REGISTRATION RIGHTS AGREEMENT
Exhibit
10.26
THIS
REGISTRATION RIGHTS AGREEMENT (this
“Agreement”)
is
made as of this 22nd day of August, 2008, by and among Green China Resources,
Inc., a company organized under the laws of the British Virgin Islands (the
“Company”),
and
each party listed on Schedule A hereto (each, a “Holder”,
and
collectively, the “Holders”).
A. In
connection with the Stock Purchase Agreement by and among the parties thereto,
including the parties hereto, of even date herewith (the "Stock
Purchase Agreement"),
the
Company has agreed, upon the terms and subject to the conditions set forth
in
the Stock Purchase Agreement, to issue and sell to the Holders (i) shares of
the
Company's ordinary stock (the “Exchange
Shares”)
and/or
(ii) convertible notes of the Company (the “Notes”),
which
will, among other things, be convertible into shares of the Company’s ordinary
stock (the “Conversion
Shares”).
B. Unless
otherwise provided in this Agreement, capitalized terms used herein shall have
the respective meanings set forth in Section 11 hereof.
NOW,
THEREFORE,
in
consideration of the above premises and the mutual covenants contained herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and Holders hereby agree as
follows:
1. Registration.
(a) Registration
of Exchange Shares.
As soon
as reasonably practicable after the filing of the Company’s Current Report on
Form 8-K with respect to the consummation of the transaction contemplated under
the Stock Purchase Agreement (the “Acquisition”),
the
Company shall file with the Commission a certain registration statement (the
“Exchange
Registration Statement”)
covering the registration of the Exchange Shares. The
Company shall be required to include all Exchange Shares for resale and offer
on
a continuous basis pursuant to Rule 415 in the Exchange Registration Statement;
provided,
however,
that if
all of the Exchange Shares of the Holders cannot be so included due to
Commission Comments, then the Company may reduce, in accordance with the
provisions of Section 1(c) hereof, the number of securities covered by the
Exchange Registration Statement to the maximum number which would enable the
Company to conduct such offering in accordance with the provisions of Rule
415.
(b) Registration
of Conversion Shares.
Within
thirty (30) days of the conversion of the Notes, the Company shall file with
the
Commission a certain registration statement (the “Conversion
Registration Statement”)
covering the registration of the Conversion Shares. The
Company shall be required to include all Conversion Shares for resale and offer
on a continuous basis pursuant to Rule 415 in the Conversion Registration
Statement; provided,
however,
that if
all of the Conversion Shares of the Holders cannot be so included due to
Commission Comments, then the Company may reduce, in accordance with the
provisions of Section 1(c) hereof, the number of securities covered by the
Conversion Registration Statement to the maximum number which would enable
the
Company to conduct such offering in accordance with the provisions of Rule
415.
(c) Cutback
Provisions.
In the
event all of the Registrable Securities cannot be included in a specific
Registration Statement due to Commission Comments, the Holders agree that
securities shall be removed from such Registration Statement in the following
order until no further removal is required by Commission Comments:
(i) First,
any securities included in the Registration Statement other than Registrable
Securities shall be removed;
(ii) Second,
the Registrable Securities held by the Holders and their respective transferees
shall be removed, pro rata based on the number of such Registrable Securities
held by the Holders and their respective transferees.
(d) Mandatory
Registrations.
In the
event all of the Registrable Securities of the Holders are not included in
either the Exchange Registration Statement or the Conversion Registration
Statement, as the case may be, due to Commission Comments, the Company shall
prepare and file an additional Registration Statement (the “Follow-up
Registration Statement”)
with
the Commission within sixty (60) days following the effectiveness of the
previously filed applicable Registration Statement; provided,
however,
that
the time period for filing the Follow-up Registration shall be extended to
the
extent that the Commission publishes written Commission Guidance or the Company
receives written Commission Guidance which provides for a longer period before
a
Follow-up Registration Statement may be filed. The Follow-up Registration
Statement shall cover the resale of all of the Registrable Securities that
were
excluded from the previously filed applicable Registration Statement.
(e) Effectiveness
of a Registration Statement.
The
Company shall cause the Exchange Registration Statement and Follow-up
Registration Statement with respect to the Exchange Shares, if any, to be
declared effective under the Securities Act as promptly as possible after the
filing thereof and shall keep such Registration Statement continuously effective
under the Securities Act until the earlier of (i) two years after its Effective
Date (provided, however, the two year period shall be extended for any Grace
Period), (ii) such time as all of the Registrable Securities covered by such
Registration Statement have been publicly sold by the Holders, or (iii) such
time as all of the Registrable Securities covered by such Registration Statement
may be sold by the Holders pursuant to Rule 144 without regard to the volume
limitations for such sales provided in Rule 144, as determined by the counsel
to
the Company pursuant to a written opinion letter to such effect, addressed
and
acceptable to the Company's transfer agent and the affected Holder (the
"Exchange
Effectiveness Period”).
