Exhibit 10.5
REGISTRATION RIGHTS AGREEMENT
This AGREEMENT is dated as of the 16th day of March, 2005, between the
person whose name appears below on the signature page (the "Investor"), and
Bodisen Biotech, Inc., a Delaware corporation having its principal executive
office at North Part of Xinquia Road, Yang Ling Ag High-Tech Industries
Demonstration Zone Yang Ling F4 712100 (the "Company"). Capitalized terms used
but not defined herein shall have the meaning provided in the Subscription
Agreement (as defined below).
WHEREAS, the Company has issued and sold certain (1) Convertible Debentures
and (2) Warrants convertible or exercisable, as the case may be, in each case
into shares of Common Stock of the Company, par value $0.0001 (the "Common
Stock"), pursuant to a Securities Subscription Agreement, dated as of March 16,
2005 (the "Subscription Agreement"), between the Investor and the Company.
WHEREAS, the Company desires to grant to the Investor the registration
rights set forth herein with respect to the shares of Common Stock issuable upon
conversion of the Convertible Debentures and the shares of Common Stock issuable
upon exercise of the Warrants;
NOW, THEREFORE, the parties hereto mutually agree as follows:
1. Registrable Securities. As used herein the term "Registrable Security"
means any shares of Common Stock (i) issued or issuable in connection with the
exercise or conversion, as applicable, of any Warrants or Convertible Debentures
issued to the Investor and (ii) issued or issuable with respect to the
securities referred to in clause (ii) above by virtue of any stock split,
combination, stock dividend, merger, consolidation or other similar event or
pursuant to any provision of the Subscription Agreement, Convertible Debentures
or Warrants; provided, however, that with respect to any particular Registrable
Security, such security shall cease to be a Registrable Security when, as of the
date of determination, it has been effectively registered under the Securities
Act of 1933, as amended (the "Securities Act"), and disposed of pursuant
thereto. The term "Registrable Securities" means any and/or all of the
securities falling within the foregoing definition of a "Registrable Security."
2. Registration. The Company shall use its best efforts to file a
registration statement on Form S-3 pursuant to Rule 415 under the Securities
Act, or, in the event that Form S-3 is unavailable to the Company, a
registration statement on such other Commission form that is available to the
Company (together with any exhibits, amendments or supplements thereto, and any
documents incorporated by reference therein, a "Registration Statement") with
the Securities and Exchange Commission (the "Commission") within 45 days of the
Closing in order to register the resale of the Registrable Securities under the
Securities Act. The Company shall use its best efforts to cause the Registration
Statement to be declared effective as soon as reasonably practicable and within
90 days after the Closing or, in the event of a review of the Registration
Statement by the Commission, within 150 days after the Closing. Once effective,
the Company will be required to maintain the effectiveness of the Registration
Statement until the earlier of (i) the date that all of the Registrable
Securities have been sold, or (ii) the date that all of the Registrable
Securities may be freely distributed, sold or otherwise disposed of without
restriction or limitation under the Securities Act or other federal securities
law (the "Effectiveness Period").
3. Liquidated Damages.
(a) If the Registration Statement is not filed within the period
provided under Section 2 hereof, the Company shall pay to each Investor
liquidated damages (in addition to the rights and remedies available to each
Investor under applicable law, the Subscription Agreement and this Agreement)
for the period from and including the first business day following 45 days after
the Closing until the date on which such Registration Statement is filed, at a
rate per week equal to twenty-five basis points of the total purchase price of
the Convertible Debentures and Warrants purchased by such Investor pursuant to
the Subscription Agreement. Such liquidated damages shall be payable monthly in
cash.
(b) If the Registration Statement is not declared effective within the
period provided under Section 2 hereof, the Company shall pay to each Investor
liquidated damages (in addition to the rights and remedies available to each
Investor under applicable law, the Subscription Agreement and this Agreement)
for the period from and including the first business day following 90 days after
the Closing or, in the event of a review of the Registration Statement by the
Commission, the first business day following 150 days after the Closing until,
but excluding the date on which such Registration Statement is declared
effective, at a rate per week equal to twenty-five basis points of the total
purchase price of the Convertible Debentures and Warrants purchased by such
Investor pursuant to the Subscription Agreement. Such liquidated damages shall
be payable monthly in cash.
