or the denial of
the
last right of appeal) that such indemnification may not be enforced in such
case
notwithstanding the fact that this Section 5 provides for indemnification
in such case, or (ii) contribution under the Act, the Exchange Act or otherwise
may be required on the part of any such person in circumstances for which
indemnification is provided under this Section 5, then, and in each such
case, the Company and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Underwriters, as incurred,
in such proportions that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount appearing on the
cover page of the Prospectus bears to the initial offering price appearing
thereon and the Company is responsible for the balance; provided, that, no
person guilty of a fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. Notwithstanding
the provisions of this Section 5.3.1, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Public Securities underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay in respect of such losses, liabilities,
claims, damages and expenses. For purposes of this Section, each director,
officer and employee of an Underwriter or the Company, as applicable, and each
person, if any, who controls an Underwriter or the Company, as applicable,
within the meaning of Section 15 of the Act shall have the same rights to
contribution as the Underwriters or the Company, as applicable.
5.3.2.Contribution
Procedure.
Within fifteen days after receipt by any party to this Agreement (or its
representative) of notice of the commencement of any action, suit or proceeding,
such party will, if a claim for contribution in respect thereof is to be made
against another party (“contributing
party”),
notify the contributing party of the commencement thereof, but the omission
to
so notify the contributing party will not relieve it from any liability which
it
may have to any other party other than for contribution hereunder. In case
any such action, suit or proceeding is brought against any party, and such
party
notifies a contributing party or its representative of the commencement thereof
within the aforesaid fifteen days, the contributing party will be entitled
to
participate therein with the notifying party and any other contributing party
similarly notified. Any such contributing party shall not be liable to any
party seeking contribution on account of any settlement of any claim, action
or
proceeding effected by such party seeking contribution on account of any
settlement of any claim, action or proceeding effected by such party seeking
contribution without the written consent of such contributing party. The
contribution provisions contained in this Section are intended to
supersede, to the extent permitted by law, any right to contribution under
the
Act, the Exchange Act or otherwise available. The Underwriters’
obligations to contribute pursuant to this Section 5.3 are several and not
joint.
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6.Default
by an Underwriter.
6.1.Default
Not Exceeding 10% of Firm Units or Option Units.
If any
Underwriter or Underwriters shall default in its or their obligations to
purchase the Firm Units or the Option Units, if the over-allotment option is
exercised, hereunder, and if the number of the Firm Units or Option Units with
respect to which such default relates does not exceed in the aggregate 10%
of
the number of Firm Units or Option Units that all Underwriters have agreed
to
purchase hereunder, then such Firm Units or Option Units to which the default
relates shall be purchased by the non-defaulting Underwriters in proportion
to
their respective commitments hereunder.
6.2.Default
Exceeding 10% of Firm Units or Option Units.
In the
event that the default addressed in Section 6.1 above relates to more than
10%
of the Firm Units or Option Units, the Representative may, in its discretion,
arrange for the Representative or for another party or parties to purchase
such
Firm Units or Option Units to which such default relates on the terms contained
herein. If within one (1) Business Day after such default relating to more
than
10% of the Firm Units or Option Units the Representative does not arrange for
the purchase of such Firm Units or Option Units, then the Company shall be
entitled to a further period of one (1) Business Day within which to procure
another party or parties satisfactory to the Representative to purchase said
Firm Units or Option Units on such terms. In the event that neither the
Representative nor the Company arrange for the purchase of the Firm Units or
Option Units to which a default relates as provided in this Section 6, this
Agreement may be terminated by the Representative or the Company without
liability on the part of the Company (except as provided in Sections 3.12 and
5
hereof) or the several Underwriters (except as provided in Section 5 hereof);
provided,
however,
that if
such default occurs with respect to the Option Units, this Agreement will not
terminate as to the Firm Units; and provided
further
that
nothing herein shall relieve a defaulting Underwriter of its liability, if
any,
to the other several Underwriters and to the Company for damages occasioned
by
its default hereunder.
6.3.Postponement
of Closing Date.
