Document:

WARRANT
AGREEMENT

     

    PRIME
ACQUISITION CORP.

     

    and

     

    AMERICAN
STOCK TRANSFER & TRUST COMPANY,

    as
Warrant Agent

     

    Dated as
of [●], 2011

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    TABLE
OF CONTENTS

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	 
      	 
      	 
      	 
      	
                                  Page

                                
	
                                  Section
      1.

                                	 
      	
                                  Appointment
      of Warrant Agent

                                	 
      	
                                  1

                                
	
                                  Section
      2.

                                	 
      	
                                  Warrant
      Certificates

                                	 
      	
                                  1

                                
	
                                  Section
      3.

                                	 
      	
                                  Execution
      of Warrant Certificates

                                	 
      	
                                  2

                                
	
                                  Section
      4.

                                	 
      	
                                  Registration
      and Countersignature

                                	 
      	
                                  2

                                
	
                                  Section
      5.

                                	 
      	
                                  Registration
      of Transfers and Exchanges; Transfer Restrictions

                                	 
      	
                                  2

                                
	
                                  Section
      6.

                                	 
      	
                                  Terms
      of Warrants.

                                	 
      	
                                  4

                                
	
                                  Section
      7.

                                	 
      	
                                  Payment
      of Taxes

                                	 
      	
                                  7

                                
	
                                  Section
      8.

                                	 
      	
                                  Mutilated
      or Missing Warrant Certificates

                                	 
      	
                                  7

                                
	
                                  Section
      9.

                                	 
      	
                                  Reservation
      of Warrant Shares

                                	 
      	
                                  8

                                
	
                                  Section
      10.

                                	 
      	
                                  Obtaining
      Stock Exchange Listings; State Registration

                                	 
      	
                                  8

                                
	
                                  Section
      11.

                                	 
      	
                                  Adjustment
      of Number of Warrant Shares.

                                	 
      	
                                  8

                                
	
                                  Section
      12.

                                	 
      	
                                  Fractional
      Interests

                                	 
      	
                                  14

                                
	
                                  Section
      13.

                                	 
      	
                                  Notices
      to Warrant Holders

                                	 
      	
                                  14

                                
	
                                  Section
      14.

                                	 
      	
                                  Merger,
      Consolidation or Change of Name of Warrant Agent

                                	 
      	
                                  15

                                
	
                                  Section
      15.

                                	 
      	
                                  Warrant
      Agent

                                	 
      	
                                  15

                                
	
                                  Section
      16.

                                	 
      	
                                  Change
      of Warrant Agent

                                	 
      	
                                  18

                                
	
                                  Section
      17.

                                	 
      	
                                  Notices
      to Company and Warrant Agent

                                	 
      	
                                  18

                                
	
                                  Section
      18.

                                	 
      	
                                  Supplements
      and Amendments

                                	 
      	
                                  19

                                
	
                                  Section
      19.

                                	 
      	
                                  Successors

                                	 
      	
                                  19

                                
	
                                  Section
      20.

                                	 
      	
                                  Termination

                                	 
      	
                                  19

                                
	
                                  Section
      21.

                                	 
      	
                                  Governing
      Law

                                	 
      	
                                  19

                                
	
                                  Section
      22.

                                	 
      	
                                  Benefits
      of This Agreement

                                	 
      	
                                  19

                                
	
                                  Section
      23.

                                	 
      	
                                  Counterparts

                                	 
      	
                                  19

                                
	
                                  Section
      24.

                                	 
      	
                                  Force
      Majeure

                                	 
      	
                                  20

                                
	
                                  EXHIBIT
      A  [Form of Warrant Certificate]

                                	 
      	
                                  A-1

                                
	
                                  EXHIBIT
      B  LEGEND FOR PRIVATE WARRANTS

                                	 
      	
                                  B-1

                                
	
                                  EXHIBIT
      C  FEE SCHEDULE

                                	
                                    

                                	
                                  C-1

                                

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        - i
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    WARRANT
AGREEMENT

     

    This
Warrant Agreement (this “Agreement”) is made as of [●],
2011 between Prime Acquisition Corp., a Cayman Islands exempted company (the
“Company”), and American
Stock Transfer & Trust Company, a [_____], as Warrant Agent (the “Warrant Agent”).

     

    WHEREAS,
the Company has filed with the Securities and Exchange Commission (the “SEC”) a Registration
Statement, No. [_____] on Form F-1 (as may be amended from time to time) (the
“Registration
Statement”) for the initial public offering of units (the “Initial Public Offering”),
each unit (“Unit”)
consisting of one of the Company’s ordinary shares, par value $0.001 per share
(“Common Stock”), and
one-half of a warrant, each full warrant to purchase one share of Common Stock
at an exercise price of $7.50 per share (“Public
Warrants”);

     

    WHEREAS,
on February 4, 2010 and February 12, 2010, for aggregate consideration of
$1,408.75, the Company issued in a private placement an aggregate of 1,408,751
units, each unit (the “Founders’ Units,” which term
shall include any additional units issued by way of dividend prior to issuance
of the Units) consisting of one share of Common Stock and one-half of a warrant,
each full warrant to purchase one share of Common Stock at an exercise price of
$7.50 per share (the “Founders’
Warrants,” which term shall include any additional warrants issued by way
of a dividend prior to the issuance of the Units) to the following persons:
(i)  422,625 Founder’s Units to Yong Hui Li, (ii)  422,625
Founder’s Units to Diana Chia-Huei Liu, (iii)  295,838 Founder’s Units
to The Shodan Company (including 14,088 Founders’ Units originally issued to
Nancy Tung), (iv)  140,875 Founder’s Units to Gary Han-Min Chang,
(v)  49,306 Founders’ Units to Joseph Liu, (vi)  49,306
Founders’ Units to Steven Liu,  (vii) 14,088 Founders’ Units to Olivia
Yu, and (viii) 14,088 Founders’ Units to Joyce Liu;

     

    
      WHEREAS,
in May 2010, Nancy Tung transferred all of her Founder Units to The Shodan
Company;

      

      WHEREAS,
on November 7, 2010, for aggregate consideration of 155.25, the Company issued
in a private placement an aggregate of 155,249 Founders’ Units to the following
person: (i) 46,575 Founders’ Units to Diana Chia-Huei Liu, (ii) 79,177 Founders’
Units to William Tsu-Cheng Yu, (iii) 15,525 Founders’ Units to Gary Chang, (iv)
5,434 Founders’ Units to Joseph Liu, (v) 5,434 Founders’ Units to Steven Liu,
(vi) 1,552 Founders’ Units to Olivia Yu, and (vii) 1,552 Founders’ Units to
Joyce Liu;

      

      WHEREAS,
in November 2010, Yong Hui Li transferred 31,625 Founders’ Units to William
Tsu-Cheng Yu, The Shodan Company transferred 92,518 Founders’ Units to William
Tsu-Cheng Yu, and Gary Chang transferred 156,400 Founders’ Units to Puway
Limited (together with Diana Chia-Huei Liu, William Tsu-Cheng Yu, Gary Chang,
Joseph Liu, Steven Liu, Olivia Yu, Joyce Liu, and The Shodan Company, the “Founding
Shareholders”).

    

     

    WHEREAS,
the Company has agreed to issue (i) in a private placement to occur immediately
prior to the closing of the Initial Public Offering, an aggregate of 1,092,533
warrants to purchase shares of Common Stock (the “Insider Warrants” and together
with the Founder’s Warrants, the “Private Warrants”) to Chardan
Capital Markets, LLC, the representative of the underwriters of the Initial
Public Offering (the “Underwriter”), Yong Hui Li,
Diana Chia-Huei Liu, The Shodan Company, and  Gary Han-Min Chang
(collectively, the “Private
Placement Warrantholders”), and (ii) up to 2,300,000 full Public Warrants
(together with the Private Warrants, the “Warrants”).  The
shares of Common Stock issuable on exercise of the Warrants are referred to as
the “Warrant Shares”;
and

     

    WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent is willing to so act, in connection with the issuance, transfer,
exchange and exercise of the Warrants and other matters as provided
herein;

     

    NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein set
forth, the parties hereto agree as follows:

     

    SECTION
1.         Appointment of Warrant
Agent.  The Company hereby appoints the Warrant Agent to act as
agent for the Company in accordance with the instructions set forth in this
Agreement, and the Warrant Agent hereby accepts such appointment.

     

    SECTION
2.         Warrant
Certificates.  The Warrant Agent shall deliver certificates
evidencing the Warrants (the “Warrant Certificates”)
pursuant to this Agreement in registered form only substantially in the form set
forth in Exhibit
A attached hereto and the warrant certificates for the Private Warrants
must bear the legend set forth in Exhibit B except as
set forth herein.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    SECTION
3.        Execution of Warrant
Certificates.

     

    3.1         
Warrant Certificates must be signed on behalf of the Company by its Chairman of
the Board, President, Chief Executive Officer or a Vice President. Each such
signature upon the Warrant Certificates may be in the form of a facsimile
signature of the present or any future Chairman of the Board, President, Chief
Executive Officer, or Vice President, and may be imprinted or otherwise
reproduced on the Warrant Certificates and for that purpose the Company may
adopt and use the facsimile signature of any person who has been Chairman of the
Board, President, Chief Executive Officer, or Vice President, notwithstanding
the fact that at the time the Warrant Certificates is countersigned and
delivered or disposed of he or she has ceased to hold such office.

     

    3.2         
If any officer of the Company who has signed any of the Warrant Certificates
ceases to be such officer before the Warrant Certificates so signed have been
countersigned by the Warrant Agent, or disposed of by the Company, such Warrant
Certificates nevertheless may be countersigned and delivered or disposed of as
though such person had not ceased to be such officer of the Company; and any
Warrant Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Warrant Certificate, is a proper
officer of the Company to sign such Warrant Certificate, although at the date of
the execution of this Agreement any such person was not such
officer.

     

    3.3     
    The Warrant Agent shall date the Warrant Certificates
the date of countersignature by the Warrant Agent.

     

    SECTION
4.        Registration and
Countersignature.

     

    4.1         
The Warrant Agent shall, upon written instructions of the Chairman of the Board,
the President, the Chief Executive Officer, a Vice President, the Treasurer or
the Chief Financial Officer of the Company, countersign, issue and deliver
Warrants as provided in this Agreement.  Warrant Certificates not
countersigned by the Warrant Agent will not be valid for any
purpose.

     

    4.2     
    The Company and the Warrant Agent may deem and treat the
registered holder(s) of the Warrant Certificates as the absolute owner(s)
thereof (notwithstanding any notation of ownership or other writing thereon made
by anyone), for all purposes, and neither the Company nor the Warrant Agent
shall be affected by any notice to the contrary.

     

    SECTION
5.         Registration of Transfers
and Exchanges; Transfer Restrictions.

     

    5.1          The
Warrant Agent shall from time to time, subject to the limitations of this
Section 5, register the transfer of any outstanding Warrant Certificates upon
the records to be maintained by it for that purpose, upon surrender thereof duly
endorsed or accompanied (if so required by the Warrant Agent) by a written
instrument or instruments of transfer in form satisfactory to the Warrant Agent,
duly executed by the registered holder or holders thereof or by the duly
appointed legal representative thereof or by a duly authorized
attorney.  Upon any such registration of transfer, the Warrant Agent
shall issue a new Warrant Certificate to the transferee(s) and shall cancel the
surrendered Warrant Certificate.  The Warrant Agent shall dispose of
such cancelled Warrant Certificates in its customary manner.

     

    5.2         
The Founders’ Warrants may not be sold or transferred for a period of nine (9)
months from the date the Company completes its initial business combination (as
described more fully in the Registration Statement) ( the “Initial Business
Combination”) with respect to 50% of the Founders’ Warrants owned by each
Founding Shareholder, and twelve (12) months from the date the Company completes
its Initial Business Combination with respect to the remaining 50% of the
Founders’ Warrants owned by each Founding Shareholder, except to a Permitted
Transferee who agrees in writing with the Company to be subject to such transfer
restrictions.

    
      
         

      

      
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    5.3    
     As used herein, “Permitted Transferee”
means

     

    (a)           any
officer, director or employee of the Company;

     

    (b)           an
affiliate or a member of the holder’s immediate family (or a member of the
immediate family of its officers or directors) or a trust or other entity, the
beneficiary of which is the holder (or one of its officers or directors or a
member of their respective immediate families); or

     

    (c)           any
successor in interest by virtue of the laws of descent and distribution upon
death of any holder, or

     

    (d)           pursuant
to a qualified domestic relations order.

     

    5.4    
    The holders of any Private Warrants or Warrant Shares issued
upon exercise of any Private Warrants further agree, prior to any transfer of
such securities, to give written notice to the Company expressing its desire to
effect such transfer and describing briefly the proposed
transfer.  Upon receiving such notice, the Company shall present
copies thereof to its counsel and the holder agrees not to make any disposition
of all or any portion of such securities unless and until:

     

    (a)           there
is then in effect a registration statement under the Securities Act covering
such proposed disposition and such disposition is made in accordance with such
registration statement, in which case the legends set forth in Exhibit B or Section
6(c) hereof, as the case may be (collectively the “Legends”) with respect to
such securities sold pursuant to such registration statement shall be removed;
or

     

    (b)           if
reasonably requested by the Company, (A) the holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such Securities under the
Securities Act, (B) the Company shall have received customary representations
and warranties regarding the transferee that are reasonably satisfactory to the
Company signed by the proposed transferee and (C) the Company shall have
received an agreement by such transferee to the restrictions contained in the
Legends.

     

    5.5     
    Each one-half of a Public Warrant must initially be
issued together with one share of Common Stock as a Unit.  The shares
of Common Stock and Public Warrants comprising a Unit may not be separately
transferable until 90 days following effectiveness of the Registration
Statement, unless the Underwriter informs the Company of its decision to allow
earlier separate trading, subject to the Company having filed a Form 6-K with
the Securities and Exchange Commission containing an audited balance sheet
reflecting the Company’s receipt of the gross proceeds of the offering of the
Units and having issued a press release announcing when such separate trading
will begin (the “Detachment
Date”).  Prior to the Detachment Date, Public Warrants may be
transferred or exchanged only together with the Unit in which such Public
Warrant is included, and only for the purpose of effecting, or in conjunction
with, a transfer or exchange of such Unit.  Furthermore, prior to the
Detachment Date, each transfer of a Public Unit on the register relating to such
Units shall operate also to transfer the Public Warrant included in such Unit.
Upon separation of the Units by a holder, the number of Warrants issuable upon
separation of the Units shall be rounded down to the nearest whole Warrant. In
no event may a Warrant Certificate for a partial Warrant be
issued.