The
Company shall cause the Conversion Registration Statement and Follow-up
Registration Statement with respect to the Conversion Shares, if any, to be
declared effective under the Securities Act within one hundred twenty (120)
days
after the filing thereof and shall keep such Registration Statement continuously
effective under the Securities Act until the earlier of (i) one year after
its
Effective Date (provided, however, the one year period shall be extended for
any
Grace Period), or (ii) such time as all of the Registrable Securities covered
by
such Registration Statement have been publicly sold by the Holders (the
"conversion
Effectiveness Period”).
By
5:00 p.m. (New York City time) on the business day immediately following the
Effective Date of a Registration Statement, the Company shall file with the
Commission in accordance with Rule 424 under the Securities Act the final
Prospectus to be used in connection with sales pursuant to such Registration
Statement (whether or not such filing is technically required under such
Rule).
(f) Liquidated
Damages.
In the
event that (i) the Exchange Registration Statement becomes not effective at
any
time after its being declared effective by the Commission, or (ii) the
Conversion Registration Statement is not filed with the Commission within the
time period required under Section 1(b) or not declared effective by the
Commission within the time period required under Section 1(e) (each an
“Event”),
the
Company shall pay liquidated damages in shares of Common Stock to the affected
Holders in an amount equal to one percent (1.0%) of the number of shares of
Registrable Securities included in such Registration Statement per month, to
be
paid in arrears on the first day of the month after the occurrence of the Event,
and each month thereafter until, (y) with respect to the Exchange Registration
Statement, such Registration Statement is effective for sale of the Registrable
Securities or until the expiration of the exchange Effectiveness Period, or
(z)
with respect to the Conversion Registration Statement, such Registration
Statement is filed with the Commission or is effective for sale of the
Registrable Securities, as the case may be, or until the expiration of the
conversion Effectiveness Period.
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(g) Termination
of Registration Rights.
The
registration rights afforded to the Holders under this Section 1 shall terminate
on the earliest date when all Registrable Securities of the Holder either:
(i)
have been publicly sold by the Holder pursuant to a Registration Statement,
(ii)
have been covered by an effective Registration Statement which has been
effective for an aggregate period of not less than twelve (12) months, subject
to the provisions of Section 1(e) hereof (whether or not consecutive);
provided,
however,
the
time period shall be calculated so as to exclude any Grace Period, or (iii)
may
be sold by the Holder pursuant to Rule 144 without regard to the volume
limitations for such sales provided in Rule 144, as determined by the counsel
to
the Company pursuant to a written opinion letter to such effect, addressed
and
acceptable to the Company's transfer agent and the affected Holder.
2. Registration
Procedures.
Whenever any Registrable Securities are to be registered pursuant to this
Agreement, the Company shall use its best efforts to effect the registration
and
sale of such Registrable Securities in accordance with the intended method
of
disposition thereof, and pursuant thereto the Company shall have the following
obligations:
(a) The
Company shall prepare and file with the Commission a Registration Statement
with
respect to such Registrable Securities and use its best efforts to cause such
Registration Statement to become effective.
(b) The
Company shall prepare and file with the Commission such amendments (including
post-effective amendments) and supplements to a Registration Statement and
the
Prospectus used in connection with such Registration Statement, which Prospectus
is to be filed pursuant to Rule 424 promulgated under the Securities Act, as
may
be necessary to keep such Registration Statement effective at all times during
the applicable Effectiveness Period, and, during such period, comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities of the Company covered by such Registration Statement
until such time as all of such Registrable Securities shall have been disposed
of in accordance with the intended methods of disposition by the seller or
sellers thereof as set forth in such Registration Statement. In the case of
amendments and supplements to a Registration Statement which are required to
be
filed pursuant to this Agreement by reason of the Company filing a report on
Form 10-Q Form 10-K or any analogous report under the Securities Exchange Act,
the Company shall have incorporated such report by reference into such
Registration Statement, if applicable, or shall file such amendments or
supplements with the Commission on the same day on which the Securities Exchange
Act report is filed which created the requirement for the Company to amend
or
supplement such Registration Statement.
(c) The
Company shall furnish to each seller of Registrable Securities in any
Registration Statement, without charge, (i) promptly after the same is prepared
and filed with the Commission at least one copy of such Registration Statement
and any amendment(s) thereto, including financial statements and schedules,
all
documents incorporated therein by reference, if requested by such seller, all
exhibits and each preliminary Prospectus, (ii) upon the effectiveness of any
Registration Statement, ten (10) copies of the Prospectus included in such
Registration Statement and all amendments and supplements thereto (or such
other
number of copies as such seller may reasonably request) and (iii) such other
documents, including copies of any preliminary or final Prospectus, as such
seller may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities owned by such seller.
