WARRANT PLACEMENT AGREEMENT
Exhibit 10.7
WARRANT PLACEMENT AGREEMENT
(this “Agreement”) made as of this ___ day of December 2006 among
China Healthcare Acquisition Corp., a Delaware corporation (the “Company”) and the undersigned (the
“Purchaser”).
WHEREAS, the Company has filed with the Securities and Exchange Commission (“SEC”) a
registration statement on Form S-1, as amended (File No. 333-135705) (the “Registration
Statement”), in connection with the Company’s initial public offering (the “IPO”) of up to
8,500,000 units, each unit (“Unit”) consisting of one share of the Company’s common stock, $.0001
par value (the “Common Stock”), and two warrants (the “Warrants”), each Warrant to purchase one
share of Common Stock; and
WHEREAS, the Company desires to sell in a private placement to the Purchaser (the “Placement”)
an aggregate of 3,000,000 Warrants (the “Placement Warrants”) substantially identical to the
Warrants being issued in the IPO pursuant to the terms and conditions hereof and as set forth in
the Registration Statement, except that the Placement Warrants to be issued in the Placement shall
not be registered under the Securities Act of 1933, as amended (the “Securities Act”);
WHEREAS, the Purchaser desires to acquire 3,000,000 Placement Warrants in a private placement;
WHEREAS, the Placement Warrants shall be governed by the Warrant Agreement filed as an exhibit
to the Registration Statement; and
WHEREAS, the Purchaser is entitled to registration rights with respect to the Placement
Warrants and the Common Stock underlying such Placement Warrants (collectively, the “Registrable
Securities”) on the terms set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants hereinafter
set forth, the parties hereto do hereby agree as follows:
1. Purchase of Placement Warrants. The Purchaser hereby agrees, directly or through
nominees, to purchase an aggregate of 3,000,000 Placement Warrants at a purchase price of $0.50 per
Placement Warrant, or an aggregate of $1,500,000 (the “Purchase Price”).
2. Closing. The closing of the purchase and sale of the Placement Warrants (the
“Closing”) will take place at such time and place as the parties may agree (the “Closing Date”),
but in no event later than the date on which the SEC declares the Registration Statement effective
(the “Effective Date”). On the Effective Date, the Purchaser shall pay the Purchase Price by wire
transfer of funds to an account maintained by the Company. Immediately prior to the closing of the
IPO, the Company shall deposit $1,500,000 of the Purchase Price into the trust account described in
the Registration Statement (the “Trust Account”). The certificates for the Placement Warrants shall
be delivered to the Purchaser promptly after the closing of the IPO.
3. Voting of Shares. If the Company solicits approval of its stockholders of a
Business Combination, the Purchaser shall vote all of the shares of the Common Stock acquired by
the Purchaser (i) pursuant to the exercise of the Placement Warrants, (ii) in the IPO and (iii) in
the aftermarket in accordance with a majority of the shares voted by the public shareholders in the
IPO and therefore waive any redemption rights they might have with respect to certain of such
shares. As used herein, a “Business
Combination” shall mean an acquisition by merger, capital stock exchange, asset or stock
acquisition of, or similar business combination with, one or more entities with agreements to
acquire an operating business selected by the Company.
4. Waiver of Liquidation Distributions. The Purchaser hereby waives any and all
right, title, interest or claim of any kind in or to any liquidating distributions by the Company
in the event of a liquidation of the Company upon the Company’s failure to timely complete a
Business Combination in connection with the Placement Warrants purchased pursuant to this
Agreement; provided however, that for purposes of clarity, any shares of Common Stock purchased in
the IPO or the aftermarket by the Purchaser shall be eligible to receive any liquidating
distributions by the Company.
5. Lock-Up Agreement. The Purchaser shall not sell, assign, hypothecate, or transfer
any of the Placement Warrants purchased pursuant to this Agreement until the consummation of a
Business Combination.
6. Representations and Warranties of the Purchaser. The Purchaser hereby represents
and warrants to the Company that:
6.1 The Purchaser is an “accredited investor” as that term is defined in Rule 501 of
Regulation D promulgated under the Securities Act.
6.2 The Placement Warrants are being acquired for the Purchaser’s own account, only for
investment purposes and not with a view to, or for resale in connection with, any distribution or
public offering thereof within the meaning of the Securities Act.
6.3 The Purchaser has the full right, power and authority to enter into this Agreement and
this Agreement is a valid and legally binding obligation of the Purchaser enforceable against the
Purchaser in accordance with its terms.