    
      
         

      

      
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    5.6    
     Subject to the terms of this Agreement, Warrant
Certificates may be exchanged at the option of the holder(s) thereof, when
surrendered to the Warrant Agent at its principal corporate trust office, which
is currently located at the address listed in Section 17 hereof, for another
Warrant Certificate or other Warrant Certificates of like tenor and representing
in the aggregate a like number of Warrants.  Any holder desiring to
exchange a Warrant Certificate shall deliver a written request to the Warrant
Agent, and shall surrender, duly endorsed or accompanied (if so required by the
Warrant Agent) by a written instrument or instruments of transfer in form
satisfactory to the Warrant Agent, the Warrant Certificate or Certificates to be
so exchanged.  Warrant Certificates surrendered for exchange shall be
cancelled by the Warrant Agent.  Such cancelled Warrant Certificates
shall then be disposed of by such Warrant Agent in its customary
manner.

     

    5.7      
   The Warrant Agent is hereby authorized to countersign, in
accordance with the provisions of this Section 5 and of Section 4 hereof, the
new Warrant Certificates required pursuant to the provisions of this Section
5.

     

    SECTION
6.         Terms of
Warrants.

     

    6.1    
     Exercise Price and Exercise
Period.

     

    (a)          The
initial exercise price per share that Warrant Shares may be purchasable upon the
exercise of full Warrants (the “Exercise Price”) is $7.50 per
share, and each full Warrant is initially exercisable to purchase one share of
Common Stock.

     

    (b)          Subject
to the terms of this Agreement (including without limitation Section 6.4 below),
each Warrant holder has the right, which may be exercised commencing at the
opening of business on the first day of the applicable Warrant Exercise Period
set forth below and until 5:00 p.m., New York City time, on the last day of such
Warrant Exercise Period, to receive from the Company the number of fully paid
and nonassessable Warrant Shares which the holder may at the time be entitled to
receive on exercise of such Warrants and payment of the Exercise Price then in
effect for such Warrant Shares, rounded down to the nearest whole
Warrant.  No adjustments as to dividends will be made upon exercise of
the Warrants.

     

    (c)          The
“Warrant Exercise
Period” for all Warrants commences (subject to Section 6.4 below) on the
later of: (A) the date that is 12 months from the date that the Registration
Statement is declared effective by the Securities and Exchange Commission (the
“Effective Date”) or (B)
the date on which the Company completes its Initial Business Combination, and
ends on the earlier of: (A) the date that is five years from the Effective
Date or (B) the Business Day preceding the date on which such Warrants are
redeemed pursuant to Section 6.2 below.

     

    (d)          The
“Closing Price” of the Common Stock on any date of determination
means:

     

    (i)           the
closing sale price for the regular trading session (without considering after
hours or other trading outside regular trading session hours) of the Common
Stock (regular way) as reported in the composite transactions for the principal
United States securities exchange on which the Common Stock is so listed on that
date (or, if no closing price is reported, the last reported sale price during
that regular trading session), or

     

    (ii)           if
the Common Stock is not so listed, the last quoted sales price for the Common
Stock in the over-the-counter market as reported by the OTC Bulletin Board, the
National Quotation Bureau or similar organization, or

    
      
         

      

      
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    (iii)           if
the Common Stock is not so quoted, the average of the mid-point of the last bid
and ask prices for the Common Stock from at least three nationally recognized
investment-banking firms that the Company selects for this purpose.

     

    (e)           Each
Warrant not exercised prior to 5:00 p.m., New York City time, on the last day of
the Warrant Exercise Period shall become void and all rights thereunder and all
rights in respect thereof under this Agreement shall cease as of such
time.

     

    6.2       
  Redemption
of Warrants.

     

    (a)           The
Company may call the Warrants for redemption upon the Underwriter’s prior
written consent, such consent not to be unreasonably withheld or delayed, in
whole and not in part, at a price of $0.01 per Warrant, upon not less than 30
days’ prior written notice of redemption to each Warrant holder, at any time
after such Warrants have become exercisable pursuant to Section 6(a), if, and
only if, (i) the Closing Price has equalled or exceeded $15.00 per share for any
20 trading days within a 30-trading-day period ending on the third business day
prior to the notice of redemption to Warrant holders and (ii) at all times
between the date of such notice of redemption and the redemption date a
registration statement is in effect covering the Warrant Shares issuable upon
exercise of the Warrants and a current prospectus relating to those Warrant
Shares is available.

     

    6.3     
    Exercise
Procedure.

     

    (a)           A
Warrant may be exercised upon surrender to the Company at the principal stock
transfer office of the Warrant Agent, which is currently located at the address
listed in Section 17 hereof, of the certificate or certificates evidencing the
Warrants to be exercised with the form of election to purchase on the reverse
thereof duly filled in and signed and such other documentation as the Warrant
Agent may reasonably request, and upon payment to the Warrant Agent for the
account of the Company of the Exercise Price (adjusted as herein provided if
applicable) for the number of Warrant Shares in respect of which such Warrants
are then exercised.  Payment of the aggregate Exercise Price must be
made in cash or by certified or official bank check payable to the order of the
Company in New York Clearing House Funds, or the equivalent
thereof.

     

    (b)           Holders
of Public Warrant may not settle Public Warrants on a cashless basis. The
Founding Shareholders and their permitted transferees may settle any Founders’
Warrants, and the Private Placement Warrantholders and their permitted
transferees may settle and Insider Warrants, on a cashless basis in accordance
with the following formula:

     

    N’= (N x
(P - E)) / P

     

    where:

     

    N’
=       the adjusted number of shares of
Common Stock issuable upon cashless exercise of each Warrant.

    N
=        the current number of shares of
Common Stock issuable upon exercise of each Warrant.

    E
=         the Exercise Price on the
date of cashless exercise of the Warrants.

    P
=         the average reported last
sales price of the Common Stock for the last 10 trading days ending on the third
business day prior to the date on which notice of cashless exercise is
given.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    (c)          Subject
to the provisions of Section 7, upon surrender of Warrants and payment of the
Exercise Price, the Company shall issue and cause to be delivered with all
reasonable dispatch to and in such name or names as the Warrant holder may
designate, a certificate or certificates for the number of full Warrant Shares
issuable upon the exercise of such Warrants together with cash as provided in
Section 12 hereof.  Such certificate or certificates are to be deemed
to have been issued and any person so designated to be named therein is to be
deemed to have become a holder of record of such Warrant Shares as of the date
of the surrender of such Warrants and payment of the Exercise
Price.

     

    (d)          The
Warrants may be exercisable, at the election of the holders thereof, either in
full or from time to time in part and, in the event that a certificate
evidencing Warrants is exercised in respect of fewer than all of the Warrant
Shares issuable on such exercise at any time prior to the date of expiration of
the Warrants, a new certificate evidencing the remaining Warrant or Warrants
will be issued, and the Warrant Agent is hereby irrevocably authorized to
countersign and to deliver the required new Warrant Certificate or Certificates
pursuant to the provisions of this Section 6 and of Section 4 hereof, and the
Company, whenever required by the Warrant Agent, shall supply the Warrant Agent
with Warrant Certificates duly executed on behalf of the Company for such
purpose.  The Warrant Agent may assume that any Warrant presented for
exercise is permitted to be so exercised under applicable law and shall have no
liability for acting in reliance on such assumption.

     

    (e)          The
Warrant Agent shall cancel all Warrant Certificates surrendered upon exercise of
Warrants and shall then dispose of such Warrant Certificates in its customary
manner.  The Warrant Agent shall account promptly to the Company with
respect to Warrants exercised and shall concurrently pay to the Company all
monies received by the Warrant Agent for the purchase of the Warrant Shares
through the exercise of such Warrants.

     

    (f)           The
Warrant Agent shall keep copies of this Agreement and any notices given or
received hereunder available for inspection by the holders with reasonable prior
written notice during normal business hours at its office.  The
Company shall supply the Warrant Agent from time to time with such numbers of
copies of this Agreement as the Warrant Agent may request.

     

    (g)          Certificates
evidencing Warrant Shares issued upon exercise of a Founders’ Warrant must bear
the following legends:

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.

     

    SECURITIES
EVIDENCED BY THIS CERTIFICATE WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER A
REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.

     

    SECURITIES
EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS OF AN
ESCROW AGREEMENT BY AND BETWEEN THE COMPANY AND THE HOLDER OF THIS
CERTIFICATE.  THESE SHARES MAY NOT BE SOLD EXCEPT IN COMPLIANCE WITH
THAT AGREEMENT.

     

    (h)          Certificates
evidencing Warrant Shares issued upon exercise of an Insider Warrant must bear
the following legends:

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW, AND MAY NOT BE OFFERED, SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.

     

    SECURITIES
EVIDENCED BY THIS CERTIFICATE WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER A
REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.

     

    6.4   
      Registration
Requirement.  Notwithstanding anything else in this Section 6,
no Public Warrants may be exercised unless at the time of exercise (i) a
registration statement covering the Warrant Shares to be issued upon exercise
(other than Warrant Shares to be issued upon exercise of any Private Warrant) is
effective under the Securities Act of 1933, as amended (the “Act”) and (ii) a prospectus
thereunder relating to the Warrant Shares is current.  The Company
shall use commercially reasonable best efforts to have a registration statement
in effect covering Warrant Shares issuable upon exercise of the Warrants from
the date the Warrants become exercisable and to maintain a current prospectus
relating to those Warrant Shares until the Warrants expire or are
redeemed.  In the event that, at the end of the Warrant Exercise
Period, a registration statement covering the Warrant Shares to be issued upon
exercise (other than Warrant Shares to be issued upon exercise of any Private
Warrant) is not effective under the Act, all the rights of holders hereunder
shall terminate and all of the Warrants shall expire unexercised and worthless,
and as a result purchasers of the Units will have paid the full Unit price
solely for the share of Common Stock included in each Unit.  The
Company is not required to issue unregistered shares upon the exercise of any
Warrant; provided, however, that the
Company shall issue unregistered shares upon the exercise of any Private Warrant
or Founders’ Warrant, if, at the time of such exercise, there is not an
effective registration statement or current prospectus covering the Warrant
Shares underlying such Private Warrant. In no event will the registered holder
of the Warrant be entitled to receive a net-cash settlement, securities or other
consideration in lieu of physical settlement in shares of Common Stock,
regardless of whether the Common Stock underlying the Warrants is registered
pursuant to an effective registration statement.

     

    SECTION
7.        Payment of
Taxes.  The Company shall pay all documentary stamp taxes
attributable to the initial issuance of Warrant Shares upon the exercise of
Warrants; provided, however, that the Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer involved in the
issue of any Warrant Certificates or any certificates for Warrant Shares in a
name other than that of the registered holder of a Warrant Certificate
surrendered upon the exercise of a Warrant, and the Company shall not be
required to issue or deliver such Warrant Certificates unless or until the
person or persons requesting the issuance thereof have paid to the Company the
amount of such tax or have established to the satisfaction of the Company that
such tax has been paid.

     

    SECTION
8.        Mutilated or Missing Warrant
Certificates.  If any Warrant Certificate is mutilated, lost,
stolen or destroyed, the Company shall issue and the Warrant Agent shall
countersign, in exchange and substitution for and upon cancellation of the
mutilated Warrant Certificate, or in lieu of and substitution for the Warrant
Certificate lost, stolen or destroyed, a new Warrant Certificate of like tenor
and representing an equivalent number of Warrants, but only upon receipt of
indemnity and evidence in each case satisfactory to the Company and the Warrant
Agent of such loss, theft or destruction of such Warrant
Certificate.  Applicants for such new Warrant Certificates shall pay
such reasonable charges as the Company may prescribe.

    
      
         

      

      
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    SECTION
9.         Reservation of Warrant
Shares.

     

    9.1    
     The Company shall at all times reserve and keep
available, free from preemptive rights, out of the aggregate of its authorized
but unissued Common Stock or its authorized and issued Common Stock held in its
treasury, for the purpose of enabling it to satisfy any obligation to issue
Warrant Shares upon exercise of Warrants, the maximum number of shares of Common
Stock which may then be deliverable upon the exercise of all outstanding
Warrants.  The Warrant Agent is not required to verify availability of
such shares set aside by the Company.

     

    9.2      
   The Company or, if appointed, the transfer agent for the
Common Stock (the “Transfer
Agent”) and every subsequent transfer agent for any shares of the
Company’s Common Stock issuable upon the exercise of any of the Warrants is
hereby irrevocably authorized and directed at all times to reserve such number
of authorized shares as shall be required for such purpose.  The
Company shall keep a copy of this Agreement on file with the Transfer Agent and
with every subsequent transfer agent for any shares of the Company’s Common
Stock issuable upon the exercise of the Warrants.  The Warrant Agent
is hereby irrevocably authorized to requisition from time to time from such
Transfer Agent the stock certificates required to honor outstanding Warrants
upon exercise thereof in accordance with the terms of this
Agreement.  The Company shall supply such Transfer Agent with duly
executed certificates for such purposes and shall provide or otherwise make
available any cash which may be payable as provided in Section 12
hereof.  The Company shall furnish such Transfer Agent a copy of all
notices of adjustments and certificates related thereto, transmitted to each
holder pursuant to Section 13 hereof.

     

    9.3      
   Before taking any action which would cause an adjustment
pursuant to Section 11 hereof to reduce the Exercise Price below the then par
value (if any) of the Warrant Shares, the Company shall take any commercially
reasonable corporate action which may, in the opinion of its counsel (which may
be counsel employed by the Company), be necessary in order that the Company may
validly and legally issue fully paid and nonassessable Warrant Shares at the
Exercise Price as so adjusted.

     

    9.4  
       The Company shall, upon exercise of
Warrants and payment of the Exercise Price therefor, issue Warrant Shares that
are fully paid, nonassessable, free of preemptive rights and free from all
taxes, liens, charges and security interests with respect to the issue
thereof.

