Exhibit 10.3
EXHIBIT B
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (this "Agreement") is made
and entered into as of May __, 2008, by and among China Pharma Holdings, Inc., a
Delaware corporation (the "Company"), and the investors signatory hereto (each
an "Investor" and collectively, the "Investors").
This Agreement is made in connection with the Securities
Purchase Agreement, dated as of the date hereof among the Company and the
Investors (the "Purchase Agreement").
The Company and the Investors hereby agree as follows:
1. Definitions. Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement will have the respective meanings given such
terms in the Purchase Agreement. As used in this Agreement, the following terms
have the respective meanings set forth in this Section 1:
"Advice" has the meaning set forth in Section 6(d).
"Commission Comments" means written comments pertaining solely
to Rule 415 which are received by the Company from the Commission to a filed
Registration Statement, a copy of which shall have been provided by the Company
to the Holders, which either (i) requires the Company to limit the number of
Registrable Securities which may be included therein to a number which is less
than the number sought to be included thereon as filed with the Commission or
(ii) requires the Company to either exclude Registrable Securities held by
specified Holders or deem such Holders to be underwriters with respect to
Registrable Securities they seek to include in such Registration Statement.
"Cut Back Shares" has the meaning set forth in Section 2(b).
"Effective Date" means, as to a Registration Statement, the
date on which such Registration Statement is first declared effective by the
Commission.
"Effectiveness Date" means (a) with respect to the initial
Registration Statement required to be filed pursuant to Section 2(a), the
earlier of: (a)(i) the 90th day following the Closing Date; provided, that, if
the Commission reviews and has written comments to the filed Registration
Statement that would require the filing of a pre-effective amendment thereto
with the Commission, then the Effectiveness Date under this clause (a)(i) shall
be the 120th day following the Closing Date, and (ii) the fifth Trading Day
following the date on which the Company is notified by the Commission that the
initial Registration Statement will not be reviewed or is no longer subject to
further review and comments; (b) with respect to any additional Registration
Statements required to be filed pursuant to Section 2(a), the earlier of: (b)
(i) the 90th day following the applicable Filing Date for such additional
Registration Statement(s); provided, that, if the Commission reviews and has
written comments to such filed Registration Statement that would require the
filing of a pre-effective amendment thereto with the Commission, then the
Effectiveness Date under this clause (b)(i) shall be the 120th day following the
applicable Filing Date for such additional Registration Statement(s), and (ii)
the fifth Trading Day following the date on which the Company is notified by the
Commission that such additional Registration Statement(s) will not be reviewed
or is no longer subject to further review; (c) with respect to any additional
Registration Statements required to be filed solely due to SEC Restrictions, the
earlier of: (c)(i) the 90th day following the applicable Restriction Termination
Date; provided, that, if the Commission reviews and has written comments to such
filed Registration Statement that would require the filing of a pre-effective
amendment thereto with the Commission, then the Effectiveness Date under this
clause (c)(i) shall be the 120th day following the applicable Restriction
Termination Date and (ii) the fifth Trading Day following the date on which the
Company is notified by the Commission that such Registration Statement will not
be reviewed or is no longer subject to further review and comments; and (d) with
respect to a Registration Statement required to be filed under Section 2(c), the
earlier of: (d)(i) the 90th day following the date on which the Company becomes
eligible to utilize Form S-3 to register the resale of Common Stock; provided,
that, if the Commission reviews and has written comments to such filed
Registration Statement that would require the filing of a pre-effective
amendment thereto with the Commission, then the Effectiveness Date under this
clause (d)(i) shall be the 120th day following the date on which the Company
becomes eligible to utilize Form S-3 to register the resale of Common Stock, and
(ii) the fifth Trading Day following the date on which the Company is notified
by the Commission that the initial Registration Statement will not be reviewed
or is no longer subject to further review and comments.
"Effectiveness Period" means, as to any Registration Statement
required to be filed pursuant to this Agreement, the period commencing on the
Effective Date of such Registration Statement and ending on the earliest to
occur of (a) the second anniversary of such Effective Date, (b) such time as all
of the Registrable Securities covered by such Registration Statement have been
publicly sold by the Holders of the Registrable Securities included therein, or
(c) such time as all of the Registrable Securities covered by such Registration
Statement may be sold by the Holders without volume restrictions pursuant to
Rule 144, in each case 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 Holders.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Filing Date" means (a) with respect to the initial
Registration Statement required to be filed pursuant to Section 2(a), the 45th
day following the Closing Date; (b) with respect to any additional Registration
Statements required to be filed pursuant to Section 2(a), the 15th day following
the Effective Date for the last Registration Statement filed pursuant to this
Agreement under Section 2(a); (c) with respect to any additional Registration
Statements required to be filed due to SEC Restrictions, the 15th day following
the applicable Restriction Termination Date; and (d) with respect to a
Registration Statement required to be filed under Section 2(c), the 30th day
following the date on which the Company becomes eligible to utilize Form S-3 to
register the resale of Common Stock.
