Document:

Exhibit 10.8 FWAC Warrant Subscription Agreement

WARRANT SUBSCRIPTION AGREEMENT 

This WARRANT SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of this 9th day of July, 2010 by and between FlatWorld Acquisition Corp., a British Virgin Islands business company (the “Company”), having its principal place of business at Palm Grove House, Palm Grove Park, Road Town, Tortola, VG1110, British Virgin Islands, and FWAC Holdings Limited, a British Virgin Islands company incorporated with limited liability (the “Sponsor”), having its principal place of business at PO Box 4649, Palm Grove House, Palm Grove Park, Road Town, Tortola, VG1110, British Virgin Islands. 

WHEREAS, the Company desires to sell on a private placement basis (the “Offering”) an aggregate of 2,827,500 warrants (the “Warrants”) of the Company for a purchase price of $0.50 per Warrant.  Each Warrant is exercisable to purchase one ordinary share of the Company, no par value (the “Ordinary Shares”), at an exercise price of $10.00 per Ordinary Share during the period commencing on the later of: (i) one (1) year from the date of the prospectus relating to the Company’s IPO (as defined below) and (ii) thirty (30) days following the consummation of an acquisition, share exchange, share reconstruction and amalgamation or contractual control arrangement with, purchase of all or substantially all of the assets of, or any other similar business transaction with one or more operating businesses or assets (a “Business Transaction”) and expiring on the fifth anniversary of the consummation of such Business Transaction; 

WHEREAS, Sponsor wishes to purchase the Warrants and the Company wishes to accept such subscription. 

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Sponsor hereby agree as follows: 

1. Agreement to Subscribe 

1.1. Purchase and Issuance of the Warrants. Upon the terms and subject to the conditions of this Agreement, Sponsor hereby agrees to purchase from the Company, and the Company hereby agrees to sell to the Sponsor, on the Closing Date (as defined in Section 1.2), the Warrants for an aggregate purchase price of $1,413,750 (the “Purchase Price”). 

1.2. Closing. The closing (the “Closing”) of the Offering, shall take place at the offices of Ellenoff Grossman & Schole LLP, 150 East 42nd Street, New York, New York, 10017, on or prior to the effective date of the registration statement relating to the Company’s initial public offering (“IPO”) of 3,750,000 units consisting of Ordinary Shares and warrants (the “Closing Date”).  

1.3. Delivery of the Purchase Price. At or prior to the Closing the Sponsor agrees to deliver the Purchase Price by certified bank check or wire transfer of immediately available funds denominated in United States Dollars to either: (i) Ellenoff Grossman & Schole LLP who is hereby irrevocably authorized to deposit such funds at the Closing of the IPO to the trust account which will be established for the benefit of the Company’s public shareholders, managed pursuant to that certain Investment Management Trust Agreement to be entered into by and between the Company and a trustee and into which substantially all of the proceeds of the IPO will be deposited (the “Trust Account”) or (ii) directly into the Trust Account.  If the IPO is not consummated, the Purchase Price shall be returned to the Sponsor as soon as practicable by certified bank check or wire transfer of immediately available funds denominated in United States Dollars.

1.4 Delivery of Warrant Certificate.  Upon delivery of the Purchase Price in accordance with Section 1.3, the Sponsor shall become irrevocably entitled to receive a warrant certificate representing the Warrants; provided, however, if the Company notifies the Sponsor the IPO will not be consummated and the Purchase Price will be returned in accordance with the last sentence of Section 1.3, the Company shall have no obligation to provide any such certificate representing the Warrants to the Sponsor.

2. Representations and Warranties of the Sponsor 

Sponsor represents and warrants to the Company that: 

2.1. No Government Recommendation or Approval. Sponsor understands that no United States federal or state agency or similar agency of any other country has passed upon or made any recommendation or endorsement of the Company, the Offering or the Ordinary Shares underlying the Warrants (the “Warrant Shares” and, collectively with the Warrants, the “Securities”). 