     

    SECTION
10.      Obtaining Stock Exchange
Listings; State Registration.  The Company shall from time to
time take all commercially reasonable actions which may be necessary so that the
Warrant Shares, immediately upon their issuance upon the exercise of Warrants,
will be listed on the principal securities exchanges and markets within the
United States of America, if any, on which other shares of Common Stock are then
listed.  To the extent that the Common Stock is not listed on a
national securities exchange or there is no exemption from state “blue sky”
securities laws for the issuance of the Warrant Shares, the Company will take
all commercially reasonable actions necessary so that the Warrant Shares are
registered in all states in which the holders of the Warrants
reside.

     

    SECTION
11.      Adjustment of Number of
Warrant Shares. The number of Warrant Shares issuable upon the exercise
of each Warrant is subject to adjustment from time to time upon the occurrence
of the events enumerated in this Section 11.  For purposes of this
Section 11, “Common Stock” means shares now or hereafter authorized of any class
of common stock of the Company and any other stock of the Company, however
designated, that has the right (subject to any prior rights of any class or
series of preferred stock) to participate in any distribution of the assets or
earnings of the Company without limit as to per share amount.

    
      
         

      

      
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    11.1   
    Adjustment for Change in
Capital Stock. If the Company:  (i) pays a dividend or makes a
distribution on its Common Stock in either case in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock into a greater number of
shares; (iii) combines its outstanding shares of Common Stock into a smaller
number of shares; (iv) makes a distribution on its Common Stock in shares of its
capital stock other than Common Stock; or (v) issues by reclassification of its
Common Stock any shares of its capital stock, then the number of shares of
Common Stock issuable upon exercise of each Warrant immediately prior to such
action shall be proportionately adjusted so that the holder of any Warrant
thereafter exercised shall receive the aggregate number and kind of shares of
capital stock of the Company which he would have owned immediately following
such action if such Warrant had been exercised immediately prior to such
action.  The adjustment shall become effective immediately after the
record date in the case of a dividend or distribution and immediately after the
effective date in the case of a subdivision, combination or
reclassification.  Such adjustment shall be made successively whenever
any event listed above shall occur.

     

    11.2    
   Adjustment for Rights
Issue.

     

    (a)           If
the Company distributes any rights, options or warrants to all holders of its
Common Stock entitling them to purchase shares of Common Stock at a price per
share less than the Closing Price per share on the Business Day immediately
preceding the ex-dividend date for such distribution of rights, options or
warrants, the number of shares of Common Stock issuable upon exercise of each
Warrant is to be adjusted in accordance with the following formula:

     

    N’= N x
((O+A) / (O+(A x (P/M))))

     

    where:

     

    N’
=       the adjusted number of shares of
Common Stock issuable upon exercise of each Warrant.

    N
=        the current number of shares of
Common Stock issuable upon exercise of each Warrant.

    O
=        the number of shares of Common
Stock outstanding on the record date for such distribution.

    A
=        the number of additional shares
of Common Stock issuable pursuant to such rights or warrants.

    P  =        the
purchase price per share of the additional shares.

    M
=       the Closing Price per share of Common
Stock on the record date.

     

    (b)           The
adjustment is to be made successively whenever any such rights, options or
warrants are issued and is to become effective immediately after the record date
for the determination of stockholders entitled to receive the rights, options or
warrants.  If at the end of the period during which such rights,
options or warrants are exercisable, not all rights, options or warrants have
been exercised, the number of shares of Common Stock issuable upon exercise of
each Warrant is to be immediately readjusted to what it would have been if “N”
in the above formula had been the number of shares actually issued.

     

    11.3    
   Adjustment for Other
Distributions.

     

    (a)           If
the Company distributes to all holders of its Common Stock any of its assets
(including cash) or debt securities or any rights, options or warrants to
purchase debt securities, assets or other securities of the Company (other than
Common Stock), the number of shares of Common Stock issuable upon exercise of
each Warrant is to be adjusted in accordance with the formula:

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    N’ = N x
(M / (M-F))

     

    where:

     

    N’
=       the adjusted number of shares of
Common Stock issuable upon exercise of each Warrant.

    N
=        the current number of shares of
Common Stock issuable upon exercise of each Warrant.

    M
=       the Closing Price per share of Common
Stock on the Business Day immediately preceding the ex dividend date for such
distribution.

    F
=         the fair market value on
the ex dividend date for such distribution of the assets, securities, rights or
warrants distributable to one share of Common Stock after taking into account,
in the case of any rights, options or warrants, the consideration required to be
paid upon exercise thereof.  The Board of Directors shall reasonably
determine the fair market value in good faith.

     

    (b)           The
adjustment is to be made successively whenever any such distribution is made and
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such distribution.

     

    (c)           If
any adjustment is made pursuant to this Section 11.3 as a result of the issuance
of rights, options or warrants and at the end of the period during which any
such rights, options or warrants are exercisable, not all such rights, options
or warrants shall have been exercised, the Warrant shall be immediately
readjusted as if “F” in the above formula was the fair market value on the
ex-dividend date for such distribution of the indebtedness or assets actually
distributed upon exercise of such rights, options or warrants divided by the
number of shares of Common Stock outstanding on the ex-dividend date for such
distribution.  Notwithstanding anything to the contrary contained in
this subsection (c), if “M−F” in the above formula is less than $1.00, the
Company may elect to, and if “M−F” or is a negative number, the Company shall,
in lieu of the adjustment otherwise required by this Section 11.3, distribute to
the holders of the Warrants, upon exercise thereof, the evidences of
indebtedness, assets, rights, options or warrants (or the proceeds thereof)
which would have been distributed to such holders had such Warrants been
exercised immediately prior to the record date for such
distribution.

     

    11.4     
  Defined
Terms; When De Minimis Adjustment May Be Deferred.

     

    (a)           As
used in this Section 11:

     

    (i)           “Closing
Price” of the Common Stock on any date of determination means: the closing sale
price for the regular trading session (without considering after hours or other
trading outside regular trading session hours) of the Common Stock (regular way)
as reported in the composite transactions for the principal United States
securities exchange on which the Common Stock is so listed on that date (or, if
no closing price is reported, the last reported sale price during that regular
trading session),  if the Common Stock is not so reported, the last
quoted sales price for the Common Stock in the over the counter market as
reported by the OTC Bulletin Board, the National Quotation Bureau or similar
organization, or if the Common Stock is not so quoted, the average of the
mid-point of the last bid and ask prices for the Common Stock from at least
three nationally recognized investment-banking firms that the Company selects
for this purpose;

     

    (ii)           “ex-dividend
date” means the first date on which the shares of Common Stock trade on the
applicable exchange or in the applicable market, regular way, without the right
to receive the issuance or distribution in question;

    
      
         

      

      
        10

        
          

        

      

      
         

      

    

     

    (iii)           “trading
day” means, with respect to the Common Stock or any other security, a day during
which (A) trading in the Common Stock or such other security generally occurs,
(B) there is no market disruption event (as defined below) and (C) a Closing
Price for the Common Stock or such other security (other than a Closing Price
referred to in the next to last clause of such definition) is available for such
day; provided that if the Common Stock or such other security is not admitted
for trading or quotation on or by any exchange, bureau or other organization,
“trading day” will mean any Business Day;

     

    (iv)           “market
disruption event” means, with respect to the Common Stock or any other security,
the occurrence or existence of more than one-half hour period in the aggregate
or any scheduled trading day for the Common Stock or such other security of any
suspension or limitation imposed on trading (by reason of movements in price
exceeding limits permitted by the stock exchange or otherwise) in the Common
Stock or such other security or in any options, contract, or future contracts
relating to the Common Stock or such other security, and such suspension or
limitation occurs or exists at any time before 1:00 p.m.  (New York
time) on such day; and

     

    (v)           “Business
Day” means, any day which is not a Saturday, a Sunday or any other day on which
banks in the City of New York, New York, are authorized or required by law to
close.

     

    (b)           No
adjustment in the number of shares of Common Stock issuable upon exercise of
each Warrant need be made unless the adjustment would require an increase or
decrease of at least 1% in such number.  Any adjustments that are not
made are to be carried forward and taken into account in any subsequent
adjustment.

     

    (c)           All
calculations under this Section 11 are to be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be.

     

    11.5   
    When No Adjustment
Required.

     

    (a)           No
adjustment need be made for a transaction referred to in Sections 11.2-11.3 if
Warrant holders are to participate, without requiring the Warrants to be
exercised, in the transaction on a basis and with notice that the Board of
Directors of the Company reasonably determines to be fair and appropriate in
light of the basis and notice on which holders of Common Stock participate in
the transaction.

     

    (b)           No
adjustment need be made for a change in the par value or no par value of the
Common Stock.

     

    (c)           To
the extent the Warrants become convertible into cash, no adjustment need be made
thereafter as to the amount of cash into which such Warrants are
exercisable.  Interest will not accrue on the cash.

     

    11.6    
   Notice of
Adjustment.  Whenever the number of shares of Common Stock
issuable upon exercise of each Warrant is adjusted, the Company shall provide
the notices required by Section 13 hereof.

    
      
         

      

      
        11

        
          

        

      

      
         

      

    

     

    11.7    
   Notice of Certain
Transactions.

     

    (a)          The
Company shall mail to Warrant holders a notice stating the proposed record date
for a dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, transfer, lease,
liquidation or dissolution if:

     

    (i)           the
Company takes any action that would require an adjustment in the Exercise Price
pursuant to this Section 11, and if the Company does not arrange for Warrant
holders to participate pursuant to Section 11.5;

     

    (ii)          the
Company takes any action that would require a supplemental Warrant Agreement
pursuant to Section 11.8; or

     

    (iii)         there
is a liquidation or dissolution of the Company.

     

    (b)          The
Company shall mail the notice at least 15 days before such
date.  Failure to mail the notice or any defect in it will not affect
the validity of the transaction.

     

    11.8    
   Reorganization of
Company.

     

    (a)           If
the Company consolidates or merges with or into, or transfers or leases all or
substantially all its assets to, any person, upon consummation of such
transaction, the Warrants will automatically become exercisable for the kind and
amount of securities, cash or other assets which the holder of a Warrant would
have owned immediately after the consolidation, merger, transfer or lease if
such holder had exercised the Warrant immediately before the effective date of
the transaction; provided that (i) if the holders of Common Stock were entitled
to exercise a right of election as to the kind or amount of securities, cash or
other assets receivable upon such consolidation or merger, then the kind and
amount of securities, cash or other assets for which each Warrant becomes
exercisable is to be deemed the weighted average of the kind and amount received
per share by the holders of Common Stock in such consolidation or merger that
affirmatively make such election or (ii) if a tender or exchange offer has been
made to and accepted by the holders of Common Stock under circumstances in
which, upon completion of such tender or exchange offer, the maker thereof,
together with members of any group (within the meaning of Rule 13d-5(b)(1) under
the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of which
such maker is a part, and together with any affiliate or associate of such maker
(within the meaning of Rule 12b-2 under the Exchange Act) and any members of any
such group of which any such affiliate or associate is a part, own beneficially
(within the meaning of Rule 13d-3 under the Exchange Act) more than 50% of the
outstanding shares of Common Stock, the holder of a Warrant is entitled to
receive the highest amount of cash, securities or other property to which such
holder would actually have been entitled as a shareholder if such Warrant holder
had exercised the Warrant prior to the expiration of such tender or exchange
offer, accepted such offer and all of the Common Stock held by such holder had
been purchased pursuant to such tender or exchange offer, subject to adjustments
(from and after the consummation of such tender or exchange offer) as nearly
equivalent as possible to the adjustments provided for in this Section
11.  Concurrently with the consummation of any such transaction, the
corporation or other entity formed by or surviving any such consolidation or
merger if other than the Company, or the person to which such sale or conveyance
has been made, shall enter into a supplemental Warrant Agreement so providing
and further providing for adjustments which are to be as nearly equivalent as
may be practical to the adjustments provided for in this Section.  The
successor Company shall mail to Warrant holders a notice describing the
supplemental Warrant Agreement.

    
      
         

      

      
        12

        
          

        

      

      
         

      

    

     

    (b)           If
the issuer of securities deliverable upon exercise of Warrants under the
supplemental Warrant Agreement is an affiliate of the formed, surviving,
transferee or lessee corporation, that issuer shall join in the supplemental
Warrant Agreement.

     

    (c)           If
this Section 11.8 applies, Sections 11.2-11.7 do not apply.

     

    11.9    
   Warrant Agent’s
Disclaimer. The Warrant Agent is not required to determine when an
adjustment under this Section 11 should be made, how it should be made or what
it should be.  The Warrant Agent is not required to determine whether
any provisions of a supplemental Warrant Agreement under Section 11.8 are
correct.  The Warrant Agent makes no representation as to the validity
or value of any securities or assets issued upon exercise of
Warrants.  The Warrant Agent is not be responsible for the Company’s
failure to comply with this Section.

     

    11.10   
  When
Issuance or Payment May Be Deferred. In any case in which this Section 11
requires that an adjustment in the number of shares of Common Stock issuable
upon exercise of each Warrant be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event (i) issuing to the holder of any Warrant exercised after such record date
the Warrant Shares and other capital stock of the Company, if any, issuable upon
such exercise over and above the Warrant Shares and other capital stock of the
Company, if any, issuable upon such exercise on the basis of the number of
shares of Common Stock issuable upon exercise of each Warrant and
(ii) paying to such holder any amount in cash in lieu of a fractional share
pursuant to Section 12; provided, however, that the Company shall deliver to
such holder a due bill or other appropriate instrument evidencing such holder’s
right to receive such additional Warrant Shares, other capital stock and cash
upon the occurrence of the event requiring such adjustment.

     

    11.11  
   Adjustment in Exercise
Price.

     

    (a)           Upon
each event that provides for an adjustment of the number of shares of Common
Stock issuable upon exercise of each Warrant pursuant to this Section 11, each
Warrant outstanding prior to the making of the adjustment is to thereafter have
an adjusted Exercise Price (calculated to the nearest ten millionth) obtained
from the following formula:

     

    E’ = E x
(N / N’)

     

    where:

     

    E’
=        the adjusted Exercise
Price.