"Holder" or "Holders" means the holder or holders, as the case
may be, from time to time of Registrable Securities.
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"Indemnified Party" has the meaning set forth in Section 5(c).
"Indemnifying Party" has the meaning set forth in Section
5(c).
"Losses" has the meaning set forth in Section 5(a).
"New York Courts" means the state and federal courts sitting
in the City of New York, Borough of Manhattan.
"Proceeding" means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.
"Prospectus" means the prospectus included in a 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 a 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.
"Registrable Securities" means: (i) the Shares, (ii) the
Warrant Shares, (iii) any shares of Common Stock issuable upon exercise of
warrants issued to any placement agent as compensation in connection with the
financing that is the subject of the Purchase Agreement ("Placement Agent
Warrant Shares") and (iv) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event, or any
price adjustment as a result of such stock splits, reverse stock splits or
similar events with respect to any of the securities referenced in (i), (ii), or
(iii) above. Notwithstanding the foregoing, a security shall cease to be a
Registrable Security for purposes of this Agreement from and after such time as
the Holder of such security may resell such security without volume restrictions
under 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 Holders.
"Registration Statement" means the initial registration
statement required to be filed in accordance with Section 2(a) and any
additional registration statements required to be filed under this Agreement,
including in each case the Prospectus, amendments and supplements to such
registration statements or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference or
deemed to be incorporated by reference therein.
"Restriction Termination Date" has the meaning set forth in
Section 2(b).
"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 having
substantially the same effect as such Rule.
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"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.
"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.
"SEC Restrictions" has the meaning set forth in Section 2(b).
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock issued or issuable
to the Investors pursuant to the Purchase Agreement.
"Warrants" means the Common Stock purchase warrants issuable
to the Investors at the Closing pursuant to the Purchase Agreement.
"Warrant Shares" means the shares of Common Stock issuable
upon exercise of the Warrants.
2. Registration.
(a) On or prior to its applicable Filing Date, the Company shall
prepare and file with the Commission a Registration Statement covering the
resale of all Registrable Securities not already covered by an existing and
effective Registration Statement for an offering to be made on a continuous
basis pursuant to Rule 415. Each Registration Statement required to be filed
under this Agreement shall be filed on Form S-1 (or if the Company is not then
eligible to utilize such form of registration, it shall utilize such other
available form appropriate for such purpose, including, without limitation, Form
S-3 in accordance with Section 2(c)) and contain (except if otherwise required
pursuant to written comments received from the Commission upon a review of such
Registration Statement, other than as to the characterization of any Holder as
an underwriter, which shall not occur without such Holder's written consent) the
"Plan of Distribution" attached hereto as Annex A. The Company shall cause each
Registration Statement required to be filed under this Agreement to be declared
effective under the Securities Act as soon as possible but, in any event, no
later than its Effectiveness Date, and shall use its reasonable best efforts to
keep each such Registration Statement continuously effective during its entire
Effectiveness Period. By 5:00 p.m. (New York City time) on the Business Day
immediately following the Effective Date of each 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). If for any reason other than due solely to SEC
Restrictions, a Registration Statement is effective but not all outstanding
Registrable Securities are registered for resale pursuant thereto, then the
Company shall prepare and file by the applicable Filing Date an additional
Registration Statement to register the resale of all such unregistered
Registrable Securities for an offering to be made on a continuous basis pursuant
to Rule 415.
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(b) Notwithstanding anything to the contrary contained in this Section
2, if the Company receives Commission Comments, and following discussions with
and responses to the Commission in which the Company uses its reasonable best
efforts and time to cause as many Registrable Securities for as many Holders as
possible to be included in the Registration Statement filed pursuant to Section
2(a) without characterizing any Holder as an underwriter (and in such regard
uses its reasonable best efforts to cause the Commission to permit the affected
Holders or their respective counsel to participate in Commission conversations
on such issue together with Company Counsel, and timely conveys relevant
information concerning such issue with the affected Holders or their respective
counsel), the Company is unable to cause the inclusion of all Registrable
Securities, then the Company may, following not less than three (3) Trading Days
prior written notice to the Holders (i) remove from the Registration Statement
such Registrable Securities (the "Cut Back Shares") and/or (ii) agree to such
restrictions and limitations on the registration and resale of the Registrable
Securities, in each case as the Commission may require in order for the
Commission to allow such Registration Statement to become effective; provided,
that in no event may the Company name any Holder as an underwriter without such
Holder's prior written consent (collectively, the "SEC Restrictions"). Unless
the SEC Restrictions otherwise require, any cut-back imposed pursuant to this
Section 2(b) shall be allocated among the Registrable Securities of the Holders
on a pro rata basis. No liquidated damages under Section 2(d) shall accrue on or
as to any Cut Back Shares, and the required Effectiveness Date for such
Registration Statement will be tolled, until such time as the Company is able to
effect the registration of the Cut Back Shares in accordance with any SEC
Restrictions (such date, the "Restriction Termination Date"). From and after the
Restriction Termination Date, all provisions of this Section 2 (including,
without limitation, the liquidated damages provisions, subject to tolling as
provided above) shall again be applicable to the Cut Back Shares (which, for
avoidance of doubt, retain their character as "Registrable Securities") so that
the Company will be required to file with and cause to be declared effective by
the Commission such additional Registration Statements in the time frames set
forth herein as necessary to ultimately cause to be covered by effective
Registration Statements all Registrable Securities (if such Registrable
Securities cannot at such time be resold by the Holders thereof without volume
limitations pursuant to Rule 144).
