EQUITY REGISTRATION RIGHTS AGREEMENT dated as of September 28, 2007 by and among SINOENERGY CORPORATION and Abax LOTUS LTD. and ccif petrol limited
EXECUTION
VERSION
dated
as
of September 28, 2007
by
and
among
SINOENERGY
CORPORATION
and
Abax
LOTUS LTD.
and
ccif
petrol limited
This
Equity Registration Rights Agreement (the “Agreement”)
is
made and entered into as of September 28, 2007, by and among (i) Sinoenergy
Corporation, a Nevada corporation (the “Company”),
and
(ii) Abax Lotus Ltd. (“Abax”)
and
CCIF Petrol Limited (“CCIF”
and,
together with Abax, the “Purchasers”).
RECITALS
WHEREAS,
the
Company and Abax have entered into that certain Notes Purchase Agreement dated
as of September 1, 2007 (the “Notes
Purchase Agreement”),
pursuant to which the Company has agreed to issue to the Purchasers, and the
Purchasers have severally agreed to purchase from the Company, an aggregate
of
US$16,000,000 of the Company’s Guaranteed Senior Notes due 2012 (the
“Senior
Notes”)
and an
aggregate of US$14,000,000 the Company’s 3.0% Guaranteed Senior Convertible
Notes due 2012 (the “Convertible
Notes”,
and
together with the Senior Notes, the “Notes”),
which
are convertible into the Company’s common stock, par value $0.001 (the
“Common
Stock”,
and,
together with the Notes, the “Securities”);
WHEREAS,
in
consideration of Abax entering into the Notes Purchase Agreement, the Company
has agreed to provide the registration rights set forth in this
Agreement.
WHEREAS,
the
execution and delivery of this Agreement is a condition to the obligations
of
the Purchaser set forth in Section 3 of the Purchase Agreement. Capitalized
terms used herein and not otherwise defined shall have the meanings ascribed
to
them in the Purchase Agreements.
AGREEMENT
The
parties hereby agree as follows:
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SECTION
1.
|
DEFINITIONS.
|
As
used
in this Agreement, the following capitalized terms shall have the following
meanings:
“Affiliate”:
As
defined in Rule 144 of the Securities Act.
“Closing
Date”:
The
date hereof.
“Common
Stock”:
As
defined in the Recitals.
“Conversion
Shares”:
The
shares of Common Stock or other securities that any Holder may acquire upon
conversion of a Convertible Note, together with any other securities which
such
Holder may acquire on account of any such securities, including, without
limitation, as the result of any dividend or other distribution on Common Stock
or any split or combination of such Common Stock as provided for in the
Convertible Note Indenture.
“Conversion
Agent”:
DB
Trustees (Hong Kong) Limited as conversion agent under the Convertible Note
Indenture, and its successors and assigns.
“Convertible
Note Indenture”:
That
certain indenture dated the date hereof between the Company and DB Trustees
(Hong Kong) Limited as trustee.
“Convertible
Notes”:
As
defined in the Recitals.
“Company”:
As
defined in the Preamble.
“Exchange
Act”:
The
Securities Exchange Act of 1934, as amended.
“Holder”:
Any
Person who holds Convertible Notes or Registrable Securities. A Person is deemed
to be a Holder whenever such Person owns Convertible Notes or Registrable
Securities or has the right to acquire such Registrable Securities by converting
the Convertible Notes held by such Person, whether or not such acquisition
has
actually been effected.
“Indemnified
Party”:
As
defined in Section
7
hereof.
“Inspectors”:
As
defined in Section
3
hereof.
“Notes”:
As
defined in the Recitals.
“Person”:
Any
individual, corporation, partnership, joint venture, association, joint-stock
company, trust, unincorporated organization, government or any agency or
political subdivision thereof or any other entity.
“Prospectus”:
The
prospectus included in a Registration Statement at the time such Registration
Statement is declared effective, as supplemented by any prospectus supplement,
and all material incorporated by reference into such prospectus.
“Purchase
Agreement”:
As
defined in the Recitals.
“Purchaser”:
As
defined in the Recitals.
“Recommencement
Date”:
As
defined in Section
5
hereof.
