PLACEMENT WARRANT PURCHASE AGREEMENT
PLACEMENT WARRANT PURCHASE
AGREEMENT (this “Agreement”) made as of this ___ day of _____, 2011 among
Prime Acquisition Corp, a Cayman Islands exempted company (the “Company”) and
the undersigned (the “Purchasers”).
WHEREAS, the Company has filed
with the Securities and Exchange Commission (“SEC”) a registration statement on
Form F-1, as amended (File No. 333-[_______]) (the “Registration Statement”), in
connection with the Company’s initial public offering (the “IPO”) of up
to [____] units, each unit (“Unit”) consisting of one ordinary share
of the Company, $0.001 par value (the “Ordinary Shares”), and (ii) one-half of a
warrant (the “Warrants”), each full Warrant to purchase one Ordinary Share;
and
WHEREAS, the Company desires
to sell in a private placement to the Purchasers (the “Placement”) an aggregate
of 1,092,533 full Warrants (the “Placement Warrants”) substantially identical to
the Warrants being issued in the IPO pursuant to the terms and conditions hereof
and as set forth in the Registration Statement, except that the Placement
Warrants to be issued in the Placement shall not be registered under the
Securities Act of 1933, as amended (the “Securities Act”);
WHEREAS, each Purchaser
desires to acquire the number of Placement Warrants set forth opposite his or
her name on Schedule A hereto;
WHEREAS, the Placement
Warrants shall be governed by the Warrant Agreement filed as an exhibit to the
Registration Statement (the “Warrant Agreement”); and
WHEREAS, the Purchasers are
entitled to registration rights with respect to the Placement Warrants and the
Ordinary Shares underlying such Placement Warrants (collectively, the
“Registrable Securities”) on the terms set forth in the Registration Rights
Agreement filed as an exhibit to the Registration Statement.
NOW, THEREFORE, for and in
consideration of the premises and the mutual covenants hereinafter set forth,
the parties hereto do hereby agree as follows:
1. Purchase of Placement
Warrants. The Purchasers hereby agree, directly or through nominees, to
purchase an aggregate of 1,092,533 Placement Warrants at a purchase price of
$1.50 per Placement Warrant, or an aggregate of $1,638,800 (the “Purchase
Price”). Such purchases shall be in the names and amounts set forth on Schedule
A hereto.
2. Closing. The closing
of the purchase and sale of the Placement Warrants (the “Closing”) will take
place at such time and place as the parties may agree (the “Closing Date”), but
in no event later than the date on which the SEC declares the Registration
Statement effective (the “Effective Date”). At least 24 hours prior to the
Effective Date, the Purchasers shall pay the Purchase Price by wire transfer of
funds to an account maintained by Loeb & Loeb LLP (“Loeb”), counsel for the
Company. Immediately prior to the closing of the IPO, Loeb shall deposit the
Purchase Price into the trust account described in the Registration Statement
(the “Trust Account”). The certificates for the Warrants comprising the
Placement Warrants shall be delivered to the Purchasers promptly after the
closing of the IPO.
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3. Redemption. Not less
than all of the outstanding Placement Warrants may be redeemed, at the option of
the Company, with the prior consent of Chardan Capital Markets, LLC, at any time
while they are exercisable and prior to their expiration, at the office of the
warrant agent, in accordance with the terms set out in the Warrant
Agreement.
4. Cashless Exercise.
The Placement Warrants may be exercised on a cashless basis any time while they
are exercisable and prior to their expiration in accordance with the terms set
out in the Warrant Agreement.
5. Restrictions on
Transfer. From the Effective Date until the consummation by the Company
of a Business Combination (the “Restriction Period”), no sale, transfer or other
disposition may be made of any or all of the Placement Warrants except (i) by
gift to a member of a Purchaser’s immediate family or to a trust or other
entity, the beneficiary of which is a Purchaser or a member of a Purchaser’s
immediate family, (ii) by virtue of the laws of descent and distribution upon
death of any Purchaser; or (iii) pursuant to a qualified domestic relations
order; provided, however, that such permissive transfers may be implemented only
upon the respective transferee’s written agreement to be bound by the terms and
conditions of this Agreement. During the Restriction Period, no Purchaser shall
pledge or grant a security interest in his or her Placement Warrants or grant a
security interest in his or her rights under this Agreement. In
addition, with respect to the Placement Warrants purchased by Chardan Capital
Markets LLC or any other member of FINRA, the holder of such Placement Warrants
agrees that, in accordance with FINRA Rule 5110(g)(1), it will not sell,
transfer, assign, pledge or hypothecate any Placement Warrant (in whole or in
part) or any interest herein for a period of 180 days following the
Effective Date to anyone other than (i) an underwriter or a selected dealer
participating in the Offering or (ii) any successor, officer or partner of
Chardan Capital Markets LLC or of any such underwriter, selected dealer or
successor.
6. Waiver of Liquidation
Distributions. In connection with the Placement Warrants purchased
pursuant to this Agreement, the Purchasers hereby waive any and all right,
title, interest or claim of any kind in or to any liquidating distributions by
the Company in the event of a liquidation of the Company upon the Company’s
failure to timely complete a Business Combination. For purposes of clarity, any
Ordinary Shares purchased in the IPO or the aftermarket by the Purchasers shall
be eligible to receive any liquidating distributions by the
Company.
7. Representations and
Warranties of the Purchasers. Each Purchaser hereby represents and
warrants on behalf of itself to the Company that:
7.1. Such
Purchaser is an “accredited investor” as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act.
7.2. The
Placement Warrants are being acquired by such Purchaser for such Purchaser’s own
account, only for investment purposes and not with a view to, or for resale in
connection with, any distribution or public offering thereof within the meaning
of the Securities Act.
7.3. Such
Purchaser has the full right, power and authority to enter into this Agreement
and this Agreement is a valid and legally binding obligation of such Purchaser
enforceable against such Purchaser in accordance with its terms.
8. Waiver and
Indemnification. The Purchasers hereby waive any and all rights to assert
any present or future claims, including any right of rescission, against the
Company with respect to their purchase of the Placement Warrants, and each
Purchaser agrees jointly and severally to indemnify and hold the Company
harmless from all losses, damages or expenses that relate to claims or
proceedings brought against the Company by any Purchaser of the Placement
Warrants or their transferees, heirs, assigns or any subsequent holders of the
Placement Warrants.
9. Counterparts;
Facsimile. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same instrument. This
Agreement or any counterpart may be executed via facsimile transmission, and any
such executed facsimile copy shall be treated as an original.
10. Governing Law. This
Agreement shall for all purposes be deemed to be made under and shall be
construed in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles that would result in the application of
the substantive laws of any other jurisdiction. Each of the parties hereby
agrees that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement shall be brought and enforced in the
courts of the State of New York or the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. Each of the parties hereby waives any
objection to such exclusive jurisdiction and that such courts represent an
inconvenient forum.
[Signature
Page Follows]
IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the __ day of _____,
2011.
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By:
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Name:
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Title:
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Purchasers:
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Yong
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THE
SHODAN COMPANY
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By:
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Name:
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Title:
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Hang-Min ▇▇▇▇▇
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CAPITAL MARKETS, LLC
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By:
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Name:
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Title:
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EXHIBIT
A
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Purchaser
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Placement
Warrants
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Purchase
Price
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Yong
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$ | |||||||
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The
Shodan Company
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Capital Markets, LLC
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Total:
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1,092,533 | $ | 1,638,800.00 | |||||