     

    E
=         the Exercise Price prior
to adjustment.

     

    N’
=       the adjusted number of Warrant Shares
issuable upon exercise of a Warrant by payment of the adjusted Exercise
Price.

     

    N
=        the number of Warrant Shares
previously issuable upon exercise of a Warrant by payment of the Exercise Price
prior to adjustment.

     

    (b)           Following
any adjustment to the Exercise Price pursuant to this Section 11, the
amount payable, when adjusted and together with any consideration allocated to
the issuance of the Warrants, is to never be less than the par value per Warrant
Share at the time of such adjustment.  Such adjustment is to be made
successively whenever any event listed above occurs.

    
      
         

      

      
        13

        
          

        

      

      
         

      

    

     

    11.12  
   Form
of Warrants.  Notwithstanding any adjustments in the number or
kind of shares issuable upon the exercise of the Warrants or the Exercise Price,
Warrants theretofore or thereafter issued may continue to express the same
number and kind of shares and Exercise Price as are stated in the Warrants
initially issuable pursuant to this Agreement.

     

    SECTION
12.       Fractional
Interests.  The Company is not required to issue fractional
Warrant Shares on the exercise of Warrants.  If more than one Warrant
is presented for exercise in full at the same time by the same holder, the
number of full Warrant Shares which are issuable upon the exercise thereof are
to be computed on the basis of the aggregate number of Warrant Shares
purchasable on exercise of the Warrants so presented, rounded down to the
nearest whole number.

     

    SECTION
13.        Notices to Warrant
Holders.

     

    13.1    
   Upon any adjustment of the Exercise Price pursuant to Section
11, the Company shall promptly thereafter, and in any event within five days,
(a) cause to be filed with the Warrant Agent a certificate executed by the Chief
Financial Officer or principal financial officer of the Company setting forth
the number of Warrant Shares issuable upon exercise of each Warrant after such
adjustment and setting forth in reasonable detail the method of calculation and
the facts upon which such calculations are based, and (b) cause to be given to
each of the registered holders of the Warrant Certificates at his address
appearing on the Warrant register written notice of such adjustments by
first-class mail, postage prepaid.  Where appropriate, such notice may
be given in advance and included as a part of the notice required to be mailed
under the other provisions of this Section 13.  The Warrant Agent
may rely on any such certificate and on any adjustment therein contained and is
not to be deemed to have knowledge of such adjustment unless and until it has
received such certificate.

     

    13.2    
   The Company shall cause to be filed with the Warrant Agent and
shall cause to be given to each registered holder of Warrant Certificates at his
address appearing on the Warrant register, at least 10 calendar days prior to
the applicable record date hereinafter specified, or as promptly as practicable
under the circumstances in the case of events for which there is no record date,
by first-class mail, postage prepaid, a written notice stating (i) the date as
of which the holders of record of shares of Common Stock to be entitled to
receive any such rights, options, warrants or distribution are to be determined,
(ii) the initial expiration date set forth in any tender offer or exchange
offer for shares of Common Stock, or (iii) the date on which any such
consolidation, merger, conveyance, transfer, dissolution, liquidation or winding
up is expected to become effective or consummated, and the date as of which it
is expected that holders of record of shares of Common Stock are to be entitled
to exchange such shares for securities or other property, if any, deliverable
upon such reclassification, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up, in the event:

     

    (a)           the
Company authorizes the issuance to all holders of shares of Common Stock of
rights, options or warrants to subscribe for or purchase shares of Common Stock
or of any other subscription rights or warrants;

     

    (b)           the
Company authorizes the distribution to all holders of shares of Common Stock of
evidences of its indebtedness or assets (other than regular cash dividends or
dividends payable in shares of Common Stock or distributions referred to in
Section 11.3);

     

    (c)           of
any consolidation or merger to which the Company is a party and for which
approval of any shareholders of the Company is required, or of the conveyance or
transfer of the properties and assets of the Company substantially as an
entirety, or of any reclassification or change of Common Stock issuable upon
exercise of the Warrants (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), or a tender offer or exchange offer for shares of Common
Stock;

    
      
         

      

      
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    (d)           of
the voluntary or involuntary dissolution, liquidation or winding up of the
Company; or

     

    (e)           the
Company proposes to take any action not specified above which would require an
adjustment of the Exercise Price pursuant to Section 11.

     

    13.3    
   The failure to give the notice required by this Section 13 or
any defect therein does not affect the legality or validity of any distribution,
right, option, warrant, consolidation, merger, conveyance, transfer,
dissolution, liquidation or winding up, or the vote upon any
action.  Nothing contained in this Agreement or in any of the Warrant
Certificates is to be construed as conferring upon the holders thereof the right
to vote or to consent or to receive notice as shareholders in respect of the
meetings of shareholders or the election of Directors of the Company or any
other matter, or any rights whatsoever as shareholders of the
Company.

     

    SECTION
14.        Merger, Consolidation or
Change of Name of Warrant Agent.

     

    14.1  
     Any corporation into which the Warrant Agent is
merged or with which it is consolidated, or any corporation resulting from any
merger or consolidation to which the Warrant Agent is a party, or any
corporation succeeding to all or substantially all the corporate trust or agency
business of the Warrant Agent, will be the successor to the Warrant Agent
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such corporation would be
eligible for appointment as a successor warrant agent under the provisions of
Section 16.  If at the time the successor to the Warrant Agent
succeeds to the agency created by this Agreement, and if at that time any of the
Warrant Certificates have been countersigned but not delivered, any such
successor to the Warrant Agent may adopt the countersignature of the original
Warrant Agent; and if at that time any of the Warrant Certificates have not been
countersigned, any successor to the Warrant Agent may countersign such Warrant
Certificates either in the name of the predecessor Warrant Agent or in the name
of the successor to the Warrant Agent; and in all such cases such Warrant
Certificates will have the full force and effect provided in the Warrant
Certificates and in this Agreement.

     

    14.2    
   If at any time the name of the Warrant Agent is changed and at
such time any of the Warrant Certificates have been countersigned but not
delivered, the Warrant Agent whose name has been changed may adopt the
countersignature under its prior name, and if at that time any of the Warrant
Certificates have not been countersigned, the Warrant Agent may countersign such
Warrant Certificates either in its prior name or in its changed name, and in all
such cases such Warrant Certificates will have the full force and effect
provided in the Warrant Certificates and in this Agreement.

     

    SECTION
15.       Conditions to Warrant Agent
Duties and Obligations.  The Warrant Agent undertakes the
duties and obligations imposed by this Agreement (and no implied duties or
obligations may be read into this Agreement against the Warrant Agent) upon the
following terms and conditions, by all of which the Company and the holders of
Warrants, by their acceptance thereof, are bound:

     

    15.1   
    The statements contained herein and in the Warrant
Certificates may be taken as statements of the Company and the Warrant Agent
assumes no responsibility for the correctness of any of the same except such as
describe the Warrant Agent or action taken or to be taken by it.  The
Warrant Agent assumes no responsibility with respect to the distribution of the
Warrant Certificates except as provided herein.

    
      
         

      

      
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    15.2    
   The Warrant Agent is not responsible for any failure of the
Company to comply with any of the covenants contained in this Agreement or in
the Warrant Certificates to be complied with by the Company.

     

    15.3    
   The Warrant Agent may consult at any time with counsel of its
own selection (who may be counsel for the Company) and the Warrant Agent incurs
no liability or responsibility to the Company or to any holder of any Warrant
Certificate in respect of any action taken, suffered or omitted by it hereunder
in good faith and in accordance with the opinion or the advice of such
counsel.  The Warrant Agent may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or through agents or
attorneys and the Warrant Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.

     

    15.4   
    The Warrant Agent may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Warrant Agent and conforming to the
requirements of this Agreement.  The Warrant Agent incurs no liability
or responsibility to the Company or to any holder of any Warrant Certificate for
any action taken in reliance on any Warrant Certificate, certificate of shares,
notice, resolution, waiver, consent, order, certificate, or other paper,
document or instrument (whether in its original or facsimile form) believed by
it to be genuine and to have been signed, sent or presented by the proper party
or parties.

     

    15.5   
    The Company shall: (i) pay to the Warrant Agent
reasonable remuneration for its services as such Warrant Agent as set forth on
Exhibit C
hereto; (ii) reimburse the Warrant Agent for all reasonable expenses, taxes and
governmental charges and other charges of any kind and nature incurred by the
Warrant Agent in the execution of this Agreement (including fees and expenses of
its counsel); and (iii) to indemnify the Warrant Agent (and any predecessor
Warrant Agent) and save it harmless against any and all claims (whether asserted
by the Company, a holder or any other person), damages, losses, expenses
(including taxes other than taxes based on the income of the Warrant Agent),
liabilities, including judgments, costs and counsel fees and expenses, for
anything done or omitted by the Warrant Agent in the execution of this Agreement
except as a result of its negligence, willful misconduct, or bad
faith.  The provisions of this Section 15.5 survive the expiration of
the Warrants and the termination of this Agreement.

     

    15.6   
    The Warrant Agent is not required to institute any
action, suit or legal proceeding or to take any other action likely to involve
expense unless the Company or one or more registered holders of Warrant
Certificates furnish the Warrant Agent with security and indemnity satisfactory
to it for any costs and expenses which may be incurred, but this provision will
not affect the power of the Warrant Agent to take such action as it may consider
proper, whether with or without any such security or indemnity.  All
rights of action under this Agreement or under any of the Warrants may be
enforced by the Warrant Agent without the possession of any of the Warrant
Certificates or the production thereof at any trial or other proceeding relative
thereto, and any such action, suit or proceeding instituted by the Warrant Agent
is to be brought in its name as Warrant Agent and any recovery of judgment is to
be for the ratable benefit of the registered holders of the Warrants, as their
respective rights or interests may appear.

     

    15.7    
   The Warrant Agent, and any stockholder, director, officer or
employee of it, may buy, sell or deal in any of the Warrants or other securities
of the Company or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Warrant Agent under this
Agreement.  Nothing herein precludes the Warrant Agent from acting in
any other capacity for the Company or for any other legal
entity.

    
      
         

      

      
        16

        
          

        

      

      
         

      

    

     

    15.8    
   The Warrant Agent shall act hereunder solely as agent for the
Company, and its duties are determined solely by the provisions
hereof.  The Warrant Agent shall not be liable for anything that it
does or refrains from doing in connection with this Agreement except for its own
negligence, willful misconduct, or bad faith.  The Warrant Agent is
not be liable for any error of judgment made in good faith by it, unless it is
proved that the Warrant Agent was negligent in ascertaining the pertinent
facts.  Notwithstanding anything in this Agreement to the contrary, in
no event is the Warrant Agent liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Warrant Agent has been advised of the likelihood
of the loss or damage and regardless of the form of the action.

     

    15.9   
    The Warrant Agent is not required to make or cause to be
made any adjustment of the Exercise Price or number of the Warrant Shares or
other securities or property deliverable as provided in this Agreement, or to
determine whether any facts exist which may require any of such adjustments, or
with respect to the nature or extent of any such adjustments, when made, or with
respect to the method employed in making the same.  The Warrant Agent
is not accountable with respect to the validity or value or the kind or amount
of any Warrant Shares or of any securities or property which may at any time be
issued or delivered upon the exercise of any Warrant or with respect to whether
any such Warrant Shares or other securities will when issued be validly issued
and fully paid and nonassessable, and makes no representation with respect
thereto.

     

    15.10  
   Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Warrant Agent has any liability to any holder of a
Warrant Certificate or other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority prohibiting or otherwise restraining
performance of such obligation; provided that (i) the Company shall use
commercially reasonable best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible and (ii) nothing in this
Section 15.10 affects the Company’s obligation under Section 6.4 to use
commercially reasonable best efforts to have a registration statement in effect
covering the Warrant Shares issuable upon exercise of the Warrants and to
maintain a current prospectus relating to those Warrant Shares.

     

    15.11
     Any application by the Warrant Agent for written
instructions from the Company may, at the option of the Warrant Agent, set forth
in writing any action proposed to be taken or omitted by the Warrant Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective.  The Warrant Agent is not be liable
for any action taken by, or omission of, the Warrant Agent in accordance with a
proposal included in such application on or after the date specified in such
application (which date must not be less than three Business Days after the date
any officer of the Company actually receives such application, unless any such
officer has consented in writing to any earlier date) unless prior to taking any
such action (or the effective date in the case of an omission), the Warrant
Agent has received written instructions in response to such application
specifying the action to be taken or omitted.

     

    15.12 
    Warrant Agent is not required to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of
its duties hereunder or in the exercise of its rights.

    
      
         

      

      
        17

        
          

        

      

      
         

      

    

    15.13   
  In addition to the foregoing, the Warrant Agent is protected and
does not incur liability for, or in respect of, any action taken or omitted by
it in connection with its administration of this Agreement if such acts or
omissions are not the result of the Warrant Agent’s reckless disregard of its
duty, gross negligence or willful misconduct and are in reliance upon (i) the
proper execution of the certification concerning beneficial ownership appended
to the form of assignment and the form of the election attached hereto unless
the Warrant Agent has actual knowledge that, as executed, such certification is
untrue, or (ii) the non-execution of such certification including, without
limitation, any refusal to honor any otherwise permissible assignment or
election by reason of such non-execution.

     

    SECTION
16.      Change of Warrant
Agent.  The Warrant Agent may at any time resign as Warrant
Agent upon written notice to the Company.  If the Warrant Agent
becomes incapable of acting as Warrant Agent, the Company shall appoint a
successor to such Warrant Agent.  If the Company fails to make such
appointment within a period of 60 days after it has been notified in writing of
such resignation or of such incapacity by the Warrant Agent or by the registered
holder of a Warrant Certificate, then the registered holder of any Warrant
Certificate or the Warrant Agent may apply, at the expense of the Company, to
any court of competent jurisdiction for the appointment of a successor to the
Warrant Agent.  Pending appointment of a successor to such Warrant
Agent, either by the Company or by such a court, the duties of the Warrant Agent
shall be carried out by the Company.  The holders of a majority of the
unexercised Warrants may at any time remove the Warrant Agent and appoint a
successor to such Warrant Agent.  If a Successor Warrant Agent is not
appointed within 60 days of such removal, the Warrant Agent may apply, at the
expense of the Company, to any court of competent jurisdiction for the
appointment of a successor to the Warrant Agent.  Such successor to
the Warrant Agent need not be approved by the Company or the former Warrant
Agent.  After appointment the successor to the Warrant Agent will be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Warrant Agent without further act or deed; but the
former Warrant Agent upon payment of all fees and expenses due it and its agents
and counsel shall deliver and transfer to the successor to the Warrant Agent any
property at the time held by it hereunder and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose.  Failure
to give any notice provided for in this Section 16, however, or any defect
therein, will not affect the legality or validity of the appointment of a
successor to the Warrant Agent.