(c) Promptly following any date on which the Company becomes eligible
to use a registration statement on Form S-3 to register Registrable Securities
for resale, the Company shall file a Registration Statement on Form S-3 covering
all Registrable Securities (or a post-effective amendment on Form S-3 to the
then effective Registration Statement) and shall cause such Registration
Statement to be filed by the Filing Date for such Registration Statement and
declared effective under the Securities Act as soon as possible thereafter, but
in any event prior to the Effectiveness Date therefor. Such Registration
Statement shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration
Statement, other than as to the characterization of any Holder as an
underwriter, which shall not occur without such Holder's consent) the "Plan of
Distribution" attached hereto as Annex A. The Company shall use its reasonable
best efforts to keep such Registration Statement continuously effective under
the Securities Act during the entire Effectiveness Period. By 5:00 p.m. (New
York City time) on the Business Day immediately following the Effective Date of
such Registration Statement, the Company shall file with the Commission in
accordance with Rule 424 under the Securities Act the final prospectus to be
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used in connection with sales pursuant to such Registration Statement (whether
or not such filing is technically required under such Rule).
(d) If: (i) a Registration Statement is not filed on or prior to its
Filing Date covering the Registrable Securities required under this Agreement to
be included therein (if the Company files a Registration Statement without
affording the Holders the opportunity to review and comment on the same as
required by Section 3(a) hereof, the Company shall not be deemed to have
satisfied this clause [(i)), or (ii) a Registration Statement is not declared
effective by the Commission on or prior to its required Effectiveness Date or if
by the Business Day immediately following the Effective Date, the Company shall
not have filed a "final" prospectus for the Registration Statement with the
Commission under Rule 424(b) in accordance with the terms hereof (whether or not
such a prospectus is technically required by such Rule), or (iii) after its
Effective Date, without regard for the reason thereunder or efforts therefor,
such Registration Statement ceases for any reason to be effective and available
to the Holders as to all Registrable Securities to which it is required to cover
at any time prior to the expiration of its Effectiveness Period for more than an
aggregate of 30 Trading Days (which need not be consecutive) (any such failure
or breach being referred to as an "Event," and for purposes of clauses (i) or
(ii) the date on which such Event occurs, or for purposes of clause (iii) the
date which such 30 Trading Day-period is exceeded,] being referred to as "Event
Date"), then in addition to any other rights the Holders may have hereunder or
under applicable law: on each such Event Date and on each monthly anniversary of
each such Event Date (if the applicable Event shall not have been cured by such
date) until the applicable Event is cured, the Company shall pay to each Holder
an amount in cash, as partial liquidated damages and not as a penalty, equal to
1.0% of the aggregate Investment Amount paid by such Holder for Shares pursuant
to the Purchase Agreement. The parties agree that (1) the Company will not be
liable for liquidated damages under this Agreement with respect to any (i)
Warrants, (ii) Warrant Shares, (iii) warrants issued to any placement agent as
compensation in connection with the financing that is the subject of the
Purchase Agreement, (iv) Placement Agent Warrant Shares or (v) Shares to the
extent such securities have ceased to be Registrable Securities for purposes of
this Agreement because the Holder of such security may resell such security
without volume restrictions under 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 Holders), or
otherwise and (2) in no event will the Company be liable for liquidated damages
under this Agreement in excess of 1.0% of the aggregate Investment Amount of the
Holders in any 30-day period and the maximum aggregate liquidated damages
payable to a Holder under this Agreement shall be ten percent (10%) of the
aggregate Investment Amount paid by such Holder pursuant to the Purchase
Agreement (from and after the 180th day following the closing date no additional
monthly liquidated damages under clause (ii) of this Section 2 (d)(ii) shall be
added to the damages paid or payable to a Holder under clause (ii) of the
Section 2 (d) ). The partial liquidated damages pursuant to the terms hereof
shall apply on a daily pro-rata basis for any portion of a month prior to the
cure of an Event (except in the case of the first Event Date), and shall cease
to accrue (unless earlier cured) upon the expiration of the Effectiveness
Period.