(c) If the effectiveness of the Registration Statement lapses at any
point during the Effectiveness Period, without such lapse being cured within
twenty (20) business days (the "Cure Period") by a post-effective amendment to
the Registration Statement, a supplement to the prospectus included in the
Registration Statement or a report filed with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act") that cures such lapse, then the Company shall pay to each
Investor that holds Registrable Securities, Convertible Debentures or Warrants
at the time such Cure Period has expired, liquidated damages (in addition to the
rights and remedies available to each Investor under applicable law, the
Subscription Agreement and this Agreement), for the period from and including
the first business day following the expiration of the Cure Period until, but
excluding, the earlier of (1) the date on which such failure is cured and (2)
the date on which the Effectiveness Period expires, at a rate per week equal to
twenty-five basis points of the total purchase price of the Convertible
Debentures and Warrants purchased pursuant to the Subscription Agreement and
still held by such Investor. Such liquidated damages shall be payable monthly in
cash.
2
(d) In the event that any failure by the Company to comply with its
obligations pursuant to Section 2 owes to the failure of the Investor to provide
timely responses to reasonable and customary inquiries by the Company for
information regarding the Investor necessary for the Company to comply with its
obligations under Section 2, then the applicable periods after which the Company
is obligated under this Section 3 to pay to the Investor liquidated damages
shall be extended for the period of time the Investor fails to provide timely
responses to such reasonable and customary inquiries.
4. Covenants of the Company With Respect to Registration.
The Company covenants and agrees as follows:
(a) In connection with any registration filed pursuant hereto, the
Company shall, upon the request of the Investor, supply such reasonable number
of copies of the Registration Statement (including, without limitation, the
exhibits and schedules thereto), preliminary prospectus and prospectus meeting
the requirements of the Securities Act (including, without limitation, any and
all amendments or supplements thereto), and other documents necessary or
incidental to the public offering of the Registrable Securities, as shall be
reasonably requested by the Investor to permit the Investor to sell, distribute
or otherwise dispose of the Investor's Registrable Securities. The Investors
agree that, upon request from the Company, they will supply information
regarding themselves, their Registrable Securities and their plan of resale to
the Company, and that such Investors and their successors and assigns will
promptly notify the Company of any changes in such information, other than sales
or transfers of Common Stock.
(b) The Company shall provide the Investor, any underwriter
participating in any disposition pursuant to a Registration Statement, and any
attorney, accountant or other agent retained by the Investor or underwriter
(each, an "Inspector" and, collectively, the "Inspectors"), the opportunity to
review and comment (including reviewing and commenting on relevant documents and
agreements) in the preparation of such Registration Statement, each prospectus
included therein or filed with the Commission and each amendment or supplement
thereto.
(c) For a reasonable period prior to the filing of any Registration
Statement pursuant to this Agreement, the Company shall make available for
inspection at the Company's offices and copying by the Inspectors such financial
and other information and books and records, pertinent corporate documents and
properties of the Company and its subsidiaries and cause the officers,
directors, employees, counsel and independent certified public accountants of
the Company and its subsidiaries to respond to such inquiries and to supply all
information reasonably requested by any such Inspector in connection with such
Registration Statement, as shall be reasonably necessary, in the judgment of the
respective counsel, to conduct a reasonable investigation within the meaning of
the Securities Act.
(d) The Company shall promptly notify in writing the Investor, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold, (i) when such Registration Statement or the prospectus
included therein or any prospectus amendment or supplement or post-effective
amendment has been filed, and, with respect to any such Registration Statement
or any post-effective amendment, when the same has become effective, (ii) when
the Commission notifies the Company whether there will be a "review" of such
Registration Statement, (iii) of any comments (oral or written) by the
Commission and by the blue sky or securities commissioner or regulator of any
state with respect thereto or (iv) of any request by the Commission for any
amendments or supplements to such Registration Statement or the prospectus or
for additional information.
