Letter Agreement between High Capital Funding, LLC and Middle Kingdom Alliance Corporation Regarding IPO and Business Combination
This agreement is between High Capital Funding, LLC and Middle Kingdom Alliance Corporation, along with its IPO underwriters. It outlines the obligations of High Capital Funding, LLC as a shareholder, officer, or director in connection with the company's initial public offering (IPO) and potential business combination. Key terms include voting requirements, indemnification for certain liabilities, restrictions on compensation and finder's fees, and escrow of shares and warrants. The agreement also sets conditions for presenting business opportunities and governs the relationship until a business combination or company liquidation occurs.
Exhibit 10.1
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
Re: Initial Public Offering
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by it in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within its power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 57.11%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow 290,625 of its Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 51,652 Insider Shares and the 258,260 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. [RESERVED.]
9. The undersigned has full right and power, without violating any agreement by which it is bound, to enter into this letter agreement.
10. The undersigned authorizes any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about its background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating the undersigned’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
2
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| HIGH CAPITAL FUNDING, LLC | ||||||
| Signature: | /s/ Fred A. Brasch | |||||
| Fred A. Brasch | ||||||
| Accepted and agreed: | ||||||
| NEWBRIDGE SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| I-BANKERS SECURITIES, INC. | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| WESTMINSTER SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| Accepted and agreed: | ||||||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||||||
| By: | /s/ David A. Rapaport | |||||
| Name: | David A. Rapaport | |||||
| Title: | Secretary | |||||
3
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
Re: Initial Public Offering
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by it in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within its power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 6.92%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
4
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow 75,000 of its Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 6,261 Insider Shares and the 31,305 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. [RESERVED.]
9. The undersigned has full right and power, without violating any agreement by which it is bound, to enter into this letter agreement.
10. The undersigned authorizes any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about its background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating the undersigned’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
5
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| MTP HOLDINGS LTD. | ||
| Signature: | /s/ Alex Chun Yao | |
| Alex Chun Yao | ||
| Accepted and agreed: | ||
| NEWBRIDGE SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| I-BANKERS SECURITIES, INC. | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| WESTMINSTER SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
6
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
| Re: | Initial Public Offering |
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by it in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within its power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 3.46%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
7
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow 37,500 of its Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 3,130 Insider Shares and the 15,650 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. [RESERVED.]
9. The undersigned has full right and power, without violating any agreement by which it is bound, to enter into this letter agreement.
10. The undersigned authorizes any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about its background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating the undersigned’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
8
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| SUPREME OCEAN DEVELOPMENT LIMITED | ||||||
| Signature: | /s/ Allan Shu Cheuk Lam | |||||
| Allan Shu Cheuk Lam | ||||||
| Accepted and agreed: | ||||||
| NEWBRIDGE SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| I-BANKERS SECURITIES, INC. | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| WESTMINSTER SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| Accepted and agreed: | ||||||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||||||
| By: | /s/ David A. Rapaport | |||||
| Name: | David A. Rapaport | |||||
| Title: | Secretary | |||||
9
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
Re: Initial Public Offering
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by it in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within its power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 11.25%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
10
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow 121,875 of its Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 10,174 Insider Shares and the 50,870 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. [RESERVED.]
9. The undersigned has full right and power, without violating any agreement by which it is bound, to enter into this letter agreement.
10. The undersigned authorizes any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about its background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating the undersigned’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
11
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| GEDEON INTERNATIONAL LIMITED | ||||||
| Signature: | /s/ [Illegible] | |||||
| Title: | ||||||
| Accepted and agreed: | ||||||
| NEWBRIDGE SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| I-BANKERS SECURITIES, INC. | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| WESTMINSTER SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| Accepted and agreed: | ||||||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||||||
| By: | /s/ David A. Rapaport | |||||
| Name: | David A. Rapaport | |||||
| Title: | Secretary | |||||
12
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
Re: Initial Public Offering
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 6.92%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
13
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 75,000 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 6,261 Insider Shares and the 31,305 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the Executive Vice President of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
14
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| ALLAN SHU CHEUK LAM | ||
| Signature: | /s/ ALLAN SHU CHEUK LAM | |
| Accepted and agreed: | ||
| NEWBRIDGE SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| I-BANKERS SECURITIES, INC. | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| WESTMINSTER SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
15
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
16
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
| Re: | Initial Public Offering |
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 3.46%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
17
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 37,500 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 3,130 Insider Shares and the 15,650 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the Non-executive Chairman of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
18
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| ANTHONY NG | ||
| Signature: | /s/ ANTHONY NG | |
| Accepted and agreed: | ||
| NEWBRIDGE SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| I-BANKERS SECURITIES, INC. | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| WESTMINSTER SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
19