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(d) The
Company shall use its best efforts to (i) register and qualify, unless an
exemption from registration and qualification applies, the resale by any seller
of the Registrable Securities covered by a Registration Statement under such
other securities or "blue sky" laws of all applicable jurisdictions in the
United States, (ii) prepare and file in those jurisdictions, such amendments
(including post-effective amendments) and supplements to such registrations
and
qualifications as may be necessary to maintain the effectiveness thereof during
the applicable Effectiveness Period, (iii) take such other actions as may be
necessary to maintain such registrations and qualifications in effect at all
times during the applicable Effectiveness Period, and (iv) take all other
actions reasonably necessary or advisable to qualify the Registrable Securities
for sale in such jurisdictions; provided,
however,
that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 2(d), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent
to
service of process in any such jurisdiction.
(e) The
Company shall use its best efforts to prevent the issuance of any stop order
or
other suspension of effectiveness of a Registration Statement, or the suspension
of the qualification of any of Registrable Securities for sale in any
jurisdiction and, if such an order or suspension is issued, to obtain the
withdrawal of such order or suspension at the earliest possible moment and
to
notify the Holder of any Registrable Securities being sold of the issuance
of
such order and the resolution thereof or its receipt of actual notice of the
initiation or threat of any proceeding for such purpose.
(f) The
Company shall notify the Holder in writing of the happening of any event, as
promptly as practicable after becoming aware of such event, as a result of
which
the Prospectus included in a Registration Statement, as then in effect, includes
an untrue statement of a material fact or omission to state a material fact
required to be stated therein or necessary to make the statements therein,
in
the light of the circumstances under which they were made, not misleading
(provided that in no event shall such notice contain any material, nonpublic
information), and, subject to Section 2(q), promptly prepare a supplement or
amendment to such Registration Statement to correct such untrue statement or
omission, and deliver ten (10) copies of such supplement or amendment to the
Holder (or such other number of copies as the Holder may reasonably request).
(g) The
Company shall promptly notify the Holder in writing (i) when a Prospectus or
any
Prospectus supplement or post-effective amendment has been filed, and when
a
Registration Statement or any post-effective amendment has become effective
(notification of such effectiveness shall be delivered to the Holder by
facsimile on the same day of such effectiveness and by overnight mail), (ii)
of
any request by the Commission for amendments or supplements to a Registration
Statement or related Prospectus or related information, and (iii) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(h) If
the
Holder is required under applicable securities laws to be described in a
Registration Statement as an underwriter, at the reasonable request of such
Holder, the Company shall furnish to such Holder, on the date of the
effectiveness of such Registration Statement and thereafter from time to time
on
such dates as the Holder may reasonably request (i) a letter, dated such date,
from the Company's independent certified public accountants in form and
substance as is customarily given by independent certified public accountants
to
underwriters in an underwritten public offering, addressed to the Holder, and
(ii) an opinion, dated as of such date, of counsel representing the Company
for
purposes of such Registration Statement, in form, scope and substance as is
customarily given in an underwritten public offering, addressed to the
Holder.
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(i) If
the
Holder is required under applicable securities laws to be described in a
Registration Statement as an underwriter, then at the request of such Holder
in
connection with such Holder's due diligence requirements, the Company shall
make
available for inspection by (i) the Holder, (ii) the Holder’s legal counsel, and
(iii) one firm of accountants or other agents retained by the Holder
(collectively, the "Inspectors"),
all
pertinent financial and other records, and pertinent corporate documents and
properties of the Company (collectively, the "Records"),
as
shall be reasonably deemed necessary by each Inspector, and cause the Company's
officers, directors and employees to supply all information which any Inspector
may reasonably request; provided,
however,
that
each Inspector shall agree to hold in strict confidence and shall not make
any
disclosure (except to the Holder) or use of any Record or other information
which the Company determines in good faith to be confidential, and of which
determination the Inspectors are so notified, unless (a) the disclosure of
such
Records is necessary to avoid or correct a misstatement or omission in any
Registration Statement or is otherwise required under the Securities Act, (b)
the release of such Records is ordered pursuant to a final, non-appealable
subpoena or order from a court or government body of competent jurisdiction,
or
(c) the information in such Records has been made generally available to the
public other than by disclosure in violation of this or any other agreement
of
which the Inspector has knowledge. Each Holder agrees that it shall, upon
learning that disclosure of such Records is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of, or to obtain a protective order
for, the Records deemed confidential.
(j)The
Company shall hold in confidence and not make any disclosure of information
concerning the Holder provided to the Company unless (i) disclosure of such
information is necessary to comply with federal or state securities laws, (ii)
the disclosure of such information is necessary to avoid or correct a
misstatement or omission in any Registration Statement, (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to
the
public other than by disclosure in violation of this Agreement or any other
agreement. The Company agrees that it shall, upon learning that disclosure
of
such information concerning the Holder is sought in or by a court or
governmental body of competent jurisdiction or through other means, give prompt
written notice to the Holder and allow the Holder, at the Holder’s expense, to
undertake appropriate action to prevent disclosure of, or to obtain a protective
order for, such information.