2.2. No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Sponsor of the transactions contemplated hereby do not violate, conflict with or constitute a default under (i) the Memorandum of Association and Articles of Association of Sponsor, (ii) any agreement, indenture or instrument to which the Sponsor is a party or (iii) any law, statute, rule or regulation to which the Sponsor is subject, or any agreement, order, judgment or decree to which the Sponsor is subject.

2.3. Organization and Authority.  The Sponsor is a British Virgin Islands company, validly existing and in good standing under the laws of the British Virgin Islands and possesses all requisite power and authority necessary to carry out the transactions contemplated by this Agreement.  Upon execution and delivery by Sponsor, this Agreement is a legal, valid and binding agreement of Sponsor, enforceable against Sponsor in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance or similar laws affecting the enforcement of creditors’ rights generally and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding at law or in equity).

2.4. Non-U.S. Person.  Sponsor is not a “U.S. person” as defined in Rule 902 of Regulation S promulgated under the Securities Act.

 

2.5. Experience, Financial Capability and Suitability.  Sponsor is (i) sophisticated in financial matters and is able to evaluate the risks and benefits of the investment in the Securities and (ii) able to bear the economic risk of his investment in the Securities for an indefinite period of time because the Securities have not been registered under the Securities Act and therefore cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available.  Sponsor has substantial experience in evaluating and investing in transactions of securities in companies similar to the Company so that it is capable of evaluating the merits and risks of its investment in the Company and has the capacity to protect its own interests.  Sponsor must bear the economic risk of this investment until the Securities are sold pursuant to: (i) an effective registration statement under the Securities Act; or (ii) an exemption from registration is available with respect to such sale.  Sponsor is able to bear the economic risks of an investment in the Securities and to afford a complete loss of Sponsor’s investment in the Securities.

2.6. Access to Information; Independent Investigation.  Prior to the execution of this Agreement, the Sponsor has had the opportunity to ask questions of and receive answers from representatives of the Company concerning an investment in the Company, as well as the finances, operations, business and prospects of the Company, and the opportunity to obtain additional information to verify the accuracy of all information so obtained.  In determining whether to make this investment, Sponsor has relied solely on Sponsor’s own knowledge and understanding of the Company and its business based upon Sponsor’s own due diligence investigation and the information furnished pursuant to this paragraph.  Sponsor understands that no person has been authorized to give any information or to make any representations which were not furnished pursuant to this Section 2 and Sponsor has not relied on any other representations or information in making its investment decision, whether written or oral, relating to the Company, its operations and/or its prospects. 

2.7. Investment Purposes.  The Sponsor is purchasing the Securities solely for investment purposes, for the Sponsor’s own account and not for the account or benefit of any U.S. person, and not with a view towards the distribution or dissemination thereof and the Sponsor has no present arrangement to sell the interest in the Securities to or through any person or entity. 

2.8. Restrictions on Transfer. Sponsor understands the Securities are being offered in a transaction not involving a public offering within the meaning of the Securities Act. The Securities have not been registered under the Securities Act, and, if in the future the Sponsor decides to offer, resell, pledge or otherwise transfer the Securities, such Securities may be offered, resold, pledged or otherwise transferred only (A) in accordance with the provisions of Regulation S (Rule 901 through 905), (B) pursuant to a registration under the Securities Act, or (C) pursuant to an available exemption from registration. Sponsor agrees that if any transfer of its Securities or any interest therein is proposed to be made, as a condition precedent to any such transfer, Sponsor may be required to deliver to the Company an opinion of counsel satisfactory to the Company.  Absent registration or an exemption, the Sponsor agrees not to resell the Securities.  Sponsor further acknowledges that because the Company is a shell company, Rule 144 may not be available to the Sponsor for the resale of the Securities until one (1) year following consummation of the initial business combination of the Company, despite technical compliance with the requirements of Rule 144 and the release or waiver of any contractual transfer restrictions.  

2.9. No Governmental Consents.  No governmental, administrative or other third party consents or approvals are required, necessary or appropriate on the part of Sponsor in connection with the transactions contemplated by this Agreement. 