3
(e) The Company shall promptly notify in writing the Investor, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold pursuant to any Registration Statement at any time when a
prospectus relating thereto is required to be delivered under the Securities Act
upon discovery that, or upon the happening of any event as a result of which,
any prospectus included in such Registration Statement (or amendment or
supplement thereto) contains an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under which they
were made, and the Company shall promptly prepare a supplement or amendment to
such prospectus and file it with the Commission promptly following notice of the
occurrence of such event to the Investor, the sales or placement agent and the
managing underwriter so that after delivery of such prospectus, as so amended or
supplemented, to the purchasers of such Registrable Securities, such prospectus,
as so amended or supplemented, shall not contain an 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 not misleading in light of the
circumstances under which they were made.
(f) The Company shall promptly notify in writing the Investor, the
sales or placement agent, if any, therefor and the managing underwriter of the
securities being sold of the issuance by the Commission of (i) any stop order
issued or threatened to be issued by the Commission or (ii) 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 the
Company agrees to use its commercially reasonable efforts to (x) prevent the
issuance of any such stop order, and in the event of such issuance, to obtain
the withdrawal of any such stop order and (y) obtain the withdrawal of any order
suspending or preventing the use of any related prospectus or suspending the
qualification of any Registrable Securities included in such Registration
Statement for sale in any jurisdiction at the earliest practicable date.
(g) The Company shall prepare and file with the Commission such
amendments, including post-effective amendments to each Registration Statement
as may be necessary to keep such Registration Statement continuously effective
for the applicable time period required hereunder and, if applicable, file any
Registration Statements pursuant to Rule 462(b) (or any similar provision then
in force) under the Securities Act; cause the related prospectus to be
supplemented by any required prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) promulgated
under the Securities Act; and comply with the provisions of the Securities Act
and the Exchange Act, with respect to the disposition of all securities covered
by such Registration Statement during such period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or in such prospectus as so supplemented.
If the Investor so requests, to request acceleration of effectiveness of the
Registration Statement from the Commission and any post-effective amendments
thereto, if any are filed. If the Company wishes to further amend the
Registration Statement prior to requesting acceleration, it shall have five (5)
days to so amend prior to requesting acceleration.
4
(h) The Company shall pay all costs, fees and expenses in connection
with all Registration Statements filed pursuant to this Agreement including,
without limitation, the Company's legal and accounting fees, printing expenses,
and blue sky fees and expenses and the fees and expenses of one counsel to the
Investor, not to exceed $5,000; provided, however, that the Investor shall be
solely responsible for any transfer taxes or underwriting discounts, commissions
or fees applicable to the Registrable Securities sold by the Investor pursuant
thereto.
(i) The Company will take all necessary action which may be required
in qualifying or registering the Registrable Securities included in a
Registration Statement for offering and sale under the securities or blue sky
laws of such states where such registration or qualification is required and an
exemption is not available and as are reasonably requested by the Investors of
such securities; provided, that the Company shall not be obligated to execute or
file any general consent to service of process or to qualify as a foreign
corporation to do business under the laws of any such jurisdiction. The Company
shall keep such registration or qualification in effect for so long as the
Registration Statement is required to be effective hereunder.
(j) The Company shall cooperate with the Investor to facilitate the
timely preparation and delivery of certificates representing the securities to
be sold pursuant to the Registration Statement free of any restrictive legends
and in such denominations and registered in such names as the Investor may
request a reasonable period of time prior to sales of the securities pursuant to
such Registration Statement.
(k) The Company agrees generally to cooperate with Investors in
effecting compliant resale of the Registrable Securities, including comfort and
other customary broker agreements and documentations and certificates.
(l) The Company shall use its best efforts to cause all Registrable
Securities covered by the Registration Statement to be registered or qualified
with or approved by all other applicable governmental authorities as may be
necessary, in the opinion of counsel to the Company and counsel to the
Investors, to enable the Investors to consummate the disposition of such
Registrable Securities.
