Document:

Subscription Agreement

As of ____________ ___, 2008

To the Board of Directors of 

China Evergreen Acquisition Corp.:

Gentlemen:

The undersigned hereby subscribes for and agrees to purchase _____ warrants (“Insider Warrants”), each to purchase one Ordinary Share, at $1.00 per Insider Warrant, of China Evergreen Acquisition Corp. (the “Corporation”) for an aggregate purchase price of $_____ (“Purchase Price”). The purchase and issuance of the Insider Warrants shall occur simultaneously with the consummation of the Corporation’s initial public offering of securities (“IPO”) which is being underwritten by Ladenburg Thalmann & Co. Inc. (“Ladenburg”). The Insider Warrants will be sold to the undersigned on a private placement basis and not part of the IPO. Except as set forth herein, the Insider Warrants shall have the same terms as the warrants being sold in 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 Graubard Miller, 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 30 days 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 (i) 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 shall not be redeemable by the Corporation and (ii) the Insider Warrants shall be exercisable on a cashless basis such that the undersigned may exercise any Insider Warrants 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 five trading days ending on the date of exercise, in each case so long as the Insider Warrants are held by the Undersigned.

Ladenburg are deemed third party beneficiaries of this agreement and 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 Ladenburg.

 

	
                         
 	
                         
 	
                         
 	
                        Very truly yours,
 
	
                          
 	
                         
 	
                         
 	
                          
 
	
                         
 	
                         
 	
                         
 	
                         
 

 

	
                        AGREED TO:
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        CHINA EVERGREEN ACQUISITION CORP.
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Name: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title: 
 	
                         
 	
                         
 	
                         
 	
                         
 

 

	
                        GRAUBARD MILLER
 	
                         
 	
                         
 
	
                         
 	
                         
 	
                         
 
	
                        By: 
 	
                          
 	
                         
 	
                         
 	
                         
 
	
                        Name: 
 	
                         
 	
                         
 	
                         
 	
                         
 
	
                        Title: 
 	
                         
 	
                         
 	
                         
 	
                         
 

 

 

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____________ ___, 2008

China Evergreen Acquisition Corp.

B-2102 CaiZhi Tower

Zhongguancun Rd. E. 

Haidian, Beijing 100083

P.R. China

Ladenburg Thalmann & Co. Inc.

153 East 53rd Street, 49th Floor

New York, New York 10022

	
                         
 	
                        Re:
 	
                        Initial Public Offering
 

Gentlemen:

The undersigned special advisor of China Evergreen Acquisition Corp. (“Company”), in consideration of Ladenburg Thalmann & Co. Inc. (“Ladenburg”) entering into a letter of intent (“Letter of Intent”) to underwrite an initial public offering of the securities of the Company (“IPO”) and embarking on the IPO process, hereby agrees as follows (certain capitalized terms used herein are defined in paragraph 13 hereof):

1. If the Company solicits approval of its shareholders of a Business Combination, the undersigned will vote all Insider Shares beneficially owned by him in accordance with the majority of the votes cast by the holders of the IPO Shares. 

  2. The undersigned hereby waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Account and any remaining net assets of the Company as a result of such liquidation with respect to his Insider Shares (“Claim”) 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 Company and will not seek recourse against the Trust Account for any reason whatsoever.

3. The undersigned acknowledges and agrees that the Company will not: (i) acquire an entity with which the Company’s officers or directors, through their other business activities, had acquisition or investment discussions in the past; (ii) consummate Business Combination with an entity which is, or has been within the past 

 

 

China Evergreen Acquisition Corp.
Ladenburg Thalmann & Co. Inc.
____________ ___, 2008
Page 2

 

five years, affiliated with any of the Insiders or their affiliates, including an entity that is either a portfolio company of, or has otherwise received a material financial investment from, any private equity fund or investment company (or an affiliate thereof) that is affiliated with such individuals; or (iii) enter into a Business Combination where the Company acquires less than 100% of a target business and any of the Insiders or their affiliates acquire the remaining portion of such target business, unless, in any of such cases, the Company obtains an opinion from an independent investment banking firm reasonably acceptable to Ladenburg that the Business Combination is fair to the Company’s unaffiliated stockholders from a financial point of view.

4. Neither the undersigned, any member of the family of the undersigned, nor any affiliate (“Affiliate”) of the undersigned will be entitled to receive and will not accept any compensation for services rendered to the Company prior to or in connection with the consummation of the Business Combination; provided that the undersigned shall be entitled to reimbursement from the Company for his out-of-pocket expenses incurred in connection with seeking and consummating a Business Combination.