 

2.10. Reliance on Representations and Warranties. Sponsor understands the Warrants are being offered and sold to Sponsor in reliance on exemptions from the registration requirements under the Securities Act, and analogous provisions in the laws and regulations of various states, and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgments and understandings of the Sponsor set forth in this Agreement in order to determine the applicability of such provisions. 

2.11. No Advertisements. The undersigned is not subscribing for the Warrants as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine, or similar media or broadcast over television or radio, or presented at any seminar or meeting. 

2.12. Legend. Sponsor acknowledges and agrees the certificates evidencing the Warrants and the Warrant Shares shall bear a restrictive legend (the “Legend”), in form and substance as set forth in Section 4 hereof. 

3. Representations and Warranties of the Company 

The Company represents and warrants to the Sponsor that: 

3.1. Valid Issuance of Capital Stock. The total number of all classes of capital shares which the Company has authority to issue is (i) an unlimited number of Ordinary Shares and (ii) 5,000,000 preferred shares. As of the date hereof, the Company has issued 1,078,125 Ordinary Shares (of which 140,625 of such Ordinary Shares are subject to forfeiture as described in the registration statement related to the Company’s IPO) and no preferred shares issued and outstanding. All of the issued capital shares of the Company have been duly authorized, validly issued, and are fully paid and non-assessable. 

3.2. Title to Warrants. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, as the case may be, each of the Warrants and the Warrant Shares will be duly and validly issued, fully paid and non-assessable. Upon issuance in accordance with, and payment pursuant to, the terms hereof and the Warrant Agreement, as the case may be, the Sponsor will have or receive good title to the Warrants, free and clear of all liens, claims and encumbrances of any kind, other than (i) any transfer restrictions hereunder and under the other agreements contemplated hereby and (ii) transfer restrictions under federal and state securities laws.

3.3. Organization and Qualification. The Company is a business company organized with limited liability and existing in good standing under the laws of the British Virgin Islands and has the requisite corporate power to own its properties and assets and to carry on its business as now being conducted. 

 

3.4. Authorization; Enforcement. (i) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Warrants and the Warrant Shares in accordance with the terms hereof, (ii) the execution, delivery and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or shareholders is required, and (iii) this Agreement constitutes valid and binding obligations of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, fraudulent conveyance, moratorium, reorganization, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by equitable principles of general application and except as enforcement of rights to indemnity and contribution may be limited by federal and state securities laws or principles of public policy. 

3.5. No Conflicts. The execution, delivery and performance of this Agreement and the consummation by the Company of the transactions contemplated hereby do not (i) result in a violation of the Company’s Memorandum and Articles of Association, (ii) conflict with, or constitute a default under any agreement, indenture or instrument to which the Company is a party or (iii) any law statute, rule or regulation to which the Company is subject or any agreement, order, judgment or decree to which the Company is subject. Other than any Securities Exchange Commission, state or foreign securities filings which may be required to be made by the Company subsequent to the Closing, and any registration statement which may be filed pursuant thereto, the Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or self-regulatory entity in order for it to perform any of its obligations under this Agreement or issue the Warrants or the Ordinary Shares issuable upon exercise thereof in accordance with the terms hereof. 

4. Legends 

4.1. Legend. The Company will issue the Warrants, and when issued, the Warrant Shares, purchased by the Sponsor, in the name of the Sponsor. The Securities will bear the following Legend and appropriate “stop transfer” instructions: 

“THESE SECURITIES (i) HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND THESE SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE SECURITIES ACT, (B) TO A NON-U.S. PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (C) PURSUANT TO THE RESALE LIMITATIONS SET FORTH IN RULE 905 OF REGULATIONS S UNDER THE SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER JURISDICTION. HEDGING TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.” 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP.”

 

4.2. Sponsor’s Compliance. Nothing in this Section 4 shall affect in any way the Sponsor’s obligations and agreements to comply with all applicable securities laws upon resale of the Securities. 

4.3. Company’s Refusal to Register Transfer of the Securities. The Company shall refuse to register any transfer of the Securities, if in the sole judgment of the Company such purported transfer would not be made (i) pursuant to an effective registration statement filed under the Securities Act, or (ii) pursuant to an available exemption from the registration requirements of the Securities Act. 