(e) Each Holder agrees to furnish to the Company a completed
Questionnaire in the form attached to this Agreement as Annex B (a "Selling
Holder Questionnaire"). The Company shall not be required to include the
Registrable Securities of a Holder in a Registration Statement and shall not be
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required to pay any liquidated or other damages under Section 2(d) to any Holder
who fails to furnish to the Company a fully completed Selling Holder
Questionnaire at least two Trading Days prior to the Filing Date (subject to the
requirements set forth in Section 3(a)).
3. Registration Procedures.
In connection with the Company's registration obligations hereunder, the
Company shall:
(a) Not less than four Trading Days prior to the filing of a
Registration Statement or any related Prospectus or any amendment or supplement
thereto, the Company shall furnish to each Holder copies of the "Selling
Stockholders" section of such document, the "Plan of Distribution" and any risk
factor contained in such document that addresses specifically this transaction
or the Selling Stockholders, as proposed to be filed, which documents will be
subject to the review of such Holder. Any Holder must provide their comments, if
any, to the Company at least one Trading day prior to the filing of such
registration Statement or any related Prospectus or any amendment or supplement
thereto. The Company shall not file a Registration Statement, any Prospectus or
any amendments or supplements thereto in which the "Selling Stockholder" section
thereof differs from the disclosure received from a Holder in its Selling Holder
Questionnaire (as amended or supplemented). The Company shall not file a
Registration Statement, any Prospectus or any amendments or supplements thereto
in which it (i) characterizes any Holder as an underwriter, (ii) excludes a
particular Holder due to such Holder refusing to be named as an underwriter, or
(iii) reduces the number of Registrable Securities being registered on behalf of
a Holder except pursuant to, in the case of subsection (iii), the Commission
Comments, without, in each case, such Holder's express written authorization.
(b) (i) Prepare and file with the Commission such amendments,
including post-effective amendments, to each Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement continuously effective as to the applicable Registrable
Securities for its Effectiveness Period and prepare and file with the Commission
such additional Registration Statements in order to register for resale under
the Securities Act all of the Registrable Securities; (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus supplement,
and as so supplemented or amended to be filed pursuant to Rule 424; (iii)
respond as promptly as reasonably possible to any comments received from the
Commission with respect to each Registration Statement or any amendment thereto
and, as promptly as reasonably possible provide the Holders true and complete
copies of all correspondence from and to the Commission relating to such
Registration Statement that would not result in the disclosure to the Holders of
material and non-public information concerning the Company; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with respect to the Registration Statement(s) and the disposition of all
Registrable Securities covered by each Registration Statement.
(c) Notify the Holders as promptly as reasonably possible (and, in the
case of (i)(A) below, not less than three Trading Days prior to such filing and,
in the case of (v) below, not less than three Trading Days prior to the
financial statements in any Registration Statement becoming ineligible for
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inclusion therein) and (if requested by any such Person) confirm such notice in
writing no later than one Trading Day following the day (i)(A) when a Prospectus
or any Prospectus supplement or post-effective amendment to a Registration
Statement is proposed to be filed; (B) when the Commission notifies the Company
whether there will be a "review" of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company shall
provide true and complete copies thereof and all written responses thereto to
each of the Holders that pertain to the Holders as a Selling Stockholder or to
the Plan of Distribution, but not information which the Company believes would
constitute material and non-public information); and (C) with respect to each
Registration Statement or any post-effective amendment, when the same has become
effective; (ii) of any request by the Commission or any other Federal or state
governmental authority for amendments or supplements to a Registration Statement
or Prospectus or for additional information; (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of a Registration
Statement covering any or all of the Registrable Securities or the initiation of
any Proceedings for that purpose; (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in a Registration Statement ineligible for
inclusion therein or any statement made in such Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case of
such Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading.
(d) Use its reasonable best efforts to avoid the issuance of, or, if
issued, obtain the withdrawal of (i) any order suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.
(e) Furnish to each Holder, without charge, at least one conformed
copy of each Registration Statement and each amendment thereto and all exhibits
to the extent requested by such Person (including those previously furnished)
promptly after the filing of such documents with the Commission.
(f) Promptly deliver to each Holder, without charge, as many copies of
each Prospectus or Prospectuses (including each form of prospectus) and each
amendment or supplement thereto as such Persons may reasonably request. The
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the selling Holders in connection with the
offering and sale of the Registrable Securities covered by such Prospectus and
any amendment or supplement thereto.
(g) Prior to any public offering of Registrable Securities, register
or qualify such Registrable Securities for offer and sale under the securities
or Blue Sky laws of all jurisdictions within the United States as any Holder may
request, to keep each such registration or qualification (or exemption
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therefrom) effective during the Effectiveness Period and to do any and all other
acts or things necessary or advisable to enable the disposition in such
jurisdictions of the Registrable Securities covered by the Registration
Statement(s).
