STOCK PURCHASE AGREEMENT
EXHIBIT
10.2
West
Coast Car Company
c/o
Weifang Shengtai Pharmaceutical Co., Ltd.
Hi-Tech
Industrial Park of Changle County,
Shandong
Province,
People’s
Republic of China 262400
Ladies
and Gentlemen:
The
undersigned (the “Investor”) hereby confirms its agreement with you, in
accordance with and pursuant to the Terms and Conditions for Purchase of
Securities (the “Terms and Conditions”) set forth in Annex I, together with the
Exhibits thereto, and the Investor Questionnaire as set forth in Annex II,
each
of which is attached hereto and incorporated herein by reference, as
follows:
1. This
Stock Purchase Agreement (the “Stock Purchase Agreement”) is made as of the date
set forth below among West Coast Car Company, a Delaware corporation (the
“Company”), and the Investor.
2. The
Company has authorized the sale and issuance of up to 8,750,000 shares (the
“Securities”) of common stock of the Company, par value US$0.001 per share (the
“Common Stock”) with .5 attached warrants to purchase Common Stock per share of
Common Stock which are exercisable at $2.60 per share for a period of five
years
(each full warrant a “Warrant”), in a private placement (the “Offering”) to
certain accredited investors in the United States and elsewhere in reliance
upon
available exemptions from the U.S. Securities Act of 1933, as amended (the
“Securities Act”).
3. The
Company and the Investor agree that the Investor will purchase from the Company
the following number of shares of Common Stock, for a purchase price of US$2.00
per share and attached .5 Warrants (the “Purchase Price”), pursuant to the Terms
and Conditions. Unless otherwise requested by the Investor, certificates
representing the Securities purchased by the Investor will be registered in
the
Investor’s name and address as set forth below.
Number
of
Shares:____________________________
Number
of
Warrants (number of shares multiplied by
50%):____________________________
Purchase
Price (number of Shares multiplied by
US$2.00):_____________________________
Please
initial below to indicate agreement to purchase the number of shares and
Warrants:
____________________
4. The
Investor represents that, except as set forth below, (a) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (b) neither
it,
nor any group of which it is a member or to which it is related, beneficially
owns (including the right to acquire or vote) any securities of the Company
and
(c) it is not a Registered Representative at a NASD member firm and has no
direct or indirect affiliation or association with any NASD member firm as
of
the date hereof. Exceptions:
______________________________________________________________________________
______________________________________________________________________________
(If
no
exceptions, write “none.” If left blank, response will be deemed to be
“none.”)
Please
confirm that the foregoing correctly sets forth the agreement between us by
signing in the space provided below for that purpose. By executing this
Agreement, you acknowledge that the Company may use the information in
paragraphs 3 and 4 above and the name and address information below in
preparation of the Registration Statement (as defined in Annex I).
Dated
as
of May 15, 2007
AGREED
AND ACCEPTED:
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West
Coast Car Company
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Investor:
_____________________________
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By:
__________________________________
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/s/Qingtai
Liu
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Print
Name: ___________________________
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By:
Qingtai Liu
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Title:
President and CEO
|
Title:
________________________________
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Address:
______________________________
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_____________________________________
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Tax
ID No. ___________________________
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Contact
name: _________________________
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Telephone:
____________________________
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Name
in which shares should be registered (if different):
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_____________________________________
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ANNEX
I
TERMS
AND CONDITIONS FOR PURCHASE OF SECURITIES
1. Authorization
and Sale of the Securities.
Subject
to these Terms and Conditions, the Company has authorized the issuance and
sale
of up to 8,750,000 shares
of
its Common Stock and up to 4,375,000 Warrants (collectively, the “Securities”)
in the Offering.
2. Agreement
to Sell and Purchase the Securities; Subscription Date.
2.1 At
the
Closing (as defined in Section 3), the Company will issue and sell to the
Investor, and the Investor will purchase from the Company upon the terms and
conditions hereinafter set forth, the number of Securities set forth in
paragraph 3 of the Stock Purchase Agreement to which these Terms and Conditions
are attached at the purchase price set forth thereon (collectively, the
“Agreement”).
2.2 As
part
of the Offering, the Company may enter into the same form of Stock Purchase
Agreement, including these Terms and Conditions, with certain other investors
(the “Other Investors”) and complete sales of Securities to them. The Investor
and the Other Investors are hereinafter sometimes collectively referred to
as
the “Investors,” and this Agreement and the Stock Purchase Agreements (including
the Terms and Conditions) executed by the Other Investors are hereinafter
sometimes collectively referred to as the “Agreements.” The Company may accept
executed Agreements from Investors for the purchase of Securities until the
date
(the “Subscription Date”) on which the Company has (i) executed Agreements
with Investors for the purchase all of the Securities, and (ii) notified
Xxxxxx Freihofner Capital, a division of Xxxxx Securities, Inc, Member
NASD/MSRB/SIPC, in its capacity as U.S. placement agent for the Offering (the
“U.S. Placement Agent”), in writing, that it will no longer accept Agreements
from Investors for the purchase of Securities in the Offering, but in no event
shall the Subscription Date be later than May 7, 2007, or such earlier date
as
the Company has received $15 million in escrow. Each Investor must complete
a
Stock Purchase Agreement and an Investor Questionnaire (in the form attached
as
Annex II to the Stock Purchase Agreement) in order to purchase Securities in
the
Offering.
2.3 The
Investor acknowledges that the Company intends to pay through Xxxxx Securities,
Inc. to the placement agents in the Offering as follows: Xxxxx Securities,
Inc.,
and the Company’s foreign finder, shall each receive 5% of the gross proceeds of
the Offering, an additional 1% for non-accountable expenses and a number of
Warrants equal to 1.25% of the number of shares of Common Stock sold in the
Offering.
3. Delivery
of the Securities at Closing.
3.1 The
completion of the purchase and sale of the Securities (the “Closing”) shall
occur (the “Closing Date”) on or about May 7, 2007, or such earlier date as the
Company has received $15 million in escrow, at the offices of the Company’s
counsel. At the Closing, the Company shall deliver to the Investor, or make
arrangements to deposit with an overnight courier for next day delivery to
the
Investor, one or more stock and Warrant certificates (in the form of Exhibit
G
annexed hereto) representing the number of Securities set forth in paragraph
4
of the Stock Purchase Agreement, each such certificate to be registered in
the
name of the Investor or, if so indicated on the signature page of the Stock
Purchase Agreement, in the name of a nominee designated by the Investor.
3.2 The
obligation of the Company to issue the Securities to the Investor shall be
subject to the following conditions, any one or more of which may be waived
by
the Company: (a) receipt by the Company of a certified or official bank check
or
wire transfer of funds in the full amount of the purchase price for the
Securities being purchased hereunder as set forth in paragraph 3 of the Stock
Purchase Agreement; (b) receipt of executed Agreements from Investors
purchasing an aggregate investment in the Common Stock of no less than US$15
million, (c) completion of the purchases and sales under the Agreements with
the
Other Investors; (d) the accuracy of the representations and warranties made
by
the Investors and the fulfillment of those undertakings of the Investors to
be
fulfilled prior to the Closing; and (e) the absence of any threat of or pending
legal action, suit or proceeding which seeks to restrain or prohibit the
transactions contemplated by the Agreements.
3.3 The
Investor’s obligation to purchase the Securities shall be subject to the
following conditions, any one or more of which may be waived by the Investor:
(a) Investors shall have executed Agreements for the purchase of Securities
so
as to constitute an aggregate investment in the Common Stock of no less than
US$15 million; (b) the representations and warranties of the Company set forth
herein shall be true and correct as of the Closing Date in all material respects
(except for representations and warranties that speak as of a specific date,
which representations and warranties shall be true and correct as of such date);
(c) the Investor shall have received such documents as such Investor shall
reasonably have requested, including, a standard opinion of Company Counsel
as
to the matters set forth in Section 4.2 and as to exemption from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), of the offer and sale of the Securities; (d) the absence of
any threat of or pending legal action, suit or proceeding which seeks to
restrain or prohibit the transactions contemplated by the Agreements; (e) the
U.S. Placement Agent shall agree to refrain from selling or transferring shares
beneficially owned by it prior to the date of this Agreement or received as
compensation in accordance with Section 2.3 hereof for such period and in such
form as may be agreed with the Company; (f) the Limited Standstill Agreements,
substantially in the form attached hereto as Exhibit B, shall be executed and
delivered by each of the Company’s directors and executive officers; (g) the
Company shall have consummated a share exchange with Shengtai Holding, Inc.
pursuant to which it has acquired all the issued and outstanding shares of
common stock of Shengtai Holding, Inc. making is a wholly owned subsidiary
of
the Company , and Shengtai Holding, Inc. shall have no other securities issued
and outstanding and shall have no obligation or agreement to issue securities
other than to the Company; and (h) as of the Closing Date, Shengtai Holding,
Inc. shall own all of the issued and outstanding shares of common stock or
other
equity interest in Weifang Shengtai Pharmaceutical Co., Ltd., also known as
Weifang Shengtai Medicine Co., Ltd.
4. Representations,
Warranties and Covenants of the Company.
The
Company hereby represents and warrants to, and covenants with, the Investor,
as
follows:
4.1 Organization.
The
Company is duly organized and validly existing in good standing under the laws
of the jurisdiction of its organization. Each of the Company and its
Subsidiaries (as defined in Rule 405 under the Securities Act) has full
power and authority to own, operate and occupy its properties and to conduct
its
business as presently conducted and as described in the documents filed by
the
Company under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), (the “Exchange Act Documents”), and is registered or qualified to do
business and in good standing in each jurisdiction in which the nature of the
business conducted by it or the location of the properties owned or leased
by it
requires such qualification and where the failure to be so qualified would
have
a material adverse effect upon the condition (financial or otherwise), earnings,
business or business prospects, properties or operations of the Company and
its
Subsidiaries, considered as one enterprise (a “Material Adverse Effect”), and no
proceeding has been instituted in any such jurisdiction, revoking, limiting
or
curtailing, or seeking to revoke, limit or curtail, such power and authority
or
qualification.
4.2 Due
Authorization and Valid Issuance.
The
Company has all requisite power and authority to execute, deliver and perform
its obligations under the Agreements, and the Agreements have been duly
authorized and validly executed and delivered by the Company and, assuming
due
authorization, execution and delivery by the Investors, constitute legal, valid
and binding agreements of the Company enforceable against the Company in
accordance with their terms, except as rights to indemnity and contribution
may
be limited by state or federal securities laws or the public policy underlying
such laws, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
Securities being purchased by the Investor hereunder, upon issuance and payment
therefor pursuant to this Agreement, will be duly authorized, validly issued,
fully-paid and non-assessable.
4.3 Non-Contravention.
The
execution and delivery of the Agreements, the issuance and sale of the
Securities under the Agreements, the fulfillment of the terms of the Agreements
and the consummation of the transactions contemplated thereby will not
(A) conflict with or constitute a violation of, or default (with the
passage of time or otherwise) under, (i) any material bond, debenture, note
or other evidence of indebtedness, lease, contract, indenture, mortgage, deed
of
trust, loan agreement, joint venture or other agreement or instrument to which
the Company or any Subsidiary is a party or by which it or any of its
Subsidiaries or their respective properties are bound, (ii) the charter,
by-laws or other organizational documents of the Company or any Subsidiary,
or
(iii) any law, administrative regulation, ordinance or order of any court
or governmental agency, arbitration panel or authority applicable to the Company
or any Subsidiary or their respective properties, except in the case of
clauses (i) and (iii) for any such conflicts, violations or defaults which
are not reasonably likely to have a Material Adverse Effect or (B) result
in the creation or imposition of any lien, encumbrance, claim, security interest
or restriction whatsoever upon any of the material properties or assets of
the
Company or any Subsidiary or an acceleration of indebtedness pursuant to any
obligation, agreement or condition contained in any material bond, debenture,
note or any other evidence of indebtedness or any material indenture, mortgage,
deed of trust or any other agreement or instrument to which the Company or
any
Subsidiary is a party or by which any of them is bound or to which any of the
material property or assets of the Company or any Subsidiary is subject. No
consent, approval, authorization or other order of, or registration,
qualification or filing with, any regulatory body, administrative agency, or
other governmental body in the United States or any other person is required
for
the execution and delivery of the Agreements and the valid issuance and sale
of
the Securities to be sold pursuant to the Agreements, other than such as have
been made or obtained, and except for any post-closing securities filings or
notifications required to be made under federal or state securities
laws.
4.4 Capitalization.
The
Company is authorized to issue 100,000,000 shares of Common Stock, $.001 par
value, and 5,000,000 shares of preferred stock, $.001 par value. On Closing
Date, the Company shall have 1,000,000 shares of Common Stock issued and
outstanding, shall have no other securities issued and outstanding and shall
have no obligation or agreement to issue securities other than to Investors
under the Stock Purchase Agreements for the purchase of Common Stock not
exceeding 8,750,000 shares. The outstanding shares of capital stock of the
Company have been duly and validly issued and are fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws,
and
were not issued in violation of any preemptive rights or similar rights to
subscribe for or purchase securities. There are no outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any unissued
shares of capital stock or other equity interest in the Company or any
Subsidiary, or any contract, commitment, agreement, understanding or arrangement
of any kind to which the Company is a party or of which the Company has
knowledge and relating to the issuance or sale of any capital stock of the
Company or any Subsidiary, any such convertible or exchangeable securities
or
any such rights, warrants or options. The issue and sale of the Securities
will
not obligate the Company to issue shares of Common Stock or other securities
to
any person and will not result in a right of any holder of the Company’s
securities to adjust the exercise, conversion, exchange or reset price under
such securities. Without limiting the foregoing, no preemptive right, co-sale
right, right of first refusal, registration right, or other similar right exists
with respect to the Securities or the issuance and sale thereof. No further
approval or authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the Securities.
The
Company owns the entire equity interest in each of its Subsidiaries, free and
clear of any pledge, lien, security interest, encumbrance, claim or equitable
interest. There are no stockholders agreements, voting agreements or other
similar agreements with respect to the Common Stock to which the Company is
a
party or, to the knowledge of the Company, between or among any of the Company’s
stockholders.
4.5 Legal
Proceedings.
There
is no material legal or governmental proceeding pending or, to the knowledge
of
the Company, threatened to which the Company or any Subsidiary, or Shengtai
Holdings, Inc. or Weifang Shengtai Pharmaceutical Co., Ltd. (collectively
“Shengtai”), is or may be a party or of which the business or property of the
Company or any Subsidiary or Shengtai is subject that is not disclosed in the
Exchange Act Documents.
4.6 Financial
Statements.
The
financial statements of the Weifang Shengtai Pharmaceutical Co., Ltd and its
related notes attached hereto as Exhibit E (the “Financial Statements”) present
fairly, in accordance with generally accepted accounting principles, the
financial position of Weifang Shengtai Pharmaceutical Co., Ltd as of the dates
indicated, and the results of its operations and cash flows for the periods
therein specified consistent with its books and records. Such financial
statements (including the related notes) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods therein specified, except as may be disclosed in
the
notes to such financial statements, or in the case of unaudited statements,
as
may be permitted by the Securities and Exchange Commission (the “SEC”). The
other financial information pertaining to Weifang Shengtai Pharmaceutical Co.,
Ltd. has been prepared on a basis consistent with its financial
statements.
4.7 No
Material Adverse Change.
Except
as disclosed in the Financial Statements, as of December 31, 2006, there has
not
been (i) any material adverse change in the financial condition or earnings
of Weifang Shengtai Pharmaceutical Co., Ltd., (ii) any material adverse
event affecting Weifang Shengtai Pharmaceutical Co., Ltd., (iii) any
obligation, direct or contingent, that is material to Weifang Shengtai
Pharmaceutical Co., Ltd, incurred by it, except obligations incurred in the
ordinary course of business, (iv) any dividend or distribution of any kind
declared, paid or made on the capital stock of Weifang Shengtai Pharmaceutical
Co., Ltd, or (v) any loss or damage (whether or not insured) to the
physical property of Weifang Shengtai Pharmaceutical Co., Ltd which has been
sustained which has a Material Adverse Effect. As of December 31, 2006, there
has not been (i) any material adverse change in the financial condition or
earnings of Shengtai Holding, Inc., (ii) any material adverse event
affecting Shengtai Holding, Inc., Ltd., (iii) any obligation, direct or
contingent, that is material to Shengtai Holding, Inc., incurred by it, except
obligations incurred in the ordinary course of business, (iv) any dividend
or distribution of any kind declared, paid or made on the capital stock of
Shengtai Holding, Inc., or (v) any loss or damage (whether or not insured)
to the physical property of Shengtai Holding, Inc. which has been sustained
which has a Material Adverse Effect.
4.8 Reporting
Status; Disclosure.
The
Company has filed in a timely manner all documents and reports that the Company
was required to file under the Exchange Act during the twelve months preceding
the date of this Agreement or has received a valid extension of such time of
filing and has filed any such documents and reports prior to the expiration
of
any such extension. The Exchange Act Documents complied in all material respects
with the applicable requirements of the SEC, including the rules and regulations
promulgated under the Securities Act and the Exchange Act as required as of
their respective filing dates and the information contained therein was
accurate, true and complete in all material respects as of such filing date.