In the event that the Firm Units or Option Units to which the default relates
are to be purchased by the non-defaulting Underwriters, or are to be purchased
by another party or parties as aforesaid, the Representative or the Company
shall have the right to postpone the Closing Date or Option Closing Date for
a
reasonable period, but not in any event exceeding five (5) business days, in
order to effect whatever changes may thereby be made necessary in the
Registration Statement and/or the Prospectus, as the case may be, or in any
other documents and arrangements, and the Company agrees to file promptly any
amendment to, or to supplement, the Registration Statement and/or the
Prospectus, as the case may be, that in the opinion of counsel for the
Underwriters may thereby be made necessary. The term “Underwriter” as used in
this Agreement shall include any party substituted under this Section 6
with like effect as if it had originally been a party to this Agreement with
respect to such Securities.
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7.Additional
Covenants.
7.1.Additional
Shares or Options.
The Company hereby agrees that until the Company consummates a Business
Combination, it shall not issue any Ordinary Shares or any options or other
securities convertible into Ordinary Shares, or any shares of Preferred Stock
which participate in any manner in the Trust Account or which vote as a class
with the Ordinary Shares on a Business Combination.
7.2.Trust
Account Waiver Acknowledgments.
The
Company hereby agrees that it will not commence its due diligence investigation
of any operating business or businesses which the Company seeks to acquire
(each, a “Target
Business”)
or
obtain the services of any vendor unless and until such Target Business or
vendor acknowledge in writing, whether through a letter of intent, memorandum
of
understanding or other similar document (and subsequently acknowledges the
same
in any definitive document replacing any of the foregoing), that (a) it has
read
the Prospectus and understands that the Company has established the Trust
Account, initially in an amount of $30,000,000 (without giving effect to any
exercise of the Over-allotment Option) for the benefit of the Public
Shareholders and that, except for taxes payable by us and up to $850,000 of
interest to fund working capital, the Company may disburse monies from the
Trust
Account only: (i) to the Public Shareholders in the event of the conversion
of
their shares or the dissolution and liquidation of the Trust Account as part
of
the Company’s plan of dissolution and liquidation or (ii) to the Company after
it consummates a Business Combination and (b) for and in consideration of the
Company (i) agreeing to evaluate such Target Business for purposes of
consummating a Business Combination with it or (ii) agreeing to engage the
services of the vendor, as the case may be, such Target Business or vendor
agrees that it does not have any right, title, interest or claim of any kind
in
or to any monies of the Trust Account (“Claim”)
and
waives any Claim it may have in the future as a result of, or arising out of,
any negotiations, contracts or agreements with the Company and will not seek
recourse against the Trust Account for any reason whatsoever. The
foregoing letters shall substantially be in the form attached hereto
asExhibit
C
and
Exhibit
D,
respectively.
7.3.Insider
Letters.
The Company shall not take any action or omit to take any action which would
cause a breach of any of the Insider Letters executed between each Company
Affiliate and Chardan and will not allow any amendments to, or waivers of,
such
Insider Letters without the prior written consent of Chardan.
7.4.Amended
and Restated Articles of Association.
The Company shall not take any action or omit to take any action that would
cause the Company to be in breach or violation of its Amended and Restated
Articles of Association. Except as set forth in Section 3.26, prior to the
consummation of a Business Combination, the Company will not amend its Amended
and Restated Articles of Association without the prior written consent of
Chardan.
7.5.Proxy
and Other Information.
The Company shall provide counsel to the Representative with ten copies of
all
proxy information and all related material filed with the Commission in
connection with a Business Combination concurrently with such filing with the
Commission. In addition, the Company shall furnish any other state in
which its initial public offering was registered, such information as may be
requested by such state.
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7.6.Acquisition/Liquidation
Procedure.
7.6.1.Distribution
Amount.
The
Company agrees: (i) that, prior to the consummation of any Business Combination,
it will submit such transaction to the Company’s shareholders for their approval
(“Business
Combination Vote”)
even
if the nature of the acquisition is such as would not ordinarily require
shareholder approval under Cayman Islands law; and (ii) that, in the event
that
the Company does not effect a Business Combination by the termination date
of
the Company’s corporate existence (“Termination
Date”),
the
Company shall take all action necessary to dissolve the Company and liquidate
the Trust Account to holders of IPO Shares as soon as reasonably practicable,
subject to the requirements of the laws of the Cayman Islands. Upon liquidation
of the Trust Account, the Company will distribute to all holders of IPO Shares
(defined below) an aggregate sum equal to $8.00 per IPO Share (plus the interest
income earned on the Trust Account not previously distributed to holders of
the
IPO Shares but net of: (i) taxes payable on interest earned; (ii) amounts to
be
paid to any redeeming shareholders voting against the extended period; and
(iii)
up to an aggregate of $850,000 of interest income that the Company may draw
for
working capital purposes) plus a pro rata share of any remaining net assets,
subject to any valid claims by our creditors that are not covered by amounts
held in the Trust Account or the indemnities provided by the Company’s directors
and officers. Only holders of IPO Shares (as defined below) shall be entitled
to
receive liquidating distributions and the Company shall pay no liquidating
distributions with respect to any other shares of capital stock of the Company,
including the Private Placement Warrants.
