REGISTRATION RIGHTS AGREEMENT
EXHIBIT
4.2
This
Registration Rights Agreement (this "Agreement")
is made
and entered into as of July 18, 2006, by and among GRC
Holdings, Inc.,
a Texas
corporation (the "Company"),
and
the investors signatory hereto (each a "Investor"
and
collectively, the "Investors").
This
Agreement is made pursuant to 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 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).
"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 Registration Statement required to be filed under
Section 2(a), the earlier of: (a)(i) the 180th
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 Registration Statement
will not be reviewed or is no longer subject to further review and
comments.
"Effectiveness
Period"
has the
meaning set forth in Section 2(a).
"Exchange
Act"
means
the Securities Exchange Act of 1934, as amended.
"Filing
Date"
means
(a) with respect to the Registration Statement required to be filed under
Section 2(a), the 45th
day
following the Closing Date.
"Holder"
or
"Holders"
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“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.
-1-
"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 in writing.
“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) the Escrow Shares, (iv) 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, and (v) any securities issued or issuable
upon any stock split, dividend or other distribution, recapitalization or
similar event, or any exercise price adjustment with respect to any of the
securities referenced in (i), (ii), (iii), or (iv) above; provided however,
that
once any such securities referred to in foregoing clauses (i), (ii), (iii),
(iv)
or (v) have been sold pursuant to the Registration Statement or are eligible
for
resale under Rule 144 of the Securities Act, they shall no longer constitute
Registrable Securities..
"Registration
Statement"
means
the registration statement required to be filed in accordance with Section
2(a)
including the Prospectus, amendments and supplements to such 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 therein.
"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.
"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.
"Securities
Act"
means
the Securities Act of 1933, as amended.
"Shares"
means
the shares of Common Stock sold to the Investors pursuant to the Purchase
Agreement.
“Warrants”
means
the
Common Stock purchase warrants issued or issuable to the Investors pursuant
to
the Purchase Agreement and to any placement agent identified in
-2-
Schedule
3.1(u)
to the
Purchase Agreement in accordance with the terms of the engagement or similar
agreements between the Company and any such agents.
"Warrant
Shares" means
the
shares of Common Stock issued or issuable upon exercise of the
Warrants.
2. Registration.
(a) On
or
prior to the Filing Date, the Company shall prepare and file with the Commission
a Registration Statement covering the resale of all Registrable Securities
for
an offering to be made on a continuous basis pursuant to Rule 415, on Form
S-1
(or on such other form appropriate for such purpose). Such Registration
Statement shall contain (except if otherwise required pursuant to written
comments received from the Commission upon a review of such Registration
Statement) the "Plan of Distribution" attached hereto as Annex A. The Company
shall cause such Registration Statement to be declared effective under the
Securities Act as soon as possible but, in any event, no later than the
Effectiveness Date, and shall use its reasonable best efforts to keep the
Registration Statement continuously effective under the Securities Act until
the
date which is the earliest of (i) three years after its Effective Date, and
(ii) such time as all of the Registrable Securities covered by such Registration
Statement have either been publicly sold by the Holders or may be sold by the
Holders pursuant to Rule 144(k) under the Securities Act (the "Effectiveness
Period").
By
5:00 p.m. (New York City time) on the Effective Date, 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).
(b) If:
(i) a Registration Statement is not filed on or prior to its Filing Date (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 second 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 Section 2(a), 2(b) or 2(c) herein, as the case may
be
(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 such Event Date and in the case of an Event arising under
either clause (i) or (ii) above, 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 or shares of Common Stock
of
the Company that have been registered under the Securities Act, 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
-3-
Purchase
Agreement;
provided,
however, that if any damages are payable pursuant to this Section 2(b) as a
result of the Registration Statement not being declared effective by the
Commission prior to the required Effectiveness Date, such liquidated damages
shall equal 0.75% (instead of 1.0%) of the aggregate Investment Amount paid
by
such Holder for Shares pursuant to the Purchase Agreement. The
parties agree that the Company will not be liable for liquidated damages under
this Section with respect to the Warrants or Warrant
Shares.
In no
event will the Company be liable for damages 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 Section 2(b) shall not exceed
ten percent (10%) of the aggregate Investment Amount paid by such Holder
pursuant to the Purchase Agreement. 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.