The
representations and warranties of the Company contained in this Section 4
as of the date hereof and as of the Closing Date are accurate, true and complete
in all material respects.
4.9 No
Manipulation of Stock.
The
Company has not taken and will not take any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation
of
the price of the Common Stock to facilitate the sale or resale of the
Securities.
4.10 Company
not an “Investment Company”.
The
Company is not, and as a result of the transactions contemplated by this
Agreement will not be, an “investment company” or an entity “controlled” by an
“investment company” within the meaning of the Investment Company
Act.
4.11 Transactions
with Affiliates and Employees.
Except
as set forth in the Exchange Act Documents, none of the officers or directors
of
the Company is a party to any transaction with the Company (other than for
services as officers and directors), since the beginning of the current fiscal
year in excess of $120,000 other than (a) payment of salary or consulting fees
for services rendered, (b) reimbursement for expenses incurred or advances
made
on behalf of the Company, (c) interests arising solely as a shareholder of
the
Company or its subsidiaries, and (d) employee benefits, including stock option
agreements under any stock option plan of the Company.
None
of
the officers or directors of the Weifang Shengtai Pharmaceutical Co., Ltd.
is a
party to any transaction with the Weifang Shengtai Pharmaceutical Co., Ltd.
(other than for services as officers and directors), since the beginning of
the
current fiscal year in excess of $120,000 other than (a) payment of salary
or
consulting fees for services rendered, (b) reimbursement for expenses incurred
or advances made on behalf of the Weifang Shengtai Pharmaceutical Co., Ltd.,
(c)
interests arising solely as a shareholder of the Weifang Shengtai Pharmaceutical
Co., Ltd. or its subsidiaries, and (d) employee benefits, including stock option
agreements under any stock option plan of the Weifang Shengtai Pharmaceutical
Co., Ltd.
None
of
the officers or directors of the Shengtai Holding, Inc. is a party to any
transaction with the Shengtai Holding, Inc. (other than for services as officers
and directors), since the beginning of the current fiscal year in excess of
$120,000 other than (a) payment of salary or consulting fees for services
rendered, (b) reimbursement for expenses incurred or advances made on behalf
of
the Shengtai Holding, Inc., (c) interests arising solely as a shareholder of
the
Shengtai Holding, Inc. or its subsidiaries, and (d) employee benefits, including
stock option agreements under any stock option plan of the Shengtai Holding,
Inc.
4.12 Accountants.
To the
Company’s knowledge, Xxxxx Xxxxxxxx Xxxxx Xxxxxx and Xxxxxx, XX are independent
accountants as required by the Securities Act and the rules and regulations
promulgated thereunder.
4.13
Taxes.
The
Company has filed all necessary federal, state and foreign income and franchise
tax returns and has paid or accrued all taxes shown as due thereon, and the
Company has no knowledge of a tax deficiency which has been or might be asserted
or threatened against it which would have a Material Adverse Effect.
4.14 Transfer
Taxes.
On the
Closing Date, all stock transfer or other taxes (other than income taxes) which
are required to be paid in connection with the sale and transfer of the
Securities to be sold to the Investor hereunder will be, or will have been,
fully paid or provided for by the Company and all laws imposing such taxes
will
be or will have been fully complied with.
4.15 Private
Offering.
The
Company has not distributed and will not distribute prior to the Closing Date
any offering material in connection with this Offering and sale of the
Securities other than the exhibits attached hereto and the corporate
presentation containing certain financial projections which constitute material
non-public information (the “Corporate Presentation”). The Company has not in
the past nor will it hereafter take any action to sell, offer for sale or
solicit offers to buy any securities of the Company which would bring the offer,
issuance or sale of the Securities as contemplated by this Agreement, within
the
provisions of Section 5 of the Securities Act, unless such offer, issuance
or
sale was or shall be within the exemptions of Section 4 of the Securities Act
and Regulation S promulgated thereunder. However, the Company shall not be
restricted from the issuance of (i) equity securities issued or sold in
connection with commercial or strategic partnership arrangements entered into
for primarily non-equity financing purposes, (ii) equity securities issued
on a
pro rata basis to all holders of a class of outstanding equity securities of
the
Company as a result of a stock split or stock dividend, (iii) equity securities
or options to acquire equity securities issued pursuant to employee stock
option, purchase or similar equity-based stock incentive plans in effect as
of
the date of this Agreement, (iv) equity securities sold or otherwise disposed
of
pursuant to plans adopted in compliance with Rule 10b5-1 under the Exchange
Act,
and (v) equity securities issued in connection with acquisitions where such
equity securities are issued by the Company as consideration to the purchaser
in
such acquisition.
4.16 Limited
Standstill.
The
Company will make available to the Investors on the Closing Date copies of
the
Limited Standstill Agreements, substantially in the form attached hereto as
Exhibit B, executed by each of the Company’s directors, the Company’s President
and the Company’s Chief Financial Officer (if applicable). The Company
represents and warrants to the Investors that, as of the date of the Agreements,
no other member of the Company’s management owns equity securities or securities
or instruments convertible into or exchangeable for equity securities of the
Company.
4.17 Foreign
Corrupt Practices; Anti Money Laundering.
Neither
the Company and its subsidiaries, nor to the knowledge of the Company or its
subsidiaries as the case may be, any agent or other person acting on behalf
of
the Company or its subsidiaries, has violated in any material respect any
provision of the Foreign Corrupt Practices Act of 1977, as amended, at any
time
the Company has been subject thereto. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance with the
money laundering statutes of applicable jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any applicable governmental authority (collectively,
the “Money Laundering Laws”) and no action, suit or proceeding by or before any
court or governmental authority or arbitrator involving the Company or its
subsidiaries with respect to the Money Laundering Laws is pending or, to the
Company’s knowledge, threatened.
4.18 Acknowledgement
Regarding Investors’ Purchase of Securities.
The
Company acknowledges and agrees that each of the Investors is acting solely
in
the capacity of an arm’s length purchaser with respect to the Agreements and the
transactions contemplated thereby. The Company further represents to each
Investor that the Company’s decision to enter into this Agreement has been based
solely on the independent evaluation of the transactions contemplated hereby
by
the Company and its representations.
4.19 Disclosure.
Following the issuance of the press release and Current Report on Form 8-K
in
accordance with Section 10 hereof, the Investors will not, to the Company’s
knowledge, possess any material non-public information concerning the Company.
The Company acknowledges that the Investor is relying on the representations,
acknowledgements and agreements made by the Company in this Section 4 and
elsewhere in this Agreement in making decisions concerning an investment in
the
Company’s securities.
5. Additional
Covenants of the Company.
5.1 Make
Good Shares.
The
Company agrees cause Mr. Qingtai Liu to escrow with the Company’s transfer agent
(or other escrow agent agreed to by the parties) to reserve for issuance on
the
Closing Date an aggregate of 5,000,000 shares of Common Stock then held by
Xx.
Xxx or other members of management (the “Make Good Shares”) for issuance to
Investors in accordance with the following:
(a) If
the
Company’s net income for the fiscal year ending June 30, 2007, is less than US$7
million, as set forth in the Company’s audited financial statements as filed
with the SEC in the Company’s Annual Report on Form 10-K for the fiscal year
ended June 30, 2007 (and any amendments thereto) or if such Annual Report is
not
prepared or filed with the SEC by the last date permissible under the Exchange
Act and any applicable grace period under the rules of any exchange or
inter-dealer quotation system on which the Company’s Common Stock is being
traded or quoted (the “Penalty Date”), then the Company and Mr. Qingtai Liu
shall provide to the Company’s Transfer Agent an instruction notice
substantially in the form attached hereto as Exhibit A, with a copy to
Investors, to transfer 2,500,000 Make Good Shares from escrow to the Investors
on a pro-rata basis; provided, however, that if no Make Good Shares are to
be
transferred pursuant to this Section 5.1(a), then such shares shall continue
to
be held in escrow , if required, in accordance with Section 5.1(b)
below;
(b) If
the
Company’s net income for the fiscal year ending June 30, 2008, is less than US$9
million, as set forth in the Company’s audited financial statements as filed
with the SEC in the Company’s Annual Report on Form 10-K for the fiscal year
ended June 30, 2008 (and any amendments thereto) or if such Annual Report is
not
prepared or filed with the SEC by the Penalty Date, then the Company and Mr.
Qingtai Liu shall provide to the Company’s Transfer Agent an instruction notice
substantially in the form attached hereto as Exhibit A, with a copy to
Investors, to transfer 2,500,000 Make Good Shares to the Investors on a pro-rata
basis.
(c) In
the
event that liquidated damages are required to be paid to Investors as set forth
in Section 8.1 below in connection with a Registration Default (as defined
below), then, prior to the determination required under Section 5.1(a) and
(b)
above, the amount of any such liquidated damages required to be paid pursuant
to
Section 8.1 shall be deducted from the required net income amount set forth
in
Section 5.1 (a) and (b) above with respect to the fiscal year in which such
liquidated damages are paid.
(d) No
portion of the Make Good Shares may be transferred to Investors or registered
for resale prior to the Penalty Date for fiscal year ended June 30, 2007 or,
if
later, thirty (30) days after the effective date of the Registration Statement
for the Securities sold in the Offering, provided that, if the Registration
Statement has not been declared effective by the Relevant Effective Date defined
in Section 8.1, all Make Goods Shares required to be transferred to Investors
as
of that date shall be transferred to the Investors on such date.
(e) Each
certificate evidencing a Make Good Share shall be dated June 30 of the relevant
year and shall be deemed transferred to the appropriate Investor as of such
date.
5.2 Right
of First Refusal.
From
the Closing Date and continuing for the longer of (a) a period of one (1) year
following the effective date of the Initial Registration Statement (as defined
in Section 8.1 below) covering the resale of the Securities, or (b) two years
following the Closing Date, the Company shall give the Investors the right
of
first refusal on any future placement or offering of any debt or equity
securities (the “Future Securities”) to a proposed third party purchaser.
The
Company shall, not less than fifteen (15) business days prior to the
consummation of such issuance or sale, offer such Future Securities to the
Investors by sending written notice (an “Issuance Notice”) to the Investors,
which shall state (a)
the
identity of the proposed third party purchaser, (b) a description of the Future
Securities to be issued or sold, including detailed terms of such securities,
(c) the amount of the Future Securities proposed to be issued to the proposed
third party purchaser (the “Offered New Securities”); (d) the proposed purchase
price for the Offered Securities (the “Issuance Price”); and (e) the terms and
conditions of such proposed sale.
The
Issuance Notice shall also certify that the Company has received a firm offer
from the proposed third party purchaser and in good faith believes a binding
agreement for the Offered New Securities is obtainable on the terms set forth
in
the Issuance Notice. The Issuance Notice shall also include a copy of any
written proposal, term sheet or letter of intent or other agreement or
understanding relating to the Offered New Securities and proof satisfactory
to
the Company that the Offered New Securities will not violate any applicable
securities laws. Upon delivery of the Issuance Notice, such offer shall be
irrevocable unless and until the rights of first refusal provided for herein
shall have been waived or shall have expired.
By
notification to the Company within ten (10) business days after the Issuance
Notice is given, the Investor may elect to purchase or otherwise acquire, at
the
price and on the terms specified in the Issuance Notice, up to all of the
Offered New Securities.
The
closing of any sale pursuant to this Section 5.2 shall occur within thirty
(30)
days after the date on which such notification is given by the
Investor.
If the
Investors elect to acquire more than all the Offered New Securities, then such
Offered New Securities shall be pro-rated to such Investors in accordance with
their respective shareholdings in the Company. If
less
than all of the Offered New Securities are elected to be purchased or acquired
as provided in Section 5.2, the Company may, during the thirty (30) day period
following the expiration of the 10-day period provided in Section 5.2, offer
and
sell the remaining unsubscribed portion of such securities to the proposed
third
party purchaser in the Issuance Notice at a price not less than, and upon terms
no more favorable to the proposed third party purchaser than, those specified
in
the Issuance Notice. If the Company does not enter into an agreement for the
sale of such securities within such period, or if such agreement is not
consummated within thirty (30) days after the execution thereof, the right
of
first refusal provided hereunder shall be deemed to be revived and such
securities shall not be offered to a third party unless first reoffered to
the
Investors in accordance with this Section.
5.3 Capitalization
upon Closing.
The
capitalization of the Company upon the Closing is set forth in Exhibit D annexed
hereto. The Company shall not take any action which would or might change the
capitalization without the prior written approval of Chinamerica Fund,
L.P.
5.4. Independent
Directors, Public Relations and Executive Searches.
The
Company agrees to deliver $5,500,000 directly into escrow on Closing Date for
the purposes of (i) ensuring the appointment of a five member board of
directors, of which a minimum of 3 directors are independent, (ii) ensuring
the
appointment of a duly qualified Chief Financial Officer with a minimum two-year
employment agreement and (iii) applying $500,000 to effect an integrated
investor and public relations campaign. The terms of such escrow shall be
governed by an escrow agreement by and among Tri-Sate Title & Escrow, LLC,
as escrow agent, the Company and the Investors in the form attached as
Exhibit
H
(the
“Escrow
Agreement”).
The
release of such portion of the escrow monies from escrow shall be effected
in
accordance with the terms of the Escrow Agreement.
6. Representations,
Warranties and Covenants of the Investor.
6.1 The
Investor represents and warrants to, and covenants with, the Company that:
(i) the Investor is either an “accredited investor” as defined in
Regulation D under the Securities Act or a non-U.S. person as defined in
Regulation S under the Securities Act who is acquiring the Securities in an
offshore transaction, and the Investor is also knowledgeable, sophisticated
and
experienced in making, and is qualified to make decisions with respect to
investments in shares presenting an investment decision like that involved
in
the purchase of the Securities, including investments in securities issued
by
the Company and investments in comparable companies, and has requested,
received, reviewed and considered all information it deemed relevant in making
an informed decision to purchase the Securities; (ii) the Investor
understands that the Securities are “restricted securities” and have not been
registered under the Securities Act and is acquiring the number of Securities
set forth in paragraph 3 of the Stock Purchase Agreement in the ordinary course
of its business and for its own account and not with a view towards, or for
resale in connection with, the public sale or distribution thereof, except
pursuant to sales registered or exempted under the Securities Act (including
pursuant to the Registration Statement (as defined in Section 8.1 below), and
has no agreement or understanding, directly or indirectly, with any person
to
distribute any of the Securities; (iii) the Investor will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of
the
Securities except in compliance with the Securities Act, applicable state
securities laws and the respective rules and regulations promulgated thereunder;
(iv) the Investor has completed or caused to be completed and delivered to
the Company the Investor Questionnaire and has answered all questions on the
Investor Questionnaire for use in preparation of the Registration Statement
and
the answers thereto are true, correct and complete in all material respects
as
of the date hereof and will be true, correct and complete in all material
respects as of the Closing Date; (v) the Investor will notify the Company
immediately of any change in any of such information until such time as the
Investor has sold all of its Securities or until the Company is no longer
required to keep the Registration Statement effective; (vi) the Investor has,
in
connection with its decision to purchase the number of Securities set forth
in
paragraph 3 of the Stock Purchase Agreement, relied only upon the Exchange
Act
Documents, the representations and warranties of the Company contained herein
and in the Exhibits attached hereto, and written information provided by the
Company or its counsel; and (vii) the Investor has reviewed and understood
the
Company’s Exchange Act Documents; (viii) the Investor has read and understands
the risk factors of Weifang Shengtai Pharmaceutical Co., Ltd. (in Exhibit F
hereto) and has considered those and other risks in deciding to purchase the
Securities and (ix) the Investor is not purchasing the Securities as a result
of
any advertisement, article, notice or other communication regarding the
Securities published in any newspaper, magazine or similar media or broadcast
over television or radio or presented at any seminar or any other general
solicitation or general advertisement. The Investor understands that its
acquisition of the Securities has not been registered under the Securities
Act
or registered or qualified under any state securities law in reliance on
specific exemptions therefrom, which exemptions may depend upon, among other
things, the representations of the Investor, including the bona fide nature
of
the Investor’s investment intent, as contained herein. The Investor acknowledges
and agrees that a restrictive legend will be included on the Securities as
follows:
THE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND, ACCORDINGLY, MAY NOT BE
OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHETICATED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR IN ACCORDANCE WITH AN
EXEMPTION THEREFROM, IF AVAILABLE, OR IN A TRANSACTION NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS, AS EVIDENCED BY AN OPINION OF COUNSEL FOR THE TRANSFEROR
REASONABLY SATISFACTORY TO THE COMPANY, PROVIDED THAT NO SUCH OPINION OR ANY
CONSENT BY THE COMPANY SHALL BE REQUIRED FOR PLEDGE OF THE SECURITIES PURSUANT
TO A BONA FIDE MARGIN OR FINANCING ARRANGEMENT.
6.2 The
Investor acknowledges that no action has been or will be taken in any
jurisdiction outside the United States by the Company that would permit an
offering of the Securities, or possession or distribution of offering materials
in connection with the issue of the Securities, in any jurisdiction outside
the
United States where legal action by the Company for that purpose is required.
