SUBSCRIPTION AGREEMENT As of September 26, 2006
EXHIBIT
10.11
As
of
September 26, 2006
To
the
Board of Directors of
Gentlemen:
The
undersigned hereby subscribes for and agrees to purchase 250,000 units (“Insider
Units”), each consisting of one ordinary share (“Ordinary Shares”) and one
warrant (“Warrant(s)”), each to purchase one Ordinary Share, at $8.00 per
Insider Unit, of China Fortune Acquisition Corp. (the “Corporation”) for an
aggregate purchase price of $2,000,000 (“Purchase Price”). The purchase and
issuance of the Insider Units shall occur simultaneously with the consummation
of the Corporation’s initial public offering of securities (“IPO”) which is
being underwritten by EarlyBirdCapital, Inc. (“EBC”). The Insider Units will be
sold to the undersigned on a private placement basis and not part of the IPO.
At
least
24 hours prior to the effective date of the registration statement filed in
connection with the IPO (“Registration Statement”), the undersigned shall
deliver the Purchase Price to Continental Stock Transfer & Trust Company, as
escrow agent (“Escrow Agent”), to hold in a non-interest bearing account until
the Corporation consummates the IPO. Simultaneously with the consummation of
the
IPO, the Escrow Agent shall deposit the Purchase Price, without interest or
deduction, into the trust fund (“Trust Fund”) established by the Corporation for
the benefit of the Corporation’s public shareholders as described in the
Corporation’s Registration Statement, pursuant to the terms of an Investment
Management Trust Agreement to be entered into between the Corporation and
Continental Stock Transfer & Trust Company. In the event that the IPO is not
consummated within 14 days of the date the Purchase Price is delivered to the
Escrow Agent, the Escrow Agent shall return the Purchase Price to the
undersigned, without interest or deduction.
The
undersigned represents and warrants that he has been advised that the Insider
Units have not been registered under the Securities Act; that he is acquiring
the Insider Units for its account for investment purposes only; that he has
no
present intention of selling or otherwise disposing of the Insider Units in
violation of the securities laws of the United States; that he is an “accredited
investor” as defined by Rule 501 of Regulation D promulgated under the
Securities Act of 1933, as amended (the “Securities Act”); and that he is
familiar with the proposed business, management, financial condition and affairs
of the Corporation.
Moreover,
the undersigned agrees that he shall not sell or transfer the Insider Units
or
any underlying securities until after the Corporation consummates a merger,
capital stock exchange, asset acquisition or other similar business combination
with an operating business (“Business Combination”) and acknowledges that the
certificates for such Insider Units shall contain a legend indicating such
restriction on transferability. If
the
Company solicits approval of its shareholders of a Business Combination, the
undersigned will vote all Ordinary Shares included within the Insider Units
in
accordance with the majority of the votes cast by the holders of the Ordinary
Shares issued in the Corporation’s IPO. Additionally,
the undersigned hereby waives, with respect to the Insider Units (and the
underlying securities), any and all right, title, interest or claim of any
kind
(“Claim”) in or to any distribution of the Trust Fund and any remaining net
assets of the Corporation as a result of the liquidation of the Corporation
and
hereby waives any Claim the undersigned may have in the future as a result
of,
or arising out of, any contracts or agreements with the Corporation and will
not
seek recourse against the Trust Fund for any reason whatsoever.
159215.1
The
Corporation hereby acknowledges and agrees that, in the event the Corporation
calls the Warrants for redemption pursuant to that certain Warrant Agreement
to
be entered into by the Corporation and Continental Stock Transfer & Trust
Company in connection with the Corporation’s IPO, the Corporation shall allow
the undersigned to exercise any Warrants included within the Insider Units
by
surrendering such Warrants for that number of Ordinary Shares equal to the
quotient obtained by dividing (x) the product of the number of Ordinary Shares
underlying the Warrant, multiplied by the difference between the Warrant
exercise price and the “Fair Market Value” (defined below) by (y) the Fair
Market Value. The “Fair Market Value” shall mean the average reported last sale
price of the Ordinary Shares for the 10 trading days ending on the third trading
day prior to the date on which the notice of redemption is sent to holders
of
Warrants.
The
terms
of this agreement and the restriction on transfers with respect to the Insider
Units may not be amended without the prior written consent of EBC.
Very
truly yours,
/s/
Bo
Xx
Xx
Yu
Agreed
to:
By:
/s/
Xxxxxx Xxxxx
Name:
Xxxxxx Xxxxx
Title:
Chief Financial Officer
EarlyBirdCapital,
Inc.
By:
/s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
Managing Director
