SUBSCRIPTION AGREEMENT
Exhibit
10.12
This
SUBSCRIPTION
AGREEMENT
(this
“Agreement”)
made
as of this ___ day of ______________, 2008 for the benefit of China Growth
Alliance Ltd., a company incorporated under the laws of the Cayman Islands
(the
“Company”),
having its principal place of business at Xxxx 000, 0/X Xxxxx Xxxxx, 000 Xxxxx
Xxxx, Xxxxxxxx 200051, China, by the persons and entities listed on the
signature pages hereto under the heading “Subscriber” (each, a “Subscriber”).
WHEREAS,
the
Company desires to sell an aggregate of 3,040,000 warrants, each exercisable
for
one ordinary share of the Company (the “Warrants”;
such
shares the “Warrant
Shares”),
for a
per Warrant purchase price of $0.75 (i.e., an aggregate purchase price of
$2,280,000); and
WHEREAS,
the
offer and sale of the Warrants (the “Offering”)
is
being made in reliance upon the provisions of Regulation S (“Regulation
S”)
promulgated by the Securities and Exchange Commission (the “SEC”)
under
the Securities Act of 1933, as amended (the “Securities
Act”);
NOW,
THEREFORE,
for and
in consideration of the premises and the mutual covenants hereinafter set forth,
the Company and the Subscriber do hereby agree as follows
1. Agreement
to Subscribe
1.1 Purchase
and Issuance of the Warrants.
Each
Subscriber is hereby subscribing for the number of Warrants indicated on the
signature page hereto by the caption, “Number of Warrants Being Subscribed” (the
“Subscriber’s
Warrants”)
which
Subscriber Warrants will be issued to the Subscriber, or his affiliates or
designees. The aggregate purchase price for such Subscriber’s Warrants (the
“Purchase
Price”)
is
indicated on the signature page hereto by the caption, “Aggregate Purchase
Price.”
1.2 Delivery
of the Purchase Price.
Upon
execution of this Agreement the undersigned is hereby bound to fulfill its
obligations hereunder and hereby irrevocably commits to deliver to the Company
on the date of Closing (as hereinafter defined) the Purchase Price by bank
check, wire transfer or such other form of payment as shall be acceptable to
the
Company, in its sole and absolute discretion, at the Closing. Any such check
delivered to the Company shall be made payable to the order of “China Growth
Alliance Ltd.”
1.3 Closing.
The
closing of the Offering (the “Closing”),
shall
take place at the offices of the Company prior to the effectiveness of the
Company’s proposed initial public offering of up to 7,000,000 units of Ordinary
Shares and warrants (the “IPO”).
2. Representations
and Warranties of the Subscribers
Each
Subscriber represents and warrants to the Company that:
2.1 No
Government Recommendation or Approval.
The
Subscriber 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 or the Offering of the Warrants.
2.2 Not
a
“U.S. Person”.
The
Subscriber is not a “U.S. Person” as defined in Rule 902 of
Regulation S promulgated under the Securities Act, was not organized under
the laws of any United States jurisdiction, and was not formed for the purpose
of investing in securities not registered under the Securities Act. At the
time
the purchase order for this transaction was originated, the Subscriber was
outside the United States.
2.3 Intent.
The
Subscriber is purchasing the Warrants solely for investment purposes, for the
Subscriber’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
Subscriber has no present arrangement to sell the Warrants to or through any
person or entity. The Subscriber understands that the Warrants must be held
indefinitely unless such Warrants are resold in accordance with the provisions
of Regulation S, are subsequently registered under the Securities Act or an
exemption from registration is available.
2.4 Restrictions
on Transfer.
The
Subscriber understands that the Warrants are being offered in a transaction
not
involving a public offering in the United States within the meaning of the
Securities Act. The Warrants have not been registered under the Securities
Act,
and, if in the future the Subscriber decides to offer, resell, pledge or
otherwise transfer the Warrants, such Warrants may be offered, resold, pledged
or otherwise transferred only (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 of
the Securities Act, (C) pursuant to the resale limitations set forth in Rule
905
of Regulation S, (D) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 thereunder (if available) or (E) pursuant
to
any other exemption from the registration requirements of the Securities Act,
and in each case in accordance with any applicable securities laws of any state
of the United States or any other jurisdiction. The Subscriber acknowledges,
agrees and covenants that it will not engage in hedging transactions with regard
to the Warrants prior to the expiration of the distribution compliance period
specified in Rule 903 of Regulation S promulgated under the Securities Act,
unless in compliance with the Securities Act. The Subscriber agrees that if
any
transfer of its Warrants or any interest therein is proposed to be made, as
a
condition precedent to any such transfer, the Subscriber may be required to
deliver to the Company an opinion of counsel satisfactory to the Company. Absent
registration or another exemption from registration, the Subscriber agrees
that
it will not resell the securities constituting the Subscriber’s Warrants to U.S.