4.4. Registration Rights.  Subscriber will be entitled to certain registration rights which will be governed by a registration rights agreement (“Registration Rights Agreement”) to be entered into with the Company on or prior to the closing of the IPO.  

5. Lockup

The Warrants will be subject to a lockup described in that certain Insider Letter pursuant to which the Warrants shall not be transferable, saleable or assignable until thirty (30) days following the consummation of a Business Transaction, subject to certain limited exceptions.   

6. Securities Laws Restrictions

Sponsor agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Securities unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Securities proposed to be transferred shall then be effective or (b) the Company shall have received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction complies with the Securities Act and the rules promulgated by the SEC thereunder and with all applicable state securities laws. 

7. Waiver of Liquidation Distributions

In connection with the Securities purchased pursuant to this Agreement, Sponsor hereby waives any and all right, title, interest or claim of any kind in or to any distributions from the Trust Account which will be established for the benefit of the Company’s public shareholders and into which substantially all of the proceeds of the IPO will be deposited (the “Trust Account”). In no event will a Sponsor have the right to exercise any Warrants prior to the later of: (i) one year from the date of the prospectus relating to the Company’s IPO and (ii) thirty (30) days after the consummation of an initial Business Transaction. 

8. Forfeiture of Warrants

8.1. Failure to Consummate Business Transaction. The Warrants shall be forfeited to the Company upon the liquidation of the Trust Account in the event an initial Business Transaction is not consummated within 18 months from the effective date of the Company’s prospectus distributed in connection with the IPO (the “prospectus”) or 24 months from the date of the prospectus if a letter of intent, agreement in principle or a definitive agreement has been executed within 18 months from the date of the prospectus and the Business Transaction relating thereto has not yet been completed within such 18-month period. 

 

8.2. Termination of Rights. If the Warrants are forfeited in accordance with this Section 8, then after such time the Sponsor (or its successor in interest), shall no longer have any rights as a holder of such Warrants, and the Company and/or its agents shall take such action as is appropriate to cancel such Warrants on the books and records of the Company.

 9. Rescission Right Waiver and Indemnification

9.1. Rescission Waiver.  Sponsor understands and acknowledges an exemption from the registration requirements of the Securities Act requires there be no general solicitation of purchasers of the Warrants. In this regard, if the IPO were deemed to be a general solicitation with respect to the Warrants, the offer and sale of such Warrants may not be exempt from registration and, if not, the Sponsor may have a right to rescind its purchase of the Warrants. In order to facilitate the completion of the Offering and in order to protect the Company, its shareholders and the trust account from claims that may adversely affect the Company or the interests of its shareholders, Sponsor hereby agrees to waive, to the maximum extent permitted by applicable law, any claims, right to sue or rights in law or arbitration, as the case may be, to seek rescission of its purchase of the Warrants. Sponsor acknowledges and agrees this waiver is being made in order to induce the Company to sell the Warrants to the Sponsor. Sponsor agrees the foregoing waiver of rescission rights shall apply to any and all known or unknown actions, causes of action, suits, claims or proceedings (collectively, “Claims”) and related losses, costs, penalties, fees, liabilities and damages, whether compensatory, consequential or exemplary, and expenses in connection therewith, including reasonable attorneys’ and expert witness fees and disbursements and all other expenses reasonably incurred in investigating, preparing or defending against any Claims, whether pending or threatened, in connection with any present or future actual or asserted right to rescind the purchase of the Warrants hereunder or relating to the purchase of the Warrants and the transactions contemplated hereby.

9.2.  No Recourse Against Trust Account.  Sponsor agrees not to seek recourse against the Trust Account for any reason whatsoever in connection with its purchase of the Warrants or any Claim that may arise now or in the future. 

9.3.  Third Party Beneficiaries.  Sponsor acknowledges and agrees the shareholders of the Company are and shall be third-party beneficiaries of the foregoing provisions of this Agreement. 

9.4.  Section 9 Waiver.  Sponsor agrees that to the extent any waiver of rights under this Section 9 is ineffective as a matter of law, Sponsor has offered such waiver for the benefit of the Company as an equitable right that shall survive any statutory disqualification or bar that applies to a legal right. Sponsor acknowledges the receipt and sufficiency of consideration received from the Company hereunder in this regard. 