(h) Cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be delivered
to a transferee pursuant to the Registration Statement(s), which certificates
shall be free, to the extent permitted by the Purchase Agreement, of all
restrictive legends, and to enable such Registrable Securities to be in such
denominations and registered in such names as any such Holders may request.
(i) Upon the occurrence of any event contemplated by Section 3(c)(v),
as promptly as reasonably possible, prepare a supplement or amendment, including
a post-effective amendment, to the affected Registration Statements or a
supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, no Registration Statement nor any Prospectus will
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
4. Registration Expenses. All fees and expenses incident to the performance
of or compliance with this Agreement by the Company shall be borne by the
Company whether or not any Registrable Securities are sold pursuant to a
Registration Statement. The fees and expenses referred to in the foregoing
sentence shall include, without limitation, (i) all registration and filing fees
(including, without limitation, fees and expenses (A) with respect to filings
required to be made with any Trading Market on which the Common Stock is then
listed for trading, and (B) in compliance with applicable state securities or
Blue Sky laws), (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities and of printing prospectuses
if the printing of prospectuses is reasonably requested by the holders of a
majority of the Registrable Securities included in the Registration Statement),
(iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of
counsel for the Company, (v) Securities Act liability insurance, if the Company
so desires such insurance, and (vi) fees and expenses of all other Persons
retained by the Company in connection with the consummation of the transactions
contemplated by this Agreement. In addition, the Company shall be responsible
for all of its internal expenses incurred in connection with the consummation of
the transactions contemplated by this Agreement (including, without limitation,
all salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
5. Indemnification.
(a) Indemnification by the Company. The Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, agents, investment advisors, partners, members and
employees of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
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and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable costs of preparation and reasonable attorneys' fees) and
expenses (collectively, "Losses"), as incurred, arising out of or relating to
any untrue or alleged untrue statement of a material fact contained in any
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or form of prospectus or supplement thereto, in light of the
circumstances under which they were made) not misleading, except to the extent,
but only to the extent, that (1) such untrue statements or omissions are based
solely upon information regarding such Holder furnished in writing to the
Company by such Holder expressly for use therein, or to the extent that such
information relates to such Holder or such Holder's proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
(it being understood that the Holder has approved Annex A hereto for this
purpose) or (2) in the case of an occurrence of an event of the type specified
in Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
an Advice or an amended or supplemented Prospectus, but only if and to the
extent that following the receipt of the Advice or the amended or supplemented
Prospectus the misstatement or omission giving rise to such Loss would have been
corrected. The Company shall notify the Holders promptly of the institution,
threat or assertion of any Proceeding of which the Company is aware in
connection with the transactions contemplated by this Agreement.
(b) Indemnification by Holders. Each Holder shall, severally and not
jointly, indemnify and hold harmless the Company, its directors, officers,
agents and employees, each Person who controls the Company (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling Persons, to the
fullest extent permitted by applicable law, from and against all Losses, as
incurred, arising solely out of or based solely upon: (x) such Holder's failure
to comply with the prospectus delivery requirements of the Securities Act or (y)
any untrue statement of a material fact contained in any Registration Statement,
any Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based solely upon information regarding such
Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to such Holder or such
Holder's proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use in
the Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or such form of Prospectus or
in any amendment or supplement thereto or (2) in the case of an occurrence of an
event of the type specified in Section 3(c)(ii)-(v), the use by such Holder of
an outdated or defective Prospectus after the Company has notified such Holder
in writing that the Prospectus is outdated or defective and prior to the receipt
by such Holder of an Advice or an amended or supplemented Prospectus, but only
if and to the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
10
would have been corrected. In no event shall the liability of any selling Holder
hereunder be greater in amount than the dollar amount of the net proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall be
brought or asserted against any Person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the Person
from whom indemnity is sought (the "Indemnifying Party") in writing, and the
Indemnifying Party shall assume the defense thereof, including the employment of
counsel reasonably satisfactory to the Indemnified Party and the payment of all
fees and expenses incurred in connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have proximately and materially
adversely prejudiced the Indemnifying Party.
An Indemnified Party shall have the right to employ separate counsel
in any such Proceeding and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.
All fees and expenses of the Indemnified Party (including reasonable
fees and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten Trading
Days of written notice thereof to the Indemnifying Party (regardless of whether
it is ultimately determined that an Indemnified Party is not entitled to
indemnification hereunder; provided, that the Indemnifying Party may require
such Indemnified Party to undertake to reimburse all such fees and expenses to
the extent it is finally judicially determined that such Indemnified Party is
not entitled to indemnification hereunder).