“Registrable
Securities”:
At any
time, any of (i) the Conversion Shares (whether or not the related Convertible
Notes have been converted) and (ii) any other securities issued or issuable
with
respect to any Conversion Shares by way of stock dividends or stock split or
in
connection with a combination of shares, recapitalization, merger, consolidation
or other reorganization or otherwise. As to any particular Registrable
Securities, such securities shall cease to be Registrable Securities when (a)
a
Registration Statement with respect to the offering of such securities by the
Holder thereof shall have been declared effective under the Securities Act
and
such securities shall have been disposed of by such Holder pursuant to such
Registration Statement, (b) such securities have been sold to the public
pursuant to Rule 144 (or any similar provisions then in force, but not Rule
144A) promulgated under the Securities Act, (c) such securities may be sold
without restriction under Rule 144(k)(or successor rule), (d) such
securities shall have been otherwise transferred by the Holder thereof and
new
certificates for such securities not bearing a legend restricting further
transfer shall have been delivered by the Company or its transfer agent and
the
subsequent disposition of such securities shall not require registration or
qualification under the Securities Act or any similar state law then in force
or
(e) such securities shall have ceased to be outstanding.
“Registration
Default”:
As
defined in Section 4
hereof.
“Registration
Statement”:
Any
registration statement of the Company relating to the registration for resale
of
Registrable Securities that is filed pursuant to the provisions of this
Agreement, including the Prospectus included therein, all amendments thereto
(including post-effective amendments) and all exhibits and all material
incorporated by reference therein.
“Rule
415 Limitation”:
Any
limitation on the number of Registrable Securities that may be included in
a
Registration Statement, the time before which a subsequent Registration
Statement covering Registrable Securities may be filed with the SEC, the manner
in which Registrable Securities may be sold and other matter relating to the
offering of Registrable Securities, in any such case as required by SEC
Guidance.
“SEC”:
The
Securities and Exchange Commission.
“SEC
Guidance”:
(i)
any publicly-available written or oral guidance, comments, requirements or
requests of the SEC staff and (ii) any provision of the Securities Act.
“Securities
Act”:
The
Securities Act of 1933, as amended.
“Senior
Notes”:
As
defined in the Recitals.
“Shelf
Registration”:
As
defined in Section 2
hereof.
“Suspension
Notice”:
As
defined in Section
5
hereof.
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SECTION
2.
|
FILING
OF REGISTRATION
STATEMENT.
|
(a) As
soon
as reasonably practicable after the Closing Date, the Company shall prepare
and
cause to be filed with the SEC pursuant to Rule 415 under the Securities Act
a
Registration Statement on the appropriate form, covering the sale of all of
the
Registrable Securities, subject to the Rule 415 Limitation and based on the
number of Registrable Securities issued or issuable at the time of the filing
of
the Registration Statement (the “Shelf
Registration”).
The
Company shall use its best efforts to cause any such Registration Statement
to
be declared effective by the SEC as soon as reasonably practicable and no later
than March 28, 2008.
To
the
extent necessary to ensure that the Registration Statement is available for
sales of Registrable Securities by the Holders thereof entitled to the benefit
of this Section
2(a),
the
Company shall use its reasonable best efforts to keep any Registration Statement
required by this Section
2(a)
continuously effective, supplemented, amended and current as required by and
subject to the provisions of Section
2(a)
hereof
and in conformity with the requirements of this Agreement, the Securities Act
and the rules and regulations of the SEC promulgated thereunder from time to
time (including (A) preparing and filing with the SEC such amendments and
post-effective amendments to the Registration Statement as may be necessary
to
keep such Registration Statement effective; (B) cause the Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented
to be
filed pursuant to Rule 424 under the Securities Act, and complying fully
with Rules 424, 430A and 462, as applicable, under the Securities Act in a
timely manner; and (C) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement), until the date when all Registrable Securities covered by the
Registration Statement (i) have been sold pursuant thereto or (ii) may be sold
without volume restrictions pursuant to Rule 144(k) as determined by the counsel
to the Company pursuant to a written opinion letter to such effect, addressed
and acceptable to the Company’s transfer agent and the affected Holders,
whichever may occur first.