(m) The Company shall supplement or amend the Registration Statement
to include in the Registration Statement any additional securities that become
Registrable Securities by operation of the definition thereof unless such
securities are otherwise registered under the Securities Act.
5
(n) The Company shall use its best efforts to cause all Registrable
Securities included in the Registration Statement to be listed on Nasdaq and
each securities exchange on which securities of the same class are then listed,
or, if not then listed on any securities exchange or Nasdaq, to be eligible for
trading in any over-the-counter market or trading system in which securities of
the same class are then traded.
(o) The Company shall, if reasonably requested by any Investor or if
required by law or the Commission or other applicable rule or regulation,
promptly incorporate in the Registration Statement such appropriate information
as the Investor may reasonably request to have included therein by filing a Form
8-K, or filing a supplement to the prospectus, to reflect any change in the
information regarding the Investor, and make all required filings with the
Commission in respect of any offer or sale of Registrable Securities or any
amendment or supplement to the Registration Statement or related prospectus.
5. Additional Terms.
(a) To the extent permitted by law, the Company will indemnify and
hold harmless the Investor, its agents, trustees and beneficiaries, partners or
officers, directors, partners, members and shareholders of the Investor, legal
counsel and accountants for the Investor, and each person who controls the
Investor within the meaning of the Securities Act or the Exchange Act, against
any losses, claims, damages or liabilities (joint or several) to which they may
become subject under the Securities Act, the Exchange Act or any state
securities laws, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
Registration Statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Securities Act, the
Exchange Act, any state securities laws or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities laws; and the
Company will reimburse the indemnified party under this Section 5(a), for any
reasonable legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity described herein shall not apply to any
loss, claim, damage, liability or action to the extent that it arises out of or
is based upon a Violation that occurs in reliance upon and in conformity with
written information furnished expressly for use in connection with such
registration by the Investor.
(b) To the extent permitted by law, the Investor will severally, and
not jointly, indemnify and hold harmless the Company, each of its directors,
each of its officers who has signed the registration statement, each person, if
any, who controls the Company within the meaning of the Securities Act or the
Exchange Act and legal counsel and accountants for the Company, against any
losses, claims, damages or liabilities to which any of the foregoing persons may
become subject, under the Securities Act, the Exchange Act or any state
securities laws, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
6
reliance upon and in conformity with written information specifically furnished
by the Investor expressly for inclusion in such Registration Statement; and the
Investor will reimburse any person intended to be indemnified pursuant to the
foregoing, for any legal or other expenses reasonably incurred by such person in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity obligation of the
Investor hereunder shall not in any event exceed the net proceeds received by
the Investor from the offering giving rise to such liability.
(c) Promptly after receipt by an indemnified party of notice of the
commencement of any action (including any governmental action), such indemnified
party will, if a claim in respect thereof is to be made against any indemnifying
party, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with counsel
reasonably satisfactory to each party; provided, however, that an indemnified
party (together with all other indemnified parties that may be represented
without conflict by one counsel) shall have the right to retain one separate
counsel, with the reasonable fees and expenses to be paid by the indemnifying
party, if representation of such indemnified party by the counsel retained by
the indemnifying party would be inappropriate due to actual or potential
differing interests between such indemnified party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the indemnifying party within a reasonable time of the commencement of
any such action, if materially prejudicial to its ability to defend such action,
shall relieve such indemnifying party of any liability to the indemnified party,
but the omission so to deliver written notice to the indemnifying party will not
relieve it of any liability that it may have to any indemnified party otherwise
than under this paragraph. After notice from an indemnifying party to such
indemnified party of its election to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party pursuant to the
provisions of this paragraph for any legal or other expense subsequently
incurred by such indemnified party in connection with the defense thereof other
than reasonable costs of investigation, unless (i) the indemnified party shall
have employed counsel in accordance with the first sentence of this paragraph or
(ii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. No indemnifying
party shall be liable for any settlement of any action, claim or proceeding
effected without its prior written consent; provided, however, that the
indemnifying party shall not unreasonably withhold, delay or condition its
consent. No indemnifying party shall, without the prior written consent of the
indemnified party, consent to entry of any judgment or enter into any settlement
or other compromise which does not include as an unconditional term thereof the
giving by the claimant or plaintiff to such indemnified party of a release from
all liability in respect to such claim or litigation. Following indemnification
as provided for hereunder, the indemnifying party shall be subrogated to all
rights of the indemnified party with respect to all third parties, firms or
corporations relating to the matter for which indemnification has been made.