7.6.2.Vote
and Share Conversion.
With
respect to the Business Combination Vote, the Company shall use its reasonable
best efforts to cause all of the Initial Shareholders to vote the Ordinary
Shares owned by them immediately prior to this Offering in accordance with
the
majority of the IPO Shares. In addition, the Company shall use its reasonable
best efforts to cause the Initial Shareholders to vote Ordinary Shares they
acquire in the IPO or in the aftermarket in favor of the Business
Combination. At the time the Company seeks approval of any potential
Business Combination, the Company will offer each of the holders of the
Company’s Ordinary Shares issued in this Offering (“IPO
Shares”)
the
right to convert their IPO Shares at a per share price equal to $8.00
(“Conversion
Price”).
If
holders of less than 35.0% of the total number of IPO Shares vote against such
approval of a Business Combination, the Company may, but will not be required
to, proceed with such Business Combination. If the Company elects to so
proceed, it will convert shares, based upon the Conversion Price, from those
holders of IPO Shares who affirmatively requested such conversion and who voted
against the Business Combination. If holders of 35.0% or more in interest of
the
IPO Shares vote against approval of any potential Business Combination, the
Company will not proceed with such Business Combination and will not convert
such shares. Only holders of IPO Shares shall be entitled to receive liquidating
distributions and the Company shall pay no liquidating distributions with
respect to any other shares of capital stock of the Company.
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7.7.Rule
419.
The
Company agrees that it will use its best efforts to prevent the Company from
becoming subject to Rule 419 under the Act prior to the consummation of any
Business Combination, including, but not limited to, using its best efforts
to
prevent any of the Company’s outstanding securities from being deemed to be a
“penny stock” as defined in Rule 3a-51-1 under the Exchange Act during such
period.
7.8.Presentation
of Potential Target Businesses.
The Company shall cause each of the Company Affiliates to agree that, in order
to minimize potential conflicts of interest which may arise from multiple
affiliations, the Company Affiliates will present to the Company for its
consideration, prior to presentation to any other person or company, any
suitable opportunity to acquire an operating business, until the earlier of
the
consummation by the Company of a Business Combination, the liquidation of the
Company or until such time as the Company Affiliates cease to be affiliates
of
the Company, subject to any pre-existing fiduciary obligations the Company
Affiliates might have.
7.9.Target
Net Assets.
The
Company agrees that the initial Target Business that it acquires must have
a
fair market value equal to at least 80.0% of the amount in the Trust Account
at
the time of such acquisition (exclusive of Chardan’s Deferred Discount plus
interest thereon held in the Trust Account). The fair market value of such
business must be determined by the Board of Directors of the Company based
upon
standards generally accepted by the financial community, such as actual and
potential sales, earnings and cash flow and book value. If the Board of
Directors of the Company is not able to independently determine that the Target
Business has a fair market value of at least 80.0% of the amount in the Trust
Account (exclusive of the Deferred Discount) at the time of such acquisition,
the Company will obtain an opinion from an unaffiliated, independent investment
banking firm which is a member of the FINRA with respect to the satisfaction
of
such criteria. The Company is not required to obtain an opinion from an
investment banking firm as to the fair market value if the Company’s Board of
Directors independently determines that the Target Business does have sufficient
fair market value.
8.Representations
and Agreements to Survive Delivery.
Except as the context otherwise requires, all representations, warranties and
agreements contained in this Agreement shall be deemed to be representations,
warranties and agreements at the Closing Date or the Option Closing Date, if
any, and such representations, warranties and agreements of the Underwriters
and
Company, including the indemnity agreements contained in Section 5 hereof,
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of any Underwriter, the Company or any
controlling person, and shall survive termination of this Agreement or the
issuance and delivery of the Securities to the several Underwriters until the
earlier of the expiration of any applicable statute of limitations and the
seventh (7th) anniversary of the later of the Closing Date or the Option Closing
Date, if any, at which time the representations, warranties and agreements
shall
terminate and be of no further force and effect.