(b) No
Holder
may include any of its Registrable Securities in any Registration Statement
pursuant to this Agreement unless and until such Holder furnishes in writing
to
the Company within 10 business days of a request therefor, such information
as
is requested by the Company regarding such Holder, the Registrable Securities
held by such Holder and the intended method of disposition of the Registrable
Securities held by such Holder, as shall be reasonably required (but in no
event
shall such information provided be less than the information required by
Regulation S-K and other applicable SEC rules, regulations and interpretations)
to effect the registration of such Registrable Securities. Each selling Holder
agrees to promptly furnish (but in no event more than 5 business days following
the Company’s request) additional information required to be disclosed in order
to make the information previously furnished to the Company by such Holder
not
materially misleading. The Company shall not have any obligation to include
in a
Registration Statement Registrable Securities held by a Holder that does not
furnish the information requested by the Company pursuant to this Section
2(b).
(c) The
Company shall be deemed not to have used its reasonable best efforts to keep
the
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in Holders of Registrable Securities covered
thereby not being able to offer and sell such Registrable Securities during
that
period, unless such action is required by applicable law or this
Agreement.
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SECTION
3.
|
REGISTRATION
PROCEDURES.
|
In
connection with the Shelf Registration, the following provisions shall
apply:
(a) Not
less
than five business days prior to the filing of each Registration Statement
and
not less than five business days prior to the filing of any related Prospectus
or any amendment or supplement thereto (including any document that would be
incorporated or deemed to be incorporated therein by reference), the Company
shall (i) furnish to the Holders, prior to the filing thereof with the SEC,
an
electronic copy of the Registration Statement and each amendment thereof (and
if
a Holder so requests in writing, and electronic copies of all such documents
incorporated therein by reference) and each supplement, if any, to the
Prospectus, which documents will be subject to the review and comment of such
Holders. The Company shall not file a Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Holders of
a
majority of the Registrable Securities shall reasonably object in good faith,
provided
that the
Company is notified of such objection in writing no later than 2 business days
after the Holders have been so furnished copies of a Registration Statement
or 2
business days after the Holders have been so furnished copies of any related
Prospectus or amendments or supplements thereto. The Company agrees that for
each Holder that furnishes to the Company the information required by
Section
2(b),
the
Company shall include in the registration statement the name of such Holder
who
proposes to sell Registrable Securities pursuant to the Registration Statement
as selling securityholders. A Holder’s objection shall be deemed to be a
reasonable objection to such filing if such Registration Statement, amendment,
related Prospectus or supplement, as applicable, as proposed to be filed,
contains an untrue statement of a material fact or omits to state any material
fact necessary to make the statements therein (in the case of the Prospectus,
in
light of the circumstances under which they were made) not misleading or fails
to comply with the applicable requirements of the Securities Act.
(b) The
Company shall give written notice to the Holders:
(i) when
the
Registration Statement or any amendment thereto has been filed with the SEC
and
when the Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of
any
request by the SEC for amendments or supplements to the Registration Statement
or the Prospectus or for additional information;
(iii) of
the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that
purpose;
(iv) of
the
receipt by the Company or its legal counsel of any notification with respect
to
the suspension of the qualification of the Registrable Securities for sale
in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose; and
(v) of
the
happening of any event that requires the Company to make changes in the
Registration Statement or the Prospectus in order that the Registration
Statement or the Prospectus does not contain an untrue statement of a material
fact nor omit to state a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not
misleading.
(c) The
Company shall make every reasonable effort to obtain the withdrawal at the
earliest possible time, of any order suspending the effectiveness of the
Registration Statement.
(d) The
Company shall furnish to each Holder, without charge, at least one electronic
copy of the Registration Statement and any post-effective amendment thereto,
including financial statements and schedules, and if the Holder so request
in
writing, all exhibits thereto (including those, if any, incorporated by
reference).
(e) The
Company shall, during the period which the Registration Statement is effective,
deliver to each Holder an electronic copy of the Prospectus (including each
preliminary Prospectus) included in the Registration Statement as such Holder
may reasonably request. The Company consents, subject to the provisions of
this
Agreement, to the use of the Prospectus and each amendment or supplement thereto
by each of the Holders in connection with the offering and sale of Registrable
Securities.