(k)The
Company shall use its best efforts either to cause all of the Registrable
Securities covered by a Registration Statement to be listed on each securities
exchange on which securities of the same class or series issued by the Company
are then listed, if any, if the listing of such Registrable Securities is then
permitted under the rules of such exchange. The Company shall pay all fees
and
expenses in connection with satisfying its obligation under this Section
2(k).
(l)The
Company shall cooperate with each Holder who holds Registrable Securities being
offered and, to the extent applicable, facilitate the timely preparation and
delivery of certificates (not bearing any restrictive legend) representing
the
Registrable Securities to be offered pursuant to an effective Registration
Statement and enable such certificates to be in such denominations or amounts,
as the case may be, as the Holder may reasonably request and registered in
such
names as the Holder may request.
(m)If
requested by the Holder, the Company shall (i) as soon as practicable
incorporate in a Prospectus supplement or post-effective amendment such
information as the Holder reasonably requests to be included therein relating
to
the sale and distribution of Registrable Securities, including, without
limitation, information with respect to the number of Registrable Securities
being offered or sold, the purchase price being paid therefor and any other
terms of the offering of the Registrable Securities to be sold in such offering;
(ii) as soon as practicable make all required filings of such Prospectus
supplement or post-effective amendment after being notified of the matters
to be
incorporated in such Prospectus supplement or post-effective amendment; and
(iii) as soon as practicable, supplement or make amendments to any Registration
Statement if reasonably requested by the Holder holding any Registrable
Securities.
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(n)The
Company shall use its best efforts to cause the Registrable Securities covered
by a Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to consummate the
disposition of such Registrable Securities.
(o)The
Company shall otherwise use its best efforts to comply with all applicable
rules
and regulations of the Commission in connection with any registration
hereunder.
(p)Notwithstanding
anything to the contrary herein, at any time after the Effective Date of a
Registration Statement, the Company may delay the disclosure of material,
non-public information concerning the Company the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of the Company
and its counsel, in the best interest of the Company and, in the opinion of
counsel to the Company, otherwise required (a "Grace
Period");
provided,
that
the Company shall promptly (i) notify the Holder in writing of the existence
of
material, non-public information giving rise to a Grace Period (provided that
in
each notice the Company will not disclose the content of such material,
non-public information to the Holder) and the date on which the Grace Period
will begin, and (ii) notify the Holder in writing of the date on which the
Grace
Period ends; and, provided further,
that no
Grace Period shall exceed sixty (60) consecutive days and during any three
hundred sixty five (365) day period such Grace Periods shall not exceed an
aggregate of one hundred twenty (120) days and the first day of any Grace Period
must be at least two (2) trading days after the last day of any prior Grace
Period (each, an "Allowable
Grace Period").
For
purposes of determining the length of a Grace Period above, the Grace Period
shall begin on and include the date the Holder receives the notice referred
to
in clause (i) and shall end on and include the later of the date the Holder
receives the notice referred to in clause (ii) and the date referred to in
such
notice. The provisions of Section 2(e) hereof shall not be applicable during
the
period of any Allowable Grace Period. Upon expiration of the Grace Period,
the
Company shall again be bound by Section 2(f) with respect to the information
giving rise thereto unless such material, non-public information is no longer
applicable. Notwithstanding anything to the contrary, the Company shall cause
its transfer agent to deliver unlegended shares of Common Stock to a transferee
of the Holder in connection with any sale of Registrable Securities with respect
to which the Holder has entered into a contract for sale, and delivered a copy
of the Prospectus included as part of the applicable Registration Statement
(unless an exemption from such Prospectus delivery requirements exists), prior
to the Holder’s receipt of the notice of a Grace Period and for which the Holder
has not yet settled.
3. Obligations
of the Holders.
(a) At
least
five (5) business days prior to the first anticipated filing date of a
Registration Statement, the Company shall notify the Holders in writing of
the
information the Company requires from each Holder if the Holder’s Registrable
Securities are to be included in such Registration Statement. It shall be a
condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of the Holder that the Holder shall furnish to the Company such
information regarding itself, the Registrable Securities held by it and the
intended method of disposition of the Registrable Securities held by it as
shall
be reasonably required to effect the effectiveness of the registration of such
Registrable Securities and shall execute such documents in connection with
such
registration as the Company may reasonably request.
(b) The
Holder, by the Holder’s acceptance of the Registrable Securities, agrees to
cooperate with the Company as reasonably requested by the Company in connection
with the preparation and filing of any Registration Statement hereunder, unless
the Holder has notified the Company in writing of the Holder's election to
exclude all of the Holder’s Registrable Securities from such Registration
Statement.