     

    SECTION
17.       Notices to Company and
Warrant Agent.

     

    17.1   
    Any notice or demand authorized by this Agreement to be
given or made by the Warrant Agent or by the registered holder of any Warrant
Certificate to or on the Company is sufficiently given or made when and if
deposited in the mail, first class or registered, postage prepaid, addressed
(until another address is filed in writing by the Company with the Warrant
Agent), as follows:

     

    Prime
Acquisition Corp.

    No. 322,
Zhongshan East Road

    Shijiazhuang

    Hebei
Province, 050011

    People’s
Republic of China

    Fax
No.:  [●]

    Attention:  Chief
Executive Officer

     

    17.2     
  If the Company fails to maintain such office or agency or fails to
give such notice of the location or of any change in the location thereof,
presentations may be made and notices and demands may be served at the principal
corporate trust office of the Warrant Agent.

     

    17.3   
    Any notice pursuant to this Agreement to be given by the
Company or by the registered holder(s) of any Warrant Certificate to the Warrant
Agent is sufficiently given when and if deposited in the mail, first-class or
registered, postage prepaid, addressed (until another address is filed in
writing by the Warrant Agent with the Company) to the Warrant Agent as
follows:

    
      
         

      

      
        18

        
          

        

      

      
         

      

    

     

    American
Stock Transfer & Trust Company

    [●]

    Attention:  Compliance
Department

     

    SECTION
18.      Supplements and
Amendments.  The Company and the Warrant Agent may from time to
time supplement or amend this Agreement without the approval of any holders of
Warrant Certificates in order to cure any ambiguity or to correct or supplement
any provision contained herein which is defective or inconsistent with any other
provision herein, or to make any other provisions in regard to matters or
questions arising hereunder which the Company and the Warrant Agent may deem
necessary or desirable and which do not in any way adversely affect the
interests of the holders of Warrant Certificates theretofore
issued.  Upon the delivery of a certificate from an appropriate
officer of the Company that states that the proposed supplement or amendment is
in compliance with the terms of this Section 18, the Warrant Agent shall execute
such supplement or amendment.  Notwithstanding anything in this
Agreement to the contrary, the prior written consent of the Warrant Agent must
be obtained in connection with any supplement or amendment that alters the
rights or duties of the Warrant Agent.  The Company and the Warrant
Agent may amend any provision herein with the consent of the holders of Warrants
exercisable for a majority of the Warrant Shares issuable on exercise of all
outstanding Warrants that would be affected by such amendment; provided that any
amendment affecting the Public Warrants must be approved by the holders of a
majority of the Public Warrants.  Without limiting the generality of
the foregoing, prior to the issuance of any Public Warrants, this Agreement
(including the exhibits hereto) may be amended by the Company and the Warrant
Agent, without the consent of any holder of Private Warrants, to modify in any
way or provide for the terms of the Public Warrants.

     

    SECTION
19.       Successors.  All
the covenants and provisions of this Agreement by or for the benefit of the
Company or the Warrant Agent bind and inure to the benefit of their respective
successors and assigns hereunder.

     

    SECTION
20.       Termination.  This
Agreement terminates on any earlier date if all Warrants have been exercised or
expire without exercise.  The provisions of Section 15 hereof shall
survive such termination.

     

    SECTION
21.      Governing
Law.  The laws of the State of New York govern this Agreement
and each Warrant Certificate issued hereunder without regard to conflicts of
laws principles.  The parties agree that all actions and proceedings
arising out of this Agreement or any of the transactions contemplated hereby,
shall be brought in the United States District Court for the Southern District
of New York or in a New York State Court in the County of New York and that, in
connection with any such action or proceeding, submit to the jurisdiction of,
and venue in, such court.  Each of the parties hereto also irrevocably
waives all right to trial by jury in any action, proceeding or counterclaim
arising out of this Agreement or the transactions contemplated
hereby.

     

    SECTION
22.      Benefits of This
Agreement.  Nothing in this Agreement is to be construed to
give to any person or corporation other than the Company, the Warrant Agent and
the registered holders of the Warrant Certificates any legal or equitable right,
remedy or claim under this Agreement, and this Agreement is for the sole and
exclusive benefit of the Company, the Warrant Agent and the registered holders
of the Warrant Certificates.

     

    SECTION
23.      Counterparts.  This
Agreement may be executed in any number of counterparts and each of such
counterparts is for all purposes to be deemed an original, and all such
counterparts together constitute but one and the same
instrument.

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    SECTION
24.      Force
Majeure.  The Warrant Agent is not responsible or liable for
any failure or delay in the performance of its obligations under this Agreement
arising out of or caused by, directly or indirectly, forces beyond its
reasonable control, including without limitation strikes, work stoppages,
accidents, acts of war or terrorism, civil or military disturbances, nuclear or
natural catastrophes or acts of God, and interruptions, loss or malfunctions of
utilities, communications or computer (software or hardware)
services.

     

    [Signature page
follows]

    
      
         

      

      
        20

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, as of the day and year first above written.

     

    
      
        
          
            
              	
                      PRIME
      ACQUISITION CORP.

                    
	 
      	 
      
	
                      By:

                    	
                         

                    
	
                      Name:

                    
	
                      Title:

                    

            

          

        

      

    

     

    AMERICAN STOCK TRANSFER & TRUST
COMPANY, as Warrant Agent

     

    
      
        
          
            
              	
                      By:

                    	
                          

                    
	
                      Name:

                    
	
                      Title:

                    

            

          

        

      

    

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    EXHIBIT
A

     

    [Form
of Warrant Certificate]

    
      
         

      

      
        A-1

        
          

        

      

      
         

      

    

    [Form of
Warrant Certificate]

     

    [Reverse]

    
      
         

      

      
        A-2

        
          

        

      

      
         

      

    

     

    EXHIBIT
B

     

    LEGEND
FOR PRIVATE WARRANTS

     

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (INCLUDING THE ORDINARY SHARES OF THE
COMPANY ISSUABLE UPON EXERCISE OF SUCH SECURITIES) HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY APPLICABLE STATE
SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE.  IN
ADDITION, THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TRANSFER RESTRICTIONS SET FORTH IN THE WARRANT AGREEMENT REFERRED TO
HEREIN.

     

    SECURITIES
EVIDENCED BY THIS CERTIFICATE AND ORDINARY SHARES OF THE COMPANY ISSUABLE UPON
EXERCISE OF SUCH SECURITIES WILL BE ENTITLED TO REGISTRATION RIGHTS UNDER A
REGISTRATION RIGHTS AGREEMENT TO BE EXECUTED BY THE COMPANY.

     

    THE
SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND CONDITIONS
OF AN ESCROW AGREEMENT BY AND BETWEEN THE COMPANY AND THE HOLDER OF THIS
CERTIFICATE.  THESE SHARES MAY NOT BE SOLD EXCEPT IN COMPLIANCE WITH
THAT AGREEMENT.1

     

    No. _____
_______ Warrants

    
      
         

      

      
        B-1

        
          

        

      

      
         

      

    

    EXHIBIT
C

     

    Warrant
Agent Fees

    

    
      
        
          
            
              
                
                  
                    	
                            Description

                          	 	
                            Amount
      ($)

                          
	 	 	 
	
                            Fee
      for acting as Warrant Agent

                          	 	
                            [_____]

                          

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        C-1THE
REGISTERED HOLDER OF THIS PURCHASE OPTION BY ITS ACCEPTANCE HEREOF, AGREES THAT
IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE OPTION EXCEPT AS HEREIN
PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE OPTION AGREES THAT IT WILL
NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE OPTION FOR A
PERIOD OF ONE YEAR FOLLOWING THE EFFECTIVE DATE (DEFINED BELOW) TO ANYONE OTHER
THAN (I) CHARDAN CAPITAL MARKETS, LLC (“CHARDAN”)
OR AN UNDERWRITER OR SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A
BONA FIDE OFFICER OR PARTNER OF CHARDAN OR OF ANY SUCH UNDERWRITER OR SELECTED
DEALER.

     

    THIS
PURCHASE OPTION IS NOT EXERCISABLE PRIOR TO THE LATER OF THE CONSUMMATION OF THE
COMPANY’S BUSINESS COMBINATION AND ________, 2011 [6 MONTHS FOLLOWING EFFECTIVE
DATE]. VOID AFTER 5:00 P.M. NEW YORK CITY LOCAL TIME, _________, 2016 [5 YEARS
FOLLOWING EFFECTIVE DATE].

     

    UNIT
PURCHASE OPTION

     

    FOR THE
PURCHASE OF

     

    ________
UNITS

     

    OF

     

    PRIME
ACQUISITION CORP.

     

    1.           Purchase Option.

     

    THIS
CERTIFIES THAT, in consideration of $_____ duly paid by or on behalf of Chardan
Capital Markets, LLC (“Initial
Holder”), as registered owner of this Purchase Option, to Prime
Acquisition Corp. (“Company”),
Holder is entitled, at any time or from time to time upon the later of the
consummation of a Business Combination (as defined in Section 2.5)
and  _________, 2011 (“Commencement
Date”) [6 months following the effective date], and at or before 5:00
p.m., New York City local time, ________, 2016 (“Expiration
Date”) [5 years following the effective date], but not thereafter, to
subscribe for, purchase and receive, in whole or in part, up to _____(_____)
units (“Units”)
of the Company, each Unit consisting of one ordinary share of the Company, par
value $0.001 per share (“Ordinary
Share”), and one-half of a warrant (“Warrant(s)”)
expiring five years from the effective date (“Effective
Date”) of the registration statement (“Registration
Statement”) pursuant to which Units are offered for sale to the public
(“Offering”).
Each Warrant is identical to the warrants included in the Units being registered
for sale to the public by way of the Registration Statement (“Public
Warrants”).  If the Expiration Date is a day on which banking
institutions are authorized by law to close, then this Purchase Option may be
exercised on the next succeeding day which is not such a day in accordance with
the terms herein. During the period ending on the Expiration Date, the Company
agrees not to take any action that would terminate the Purchase Option. This
Purchase Option is initially exercisable at $12.00 per Unit so purchased;
provided, however, that upon the occurrence of any of the events specified in
Section 6 hereof, the rights granted by this Purchase Option, including the
exercise price per Unit and the number of Units (and Ordinary Shares and
Warrants) to be received upon such exercise, shall be adjusted as therein
specified. The term “Exercise Price” shall mean the initial exercise price or
the adjusted exercise price, depending on the context.  The term
“Holder” shall mean, as of any date, the Initial Holder and/or any transferee
who acquires this Purchase Option (in whole or in part) in accordance with
Section 3.1 hereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.           Exercise.

     

    2.1           Exercise Form. In
order to exercise this Purchase Option, the exercise form attached hereto must
be duly executed and completed and delivered to the Company, together with this
Purchase Option and payment of the Exercise Price for the Units being purchased
payable in cash or by certified check or official bank check. If the
subscription rights represented hereby shall not be exercised at or before 5:00
p.m., New York City local time, on the Expiration Date this Purchase Option
shall become and be void without further force or effect, and all rights
represented hereby shall cease and expire.

     

    2.2           Legend. Each
certificate for the securities purchased under this Purchase Option shall bear a
legend as follows unless such securities have been registered under the
Securities Act of 1933, as amended (“Act”):

     

    “The
securities represented by this certificate have not been registered under the
Securities Act of 1933, as amended (“Act”) or applicable state law. The
securities may not be offered for sale, sold or otherwise transferred except
pursuant to an effective registration statement under the Act, or pursuant to an
exemption from registration under the Act and applicable state
law.”

     

    2.3           Cashless
Exercise.

     

     
2.3.1        Determination of Amount. In
lieu of the payment of the Exercise Price multiplied by the number of Units for
which this Purchase Option is exercisable and in lieu of being entitled to
receive Units in the manner required by Section 2.1, the Holder shall have the
right (but not the obligation) to convert any exercisable but unexercised
portion of this Purchase Option into Units (the “Conversion Right”) as follows:
upon exercise of the Conversion Right, the Company shall deliver to the Holder
(without payment by the Holder of any of the Exercise Price in cash) that number
of Units equal to the quotient obtained by dividing (x) the “Value” (as defined
below) of the portion of this Purchase Option being converted by (y) the
“Current Market Price” (as defined below) of the portion of the Purchase Option
being converted. The “Value” of the portion of this Purchase Option being
converted shall equal the remainder derived from subtracting (a) the product of
(i) the Exercise Price multiplied by (ii) the number of Units underlying the
portion of this Purchase Option being converted from (b) the product of (i)
Current Market Price of a Unit multiplied by (ii) the number of Units underlying
the portion of this Purchase Option being converted. The “Current Market Price”
of a Unit at any day shall mean (i) if the Units are listed on a national
securities exchange (including, without limitation, the NYSE Euronext and the
NASDAQ Stock Market) or quoted on the Over the Counter Bulletin Board (or any
successor electronic inter-dealer quotation system), the average closing price
of a Unit for the thirty (30) trading days immediately preceding the date of
determination of the Current Market Price in the principal trading market for
the Units as reported by the exchange or the quotation system, as the case may
be; (ii) if the Units are not listed on a national securities exchange or quoted
on Over the Counter Bulletin Board (or any successor electronic inter-dealer
quotation system), but are traded in the residual over-the-counter market, the
closing bid price for a Unit on the last trading day preceding the date in
question for which such quotations are reported by the Pink Sheets, LLC or
similar publisher of such quotations; and (iii) if the fair market value of the
Units cannot be determined pursuant to clause (i) or (ii) above, such price as
the Board of Directors of the Company shall determine, in good
faith.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     
2.3.2        Mechanics of Cashless
Exercise. The Conversion Right described in this Section 2.3 may be exercised by
the Holder on any Business Day on or after the Commencement Date and not later
than the Expiration Date by delivering this Purchase Option, with the duly
executed exercise form attached hereto and with the cashless exercise section
completed, specifying the total number of Units the Holder will purchase
pursuant to such Conversion Right, to the Company.

