Subscription Agreement
As
of
November 9, 2007
To
the
Board of Directors of
Gentlemen:
The
undersigned hereby subscribes for and agrees to purchase 1,500,000 warrants
(“Insider Warrants”), each to purchase one Ordinary Share, at $1.00 per Insider
Warrant, of CS China Acquisition Corp. (the “Corporation”) for an aggregate
purchase price of $1,500,000 (“Purchase Price”). The purchase and issuance of
the Insider Warrants shall occur simultaneously with the consummation of the
Corporation’s initial public offering of Units, consisting of one Ordinary Share
and one Public Warrant (“IPO”), which is being underwritten by EarlyBirdCapital,
Inc. (“EBC”). The Insider Warrants will be sold to the undersigned on a private
placement basis and not part of the IPO. Except as herein provided, the Insider
Warrants shall have the same terms as the Public Warrants.
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 Xxxxxxxx Xxxxxx, 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
Warrants have not been registered under the Securities Act; that he is acquiring
the Insider Warrants for its account for investment purposes only; that he
has
no present intention of selling or otherwise disposing of the Insider Warrants
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 Warrants
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 Warrants shall contain a legend indicating such
restriction on transferability.
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 Insider Warrants may be
exercised 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, so long as the Insider Warrants are still held by the undersigned
or its affiliates. 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
Warrants may not be amended without the prior written consent of
EBC.
| Very truly yours, | ||
|
CS
Capital USA, LLC
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Name: |
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Title:
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Agreed
to:
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Name:
Title:
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EarlyBirdCapital,
Inc.
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Name:
Title:
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Xxxxxxxx
Xxxxxx
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Name:
Title:
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