Each Investor outside the United States will comply with all applicable laws
and
regulations in each foreign jurisdiction in which it purchases, offers, sells
or
delivers Securities or has in its possession or distributes any offering
material, in all cases at its own expense.
6.3 The
Investor further represents and warrants to, and covenants with, the Company
that (i) the Investor has full right, power, authority and capacity to
enter into this Agreement and to consummate the transactions contemplated hereby
and has taken all necessary action to authorize the execution, delivery and
performance of this Agreement; and (ii) this Agreement constitutes a valid
and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of the Investors herein may be
legally unenforceable.
6.4 Investor
will not, prior to the effectiveness of the Registration Statement, directly
or
indirectly, sell, offer to sell, solicit offers to buy, dispose of, loan, pledge
or grant any right with respect to (collectively, a "Disposition") the
Securities in violation of the Securities Act. The Investor has not, during
the
15 days prior to the date of this Agreement, directly or indirectly, traded
in
the Securities or established any hedge or other position in the Securities
that
is outstanding on the Closing Date and that is designed to or expected to lead
to or result in a Disposition by the Investor or any other person or entity,
nor
will Investor engage in any hedging or other transaction which is designed
to or
could reasonably be expected to lead to or result in a Disposition of Securities
by the Investor or any other person or entity in violation of the Securities
Act. For purposes of the preceding sentence, “hedging or other transactions”
would include without limitation effecting any short sale or having in effect
any short position (whether or not such sale or position is against the box
and
regardless of when such position was entered into) or any purchase, sale or
grant of any right (including without limitation any put or call option) with
respect to the Securities of the Company or with respect to any security (other
than a broad-based market basket or index) that includes, relates to or derives
any significant part of its value from the Securities.
6.5 The
Investor understands that nothing in the Exchange Act Documents, this Agreement
or any other materials presented to the Investor in connection with the purchase
and sale of the Securities constitutes legal, tax or investment advice. The
Investor has consulted such legal, tax and investment advisors as it, in its
sole discretion, has deemed necessary or appropriate in connection with its
purchase of Securities.
6.6 The
Investor represents to the Company that, at all time during the Offering, the
Investor has maintained in confidence all material non-public information
relating to the Company received by the Investor from the Company or the
Placement Agents, and covenants that from the date hereof it will maintain
in
confidence all material non-public information regarding the Offering and the
Corporate Presentation received by the Investor from the Company or the
Placement Agents until such information (a) is disclosed by the Company pursuant
to Section 10 below or otherwise, (b) becomes generally publicly available
other
than through a violation of this provision by the Investor or its agents, or
(c)
is required to be disclosed in legal, regulatory or administrative proceedings
or similar process; provided, however, that before making any disclosure in
reliance on this Section 6.6, the Investor will give the Company at least
fifteen (15) days prior written notice ( or such shorter period as may be
required by law) specifying the circumstances giving rise thereto and will
furnish only that portion of the non-public information which is legally
required and will exercise its commercially reasonable efforts to ensure that
confidential treatment will be accorded any non-public information so furnished.
6.7 The
Investor acknowledges that it has independently evaluated the merits of the
transaction contemplated by this Agreement, that it has independently determined
to enter into the transaction contemplated hereby, that it is not relying on
any
advice from or evaluation by any Other Investor, and that it is not acting
in
concert with any Other Investor in making its purchase of the Securities
hereunder. The Investor acknowledges that the Investors have not taken any
actions that would deem the Investors to be members of a “group” for purposes of
Section 13(d) of the Exchange Act.
6.8 The
Investor agrees to comply with the requirements of Regulation M, if applicable,
with respect to the sale of the Securities by the Investor. The Investor hereby
confirms its understanding that it may not cover short sales made prior to
the
effective date of the Registration Statement with Securities registered for
resale thereon. The Investor acknowledges that it does not intend to cover
short
positions made by it before the effective date with Securities held by it and
registered on the Registration Statement.
7. Survival
of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Securities being purchased and the payment
therefor.
8. Registration
of the Securities; Compliance with the Securities Act.
8.1 Registration
Requirement.
The
Company shall file a Registration Statement on
Form
S-1
(or any other applicable form to this offering) (the “Initial Registration
Statement”) within 45 days of the Closing of this transaction covering 100% of
the Common Stock purchased and the Common Stock underlying the Warrants with
the
SEC (the “Registrable Securities”). If the Initial Registration Statement is not
filed within 45 days of the Closing Date (the “Relevant Filing Date”), damages
shall be paid to each Investor in cash in an amount equal to 1.0% of the
purchase amount subscribed for by such the Investor. Such 1.0% damage amount
shall e paid each month (or part thereof) after the Relevant Filing Date and
before the date of the Initial Registration Statement is filed. Such 1.0% damage
amount shall be paid on the first business day after the Relevant Filing Date
and on each monthly anniversary of said date until the Initial Registration
Statement is filed.
If
the
Initial Registration Statement is not declared effective within 200 days of
the
Closing date (the “Relevant Effective Date”),
the
Company shall pay liquidated damages to the Investors. Such damages shall be
paid in cash to each Investor in the amount equal to 0.50% of the purchase
amount subscribed for by such Investor. Such 0.5% damage amount shall be paid
each month (or part thereof) after the Relevant Effective Date and before the
date the Initial Registration Statement is declared effective. Such 0.5% damage
amount shall be paid on the first business day after the Relevant Effective
Date
and on each monthly anniversary of said date (applied on a daily pro-rata basis)
until the Initial Registration Statement is declared effective, provided,
however, that the Company shall not have any obligation to pay liquidated
damages pursuant to this provision for any delay arising from (i) issues raised
by the SEC relating to Rule 415 of the Securities Act, as amended, or to the
structure of the sale and resale of the Securities, (ii) information required
from person or entities other than the Company or its subsidiary, or (iii)
issues resulting from or relating to acts or omissions of persons or entities
other than the Company or its subsidiary. Such liquidated damages (including
any
damages under Section 8.8(f)) shall be capped at 10% of the principal amount
subscribed for by the Investors (the “Registration Damages Cap”).
If
necessary, the Company shall file subsequent Registration Statements until
all
of the Registrable Securities have been registered for resale (each a
“Subsequent Registration Statement”). The Subsequent Registration Statements
will be filed at the earliest date permissible under then current SEC guidance,
which is at least 180 days from the effective date of the last Registration
Statement (each such date referred to as “Subsequent Relevant Filing Date”).
Each Investor’s Registrable Securities in this transaction will participate in
the subsequent registrations on a pro rata basis. If any Subsequent Registration
Statement is not filed on time, liquidated damages equal to the amount of 1.0%
of the purchase amount of the remaining unregistered Registrable Securities
shall be paid pro-rata in cash to the Investors on the first business day after
the Subsequent Relevant Filing Date, and on each monthly anniversary of said
date (applied on a daily pro rata basis) until the Subsequent Registration
Statement is filed, provided, however, that the Company shall not have any
obligation to pay liquidated damages pursuant to this provision for any delay
arising from (i) issues raised by the SEC relating to Rule 415 of the Securities
Act, as amended, or to the structure of the sale and resale of the Registrable
Securities, (ii) information required from person or entities other than the
Company or its subsidiary, or (iii) issues resulting from or relating to acts
or
omissions of persons or entities other than the Company or its subsidiary.
Such
liquidated damages shall be subject to and included in the Registration Damages
Cap.
If
the
Subsequent Registration Statement is not declared effective within 200 days
of
the Subsequent Relevant Filing Date (each referred to as the “Subsequent
Relevant Effective Date”), liquidated damages shall be paid in cash pro-rata to
Investors holding unregistered Registrable Securities in the amount equal to
0.50% of the purchase amount of the remaining unregistered Registrable
Securities subscribed for by the Investors per month (applied on a daily pro
rata basis) after the Subsequent Relevant Effective Date to be paid on the
first
business day after the Subsequent Relevant Effective Date and on each monthly
anniversary of said date until the Registration Statement is declared effective,
provided, however, that the Company shall not have any obligation to pay
liquidated damages pursuant to this provision for any delay arising from (i)
issues raised by the SEC relating to Rule 415 of the Securities Act, as amended,
or to the structure of the sale and resale of the Securities, (ii) information
required from person or entities other than the Company or its subsidiary,
or
(iii) issues resulting from or relating to acts or omissions of persons or
entities other than the Company or its subsidiary. Such liquidated damages
shall
be subject to and included in the Registration Damages Cap.
8.2 Rule
415; Cutback.
Notwithstanding the registration obligations set forth in Section 8.1, in the
event the SEC informs the Company that all of the Registrable Securities cannot,
as a result of the application of Rule 415, be registered for resale on a single
registration statement, the Company agrees to promptly (i) inform each of the
holders thereof and use its reasonable best efforts to file amendments to the
Initial Registration Statement as required by the SEC and/or (ii) withdraw
the
Initial Registration Statement and file a new registration statement (a “New
Registration Statement”), in either case covering the maximum number of
Registrable Securities permitted to be registered by the SEC on Form S-1 or
such
other form available to register for resale the Registrable Securities.
In the event the Company amends the Initial Registration Statement or files
a
New Registration Statement, as the case may be, under clauses (i) or (ii) above,
the Company will use its reasonable best efforts to file with the SEC, as
promptly as allowed by SEC or staff guidance provided to the Company or to
registrants of securities in general, one or more registration statements on
Form S-1 or such other form available to register for resale those Registrable
Securities that were not registered for resale on the Initial Registration
Statement, as amended, or the New Registration Statement (the “Remainder
Registration Statements”).
8.3 Limitation
to Registration Requirement.
The
Company shall not be obligated to effect any registration of the Registrable
Securities or take any other action pursuant to this Section 8 or any subsection
thereof (i) in any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting such
registration, qualification or compliance unless the Company is already subject
to service in such jurisdiction and except as may be required by the Securities
Act, or (ii) during any period in which the Company suspends the rights of
an
Investor after giving the Investor a Suspension Notice (defined below) pursuant
to Section 8.8 hereof.
8.4 Expenses
of Registration.
Except
as otherwise expressly set forth, the Company shall bear all expenses incurred
by the Company in compliance with the registration obligation of the Company,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel for the Company incurred in
connection with any registration, qualification or compliance pursuant to the
Agreements. All underwriting discounts, selling commissions and expense
allowances applicable to the sale by the Investor of Registrable Securities
and
all fees and disbursements of counsel for the Investor shall be borne by the
Investor.
8.5 Registration
Procedures.
The
Company shall:
(a) Subject
to the prompt receipt of necessary information from the Investors, prepare
and
file with the SEC such amendments and supplements to the Registration Statement
and the prospectus used in connection with the Registration Statement as may
be
necessary to comply with the provisions of the Securities Act with respect
to
the disposition of securities covered by the Registration
Statement;
(b) Respond
as promptly as reasonably practicable to any comments received from the SEC
with
respect to the Registration Statement or any amendment thereto.
(c) Notify
the Investor as promptly as reasonably practicable and (if requested by any
such
person) confirm such notice in writing no later than one trading day following
the day (A) when a prospectus or any prospectus supplement or post-effective
amendment to the Registration Statement is proposed to be filed and (B) with
respect to the Registration Statement or any post-effective amendment, when
the
same has become effective;
(d) Furnish
such number of prospectuses and other documents incident thereto, including
supplements and amendments, as the Investor may reasonably request, together
with a copy of a letter from the Company substantially in the form attached
hereto as Exhibit C;
(e) Use
its
reasonable best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of the Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment;
(f) Use
its
reasonable best efforts to comply with all applicable rules and regulations
of
the U.S. federal and state securities laws applicable to the Registration
Statement; and
(g) Take
such
action, consistent with Section 11 below, as is necessary to cause the Company’s
transfer agent promptly after the effective date of the Registration Statement,
to effect the removal of the legend set forth in Section 6.1 above.
8.6 Statement
of Beneficial Ownership.
The
Company may require the Investor to furnish to the Company a certified statement
as to the number of shares of Common Stock beneficially owned by such Investor
and the controlling person thereof and any other such information regarding
the
Investor, the Registrable Securities held by the Investor and the intended
method of disposition of such securities as shall be reasonably required with
respect to the registration of the Investor’s Registrable Securities. The
Investor hereby understands and agrees that the Company may, in its sole
discretion, exclude the Investor’s shares of Common Stock from the Registration
Statement in the event that the Investor fails to provide such information
requested by the Company within the time period reasonably specified by the
Company.
8.7 Compliance.
The
Investor covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to such Investor in connection
with sales of Registrable Securities pursuant to the registration statement
required hereunder.
8.8 Transfer
of Securities After Registration; Suspension.
(a) The
Investor agrees that it will not effect any disposition of the Securities or
its
right to purchase the Securities that would constitute a sale within the meaning
of the Securities Act except as contemplated in the Registration Statement
referred to in Section 8.1 and as described below or as otherwise permitted
by law, and that it will promptly notify the Company of any changes in the
information set forth in the Registration Statement regarding the Investor
or
its plan of distribution.
(b) Except
in
the event that paragraph (c) below applies, the Company shall (i) if deemed
necessary by the Company, prepare and file from time to time with the SEC a
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to
make the statements therein not misleading, and so that, as thereafter made
available to or, if required, delivered to purchasers of the Securities being
sold thereunder in accordance with the Securities Act, such Prospectus will
not
contain an untrue statement of a material fact or omit to state a material
fact
required to be stated therein or necessary to make the statements therein,
in
light of the circumstances under which they were made, not misleading;
(ii) to the extent required under the Securities Act, provide the Investor
copies of any documents filed pursuant to Section 8.8(b)(i); and
(iii) inform each Investor that the Company has complied with its
obligations in Section 8.8(b)(i) (or that, if the Company has filed a
post-effective amendment to the Registration Statement which has not yet been
declared effective, the Company will notify the Investor to that effect, will
use its commercially reasonable efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly notify the
Investor when the amendment has become effective).
(c) Subject
to paragraph (d) below, in the event (i) of any request by the SEC or any
other federal or state governmental authority during the period of effectiveness
of the Registration Statement for amendments or supplements to a Registration
Statement or related Prospectus or for additional information, (ii) of the
issuance by the SEC or any other federal or state governmental authority of
any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iii) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, or (iv) of any event or circumstance which, upon the advice of its
counsel, necessitates the making of any changes in the Registration Statement
or
Prospectus, or any document incorporated or deemed to be incorporated therein
by
reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, then the Company shall deliver a certificate in writing to the
Investor (the “Suspension Notice”) to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Investor will refrain from selling any
Securities pursuant to the Registration Statement (a “Suspension”) until the
Investor’s receipt of notice from the Company that a supplemented or amended
Prospectus has been prepared and filed by the Company with the SEC and is
available electronically, or, if required in accordance with the Securities
Act,
until it is advised in writing by the Company that the current Prospectus may
be
used, and has received copies of any additional or supplemental filings that
are
incorporated or deemed incorporated by reference in any such Prospectus. In
the
event of any Suspension, the Company will use its commercially reasonable
efforts to cause the use of the Prospectus so suspended to be resumed as soon
as
reasonably practicable after the delivery of a Suspension Notice to the
Investor.
(d) Provided
that a Suspension is not then in effect, the Investor may sell Securities under
the Registration Statement. Upon receipt of a request therefor, the Company
has
agreed, if required under applicable law, to provide an adequate number of
current Prospectuses to the Investor and to supply copies to any other parties
requiring such Prospectuses.
(e) In
the
event of a sale of Registrable Securities by the Investor pursuant to the
Registration Statement, the Investor must also deliver to the Company’s transfer
agent, with a copy to the Company, a certificate of subsequent sale
substantially in the form included in Exhibit C attached hereto, so that
the Registrable Securities may be properly transferred.
(f)
on
any
day after the Relevant Effective Date or the Subsequent Relevant Effective
Date
(as the case may be), sales of all of the Registrable Securities required to
be
included in the Initial Registration Statement or Subsequent Registration
Statement, as applicable, cannot be made, other than during any period in which
the Company is diligently pursuing the effectiveness under the 1933 Act of
any
amendment to such Registration Statement or Subsequent Registration Statement
(including, without limitation, because of a failure to (a) keep such
Registration Statement or Subsequent Registration Statement effective or (b)
disclose such information as is necessary for sales to be made pursuant to
such
Registration Statement or Subsequent Registration Statement, as applicable
(a
"Maintenance Failure");
then,
as
the sole and exclusive relief to any Investor by reason of any such delay in
or
reduction of its ability to sell the Registrable Securities, the Company shall
pay to each holder of Registrable Securities required under this Agreement
to
be, or remain (as applicable), registered under such Initial Registration
Statement, or Subsequent Registration Statement, as applicable (the “Subject
Securities”), an amount in cash,
(A) equal
to
one half of one percent (0.5%) of the aggregate Purchase Price (as such term
is
defined above) of such Investor's Subject Securities that corresponds to the
number of such Investor’s Subject Securities permitted to be registered by the
SEC in such Registration Statement pursuant to Rule 415, such 0.5% amount
payable on every thirtieth (30th)
day
(prorated for periods totaling less than thirty (30) days) after the occurrence
of any Maintenance Failure if such Maintenance Failure has not been cured on
or
before the ninetieth (90th)
day
after such Maintenance Failure, and
(B)
equal
to
one percent (1.0%) of the aggregate Purchase Price of such Investor's Subject
Securities that corresponds to the number of such Investor’s Subject Securities
permitted to be registered by the SEC in such Registration Statement pursuant
to
Rule 415, such 1.0% amount payable on every thirtieth (30th)
day
(prorated for periods totaling less than thirty (30) days) starting with the
ninety-first (91st)
day
after the occurrence of a Maintenance Failure until such Maintenance Failure
is
cured.