(c) 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 required to pay any liquidated
or
other damages under Section 2(b) 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, the
Company shall furnish to each Holder copies of such document which will be
subject to the review of such Holder. The Company shall not file a Registration
Statement to which a Holder reasonably objects in writing (including via
e-mail).
(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,
upon
request, 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 Statements
and the disposition of all Registrable Securities covered by each Registration
Statement.
-4-
(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 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, upon request, 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 the 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) Promptly
deliver to each Holder, without charge, one electronic copy 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.
(f) Prior
to
any resale of Registrable Securities by a Holder, use its reasonable best
efforts to register or qualify or cooperate with the selling Holders in
connection with the registration or qualification (or exemption from the
registration or qualification) of such Registrable Securities for the resale
by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing (including
via
-5-
e-mail),
to keep each registration or qualification (or exemption therefrom) effective
during the Effectiveness Period and to do any and all other acts or things
reasonably necessary to enable the disposition in such jurisdictions of the
Registrable Securities covered by each Registration Statement; provided,
that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file
a
general consent to service of process in any such jurisdiction. In connection
with the Company’s obligations under this Section 3(f), the Company shall
promptly following the Effectiveness Date, qualify for a “Manual’s Exemption”
allowing for secondary trading in the Company’s Common Stock once the Company
has a listing in Standard & Poor’s Rating Services, Xxxxx’x Investor
Service, or other similar nationally recognized securities manual.
(g) 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, 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.
(h) 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
the 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 the 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), (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.
-6-
(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 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
-7-
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 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
-8-
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 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.
-9-
(b) No
Piggyback on Registrations.
Except
as and to the extent specified in Schedule 3.1(v) to the Purchase Agreement,
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.
(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 or any portion of the Registrable Securities and the
Company shall file with the Commission a resale registration statement relating
to an offering for 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 Investor holding such
Registrable Securities which are then not covered by an effective Registration
Statement, written notice of such determination and, if within fifteen days
after receipt of such notice, any such Investor shall so request in writing,
the
Company shall include in such registration statement all or any part of such
Registrable Securities, 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.
-10-
(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 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:
Xx.
00
Xxxx Xxxxxx Xxxx
Xx’ian
City, Shandong Province
P.C.
271000, China
Attention:
Xxxxxxx Xx
With
a
copy to:
Loeb
& Loeb LLP
000
Xxxx
Xxxxxx
Xxx
Xxxx,
XX 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxxx X. Xxxxxxxx, Esq.
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 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.
-11-
(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
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
-12-
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]
-13-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
GRC
HOLDINGS, INC.
By:
/s/ Xxxxxxx Xx
Name:
Xxxxxxx Xx
Title:
CEO
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES OF INVESTORS TO FOLLOW]
-14-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
NAME
OF INVESTING ENTITY
Pinnacle
China Fund; LP
By:
/s/ Xxxxx X. Xxxx
Name:
Xxxxx X. Xxxx
Title:
General Partner
ADDRESS
FOR NOTICE
c/o:
Pinnacle China Fund, LP
Street:
0000 Xxxxxxx Xxxx Xxxx, Xxx 000
Xxxx/Xxxxx/Xxx:
Xxxxx, XX 00000
Attention:
Xxxxx X. Xxxx
Tel:
000-000-0000
Fax: 000-000-0000
Email:
xxxxx@xxxxxxxxxxxxxxxxx.xxx
-15-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
NAME
OF INVESTING ENTITY
Jayhawk
China Fund (Cayman) Ltd.
By:
/s/ Xxxxxxx Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
CFO of Investment Manager
ADDRESS
FOR NOTICE
c/o:
Jayhawk Capital Management, LLC
Street:
0000 Xxxxxxx Xx., Xxx. 000
Xxxx/Xxxxx/Xxx:
Xxxxxxx Xxxxxxx, XX 00000
Attention:
Tel:
Fax:
Email:
-16-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
NAME
OF INVESTING ENTITY
Xxxxxx
Bay Overseas Fund, Ltd.