6
(c) The
Holder agrees that, upon receipt of any notice from the Company of the happening
of any event of the kind described in Sections 2(e) or 2(f), the Holder will
immediately discontinue disposition of Registrable Securities pursuant to any
Registration Statement(s) covering such Registrable Securities until the
Holder’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Sections 2(e) or 2(f) or receipt of notice that no supplement
or
amendment is required. Notwithstanding anything to the contrary, the Company
shall cause its transfer agent to deliver unlegended shares of Common Stock
to a
transferee of the Holder in connection with any sale of Registrable Securities
with respect to which the Holder has entered into a contract for sale prior
to
the Holder’s receipt of a notice from the Company of the happening of any event
of the kind described in Sections 2(e) or 2(f) and for which the Holder has
not
yet settled.
(d) The
Holder covenants and agrees that it will comply with the Prospectus delivery
requirements of the Securities Act as applicable to it or an exemption therefrom
in connection with sales of Registrable
Securities pursuant to a Registration Statement.
4. Registration
Expenses.
All
expenses incident to the Company’s performance of or compliance with this
Agreement, including without limitation all registration and filing fees, fees
and expenses of compliance with securities or blue sky laws, printing expenses,
messenger and delivery expenses, fees and disbursements of custodians, and
fees
and disbursements of counsel for the Company and all independent certified
public accountants, underwriters (excluding discounts, commissions and placement
agent fees) and other Persons retained by the Company (all such expenses being
herein called “Registration
Expenses”),
shall
be borne by the Company. Further, the Company shall pay its internal expenses
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit or quarterly review, the expense of any liability insurance and the
expenses and fees for listing the securities to be registered on each securities
exchange on which similar securities issued by the Company are then
listed.
5. Indemnification.
In
the
event any Registrable Securities are included in a Registration Statement under
this Agreement:
(a)To
the
fullest extent permitted by law, the Company will, and hereby does, indemnify,
hold harmless and defend the Holder, the directors, officers, members, partners,
employees, agents, representatives of, and each Person, if any, who controls
the
Holder within the meaning of the Securities Act or the Securities Exchange
Act
(each, an "Indemnified
Person"),
against any losses, claims, damages, liabilities, judgments, fines, penalties,
charges, costs, reasonable attorneys' fees, amounts paid in settlement or
expenses, joint or several, (collectively, "Claims")
incurred in investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the foregoing by or
before any court or governmental, administrative or other regulatory agency,
body or the Commission, whether pending or threatened, whether or not an
indemnified party is or may be a party thereto ("Indemnified
Damages"),
to
which any of them may become subject insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out
of
or are based upon: (i) any untrue statement or alleged untrue statement of
a
material fact in a Registration Statement or any post-effective amendment
thereto or in any filing made in connection with the qualification of the
offering under the securities or other "blue sky" laws of any jurisdiction
in
which Registrable Securities are offered ("Blue
Sky Filing"),
or
the omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, (ii) any
untrue statement or alleged untrue statement of a material fact contained in
any
preliminary Prospectus if used prior to the effective date of such Registration
Statement, or contained in the final Prospectus (as amended or supplemented,
if
the Company files any amendment thereof or supplement thereto with the
Commission) or the omission or alleged omission to state therein any material
fact necessary to make the statements made therein, in the light of the
circumstances under which the statements therein were made, not misleading,
(iii) any violation or alleged violation by the Company of the Securities Act
or
the Securities Exchange Act, any other law, including, without limitation,
any
state securities law, or any rule or regulation thereunder relating to the
offer
or sale of the Registrable Securities pursuant to a Registration Statement
or
(iv) any violation of this Agreement (the matters in the foregoing clauses
(i)
through (iv) being, collectively, "Violations").
Subject to Section 5(c), the Company shall reimburse the Indemnified Persons,
promptly as such expenses are incurred and are due and payable, for any legal
fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 5(a): (i) shall not apply to a Claim by an Indemnified Person arising
out of or based upon a Violation which occurs in reliance upon and in conformity
with information furnished in writing to the Company by such Indemnified Person
for such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement or any such amendment thereof or supplement
thereto, if such Prospectus was timely made available by the Company pursuant
to
Section 2(c); (ii) shall not be available to the extent such Claim is based
on a
failure of the Holder to deliver or to cause to be delivered the Prospectus
made
available by the Company, including a corrected Prospectus, if such Prospectus
or corrected Prospectus was timely made available by the Company pursuant to
Section 2(c); and (iii) shall not apply to amounts paid in settlement of any
Claim if such settlement is effected without the prior written consent of the
Company, which consent shall not be unreasonably withheld or delayed. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Indemnified Person and shall survive the transfer
of
the Registrable Securities by the Holder pursuant to Section 9.