Persons or within the United States.
2.5 Sophisticated
Investor.
(i) The
Subscriber is sophisticated in financial matters and is able to evaluate the
risks and benefits of the investment in the Warrants.
(ii) The
Subscriber is able to bear the economic risk of his investment in the Warrants
for an indefinite period of time because none of the Warrants have 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.
2.6 Independent
Investigation.
The
Subscriber, in making the decision to purchase the Warrants, has relied upon
an
independent investigation of the Company and has not relied upon any information
or representations made by any third parties or upon any oral or written
representations or assurances from the Company, its officers, directors or
employees or any other representatives or agents of the Company, other than
as
set forth in this Agreement. The Subscriber is familiar with the business,
operations and financial condition of the Company and has had an opportunity
to
ask questions of, and receive answers from, the Company’s officers and directors
concerning the Company and the terms and conditions of the offering of the
Warrants and has had full access to such other information concerning the
Company as the Subscriber has requested.
2.7 Authority.
This
Agreement has been validly authorized, executed and delivered by the Subscriber
and is a valid and binding agreement enforceable in accordance with its terms,
subject to the general principles of equity and to bankruptcy or other laws
affecting the enforcement of creditors’ rights generally. The execution,
delivery and performance of this Agreement by the Subscriber does not and will
not conflict with, violate or cause a breach of any agreement, contract or
instrument to which the Subscriber is a party.
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2.8 No
Legal Advice from Company.
The
Subscriber acknowledges that he, she or it has had the opportunity to review
this Agreement and the transactions contemplated by this Agreement and the
other
agreements entered into between the parties hereto with the Subscriber’s own
legal counsel and investment and tax advisors. Except for any statements or
representations of the Company made in this Agreement and the other agreements
entered into between the parties hereto, the Subscriber is relying solely on
such counsel and advisors and not on any statements or representations of the
Company or any of its representatives or agents for legal, tax or investment
advice with respect to this investment, the transactions contemplated by this
Agreement or the securities laws of any jurisdiction.
2.9 Reliance
on Representations and Warranties.
The
Subscriber understands that the Warrants are being offered and sold to the
Subscriber in reliance on exemptions contained in specific provisions of United
States federal and state securities laws and that the Company is relying upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Subscriber set forth in this Agreement
in order to determine the applicability of the exemptions contained in such
provisions.
2.10 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.
2.11 Legend.
The
Subscriber acknowledges and agrees that the Warrants, and when issued the
Warrant Shares, shall bear a restricted legend (the “Legend”),
in
the form and substance as set forth in Section 4 hereof, prohibiting the offer,
sale, pledge or transfer of the securities, except (i) pursuant to an effective
registration statement filed under the Securities Act, (ii) in accordance with
the applicable provisions of Regulation S, promulgated under the Securities
Act,
(iii) pursuant to an exemption from registration provided by Rule 144 under
the
Securities Act (if available), and (iv) pursuant to any other exemption from
the
registration requirements of the Securities Act or for estate planning purposes
(subject to any escrow restrictions).
3. Representations
and Warranties of the Company
The
Company represents and warrants to each Subscriber that:
3.1 Valid
Issuance of Capital Stock.
The
total number of shares of all classes of capital stock which the Company has
authority to issue is 90,000,000 Ordinary Shares and 10,000,000 preferred
shares. As of the date hereof, the Company has 1,750,000 Ordinary Shares issued
and outstanding. All of the issued shares of capital stock of the Company have
been duly authorized, validly issued, and are fully paid and
non-assessable.
3.2 Organization
and Qualification.
The
Company is a corporation duly incorporated and existing in good standing under
the laws of the Cayman Islands and has the requisite corporate power to own
its
properties and assets and to carry on its business as now being
conducted.
3.3 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 Ordinary 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 stockholders 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.
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3.4 No
Conflicts.
The
execution, delivery and performance of this Agreement and the consummation
by
the Company of the transactions contemplated hereby do not in any material
respect: (i) result in a violation of the Company’s Amended and Restated
Memorandum and Articles of Association or (ii) conflict with, or constitute
a
default under any agreement, indenture or instrument to which the Company is
a
party. Other than any SEC or state 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 Ordinary Shares in accordance
with
the terms hereof.