     

    2.4           No Obligation to Net Cash
Settle. Notwithstanding anything to the contrary contained in this
Purchase Option, in no event will the Company be required to net cash settle the
exercise of the Purchase Option or the Warrants underlying the Purchase Option.
The holder of the Purchase Option and the Warrants underlying the Purchase
Option will not be entitled to exercise the Purchase Option or the Warrants
underlying such Purchase Option unless a registration statement is effective, or
an exemption from the registration requirements is available at such time and,
if the holder is not able to exercise the Purchase Option or underlying
Warrants, the Purchase Option and/or the underlying Warrants, as applicable,
will expire worthless.

     

    2.5           Redemption of Purchase
Option.

     

     
2.5.1        The Company may call the
Purchase Option for redemption, in whole and not in part, at a price of [$0.01],
upon not less than 30 days’ prior written notice of redemption, if, and only if,
(i) the Closing Price has equaled or exceeded $18.00 per share for any 20
trading days within a 30-trading-day period following consummation of the
Company’s business combination (as described more fully in the Registration
Statement) (the “Business
Combination”) (ii) at all times between the date of such notice of
redemption and the redemption date the Purchase Option is exercisable, and (iii)
at all times between the date of such notice of redemption and the redemption
date a registration statement is in effect covering the Ordinary Shares and
Warrants issuable upon exercise of the Purchase Option and a current prospectus
relating to those Ordinary Shares and Warrants is available.

     

     
2.5.2        The “Closing Price” of the
Ordinary Shares on any date of determination means:

     

     
(a)           the closing
sale price for the regular trading session (without considering after hours or
other trading outside regular trading session hours) of the Common Stock
(regular way) as reported in the composite transactions for the principal United
States securities exchange on which the Ordinary Shares is so listed on that
date (or, if no closing price is reported, the last reported sale price during
that regular trading session), or

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     
(b)           if the
Ordinary Shares is not so quoted, the last quoted bid price for the Ordinary
Shares in the over the counter market as reported by the OTC Bulletin Board, the
National Quotation Bureau or similar organization, or

     

     
(c)           if the
Ordinary Shares is not so quoted, the average of the mid point of the last bid
and ask prices for the Ordinary Shares from at least three nationally recognized
investment banking firms that the Company selects for this purpose.

     

    2.6           Warrant
Exercise. Any Warrants underlying the Units shall be issued pursuant and subject
to the terms and conditions set forth in the Warrant Agreement, dated [●],
by and between the Company and [●]
(the “Warrant
Agreement”).

     

    3.           Transfer.

     

    3.1           General Restrictions.
The registered Holder of this Purchase Option, by its acceptance hereof, agrees
that it will not sell, transfer, assign, pledge or hypothecate this Purchase
Option (or the Ordinary Shares and Warrants underlying this Purchase Option) for
a period of one year (including a period of 180 days pursuant to FINRA Rule
5110(g)(1)) following the Effective Date to anyone other than (i) Chardan
or an underwriter or selected dealer in connection with the Offering, or
(ii) a bona fide officer, manager, member or partner of Chardan or of any
such underwriter or selected dealer. On and after the first anniversary of the
Effective Date, transfers to others may be made subject to compliance with or
exemptions from applicable securities laws. In order to make any permitted
assignment, the Holder must deliver to the Company the assignment form attached
hereto duly executed and completed, together with the Purchase Option and
payment of all transfer taxes, if any, payable in connection therewith. The
Company shall within five business days transfer this Purchase Option on the
books of the Company and shall execute and deliver a new Purchase Option or
Purchase Options of like tenor to the appropriate assignee(s) expressly
evidencing the right to purchase the aggregate number of Units purchasable
hereunder or such portion of such number as shall be contemplated by any such
assignment.

     

    3.2           Restrictions Imposed by the
Act. The securities evidenced by this Purchase Option shall not be
transferred unless and until (i) the Company has received the opinion of
counsel for the Holder that the securities may be transferred pursuant to an
exemption from registration under the Act and applicable state securities laws,
the availability of which is established to the reasonable satisfaction of the
Company, or (ii) a registration statement or a post-effective amendment to
the Registration Statement relating to such securities has been filed by the
Company and declared effective by the Securities and Exchange Commission (the
“Commission”),
a current prospectus is available and compliance with applicable state
securities law has been established.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    4.           New Purchase Options to be
Issued.

     

    4.1           Partial Exercise or
Transfer. Subject to the restrictions in Section 3 hereof, this Purchase
Option may be exercised or assigned in whole or in part.  In the event
of the exercise or assignment hereof in part only, upon surrender of this
Purchase Option for cancellation, together with the duly executed exercise or
assignment form and funds sufficient to pay any Exercise Price (except to the
extent the Holder elects to exercise this Purchase Option by means of a cashless
exercise as provided by Section 2.3 above) and/or transfer tax, the Company
shall cause to be delivered to the Holder without charge a new Purchase Option
of like tenor to this Purchase Option in the name of the Holder evidencing the
right of the Holder to purchase the number of Units purchasable hereunder as to
which this Purchase Option has not been exercised or assigned.  In
addition, upon surrender of the original Purchase Option at the offices of the
Company, together with evidence reasonably satisfactory to the Company in its
sole discretion of the transfer thereof, the Company shall cause to be delivered
to any Permitted Transferee without charge a new Purchase Option of like tenor
to this Purchase Option in the name of such transferee evidencing the right of
such transferee to purchase the number of Units purchasable hereunder as to
which this Purchase Option has been transferred to such transferee.

     

    4.2           Lost Certificate.
Upon receipt by the Company of evidence satisfactory to it of the loss, theft,
destruction or mutilation of this Purchase Option and of reasonably satisfactory
indemnification or the posting of a bond, the Company shall execute and deliver
a new Purchase Option of like tenor and date. Any such new Purchase Option
executed and delivered as a result of such loss, theft, mutilation or
destruction shall constitute a substitute contractual obligation on the part of
the Company.

     

    5.           Registration
Rights.

     

    5.1           Demand
Registration.

     

     
5.1.1        Grant of Right. The
Company, upon written demand (“Initial
Demand Notice”) of the Holder(s) of at least 51% of the Purchase Options
and/or the underlying Units and/or the underlying securities (“Majority
Holders”), agrees to use its best efforts to register (the “Demand
Registration”) under the Act on one occasion, all or any portion of the
Purchase Options requested by the Majority Holders in the Initial Demand Notice
and all of the securities underlying such Purchase Options, including the Units,
Ordinary Shares, the Warrants and the Ordinary Shares underlying the Warrants
(collectively, the “Registrable
Securities”). On such occasion, the Company will use its best efforts to
file a registration statement or a post-effective amendment to the Registration
Statement covering the Registrable Securities within sixty days after receipt of
the Initial Demand Notice and use its best efforts to have such registration
statement or post-effective amendment declared effective as soon as possible
thereafter. The demand for registration may be made at any time during a period
of five years beginning on the Effective Date.  The Initial Demand
Notice shall specify the number and type of Registrable Securities proposed to
be sold and the intended method(s) of distribution thereof. The Company will
notify all holders of the Purchase Options and/or Registrable Securities of the
demand within ten days from the date of the receipt of any such Initial Demand
Notice. Each holder of Registrable Securities who wishes to include all or a
portion of such holder’s Registrable Securities in the Demand Registration (each
such holder including shares of Registrable Securities in such registration, a
“Demanding
Holder”) shall so notify the Company within fifteen (15) days after the
receipt by the holder of the notice from the Company. Upon any such request, the
Demanding Holders shall be entitled to have their Registrable Securities
included in the Demand Registration, subject to Section 5.1.4.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     
5.1.2        Effective
Registration. A registration will not count as a Demand Registration
until the registration statement filed with the Commission with respect to such
Demand Registration has been declared effective and the Company has complied
with all of its obligations under this Agreement with respect thereto: provided,
however, that if, after such registration statement has been declared effective,
the offering of Registrable Securities pursuant to a Demand Registration is
interfered with by any stop order or injunction of the Commission or any other
governmental agency or court, the registration statement with respect to such
Demand Registration will be deemed not to have been declared effective unless
and until such stop order or injunction is removed, rescinded or otherwise
terminated.

     

     
5.1.3        Underwritten
Offering. If the Majority Holders so elect and such holders so advise the
Company as part of the Initial Demand Notice, the offering of such Registrable
Securities pursuant to such Demand Registration shall be in the form of an
underwritten offering. In such event, the right of any holder to include its
Registrable Securities in such registration shall be conditioned upon such
holder’s participation in such underwriting and the inclusion of such holder’s
Registrable Securities in the underwriting to the extent provided herein. All
Demanding Holders proposing to distribute their securities through such
underwriting shall enter into an underwriting agreement in customary form with
the underwriter or underwriters selected for such underwriting by the Majority
Holders.

     

     
5.1.4        Reduction of
Offering. If the managing underwriter or underwriters for a Demand
Registration that is to be an underwritten offering advises the Company and the
Demanding Holders in writing that the dollar amount or number of shares of
Registrable Securities which the Demanding Holders desire to sell, taken
together with all other Ordinary Shares or other securities which the Company
desires to sell and the Ordinary Shares, if any, as to which registration has
been requested pursuant to written contractual piggy-back registration rights
held by other stockholders of the Company who desire to sell, exceeds the
maximum dollar amount or maximum number of shares that can be sold in such
offering without adversely affecting the proposed offering price, the timing,
the distribution method, or the probability of success of such offering (such
maximum dollar amount or maximum number of shares, as applicable, the “Maximum
Number of Shares”), then the Company shall include in such registration:
(i) first, the Registrable Securities as to which Demand Registration has
been requested by the Demanding Holders (pro rata in accordance with the number
of shares that each such Person has requested be included in such registration,
regardless of the number of shares held by each such Person (such proportion is
referred to herein as “Pro
Rata”)) that can be sold without exceeding the Maximum Number of Shares;
(ii) second, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clause (i), the Ordinary Shares or other securities
that the Company desires to sell that can be sold without exceeding the Maximum
Number of Shares; (iii) third, to the extent that the Maximum Number of
Shares has not been reached under the foregoing clauses (i) and (ii), the
Ordinary Shares or other securities registrable pursuant to the terms of the
Registration Rights Agreement between the Company and the initial investors in
the Company, dated as of ________, 2011 (the “Registration
Rights Agreement” and such registrable securities, the “Investor
Securities”) as to which “piggy-back” registration has been requested by
the holders thereof, Pro Rata, that can be sold without exceeding the Maximum
Number of Shares; and (iv) fourth, to the extent that the Maximum Number of
Shares have not been reached under the foregoing clauses (i), (ii), and
(iii), the Ordinary Shares or other securities for the account of other persons
that the Company is obligated to register pursuant to written contractual
arrangements with such persons and that can be sold without exceeding the
Maximum Number of Shares.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     
5.1.5        Withdrawal. If a
majority-in-interest of the Demanding Holders disapprove of the terms of any
underwriting or are not entitled to include all of their Registrable Securities
in any offering, such majority-in-interest of the Demanding Holders may elect to
withdraw from such offering by giving written notice to the Company and the
underwriter or underwriters of their request to withdraw prior to the
effectiveness of the registration statement filed with the Commission with
respect to such Demand Registration. If the majority-in-interest of the
Demanding Holders withdraws from a proposed offering relating to a Demand
Registration, then the Company does not have to continue its obligations under
Section 5.1 with respect to such proposed offering and assuming the
Demanding Holders pay for any expenses incurred by the Company in connection
with said withdraw offering such registration shall not count as a Demand
Registration provided for in Section 5.1.

     

     
5.1.6        Terms. The Company
shall bear all fees and expenses attendant to registering the Registrable
Securities, including the expenses of any legal counsel selected by the Holders
to represent them in connection with the sale of the Registrable Securities, but
the Holders shall pay any and all underwriting commissions. The Company agrees
to use its reasonable best efforts to qualify or register the Registrable
Securities in such states as are reasonably requested by the Majority Holder(s);
provided, however, that in no event shall the Company be required to register
the Registrable Securities in a state in which such registration would cause (i)
the Company to be obligated to qualify to do business in such state, or would
subject the Company to taxation as a foreign corporation doing business in such
jurisdiction or (ii) the principal stockholders of the Company to be
obligated to escrow their shares of capital stock of the Company. The Company
shall use its best efforts to cause any registration statement or post-effective
amendment filed pursuant to the demand rights granted under Section 5.1.1 to
remain effective for a period of nine consecutive months from the effective date
of such registration statement or post-effective amendment.