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
20
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
| Re: | Initial Public Offering |
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 2.23%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
21
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 18,750 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 2,015 Insider Shares and the 10,075 Class A warrants purchased prior to the IPO or beneficially held prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the Secretary and General Counsel of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
22
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| DAVID A. RAPAPORT | ||
| Signature: | /s/ DAVID A. RAPAPORT | |
| Accepted and agreed: | ||
| NEWBRIDGE SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| I-BANKERS SECURITIES, INC. | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| WESTMINSTER SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
23
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ B. J. Tannenbaum III | |
| Name: | B. J. Tannenbaum III | |
| Title: | CEO | |
24
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
| Re: | Initial Public Offering |
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 0.87%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
25
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 9,375 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 783 Insider Shares and the 3,915 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the Chief Financial Officer of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
26
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| FRED A. BRASCH | ||||||
| Signature: | /s/ FRED A. BRASCH | |||||
| Accepted and agreed: | ||||||
| NEWBRIDGE SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| I-BANKERS SECURITIES, INC. | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| WESTMINSTER SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
27
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
28
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
Re: Initial Public Offering
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 11.25%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
29
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 121,875 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 10,174 Insider Shares and the 50,870 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the President of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
30
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| MICHAEL MARKS | ||
| Signature: | /s/ MICHAEL MARKS | |
| Accepted and agreed: | ||
| NEWBRIDGE SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| I-BANKERS SECURITIES, INC. | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| WESTMINSTER SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
31
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
32
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
| Re: | Initial Public Offering |
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by it in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within its power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 11.25%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
33
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow 121,875 of its Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 10,174 Insider Shares and the 50,870 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. [RESERVED.]
9. The undersigned has full right and power, without violating any agreement by which it is bound, to enter into this letter agreement.
10. The undersigned authorizes any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about its background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating the undersigned’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
34
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| BERNARD JEROME TANENBAUM III FAMILY TRUST | ||||||
| Signature: | /s/ Bernard J. Tanenbaum III | |||||
| Bernard J. Tanenbaum III | ||||||
| Accepted and agreed: | ||||||
| NEWBRIDGE SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| I-BANKERS SECURITIES, INC. | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| WESTMINSTER SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| Accepted and agreed: | ||||||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||||||
| By: | /s/ David A. Rapaport | |||||
| Name: | David A. Rapaport | |||||
| Title: | Secretary | |||||
35
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
Re: Initial Public Offering
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 11.25%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
36
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 121,875 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 10,174 Insider Shares and the 50,870 Class A warrants purchased prior to the IPO or beneficially owned prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the Chief Executive Officer of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
37
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| BERNARD J. TANENBAUM III | ||||||
| Signature: | /s/ BERNARD J. TANENBAUM III | |||||
| Accepted and agreed: | ||||||
| NEWBRIDGE SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| I-BANKERS SECURITIES, INC. | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| WESTMINSTER SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
38
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
39
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
Re: Initial Public Offering
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 2.31%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
40
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 25,000 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 2,087 Insider Shares and the 10,435 Class A warrants purchased prior to the IPO or beneficially held prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the Senior Vice President of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
41
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| HAROLD ZHI PING DING | ||
| Signature: | /s/ HAROLD ZHI PING DING | |
| Accepted and agreed: | ||
| NEWBRIDGE SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| I-BANKERS SECURITIES, INC. | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
| WESTMINSTER SECURITIES CORPORATION | ||
| By: |
| |
| Name: | [ ] | |
| Title: | [ ] | |
42
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
43
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
| Re: | Initial Public Offering |
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 2.31%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
44
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 25,000 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 2,087 Insider Shares and the 10,435 Class A warrants purchased prior to the IPO or beneficially held prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the Senior Vice President of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
45
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| ERICK YAN QI CHAI | ||||||
| Signature: | /s/ ERICK YAN QI CHAI | |||||
| Accepted and agreed: | ||||||
| NEWBRIDGE SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| I-BANKERS SECURITIES, INC. | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| WESTMINSTER SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
46
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
47
December 19, 2006
Middle Kingdom Alliance Corporation
333 Sandy Springs Circle, Suite 223
Atlanta, GA 30328
Newbridge Securities Corporation
5350 South Roslyn St., Suite 440
Greenwood Village, CO 80111
I-Bankers Securities, Inc.
3340 Indian Creek Court
Fort Worth, Texas 76180
Westminster Securities Corporation
100 Wall Street
7th Floor
New York, New York 10005
Re: Initial Public Offering
Gentlemen:
The undersigned shareholder, officer and/or director of Middle Kingdom Alliance Corporation (the “Company”), in consideration of I-Bankers Securities, Inc., Newbridge Securities Corporation and Westminster Securities Corporation (the “Representatives”) entering into a letter of intent (the “Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 12 hereof):
1. If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all Insider Shares owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares.