 

10. Terms of the Warrant 

The Warrants are substantially identical to the warrants included in the units offered in the IPO as set forth in the Warrant Agreement to be entered into with a mutually agreeable warrant agent on or prior to the closing of the IPO, except the Warrants: (i) will be subject to transfer restrictions, (ii) are being purchased pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant to the Registration Rights Agreement, (iii) will be non-redeemable so long as they are held by the initial holder thereof (or any of its permitted transferees), and (iv) are exercisable on a “cashless” basis if held by the Sponsor or its permitted assigns.  

11. Governing Law; Jurisdiction; Waiver of Jury Trial 

This Agreement shall be governed by and construed in accordance with the laws of the British Virgin Islands for agreements made and to be wholly performed within such country. The parties hereto hereby waive any right to a jury trial in connection with any litigation pursuant to this Agreement and the transactions contemplated hereby. 

12. Assignment; Entire Agreement; Amendment 

12.1. Assignment. Neither this Agreement nor any rights hereunder may be assigned by any party to any other person other than by Sponsor to a person agreeing to be bound by the terms hereof. 

12.2. Entire Agreement. This Agreement sets forth the entire agreement and understanding between the parties as to the subject matter hereof and supersedes any and all prior discussions, agreements and understandings of any and every nature. 

12.3. Amendment. Except as expressly provided in this Agreement, neither this Agreement nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the party against whom enforcement of any such amendment, waiver, discharge or termination is sought. 

12.4. Binding upon Successors. This Agreement shall be binding upon and inure to the benefit of the parties hereto and to their respective heirs, legal representatives, successors and permitted assigns. 

13. Notices; Indemnity 

13.1 Notices. All notices, requests, consents and other communications hereunder shall be in writing, shall be addressed to the receiving party’s address set forth on the first page of this Agreement or to such other address as a party may designate by notice hereunder, and shall be either (a) delivered by hand, (b) sent by overnight courier, or (c) sent by certified mail, return receipt requested, postage prepaid.  All notices, requests, consents and other communications hereunder shall be deemed to have been given either (i) if by hand, at the time of the delivery thereof to the receiving party at the address of such party set forth above, (ii) if sent by overnight courier, on the next business day following the day such notice is delivered to the courier service, or (iii) if sent by certified mail, on the (5th) business day following the day such mailing is made.

13.2 Indemnification. Each party shall indemnify the other party against any loss, cost or damages (including reasonable attorney’s fees and expenses) incurred as a result of such party’s breach of any representation, warranty, covenant or agreement set forth in this Agreement. 

 

14. Counterparts 

This Agreement may be executed in one or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart.  In the event that any signature is delivered by facsimile transmission or any other form of electronic delivery, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such signature page were an original thereof.

15. Survival; Severability 

15.1. Survival. The representations, warranties, covenants and agreements of the parties hereto shall survive the Closing and one (1) year following the consummation of an initial Business Transaction. 

15.2. Severability. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that no such severability shall be effective if it materially changes the economic benefit of this Agreement to any party. 

16. Headings 

The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 

 

17. Construction

The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement will be construed as if drafted jointly by the parties hereto and no presumption or burden of proof will arise favoring or disfavoring any party hereto because of the authorship of any provision of this Agreement. The words “include,” “includes,” and “including” will be deemed to be followed by “without limitation.” Pronouns in masculine, feminine, and neuter genders will be construed to include any other gender, and words in the singular form will be construed to include the plural and vice versa, unless the context otherwise requires. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder,” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. The parties hereto intend that each representation, warranty, and covenant contained herein will have independent significance. If any party hereto has breached any representation, warranty, or covenant contained herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter (regardless of the relative levels of specificity) which such party hereto has not breached will not detract from or mitigate the fact that such party hereto is in breach of the first representation, warranty, or covenant.

[remainder of page intentionally left blank]

This subscription is accepted by the Company as of the date first written above. 

 

      FLATWORLD ACQUISITION CORP.