(d) Contribution. If a claim for indemnification under Section 5(a) or
5(b) is unavailable to an Indemnified Party (by reason of public policy or
otherwise), then each Indemnifying Party, in lieu of indemnifying such
11
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Losses, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission. The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable fees or expenses incurred by such party in connection with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the indemnification provided for in this Section was available to
such party in accordance with its terms.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
The indemnity and contribution agreements contained in this Section
are in addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.
6. Miscellaneous.
(a) Remedies. In the event of a breach by the Company or by a Holder,
of any of their obligations under this Agreement, each Holder or the Company, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation for
any losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.
(b) No Piggyback on Registrations. Neither the Company nor any of its
security holders (other than the Holders in such capacity pursuant hereto) may
include securities of the Company in a Registration Statement other than the
Registrable Securities, and the Company shall not during the Effectiveness
Period enter into any agreement providing any such right to any of its security
holders.
12
(c) Compliance. Each Holder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to the
Registration Statement.
(d) Discontinued Disposition. Each Holder agrees by its acquisition of
such Registrable Securities that, upon receipt of a notice from the Company of
the occurrence of any event of the kind described in Section 3(c), such Holder
will forthwith discontinue disposition of such Registrable Securities under the
Registration Statement until such Holder's receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus or Registration Statement. The
Company may provide appropriate stop orders to enforce the provisions of this
paragraph.
(e) Piggy-Back Registrations. If at any time during the Effectiveness
Period there is not an effective Registration Statement covering all of the
Registrable Securities and the Company shall determine to prepare and file with
the Commission a registration statement relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice of such
determination and, if within fifteen calendar days after receipt of such notice,
any such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
holder requests to be registered, subject to customary underwriter cutbacks
applicable to all holders of registration rights.
(f) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this Section 6(f), may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the same shall be in writing and signed by the Company
and the Holders of no less than a majority in interest of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of certain Holders and that does not directly or
indirectly affect the rights of other Holders may be given by Holders of at
least a majority of the Registrable Securities to which such waiver or consent
relates; provided, further that no amendment or waiver to any provision of this
Agreement relating to naming any Holder or requiring the naming of any Holder as
an underwriter may be effected in any manner without such Holder's prior written
consent. Section 2(a) may not be amended or waived except by written consent of
each Holder affected by such amendment or waiver.
(g) Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of (a) the date of transmission, if
such notice or communication is delivered via facsimile (provided the sender
13
receives a machine-generated confirmation of successful transmission) at the
facsimile number specified in this Section prior to 6:30 p.m. (New York City
time) on a Trading Day, (b) the next Trading Day after the date of transmission,
if such notice or communication is delivered via facsimile at the facsimile
number specified in this Section on a day that is not a Trading Day or later
than 6:30 p.m. (New York City time) on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service, or (d) upon actual receipt by the party to whom such notice is
required to be given. The address for such notices and communications shall be
as follows:
If to the Company: China Pharma Holdings, Inc.
2nd Floor, Xx. 00
Xxxxxx Xxxx
Xxxxxx, Xxxxxx Xxxxxxxx
Xxxxxx'x Xxxxxxxx of China
Attn: Chief Executive Officer
Facsimile: x00 000-00000000
With a copy to: King & Wood LLP
40th Floor, Office Tower A
Beijing Fortune Plaza 7
Dongsanhuan Zhonglu
Xxxxxxxx Xxxxxxxx
Xxxxxxx 000000, Xxxxxx'x Xxxxxxxx of China
Facsimile: 8610-58785588
Attn.: Xxxxxxx Law
If to a Investor: To the address set forth under such Investor's
name on the signature pages hereto.
If to any other Person who is then the registered Holder:
To the address of such Holder as it appears
in the stock transfer books of the Company
or such other address as may be designated in writing hereafter, in the same
manner, by such Person.
(h) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties and shall inure to the benefit of each Holder. The Company may not
assign its rights or obligations hereunder without the prior written consent of
each Holder. Each Holder may assign their respective rights hereunder in the
manner and to the Persons as permitted under the Purchase Agreement.
(i) Execution and Counterparts. This Agreement may be executed in any
number of counterparts, each of which when so executed shall be deemed to be an
original and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid binding obligation of the
14
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature were the original
thereof.
(j) Governing Law. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all Proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by this Agreement (whether brought
against a party hereto or its respective Affiliates, employees or agents) will
be commenced in the New York Courts. Each party hereto hereby irrevocably
submits to the exclusive jurisdiction of the New York Courts 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 Proceeding, any claim that it is not
personally subject to the jurisdiction of any New York Court, or that such
Proceeding has been commenced in an improper or inconvenient forum. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such Proceeding by mailing a copy thereof via
registered or certified mail or overnight delivery (with evidence of delivery)
to such party at the address in effect for 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. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. If either
party shall commence a Proceeding to enforce any provisions of this Agreement,
then the prevailing party in such Proceeding shall be reimbursed by the other
party for its attorney's fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(k) Cumulative Remedies. The remedies provided herein are cumulative
and not exclusive of any remedies provided by law.