(f) Prior
to
any public offering of the Registrable Securities pursuant to any Registration
Statement the Company shall use its commercially reasonable efforts to register
or qualify or cooperate with the Holders and their respective counsel in
connection with the registration or qualification (or exemption from
registration or qualification) of the Registrable Securities for resale by
the
Holders under the securities or “blue sky” laws of such jurisdictions of the
United States as any Holder reasonably requests in writing and do any and all
other acts or things reasonably necessary or advisable to enable the offer
and
sale in such jurisdictions of the Registrable Securities; provided,
however,
that
the Company shall not be required to (i) qualify generally to do business in
any
jurisdiction where it is not then so qualified or (ii) take any action which
would subject it to general service of process or to taxation in more than
a
nominal amount in any jurisdiction where it is not then so subject.
(g) The
Company shall cooperate with the Holders or underwriters to facilitate the
timely preparation and delivery of certificates representing the Registrable
Securities to be sold pursuant to any Registration Statement free of any
restrictive legends and in such denominations and registered in such names
as
the Holders may request a reasonable period of time prior to sales of the
Registrable Securities pursuant to such Registration Statement.
(h) Upon
the
occurrence of any event contemplated by paragraphs (ii) through (v) of
Section
3(b)
above
during the period for which the Company is required to maintain an effective
Registration Statement, the Company shall promptly prepare and file a
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus and any other required document so that, as thereafter
delivered to Holders or purchasers of Securities, the Prospectus will 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,
in light of the circumstances under which they were made, not misleading.
(i) Not
later
than the effective date of the Registration Statement, the Company will provide
the Conversion Agent with printed certificates for the Registrable Securities,
in a form eligible for deposit with The Depository Trust Company.
(j) Use
its
commercially reasonable efforts to cause all such Registrable Securities to
be
quoted on the principal stock exchange or market on which the Common Stock
is
traded, and enter into such customary agreements including a listing application
and indemnification agreement in customary form, provided that the applicable
listing requirements are satisfied, and to provide a transfer agent and
registrar for such Registrable Securities covered by such registration statement
no later than the effective date of such registration statement.
(k) Upon
execution by selling Holders of commercially customary confidentiality
agreements for securities offerings, the Company will make available for
inspection by the selling Holders, any underwriter participating in any
disposition pursuant to any Registration Statement, and any attorney, accountant
or other agent retained by any Holder or underwriter (collectively, the
“Inspectors”),
all
financial and other records, pertinent corporate documents and properties of
the
Company and its subsidiaries, if any, as shall be reasonably necessary to enable
them to exercise their due diligence responsibility, and cause the Company’s and
its subsidiaries’ officers, directors and employees to supply all information
and respond to all inquiries reasonably requested by any such Inspector in
connection with such registration statement.
(l) If
requested by the managing underwriter or underwriters or any Holder, promptly
incorporate in a prospectus supplement or post-effective amendment such
information as the managing underwriters, each selling Holder and the Company
agree should be included therein relating to the plan of distribution with
respect to such Registrable Securities, including, without limitation,
information with respect to the number of Registrable Securities being sold
to
such underwriters, the purchase price being paid therefor by such underwriters
and with respect to any other terms of the underwritten (or best efforts
underwritten) offering of the Registrable Securities to be sold in such
offering; and make all required filings of such prospectus supplement or
post-effective amendment as soon as practicable as notified of the matters
to be
incorporated in such prospectus supplement or post-effective
amendment.
(m) Cooperate
with the selling Holders and each underwriter or agent participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with or any other securities
exchange and/or the NASD;
(n) The
Company will comply with all rules and regulations of the SEC and make available
to its security holders, within the required time periods, an earning statement
covering a period of at least twelve months, beginning with the first month
after the effective date of the registration statement (as the term “effective
date” is defined in Rule 158(c) under the Securities Act), which earning
statement shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder or any successor provisions thereto.
(o) The
Company shall enter into such customary agreements (including, if applicable,
an
underwriting agreement in customary form, which may include customary
indemnification provisions) and take all such other action, if any, in order
to
facilitate the disposition of the Registrable Securities pursuant to the Shelf
Registration, including (i) supporting any Holder’s efforts to execute block
trades with institutional buyers, (ii) making appropriate members of senior
management of the Company reasonably available (subject to consulting with
them
in advance as to schedule) for customary participation in telephonic, in-person
conferences or “road show” presentations to potential investors, (iii) obtaining
customary opinions of counsel to the Company or comfort letters from the
Company’s independent auditors and (iv) delivering copies of Prospectuses as may
be requested by the managing underwriter or underwriters.
SECTION
4. REGISTRATION
DEFAULT.