The
payments to which a holder shall be entitled pursuant to this Section 8.8(f)
are
referred to herein as "Registration Delay Payments." In the event the Company
fails to make Registration Delay Payments in a timely manner, such Registration
Delay Payments shall bear interest at the rate of one and one-half percent
(1.5%) per month (prorated for partial months) until paid in full.
Notwithstanding
anything herein to the contrary, (i) in no event shall the aggregate amount
of
Registration Delay Payments payable to any Investor exceed, in the aggregate,
the limits set out in Section 8.1 above , (ii) in no case shall Registration
Delay Payments be payable from and after the date the Registrable Securities
are
eligible for sale pursuant to Rule 144(k) under the 1933 Act, and (iii) the
Company shall have no obligation to pay any such Registration Delay Payments
to
the Investor during an Maintenance Failure for any delay substantially due
to
information required from the Investor not being provided or being inaccurate
or
incomplete. For the avoidance of doubt, any right to receive such Registration
Delay Payments shall be the Investor’s sole and exclusive remedy at law or in
equity for a Maintenance Failure.
8.9 Indemnification.
For the
purpose of this Section 8.9:
(i) the
term
“Selling Holder” shall include the Investor and any affiliate of such
Investor;
(ii) the
term
“Registration Statement” shall include the Prospectus in the form first filed
with the SEC pursuant to Rule 424(b) of the Securities Act or filed as part
of the Registration Statement at the time of effectiveness if no
Rule 424(b) filing is required, together with any exhibit, supplement or
amendment included in or relating to the Registration Statement referred to
in
Section 8.5; and
(iii) the
term
“untrue statement” shall include any untrue statement or alleged untrue
statement, or any omission or alleged omission to state in the Registration
Statement a material fact required to be stated therein or necessary to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(a) The
Company agrees to indemnify and hold harmless each Selling Holder from and
against any losses, claims, damages or liabilities to which such Selling Holder
may become subject (under the Securities Act or otherwise) insofar as such
losses, claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon (i) any material breach of the
representations or warranties of the Company contained herein or failure to
comply materially with the covenants and agreements of the Company contained
herein, (ii) any untrue statement of a material fact contained in the
Registration Statement as amended at the time of effectiveness or any omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, or (iii) any failure by the Company to
fulfill any material undertaking included in the Registration Statement as
amended at the time of effectiveness, and the Company will reimburse such
Selling Holder for any reasonable legal or other expenses reasonably incurred
in
investigating, defending or preparing to defend any such action, proceeding
or
claim, provided,
however,
that
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, an untrue statement
made in such Registration Statement or any omission of a material fact required
to be stated therein or necessary to make the statements therein not misleading
in reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Selling Holder specifically for use in
preparation of the Registration Statement or the failure of such Selling Holder
to comply with its covenants and agreements contained in Section 8.8 hereof
respecting sale of the Securities or any statement or omission in any Prospectus
that is corrected in any subsequent Prospectus prior to the time of any sale
giving rise to the obligations to indemnify. The Company shall reimburse each
Selling Holder for the amounts provided for herein on demand as such expenses
are incurred.
(b) The
Investor agrees to indemnify and hold harmless the Company and each person,
if
any, who controls the Company within the meaning of Section 15 of the
Securities Act, each officer of the Company who signs the Registration Statement
and each director of the Company from and against any losses, claims, damages
or
liabilities to which the Company (or any such officer, director or controlling
person) may become subject (under the Securities Act or otherwise), insofar
as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of, or are based upon, (i) any failure to comply
with
the covenants and agreements contained in Section 8.8 hereof respecting
sale of the Securities, or (ii) any untrue statement of a material fact
contained in the Registration Statement or any omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading if such untrue statement or omission was made in reliance upon and
in
conformity with written information furnished by or on behalf of the Investor
specifically for use in preparation of the Registration Statement, and the
Investor will reimburse the Company (or such officer, director or controlling
person), as the case may be, for any legal or other expenses reasonably incurred
in investigating, defending or preparing to defend any such action, proceeding
or claim; provided
that the
Investor’s obligation to indemnify the Company shall be limited to the net
amount received by the Investor from the sale of the Securities.
(c) Promptly
after receipt by any indemnified person of a notice of a claim or the beginning
of any action in respect of which indemnity is to be sought against an
indemnifying person pursuant to this Section 8.9, such indemnified person
shall notify the indemnifying person in writing of such claim or of the
commencement of such action, but the omission to so notify the indemnifying
person will not relieve it from any liability which it may have to any
indemnified person under this Section 8.9 (except to the extent that such
omission materially and adversely affects the indemnifying person’s ability to
defend such action) or from any liability otherwise than under this
Section 8.9. Subject to the provisions hereinafter stated, in case any such
action shall be brought against an indemnified person, the indemnifying person
shall be entitled to participate therein, and, to the extent that it shall
elect
by written notice delivered to the indemnified person promptly after receiving
the aforesaid notice from such indemnified person, shall be entitled to assume
the defense thereof, with counsel reasonably satisfactory to such indemnified
person. After notice from the indemnifying person to such indemnified person
of
its election to assume the defense thereof, such indemnifying person shall
not
be liable to such indemnified person for any legal expenses subsequently
incurred by such indemnified person in connection with the defense thereof,
provided,
however,
that if
there exists or shall exist a conflict of interest that would make it
inappropriate, in the opinion of counsel to the indemnified person, for the
same
counsel to represent both the indemnified person and such indemnifying person
or
any affiliate or associate thereof, the indemnified person shall be entitled
to
retain its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees and
expenses of more than one separate counsel (together with appropriate local
counsel) for all indemnified parties. In no event shall any indemnifying person
be liable in respect of any amounts paid in settlement of any action unless
the
indemnifying person shall have approved the terms of such settlement;
provided
that
such consent shall not be unreasonably withheld. No indemnifying person shall,
without the prior written consent of the indemnified person, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification could
have
been sought hereunder by such indemnified person, unless such settlement
includes an unconditional release of such indemnified person from all liability
on claims that are the subject matter of such proceeding.
(d) If
the
indemnification provided for in this Section 8.9 is unavailable to or
insufficient to hold harmless an indemnified person under subsection (a) or
(b)
above in respect of any losses, claims, damages or liabilities (or actions
or
proceedings in respect thereof) referred to therein, then each indemnifying
person shall contribute to the amount paid or payable by such indemnified person
as a result of such losses, claims, damages or liabilities (or actions in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Company on the one hand and the Investor, on the other hand in
connection with the statements or omissions or other matters which resulted
in
such losses, claims, damages or liabilities (or actions in respect thereof),
as
well as any other relevant equitable considerations. The relative fault shall
be
determined by reference to, among other things, in the case of an untrue
statement, whether the untrue statement relates to information supplied by
the
Company on the one hand or an Investor or other Investors on the other and
the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statement. The Company and the Investor agree
that it would not be just and equitable if contribution pursuant to this
subsection (d) were determined by pro rata allocation (even if the Investor
and
Other Investors were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to above in this subsection (d). The amount paid or
payable by an indemnified person as a result of the losses, claims, damages
or
liabilities (or actions in respect thereof) referred to above in this subsection
(d) shall be deemed to include any legal or other expenses reasonably incurred
by such indemnified person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this subsection (d),
the
Investor shall not be required to contribute any amount in excess of the amount
by which the net amount received by the Investor from the sale of the Securities
to which such loss relates exceeds the amount of any damages which such Investor
has otherwise been required to pay by reason of such untrue statement. 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. The Investor’s obligations in
this subsection to contribute shall be in proportion to such Investor’s sale of
Securities to which such loss relates and shall not be joint with any Other
Investors.
(e) The
parties to this Agreement hereby acknowledge that they are sophisticated
business persons who were represented by counsel during the negotiations
regarding the provisions hereof including, without limitation, the provisions
of
this Section 8.9, and are fully informed regarding said provisions. They
further acknowledge that the provisions of this Section 8.9 fairly allocate
the risks in light of the ability of the parties to investigate the Company
and
its business in order to assure that adequate disclosure is made in the
Registration Statement as required by the Securities Act and the Exchange Act.
The parties are advised that federal or state public policy as interpreted
by
the courts in certain jurisdictions may be contrary to certain of the provisions
of this Section 8.9, and the parties hereto hereby expressly waive and
relinquish any right or ability to assert such public policy as a defense to
a
claim under this Section 8.9 and further agree not to attempt to assert any
such defense.
8.10 Termination
of Conditions and Obligations.
The
conditions precedent imposed by Section 6 or this Section 8 upon the
transferability of the Securities shall cease and terminate as to any particular
number of the Securities when such Securities shall have been effectively
registered under the Securities Act and sold or otherwise disposed of in
accordance with the intended method of disposition set forth in the Registration
Statement covering such Securities or at such time as an opinion of counsel
reasonably satisfactory to the Company shall have been rendered to the effect
that such conditions are not necessary in order to comply with the Securities
Act.
8.11 Information
Available.
So long
as the Registration Statement is effective covering the resale of Securities
owned by the Investor, the Company will furnish or otherwise make available
to
the Investor:
(a) as
soon
as practicable after it is available, one copy (excluding exhibits) of its
Annual Report on Form 10-K, which Annual Report on Form 10-K shall contain
financial statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants;
(b) upon
the
reasonable request of the Investor, all exhibits excluded by the parenthetical
to subparagraph (a) of this Section 8.11 as filed with the SEC and all
other information that is made available to stockholders; and
(c) upon
the
reasonable request of the Investor, an adequate number of copies of the
Prospectuses to supply to any other party requiring such Prospectuses; and,
upon
the reasonable request of the Investor, the President or the Chief Financial
Officer of the Company (or an appropriate designee thereof) will meet with
the
Investor or a representative thereof at the Company’s headquarters to discuss
all information relevant for disclosure in the Registration Statement covering
the Securities and will otherwise cooperate with any Investor conducting an
investigation for the purpose of reducing or eliminating such Investor’s
exposure to liability under the Securities Act, including the reasonable
production of information at the Company’s headquarters; provided, that the
Company shall not be required to disclose any confidential information to or
meet at its headquarters with any Investor until and unless the Investor shall
have entered into a confidentiality agreement in form and substance reasonably
satisfactory to the Company with the Company with respect thereto.
9. Rule
144.
The
Company covenants that it will timely file the reports required to be filed
by
it under the Securities Act and the Exchange Act and the rules and regulations
adopted by the SEC thereunder, and it will take such further action as any
such
Investor may reasonably request, all to the extent required from time to time
to
enable such Investor to sell Securities purchased hereunder without registration
under the Securities Act within the limitation of the exemptions provided by
(a)
Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (b) any similar rule or regulation hereafter adopted by the SEC.
10.
Public
Statements.
The Company shall, on or before 8:30 a.m., New York time, on the first Business
Day following execution of the Agreements, issue a press release disclosing
all
material terms of the Offering, including the financial projections contained
in
the Corporate Presentation. Within four (4) Business Days after the
Closing Date, the Company shall file a Current Report on Form 8-K with the
SEC
(the “8-K Filing”) describing the terms of the Offering and including as
exhibits to the 8-K Filing this Agreement in the form required by the Exchange
Act. Thereafter, the Company shall timely file any filings and notices
required by the SEC or applicable law with respect to the Offering. The Company
shall not include the name of any Investor in any press release without the
prior written consent of such Investor.
11. Removal
of Legends.
Certificates evidencing the Securities shall not contain any legend (including
the legend set forth in Section 6.1 above) (i) while the Registration Statement
covering the resale of the Securities is effective under the Securities Act;
(ii) if such Securities are sold pursuant to Rule 144 (assuming the transferor
is not an affiliate of the Company); (iii) if such Securities are eligible
for
resale under Rule 144(k); or (iv) if such legend is not otherwise required
under
applicable requirements of the Securities Act. After the effective date of
the
Registration Statement or at such earlier time as a legend is no longer required
for the Securities, the Company shall, no later than five business days
following the delivery by an Investor to the Company or the Company’s transfer
agent (with notice to the Company) of a legended certificate representing such
Securities (endorsed or with stock powers attached, signatures guaranteed,
and
otherwise in form necessary to effect the re-issuance and/or transfer), take
all
action as is necessary for a certificate representing such Securities to be
delivered to such Investor that is free from all restrictive and other legends.
The Company shall cause its counsel to issue a legal opinion to the transfer
agent with respect to such matters on the effective date. Any fees incurred
by
the transfer agent, counsel to the Company or otherwise associated with the
issuance of such opinion, the removal of the legend, and the re-issuance of
the
certificates representing the Securities shall be borne by the Company. The
Company may not make any notation on its records or give instructions to the
transfer agent that enlarge the restrictions on transfer set forth in this
Section 11 with respect to the Securities.
12. Notices.
All
notices, requests, consents and other communications hereunder shall be in
writing, and shall be deemed given (i) if deposited in the U.S. mail, on
the business day actually received, (ii) if delivered by overnight courier,
on the next business day after delivery to such courier, (iii) if delivered
by facsimile, upon electronic confirmation of receipt and shall be delivered
as
addressed as follows:
(a) if
to the
Company, to:
Shengtai
Holding Inc.
c/o
Weifang Shengtai Pharmaceutical Co., Ltd.
Hi-Tech
Industrial Park of Changle County,
Shandong
Province,
People’s
Republic of China 262400
Attn:
Mr.
Qingtai Liu
Phone:
x0-00-000-0000000, 0000000
Fax:
x0-00-000-0000000
(b) with
a
copy to:
Guzov
Ofsink LLC
000
Xxxxxxx Xxxxxx, 00xx
Xxxxx
Xxx
Xxxx,
XX 00000
Fax:
(000) 000 0000
Attn:
Xxxxxx Xxxxxx, Esq.
(c) if
to the
Investor, at its address on the signature page hereto, or at such other address
or addresses as may have been furnished to the Company in writing.
13. Changes.
This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.
14. Headings.
The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed to be part of this
Agreement.
15. Severability.
In case
any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the
remaining provisions contained herein shall not in any way be affected or
impaired thereby.
16. Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the internal
laws of the State of New York.
17. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
constitute an original, but all of which, when taken together, shall constitute
but one instrument, and shall become effective when one or more counterparts
have been signed by each party hereto and delivered to the other
parties.
ANNEX
II
WEST
COAST CAR COMPANY
INVESTOR
QUESTIONNAIRE
(ALL
INFORMATION WILL BE TREATED CONFIDENTIALLY)
| To: |
West
Coast Car Company
c/o
Weifang Shengtai Pharmaceutical Co., Ltd.
Hi-Tech
Industrial Park of Changle County,
Shandong
Province,
People’s
Republic of China 262400
Attn:
Mr. Qingtai Liu
|
This
Investor Questionnaire (“Questionnaire”) must be completed by each potential
investor in connection with the offer and sale of the shares of the common
stock, $0.001 par value per share (the “Securities), of West Coast Car Company
(“WCSC”). The Securities are being offered and sold by WCSC without registration
under the Securities Act of 1933, as amended (the “Act”), and the securities
laws of certain states, in reliance on the exemptions contained in
Section 4(2) of the Act and on Regulation D and Regulation S promulgated
thereunder and in reliance on similar exemptions under applicable state laws.
WCSC must determine that a potential investor meets certain suitability
requirements before offering or selling Securities to such investor. The purpose
of this Questionnaire is to assure WCSC that each investor will meet the
applicable suitability requirements. The information supplied by you will be
used in determining whether you meet such criteria, and reliance upon the
private offering exemption from registration is based in part on the information
herein supplied.
This
Questionnaire does not constitute an offer to sell or a solicitation of an
offer
to buy any security. Your answers will be kept strictly confidential. However,
by signing this Questionnaire you will be authorizing WCSC to provide a
completed copy of this Questionnaire to such parties as WCSC deems appropriate
in order to ensure that the offer and sale of the Securities will not result
in
a violation of the Act or the securities laws of any state and that you
otherwise satisfy the suitability standards applicable to purchasers of the
Securities. All potential investors must answer all applicable questions and
complete, date and sign this Questionnaire. Please print or type your responses
and attach additional sheets of paper if necessary to complete your answers
to
any item.
A. BACKGROUND
INFORMATION
Name:
____________________________________________________________________________________
Business
Address: __________________________________________________________________________
(Number
and Street)
_________________________________________________________________________________________
(City) (State) (Zip
Code)
Telephone
Number: (___) _____________________________________________________________________
Residence
Address: __________________________________________________________________________
(Number
and Street)
_________________________________________________________________________________________
(City) (State) (Zip
Code)
Telephone
Number: (___) _____________________________________________________________________
If
an
individual:
Age:
____________ Citizenship: ____________ Where registered to vote:
_______________
If
a
corporation, partnership, limited liability company, trust or other
entity:
Type
of
entity:
____________________________________________________________________
State
of
formation: _______________ Date of formation: _______________
Social
Security or Taxpayer Identification No.