Chardan
Capital Markets, LLC
________
__, 2008
Page
39
of
46
9.Effective
Date of This Agreement and Termination Thereof.
9.1.Effective
Date.
This Agreement shall become effective on the Effective Date at the time the
Registration Statement is declared effective by the Commission.
9.2.Termination.
The Representative shall have the right to terminate this Agreement at any
time
prior to any Closing Date: (i) if any domestic or international event or act
or
occurrence has materially disrupted or, in the Representative’s sole opinion,
will in the immediate future materially disrupt, general securities markets
in
the United States; or (ii) if trading on the New York Stock Exchange, the AMEX,
the Boston Stock Exchange or on the FINRA OTC Bulletin Board (or successor
trading market) shall have been suspended, or minimum or maximum prices for
trading shall have been fixed, or maximum ranges for prices for securities
shall
have been fixed, or maximum ranges for prices for securities shall have been
required on the FINRA OTC Bulletin Board or by order of the Commission or any
other government authority having jurisdiction, or (iii) if the United States
shall have become engaged in a major increase in hostilities or (iv) if a
banking moratorium has been declared by a New York State or federal authority,
or (v) if a moratorium on foreign exchange trading has been declared which
materially adversely impacts the United States securities market, or (vi) if
the
Company shall have sustained a material loss by fire, flood, accident,
hurricane, earthquake, theft, sabotage or other calamity or malicious act which,
whether or not such loss shall have been insured, will, in the Representative’s
sole opinion, make it inadvisable to proceed with the delivery of the Units,
or
(vii) if any of the Company’s representations, warranties or covenants hereunder
are breached, or (viii) if the Representative shall have become aware after
the
date hereof of such a material adverse change in the conditions or prospects
of
the Company, or such adverse material change in general market conditions,
including, without limitation, as a result of terrorist activities after the
date hereof, as in the Representative’s judgment would make it impracticable to
proceed with the offering, sale and/or delivery of the Units or to enforce
contracts made by the Underwriters for the sale of the Units.
9.3.Expenses.
In the event that this Agreement shall not be carried out for any reason
whatsoever, within the time specified herein or any extensions thereof pursuant
to the terms herein, the obligations of the Company to pay the out of pocket
expenses related to the transactions contemplated herein shall be governed
by
Section 3.13.1 hereof.
9.4.Indemnification.
Notwithstanding any contrary provision contained in this Agreement, any election
hereunder or any termination of this Agreement, and whether or not this
Agreement is otherwise carried out, the provisions of Section 5 shall not
be in any way effected by, such election or termination or failure to carry
out
the terms of this Agreement or any part hereof.
Chardan
Capital Markets, LLC
________
__, 2008
Page
40
of
46
10.Miscellaneous.
10.1.Notices.
All communications hereunder, except as herein otherwise specifically provided,
shall be in writing and shall be mailed, delivered by hand or reputable
overnight courier or delivered by facsimile transmission (with printed
confirmation of receipt) and confirmed and shall be deemed given when so mailed,
delivered or faxed (or if mailed, two days after such mailing):
With
a
copy (which shall not constitute notice) to:
Skadden,
Arps, Slate, Meagher & Flom LLP
Izumi
Garden Tower, 21st
Floor
1-6-1
Roppongi, Minato-Ku,
Tokyo,
106-6021
Attn:
Robert G. Wray, Esq.
81-3-3568-2626
10.2.Headings.
The headings contained herein are for the sole purpose of convenience of
reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of this Agreement.
10.3.Amendment.
This Agreement may only be amended by a written instrument executed by each
of
the parties hereto.
Chardan
Capital Markets, LLC
________
__, 2008
Page
41
of
46
10.4.Entire
Agreement.
This Agreement (together with the other agreements and documents being delivered
pursuant to or in connection with this Agreement) constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof, and supersede all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.
10.5.Binding
Effect.
This Agreement shall inure solely to the benefit of and shall be binding upon
the Representative, the Underwriters, the Company and the controlling persons,
directors and officers referred to in Section 5 hereof, and their
respective successors, legal representatives and assigns, and no other person
shall have or be construed to have any legal or equitable right, remedy or
claim
under or in respect of or by virtue of this Agreement or any provisions herein
contained.
