REGULATION S SUBSCRIPTION AGREEMENT AND INVESTMENT REPRESENTATION
AND INVESTMENT REPRESENTATION
This Regulation S Subscription and Investment Representation is entered into this 6th day of June, 2014 between Tianli Agritech, Inc., a British Virgin Islands corporation (the “Company”), and Houliang Yu (the “Investor”).
Preliminary Statement
The Company has offered the Investor the opportunity to purchase 1,600,000 common shares of the Company (the “Shares”) for a total purchase price $3,840,000 (the “Purchase Price”), or $2.40 per Share, to be paid in cash at the closing and the Investor has agreed to do so on the terms and conditions set forth herein.
SECTION 1
The Investor, intending to be legally bound, hereby irrevocably subscribes for and agrees to purchase the Shares for the Purchase Price, which is equivalent to $2.40 per Share, and the Company, intending to be legally bound, hereby agrees to issue the Shares to the Investor against receipt of the Purchase Price.
SECTION 2
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SECTION 3
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(h) The Investor is not a U.S. Person (as defined in the Securities Act) and is not an affiliate (as defined in Rule 501(b) under the Securities Act) of the Company and is not acquiring the Shares for the account or benefit of a U.S. Person.
(i) At the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement, the Investor was outside of the United States.
(j) The Investor will not, during the period commencing on the date of issuance of the Shares and ending on the first anniversary of such date, or such shorter period as may be permitted by Regulation S or other applicable securities law (the “Restricted Period”), offer, sell, pledge or otherwise transfer the Shares in the United States, or to a U.S. Person for the account or for the benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S.
(k) The Investor will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the Shares only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all applicable state and foreign securities laws.
(l) The Investor was not in the United States, engaged in, and prior to the expiration of the Restricted Period will not engage in, any short selling of or any hedging transaction with respect to the Shares, including without limitation, any put, call or other option transaction, option writing or equity swap.
(m) Neither the Investor nor or any person acting on its behalf has engaged, nor will engage, in any directed selling efforts to a U.S. Person with respect to the Shares and the Investor and any person acting on his behalf have complied and will comply with the “offering restrictions” requirements of Regulation S under the Securities Act.
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(n) The transactions contemplated by this Agreement have not been pre-arranged with a buyer located in the United States or with a U.S. Person, and are not part of a plan or scheme to evade the registration requirements of the Securities Act.
(o) Neither the Investor nor any person acting on its behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories or possessions, for any of the Shares. The Investor agrees not to cause any advertisement of the Shares to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Shares, except such advertisements that include the statements required by Regulation S under the Securities Act, and only offshore and not in the U.S. or its territories, and only in compliance with any local applicable securities laws.
(p) Each certificate representing the Shares shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities laws:
(A) “THE SECURITIES ARE BEING OFFERED TO INVESTORS WHO ARE NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”
(B) “TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
(C) “TRANSFER OF THESE SECURITIES PRIOR TO TWELVE MONTHS FROM THE DATE OF THIS CERTIFICATE IS PROHIBITED. THEREAFTER, THESE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED FOR A PRICE OF LESS THAN $2.40 PER SHARE OR UPON THE DEATH OF THE HOLDER HEREOF. IN THE EVENT OF THE TRANSFER OF THESE SECURITIES UPON THE DEATH OF THE HOLDER, THE TRANSFER OF THESE SECURITIES BY THE TRASFEREE WILL BE SUBJECT TO THE FOREGOING RESTRICTIONS.”
(q) The Investor consents to the Company making a notation on its records or giving instructions to any transfer agent of the Company, if any, in order to implement the restrictions on transfer of the Shares set forth in this Section.
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SECTION 4
The Investor covenants and agrees with the Company that he will not or otherwise transfer, other than in accordance with the law upon his death, all or any portion of the Shares for a period of 12 months commencing on the date of the Closing or thereafter at a price of less than $2.40 per share (subject to adjustment in the event of any stock splits). In the event of the transfer of the Shares upon the death of the Investor, the transfer of the Shares by the transferee will be subject to the foregoing restrictions.
SECTION 5
(a) Organization of the Company. The Company is a corporation duly organized and validly existing and in good standing under the laws of the British Virgin Islands.
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SECTION 6
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[signature page is on following page]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year this subscription has been accepted by the Company as set forth below.
/s/ Houliang Yu
Houliang Yu
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Address: Xx.000-0-0 Xxxxxxxxxxxxxxx, Xxxxxxxx Xxxxxxxx,
Xxxxx Xxxx, Xxxxx, Xxxxx
Identification Number:
China: 000000000000000000
US: N/A
ACCEPTANCE OF SUBSCRIPTION
ACCEPTED BY:
By: /s/ Ping Xxxx
Xxxx Xxxx
Chairman and CEO
Address:
Suite K, 12th Floor, Building A, Jiangjing Mansion
000 Xxxxxxxx Xxx., Xxxxxxx District, Wuhan City
Hubei Province, China 430010
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