7. Registration Rights.
7.1 Demand Registration. At any time and from time to time on or after the date on
which the Company has publicly announced that it has entered into a letter of intent or made a
comparable announcement with respect to a Business Combination, the Purchaser or his transferees
holding a majority-in-interest of the Registrable Securities may make a written demand for
registration under the Securities Act of all or part of their Registrable Securities (a “Demand
Registration”). Any demand for a Demand Registration shall specify the number of Registrable
Securities proposed to be sold and the intended method(s) of distribution thereof. The Company will
notify all holders of Registrable Securities of the demand, and each holder of Registrable
Securities who wishes to include all or a portion of such holder’s Registrable Securities in the
Demand Registration (each such holder including shares of Registrable Securities in such
registration, a “Demanding Holder”) shall so notify the Company within fifteen (15) days after the
receipt by the holder of the notice from the Company. Upon any such request, the Demanding Holders
shall be entitled to have their Registrable Securities included in the Demand Registration. The
Company shall, as expeditiously as possible and in any event within sixty (60) days after receipt
of a request for a Demand, prepare and file with the SEC a Registration Statement on any form for
which the Company then qualifies or which counsel for the Company shall deem appropriate and which
form shall be available for the sale of all Registrable Securities to be registered thereunder in
accordance with the intended method(s) of distribution thereof, and shall use its best efforts to
cause such Registration Statement to become effective as promptly as practicable, but in no event
prior to the consummation of the Business Combination. The Company shall not be obligated to effect
more than two Demand Registrations in respect of Registrable Securities.
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7.2 “Piggyback” Registration Rights. Subject to the last sentence of this Section 7.2,
at any time after a Business Combination, if the Company shall determine to proceed with the
preparation and filing of a new registration statement under the Securities Act in connection with
the proposed offer and sale of any of its securities by it or any of its security holders (other
than a registration statement on Form X-0, X-0 or other limited purpose form), the Company will
give written notice of its determination to the Purchaser or his nominees. Upon the written request
from the Purchaser, within 15 days after receipt of any such notice from the Company, the Company
will, except as herein provided, cause all of the Registrable Securities covered by such request
(the “Requested Stock”) held by the Purchaser making such request (the “Requesting Holders”) to be
included in such registration statement (each, a “Piggy-Back Registration”), all to the extent
requisite to permit the sale or other disposition by the prospective seller or sellers of the
Requested Stock; provided, further, that nothing herein shall prevent the Company from, at any
time, abandoning or delaying any registration. If any registration pursuant to this Section 7.2
shall be underwritten in whole or in part, the Company may require that the Requested Stock be
included in the underwriting on the same terms and conditions as the securities otherwise being
sold through the underwriters. In such event, the Requesting Holders shall, if requested by the
underwriters, execute an underwriting agreement containing customary representations and warranties
by selling stockholders and a lock-up (not to exceed 90 days) on Registrable Securities not being
sold. If in the good faith judgment of the managing underwriter of such public offering the
inclusion of all of the Requested Stock would reduce the number of shares to be offered by the
Company or interfere with the successful marketing of the shares of stock offered by the Company,
the number of shares of Requested Stock otherwise to be included in the underwritten public
offering may be reduced pro rata (by number of shares) among the Requesting Holders and all other
holders of registration rights who are entitled to request and have requested inclusion of their
securities or excluded in their entirety if so required by the underwriter. To the extent only a
portion of the Requested Stock is included in the underwritten public offering, those shares of
Requested Stock which are thus excluded from the underwritten public offering and any other
securities of the Company held by such holders shall be withheld from the market by the Holders
thereof for a period, not to exceed 90 days, which the managing underwriter reasonably determines
is necessary in order to effect the underwritten public offering. At such time as the provisions of
the registration rights agreement filed as an exhibit to the Registration Statement covering the
shares of Common Stock acquired by the Purchaser prior to the IPO may be exercised, the exercise
and procedural provisions of such agreement, rather than the provisions of Sections 7.2, 7.3 and
7.4 hereof, shall govern the Registrable Securities with respect to Piggy-Back Registrations.