(d) If the indemnification provided for above is held by a court of
competent jurisdiction to be unavailable to an indemnified party with respect to
any loss, liability, claim, damage or expense referred to herein, then the
indemnifying party, in lieu of indemnifying such indemnified party hereunder,
shall contribute to the amount paid or payable by such indemnified party as a
result of such loss, liability, claim, damage or expense in such proportion as
7
is appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
statements or omissions that resulted in such loss, liability, claim, damage or
expense, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party and of the indemnified party shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and
the parties' relative intent, knowledge, access to information, and opportunity
to correct or prevent such statement or omission. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Notwithstanding any other provision of this
Section, the Investor shall not be required to contribute, in the aggregate
(including any payments made by the Investor pursuant to Section 5(b) or as an
Indemnifying Party), any amount in excess of the amount by which the net
proceeds received by such Investor from the sale of the shares of the Common
Stock issued upon conversion of the Convertible Debenture or sale of the shares
of Common Stock issued upon exercise of the Warrants, in each case pursuant to a
Registration Statement exceeds the amount of damages which the Investor has
otherwise been required to pay be reason of such untrue or alleged untrue
statement or alleged omission. The obligation of the Investor obliged to make
contribution pursuant to this Section shall be several and not joint.
(e) Neither the filing of a Registration Statement by the Company
pursuant to this Agreement nor the making of any request for prospectuses by the
Investor shall impose upon the Investor any obligation to sell the Investor's
beneficially owned Registrable Securities.
(f) The Investor, upon receipt of notice from the Company that an
event has occurred which requires a post-effective amendment to the Registration
Statement or a supplement to the prospectus included therein, shall promptly
discontinue the sale of Registrable Securities until the Investor receives a
copy of a supplemented or amended prospectus from the Company, which the Company
shall provide as soon as practicable, and in any event within thirty (30) days,
after such notice; provided however, that no such discontinuation shall be
required for consecutive thirty (30) day periods arising out of the same set of
facts, circumstances or transactions.
(g) If the Company fails to keep the Registration Statement referred
to above continuously effective during the requisite period, then the Company
shall, promptly upon the request of the Investor, use its best efforts to update
the Registration Statement or file a new registration statement covering the
Registrable Securities remaining unsold, subject to the terms and provisions
hereof.
(h) The Investor agrees to provide, upon reasonable request by the
Company, any information or undertakings reasonably requested by the Company in
order for the Company to include any appropriate information concerning the
Investor in the Registration Statement or in order to promote compliance by the
Company or the Investor with the Securities Act.
8
(i) With a view to making available to the Investor the benefits of
Rule 144 and Rule 144A promulgated under the Securities Act and other rules and
regulations of the Commission that may at any time permit the Investor to sell
securities of the Company to the public without registration, the Company
covenants that it shall use commercially reasonable efforts to (i) file in a
timely manner all reports and other documents required to be filed by it under
the Securities Act and the Exchange Act and the rules and regulations adopted by
the Commission thereunder and make and keep "current public information"
regarding the Company available, as defined in Commission Rule 144(c) under the
Securities Act, (ii) so long as an Investor owns any Registrable Securities,
furnish the Investor forthwith upon request a written statement by the Company
as to its compliance with the reporting requirements under the Securities Act
and the Exchange Act, including compliance with Commission Rule 144(c), a copy
of the most recent annual or quarterly report of the Company, and such other
reports and documents of the Company and other information in the possession of,
or reasonably obtainable by, the Company as an Investor may reasonably request
in availing itself of any rule or regulation of the Commission allowing an
Investor to sell any such securities without registration, and (iii) take such
further action as the Investor may reasonably request (including providing any
information necessary to comply with Rule 144 and Rule 144A, if available with
respect to resales of the Registrable Securities under the Securities Act), at
all times, all to the extent required from time to time to enable the Investor
to sell Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (x) Rule 144 and Rule 144A
(if available with respect to resales of the Registrable Securities) under the
Securities Act, as such rules may be amended from time to time, or (y) any other
rules or regulations now existing or hereafter adopted by the Commission.