________________________________________
Send
all
correspondence to (check one): ______________ Residence Address ____________
Business Address
Current
ownership of securities of CPSL: __________ shares of common stock, $0.001
value
per share (the “Common Stock”); ___________ options to purchase __________
shares of Common Stock
B. STATUS
AS ACCREDITED INVESTOR
The
undersigned is an “accredited investor” as such term is defined in Regulation D
under the Act, as at the time of the sale of the Securities the undersigned
falls within one or more of the following categories (Please
initial one or more, as applicable):1
____
(1) a
bank as
defined in Section 3(a)(2) of the Act, or a savings and loan association or
other institution as defined in Section 3(a)(5)(A) of the Act whether
acting in its individual or fiduciary capacity; a broker or dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934; an insurance
company as defined in Section 2(13) of the Act; an investment company
registered under the Investment Corporation Act of 1940 or a business
development company as defined in Section 2(a)(48) of that Act; a Small
Business Investment Corporation licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment
Act of 1958; a plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions for the benefit of its employees, if such plan has total assets
in
excess of $5,000,000; an employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974 if the investment decision
is
made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with the investment decisions made
solely by persons that are accredited investors;
1
As
used in this Questionnaire, the term “net worth” means the excess of total
assets over total liabilities. In computing net worth for the purpose of
subsection (4), the principal residence of the investor must be valued at
cost,
including cost of improvements, or at recently appraised value by an
institutional lender making a secured loan, net of encumbrances. In determining
income, the investor should add to the investor’s adjusted gross income any
amounts attributable to tax exempt income received, losses claimed as a limited
partner in any limited partnership, deductions claimed for depiction,
contributions to an XXX or XXXXX retirement plan, alimony payments, and any
amount by which income from long-term capital gains has been reduced in arriving
at adjusted gross income.
____
(2) a
private
business development company as defined in Section 202(a)(22) of the
Investment Adviser Act of 1940;
____
(3) an
organization described in Section 501(c)(3) of the Internal Revenue Code of
1986, as amended, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the Securities
offered, with total assets in excess of $5,000,000;
____
(4) a
natural
person whose individual net worth, or joint net worth with that person’s spouse,
at the time of such person’s purchase of the Securities exceeds
$1,000,000;
____
(5) a
natural
person who had an individual income in excess of $200,000 in each of the two
most recent years or joint income with that person’s spouse in excess of
$300,000 in each of those years and has a reasonable expectation of reaching
the
same income level in the current year;
____
(6) a
trust,
with total assets in excess of $5,000,000, not formed for the specific purpose
of acquiring the Securities offered, whose purchase is directed by a
sophisticated person as described in Rule 506(b)(2)(ii) of Regulation D;
and
____
(7) an
entity
in which all of the equity owners are accredited investors (as defined
above).
|
C.
|
FOR
NON-U.S. PERSONS ACQUIRING IN RELIANCE UPON REGULATION S ONLY.
PLEASE
CHECK ALL BOXES THAT APPLY.
|
| 1. |
The
undersigned has checked the following box as
appropriate:
|
|
o
|
The
undersigned is an “accredited investor” (as defined above in Part
B).
|
|
o
|
The
undersigned is not an accredited investor.
|
| 2. |
o
The undersigned is not a “U.S. person” as defined in Rule 902 of
Regulation S under the Act. Specifically, the undersigned is not:
|
|
·
|
A
natural person resident in the United
States;
|
|
A
partnership or corporation organized or incorporated under the
laws of the
United States;
|
|
An
estate of which any executor or administrator is a U.S.
person;
|
|
A
trust of which any trustee is a U.S.
person;
|
|
An
agency or branch of a foreign entity located in the United
States;
|
|
A
non-discretionary account or similar account (other than an estate
or
trust) held by a dealer or other fiduciary for the benefit or account
of a
U.S. person;
|
|
A
discretionary account or similar account (other than an estate
or trust)
held by a dealer or other fiduciary organized, incorporated, or
(if an
individual) resident in the United States;
and
|
|
A
partnership or corporation if:
|
| 7. |
o
The undersigned has not prearranged the sale of the Securities
to any
buyer in the United States and has no present plan or
intention to engage
in a distribution of the Securities in the United
States.
|
| 11. |
o
The undersigned will not make any sale,
transfer or other disposition of
the Securities in violation of the Act,
the Securities and Exchange Act of
1934, as amended (the “Exchange Act”), or the rules and regulations of the
Securities and Exchange Commission (the
“Commission”) promulgated
thereunder.
|
Note:
Each equity owner must submit an individual investor
questionnaire.
IN
WITNESS WHEREOF, the undersigned has executed this Questionnaire this _____
day
of____________, 2007, and declares under oath that it is truthful and
correct.
|
Print
Name
|
||
| |
|
|
| By: | ||
|
Signature
|
||
| Title: | ||
|
(required
for any purchaser that is a corporation,
partnership,
trust or other entity)
|
||
EXHIBIT
A
INSTRUCTIONS
TO TRANSFER MAKE GOOD SHARES
Pursuant
to Section 5.1 of the Stock Purchase Agreement, dated as of May
[ ], 2007, among West
Coast Car Company (the “Company”) and the Investors named therein, the Company
hereby instructs [
],
as the
Company’s share registrar and transfer agent, as follows:
These
instructions are made pursuant to Section 5.1 [(a)] [(b)] [insert
applicable section reference]
of the
Stock Purchase Agreement, dated May _____, 2007.
The
Company hereby certifies that the condition for transfer of the Make Good
Shares
as set forth such Section 5.1 [(a)] [(b)] [insert
applicable section reference]
[has]
[has not] been satisfied as evidenced in the Company’s audited financial
statements for the fiscal year ended June 31, 200[7] [8] [insert
applicable year]
and
filed with the U.S. Securities Exchange Commission in the Company’s Annual
Report on Form 10-K for such fiscal year on [insert
date of SEC filing].
Make
Good
Shares should be transferred from escrow to the Investors pro-rata [insert
as appropriate]
as set
forth below:
Amount
of
Make Good Shares
to
be
transferred: ________________________________
Transferor:
________________________________
Transferees: [Include
names of all Investors]
Name: ________________________________
Address: ________________________________
City/State:
________________________________
Zip:
________________________________
Number
of
Shares: ________________________________
|
WEST
COAST CAR COMPANY
|
||
| |
|
|
| Date: _________________ | By: | |
|
Name: |
||
| Title: | ||
EXHIBIT
B
LIMITED
STANDSTILL AGREEMENT
This
AGREEMENT (the “Agreement”) is made as of the ___ day of May, 2007, by the
signatories hereto (each a “Holder”), in connection with their respective
ownership of shares of West Coast Car Company, a Delaware corporation (the
“Company”). Terms not otherwise defined herein are defined in the Stock Purchase
Agreement among the Company and the Investors named therein; dated as of
May __,
2007 (the “Stock Purchase Agreement”).
NOW
THEREFORE, for good and valuable consideration, the sufficiency and receipt
of
which consideration are hereby acknowledged, Holder agrees as
follows:
1. General.
(a) Holder
is
a director or executive officer of the Company and the beneficial owner of
the
amount of shares of the Common Stock, $0.001 par value, of the Company (“Common
Stock”) and rights to purchase Common Stock as designated on the signature page
hereto (collectively, the “Shares”).
(b) Holder
acknowledges that the Company has entered into or will enter into an agreement
with each Investor (a “Stock Purchase Agreement”) for the sale to the Investors
of an aggregate of at least $15,000,000 but no more than $17,500,000 principal
amount of Common Stock (the “Offering”). Holder understands that, as a condition
to Closing, the Investors have required, and the Company has agreed to obtain,
an agreement from the Holder to refrain from selling any securities of the
Company in accordance with the terms and conditions set forth
herein.
2. Share
Restriction.
(a) Holder
hereby agrees that during the period commencing on the Closing Date under
the
Stock Purchase Agreement, continuing through the effective date of the
Registration Statement filed pursuant to Section 8 of the Stock Purchase
Agreement and ending on the date that is twelve (12) months thereafter (the
“Restriction Period”), the Holder will not offer, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
sell short, grant any option, right or warrant to purchase, lend or otherwise
transfer or dispose of any Shares or enter into any swap or other arrangement
that transfers any economic consequences of ownership of Shares other than
any
transfer of Make Good Shares to an Investor and a transfer of 600,000 shares
to
Chinamerica Fund L.P. on Closing Date; provided, however, that 20% of the
Holder’s Shares shall be released from and no longer subject to the foregoing
restrictions after ninety (90) calendar days following the effective date
of
such Registration Statement, and further, provided, that such 20% may, at
Holder’s option, be registered for resale under the Securities Act of 1933, as
amended, on the Registration Statement to be filed pursuant to Section 8
of the
Stock Purchase Agreement. The foregoing sentence shall not apply with respect
to
an offer made to all shareholders of the Company in connection with any merger,
consolidation or similar transaction involving the Company. Holder further
agrees that the Company is authorized to and the Company agrees to place
“stop
orders” on its books to prevent any transfer of Shares held by Holder in
violation of this Agreement.
(b) Any
subsequent issuance to and/or acquisition of Common Stock or the right to
acquire Common Stock by Holder will be subject to the provisions of this
Agreement; provided, however, that the Restriction Period shall not be extended
hereby with respect thereto.
(c) Notwithstanding
the foregoing restrictions on transfer, the Holder may, at any time and from
time to time during the Restriction Period, transfer the Common Stock (i)
as
bona fide gifts or transfers by will or intestacy, (ii) to any trust for
the
direct or indirect benefit of the undersigned or the immediate family of
the
Holder, provided that any such transfer shall not involve a disposition for
value, (iii) to a partnership which is the general partner of a partnership
of
which the Holder is a general partner, provided, that, in the case of any
gift
or transfer described in clauses (i), (ii) or (iii), each donee or transferee
agrees in writing to be bound by the terms and conditions contained herein
in
the same manner as such terms and conditions apply to the undersigned. For
purposes hereof, “immediate family” means any relationship by blood, marriage or
adoption, not more remote than first cousin.
3. Miscellaneous.
(a) At
any
time, and from time to time, after the signing of this Agreement Holder will
execute such additional instruments and take such action as may be reasonably
requested by the Investors to carry out the intent and purposes of this
Agreement. The Company agrees not to take any action or allow any act to
be
taken which would be inconsistent with this Agreement.
(b) This
Agreement shall be governed, construed and enforced in accordance with the
laws
of the State of New York without regard to conflicts of laws principles that
would result in the application of the substantive laws of another jurisdiction,
except to the extent that the securities laws of the state in which Holder
resides and federal securities laws may apply. Any proceeding brought to
enforce
this Agreement may be brought exclusively in courts sitting in New York County,
New York.
(c) This
Agreement contains the entire agreement of the Holder with respect to the
subject matter hereof. This Agreement shall be binding upon Holder, its legal
representatives, successors, heirs and assigns.
(d) This
Agreement may be signed in counterpart and delivered by facsimile or electronic
transmission and such facsimile or electronic transmission signed and delivered
shall be enforceable.
IN
WITNESS WHEREOF, and intending to be legally bound hereby, Holder has executed
this Agreement as of the day and year first above written.
| HOLDER: | |||
|
(Signature of Holder) |
|||
|
(Print name of Holder) |
|||
|
Number
of shares of Common Stock
Beneficially
Owned
|
|||
|
Number
of options, warrants or other rights to
acquire
Common Stock
|
|||
| COMPANY: | |||
|
WEST
COAST CAR COMPANY
|
|||
| By: | |||
|
Name:
Qingtai Liu
|
|||
|
Title:
President and Chief Executive
Officer
|
|||
EXHIBIT
C
WEST
COAST CAR COMPANY
___________________,
2007
Re:
West
Coast Car Company.; Registration Statement on Form S-1
Dear
Investor:
Please
be
advised that the Company’s Registration Statement on Form S-1 (Registration No.
333- ) (the “Registration
Statement”)
relating to the resale of your shares of common stock, $0.001 par value (the
“Securities”),
of
the Company has been declared effective by the Securities and Exchange
Commission and the prospectus dated ______________, 2007 (the “Prospectus”)
is now
available for use in connection therewith. As
an Investor under the Registration Statement, you may have an obligation to
deliver a copy of the Prospectus to each purchaser of your Securities, either
directly or through the broker-dealer who executes the sale of your
Securities.
The
Company is obligated to notify you in the event that it suspends trading under
the Registration Statement in accordance with the terms of the Stock Purchase
Agreement between the Company and you. During the period that the Registration
Statement remains effective and trading thereunder has not been suspended,
you
will be permitted to sell your Securities which are included in the Prospectus
under the Registration Statement. Upon a sale of any Securities under the
Registration Statement, you or your broker will be required to deliver to the
Transfer Agent, Corporate Stock Transfer, Inc. (1) your restricted stock
certificate(s) representing the Securities, (2) instructions for transfer of
the
Securities sold, and (3) a representation letter from your broker, or from
you
if you are selling in a privately negotiated transaction, or from such other
appropriate party, in the form of Exhibit 1
attached
hereto (the “Representation Letter”). The Representation Letter confirms that
the Securities have been sold pursuant to the Registration Statement and in a
manner described under the caption “Plan of Distribution” in the Prospectus and
that such sale was made in accordance with all applicable securities laws,
including any applicable prospectus delivery requirements.
Please
note that you are under no obligation to sell your Securities during the
registration period. However, if you do decide to sell, you must comply with
the
requirements described in this letter or otherwise applicable to such sale.
Your
failure to do so may result in liability under the Securities Act of 1933,
as
amended, and the Securities Exchange Act of 1934, as amended. Please remember
that all sales of your Securities must be carried out in the manner set forth
under the caption “Plan of Distribution” in the Prospectus if you sell under the
Registration Statement. The Company may require an opinion of counsel reasonably
satisfactory to the Company if you choose another method of sale. You
should consult with your own legal advisor(s) on an ongoing basis to ensure
your
compliance with the relevant securities laws and
regulations.
1
In
order to maintain the accuracy of the Prospectus, you must notify the
undersigned upon the sale, gift, or other transfer of any Securities by you,
including the number of Securities being transferred, and in the event of any
other change in the information regarding you which is contained in the
Prospectus. For example, you must notify the undersigned if you enter into
any
arrangement with a broker-dealer for the sale of shares through a block trade,
special offering, exchange distribution or secondary distribution or a purchase
by a broker-dealer. Depending on the circumstances, such transactions may
require the filing of a supplement to the prospectus in order to update the
information set forth under the caption “Plan of Distribution” in the
Prospectus.
Should
you need any copies of the Prospectus, or if you have any questions concerning
the foregoing, please write to me at West Coast Car Company c/o Weifang Shengtai
Pharmaceutical Co., Ltd., Hi-Tech Industrial Park of Changle County, Shandong
Province, People’s Republic of China 262400 Attn: Mr. Qingtai Liu. Thank
you.
| Sincerely, | ||
| WEST COAST CAR COMPANY | ||
| |
|
|
| By: | ||
|
Qingtai Liu, President and CEO |
||
2
Exhibit
1
CERTIFICATE
OF SUBSEQUENT SALE
Name
and
Address of Transfer Agent
|
RE:
|
Sale
of Shares of Common Stock of West Coast Car Company (the “Company”)
pursuant to the Company’s Prospectus dated _____________, 2007 (the
“Prospectus”)
|
Dear
Sir/Madam:
The
undersigned hereby certifies, in connection with the sale of shares of Common
Stock of the Company included in the table of Investors in the Prospectus,
that
the undersigned has sold the shares pursuant to the Prospectus and in a manner
described under the caption “Plan of Distribution” in the Prospectus and that
such sale complies with all securities laws applicable to the undersigned,
including, without limitation, applicable Prospectus delivery requirements
of
the Securities Act of 1933, as amended.
|
Investor
(the beneficial
owner): _______________________________________________________
|
|
Record
Holder (e.g., if held in name of
nominee): ___________________________________________
|
|
Restricted
Stock Certificate
No.(s): _______________________________________________________
|
|
Number
of Shares
Sold: _______________________________________________________________
|
|
Date
of
Sale: ______________________________________________________________________
|
In
the
event that you receive a stock certificate(s) representing more shares of Common
Stock than have been sold by the undersigned, then you should return to the
undersigned a newly issued certificate for such excess shares in the name of
the
Record Holder. Further, you should place a stop transfer on your records with
regard to such certificate.
|
Very
truly yours,
|
||||
| Dated: |
By:
|
|||
|
Print
Name:
|
||||
|
Title:
|
||||
3
EXHIBIT
D
Capitalization
Table
Pre-Money
Valuation: US$20.25 million
Post-Money
Valuation (in the event US$15 million is raised *): US$35.25 million
Post-Money
Valuation (in the event US$17.5 million is raised **): US$37.75
million
|
Name
of Shareholder
|
No.
of Shares
*
|
Percentage *
|
No.
of Shares
**
|
Percentage **
|
|||||||||
|
Qingtai
Liu
|
7,840,600
|
44.49
|
%
|
7,840,600
|
41.54
|
%
|
|||||||
|
Investors
|
7,500,000
|
42.55
|
%
|
8,750,000
|
46.36
|
%
|
|||||||
|
Others
|
2,284,400
|
12.96
|
%
|
2,284,400
|
12.10
|
%
|
|||||||
|
Total
|
17,625,000
|
100
|
%
|
18,875,000
|
100
|
%
|
|||||||
4
EXHIBIT
E
Financials
of Weifang Shengtai Pharmaceutical Co., Ltd.