     

    5.2           Piggy-Back
Registration.

     

     
5.2.1        Piggy-Back Rights. If
at any time during the seven year period commencing on the Effective Date the
Company proposes to file a registration statement under the Act with respect to
an offering of equity securities, or securities or other obligations exercisable
or exchangeable for, or convertible into, equity securities, by the Company for
its own account or for stockholders of the Company for their account (or by the
Company and by stockholders of the Company including, without limitation,
pursuant to Section 5.1), other than a registration statement (i) filed in
connection with any employee stock option or other benefit plan, (ii) for
an exchange offer or offering of securities solely to the Company’s existing
stockholders, (iii) for an offering of debt that is convertible into equity
securities of the Company or (iv) for a dividend reinvestment plan, then
the Company shall (x) give written notice of such proposed filing to the holders
of Registrable Securities as soon as practicable but in no event less than ten
(10) days before the anticipated filing date, which notice shall describe the
amount and type of securities to be included in such offering, the intended
method(s) of distribution, and the name of the proposed managing underwriter or
underwriters, if any, of the offering, and (y) offer to the holders of
Registrable Securities in such notice the opportunity to register the sale of
such number of shares of Registrable Securities as such holders may request in
writing within five (5) days following receipt of such notice (a “Piggy-Back
Registration”). The Company shall cause such Registrable Securities to be
included in such registration and shall use its best efforts to cause the
managing underwriter or underwriters of a proposed underwritten offering to
permit the Registrable Securities requested to be included in a Piggy-Back
Registration on the same terms and conditions as any similar securities of the
Company and to permit the sale or other disposition of such Registrable
Securities in accordance with the intended method(s) of distribution thereof.
All holders of Registrable Securities proposing to distribute their securities
through a Piggy-Back Registration that involves an underwriter or underwriters
shall enter into an underwriting agreement in customary form with the
underwriter or underwriters selected for such Piggy-Back
Registration.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     
5.2.2        Reduction of
Offering. If the managing underwriter or underwriters for a Piggy-Back
Registration that is to be an underwritten offering advises the Company and the
holders of Registrable Securities in writing that the dollar amount or number of
Ordinary Shares which the Company desires to sell, taken together with Ordinary
Shares, if any, as to which registration has been demanded pursuant to written
contractual arrangements with persons other than the holders of Registrable
Securities hereunder, the Registrable Securities as to which registration has
been requested under this Section 5.2, and the Ordinary Shares, if any, as to
which registration has been requested pursuant to the written contractual
piggy-back registration rights of other stockholders of the Company, exceeds the
Maximum Number of Shares, then the Company shall include in any such
registration:

     

     
(a)           If the
registration is undertaken for the Company’s account: (A) first, the
Ordinary Shares or other securities that the Company desires to sell that can be
sold without exceeding the Maximum Number of Shares; (B) second, to the
extent that the Maximum Number of Shares has not been reached under the
foregoing clause (A), the Ordinary Shares or other securities, if any,
comprised of  Registrable Securities and Investor Securities, as to
which registration has been requested pursuant to the applicable written
contractual piggy-back registration rights of such security holders, Pro Rata,
that can be sold without exceeding the Maximum Number of Shares; and
(C) third, to the extent that the Maximum Number of shares has not been
reached under the foregoing clauses (A) and (B), the Ordinary Shares or
other securities for the account of other persons that the Company is obligated
to register pursuant to written contractual piggy-back registration rights with
such persons and that can be sold without exceeding the Maximum Number of
Shares;

     

     
(b)           If the
registration is a “demand” registration undertaken at the demand of holders of
Investor Securities, (A) first, the Ordinary Shares or other securities for
the account of the demanding persons, Pro Rata, that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the
Maximum Number of Shares has not been reached under the foregoing
clause (A), the Ordinary Shares or other securities that the Company
desires to sell that can be sold without exceeding the Maximum Number of Shares;
(C) third, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A) and (B), the shares of Registrable
Securities, Pro Rata, as to which registration has been requested pursuant to
the terms hereof, that can be sold without exceeding the Maximum Number of
Shares; and (D) fourth, to the extent that the Maximum Number of Shares has
not been reached under the foregoing clauses (A), (B) and (C), the Ordinary
Shares or other securities for the account of other persons that the Company is
obligated to register pursuant to written contractual arrangements with such
persons, that can be sold without exceeding the Maximum Number of Shares;
and

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     
(c)           If the
registration is a “demand” registration undertaken at the demand of persons
other than either the holders of Registrable Securities or of Investor
Securities, (A) first, the Ordinary Shares or other securities for the account
of the demanding persons that can be sold without exceeding the Maximum Number
of Shares; (B) second, to the extent that the Maximum Number of Shares has not
been reached under the foregoing clause (A), the Ordinary Shares or other
securities that the Company desires to sell that can be sold without exceeding
the Maximum Number of Shares; (C) third, to the extent that the Maximum Number
of Shares has not been reached under the foregoing clauses (A) and (B),
collectively the Ordinary Shares or other securities comprised of Registrable
Securities and Investor Securities, Pro Rata, as to which registration has been
requested pursuant to the terms hereof and of the Registration Rights Agreement,
as applicable, that can be sold without exceeding the Maximum Number of Shares;
and (D) fourth, to the extent that the Maximum Number of Shares has not been
reached under the foregoing clauses (A), (B) and (C), the Ordinary Shares or
other securities for the account of other persons that the Company is obligated
to register pursuant to written contractual arrangements with such persons, that
can be sold without exceeding the Maximum Number of Shares.

     

     
5.2.3        Withdrawal. Any
holder of Registrable Securities may elect to withdraw such holder’s request for
inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the registration statement. The Company (whether on its own
determination or as the result of a withdrawal by persons making a demand
pursuant to written contractual obligations) may withdraw a registration
statement at any time prior to the effectiveness of the registration statement.
Notwithstanding any such withdrawal, the Company shall pay all expenses incurred
by the holders of Registrable Securities in connection with such Piggy-Back
Registration as provided in Section 5.2.4.

     

     
5.2.4        Terms. The Company
shall bear all fees and expenses attendant to registering the Registrable
Securities, including the expenses of any legal counsel selected by the Holders
to represent them in connection with the sale of the Registrable Securities but
the Holders shall pay any and all underwriting commissions related to the
Registrable Securities. In the event of such a proposed registration, the
Company shall furnish the then Holders of outstanding Registrable Securities
with not less than fifteen days written notice prior to the proposed date of
filing of such registration statement. Such notice to the Holders shall continue
to be given for each applicable registration statement filed (during the period
in which the Purchase Option is exercisable) by the Company until such time as
all of the Registrable Securities have been registered and sold. The Holders of
the Registrable Securities shall exercise the “piggy-back” rights provided for
herein by giving written notice, within ten days of the receipt of the Company’s
notice of its intention to file a registration statement. The Company shall use
its best efforts to cause any registration statement filed pursuant to the above
“piggyback” rights to remain effective for at least nine months from the date
that the Holders of the Registrable Securities are first given the opportunity
to sell all of such securities.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    5.3           Intentionally
Omitted.

     

    5.4           General
Terms.

     

     
5.4.1        Indemnification. The
Company shall indemnify the Holder(s) of the Registrable Securities to be sold
pursuant to any registration statement hereunder and each person, if any, who
controls such Holders within the meaning of Section 15 of the Act or Section
20(a) of the Securities Exchange Act of 1934, as amended (“Exchange
Act”), against all loss, claim, damage, expense or liability (including
all reasonable attorneys’ fees and other expenses reasonably incurred in
investigating, preparing or defending against litigation, commenced or
threatened, or any claim whatsoever whether arising out of any action between
the underwriter and the Company or between the underwriter and any third party
or otherwise) to which any of them may become subject under the Act, the
Exchange Act or otherwise, arising from such registration statement but only to
the same extent and with the same effect as the provisions pursuant to which the
Company has agreed to indemnify the underwriters contained in Section [__] of
the Underwriting Agreement between the Company, Chardan and the other
underwriters named therein dated the Effective Date. The Holder(s) of the
Registrable Securities to be sold pursuant to such registration statement, and
their successors and assigns, shall severally, and not jointly, indemnify the
Company, its officers and directors and each person, if any, who controls the
Company within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act, against all loss, claim, damage, expense or liability (including
all reasonable attorneys’ fees and other expenses reasonably incurred in
investigating, preparing or defending against any claim whatsoever) to which
they may become subject under the Act, the Exchange Act or otherwise, arising
from information furnished by or on behalf of such Holders, or their successors
or assigns, in writing, for specific inclusion in such registration statement to
the same extent and with the same effect as the provisions contained in Section
[__] of the Underwriting Agreement pursuant to which the underwriters have
agreed to indemnify the Company.

     

     
5.4.2        Exercise of Purchase
Options. Nothing contained in this Purchase Option shall be construed as
requiring the Holder(s) to exercise their Purchase Options or Warrants
underlying such Purchase Options prior to or after the initial filing of any
registration statement or the effectiveness thereof.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     
5.4.3        Documents Delivered to
Holders. The Company shall furnish Chardan, as representative of the
Holders participating in any of the foregoing offerings, a signed counterpart,
addressed to the participating Holders, of (i) an opinion of counsel to the
Company, dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, an opinion dated the date
of the closing under any underwriting agreement related thereto), and (ii) a
“cold comfort” letter dated the effective date of such registration statement
(and, if such registration includes an underwritten public offering, a letter
dated the date of the closing under the underwriting agreement) signed by the
independent public accountants who have issued a report on the Company’s
financial statements included in such registration statement, in each case
covering substantially the same matters with respect to such registration
statement (and the prospectus included therein) and, in the case of such
accountants’ letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer’s counsel
and in accountants’ letters delivered to underwriters in underwritten public
offerings of securities. The Company shall also deliver promptly to Chardan, as
representative of the Holders participating in the offering, the correspondence
and memoranda described below and copies of all correspondence between the
Commission and the Company, its counsel or auditors and all memoranda relating
to discussions with the Commission or its staff with respect to the registration
statement and permit Chardan, as representative of the Holders, to do such
investigation, upon reasonable advance notice, with respect to information
contained in or omitted from the registration statement as it deems reasonably
necessary to comply with applicable securities laws or rules of FINRA. Such
investigation shall include access to books, records and properties and
opportunities to discuss the business of the Company with its officers and
independent auditors, all to such reasonable extent and at such reasonable times
and as often as Chardan, as representative of the Holders, shall reasonably
request. The Company shall not be required to disclose any confidential
information or other records to Chardan, as representative of the Holders, or to
any other person, until and unless such persons shall have entered into
reasonable confidentiality agreements (in form and substance reasonably
satisfactory to the Company), with the Company with respect
thereto.

     

     
5.4.4        Underwriting
Agreement. The Company shall enter into an underwriting agreement with
the managing underwriter(s), if any, selected by any Holders whose Registrable
Securities are being registered pursuant to this Section 5, which managing
underwriter shall be reasonably acceptable to the Company. Such agreement shall
be reasonably satisfactory in form and substance to the Company, each Holder and
such managing underwriters, and shall contain such representations, warranties
and covenants by the Company and such other terms as are customarily contained
in agreements of that type used by the managing underwriter. The Holders shall
be parties to any underwriting agreement relating to an underwritten sale of
their Registrable Securities and may, at their option, require that any or all
the representations, warranties and covenants of the Company to or for the
benefit of such underwriters shall also be made to and for the benefit of such
Holders. Such Holders shall not be required to make any representations or
warranties to or agreements with the Company or the underwriters except as they
may relate to such Holders and their intended methods of distribution. Such
Holders, however, shall agree to such covenants and indemnification and
contribution obligations for selling stockholders as are customarily contained
in agreements of that type used by the managing underwriter. Further, such
Holders shall execute appropriate custody agreements and otherwise cooperate
fully in the preparation of the registration statement and other documents
relating to any offering in which they include securities pursuant to this
Section 5. Each Holder shall also furnish to the Company such information
regarding itself, the Registrable Securities held by it, and the intended method
of disposition of such securities as shall be reasonably required to effect the
registration of the Registrable Securities.

     

     
5.4.5        Rule 144 Sale.
Notwithstanding anything contained in this Section 5 to the contrary, the
Company shall have no obligation pursuant to Sections 5.1 or 5.2 to use its best
efforts to obtain the registration of Registrable Securities held by any Holder
(i) where such Holder would then be entitled to sell under Rule 144 within any
three-month period (or such other period prescribed under Rule 144 as may be
provided by amendment thereof) all of the Registrable Securities then held by
such Holder, and (ii) where the number of Registrable Securities held by such
Holder is within the volume limitations under paragraph (e) of Rule 144
(calculated as if such Holder were an affiliate within the meaning of Rule
144).

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

     
5.4.6        Supplemental
Prospectus. Each Holder agrees, that upon receipt of any notice from the
Company of the happening of any event as a result of which the prospectus
included in the registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in
light of the circumstances then existing, such Holder will immediately
discontinue disposition of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until such Holder’s receipt of
the copies of a supplemental or amended prospectus, and, if so desired by the
Company, such Holder shall deliver to the Company (at the expense of the
Company) or destroy (and deliver to the Company a certificate of such
destruction) all copies, other than permanent file copies then in such Holder’s
possession, of the prospectus covering such Registrable Securities current at
the time of receipt of such notice.

     

    6.           Adjustments.

     

    6.1           Adjustments to Exercise
Price and Number of Securities. The Exercise Price and the number of
Securities underlying the Purchase Option shall be subject to adjustment from
time to time as hereinafter set forth:

     

     
6.1.1        Stock Dividends -
Split-Ups. If after the date hereof, and subject to the provisions of
Section 6.4 below, the number of outstanding Ordinary Shares is increased by a
stock dividend payable in Ordinary Shares or by a split-up of Ordinary Shares or
other similar event, then, on the effective date thereof, the number of Ordinary
Shares underlying each of the Units purchasable hereunder shall be increased in
proportion to such increase in outstanding shares. In such case, the number of
Ordinary Shares, and the exercise price applicable thereto, underlying the
Warrants underlying each of the Units purchasable hereunder shall be adjusted in
accordance with the terms of the Warrants. For example, if the Company declares
a two-for-one stock dividend and at the time of such dividend this Purchase
Option is for the purchase of one Unit at $12.00 per whole Unit (each Warrant
underlying the Units is exercisable for $7.50 per share), upon effectiveness of
the dividend, this Purchase Option will be adjusted to allow for the purchase of
one Unit at $12.00 per Unit, each Unit entitling the holder to receive two
Ordinary Shares and two Warrants (each Warrant exercisable for $3.75 per
share).