6. Governing Law. This Agreement shall be deemed to have been made and
delivered in the State of New York and shall be governed as to validity,
interpretation, construction, effect and in all other respects by the internal
substantive laws of the State of New York, without giving effect to the choice
of law rules thereof.
7. Amendment. This Agreement may only be amended by a written instrument
executed by the Company and the Investor.
8. Entire Agreement. This Agreement constitutes the entire agreement of the
parties hereto with respect to the subject matter hereof, and supersedes all
prior agreements and understandings of the parties, oral and written, with
respect to the subject matter hereof.
9. Execution in Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same document.
10. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given when delivered by
hand or by facsimile, with a hard copy to follow by overnight courier addressed
to the parties at the addresses set forth in theSubscription Agreement or such
other address as a party may request by notifying the other in writing.
9
11. Binding Effect; Benefits. The Investor may assign his, her or its
rights hereunder as set forth in the Warrant. This Agreement shall inure to the
benefit of, and be binding upon, the parties hereto and their respective heirs,
legal representatives and successors. Nothing herein contained, express or
implied, is intended to confer upon any person other than the parties hereto and
their respective heirs, legal representatives and successors, any rights or
remedies under or by reason of this Agreement.
12. Remedies. Each Investor, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of this Agreement and hereby agrees
to waive the defense in any action for specific performance that a remedy at law
would be adequate.
13. Delays or Omissions. It is agreed that no delay or omission to exercise
any right, power or remedy accruing to an Investor, upon any breach or default
of the Company under this Agreement, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any provision hereof, or of
any similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. It is further agreed that any waiver,
permit, consent or approval of any kind or character by an Investor of any
breach or default under this Agreement, or any waiver by an Investor of any
provisions or conditions of this Agreement, must be in writing and shall be
effective only to the extent specifically set forth in the writing, and that all
remedies, either under this Agreement, or by law or otherwise afforded to an
Investor, shall be cumulative and not alternative.
14. Attorney's Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to reasonable attorney's fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
15. Transfer of Registration Rights. The rights of the Investor under this
Agreement may be transferred or assigned in connection with a transfer of
Registrable Securities to any transferee or assignee. Notwithstanding the
foregoing, such rights may only be transferred or assigned if all of the
following additional conditions are satisfied: (a) such transfer or assignment
is effected in accordance with applicable securities laws; (b) such transferee
or assignee agrees in writing to become subject to the terms of this Agreement;
and (c) the Company is given written notice by the Investor of such transfer or
assignment, stating the name and address of the transferee or assignee and
identifying the Registrable Securities with respect to which such rights are
being transferred or assigned.
16. Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning
or interpretation of any of the terms or provisions of this Agreement.
17. Severability. Any provision of this Agreement which is held by a court
of competent jurisdiction to be prohibited or unenforceable in any
jurisdiction(s) shall be, as to such jurisdiction(s), ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in any other jurisdiction.
10
IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto as of the date first above written.
Bodisen Biotech, Inc.
By: ____________________________
Name: __________________________
Its: ___________________________
INVESTOR:
Amulet Limited
By: ____________________________
Name:
Title:
11
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:
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 short sales;
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 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.
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.
B-1
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. At the
time a particular offer of shares is made by the Selling Stockholders, to the
extent required, a prospectus will be distributed. 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 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.
B-2