5
EXHIBIT
F
Weifang
Shengtai Pharmaceutical Co., Ltd’s Risk Factors
For
the purposes of this Exhibit F, references to “we” and “our” refer to Weifang
Shengtai Pharmaceutical Co. Ltd.
Risks
related to doing business in the People’s Republic of China
Our
business operations take place primarily in the People’s Republic of China
(“PRC”). Because Chinese laws, regulations and policies are continually
changing, our Chinese operations will face several risks summarized
below.
Laws
and Regulations
Our
offices and manufacturing plants are located in the PRC and the production,
sale
and distribution of your products are subject to Chinese rules and regulations.
The
PRC
only recently has permitted provincial and local economic autonomy and private
economic activities. Chinese government has exercised and continues to exercise
substantial control over virtually every sector of the Chinese economy through
regulation and state ownership.
Our
ability to operate in the PRC may be harmed by changes in its laws and
regulations, including those relating to taxation, import and export tariffs,
environmental regulations, land use rights, property and other
matters.
Also,
we
are a state-licensed corporation and production and manufacturing facility
and
subject to Chinese regulation and environmental laws. The Chinese government
has
been active in regulating the pharmaceutical and medicinal goods industry.
Our
business and products are subject to government regulations mandating the use
of
good manufacturing practices. Changes in such laws or regulations in the PRC,
or
other countries we sell into, that govern or apply to our operations could
have
a materially adverse effect on our business. For example, the law could change
so as to prohibit the use of certain chemical agents in our products. If such
chemical agents are found in our products, then such a change would reduce
our
productivity of that product.
If
we
were to lose our state-licensed status, we would no longer be able to
manufacture our products in the PRC, which is our sole operation.
Economic
Reforms
Although
the Chinese government owns the majority of productive assets in the PRC, in
the
past several years the government has implemented economic reform measures
that
emphasize decentralization and encourage private economic activity.
6
Because
these economic reform measures may be inconsistent or ineffectual, there are
no
assurances that:
|
-
|
We will be able to capitalize on economic reforms; |
|
-
|
The
Chinese government will continue its pursuit of economic reform policies;
|
|
-
|
The economic policies, even if pursued, will be successful; |
|
-
|
Economic policies will not be significantly altered from time to time; and |
|
-
|
Business
operations in the PRC will not become subject to the risk of
nationalization.
|
Since
1979, the Chinese government has reformed its economic systems. Because many
reforms are unprecedented or experimental, they are expected to be refined
and
improved. Other political, economic and social factors, such as political
changes, changes in the rates of economic growth, unemployment or inflation,
or
in the disparities in per capita wealth between regions within the PRC, could
lead to further readjustment of the reform measures. This refining and
readjustment process may negatively affect our operations.
Over
the
last few years, the PRC's economy has registered a high growth rate. During
the
past ten years, the rate of inflation in the PRC has been as high as 20.7%
and
as low as -2.2%. Recently, there have been indications that rates of inflation
have increased. In response, the Chinese government recently has taken measures
to curb this excessively expansive economy. These corrective measures were
designed to restrict the availability of credit or regulate growth and contain
inflation. These measures have included devaluations of the Chinese currency,
the Renminbi (RMB), restrictions on the availability of domestic credit,
reducing the purchasing capability of certain of its customers, and limited
re-centralization of the approval process for purchases of some foreign
products. These austerity measures alone may not succeed in slowing down the
economy's excessive expansion or control inflation, and may result in severe
dislocations in the Chinese economy. The Chinese government may adopt additional
measures to further combat inflation, including the establishment of freezes
or
restraints on certain projects or markets.
While
inflation has been more moderate since 1995, high inflation may in the future
cause Chinese government to impose controls on credit and/or prices, or to
take
other action, which could inhibit economic activity in China, and thereby harm
the market for our products. Future inflation in China may inhibit our activity
to conduct business in China.
To
date
reforms to the PRC's economic system have not adversely impacted our operations
and are not expected to adversely impact operations in the foreseeable future;
however, there can be no assurance that the reforms to the PRC's economic system
will continue or that we will not be adversely affected by changes in the PRC's
political, economic, and social conditions and by changes in policies of the
Chinese government, such as changes in laws and regulations, measures which
may
be introduced to control inflation, changes in the rate or method of taxation,
imposition of additional restrictions on currency conversion and remittance
abroad, and reduction in tariff protection and other import
restrictions.
7
Accordingly,
government actions in the future, including any decision not to continue to
support recent economic reforms and to return to a more centrally planned
economy or regional or local variations in the implementation of economic
policies, could have a significant effect on economic conditions in the PRC
or
particular regions thereof, and could require us to divest ourselves of any
interest we then hold in Chinese properties or businesses.
Limitations
on Chinese economic market reforms may discourage foreign investment in Chinese
businesses. The value of investments in Chinese businesses could be adversely
affected by political, economic and social uncertainties in the PRC. The
economic reforms in the PRC in recent years are regarded by the PRC's central
government as a way to introduce economic market forces into the PRC. Given
the
overriding desire of the central government leadership to maintain stability
in
the PRC amid rapid social and economic changes in the country, the economic
market reforms of recent years could be slowed, or even reversed.
Any
change in policy by the Chinese government could adversely affect investments
in
Chinese businesses. Changes in policy could result in imposition of restrictions
on currency conversion, imports or the source of suppliers, as well as new
laws
affecting joint ventures and foreign-owned enterprises doing business in the
PRC. Although the PRC has been pursuing economic reforms for the past two
decades, events such as a change in leadership or social disruptions that may
occur upon the proposed privatization of certain state-owned industries could
significantly affect the government's ability to continue with its
reform.
We
face
economic risks in doing business in the PRC. As a developing nation, the PRC's
economy is more volatile than that of developed Western industrial economies.
It
differs significantly from that of the U.S. or a Western European Country in
such respects as structure, level of development, capital reinvestment, resource
allocation and self-sufficiency. Only in recent years has the Chinese economy
moved from what had been a command economy through the 1970s to one that during
the 1990s encouraged substantial private economic activity. In 1993, the
Constitution of the PRC was amended to reinforce such economic reforms. The
trends of the 1990s indicate that future policies of the Chinese government
will
emphasize greater utilization of market forces. The PRC government has confirmed
that economic development will follow the model of a market economy. For
example, in 1999 the Government announced plans to amend the Chinese
Constitution to recognize private property, although private business will
officially remain subordinated to the state-owned companies, which are the
mainstay of the Chinese economy. However, there can be no assurance that, under
some circumstances, the government's pursuit of economic reforms will not be
restrained or curtailed. Actions by the central government of the PRC could
have
a significant adverse effect on economic conditions in the country as a whole
and on the economic prospects for our Chinese operations. Economic reforms
could
either benefit or damage our operations and profitability. Some of the things
that could have this effect are: i) level of government involvement in the
economy; ii) control of foreign exchange; methods of allocating resources;
iv)
international trade restrictions; and v) international conflict.
8
Under
the
present direction, we believe that the PRC will continue to strengthen its
economic and trading relationships with foreign countries and business
development in the PRC will follow market forces. While we believe that this
trend will continue, there can be no assurance that this will be the case.
A
change in policies by the PRC government could adversely affect our interests
by, among other factors: changes in laws, regulations or the interpretation
thereof, confiscatory taxation, restrictions on currency conversion, imports
or
sources of supplies, or the expropriation or nationalization of private
enterprises. Although the PRC government has been pursuing economic reform
policies for more than two decades, there is no assurance that the government
will continue to pursue such policies or that such policies may not be
significantly altered, especially in the event of a change in leadership, social
or political disruption, or other circumstances affecting the PRC's political,
economic and social life.
Legal
and Judicial System
The
Chinese legal and judicial system may negatively impact foreign investors.
In
1982, the National People's Congress amended the Constitution of China to
authorize foreign investment and guarantee the "lawful rights and interests"
of
foreign investors in the PRC. However, the PRC's system of laws is not yet
comprehensive. The legal and judicial systems in the PRC are still rudimentary,
and enforcement of existing laws is inconsistent. Many judges in the PRC lack
the depth of legal training and experience that would be expected of a judge
in
a more developed country. Because the Chinese judiciary is relatively
inexperienced in enforcing the laws that do exist, anticipation of judicial
decision-making is more uncertain than would be expected in a more developed
country. It may be impossible to obtain swift and equitable enforcement of
laws
that do exist, or to obtain enforcement of the judgment of one court by a court
of another jurisdiction. The PRC's legal system is based on written statutes;
a
decision by one judge does not set a legal precedent that is required to be
followed by judges in other cases. In addition, the interpretation of Chinese
laws may be varied to reflect domestic political changes.
The
promulgation of new laws, changes to existing laws and the pre-emption of local
regulations by national laws may adversely affect foreign investors. However,
the trend of legislation over the last 20 years has significantly enhanced
the
protection of foreign investment and allowed for more control by foreign parties
of their investments in Chinese enterprises. There can be no assurance that
a
change in leadership, social or political disruption, or unforeseen
circumstances affecting the PRC's political, economic or social life, will
not
affect the Chinese government's ability to continue to support and pursue these
reforms. Such a shift could have a material adverse effect on our business
and
prospects.
9
The
practical effect of the PRC legal system on our business operations in the
PRC
can be viewed from two separate but intertwined considerations. First, as a
matter of substantive law, the Foreign Invested Enterprise laws provide
significant protection from government interference. In addition, these laws
guarantee the full enjoyment of the benefits of corporate Articles and contracts
to Foreign Invested Enterprise participants. These laws, however, do impose
standards concerning corporate formation and governance, which are not
qualitatively different from the general corporation laws of the several states.
Similarly, the PRC accounting laws mandate accounting practices, which are
not
consistent with U.S. Generally Accepted Accounting Principles. PRC’s accounting
laws require that an annual "statutory audit" be performed in accordance with
PRC accounting standards and that the books of account of Foreign Invested
Enterprises are maintained in accordance with Chinese accounting laws. Article
14 of the People's Republic of China Wholly Foreign-Owned Enterprise Law
requires a Wholly Foreign-Owned Enterprise to submit certain periodic fiscal
reports and statements to designated financial and tax authorities, at the
risk
of business license revocation. Second, while the enforcement of substantive
rights may appear less clear than United States procedures, the Foreign Invested
Enterprises and Wholly Foreign- Owned Enterprises are Chinese registered
companies, which enjoy the same status as other Chinese registered companies
in
business-to-business dispute resolution.
Since
our
Articles of Association do not provide for the resolution of disputes business,
the parties are free to proceed to either the Chinese courts or if they are
in
agreement, to arbitration.
Any
award
rendered by an arbitration tribunal is enforceable in accordance with the United
Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards
(1958). Therefore, as a practical matter, although no assurances can be given,
the Chinese legal infrastructure, while different in operation from its United
States counterpart, should not present any significant impediment to the
operation of Foreign Invested Enterprises.
The
Chinese legal system is a civil law system based on written statutes. Unlike
common law systems, it is a system in which precedents set in earlier legal
cases are not generally used. The overall effect of legislation enacted over
the
past 20 years has been to enhance the protections afforded to foreign invested
enterprises in China. However, these laws, regulations and legal requirements
are relatively recent and are evolving rapidly, and their interpretation and
enforcement involve uncertainties. These uncertainties could limit the legal
protections available to foreign investors, such as the right of foreign
invested enterprises to hold licenses and permits such as requisite business
licenses.
In
addition, our executive officers and our directors, most notably, Mr. Qingtai
Liu, are residents of the PRC and not of the United States, and substantially
all the assets of these persons are located outside the United States. As a
result, it could be difficult for investors to affect service of process in
the
United States, or to enforce a judgment obtained in the United States against
us
or any of these persons.
10
The
PRC
laws and regulations governing our current business operations are sometimes
vague and uncertain. There are substantial uncertainties regarding the
interpretation and application of PRC laws and regulations, including but not
limited to the laws and regulations governing our business, or the enforcement
and performance of our arrangements with customers in the event of the
imposition of statutory liens, death, bankruptcy and criminal proceedings.
These
laws and regulations are sometimes vague and may be subject to future changes,
and their official interpretation and enforcement may involve substantial
uncertainty. The effectiveness of newly enacted laws, regulations or amendments
may be delayed, resulting in detrimental reliance by foreign investors. New
laws
and regulations that affect existing and proposed future businesses may also
be
applied retroactively. We cannot predict what effect the interpretation of
existing or new PRC laws or regulations may have on our business.
Foreign
Currency
The
majority of our revenues will be settled in Renminbi and U.S. Dollars, and
any
future restrictions on currency exchanges may limit our ability to use revenue
generated in Renminbi to fund any future business activities outside the PRC
or
to make payments in U.S. dollars. Although the Chinese government introduced
regulations in 1996 to allow greater convertibility of the Renminbi for current
account transactions, significant restrictions still remain, including primarily
the restriction that foreign-invested enterprises may only buy, sell or remit
foreign currencies after providing valid commercial documents, at those banks
in
the PRC authorized to conduct foreign exchange business.
In
addition, conversion of Renminbi for capital account items, including direct
investment and loans, is subject to governmental approval in the PRC, and
companies are required to open and maintain separate foreign exchange accounts
for capital account items. We cannot be certain that the Chinese regulatory
authorities will not impose more stringent restrictions on the convertibility
of
the Renminbi.
The
value
of our common stock will be affected by the foreign exchange rate between U.S.
dollars and Renminbi, and between those currencies and other currencies in
which
our sales may be denominated. For example, to the extent that we need to convert
U.S. dollars into Renminbi for our operational needs and should the Renminbi
appreciate against the U.S. dollar at that time, our financial position, the
business of the Company, and the price of our common stock may be harmed.
Conversely, if we decide to convert our Renminbi into U.S. dollars for the
purpose of declaring dividends on our common stock or for other business
purposes and the U.S. dollar appreciates against the Renminbi, our earnings
will
be reduced.
11
The
PRC
government imposes controls on the convertibility of Renminbi ("RMB") into
foreign currencies and, in certain cases, the remittance of currency out of
the
PRC. We receive substantially all of our revenues in RMB, which is currently
not
a freely convertible currency. Shortages in the availability of foreign currency
may restrict our ability to remit sufficient foreign currency to pay dividends,
or otherwise satisfy foreign currency dominated obligations. Under existing
PRC
foreign exchange regulations, payments of current account items, including
profit distributions, interest payments and expenditures from the transaction,
can be made in foreign currencies without prior approval from the PRC State
Administration of Foreign Exchange by complying
with certain procedural requirements. However, approval from appropriate
governmental authorities is required where RMB is to be converted into foreign
currency and remitted out of the PRC to pay capital expenses, such as the
repayment of bank loans denominated in foreign currencies.
The
PRC
government may also at its discretion restrict access in the future to foreign
currencies for current account transactions. If the foreign exchange control
system prevents us from obtaining sufficient foreign currency to satisfy our
currency demands, we may not be able to pay certain expenses as they come
due.
On
July
21, 2005, the PRC government changed its decade-old policy of pegging the value
of the RMB to the U.S. Dollar. Under the new policy, the RMB is permitted to
fluctuate within a narrow and managed band against a basket of certain foreign
currencies. This change in policy has resulted in an approximately 2.0%
appreciation of the RMB against the U.S. Dollar. While the international
reaction to the RMB revaluation has generally been positive, there remains
significant international pressure on the PRC government to adopt an even more
flexible currency policy, which could result in a further and more significant
appreciation of the RMB against the U.S. Dollar.
Recent
PRC State Administration of Foreign Exchange ("SAFE") Regulations regarding
offshore financing activities by PRC residents have undergone a number of
changes which may increase the administrative burden we face. The failure by
shareholders of foreign holding corporations who are PRC residents to make
any
required applications and filings pursuant to such regulations may prevent
the
foreign holding corporation from being able to distribute profits and could
expose the foreign holding corporation and its PRC resident shareholders to
liability under PRC law.
SAFE
issued a public notice ("October Notice") effective from November 1, 2005,
which
requires registration with SAFE by the PRC resident shareholders of any foreign
holding company of a PRC entity. Without registration, the PRC entity cannot
remit any of its profits out of the PRC as dividends or otherwise; however,
it
is uncertain how the October Notice will be interpreted or implemented. In
addition, the October Notice requires that any monies remitted to PRC residents
outside of the PRC be returned within 180 days; however, there is no indication
of what the penalty will be for failure to comply or if shareholder
non-compliance will be considered to be a violation of the October Notice by
us
or otherwise affect us.
12
In
the
event that the proper procedures are not followed under the SAFE October Notice,
our holding company could lose the ability to remit monies outside of the PRC
and would therefore be unable to pay dividends or make other distributions.