                                                            By:  /s/ Raj K. Gupta

                                                            Name:  Raj K. Gupta

                                                            Title: Chief Executive Officer

	

 

Accepted and agreed this 

9th day of July, 2010

FWAC HOLDINGS LIMITED

By: /s/ Jeffrey A. Valenty

	
	Name:   Jeffrey Valenty

	Title: Chief Financial OfficerExhibit 10.9 Right of First Refusal Agreement - Final

RIGHT OF FIRST REFUSAL AND

CORPORATE OPPORTUNITIES AGREEMENT

THIS RIGHT OF FIRST REFUSAL AND CORPORATE OPPORTUNITIES AGREEMENT (this “Agreement”) is made as of  [      ], 2010 by and between FlatWorld Acquisition Corp., a British Virgin Islands company organized with limited liability (the “Company”) and FlatWorld Capital LLC, a Delaware limited liability company (“FlatWorld”) in connection with the Company’s proposed public offering of units consisting of ordinary shares, no par value (“Ordinary Shares”) and warrants to purchase Ordinary Shares, pursuant to a registration statement on Form F-1, filed by the Company with the Securities and Exchange Commission (as amended, the “Registration Statement”).

RECITALS

WHEREAS, FlatWorld is an affiliate of the Company’s sponsor; and

WHEREAS, each of the Company and FlatWorld will be attempting to consummate one or more acquisitions, share exchanges, share reconstructions and amalgamations or contractual control arrangements with, purchase of all or substantially all of the assets of, or any other similar business transactions with operating businesses or assets (a “Business Transaction”); and 

WHEREAS, the Company and FlatWorld may also be seeking investment opportunities which may be a part of, in connection with or deemed a Business Transaction; and

WHEREAS, the Company and FlatWorld each believe it is in their best interests to clarify any potential Business Transaction and investment opportunities for which each party shall have the right of first refusal.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. 

Right of First Refusal. 

For the term specified in Section 2 of this Agreement and subject to subsections (b), (c) and (d) of this Section 1, FlatWorld hereby grants to the Company a right of first refusal as follows:

(a)

FlatWorld shall not enter into any agreement to purchase or invest in a business having a value in excess of $28 million (as computed in accordance with standard valuation practices and procedures, such opportunity a “suitable opportunity”) without first presenting such suitable opportunity to the Company’s directors, and will not enter into any such agreement until the Company’s directors determine, within the time frame and in the manner specified below, not to pursue such Business Transaction opportunity.  

(b)

Notwithstanding anything to the contrary in this Agreement, the Company agrees that any such business entity with respect to which FlatWorld has initiated any contacts or entered into any discussions or negotiations, formal or informal, regarding FlatWorld’s acquisition of, or investment in, such business prior to the completion of the Company’s initial public offering, as set forth in the Registration Statement, will not be a potential acquisition target for the Company, unless FlatWorld declines to pursue such business opportunity and notifies the Company of the same in writing. 

(c)

After review of any potential Business Transaction or investment opportunity, the Company may release the right of first refusal set forth in this Section 1(a) with respect to such Business Transaction or suitable opportunity.  Decisions by the Company to release FlatWorld to pursue such suitable opportunity will be made by a majority of the Company’s directors. 

(d)

FlatWorld shall provide written notice to the Company of any such suitable opportunity brought to its attention by its current partners, principals, directors, officers or employees within ten (10) business days of its identification of such suitable opportunity. Any right of first refusal granted shall expire ninety (90) days from the date of the written notice unless earlier released pursuant to Section 1(c), provided that, during such ninety (90)-day period, the Company has failed to commence discussions with any third party regarding the specified Business Transaction or suitable opportunity.  For the purposes of clarity, if such suitable opportunity is brought to the attention of any of FlatWorld’s current partners, principals, directors, officers or employees solely by an investor or limited partner of FlatWorld, then no such obligation shall exist with respect to this Agreement.

2. 