(a) The
Company agrees that, in the event that (i) the Registration Statement has not
been declared effective by the SEC on or before March 28, 2008 or (ii) if
effectiveness of the Registration Statement is suspended at any time other
than
pursuant to a Suspension Notice while any Registrable Securities remain
outstanding (each, a “Registration
Default”),
for
each ninety (90) day period during which the Registration Default remains
uncured, the Company shall be required to pay an additional amount of interest
at the rate of one percent (1%) on the Convertible Notes, in accordance with
the
terms and conditions of Section 4.01 of the Convertible Note
Indenture.
(b)
Notwithstanding
the foregoing, the Company will not be liable for liquidated damages or any
adjustment pursuant to the Convertible Note Indenture for any failure to
register Registrable Securities as a result of the Rule 415 Limitation or as
a
result of the failure of such selling Holders to provide any information
requested by the SEC or reasonably required by the Company in connection with
the preparation of the Registration Statement.
|
SECTION
5.
|
LIMITATIONS,
CONDITIONS AND QUALIFICATIONS TO OBLIGATIONS UNDER REGISTRATION
COVENANTS.
|
The
obligations of the Company described in Section
2
of this
Agreement are subject to each of the following limitations, conditions and
qualifications:
(a) Subject
to the next sentence of this paragraph, the Company shall be entitled to
postpone, for a reasonable period of time, the filing of effectiveness of,
or
suspend the right of any Holder to make sales pursuant to, any Registration
Statement otherwise required to be prepared, filed and made and kept effective
by it under the registration covenants described in Section
2
hereof;
provided,
however,
that
the duration of such postponement or suspension may not exceed 90 days in any
365-day period. Such postponement or suspension may be effected only if (i)
(A) an event or circumstance occurs and is continuing as a result of which
such Registration Statement, any related Prospectus or any document incorporated
therein by reference as then amended or supplemented or proposed to be filed
would, in the Company’s good faith judgment, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein (in the case of the Prospectus, in the light of the
circumstances under which they were made) not misleading and (B)(1) the Company
determines in its good faith judgment that the disclosure of the event at that
time would have a material adverse effect on the business, operations or
prospects of the Company or (2) the disclosure otherwise relates to a material
business transaction or development that has not yet been publicly disclosed
or
(ii) the Company shall have received a notice referred to Section
3(b)(iii)
hereof.
If the Company shall so postpone the filing or effectiveness of, or suspend
the
rights of any Holders to make sales pursuant to, a Registration Statement it
shall, as promptly as possible, notify the Holders of such determination (in
each case, a “Suspension
Notice”).
Upon
receipt of such Suspension Notice, each Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
until (i) such Holder has received copies of the supplemented or amended
Prospectus contemplated by Section
3(h)
hereof,
or (ii) such Holder is advised in writing by the Company that the use of the
Prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in
each case, the “Recommencement
Date”).
Each
Holder receiving a Suspension Notice hereby agrees that it will either (i)
destroy any Prospectuses, other than permanent file copies, then in such
Holder’s possession which have been replaced by the Company with more recently
dated Prospectuses or (ii) deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies, then in such Holder’s
possession of the Prospectus covering such Registrable Securities that was
current at the time of receipt of the Suspension Notice.
(b) The
Company’s obligations shall be subject to the obligations of the Holders to
furnish all information and materials and to take any and all actions as may
be
required under federal and state securities laws and regulations (including
any
comments issued by the SEC staff with respect to the Registration Statement
or
the matters related thereto) to permit the Company to comply with all applicable
requirements of the SEC and to obtain any acceleration of the effective date
of
such Registration Statement.
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SECTION
6.
|
REGISTRATION
EXPENSES.
|
(a) All
expenses incident to the Company’s performance of and compliance with this
Agreement will be borne by the Company, including without limitation:
(i) all
registration and filing fees and expenses;
(ii) all
fees
and expenses of compliance with federal securities and state “blue sky” or
securities laws;
(iii) all
expenses of printing (including printing certificates for the securities to
be
issued in the Registration and printing of prospectuses), messenger and delivery
services and telephone usage;
(iv) all
fees
and expenses customarily paid by an issuer in connection with an underwritten
offering, if the offering is an underwritten offering;
(v) all
fees
and disbursements of counsel for the Company;
(vi) all
fees
and disbursements of independent certified public accountants of the Company
(including the expenses of any special audit required by or incident to such
performance); and
(vii) all
other
reasonable out-of-pocket expenses of any Holder which are customarily paid
by an
issuer.