10.6.Governing
Law, Venue, etc.
This
Agreement shall be governed by and construed and enforced in accordance with
the
laws of the State of New York, without giving effect to the conflict of laws
principles thereof. Each of the Representative and the Company (and any
individual signatory hereto): (i) agrees that any legal suit, action or
proceeding (each hereinafter an “Action”) arising out of or relating to this
agreement and/or the transactions contemplated hereby shall be instituted
exclusively in New York Supreme Court, County of New York, or in the United
States District Court for the Southern District of New York, (ii) waives any
objection which such party may have or hereafter has and agrees not to assert
in
any such Action that it is not personally subject to the jurisdiction of such
court, that the Action is brought in an inconvenient forum or that the venue
of
the Action is improper and (iii) irrevocably and exclusively consents to the
jurisdiction of the New York Supreme Court, County of New York, and the United
States District Court for the Southern District of New York in any
Action.
10.7.Service
of Process.
Each of
the Representative and the Company (and any individual signatory hereto) further
agrees to accept and acknowledge service of any and all process which may be
served in any Action in the New York Supreme Court, County of New York, or
in
the United States District Court for the Southern District of New York and
agrees that service of process upon the Company or any such individual mailed
by
certified mail to the Company’s address shall be deemed in every respect
effective service of process upon the Company or any such individual in any
Action, and service of process upon the Representative mailed by certified
mail
to the Representative’s address shall be deemed in every respect effective
service process upon the Representative, in any Action.
10.8.JURY
TRIAL WAIVER.
THE
COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON
BEHALF OF ITS EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT TO A TRIAL
BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION
WITH
THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, THE
REGISTRATION STATEMENT AND THE PROSPECTUS.
Chardan
Capital Markets, LLC
________
__, 2008
Page
42
of
46
10.9.Execution
in Counterparts.
This
Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which shall be deemed to be
an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when one or more counterparts has been
signed by each of the parties hereto and delivered to each of the other parties
hereto. Delivery of a signed counterpart of this Agreement by fax or email/.pdf
transmission shall constitute valid and sufficient delivery
thereof.
10.10.Waiver,
etc.
The failure of any of the parties hereto to at any time enforce any of the
provisions of this Agreement shall not be deemed or construed to be a waiver
of
any such provision, nor to in any way effect the validity of this Agreement
or
any provision hereof or the right of any of the parties hereto to thereafter
enforce each and every provision of this Agreement. No waiver of any
breach, non-compliance or non-fulfillment of any of the provisions of this
Agreement shall be effective unless set forth in a written instrument executed
by the party or parties against whom or which enforcement of such waiver is
sought; and no waiver of any such breach, non-compliance or non-fulfillment
shall be construed or deemed to be a waiver of any other or subsequent breach,
non-compliance or non-fulfillment.
10.11.No
Fiduciary Relationship.
The
Company hereby acknowledges that the Underwriters are acting solely as
underwriters in connection with the offering of the Company’s securities. The
Company further acknowledges that the Underwriters are acting pursuant to a
contractual relationship created solely by this Agreement entered into on an
arms-length basis and in no event do the parties intend that the Underwriters
act or be responsible as a fiduciary to the Company, its management,
shareholders, creditors or any other person in connection with any activity
that
the Underwriters may undertake or have undertaken in furtherance of the offering
of the Company’s securities, either before or after the date hereof. The
Underwriters hereby expressly disclaim any fiduciary or similar obligations
to
the Company, either in connection with the transactions contemplated by this
Agreement or any matters leading up to such transactions, and the Company hereby
confirms its understanding and agreement to that effect. The Company and the
Underwriters agree that they are each responsible for making their own
independent judgments with respect to any such transactions, and that any
opinions or views expressed by the Underwriters to the Company regarding such
transactions, including but not limited to any opinions or views with respect
to
the price or market for the Company’s securities, do not constitute advice or
recommendations to the Company. The Company acknowledges that the price of
the
Securities set forth in this Agreement was established following arms-length
negotiations and that the Company is capable of evaluating and understanding,
and understands and accepts, the terms, risks and conditions of the transactions
contemplated by this Agreement. The Company hereby waives and releases, to
the
fullest extent permitted by law, any claims that it may have against the
Underwriters with respect to any breach or alleged breach of any fiduciary
or
similar duty to the Company and agrees that the Underwriters shall have no
liability (whether direct or indirect) to the Company in respect of such
fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf
of or in right of the Company, including stockholders, employees or
creditors.