(l) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their reasonable efforts to find and employ an alternative
means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.
(m) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(n) Independent Nature of Investors' Obligations and Rights. The
obligations of each Investor under this Agreement are several and not joint with
the obligations of each other Investor, and no Investor shall be responsible in
any way for the performance of the obligations of any other Investor under this
Agreement. Nothing contained herein or in any Transaction Document, and no
15
action taken by any Investor pursuant thereto, shall be deemed to constitute the
Investors as a partnership, an association, a joint venture or any other kind of
entity, or create a presumption that the Investors are in any way acting in
concert or as a group with respect to such obligations or the transactions
contemplated by this Agreement or any other Transaction Document. Each Investor
acknowledges that no other Investor will be acting as agent of such Investor in
enforcing its rights under this Agreement. Each Investor shall be entitled to
independently protect and enforce its rights, including without limitation the
rights arising out of this Agreement, and it shall not be necessary for any
other Investor to be joined as an additional party in any Proceeding for such
purpose. The Company acknowledges that each of the Investors has been provided
with the same Registration Rights Agreement for the purpose of closing a
transaction with multiple Investors and not because it was required or requested
to do so by any Investor.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES TO FOLLOW]
16
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
CHINA PHARMA HOLDINGS, INC.
By:_________________________________
Name:
Title:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGES OF INVESTORS TO FOLLOW]
17
IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first written above.
NAME OF INVESTING ENTITY
By:
------------------------------------------------
Name:
Title:
ADDRESS FOR NOTICE
c/o:
-----------------------------------------------
Street:
--------------------------------------------
City/State/Zip:
------------------------------------
Attention:
-----------------------------------------
Tel:
-------------------------------------------
Fax:
-------------------------------------------
Email:
-------------------------------------------
18
Annex A
Plan of Distribution
The Selling Stockholders and any of their pledgees, donees,
transferees, assignees and successors-in-interest may, from time to time, sell
any or all of their shares of Common Stock on any stock exchange, market or
trading facility on which the shares are traded or quoted or in private
transactions. These sales may be at fixed or negotiated prices. The Selling
Stockholders may use any one or more of the following methods when selling
shares:
o ordinary brokerage transactions and transactions in which the broker-dealer
solicits Investors;
o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o to cover short sales made after the date that this Registration Statement
is declared effective by the Commission;
o broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the Selling Stockholders (or, if any broker-dealer
acts as agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The Selling Stockholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The Selling Stockholders may from time to time pledge or grant a
security interest in some or all of the Securities owned by them and, if they
default in the performance of their secured obligations, the pledgees or secured
parties may offer and sell shares of Common Stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or
other applicable provision of the Securities Act of 1933 amending the list of
selling stockholders to include the pledgee, transferee or other successors in
interest as selling stockholders under this prospectus.
19
Upon the Company being notified in writing by a Selling Stockholder
that any material arrangement has been entered into with a broker-dealer for the
sale of Common Stock through a block trade, special offering, exchange
distribution or secondary distribution or a purchase by a broker or dealer, a
supplement to this prospectus will be filed, if required, pursuant to Rule
424(b) under the Securities Act, disclosing (i) the name of each such Selling
Stockholder and of the participating broker-dealer(s), (ii) the number of shares
involved, (iii) the price at which such the shares of Common Stock were sold,
(iv)the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable, (v) that such broker-dealer(s) did not
conduct any investigation to verify the information set out or incorporated by
reference in this prospectus, and (vi) other facts material to the transaction.
In addition, upon the Company being notified in writing by a Selling Stockholder
that a donee or pledgee intends to sell more than 500 shares of Common Stock, a
supplement to this prospectus will be filed if then required in accordance with
applicable securities law.
The Selling Stockholders also may transfer the shares of Common Stock
in other circumstances, in which case the transferees, pledgees or other
successors in interest will be the selling beneficial owners for purposes of
this prospectus.
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Discounts, concessions,
commissions and similar selling expenses, if any, that can be attributed to the
sale of Securities will be paid by the Selling Stockholder and/or the
purchasers. Each Selling Stockholder has represented and warranted to the
Company that it acquired the securities subject to this Registration Statement
in the ordinary course of such Selling Stockholder's business and, at the time
of its purchase of such securities such Selling Stockholder had no agreements or
understandings, directly or indirectly, with any person to distribute any such
securities.