Risks
related to our business
We
give
no assurances that any plans for future expansion will be
implemented.
We
have a
limited operating history and limited historical financial information upon
which you may evaluate our performance.
We
are in
our early stages of development and face risks associated with a new company
in
a growth industry. We may not successfully address these risks and uncertainties
or successfully implement our operating strategies. If we fail to do so, it
could materially harm our business to the point of having to cease operations
and could impair the value of our common stock to the point investors may lose
their entire investment. Even if we accomplish these objectives, we may not
generate positive cash flows or the profits we anticipate in the
future.
Although
our revenues have grown rapidly since our inception, we cannot assure you that
we will maintain our profitability or that we will not incur net losses in
the
future. We expect that our operating expenses will increase as we expand. Any
significant failure to realize anticipated revenue growth could result in
significant operating losses. We will continue to encounter risks and
difficulties frequently experienced by companies at a similar stage of
development, including our potential failure to:
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expand
our product offerings and maintain the high quality of our
products;
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manage
our expanding operations, including the integration of any future
acquisitions;
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obtain
sufficient working capital to support our expansion and to fill customers'
orders in time;
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maintain
adequate control of our expenses;
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implement
our product development, marketing, sales, and acquisition strategies
and
adapt and modify them as needed;
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anticipate
and adapt to changing conditions in the dextrose monohydrate and
glucose
products markets in which we operate as well as the impact of any
changes
in government regulation, mergers and acquisitions involving our
competitors, technological developments and other significant competitive
and market dynamics.
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13
If
we are
not successful in addressing any or all of these risks, our business may be
materially and adversely affected.
We
will
face a lot of competition, some of which may be better capitalized and more
experienced than us.
We
face
competition in the pharmaceutical grade dextrose monohydrate and glucose
industries. Although we view ourselves in a favorable position vis-à-vis our
competition, some of the other companies that sell into our markets may be
more
successful than us and/or have more experience and money that we do. This
additional experience and money may enable our competitors to produce more
cost-effective products and market their products with more success than we
are
able to, which would decrease our sales. We expect that we will be required
to
continue to invest in product development and productivity improvements to
compete effectively in our markets. However, we cannot give you assurance that
we can successfully remain competitive. If our competitors could develop a
more
efficient product or undertake more aggressive and costly marketing campaigns
than us, which may adversely affect our marketing strategies and could have
a
material adverse effect on our business, results of operations or financial
condition.
Our
business is largely subject to the uncertain legal environment in the PRC and
your legal protection could be limited.
A
slowdown or other adverse developments in the PRC economy may materially and
adversely affect our customers, demand for our products and our
business.
All
of
our operations are conducted in the PRC and most of all of our revenues are
generated from sales in the PRC. Although the PRC economy has grown
significantly in recent years, we cannot assure you that such growth will
continue. Also, while we believe the demand for our products are independent
of
the health of the economy, we do not know how sensitive we are to a slowdown
in
economic growth or other adverse changes in the PRC economy. A slowdown in
overall economic growth, an economic downturn or recession or other adverse
economic developments in the PRC may materially reduce the demand for our
products and materially and adversely affect our business.
Conversely,
our major competitors may be better able than us to successfully endure
downturns in our sector. In periods of reduced demand for our products, we
can
either choose to maintain market share by reducing our selling prices to meet
competition or maintain selling prices, which would likely sacrifice market
share. Sales and overall profitability would be reduced under either scenario.
In addition, we cannot assure you that additional competitors will not enter
our
existing markets, or that we will be able to compete successfully against
existing or new competition.
Inflation
in the PRC could negatively affect our profitability and growth.
14
While
the
PRC economy has experienced rapid growth, such growth has been uneven
among various sectors of the economy and in different geographical areas of
the
country. Rapid economic growth can lead to growth in the money supply and rising
inflation. If prices for our products rise at a rate that is insufficient to
compensate for the rise in the costs of supplies, it may have an adverse effect
on profitability. In order to control inflation in the past, the PRC government
has imposed controls on bank credits, limits on loans for fixed assets and
restrictions on state bank lending. Such an austere policy can lead to a slowing
of economic growth. In October 2004, the People's Bank of China, the PRC's
central bank, raised interest rates for the first time in nearly a decade and
indicated in a statement that the measure was prompted by inflationary concerns
in the Chinese economy. Repeated rises in interest rates by the central bank
would likely slow economic activity in China which could, in turn, materially
increase our costs and also reduce demand for our products.
A
renewed
outbreak of SARS or another widespread public health problem in the
PRC,
such as bird flu where all of the Company's revenue is derived, could have
an
adverse effect on our operations. Our operations may be impacted by a number
of
health-related factors, including quarantines or closures of some offices that
would adversely disrupt our operations.
Any
of
the foregoing events or other unforeseen consequences of public health problems
could adversely affect our operations.
Because
our principal assets are located outside of the U.S. and all of our directors
and all our officers reside outside of the U.S., it may be difficult for you
to
enforce your rights based on U.S. Federal Securities Laws against us and our
officers and some directors in the U.S. or to enforce a U.S. court judgment
against us or them in the PRC.
Further,
it is unclear if extradition treaties now in effect between the U.S. and the
PRC
would permit effective enforcement against us or our officers and directors
of
criminal penalties under the U.S. Federal securities laws or
otherwise.
We
may
have difficulty establishing adequate management, legal and financial
controls
in the PRC.
The
PRC
historically has not adopted a western style of management and financial
reporting concepts and practices, as well as in modern banking, computer and
other control systems. We may have difficulty in hiring and retaining a
sufficient number of qualified employees to work in the PRC. As a result of
these factors, we may experience difficulty in establishing management, legal
and financial controls, collecting financial data and preparing financial
statements, books of account and corporate records and instituting business
practices that meet Western standards.
15
Our
inability to fund our capital expenditure requirements may adversely affect
our
growth and profitability. Our continued growth is dependent upon our ability
to
raise capital from outside sources. Our ability to obtain financing will depend
upon a number of factors, including:
-
our
financial condition and results of operations,
-
the
condition of the PRC economy and the healthcare sector in the PRC,
and
-
conditions
in relevant financial markets.
If
we are
unable to obtain financing, as needed, on a timely basis and on acceptable
terms, our financial position, competitive position, growth and profitability
may be adversely affected.
We
may
not be able to effectively control and manage our growth.
If
our
business and markets grow and develop, it will be necessary for us to finance
and manage expansion in an orderly fashion. In addition, we may face challenges
in managing expanding product offerings and in integrating acquired businesses
with our own. Such eventualities will increase demands on our existing
management, workforce and facilities. Failure to satisfy such increased demands
could interrupt or adversely affect our operations and cause production
backlogs, longer product development time frames and administrative
inefficiencies.
We
do not
have any long-term supply contracts with our raw materials suppliers as the
market price for the raw materials has been fairly stable. Any significant
fluctuation in price of our raw materials may have a material adverse effect
on
the manufacturing cost of our products. We are subject to market conditions
and
although these raw materials are generally available and we have not experienced
any raw material shortage in the past, we cannot assure you that the necessary
materials will continue to be available to us at prices currently in effect
or
acceptable to us.
We
may
have limited options in the short-term for alternative supply if our suppliers
fail for any reason, including their business failure or financial difficulties,
to continue the supply of materials or components. Moreover, identifying and
accessing alternative sources may increase our costs.
Although
we are in the corn-producing region in the Shandong province, there is no
guarantee that we will not face a shortage of corn because of some natural
calamity or other reason. We have also mitigated the risks of a shortage in
cornstarch by managing a cornstarch-producing company, Shouguang Shengtai Starch
Company, and implemented a vertical integration manufacturing program, which
includes building our own cornstarch processing plant. This will not only lower
productions costs and improve profit margins, it will also allow Weifang
Shengtai to produce higher quality, lower-cost cornstarch. We cannot guarantee
such measures will be effective in eradicating all risks attendant to the supply
of raw materials. In the event our cost of materials is increased, we may have
to raise the prices of our products, making us less competitive
price-wise.
16
We
may
not be able to adjust our product prices, especially in the short-term, to
recover the costs of any increases in raw materials. Our future profitability
may be adversely affected to the extent we are unable to pass on higher raw
material costs to our customers.
We
depend
on a concentration of customers.
Our
revenue is dependent, in large part, on significant orders from certain
customers. We believe that revenue derived from current and future large
customers will continue to represent a significant portion of our total revenue
although we plan to diversity our customer base by, among other things,
expanding our international sales. Our inability to continue to secure and
maintain a sufficient number of large customers or increase our customer base
would have a material adverse effect on our business, operating results and
financial condition. Moreover, our success will depend in part upon our ability
to obtain orders from new customers, as well as the financial condition and
success of our customers and general economic conditions.
We
usually enter into annual contracts with our domestic customers and long term
contracts with our international customers. If there is an unforeseen
circumstance e.g. in the dramatic increase of the costs of our raw materials,
we
may have to honor these contracts and suffer a loss if we are unable to
renegotiate the terms.
We
may be
exposed to intellectual property infringement and other claims by third parties,
which, if successful, could cause us to pay significant damage awards and incur
other costs.
Our
success also depends in large part on our ability to use and develop our
technology and know-how without infringing the intellectual property rights
of
third parties. As litigation becomes more common in the PRC in resolving
commercial disputes, we face a higher risk of being the subject of intellectual
property infringement claims. The validity and scope of claims relating to
manufacturing of pharmaceuticals involve complex technical, legal and factual
questions and analysis and, therefore, may be highly uncertain. The defense
and
prosecution of intellectual property suits, patent opposition proceedings and
related legal and administrative proceedings can be both costly and time
consuming and may significantly divert the efforts and resources of our
technical and management personnel. An adverse determination in any such
litigation or proceedings to which we may become a party could subject us to
significant liability, including damage awards, to third parties, require us
to
seek licenses from third parties, to pay ongoing royalties, or to redesign
our
products or subject us to injunctions preventing the manufacture and sale of
our
products. Protracted litigation could also result in our customers or potential
customers deferring or limiting their purchase or use of our products until
resolution of such litigation.
Potential
environmental liability could have a material adverse effect on our operations
and financial condition.
17
To
the
knowledge of our management team, neither the production nor the sale of our
products constitute activities, or generate materials in a material manner,
that
requires our operation to comply with the PRC environmental laws. Although
it
has not been alleged by PRC government officials that we have violated any
current environmental regulations, we cannot assure you that the PRC government
will not amend the current PRC environmental protection laws and regulations.
Our business and operating results may be materially and adversely affected
if
we were to be held liable for violating existing environmental regulations
or if
we were to increase expenditures to comply with environmental regulations
affecting our operations.
We
rely
on Mr. Qingtai Liu, our chairman and president, for the management of our
business, and the loss of his services may significantly harm our business
and
prospects.
We
depend, to a large extent, on the abilities and participation of our current
management team, but have a particular reliance upon Mr. Qingtai Liu for the
direction of our business. The loss of the services of Xx. Xxx, for any reason,
may have a material adverse effect on our business and prospects. We cannot
assure you that the services of Xx. Xxx will continue to be available to us,
or
that we will be able to find a suitable replacement for Xx. Xxx.
We
do not
have key man insurance on Mr. Qingtai Liu, our chairman and president, upon
whom
we rely primarily for the direction of our business. If Xx. Xxx dies and we
are
unable to replace Xx. Xxx for a prolonged period of time, we may be unable
to
carry out our long term business plan and our future prospect for growth, and
our business, may be harmed.
We
may
not be able to hire and retain qualified personnel to support our growth and
if
we are unable to retain or hire such personnel in the future, our ability to
improve our products and implement our business objectives could be adversely
affected.
Our
future success depends heavily upon the continuing services of the members
of
our senior management team, in particular our chairman and president, Mr.
Qingtai Liu. If one or more of our senior executives or other key personnel
are
unable or unwilling to continue in their present positions, we may not be able
to replace them easily or at all, and our business may be disrupted and our
financial condition and results of operations may be materially and adversely
affected. Competition for senior management and personnel is intense, the pool
of qualified candidates is very limited, and we may not be able to retain the
services of our senior executives or senior personnel, or attract and retain
high-quality senior executives or senior personnel in the future. Such failure
could materially and adversely affect our future growth and financial
condition.
We
may
not have adequate internal accounting controls. While we have certain internal
procedures in our budgeting, forecasting and in the management and allocation
of
funds, such controls may not be adequate.
18
We
presently do not have an experienced Chief Financial Officer who is conversant
with U.S. Generally Accepted Accounting Principles and knowledgeable in our
industry but we intend to search for a suitably qualified person to fill this
position. There is no guarantee that we would be successful in our search or
would be successful in retaining such a person. If we are unable to find a
suitable candidate or unable to retain his services, we may not be able to
comply with our continuing financial reporting obligations and our financial
condition and results of operations may be materially and adversely
affected,
We
do not
presently maintain product liability insurance, and our property and equipment
insurance does not cover the full value of our property and equipment, which
leaves us with exposure in the event of loss or damage to our properties or
claims filed against us.
We
currently do not carry any product liability or other similar insurance. We
cannot assure you that we would not face liability in the event of the failure
of any of our products. This is particularly true given our plan to
significantly expand our sales into international markets, like the United
States, where product liability claims are more prevalent.
Except
for property and automobile insurance, we do not have other insurance such
as
business liability or disruption insurance coverage for our operations in the
PRC.
We
do not
maintain a reserve fund for warranty or defective products claims. Our costs
could substantially increase if we experience a significant number of warranty
claims. We have not established any reserve funds for potential warranty claims
since historically we have experienced few warranty claims for our products
so
that the costs associated with our warranty claims have been low. If we
experience an increase in warranty claims or if our repair and replacement
costs
associated with warranty claims increase significantly, it would have a material
adverse effect on our financial condition and results of
operations.
19
EXHIBIT
G
FORM
OF WARRANT
NEITHER
THIS WARRANT NOR ANY SHARES OF COMMON STOCK ISSUABLE UPON THE EXERCISE OF THIS
WARRANT HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND
THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “SECURITIES
ACT”).
THIS
WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT
BE
OFFERED, SOLD, OR OTHERWISE TRANSFERRED IN THE ABSENCE OF REGISTRATION UNDER
THE
SECURITIES ACT OR UNLESS SUCH OFFER, SALE OR TRANSFER IS EXEMPT FROM SUCH
REGISTRATION.
WEST
COAST CAR COMPANY
COMMON
STOCK WARRANT
| No. __________ | May __, 2007 |
WEST
COAST CAR COMPANY,
a
Delaware corporation (the “Company”),
hereby certifies that ______________________________________, its permissible
transferees, designees, successors and assigns (collectively, the “Holder”), for
value received, is entitled to purchase from the Company at any time commencing
on the effective date (the “Effective Date”), and terminating on the fifth
anniversary of the date of issuance of this Warrant (the “Termination Date”)
_____________ shares (each, a “Share” and collectively the “Shares”) of the
Company’s common stock, $.001 par value per Share (the “Common Stock”), at an
exercise price $2.60 per Share (the “Exercise Price”). The number of Shares
purchasable hereunder and the Exercise Price are subject to adjustment as
provided in Section 4 hereof.
1. Exercise
of Warrant.
(a) The
purchase right represented by this Common Stock Warrant (this "Warrant") is
exercisable, in whole or in part, at any time and from time to time from and
after the Effective Date through and including the Termination
Date.
(b) Upon
presentation and surrender of this Warrant, accompanied by a completed Election
to Purchase in the form attached hereto as Exhibit
A
(the
“Election
to Purchase”)
duly
executed, at the principal office of the Company currently located at 00 Xxx
Xxxxxxxxx Xxxxx, Xxxx #0, Xxxx Xxxxxxx, XX 00000 (or
such
other office or agency of the Company as the Company may designate to the
Holder) together with a check payable to, or wire transfer to, the Company
in
the amount of the Exercise Price multiplied by the number of Shares being
purchased, the Company or the Company’s transfer agent, as the case may be,
shall within three (3) business days deliver to the Holder hereof certificates
of fully paid and non-assessable Common Stock which in the aggregate represent
the number of Shares being purchased. The certificates so delivered shall be
in
such denominations as may be requested by the Holder and shall be registered
in
the name of the Holder or such other name as shall be designated by the Holder.
All or less than all of the purchase rights represented by this Warrant may
be
exercised and, in case of the exercise of less than all, the Company, upon
surrender hereof, will at the Company’s expense deliver to the Holder a new
warrant entitling said holder to purchase the number of Shares represented
by
this Warrant which have not been exercised. This Warrant may only be exercised
to the extent the Company has a sufficient number of Shares of Common Stock
available for issuance at the time of any exercise. The Company convenants
that
it will maintain a sufficient number of authorized and unissued shares of Common
stock, available for issuance, to satisfy the Company’s obligations under all
outstanding Warrants.
20
| 2. |
Warrant.
|
(a) Exchange,
Transfer and Replacement.
At any
time prior to the exercise hereof, this Warrant may be exchanged upon
presentation and surrender to the Company, alone or with other warrants of
like
tenor of different denominations registered in the name of the same Holder,
for
another warrant or warrants of like tenor in the name of such Holder exercisable
for the aggregate number of Shares as the warrant or warrants
surrendered.