(b) The
Company will bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expenses of any annual audit and the fees and expenses
of any Person, including special experts, retained by the Company.
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SECTION
7.
|
INDEMNIFICATION.
|
(a) The
Company agrees to indemnify and hold harmless each Holder and each Person,
if
any, who controls such Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Registrable Securities) to which
each Indemnified Party (as defined in Section
7(c)
below)
may become subject under the Securities Act, the Exchange Act or otherwise,
insofar as such losses, claims, damages, liabilities or actions arise out of
or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or Prospectus or in any amendment
or supplement thereto or in any preliminary Prospectus relating to a
Registration, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of the Prospectus, in
light of the circumstances under which they were made) not misleading, and
shall
reimburse, as incurred, the Indemnified Parties for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action in respect thereof; provided,
however,
that
(i) the Company shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made
in
the Registration Statement or Prospectus or in any amendment or supplement
thereto or in any preliminary Prospectus relating to a Registration Statement
in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein and (ii) with respect to any untrue statement or omission
or alleged untrue statement or omission made in any preliminary Prospectus
relating to the Registration Statement, the indemnity agreement contained in
this subsection (a) shall not inure to the benefit of any Holder from whom
the
Person asserting any such losses, claims, damages or liabilities purchased
the
Registrable Securities concerned, to the extent that the Prospectus was required
to be delivered by such Holder under the Securities Act in connection with
such
purchase and any such loss, claim, damage or liability of such Holder results
from the fact that there was not sent or given to such Person, at or prior
to
the written confirmation of the sale of such Registrable Securities to such
Person, a copy of the final Prospectus if the Company had previously furnished
copies thereof to such Holder; provided
further, however,
that
this indemnity agreement will be in addition to any liability which the Company
may otherwise have to such Indemnified Party.
(b) Each
Holder of the Registrable Securities, severally and not jointly, will indemnify
and hold harmless the Company and each other Holder and each Person, if any,
who
controls the Company or any such other Holder within the meaning of Section
15
of the Securities Act or Section 20 of the Exchange Act from and against any
losses, claims, damages or liabilities or any actions in respect thereof, to
which the Company, such other Holder or any such controlling Person may become
subject under the Securities Act, the Exchange Act or otherwise, insofar as
such
losses, claims, damages, liabilities or actions arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained
in
a Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary Prospectus relating to a Registration Statement, or arise
out of or are based upon the omission or alleged omission to state therein
a
material fact necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading, but in each case only to the extent that the untrue statement or
omission or alleged untrue statement or omission was made in reliance upon
and
in conformity with written information pertaining to such Holder and furnished
to the Company by or on behalf of such Holder specifically for inclusion
therein; and, subject to the limitation set forth immediately preceding this
clause, shall reimburse, as incurred, the Company and each such other Holder
for
any legal or other expenses reasonably incurred by the Company, such other
Holder or any such controlling Person in connection with investigating or
defending any loss, claim, damage, liability or action in respect thereof.
This
indemnity agreement will be in addition to any liability which such Holder
may
otherwise have to the Company, such other Holder or any such controlling
Persons. No Holder shall be liable under this Section
7(b)
for any
amounts exceeding the net proceeds received by such Holder from the sale of
Registrable Securities pursuant to the Registration Statement giving rise to
the
indemnification obligation.
(c) Promptly
after receipt by any Person in respect of which indemnity may be sought pursuant
to Section 7(a)
or
(b)
(any
such Person, an “Indemnified
Party”)
under
this Section
7
of
notice of the commencement of any action or proceeding (including a governmental
investigation), such Indemnified Party will, if a claim in respect thereof
is to
be made against the indemnifying party under this Section
7,
notify
the indemnifying party of the commencement thereof; but the omission so to
notify the indemnifying party will not, in any event, relieve the indemnifying
party from any obligations to any Indemnified Party other than the
indemnification obligation provided in paragraph (a) or (b) above. In case
any
such action is brought against any Indemnified Party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will
be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such Indemnified Party (who
shall not, except with the consent of the indemnified party, be counsel to
the
indemnifying party), and after notice from the indemnifying party to such
Indemnified Party of its election so to assume the defense thereof the
indemnifying party will not be liable to such Indemnified Party under this
Section
7
for any
legal or other expenses, other than reasonable costs of investigation,
subsequently incurred by such Indemnified Party in connection with the defense
thereof. No indemnifying party shall, without the prior written consent of
the
Indemnified Party, effect any settlement of any pending or threatened action
in
respect of which any Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party unless
such
settlement includes an unconditional release of such Indemnified Party from
all
liability on any claims that are the subject matter of such action, and does
not
include a statement as to or an admission of fault, culpability or a failure
to
act by or on behalf of any Indemnified Party. The indemnifying party shall
not
be liable for the costs and expenses of any settlement of such action effected
by such Indemnified Party without the consent of the indemnifying party, which
consent shall not be unreasonably withheld.