By:
/s/ Xxxx Xxxx
Name:
Xxxx Xxxx
Title:
Principle and Portfolio Manager
ADDRESS
FOR NOTICE
c/o:
Xxxxxx Bay Capital Management LP
Street:
000 Xxxxxxxx, 00xx Xxxxx
Xxxx/Xxxxx/Xxx:
Xxx Xxxx, XX 00000
Attention:
Xxxx Xxxx
Tel:
000-000-0000
Fax: 000-000-0000
Email:
xxxxx@xxxxxxxxxxxxxxxx.xxx
-17-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
NAME
OF INVESTING ENTITY
Xxxxxx
Bay Fund
By:
/s/ Xxxx Xxxx
Name:
Xxxx Xxxx
Title:
Principle and Portfolio Manager
ADDRESS
FOR NOTICE
c/o:
Xxxxxx Bay Capital Management, LP
Street:
000 Xxxxxxxx, 00xx Xxxxx
Xxxx/Xxxxx/Xxx:
Xxx Xxxx, XX 00000
Attention: Xxxx
Xxxx
Tel:
000-000-0000
Fax: 000-000-0000
Email:
-18-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
NAME
OF INVESTING ENTITY
Capital
Ventures International
By:
/s/ Xxxxxx Xxxxxxxx
Name:
Xxxxxx Xxxxxxxx
Title:
Investment Manager
ADDRESS
FOR NOTICE
c/o:
Heights Capital Management
Street:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxx/Xxxxx/Xxx:
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx
Xxxxxxxx or Xxxxxx Hoe
Tel:
000-000-0000
Fax: 000-000-0000
Email:
xxxxxx.xxxxxxxx@xxx.xxx or xxxxxx.xxx@xxx.xxx
-19-
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 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:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits Investors;
|
|
·
|
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;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
to
cover short sales made after the date that this Registration Statement
is
declared effective by the Commission;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
·
|
a
combination of any such methods of sale;
and
|
|
·
|
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 Shares 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.
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, and (v) 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 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.
-21-
Annex
B
China
Biologic Products, Inc. (the “Company”)
SELLING
SHAREHOLDER QUESTIONNAIRE
The
following information is requested for use in connection with the preparation
of
a registration statement registering shares of our common stock, including
shares of our common stock underlying warrants, options and convertible notes
that we have sold or issued, for resale by you as a selling shareholder (the
“Shares”). The Shares, which you acquired in connection with the Company’s
reverse merger (the “Acquisition”) and in other financing transactions, will be
included in a Registration Statement on Form SB-2 (the “Registration Statement”)
filed under the Securities Act of 1933 (the “Act”).
Please
complete and sign one copy of this questionnaire, and return it to Xxxxxxx
Xxxxxxxxx, Esq., Loeb & Loeb LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
at your earliest opportunity.
Kindly
note that while some of the information requested herein may be deemed not
material and therefore not required to be disclosed in the Registration
Statement relating to the proposed public offering, you should provide all
the
information requested.
ITEM
1.
DEFINITIONS
Before
you complete this Questionnaire, please give consideration to the following
definitions of various terms used in this Questionnaire.
“Associate”,
as used throughout this questionnaire, means (a) any corporation or organization
(other than the Company or any of its subsidiaries) of which you are an officer,
director or partner or of which you are, directly or indirectly, the beneficial
owner of 5% or more of any class of equity securities, (b) any trust or other
estate in which you have a substantial beneficial interest or as to which you
serve as trustee or in a similar capacity, (c) your spouse, (d) any relative
of
your spouse or any relative of yours who has the same home as you or who is
a
director or officer of key executive of the Company or any of its subsidiaries,
(e) any partner, syndicate member or person with whom you have agreed to act
in
concert with respect to the acquisition, holding, voting or disposition of
shares of the Company's securities.
“Beneficially”,
when used in connection with the ownership of securities, means (a) any interest
in a security which entitled you to any of the rights or benefits of ownership
even though you may not be the owner of record or (b) securities owned by you
directly or indirectly, including those held by you for your own benefit
(regardless of how registered), and securities held by others for your benefit
(regardless of how registered), such as by custodians, brokers, nominees,
pledgees, etc., and including securities held by an estate or trust in which
you
have an interest as legatee or beneficiary, securities owned by a partnership
of
which you are a partner, securities held by a personal holding company of which
you are a shareholder, etc., and securities held in the name of your spouse,
minor children and any relative (sharing the same
-22-
home).