4. Legends;
Denominations
4.1 Legend.
The
Company will issue the Warrants purchased by the Subscriber and, when issued,
the Warrant Shares, in the name of the Subscriber and in such denominations
to
be specified by the Subscriber prior to the Closing. The Warrants and Warrant
Shares will bear the following legend and appropriate “stop transfer”
instructions:
THESE
SECURITIES 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.
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4.2 Subscriber’s
Compliance.
Nothing
in this Section 4 shall affect in any way a Subscriber’s obligations and
agreement to comply with all applicable securities laws upon resale of the
Warrants, and the Warrant Shares.
4.3 Company’s
Refusal to Register Transfer of Warrants.
The
Company shall refuse to register any transfer of the Warrants and the Warrant
Shares, not made in accordance with (i) the provisions of Regulation S, (ii)
pursuant to an effective registration statement filed under the Securities
Act,
or (iii) pursuant to an available exemption from the registration requirements
of the Securities Act.
5. Lock-Up
Each
Subscriber, and his designees, shall not sell, assign, hypothecate, or transfer
any of the Warrants or Warrant Shares, until the earlier of the consummation
of
a Business Combination (as hereinafter defined) or liquidation of the Company,
provided
however,
that no
such sale, assignment, hypothecation or transfer may be effected unless, in
each
case, it is made in accordance with transfer restrictions set forth in
Regulation S and the Securities Act. As used herein, a “Business
Combination”
shall
mean an acquisition by merger, capital stock exchange, asset or stock
acquisition, contractual control arrangement or other similar business
combination with one or more businesses with agreements to acquire an operating
business or assets selected by the Company in the People’s Republic of
China.
6. Waiver
of Liquidation Distributions
In
connection with the Warrants purchased pursuant to this Agreement, the
Subscribers hereby waive any and all right, title, interest or claim of any
kind
in or to any liquidating distributions by the Company in the event of a
liquidation of the Company upon the Company’s failure to timely complete a
Business Combination. For purposes of clarity, in the event the Subscribers
purchase Ordinary Shares in the IPO or in the aftermarket such shares shall
be
eligible to receive any liquidating distributions by the Company.
7. Governing
Law; Jurisdiction; Waiver of Jury Trial
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York. 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.
8. Assignment;
Entire Agreement; Amendment
8.1 Assignment.
Neither
this Agreement nor any rights hereunder may be assigned by any party to any
other person other than by Subscriber to a person agreeing to be bound by the
terms hereof.
8.2 Entire
Agreement.
This
Subscription Agreement sets forth the entire agreement and understanding between
the parties as to the subject matter thereof and merges and supersedes all
prior
discussions, agreements and understandings of any and every nature among
them.
8.3 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.
8.4 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
assigns.
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9. Notices;
Indemnity
9.1 Notices.
Unless
otherwise provided herein, any notice or other communication to a party
hereunder shall be sufficiently given if in writing and personally delivered
or
sent by facsimile with copy sent in another manner herein provided or sent
by
courier (which for all purposes of this Agreement shall include Federal Express
or other recognized overnight courier) or mailed to said party by certified
mail, return receipt requested, at its address provided for herein or such
other
address as either may designate for itself in such notice to the other and
communications shall be deemed to have been received when delivered personally,
on the scheduled arrival date when sent by next day or 2-day courier service,
or
if sent by facsimile upon receipt of confirmation of transmittal or, if sent
by
mail, then three days after deposit in the mail.
9.2 Indemnification.
Each
party shall indemnify the other 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 in this
Agreement.
10. Counterparts
This
Agreement may be executed in any number of counterparts, each of which shall
be
enforceable against the parties actually executing such counterparts, and all
of
which together shall constitute one instrument. Such counterparts may be
delivered by facsimile or other electronic transmission, which shall not impair
the validity thereof.
11. Survival;
Severability
11.1 Survival.
The
representations, warranties, covenants and agreements of the parties hereto
shall survive the Closing.
11.2 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.
12. Titles
and Subtitles
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.
[Signature
page follows]
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SUBSCRIPTION
INFORMATION AND SIGNATURE PAGE
Name
of
the Subscriber: FAIR VALUE OPPORTUNITY
LTD.
(Please
print legibly)
Number
of Warrants Being Subscribed: _______________________
Aggregate
Purchase Price: ___________________
Date
of
Subscription: ______________, 2008
Place
of
Residency and/or Principal Place of Business:
This
subscription is accepted by the Company on the ___ day of ________,
2008.
[Signature
blocks to be added]
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