(d) If
the
indemnification provided for in this Section
7
is
unavailable or insufficient to hold harmless an Indemnified Party under
subsections (a) or (b) above, then each indemnifying party shall contribute
to
the amount paid or payable by such Indemnified Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to
in
subsection (a) or (b) above (i) in such proportion as is appropriate to reflect
the relative benefits received by the indemnifying party or parties on the
one
hand and the Indemnified Party on the other from the sale of the Registrable
Securities by the Holders, or (ii) if the allocation provided by the foregoing
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i)
above but also the relative fault of the indemnifying party or parties on the
one hand and the Indemnified Party on the other in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company on the one hand
or
such Holder or such other Indemnified Party, as the case may be, on the other,
and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The amount paid
by
an Indemnified Party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any action or claim which
is
the subject of this subsection (d). Notwithstanding any other provision of
this
Section
7(d),
the
Holders of the Registrable Securities shall not be required to contribute any
amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Registrable Securities pursuant to the Registration
Statement exceeds the amount of damages that such Holders have otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No Person guilty of fraudulent misrepresentation (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. For purposes of this paragraph (d), each Person, if any,
who
controls such Indemnified Party within the meaning of the Securities Act or
the
Exchange Act shall have the same rights to contribution as such Indemnified
Party, and each Person, if any, who controls the Company within the meaning
of
the Securities Act or the Exchange Act shall have the same rights to
contribution as the Company.
(e) The
agreements contained in this Section
7
shall
survive the sale of the Registrable Securities pursuant to the Registration
Statement and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made by
or on
behalf of any Indemnified Party.
|
SECTION
8.
|
Rule
144.
|
The
Company shall use its best efforts to file the reports required to be filed
by
it under the Exchange Act in a timely manner and, if at any time the Company
is
not required to file such reports, it will, upon the request of any Holder,
make
publicly available other information so long as necessary to permit sales of
their securities pursuant to Rule 144. The Company covenants that it will take
such further action as any Holder may reasonably request, all to the extent
required from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144. Upon the request of any Holder, the Company
shall deliver to such Holder a written statement as to whether it has complied
with such requirements.
|
SECTION
9.
|
MISCELLANEOUS.
|
(a) Remedies.
The
Company acknowledges and agrees that upon its failure to comply with its
obligations under Section
2
hereof
may result in material irreparable injury to the Holders for which the
additional interest herein provided for may not be an adequate remedy at law,
that it will not be possible to measure damages for such injuries precisely
and
that, in the event of any such failure, any Holder may obtain such relief as
may
be granted by a court of competent jurisdiction in connection with the Company’s
obligations under Section
2
hereof.
The Company further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.
(b) 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 a Registration Statement.
(c) Discontinued
Disposition.
By its
acquisition of Registrable Securities, each Holder agrees that, upon receipt
of
a notice from the Company of the occurrence of any event of the kind described
in Section
3(b),
such
Holder will forthwith discontinue disposition of such Registrable Securities
under a Registration Statement until it is advised in writing by the Company
that the use of the applicable Prospectus (as it may have been supplemented
or
amended) may be resumed. The Company will use its best efforts to ensure that
the use of the Prospectus may be resumed as promptly as it
practicable.
(d) No
Inconsistent Agreements.
The
Company will not on or after the date of this Agreement enter into any agreement
with respect to its securities that is inconsistent with the rights granted
to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
The rights granted to the Holders hereunder do not in any way conflict with
and
are not inconsistent with the rights granted to the holders of the Company’s
securities under any agreement in effect on the Closing Date.