A
“beneficial owner” of a security includes any person who, directly or
indirectly, through any contract, arrangement, understanding, relationship
or
otherwise has or shares:
|
(1)
|
voting
power which includes the power to vote, or to direct the voting of,
such
security; and/or
|
|
(2)
|
investment
power which includes the power to dispose, or to direct the disposition,
of such security.
|
In
addition to being beneficial owner of securities over which you have, or share,
voting or investment power, you are deemed to be the beneficial owner of a
security if you have a right, within 60 days, to acquire beneficial ownership
of
(i.e., the right to obtain or share voting or investment power over) such
security. Examples of such rights would include the right to acquire: (i)
through the exercise of any option, warrant or similar right; (ii) through
conversion of any security; or (iii) pursuant to the power to revoke, or the
provision for automatic termination of, a trust, discretionary account or
options, convertible securities or power to revoke such a trust with the
“purpose or effect” or changing or influencing control underlying securities
upon such acquisition, without regard to the sixty day rule state
above.
“Control”
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a person, whether through the
ownership of voting securities, by contract or otherwise.
A
“Control Person” of a specified person is a person that directly, or indirectly
through one or more intermediaries, controls the person specified.
“Material”,
when used in this Questionnaire to qualify a requirement for the furnishing
of
information as to any subject, limits the information required to those matters
as to which an average prudent investor ought reasonable to be informed before
purchasing the common stock of the Company.
“Material
Relationship” has not been defined by the Securities and Exchange Commission.
However, the Commission has indicated that it will probably construe as a
“material relationship” any relationship which tends to prevent arms-length
bargaining in dealings with a company, whether arising from a close business
connection or family relationship, a relationship of control or otherwise.
It
seems prudent, therefore, to consider that you would have such a relationship,
for example, with any organization of which you are an officer, director,
trustee or partner or in which you own, directly or indirectly, 10% or more
of
the outstanding voting stock, or in which you have some other substantial
interest, and with any person or organization with whom you have, or with whom
any relative or spouse (or any other person or organization as to which you
have
any of the foregoing other relationships) has, a contractual
relationship.
-23-
The
National Association of Securities Dealers, Inc. (“NASD”) defines a “Member” as
being either any broker or dealer admitted to a membership in the NASD or any
officer or partner of such a member, or the executive representative of such
a
member or the substitute for such a representative.
The
NASD
defines a “Person Associated with a Member” as being every sole proprietor,
partner, officer, director or branch manager of any member, or any natural
person occupying a similar status or performing similar functions, or any
natural person engaged in the investment banking or securities business who
is
directly or indirectly controlling or controlled by such member (for example,
any employee), whether or not any such person is registered or exempt from
registration with the NASD.
The
NASD
defines an “Underwriter or a Related Person” with respect to a proposed offering
as being underwriters, underwriters' counsel, financial consultants and
advisors, finders, members of the selling or distribution group, and any and
all
other persons associated with or related to any of such persons.
ITEM
2.
Please complete the following:
If
you
need more space to respond to or clarify your response to a question, use the
“Additional Information” page at the end of this Questionnaire.
| 1. |
Print
name of shareholder
_____________________________________________
|
| 2. |
Print
address
_____________________________________________________________
|
_______________________________________________________________
_______________________________________________________________
|
3.
|
If
you plan to sell any shares in a state other than the state included
in
your address, please identify
below:
|
|
4.
|
List
all positions or offices that you or any of your directors, officers,
partners, shareholders or members have had since January 1, 2001
with the
Company or any of its affiliates:
|
-24-
|
5.
|
Describe
below any material relationship you or any of your directors, officers,
partners, shareholders or members have had with the Company or any
of its
officers or directors:
|
|
6.
|
State
below whether you or any of your Associates is or after January 1,
2001
was a member of the NASD, a controlling shareholder of a member,
a person
Associated or affiliated with a member or an Underwriter or a Related
Person with respect to the proposed offering. If you respond “yes”,
describe such relationship:
|
Yes
_____
No _____
(IF
THE
RESPONSE TO 6 WAS “NO”, DO NOT RESPOND TO PARTS 7-9)
|
7.
|
Describe
below information as to all purchases and acquisitions (including
contracts to purchase or to acquire) of securities of the Company
by you
since January 1, 2001, and all proposed purchases and acquisitions
which
are to be consummated in whole or in part within the next twelve
months:
|
|
Seller
or
Prospective
Seller
|
Amount
and
Nature
of Securities
|
Price
or Other Consideration
|
Date
|
|||
|
8.