     

     
6.1.2        Aggregation of
Shares. If after the date hereof, and subject to the provisions of
Section 6.4, the number of outstanding Ordinary Shares is decreased by a
consolidation, combination or reclassification of Ordinary Shares or other
similar event, then, on the effective date thereof, the number of Ordinary
Shares underlying each of the Units purchasable hereunder shall be decreased in
proportion to such decrease in outstanding shares. In such case, the number of
Ordinary Shares, and the exercise price applicable thereto, underlying the
Warrants underlying each of the Units purchasable hereunder shall be adjusted in
accordance with the terms of the Warrants.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     
6.1.3        Replacement of Securities
upon Reorganization, etc. In case of any reclassification or
reorganization of the outstanding Ordinary Shares other than a change covered by
Section 6.1.1 or 6.1.2 hereof or that solely affects the par value of such
Ordinary Shares, or in the case of any merger or consolidation of the Company
with or into another corporation (other than a consolidation or merger in which
the Company is the continuing corporation and that does not result in any
reclassification or reorganization of the outstanding Ordinary Shares), or in
the case of any sale or conveyance to another corporation or entity of the
property of the Company as an entirety or substantially as an entirety in
connection with which the Company is dissolved, the Holder of this Purchase
Option shall have the right thereafter (until the expiration of the right of
exercise of this Purchase Option) to receive upon the exercise hereof, for the
same aggregate Exercise Price payable hereunder immediately prior to such event,
the kind and amount of shares of stock or other securities or property
(including cash) receivable upon such reclassification, reorganization, merger
or consolidation, or upon a dissolution following any such sale or transfer, by
a Holder of the number of Ordinary Shares of the Company obtainable upon
exercise of this Purchase Option and the underlying Warrants immediately prior
to such event; and if any reclassification also results in a change in Ordinary
Shares covered by Section 6.1.1 or 6.1.2, then such adjustment shall be made
pursuant to Sections 6.1.1, 6.1.2 and this Section 6.1.3. The provisions of this
Section 6.1.3 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other
transfers.

     

     
6.1.4        Business Combination.
If, upon the Company’s consummation of the Business Combination, Yong Hui Li,
Diana Chia-Huei Liu, and William Yu have been required, as a closing condition,
to cancel any of the Ordinary Shares or Warrants issued to them prior to the
consummation of the Company’s initial public offering or the private placement
of warrants occurring immediately prior to the initial public offering (the
“Insider Promote”) and
such cancelled Ordinary Shares or Warrants are not replaced following the
Business Combination, the number of Units purchasable from the exercise of the
Purchase Option shall be reduced on a pro-rata basis with the reduction of the
Insider Promote.

     

     
6.1.5        Changes in Form of Purchase
Option. This form of Purchase Option need not be changed because of any
change pursuant to this Section, and Purchase Options issued after such change
may state the same Exercise Price and the same number of Units as are stated in
the Purchase Options initially issued pursuant to this Agreement. The acceptance
by any Holder of the issuance of new Purchase Options reflecting a required or
permissive change shall not be deemed to waive any rights to an adjustment
occurring after the Commencement Date or the computation thereof.

     

     
6.1.6        Adjustments of Warrants. To
the extent the exercise price of the Warrants are changed pursuant to Section 11
of the Warrant Agreement, either due to the anti-dilution provisions thereof or
otherwise, the exercise price of the Warrants underlying this Purchase Option
shall be proportionately changed.

     

    6.2           [Intentionally
Omitted]

     

    6.3           Substitute Purchase
Option. In case of any consolidation of the Company with, or merger of
the Company with, or merger of the Company into, another corporation (other than
a consolidation or merger which does not result in any reclassification or
change of the outstanding Ordinary Share), the corporation formed by such
consolidation or merger shall execute and deliver to the Holder a supplemental
Purchase Option providing that the holder of each Purchase Option then
outstanding or to be outstanding shall have the right thereafter (until the
stated expiration of such Purchase Option) to receive, upon exercise of such
Purchase Option, the kind and amount of shares of stock and other securities and
property receivable upon such consolidation or merger, by a holder of the number
of Ordinary Shares of the Company for which such Purchase Option might have been
exercised immediately prior to such consolidation, merger, sale or transfer.
Such supplemental Purchase Option shall provide for adjustments which shall be
identical to the adjustments provided in Section 6. The above provision of this
Section shall similarly apply to successive consolidations or
mergers.  In the event of a merger or consolidation as described in
this Section 6, the Warrants underlying the Units shall be adjusted in
accordance with and as set forth in Section 11 of the Warrant
Agreement.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    6.4           Elimination of Fractional
Interests. The Company shall not be required to issue certificates
representing fractions of Ordinary Shares or Warrants upon the exercise of the
Purchase Option, nor shall it be required to issue scrip or pay cash in lieu of
any fractional interests, it being the intent of the parties that all fractional
interests shall be eliminated by rounding any fraction up to the nearest whole
number of Warrants, Ordinary Shares or other securities, properties or
rights.

     

    7.           Reservation and Listing. The
Company shall at all times reserve and keep available out of its authorized
Ordinary Shares, solely for the purpose of issuance upon exercise of the
Purchase Options or the Warrants underlying the Purchase Option, such number of
Ordinary Shares or other securities, properties or rights as shall be issuable
upon the exercise thereof. The Company covenants and agrees that, upon exercise
of the Purchase Options and payment of the Exercise Price therefor, all Ordinary
Shares and other securities issuable upon such exercise shall be duly and
validly issued, fully paid and non-assessable and not subject to preemptive
rights of any stockholder. The Company further covenants and agrees that upon
exercise of the Warrants underlying the Purchase Options and payment of the
respective Warrant exercise price therefor, all Ordinary Shares and other
securities issuable upon such exercise shall be duly and validly issued, fully
paid and non-assessable and not subject to preemptive rights of any stockholder.
As long as the Purchase Options shall be outstanding, the Company shall use its
best efforts to cause all (i) Units and Ordinary Shares issuable upon exercise
of the Purchase Options, (iii) Warrants issuable upon exercise of the Purchase
Options and (iv) Ordinary Shares issuable upon exercise of the Warrants included
in the Units issuable upon exercise of the Purchase Option to be listed (subject
to official notice of issuance) on all securities exchanges (or, if applicable,
on the Nasdaq National Market, SmallCap Market, OTC Bulletin Board or any
successor trading market) on which the Units, the Ordinary Share or the Public
Warrants issued to the public in connection herewith may then be listed and/or
quoted.

     

    8.           Certain Notice
Requirements.

     

    8.1           Holder’s Right to Receive
Notice. Nothing herein shall be construed as conferring upon the Holders
the right to vote or consent as a stockholder for the election of directors or
any other matter, or as having any rights whatsoever as a stockholder of the
Company. If, however, at any time prior to the expiration of the Purchase
Options and their exercise, any of the events described in Section 8.2 shall
occur, then, in one or more of said events, the Company shall give written
notice of such event at least fifteen days prior to the date fixed as a record
date or the date of closing the transfer books for the determination of the
stockholders entitled to such dividend, distribution, conversion or exchange of
securities or subscription rights, or entitled to vote on such proposed
dissolution, liquidation, winding up or sale. Such notice shall specify such
record date or the date of the closing of the transfer books, as the case may
be. Notwithstanding the foregoing, the Company shall deliver to each Holder a
copy of each notice given to the other stockholders of the Company at the same
time and in the same manner that such notice is given to the
stockholders.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    8.2           Events Requiring
Notice. The Company shall be required to give the notice described in
this Section 8 upon one or more of the following events: (i) if the Company
shall take a record of the holders of its Ordinary Shares for the purpose of
entitling them to receive a dividend or distribution payable otherwise than in
cash, or a cash dividend or distribution payable otherwise than out of retained
earnings, as indicated by the accounting treatment of such dividend or
distribution on the books of the Company, or (ii) the Company shall offer to all
the holders of its Ordinary Share any additional shares of capital stock of the
Company or securities convertible into or exchangeable for shares of capital
stock of the Company, or any option, right or warrant to subscribe therefor, or
(iii) a dissolution, liquidation or winding up of the Company (other than in
connection with a consolidation or merger) or a sale of all or substantially all
of its property, assets and business shall be proposed.

     

    8.3           Notice of Change in Exercise
Price. The Company shall, promptly after an event requiring a change in
the Exercise Price pursuant to Section 6 hereof, send notice to the Holders of
such event and change (“Price
Notice”). The Price Notice shall describe the event causing the change
and the method of calculating same and shall be certified as being true and
accurate by the Company’s President and Chief Financial Officer.

     

    8.4           Transmittal of
Notices. All notices, requests, consents and other communications under
this Purchase Option shall be in writing and shall be deemed to have been duly
made when hand delivered, or mailed by express mail or private courier service:
(i) if to the registered Holder of the Purchase Option, to the address of such
Holder as shown on the books of the Company, or (ii) if to the Company, to the
following address or to such other address as the Company may designate by
notice to the Holders:

     

    
      	 
      	
              Prime
      Acquisition Corp.

            
	 
      	
              No.
      322, Zhongshan East Road

            
	 
      	
              Shijiazhuang

            
	 
      	
              Hebei
      Province, 050011

            
	 
      	
              People’s
      Republic of China

            
	 
      	
              Attn:  Chairman

            

    

     

    9.           Miscellaneous.

     

    9.1           Amendments. The
Company and Chardan may from time to time supplement or amend this Purchase
Option without the approval of any of the Holders in order to cure any
ambiguity, to correct or supplement any provision contained herein that may be
defective or inconsistent with any other provisions herein, or to make any other
provisions in regard to matters or questions arising hereunder that the Company
and Chardan may deem necessary or desirable and that the Company and Chardan
deem shall not adversely affect the interest of the Holders. All other
modifications or amendments shall require the written consent of and be signed
by the party against whom enforcement of the modification or amendment is
sought.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    9.2           Headings. The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of this Purchase Option.

     

    9.3           Entire Agreement.
This Purchase Option (together with the other agreements and documents being
delivered pursuant to or in connection with this Purchase Option) constitutes
the entire agreement of the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements and understandings of the parties,
oral and written, with respect to the subject matter hereof.

     

    9.4           Binding Effect. This
Purchase Option shall inure solely to the benefit of and shall be binding upon,
the Holder and the Company and their permitted assignees, respective successors,
legal representative and assigns, and no other person shall have or be construed
to have any legal or equitable right, remedy or claim under or in respect of or
by virtue of this Purchase Option or any provisions herein
contained.

     

    9.5           Governing Law; Submission to
Jurisdiction. This Purchase Option shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without giving
effect to conflict of laws. The Company hereby agrees that any action,
proceeding or claim against it arising out of, or relating in any way to this
Purchase Option shall be brought and enforced in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. The Company hereby waives any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum. Any process
or summons to be served upon the Company may be served by transmitting a copy
thereof by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 8 hereof. Such
mailing shall be deemed personal service and shall be legal and binding upon the
Company in any action, proceeding or claim. The Company and the Holder agree
that the prevailing party(ies) in any such action shall be entitled to recover
from the other party(ies) all of its reasonable attorneys’ fees and expenses
relating to such action or proceeding and/or incurred in connection with the
preparation therefor.

     

    9.6           Waiver, Etc. The
failure of the Company or the Holder to at any time enforce any of the
provisions of this Purchase Option shall not be deemed or construed to be a
waiver of any such provision, nor to in any way affect the validity of this
Purchase Option or any provision hereof or the right of the Company or any
Holder to thereafter enforce each and every provision of this Purchase Option.
No waiver of any breach, non-compliance or non-fulfillment of any of the
provisions of this Purchase Option shall be effective unless set forth in a
written instrument executed by the party or parties against whom or which
enforcement of such waiver is sought; and no waiver of any such breach,
non-compliance or non- fulfillment shall be construed or deemed to be a waiver
of any other or subsequent breach or non-compliance.

     

    9.7           Execution in
Counterparts. This Purchase Option may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement, and shall become effective when one
or more counterparts has been signed by each of the parties hereto and delivered
to each of the other parties hereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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    IN
WITNESS WHEREOF, the Company has caused this Purchase Option to be signed by its
duly authorized officer as of the __ day of _______, 2011.

     

    
      
        	 
      	
                PRIME
      ACQUISITION CORP.

              
	 
      	 
      
	 
      	
                By:

              	 
      
	 
      	
                Name:

              
	 
      	
                Title:

              

      

    

     

    
      Unit
Purchase Option

          

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Form to
be used to exercise Purchase Option:

     

    Prime
Acquisition Corp.

    No. 322,
Zhongshan East Road

    Shijiazhuang

    Hebei
Province, 050011 China

    People’s
Republic of China

    Attn:       Chairman

     

    Date:_________________,
201__

     

    The
undersigned hereby elects irrevocably to exercise all or a portion of the within
Purchase Option and to purchase ____ Units of Prime Acquisition Corp. and hereby
makes payment of $____________ (at the rate of $_________ per Unit) in payment
of the Exercise Price pursuant thereto. Please issue the Ordinary Shares and
Warrants as to which this Purchase Option is exercised in accordance with the
instructions given below.

     

    or

     

    The
undersigned hereby elects irrevocably to convert its right to purchase _________
Units purchasable under the within Purchase Option by surrender of the
unexercised portion of the attached Purchase Option (with a “Value” based of
$_______ based on a “Market Price” of $_______). Please issue the securities
comprising the Units as to which this Purchase Option is exercised in accordance
with the instructions given below.

     

    
      
        	 
      	
                 
      

              
	 
      	
                NOTICE:  The
      signature to this assignment must correspond with the name as written upon
      the face of the purchase option in every particular, without alteration or
      enlargement or any change
whatever.

              

      

    

    

    Signature(s)
Guaranteed:

    

    
      
        	
                 

              	 
      
	
                THE
      SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
      (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
      MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT
      TO S.E.C. RULE 17Ad-15).

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    INSTRUCTIONS
FOR REGISTRATION OF SECURITIES

     

    
      
        	
                Name

              	 
      
	 
      	
                            

              
	 
      	
                (Print
      in Block Letters)

              
	 	 
	
                Address

              	 
      
	 
      	
                                   

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Form to
be used to assign Purchase Option:

     

    ASSIGNMENT

     

    (To be
executed by the registered Holder to effect a transfer of the within Purchase
Option):

     

    FOR VALUE
RECEIVED,______________________________________________ does hereby sell, assign
and transfer unto___________________________________________ the right to
purchase __________ Units of Prime Acquisition Corp. (“Company”)
evidenced by the within Purchase Option and does hereby authorize the Company to
transfer such right on the books of the Company.

     

    Dated:___________________,
201_

     

    
      	 
      	
                                   

            
	 
      	
              Signature

            
	 
      	 
      
	 
      	
                                

            
	 
      	
              NOTICE:  The
      signature to this assignment must correspond with the name as written upon
      the face of the purchase option in every particular, without alteration or
      enlargement or any change whatever.

            

    

    

    Signature(s)
Guaranteed:

    

    
      
        	
                  
      

              	 
      
	
                THE
      SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
      (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
      MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT
      TO S.E.C. RULE 17Ad-15).

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