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(b)In
connection with any Registration Statement in which the Holder is participating,
each Holder, severally and not jointly, agrees to indemnify, hold harmless
and
defend, to the same extent and in the same manner as is set forth in Section
5(a), the Company, each of its directors, each of its officers who signs the
Registration Statement and each Person, if any, who controls the Company within
the meaning of the Securities Act or the Securities Exchange Act (each, an
"Indemnified
Party"),
against any Claim or Indemnified Damages to which any of them may become
subject, under the Securities Act or the Securities Exchange Act or otherwise,
insofar as such Claim or Indemnified Damages arise out of or are based upon
any
Violation, in each case to the extent, and only to the extent, that such
Violation occurs in reliance upon and in conformity with written information
furnished to the Company by the Holder expressly for use in connection with
such
Registration Statement; and, subject to Section 5(c), the Holder will reimburse
any legal or other expenses reasonably incurred by an Indemnified Party in
connection with investigating or defending any such Claim; provided,
however,
that
the indemnity agreement contained in this Section 5(b) and the agreement with
respect to contribution contained in Section 6 shall not apply to amounts paid
in settlement of any Claim if such settlement is effected without the prior
written consent of the Holder, which consent shall not be unreasonably withheld
or delayed; provided
further,
however,
that
the Holder shall be liable under this Section 5(b) for only that amount of
a
Claim or Indemnified Damages as does not exceed the net proceeds to the Holder
as a result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless
of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Holder pursuant to
Section 9.
(c)Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section
5
of notice of the commencement of any action or proceeding (including any
governmental action or proceeding) involving a Claim, such Indemnified Person
or
Indemnified Party shall, if a Claim in respect thereof is to be made against
any
indemnifying party under this Section 5, deliver to the indemnifying party
a
written notice of the commencement thereof, and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party
so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel mutually satisfactory to the
indemnifying party and the Indemnified Person or the Indemnified Party, as
the
case may be; provided,
however,
that an
Indemnified Person or Indemnified Party shall have the right to retain its
own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party,
the
representation by such counsel of the Indemnified Person or Indemnified Party
and the indemnifying party would be inappropriate due to actual or potential
differing interests between such Indemnified Person or Indemnified Party and
any
other party represented by such counsel in such proceeding. The Indemnified
Party or Indemnified Person shall cooperate fully with the indemnifying party
in
connection with any negotiation or defense of any such action or Claim by the
indemnifying party and shall furnish to the indemnifying party all information
reasonably available to the Indemnified Party or Indemnified Person which
relates to such action or Claim. The indemnifying party shall keep the
Indemnified Party or Indemnified Person reasonably apprised at all times as
to
the status of the defense or any settlement negotiations with respect thereto.
No indemnifying party shall be liable for any settlement of any action, claim
or
proceeding effected without its prior written consent, provided, however, that
the indemnifying party shall not unreasonably withhold, delay or condition
its
consent. No indemnifying party shall, without the prior written consent of
the
Indemnified Party or Indemnified Person, consent to entry of any judgment or
enter into any settlement or other compromise which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party or Indemnified Person of a release from all liability in
respect to such Claim or litigation, and such settlement shall not include
any
admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter
for
which indemnification has been made. The failure to deliver written notice
to
the indemnifying party within a reasonable time of the commencement of any
such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 5, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.
8
(d)The
indemnification required by this Section 5 shall be made by periodic payments
of
the amount thereof during the course of the investigation or defense, as and
when bills are received or Indemnified Damages are incurred.
(e) The
indemnity agreements contained herein shall be in addition to (i) any cause
of
action or similar right of the Indemnified Party or Indemnified Person against
the indemnifying party or others, and (ii) any liabilities the indemnifying
party may be subject to pursuant to the law.
6. Contribution.
To the
extent any indemnification by an indemnifying party is prohibited or limited
by
law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 5 to the
fullest extent permitted by law; provided,
however,
that:
(i) no Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 10(f)
of
the Securities Act) in connection with such sale shall be entitled to
contribution from any Person involved in such sale of Registrable Securities
who
was not guilty of fraudulent misrepresentation; and (ii) contribution by any
seller of Registrable Securities shall be limited in amount to the net amount
of
proceeds received by such seller from the sale of such Registrable Securities
pursuant to such Registration Statement
9
7. Participation
in Underwritten Registrations.
No
Person may participate in any registration hereunder which is underwritten
or
sold through a placement agent unless such Person (i) agrees to sell such
Person’s securities on the basis provided in any underwriting or placement
agency arrangements approved by the Company, and (ii) completes and executes
all
questionnaires, powers of attorney, indemnities, underwriting or placement
agency agreements and other documents required under the terms of such
underwriting or placement agency arrangements.
8. Reports
under Securities Exchange Act.
