January 16, 2004
EarlyBirdCapital, Inc.
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Re: Chardan China Acquisition Corp.
Gentlemen:
This letter will confirm the agreement of the undersigned to purchase
warrants ("Warrants") of Chardan China Acquisition Corp. ("Company") included in
the units ("Units") being sold in the Company's initial public offering ("IPO")
upon the terms and conditions set forth herein. Each Unit is comprised of one
share of Common Stock and two Warrants. The shares of Common Stock and Warrants
will not be separately tradeable until 90 days after the effective date of the
Company's IPO unless EarlyBirdCapital, Inc. ("EBC") informs the Company of its
decision to allow earlier separate trading.
The undersigned agrees that this letter agreement constitutes an
irrevocable order for EBC to purchase for the undersigned's account following on
the date separate trading of the Warrants commences up to 1,000,000 Warrants at
market prices not to exceed $0.65 per Warrant ("Maximum Warrant Purchase"). EBC
(or such other broker dealer(s) as EBC may assign the order to) agrees to fill
such order in such amounts and at such times as it may determine, in its sole
discretion. EBC further agrees that it will not charge the undersigned any fees
and/or commissions with respect to such purchase obligation.
The undersigned may notify EBC that all or part of his respective Maximum
Warrant Purchase will be made by an affiliate of the undersigned (or another
person or entity introduced to EBC by the undersigned (a "Designee")) who (or
which) has an account at EBC and, in such event, EBC will make such purchase on
behalf of said affiliate or Designee; provided, however, that the undersigned
hereby agrees to make payment of the purchase price of such purchase in the
event that the affiliate or Designee fails to make such payment.
The undersigned agrees that neither he nor any affiliate or Designee shall
sell or transfer the Warrants until after the consummation of a merger, capital
stock exchange, asset acquisition or other similar business combination with a
which has its primary operating facilities located in the People's Republic of
China and acknowledges that, at the option of EBC, the certificates for such
Warrants shall contain a legend indicating such restriction on transferability.
Very truly yours,
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