The Company has advised each Selling Stockholder that it is the view of
the Commission that it may not use shares registered on this Registration
Statement to cover short sales of Common Stock made prior to the date on which
this Registration Statement shall have been declared effective by the
Commission. If a Selling Stockholder uses this prospectus for any sale of the
Common Stock, it will be subject to the prospectus delivery requirements of the
Securities Act. The Selling Stockholders will be responsible to comply with the
applicable provisions of the Securities Act and Exchange Act, and the rules and
regulations thereunder promulgated, including, without limitation, Regulation M,
as applicable to such Selling Stockholders in connection with resales of their
respective shares under this Registration Statement.
The Company is required to pay all fees and expenses incident to the
registration of the shares, but the Company will not receive any proceeds from
the sale of the Common Stock. The Company has agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
20
Annex B
CHINA PHARMA HOLDINGS, INC.
Selling Securityholder Notice and Questionnaire
The undersigned beneficial owner of common stock (the "Common Stock"), of China
Pharma Holdings, Inc., a Delaware corporation (the "Company"), understands that
the Company has filed or intends to file with the Securities and Exchange
Commission (the "Commission") a Registration Statement for the registration and
resale of the Registrable Securities, in accordance with the terms of the
Registration Rights Agreement, dated as of May __, 2008 (the "Registration
Rights Agreement"), among the Company and the Investors named therein. A copy of
the Registration Rights Agreement is available from the Company upon request at
the address set forth below. All capitalized terms used and not otherwise
defined herein shall have the meanings ascribed thereto in the Registration
Rights Agreement.
The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
QUESTIONNAIRE
1. Name.
(a) Full Legal Name of Selling Securityholder
--------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as (a)
above) through which Registrable Securities Listed in Item 3
below are held:
--------------------------------------------------------------
(c) Full Legal Name of Natural Control Person (which means a
natural person who directly or indirectly alone or with others
has power to vote or dispose of the securities covered by the
questionnaire):
--------------------------------------------------------------
2. Address for Notices to Selling Securityholder:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Telephone:
----------------------------------------------------------------------
21
Fax:
---------------------------------------------------------------------------
Contact Person:
----------------------------------------------------------------
3. Beneficial Ownership of Registrable Securities:
Type and Principal Amount of Registrable Securities
beneficially owned:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
4. Broker-Dealer Status:
(a) Are you a broker-dealer?
Yes |_| No |_|
Note: If yes, the Commission's staff has indicated that you should
be identified as an underwriter in the Registration Statement.
(b) Are you an affiliate of a broker-dealer?
Yes |_| No |_|
(c) If you are an affiliate of a broker-dealer, do you certify
that you bought the Registrable Securities in the ordinary
course of business, and at the time of the purchase of the
Registrable Securities to be resold, you had no agreements or
understandings, directly or indirectly, with any person to
distribute the Registrable Securities?
Yes |_| No |_|
Note: If no, the Commission's staff has indicated that you should be
identified as an underwriter in the Registration Statement.
5. Beneficial Ownership of Other Securities of the Company Owned by the Selling
Securityholder.
Except as set forth below in this Item 5, the undersigned is not the
beneficial or registered owner of any securities of the Company other
than the Registrable Securities listed above in Item 3.
Type and Amount of Other Securities beneficially owned by the
Selling Securityholder:
--------------------------------------------------------------
--------------------------------------------------------------
22
6. Relationships with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, officers, directors or principal equity holders (owners of
5% of more of the equity securities of the undersigned) has held any
position or office or has had any other material relationship with the
Company (or its predecessors or affiliates) during the past three
years.
State any exceptions here:
-----------------------------------------------------------------------
-----------------------------------------------------------------------
7. The Company has advised each Selling Stockholder that it is the view of the
Commission that it may not use shares registered on the Registration Statement
to cover short sales of Common Stock made prior to the date on which the
Registration Statement is declared effective by the Commission, in accordance
with 1997 Securities and Exchange Commission Manual of Publicly Available
Telephone Interpretations Section A.65. If a Selling Stockholder uses the
prospectus for any sale of the Common Stock, it will be subject to the
prospectus delivery requirements of the Securities Act. The Selling Stockholders
will be responsible to comply with the applicable provisions of the Securities
Act and Exchange Act, and the rules and regulations thereunder promulgated,
including, without limitation, Regulation M, as applicable to such Selling
Stockholders in connection with resales of their respective shares under the
Registration Statement.
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof and prior to the Effective Date for the Registration Statement.
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related prospectus. The
undersigned understands that such information will be relied upon by the Company
in connection with the preparation or amendment of the Registration Statement
and the related prospectus.
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
Dated: Beneficial Owner:
------------------- -------------------------------
By:
--------------------------------------------
Name:
Title:
23
PLEASE FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND
RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
King & Wood
40th Floor, Office Tower A
Beijing Fortune Plaza 7
Dongsanhuan Zhonglu
Xxxxxxxx Xxxxxxxx
Xxxxxxx 000000, Xxxxxx'x Xxxxxxxx of China
Facsimile: 8610-58785588
Attn.: Xxxxxxx Law
24