Term. This Agreement shall become effective on its execution and shall remain in effect for a period to expire upon the earlier of: (i) the consummation by the Company of a Business Transaction or (ii) 18 months from the date of the Registration Statement (or 24 months from the date of the Registration Statement if a letter of intent, agreement in principle or a definitive agreement has been executed within 18 months from the date of the Registration Statement and the Business Transaction relating thereto has not yet been completed within such 18-month period). 

3. 

Notices. All notices or communications hereunder shall be in writing, addressed as follows:

To the Company:

FlatWorld Acquisition Corp.

Palm Grove House

Road Town, Tortola, VG1110, British Virgin Islands

Attn:  Raj K. Gupta

with copies to (which shall not constitute notice):

 

Ellenoff, Grossman & Schole LLP

150 East 42nd Street, 11th Floor

New York, New York 10017

Attn: Douglas S. Ellenoff, Esq. 

  If to FlatWorld:

FlatWorld Capital LLC

220 East 42nd Street, 29th Floor

New York, NY  10017

Attn: Jeffrey A. Valenty

All notices, statements or other documents which are required or contemplated by this Agreement shall be: (i) in writing and delivered personally or sent by first class registered or certified mail, overnight courier service or facsimile transmission to the address designated in writing, (ii) by facsimile to the number most recently provided to such party or such other address or fax number as may be designated in writing by such party and (iii) by electronic mail, to the electronic mail address most recently provided to such party or such other electronic mail address as may be designated in writing by such party.  Any notice or other communication so transmitted shall be deemed to have been given on the day of delivery, if delivered personally, on the business day following receipt of written confirmation, if sent by facsimile transmission or email, one (1) business day after delivery to an overnight courier service or five (5) days after mailing if sent by mail.

4. 

Severability. If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall be valid and enforced to the fullest extent permitted by law.

5.

Entire Agreement.  This Agreement, as the same may be amended from time to time in accordance with the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and supersedes in all respects any prior or other agreement or understanding concerning the subject matter hereof between the Company and FlatWorld.

6.

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

 

7. 

Amendment. This Agreement may only be amended by written agreement of the parties hereto.

8. 

Survival. The respective rights and obligations of the parties hereunder shall survive any termination of this Agreement to the extent necessary to the intended preservation of such rights and obligations. The provisions of this Section 8 are in addition to the survivorship provisions of any other section of this Agreement.

9. 

Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.  Delivery of a signed counterpart of this Agreement by facsimile or electronic transmission shall constitute valid and sufficient delivery thereof.

10.

Headings.  The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement. 

11.

Mutual Drafting.  This Agreement is the joint product of FlatWorld and the Company and each provision hereof has been subject to the mutual consultation, negotiation and agreement of such parties and shall not be construed for or against any party hereto.

12. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed and enforced in accordance with the laws of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction.  The parties hereby (i) agree that any action, proceeding or claim against it arising out of or relating in any way to this Agreement shall be brought and enforced first in the U.S. District Court for the Southern District of New York, then to such other federal or state courts located in the State of New York, and irrevocably submits to such jurisdiction in New York, which jurisdiction shall be exclusive and (ii) waive any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.  THE PARTIES HERETO, TO THE FULLEST EXTENT PERMITTED BY LAW, WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF, OR IN CONNECTION WITH, THIS AGREEMENT.

13. Trust Waiver. Notwithstanding anything herein to the contrary, FlatWorld hereby waives any and all right, title, interest or claim of any kind, regardless of whether such claim arises based on contract, tort, equity or any other theory of legal liability (“Claim”) in or to any distribution from the trust account in which the proceeds of the Company’s initial public offering will be deposited and held for the benefit of the public shareholders (the “Trust Account”) and hereby agrees not to seek recourse, reimbursement, payment or satisfaction for any Claim against the Trust Account for any reason whatsoever. 

 [Signature Page Follows]

IN WITNESS WHEREOF, the parties hereto have executed this Right of First Refusal and Corporate Opportunities Agreement as of the date first specified above.

 

FLATWORLD ACQUISITION CORP.

By:

__                               ___

Name:  Raj K. Gupta

Title:

Chief Executive Officer

FLATWORLD CAPITAL LLC

By:

__                      ________

Name: Jeffrey A. Valenty

Title: Partner

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