(e) Amendments
and Waivers.
The
provisions of this Agreement may not be amended, modified or supplemented,
and
waivers or consents to departures from the provisions hereof may not be given,
except by the Company and the written consent of the Holders of a majority
of
the Registrable Securities affected by such amendment, modification, supplement,
waiver or consent.
(f) Notices.
All
notices and other communications provided for or permitted hereunder shall
be
made in writing by hand delivery, first-class mail, facsimile transmission,
or
air courier which guarantees overnight delivery:
(1) if
to a
Holder of the Securities, at the most current address given by such Holder
to
the Company or Conversion Agent.
(2) if
to the
Company, at its address as follows:
Sinoenergy
Corporation
1603-1604,
Tower B fortune Centre Ao City
▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇.▇. ▇▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇
Attention:
Chief Financial Officer
with
a
copy to:
Sichenzia
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ LLP
▇▇
▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax:
▇▇
▇▇▇ ▇▇▇ ▇▇▇▇
Attention:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, P.C.
(3) if
to the
Purchaser, at its address indicated on Schedule
I
to the
Notes Purchase Agreement.
All
such
notices and communications shall be deemed to have been duly given: at the
time
delivered by hand, if personally delivered; three business days after being
deposited in the mail, postage prepaid, if mailed; when receipt is acknowledged
by the recipient’s facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.
(g) Successors
and Assigns.
This
Agreement shall be binding upon and shall inure to the benefit the Company,
the
Holders and their respective successors and assigns. In addition, and whether
or
not any express assignment shall have been made, the provisions of this
Agreement which are for the benefit of the Purchasers shall also be for the
benefit of and enforceable by any subsequent Holder, subject to the terms and
conditions contained in this Agreement. Each Purchaser and any Holder shall
provide written notice to the Company of any assignment of their rights
hereunder or any transfer of Registrable Securities which are entitled to such
rights under the terms of this Agreement; provided
that the
failure to provide such notice shall not affect any such rights of any Purchaser
or any Holder.
(h) Counterparts.
This
Agreement may be executed in any number of counterparts and by the parties
hereto in separate 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.
(i) Headings.
The
headings in this Agreement are for convenience of reference only and shall
not
limit or otherwise affect the meaning hereof.
(j) Governing
Law.
THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF
LAWS.
(k) Severability.
If any
one or more of the provisions contained herein, or the application thereof
in
any circumstance, is held invalid, illegal or unenforceable, the validity,
legality and enforceability of any such provision in every other respect and
of
the remaining provisions contained herein shall not be affected or impaired
thereby.
(l) Securities
Held by the Company.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the
Company or its Affiliates (other than subsequent Holders of Registrable
Securities if such subsequent Holders are deemed to be Affiliates solely by
reason of their holdings of such Registrable Securities) shall not be counted
in
determining whether such consent or approval was given by the Holders of such
required percentage.
(m) Business
Combinations.
Without
the prior written consent of the Holders, the Company shall not consolidate
with
or enter into any merger, consolidation or other business combination
transaction (for the purposes of this Section
9(k),
a
“business
combination”)
with
another Person (whether or not the Company is the surviving entity) or sell,
transfer or distribute all or substantially all of its assets, whether in a
single transaction or through a series of related transactions, to another
Person or group of affiliated Persons or permit any of its subsidiaries to
enter
into any such transaction or transactions, where the business combination or
sale, transfer or distribution involves the payment by any Person of any
securities to, or the exchange by any Person of any securities with, the Company
or any holders of Common Stock of the Company, unless the issuer of such
securities agrees to be bound by the terms of this Agreement with Holders
relating to such securities or otherwise enters into a new registration rights
agreement which shall contain terms substantially similar to this Agreement
and
shall otherwise be in a form satisfactory to the Holders.
[Signature
Page Follows]
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
SINOENERGY
CORPORATION
By:_/s/
▇▇▇▇▇ Bo__________________
Name: ▇▇▇▇▇
▇▇
Title: Chief
Executive Officer
ABAX
LOTUS LTD.
By:
By:
/s/ Yang
Xiangdong____________________
Name:
Title:
Authorized Signatory
CCIF
PETROL LIMITED
By:
/s/ ▇▇▇▇▇▇
Lo________________
Name:
Title:
Authorized Signatory