|
Describe
below all information as to all sales and dispositions (including
contracts to sell or to dispose) of securities of the Company since
January 1, 2001 by you to any “member” of the NASD or any Person
Associated with a Member with respect to the proposed public offering,
as
well as to all proposed sales and dispositions by you which are to
be
consummated in whole or in part within the next twelve
months.
|
|
Seller
or
Prospective
Seller
|
Amount
and
Nature
of Securities
|
Price
or Other Consideration
|
Date
|
|||
-25-
|
9.
|
If
you have had since January 1, 2001, or are to have within the next
twelve
months, any transaction of the character referred to in either Point
7 or
8 above, describe briefly below the relationship, affiliation or
association of both you and, if known, the other party or parties
to any
such transaction with an underwriter or other “in the stream of
distribution” with respect to the proposed offering. In any case, where
the purchaser (whether you or any such party) is known by you to
be a
member of a “private investment group”, such as a hedge fund or other
group of purchasers, list, if known, the names of all persons comprising
the “group” and their “association with” or “relationship to” any
broker-dealer.
|
|
10.
|
Describe
any arrangement known to you made or to be made by any person, or
any
transaction already effected and if no such arrangement or transaction
is
known to you, state “none”:
|
|
(i)
|
to
limited or restrict the sale of the common stock of the Company during
the
period of the offering of such common stock registered under the
Registration Statement;
|
|
(ii)
|
to
stabilize the market for the common stock;
or
|
|
(iii)
|
to
withhold commissions or otherwise to hold each underwriter or dealer
responsible for the distribution of his participation in the
offering.
|
|
11.
|
Specify
below the information required as to Shares and all other securities
beneficially owned by you (including any options or warrants) as
of the
date of this Questionnaire. [Please refer to the attached definition
of
“Beneficially” or the first page of this
Questionnaire.]
|
|
Number
of Shares
|
Registered
in
the
Name of:
|
Beneficially
Owned
by:
|
Remarks
(specify voting or investment power you have, in what capacity you
have
such power)
|
|||
| 12. |
Specify
below the number of Shares acquired by you in the Acquisition or
other
financing transaction which you wish to include in the Registration
Statement pursuant to your registration rights (if left blank, all
such
Shares will be included):
|
|
Number
of Shares
|
Registered
in
the
Name of:
|
Beneficially
Owned
by:
|
Remarks
(specify voting or investment power you have, in what capacity you
have
such power)
|
|||
|
13.
|
State
below whether you or any of your Associates is a market-maker in,
or in
any other way involved in the trading of, any security of the Company.
If
you respond “yes”, describe such
relationship:
|
Yes
_____
No _____
|
14.
|
State
below whether shareholder is selling the Shares to be sold pursuant
to the
registration statement for the purposes of raising funds or diversifying
your investment portfolio. If you respond “no”, describe the purpose of
your sale:
|
Yes
_____
No _____
|
15.
|
State
whether you may sell shares in any method of distribution other than
from
time to time in transactions on the OTC Bulletin Board, in negotiated
transactions, through the writing of options or a combination of
such
methods of sale. If you respond “yes”, describe such
method:
|
Yes
_____
No _____
|
16.
|
State
whether you may sell the shares to or through broker-dealers.
|
Yes
_____
No _____
Please
note that the selling shareholders and any broker-dealers or agents who
participate in the distribution of shares pursuant to the Registration Statement
may be deemed to be “underwriters” as that term is defined in the Act, and any
commissions received by them and profit on any resale of the shares as principal
might be deemed to be underwriting discounts and commissions under the
Act.
-27-
ITEM
3.
SIGNATURE
I
understand that the information that I am furnishing China Biologic Products,
Inc. herein will be used by the Company in the preparation of the Registration
Statement under the Securities Act of 1933, as amended. The responses supplied
in this questionnaire are accurate and complete to the best of my knowledge.
If,
at any time after the date of my signing this Questionnaire and prior to the
date of registration of the Company’s securities, any change occurs which would
render any of my statements in this Questionnaire inaccurate, misleading or
incomplete in any respect, I will immediately advise Loeb & Loeb LLP of such
changes and the details thereof.
Signature:________________________________________
Name
(please
print):
Title:____________________________________________
Telephone
No:____________________________________
Fax
No:_________________________________________
Business
Address:________________________________
_________________________________________
Date:___________________________________________
-28-