7.3 Registration Procedures. To the extent required by Sections 7.1 or 7.2, the
Company will:
(a) prepare and file with the SEC a registration statement with respect to such securities,
and use its best efforts to cause such registration statement to become and remain effective until
the earlier of the date on which all of the Registrable Securities included in the registration
statement have been disposed of in accordance with the intended method(s) of distribution set forth
in such Registration Statement or three years from such effective date;
(b) prepare and file with the SEC such amendments to such registration statement and
supplements to the prospectus contained therein as may be necessary to keep such registration
statement effective until the earlier of the date on which all of the Registrable Securities
included in the registration statement have been disposed of in accordance with the intended
method(s) of distribution set forth in such Registration Statement or three years from such
effective date;
(c) furnish to the holders participating in such registration and to the underwriters of the
securities being registered such reasonable number of copies of the registration statement,
preliminary
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prospectus, final prospectus and such other documents as such underwriters may reasonably
request in order to facilitate the public offering of such securities;
(d) use its best efforts to register or qualify the securities covered by such registration
statement under such state securities or blue sky laws of such jurisdictions as the holders may
reasonably request in writing within 20 days following the original filing of such registration
statement, except that the Company shall not for any purpose be required to execute a general
consent to service of process or to qualify to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified;
(e) notify the holders, promptly after it shall receive notice thereof, of the time when such
registration statement has become effective or a supplement to any prospectus forming a part of
such registration statement has been filed;
(f) notify the holders promptly of any request by the SEC for the amending or supplementing of
such registration statement or prospectus or for additional information;
(g) prepare and promptly file with the SEC and promptly notify such holders of the filing of
such amendment or supplement to such registration statement or prospectus as may be necessary to
correct any statements or omissions if, at the time when a prospectus relating to such securities
is required to be delivered under the Securities Act, any event shall have occurred as the result
of which any such prospectus or any other prospectus as then in effect would include an untrue
statement of a material fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances in which they were made, not misleading; and
(h) advise the holders, promptly after it shall receive notice or obtain knowledge thereof, of
the issuance of any stop order by the SEC suspending the effectiveness of such registration
statement or the initiation or threatening of any proceeding for that purpose and promptly use its
best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop
order should be issued.
The Purchaser shall cooperate with the Company in providing the information necessary to
effect the registration of the Registrable Securities, including completion of customary
questionnaires.
7.4 Expenses. The Company shall bear all costs and expenses incurred in connection
with any Demand Registration pursuant to Section 7.1, any Piggy-Back Registration pursuant to
Section 7.2, and all expenses incurred in performing or complying with its other obligations under
this Agreement, whether or not the Registration Statement becomes effective, including, without
limitation: (i) all registration and filing fees; (ii) fees and expenses of compliance with
securities or “blue sky” laws (including fees and disbursements of counsel in connection with blue
sky qualifications of the Registrable Securities); (iii) printing expenses; (iv) the Company’s
internal expenses (including, without limitation, all salaries and expenses of its officers and
employees); (v) the fees and expenses incurred in connection with the exchange listing of the
Registrable Securities; (vi) National Association of Securities Dealers, Inc. fees; (vii) fees and
disbursements of counsel for the Company and fees and expenses for independent certified public
accountants retained by the Company (including the expenses or costs associated with the delivery
of any opinions or comfort letters); (viii) the fees and expenses of any special experts retained
by the Company in connection with such registration and (ix) the fees and expenses of one legal
counsel selected by the holders of a majority-in-interest of the Registrable Securities included in
such registration. The Company shall have no obligation to pay any underwriting discounts or
selling commissions attributable to the Registrable Securities being sold by the holders thereof,
which underwriting discounts or selling commissions shall be borne by such holders. Additionally,
in an underwritten offering, all selling shareholders and the Company shall bear the expenses of
the underwriter pro rata in proportion to the respective amount of shares each is selling in such
offering.
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8. Counterparts; Facsimile. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument. This Agreement or any counterpart may
be executed via facsimile transmission, and any such executed facsimile copy shall be treated as an
original.
9. Governing Law. This Agreement shall for all purposes be deemed to be made under and
shall be construed in accordance with the laws of the State of Maryland. Each of the parties hereby
agrees that any action, proceeding or claim against it arising out of or relating in any way to
this Agreement shall be brought and enforced in the courts of the State of Maryland or the United
States District Court for the Southern District of Maryland, and irrevocably submits to such
jurisdiction, which jurisdiction shall be exclusive. Each of the parties hereby waives any
objection to such exclusive jurisdiction and that such courts represent an inconvenient forum.
IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the ___ day of
December, 2006.
| CHINA HEALTHCARE ACQUISITION CORP. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | President and Chief Executive Officer | |||||
| PURCHASER: | ||||||
| Name: | Xxxx Xxxx | |||||
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