2. In the event that the Company fails to consummate a Business Combination within 18 months from the effective date (the “Effective Date”) of the registration statement relating to the IPO (or 24 months from the consummation of the IPO if a letter of intent, agreement in principle or definitive agreement has been executed within 18 months of commencement of the IPO), the undersigned will take all reasonable actions within his power to cause the Company to liquidate as soon as reasonably practicable. In the event of the liquidation of the Trust Fund (as described in the IPO prospectus), the undersigned agrees, subject to the limitation set forth in the following sentence, to indemnify and hold harmless the Company against any and all loss, liability, claims, 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, whether pending or threatened, or any claim whatsoever) which the Company may become subject as a result of any claim by any vendor or other person who is owed money by the Company for services rendered or products sold or contracted for, or by any target business, but only to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount in the Trust Fund. The foregoing indemnification shall be on a several basis with the other Insiders, and the indemnification amount owed by the undersigned shall be limited to that percentage of the total indemnification amount multiplied by the undersigned’s ownership of the Company’s Series A Units immediately prior to the IPO (or 2.31%). Any amounts payable by the undersigned pursuant to this paragraph shall be payable directly to Continental Stock Transfer and Trust Company, as trustee, to be held for the benefit of the Class B common stockholders and to be distributed in accordance with the Investment Management Trust Agreement between Continental Stock Transfer and Trust Company and the Company.
3. In order to minimize potential conflicts of interest which may arise from multiple affiliations, the undersigned agrees to present to the Company for its consideration, prior to presentation to any other person or
48
entity, any suitable opportunity to invest in 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 undersigned ceases to be an officer or director of the Company, subject to any pre-existing fiduciary obligations the undersigned might have.
4. The undersigned acknowledges and agrees that the Company will not consummate any Business Combination that involves a company which is affiliated with any of the Insiders unless the Company obtains an opinion from an independent investment banking firm reasonably acceptable to the Representatives that the business combination is fair to the Company’s stockholders from a financial perspective.
5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to the consummation of the Business Combination; provided that, commencing on the Effective Date, Primus Capital, LLC, Michael Marks, MTP Holdings LLC and Allan Shu Cheuk Lam (“Related Parties”) shall be allowed to charge the Company an aggregate amount of $7,500 per month, to compensate them for the Company’s use of Related Parties’ offices, utilities and personnel. Related Parties and the undersigned shall also be entitled to reimbursement from the Company, in accordance with the Company’s policy for such reimbursement, for their out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination or otherwise conducting the Company’s business.
6. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination.
7. The undersigned will escrow certain 25,000 of his Insider Shares for the three year period commencing on the Effective Date and will escrow the remaining 2,087 Insider Shares and the 10,435 Class A warrants purchased prior to the IPO or beneficially held prior to the IPO subject to the terms of a Securities Escrow Agreement which the Company will enter into with the undersigned and Continental Stock Transfer & Trust Company as escrow agent, in the form of Exhibit A attached hereto.
8. I agree to serve as the Executive Vice President of the Company until the earlier of the consummation by the Company of a Business Combination or the liquidation of the Company. The undersigned’s biographical information furnished to the Company and the Representatives included in the S-1 Registration Statement is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and the Representatives is true and accurate in all respects. The undersigned represents and warrants that:
A. he is not subject to or a respondent in any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;
B. he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and
C. he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.
9. I have full right and power, without violating any agreement by which I am bound, to enter into this letter agreement and to serve as an officer of the Company.
49
10. I authorize any employer, financial institution, or consumer credit reporting agency to release to the Representatives and their respective legal representatives or agents (including any investigative search firm retained by the Representative) any information they may have about my background and finances (the “Information”). Neither the Representatives nor its respective agents shall be violating my right of privacy in any manner in requesting and obtaining the Information and I hereby release them from liability for any damage whatsoever in that connection.
11. This letter agreement shall be governed by and interpreted and construed in accordance with the laws of the State of Delaware applicable to contracts formed and to be performed entirely within the State of Delaware, without regard to the conflicts of law provisions thereof to the extent such principles and rules would require or permit the application of the laws of another jurisdiction.
12. As used herein,
A. “Business Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock acquisition, reorganization or otherwise, of an operating business selected by the Company;
B. “Insiders” shall mean all officers, directors and stockholders of the Company immediately prior to the IPO;
C. “Insider Shares” shall mean all of the common stock of the Company beneficially owned by an Insider prior to the IPO; and
D. “IPO Shares” shall mean the common stock issued in the Company’s IPO.
| ALEX CHUN YAO | ||||||
| Signature: | /s/ ALEX CHUN YAO | |||||
| Accepted and agreed: | ||||||
| NEWBRIDGE SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| I-BANKERS SECURITIES, INC. | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
| WESTMINSTER SECURITIES CORPORATION | ||||||
| By: |
| |||||
| Name: | [ ] | |||||
| Title: | [ ] | |||||
50
| Accepted and agreed: | ||
| MIDDLE KINGDOM ALLIANCE CORPORATION | ||
| By: | /s/ David A. Rapaport | |
| Name: | David A. Rapaport | |
| Title: | Secretary | |
51