With a
view to making available to the Holder the benefits of Rule 144 promulgated
under the Securities Act or any other similar rule or regulation of the
Commission that may at any time permit the Holder to sell securities of the
Company to the public without registration, the Company agrees, for so long
as
the Holders or their transferees own Registrable Securities, to:
(a) make
and
keep public information available, as those terms are understood and defined
in
Rule 144;
(b) not
to
take any actions to terminate its status as a reporting company under the
Securities Exchange Act or to terminate its obligations to file periodic reports
under the Securities Exchange Act;
(c) file
with
the Commission in a timely manner all reports and other documents required
of
the Company under the Securities Act and the Securities Exchange Act to maintain
its status as reporting company under the Securities Exchange Act;
and
(d) furnish
to the Holder so long as the Holder owns Registrable Securities, promptly upon
request, (i) a written statement by the Company, if true, that it has complied
with the reporting requirements of Rule 144, the Securities Act and the
Securities Exchange Act, (ii) a copy of the most recent annual or quarterly
report of the Company and such other reports and documents so filed by the
Company, and (iii) such other information as may be reasonably requested to
permit the Holder to sell such securities pursuant to Rule 144 without
registration.
9. Assignment
of Registration Rights.
The
rights under this Agreement shall be automatically assignable by the Holder
to
any transferee of all or any portion of the Holder’s Registrable Securities if:
(i) the Holder agrees in writing with the transferee or assignee to assign
such
rights, and a copy of such agreement is furnished to the Company within a
reasonable time after such assignment; (ii) the Company is, within a reasonable
time after such transfer or assignment, furnished with written notice of (a)
the
name and address of such transferee or assignee, and (b) the securities with
respect to which such registration rights are being transferred or assigned;
(iii) immediately following such transfer or assignment the further disposition
of such securities by the transferee or assignee is restricted under the
Securities Act and applicable state securities laws; and (iv) at or before
the
time the Company receives the written notice contemplated by clause (ii) of
this
sentence the transferee or assignee agrees in writing with the Company to be
bound by all of the provisions contained herein.
10. Amendment
of Registration Rights.
Provisions of this Agreement may be amended and the observance thereof may
be
waived (either generally or in a particular instance and either retroactively
or
prospectively), only with the written consent of the Company and each Holder.
11. Definitions.
(a) “Commission”
means
the Securities and Exchange Commission.
10
(b) “Commission
Comments”
means
written comments pertaining solely to Rule 415 which are received by the Company
from the Commission to a filed Registration Statement which limit the amount
of
shares which may be included therein to a number of shares which is less than
such amount sought to be included thereon as filed with the
Commission.
(c) “Commission
Guidance”
means
(i) any publicly-available written or oral guidance, comments, requirements
or
requests of the Commission staff, and (ii) the Securities Act.
(d) “Common
Stock”
means
the ordinary stock of the Company.
(e) “Effective
Date”
means,
as to a Registration Statement, the date on which such Registration Statement
is
first declared effective by the Commission.
(f) “Person”
means
an individual, a partnership, a limited liability company, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
(g) "Prospectus"
means
the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective Registration Statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of
any
portion of the Registrable Securities covered by the Registration Statement,
and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus
(h) “Registrable
Securities”
means,
as the context warrants, (i) the Exchange Shares issued to the Holder or its
assignees pursuant to the terms of the Stock Purchase Agreement, or (ii) the
Conversion Shares issuable upon conversion of the Notes issued to the Holder
or
its assignees pursuant to the terms of the Stock Purchase Agreement.
(i) "Registration
Statement"
means
any registration statement (including, without limitation, the Exchange
Registration Statement, the Conversion Registration Statement and the Follow-up
Registration Statement) required to be filed hereunder, including (in each
case)
the Prospectus, amendments and supplements to the Registration Statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in the Registration Statement.
(j) “Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission that may at any time permit the Holder
to
sell securities of the Company to the public without registration.
(k) "Rule
415"
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
(l) “Rule
424"
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such
Rule.
11
(m) “Securities
Act”
means
the Securities Act of 1933, as amended from time to time.
(n) “Securities
Exchange Act”
means
the Securities Exchange Act of 1934, as amended from time to time.
12. Miscellaneous.
(a) A
Person
is deemed to be a holder of Registrable Securities whenever such Person owns
or
is deemed to own of record such Registrable Securities. If the Company receives
conflicting instructions, notices or elections from two or more Persons with
respect to the same Registrable Securities, the Company shall act upon the
basis
of instructions, notice or election received from the such record owner of
such
Registrable Securities.
(b) Any
notices, consents, waivers or other communications required or permitted to
be
given under the terms of this Agreement must be in writing and will be deemed
to
have been delivered: (i) upon receipt, when delivered personally; (ii) upon
receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party);
or (iii) one business day after deposit with a nationally recognized overnight
delivery service, in each case properly addressed to the party to receive the
same. The addresses and facsimile numbers for such communications shall
be:
If
to the
Company:
Green
China Resources, Inc.