  5. Neither the undersigned, any member of the family of the undersigned, nor any Affiliate of the undersigned will be entitled to receive or accept a finder’s fee or any other compensation in the event the undersigned, any member of the family of the undersigned or any Affiliate of the undersigned originates a Business Combination. 

  6. On the Effective Date, the undersigned will escrow the Insider Shares and Insider Warrants beneficially held by him, subject to the terms of a Stock Escrow Agreement and Warrant Escrow Agreement, respectively, which the Company will enter into with the undersigned and an escrow agent acceptable to the Company.

  7. The undersigned’s biographical information furnished to the Company and Ladenburg and attached hereto as Exhibit A is true and accurate in all respects, does not omit any material information with respect to the undersigned’s background and contains all of the information required to be disclosed pursuant to Item 401 of Regulation S-K, promulgated under the Securities Act of 1933, as amended. The undersigned’s Questionnaire furnished to the Company and Ladenburg and annexed as Exhibit B hereto is true and accurate in all respects. The undersigned represents and warrants that:

 

 

China Evergreen Acquisition Corp.
Ladenburg Thalmann & Co. Inc.
____________ ___, 2008
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(a) he is not subject to, or a respondent in, any legal action for, any injunction, cease-and-desist order or order or stipulation to desist or refrain from any act or practice relating to the offering of securities in any jurisdiction;

(b) he has never been convicted of or pleaded guilty to any crime (i) involving any fraud or (ii) relating to any financial transaction or handling of funds of another person, or (iii) pertaining to any dealings in any securities and he is not currently a defendant in any such criminal proceeding; and

(c) he has never been suspended or expelled from membership in any securities or commodities exchange or association or had a securities or commodities license or registration denied, suspended or revoked.

  8. The undersigned has full right and power, without violating any agreement by which he is bound, to enter into this letter agreement.

  9. The undersigned hereby waives his right to exercise conversion rights or appraisal rights with respect to any Insider Shares of the Company owned or to be owned by the undersigned, directly or indirectly, and agrees that he will not seek conversion or appraisal with respect to such shares in connection with any vote to approve a Business Combination.

  10. The undersigned hereby agrees to not propose, or vote in favor of, an amendment to the Company’s Memorandum and Articles of Association to extend the period of time in which the Company must consummate a Business Combination prior to its liquidation. Should such a proposal be put before shareholders other than through actions by the undersigned, the undersigned hereby agrees to vote against such proposal. This paragraph may not be modified or amended under any circumstances.

  11. The undersigned authorizes any employer, financial institution, or consumer credit reporting agency to release to Ladenburg and its legal representatives or agents (including any investigative search firm retained by Ladenburg) any information they may have about the undersigned’s background and finances (“Information”). Neither Ladenburg nor its agents shall be violating the undersigned’s right of privacy in any manner in requesting and obtaining the Information and the undersigned hereby releases them from liability for any damage whatsoever in that connection.

  12. This letter agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to 

 

 

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Ladenburg Thalmann & Co. Inc.
____________ ___, 2008
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conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against his arising out of or relating in any way to this letter agreement (a “Proceeding”) shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive, (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum and (iii) irrevocably agrees to appoint Graubard Miller as agent for the service of process in the State of New York to receive, for the undersigned and on his behalf, service of process in any Proceeding. If for any reason such agent is unable to act as such, the undersigned will
promptly notify the Company and Ladenburg and appoint a substitute agent acceptable to each of the Company and Ladenburg within 30 days and nothing in this letter will affect the right of either party to serve process in any other manner permitted by law. 

  13. As used herein, (i) a “Business Combination” shall mean a merger, capital stock exchange, asset acquisition, stock purchase or other similar business combination with an operating business; (ii) “Insiders” shall mean all officers, directors and shareholders of the Company immediately prior to the IPO; (iii) “Insider Shares” shall mean all of the Ordinary Shares of the Company acquired by an Insider prior to the IPO; (iv) “Insider Warrants” means the warrants being sold privately by the Company to certain of the Insiders simultaneously with the consummation of the IPO; and (v) “IPO Shares” shall mean the Ordinary Shares issued in the Company’s IPO.

 

	
                          
 	
                         
 	
                         
 	
                        
 Shuang Li
 
	
                         
 	
                         
 	
                         
 	
                        Print Name of Insider
 

 

	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
                         
 	
                        
  
 
	
                         
 	
                         
 	
                         
 	
                        Signature
 

 

 

Exhibit A

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