Chardan
Capital Markets, LLC
________
__, 2008
Page
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46
If
the
foregoing correctly sets forth the understanding between the Underwriters and
the Company, please so indicate in the space provided below for that purpose,
whereupon this letter shall constitute a binding agreement between
us.
Very
truly yours,
CHINA
FUNDAMENTAL ACQUISITION CORPORATION
By:
_______________________________
Name:
Chun Yi Hao
Title:
Chief Executive Officer
Agreed
to and accepted
as
of the date first written above:
CHARDAN
CAPITAL MARKETS LLC, as Representative
of
the
several Underwriters
By:
________________________________________
Name:
Kerry Propper
Title:
Chief Executive Officer
SCHEDULE
A
CHINA
FUNDAMENTAL ACQUISITION CORPORATION
3,750,000
Units
Underwriter
Number
of Firm Units
to
be Purchased
Chardan
Capital Markets, LLC
Maxim
Group LLC
3,750,000
EXHIBIT
C
Form
of Target Business Letter
China
Fundamental Acquisition Corporation.
Room
2301, World Wide House
19
Des
Voex Road
Central,
Hong Kong
Attn:
Chun Yi Hao
Gentlemen:
Reference
is made to the Final Prospectus of China Fundamental Acquisition Corporation
(the “Company”),
dated
_______________, 2008 (the “Prospectus”).
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in Prospectus.
We
have
read the Prospectus and understand that the Company has established the Trust
Account, initially in an amount of at least $30,000,000 for the benefit of
the
Public Shareholders and the underwriters of the Company’s initial public
offering (the “Underwriters”)
and
that, except for a portion of the interest earned on the amounts held in the
Trust Account, the Company may disburse monies from the Trust Account only:
(i)
to the Public Shareholders in the event of the redemption of their shares or
the
dissolution and liquidation of the Company; (ii) to the Public Shareholders
from
the interest income earned on the Trust Account, as determined by the Board
of
Directors; or (iv) to the Company and the Underwriters after it consummates
a
Business Combination.
For
and
in consideration of the Company agreeing to evaluate the undersigned for
purposes of consummating a Business Combination with it, the undersigned hereby
agrees that it does not have any right, title, interest or claim of any kind
in
or to any monies in the Trust Account (each, a “Claim”)
and
hereby waives any Claim it may have in the future as a result of, or arising
out
of, any negotiations, contracts or agreements with the Company and will not
seek
recourse against the Trust Account for any reason whatsoever.
Print
Name of Target Business
Authorized
Signature of Target Business
EXHIBIT
D
Form
of Vendor Letter
China
Fundamental Acquisition Corporation.
Room
2301, World Wide House
19
Des
Voex Road
Central,
Hong Kong
Attn:
Chun Yi Hao
Gentlemen:
Reference
is made to the Final Prospectus of China Fundamental Acquisition Corporation
(the “Company”),
dated
_______________, 2008 (the “Prospectus”).
Capitalized terms used and not otherwise defined herein shall have the meanings
assigned to them in Prospectus.
We
have
read the Prospectus and understand that the Company has established the Trust
Account, initially in an amount of at least $30,000,000 for the benefit of
the
Public Shareholders and the underwriters of the Company’s initial public
offering (the “Underwriters”)
and
that, except for a portion of the interest earned on the amounts held in the
Trust Account, the Company may disburse monies from the Trust Account only:
(i)
to the Public Shareholders in the event of the redemption of their shares or
the
dissolution and liquidation of the Company; (ii) to the Public Shareholder
from
the interest income earned on the Trust Account, as determined by the Board
of
Directors; or (ii) to the Company and the Underwriters after it consummates
a
Business Combination.
For
and
in consideration of the Company agreeing to use the services of the undersigned,
the undersigned hereby agrees that it does not have any right, title, interest
or claim of any kind in or to any monies in the Trust Account (each, a
“Claim”)
and
hereby waives any Claim it may have in the future as a result of, or arising
out
of, any services provided to the Company and will not seek recourse against
the
Trust Account for any reason whatsoever.
Print
Name of Vendor
Authorized
Signature of Vendor
Dates Referenced Herein and Documents Incorporated by Reference