29
Level,
Central Plaza
381
Xxxx
Xxx Xxxxx Xxxx
Xxxxxxxx
000000 Xxxxx
____________________fax
Attention:
Xx. Xxxxx X. Xxxx
and
If
to any
Holder, at the address for such Holder on the records of the Company.
or
to
such other address and/or facsimile number and/or to the attention of such
other
Person as the recipient party has specified by written notice given to each
other party five (5) days prior to the effectiveness of such change. Written
confirmation of receipt (A) given by the recipient of such notice, consent,
waiver or other communication, (B) mechanically or electronically generated
by
the sender's facsimile machine containing the time, date, recipient facsimile
number and an image of the first page of such transmission or (C) provided
by a
courier or overnight courier service shall be rebuttable evidence of personal
service, receipt by facsimile or receipt from a nationally recognized overnight
delivery service in accordance with clause (i), (ii) or (iii) above,
respectively.
(c) Failure
of any party to exercise any right or remedy under this Agreement or otherwise,
or delay by a party in exercising such right or remedy, shall not operate as
a
waiver thereof.
12
(d) All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
Delaware, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Delaware or other jurisdictions)
that
would cause the application of the laws of any jurisdictions other than the
State of Delaware. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the State of Delaware,
for the adjudication of any dispute hereunder or in connection herewith or
with
any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that
the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to
such
party at the address for such notices to it under this Agreement and agrees
that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.
EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO
REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN
CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.
(e) This
Agreement and the instruments referenced herein and therein constitute the
entire agreement among the parties hereto with respect to the subject matter
hereof and thereof. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein and therein.
This
Agreement and the instruments referenced herein and therein supersede all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
(f) Subject
to the requirements of Section 9, this Agreement shall inure to the benefit
of
and be binding upon the permitted successors and assigns of each of the parties
hereto.
(g) The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(h) This
Agreement may be executed in identical counterparts, each of which shall be
deemed an original but all of which shall constitute one and the same agreement.
This Agreement, once executed by a party, may be delivered to the other party
hereto by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement. This Agreement may also
be
executed by electronic signature of such Person.
(i) Each
party shall do and perform, or cause to be done and performed, all such further
acts and things, and shall execute and deliver all such other agreements,
certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.
(j) All
consents and other determinations required to be made by the Holder pursuant
to
this Agreement shall be made, unless otherwise specified in this Agreement,
by
the Holder.
(k) The
language used in this Agreement will be deemed to be the language chosen by
the
parties to express their mutual intent and no rules of strict construction
will
be applied against any party.
(l) This
Agreement is intended for the benefit of, and shall be binding upon, the parties
hereto and their respective successors and permitted assigns, and is not for
the
benefit of, nor may any provision hereof be enforced by, any other
Person.
13
(m) The
obligations of each Holder hereunder are several and not joint with the
obligations of any other Holder, and no provision of this Agreement is intended
to confer any obligations on a Holder vis-à-vis any other Holder. Nothing
contained herein, and no action taken by any Holder pursuant hereto, shall
be
deemed to constitute the Holder as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Holder
are
in any way acting in concert or as a group with respect to such obligations
or
the transactions contemplated herein.
[signature
pages follow immediately]
14
IN
WITNESS WHEREOF,
the
parties have executed this Registration Rights Agreement as of the date first
written above.
|
COMPANY:
|
||
|
Green
China Resources, Inc.
|
||
|
By:
|
||
|
Xxxxx
Xx Xxxx,
|
||
|
Director
|
||
|
HOLDER:
|
||
|
|
||
|
By:
|
||
|
Name:
|
||
|
Title:
|
||
15
SCHEDULE
A
List
of Holders
|
Chardan
China Investments, LLC
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Ancora
Greater China Fund, LP
|
|
____________________
|
|
____________________
|
|
____________________
|
|
GB
Global Private Balanced Fund I
|
|
____________________
|
|
____________________
|
|
____________________
|
|
China
Private Equity Partners Co., Limited
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Xxxx
Xxxxxxxx Family Trust
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Xxxx
Xxxxxxxx
|
|
____________________
|
|
____________________
|
|
____________________
|
|
MidSouth
Investor Fund LP
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Renaissance
US Growth and Income Trust, PLC
|
|
____________________
|
|
____________________
|
|
____________________
|
16
|
Premier
Xxxx US Emerging Growth Fund Limited
|
|
____________________
|
|
____________________
|
|
____________________
|
|
US
Special Opportunities Trust PLC
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Egatniv,
LLC
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Orion
KF Partners
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Xxxxxx
Xxxxx
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Liping
He
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Xxxxxxx
He
|
|
____________________
|
|
____________________
|
|
Kelell
Inc.
|
|
____________________
|
|
____________________
|
|
____________________
|
|
Coway
Asia Pacific Limited
|
|
____________________
|
|
____________________
|
|
____________________
|
17
|
____________________
|
|
____________________
|
|
____________________
|
|
____________________
|
18