(b) Replacement
of Warrant.
Upon
receipt of evidence reasonably satisfactory to the Company of the loss, theft,
destruction, or mutilation of this Warrant and, in the case of any such loss,
theft, or destruction, upon delivery of an indemnity agreement reasonably
satisfactory in form and amount to the Company, or, in the case of any such
mutilation, upon surrender and cancellation of this Warrant, the Company, at
its
expense, will execute and deliver in lieu thereof, a new Warrant of like
tenor.
(c)
Cancellation;
Payment of Expenses.
Upon
the surrender of this Warrant in connection with any transfer, exchange or
replacement as provided in this Section 2, this Warrant shall be promptly
canceled by the Company. The Holder shall pay all taxes and all other expenses
(including legal expenses, if any, incurred by the Holder or transferees) and
charges payable in connection with the preparation, execution and delivery
of
Warrants pursuant to this Section 2.
(d)
Warrant
Register.
The
Company shall maintain, at its principal executive offices (or at the offices
of
the transfer agent for the Warrant or such other office or agency of the Company
as it may designate by notice to the holder hereof), a register for this Warrant
(the “Warrant Register”), in which the Company shall record the name and address
of the person in whose name this Warrant has been issued, as well as the name
and address of each transferee and each prior owner of this
Warrant.
21
| 3. |
Rights
and Obligations of Holders of this Warrant.
The Holder of this Warrant shall not, by virtue hereof, be entitled
to any
rights of a stockholder in the Company, either at law or in equity;
provided,
however,
that in the event any certificate representing shares of Common Stock
or
other securities is issued to the holder hereof upon exercise of
this
Warrant, such holder shall, for all purposes, be deemed to have become
the
holder of record of such Common Stock on the date on which this Warrant,
together with a duly executed Election to Purchase, was surrendered
and
payment of the aggregate Exercise Price was made, irrespective of
the date
of delivery of such Common Stock
certificate.
|
| 4. |
Adjustments.
|
(a) Stock
Dividends, Reclassifications, Recapitalizations, Etc.
In the
event that after the Effective Date the Company: (i) pays a dividend in
Common Stock or makes a distribution in Common Stock, (ii) subdivides its
outstanding Common Stock into a greater number of shares, (iii) combines
its outstanding Common Stock into a smaller number of shares or
(iv) increases or decreases the number of shares of Common Stock
outstanding by reclassification of its Common Stock (including a
recapitalization in connection with a consolidation or merger in which the
Company is the continuing corporation), then (1) the Exercise Price on the
record date of such division or distribution or the effective date of such
action shall be adjusted by multiplying such Exercise Price by a fraction,
the
numerator of which is the number of shares of Common Stock outstanding
immediately before such event and the denominator of which is the number of
shares of Common Stock outstanding immediately after such event, and
(2) the number of shares of Common Stock for which this Warrant may be
exercised immediately before such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the Exercise Price immediately
before such event and the denominator of which is the Exercise Price immediately
after such event.
(b) Subject
to Sections 4(f) and (g), in the event the Company issues, during the period
of
eighteen (18) months after the Effective Date, any additional shares of Common
Stock at a price per share less than $2.60 or without consideration, then the
Warrant price upon each such issuance shall be adjusted to the price equal
to
the consideration per share paid for such additional shares of Common
Stock.
(c) In
the
event the Company shall at any time within eighteen (18) months following the
original issuance of this Warrant take a record of the holders of its Common
Stock for the purpose of entitling them to receive a distribution of, or shall
in any manner (whether directly or by assumption in a merger in which the
Company is the surviving corporation) issue or sell, any Common Stock
equivalents, whether or not the rights to exchange or convert thereunder are
immediately exercisable, and the price per share for which Common Stock is
issuable upon such conversion or exchange shall be less than $2.60 immediately
prior to the time of such issue or sale, or if, after any such issuance of
Common Stock Equivalents, the price per share for which additional shares of
Common Stock may be issuable thereafter is amended or adjusted, and such price
as so amended shall be less than $2.60 at the time of such amendment or
adjustment, then the Warrant price then in effect shall be adjusted as provided
in Section 4(b). No further adjustments of the number of shares of Common Stock
for which this Warrant is exercisable and the Warrant price then in effect
shall
be made upon the actual issue of such Common Stock upon conversion or exchange
of such Common Stock equivalents.
22
(d) Other
Provisions Applicable to Adjustments under this Section.
The
following provisions shall be ap-plicable to the making of adjustments of the
number of shares of Common Stock for which this Warrant is exercisable and
the
Warrant price then in effect provided for in this Section 4:
(i) Computation
of Consideration.
To the
extent that any additional shares of Common Stock or any Common Stock
equivalents (or any warrants or other rights therefor) shall be issued for
cash
consideration, the consideration received by the Company therefor shall be
the
amount of the cash received by the Company therefor, or, if such additional
shares of Common Stock or Common Stock equivalents are offered by the Company
for subscription, the subscription price, or, if such additional shares of
Common Stock or Common Stock equivalents are sold to underwriters or dealers
for
public offering without a subscription offering, the initial public offering
price (in any such case subtracting any amounts paid or receivable for accrued
interest or accrued dividends and without taking into account any compensation,
discounts or expenses paid or incurred by the Company for and in the
underwriting of, or otherwise in connection with, the issuance thereof). In
connection with any merger or consolidation in which the Company is the
surviving corporation (other than any consolidation or merger in which the
previously outstanding shares of Common Stock of the Company shall be changed
to
or exchanged for the stock or other securities of another corporation), the
amount of consideration therefore shall be, deemed to be the fair value, as
determined reasonably and in good faith by the Board and acceptable to the
Holder, of such portion of the assets and business of the nonsurviving
corporation as the Board may determine to be attributable to such shares of
Common Stock or Common Stock equivalents, as the case may be. The consideration
for any additional shares of Common Stock issuable pursuant to any Warrants
or
other rights to subscribe for or purchase the same shall be the consideration
received by the Company for issuing such Warrants or other rights plus the
additional con-sideration payable to the Company upon exercise of such Warrants
or other rights. The consideration for any additional shares of Common Stock
issuable pursuant to the terms of any Common Stock equivalents shall be the
consideration received by the Company for issuing War-rants or other rights
to
subscribe for or purchase such Common Stock equivalents, plus the consideration
paid or payable to the Company in respect of the subscription for or purchase
of
such Common Stock equivalents, plus the additional consideration, if any,
payable to the Company upon the exercise of the right of conversion or exchange
in such Common Stock equivalents. In the event of any consolidation or merger
of
the Company in which the Company is not the surviving corporation or in which
the previously outstanding shares of Common Stock of the Company shall be
changed into or exchanged for the stock or other securities of another
corporation, or in the event of any sale of all or substantially all of the
assets of the Company for stock or other securities of any corporation, the
Company shall be deemed to have issued a number of shares of its Common Stock
for stock or securities or other property of the other corporation computed
on
the basis of the actual exchange ratio on which the transaction was predicated,
and for a consideration equal to the fair market value on the date of such
transaction of all such stock or securities or other property of the other
corporation. In the event any consideration received by the Company for any
securities consists of property other than cash, the fair market value thereof
at the time of issuance or as otherwise applicable shall be as determined in
good faith by the Board. In the event Common Stock is issued with other shares
or securities or other assets of the Issuer for consideration which covers
both,
the consideration computed as provided in this Section 4(d)(i) shall be
allocated among such securities and assets as determined in good faith by the
Board.
23
(ii) When
Adjustments to Be Made.
The
adjustments required by this Section 4 shall be made whenever and as often
as
any specified event requiring an adjustment shall occur, except that any
adjustment of the number of shares of Common Stock for which this Warrant is
exercisable that would otherwise be required may be postponed (except in the
case of a subdivision or combination of shares of the Common Stock, but not
beyond the date of exercise if such adjustment either by itself or with other
adjustments not previously made adds or subtracts less than one percent (1%)
of
the shares of Common Stock for which this Warrant is exercisable immediately
prior to the making of such adjustment. Any adjustment representing a change
of
less than such minimum amount (except as aforesaid) which is postponed shall
be
carried forward and made as soon as such adjustment, together with other
adjustments required by this Section 4 and not previously made, would result
in
a minimum adjustment or on the date of exercise. For the purpose of any
adjustment, any specified event shall be deemed to have occurred at the close
of
business on the date of its occurrence.
(iii) Fractional
Interests.
In
computing ad-justments under this Section 4, fractional interests in Common
Stock shall be taken into account to the near-est one one-hundredth
(1/100th)
of a
share.
(iv) When
Adjustment Not Required.
If the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or distribution or subscription or
purchase rights and shall, thereafter and before the distribution to
stockholders thereof, legally abandon its plan to pay or deliver such dividend,
distribution, subscription or purchase rights, then thereafter no adjustment
shall be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled.
24
(e) Form
of Warrant after Adjustments.
The
form of this Warrant need not be changed because of any adjustments in the
Warrant Price or the number and kind of Securities purchasable upon the exercise
of this Warrant.
(f) Cash
Dividends and Other Distributions.
In the
event that at any time or from time to time the Company shall distribute to
all
holders of Common Stock (i) any dividend or other distribution of cash,
evidences of its indebtedness, shares of its capital stock or any other
properties or securities or (ii) any options, warrants or other rights to
subscribe for or purchase any of the foregoing (other than in each case,
(w) the issuance of any rights under a shareholder rights plan,
(x) any dividend or distribution described in Section 4(a) and (y) any
rights, options, warrants or securities described in Section 4(c)), then the
number of shares of Common Stock issuable upon the exercise of this Warrant
shall be increased to a number determined by multiplying the number of shares
of
Common Stock issuable upon the exercise of this Warrant immediately prior to
the
record date for any such dividend or distribution by a fraction, the numerator
of which shall be such Current Market Value (as hereinafter defined) per share
of Common Stock on the record date for such dividend or distribution, and the
denominator of which shall be such Current Market Value per share of Common
Stock on the record date for such dividend or distribution less the sum of
(x)
the amount of cash, if any, distributed per share of Common Stock and (y) the
fair value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be evidenced by a board resolution, a copy
of
which will be sent to the Holders upon request) of the portion, if any, of
the
distribution applicable to one share of Common Stock consisting of evidences
of
indebtedness, shares of stock, securities, other property, warrants, options
or
subscription or purchase rights; and the Exercise Price shall be adjusted to
a
number determined by dividing the Exercise Price immediately prior to such
record date by the above fraction. Such adjustments shall be made whenever
any
distribution is made and shall become effective as of the date of distribution,
retroactive to the record date for any such distribution. No adjustment shall
be
made pursuant to this Section 4(b) which shall have the effect of decreasing
the
number of shares of Common Stock issuable upon exercise of this Warrant or
increasing the Exercise Price.
(g) Combination;
Liquidation.
(i) In the event of a Combination (as defined below), each Holder shall
have the right to receive upon exercise of the Warrant the kind and amount
of
shares of capital stock or other securities or property which such Holder would
have been entitled to receive upon or as a result of such Combination had such
Warrant been exercised immediately prior to such event (subject to further
adjustment in accordance with the terms hereof). Unless paragraph (ii) is
applicable to a Combination, the Company shall provide that the surviving or
acquiring Person (the “Successor Company”) in such Combination will assume by
written instrument the obligations under this Section 4 and the obligations
to deliver to the Holder such shares of stock, securities or assets as, in
accordance with the foregoing provisions, the Holder may be entitled to acquire.
“Combination” means an event in which the Company consolidates with, mergers
with or into, or sells all or substantially all of its assets to another Person,
where “Person” means any individual, corporation, partnership, joint venture,
limited liability company, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity; (ii) In the event of (x) a Combination where
consideration to the holders of Common Stock in exchange for their shares is
payable solely in cash or (y) the dissolution, liquidation or winding-up of
the
Company, the Holders shall be entitled to receive, upon surrender of their
Warrant, distributions on an equal basis with the holders of Common Stock or
other securities issuable upon exercise of the Warrant, as if the Warrant had
been exercised immediately prior to such event, less the Exercise Price. In
case
of any Combination described in this Section 4, the surviving or acquiring
Person and, in the event of any dissolution, liquidation or winding-up of the
Company, the Company, shall deposit promptly with an agent or trustee for the
benefit of the Holders all the funds, if any, necessary to pay to the Holders
the amounts to which they are entitled as described above. As each Warrant
is
received, the Company is required to deliver a check in such amount as is
appropriate (or, in the case of consideration other than cash, such other
consideration as is appropriate) to the Holders surrendering such
Warrant.
25
a. Notice
of Adjustment.
Whenever the Exercise Price or the number of shares of Common Stock and other
property, if any, issuable upon exercise of the Warrant is adjusted, as herein
provided, the Company shall deliver to the Holders of the Warrants in accordance
with Section 10 a certificate of the Company’s Chief Financial Officer
setting forth, in reasonable detail, the event requiring the adjustment and
the
method by which such adjustment was calculated (including a description of
the
basis on which (i) the Board of Directors determined the fair value of any
evidences of indebtedness, other securities or property or warrants, options
or
other subscription or purchase rights and (ii) the Current Market Value of
the
Common Stock was determined, if either of such determinations were required),
and specifying the Exercise Price and number of shares of Common Stock issuable
upon exercise of Warrant after giving effect to such adjustment.
b.Notice
of Certain Transactions.
In the
event that the Company shall propose (a) to pay any dividend payable in
securities of any class to the holders of its Common Stock or to make any other
non-cash dividend or distribution to the holders of its Common Stock,
(b) to offer the holders of its Common Stock rights to subscribe for or to
purchase any securities convertible into shares of Common Stock or shares of
stock of any class or any other securities, rights or options, (c) to
effect any capital reorganization, reclassification, consolidation or merger
affecting the class of Common Stock, as a whole, or (d) to effect the
voluntary or involuntary dissolution, liquidation or winding-up of the Company,
the Company shall, within the time limits specified below, send to each Holder
a
notice of such proposed action or offer. Such notice shall be mailed to the
Holders at their addresses as they appear in the Warrant Register (as defined
in
Section 2(d)),
which
shall specify the record date for the purposes of such dividend, distribution
or
rights, or the date such issuance or event is to take place and the date of
participation therein by the holders of Common Stock, if any such date is to
be
fixed, and shall briefly indicate the effect of such action on the Common Stock
and on the number and kind of any other shares of stock and on other property,
if any, and the number of shares of Common Stock and other property, if any,
issuable upon exercise of each Warrant and the Exercise Price after giving
effect to any adjustment pursuant to Section 4 which will be required as a
result of such action. Such notice shall be given as promptly as possible and
(x) in the case of any action covered by clause (a) or (b) above, at least
ten
(10) days prior to the record date for determining holders of the Common Stock
for purposes of such action or (y) in the case of any other such action, at
least twenty (20) days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of Common Stock, whichever
shall be the earlier.
26
c. Current
Market Value.“Current
Market Value” per share of Common Stock or any other security at any date means
(i) if the security is not registered under the Securities Exchange Act of
1934
and/or traded on a national securities exchange, quotation system or bulletin
board, as amended (the “Exchange Act”), (a) the value of the security,
determined in good faith by the Board of Directors of the Company and certified
in a board resolution, based on the most recently completed arm’s-length
transaction between the Company and a Person other than an affiliate of the
Company or between any two such Persons and the closing of which occurs on
such
date or shall have occurred within the six-month period preceding such date,
or
(b) if no such transaction shall have occurred within the six-month period,
the
value of the security as determined by an independent financial expert or an
agreed upon financial valuation model or (ii) if the security is registered
under the Exchange Act and/or traded on a national securities exchange,
quotation system or bulletin board, the average of the daily closing bid prices
(or the equivalent in an over-the-counter market) for each day on which the
Common Stock is traded for any period on the principal securities exchange
or
other securities market on which the common Stock is being traded (each, a
“Trading Day”) during the period commencing thirty (30) days before such date
and ending on the date one day prior to such date.
|
5.
|
Fractional
Shares.
In lieu of issuance of a fractional share upon any exercise hereunder,
the
Company will pay the cash value of that fractional share, calculated
on
the basis of the Exercise Price.
|
|
6.
|
Legends.
Prior to issuance of the shares of Common Stock underlying this Warrant,
all such certificates representing such shares shall bear a restrictive
legend to the effect that the Shares represented by such certificate
have
not been registered under the 1933 Act, and that the Shares may not
be
sold or transferred in the absence of such registration or an exemption
therefrom, such legend to be substantially in the form of the bold-face
language appearing at the top of Page 1 of this Warrant.
|
27
| 7. |
Call
Rights.
The Company shall have the right to call the
exercise of all, or the remaining portion of this Warrant outstanding
and
unexercised
at
the Exercise Price in the event (i) the Volume Weighted Average Price
(“VWAP”) of the Company’s Common Stock equals or exceeds $8.00 per share
during any twenty (20) consecutive trading days and (ii) all Shares
for
which this Warrant is exercisable are registered for resale by the
Holder
(the “Call Conditions”). For the purposes of this Warrant, the VWAP shall
be the volume weighted average price reported by Bloomberg for the
Common
Stock. Within ten (10) business days of the Call Conditions, the
Company
shall deliver a notice to each registered Holder of the Warrants
setting
for the number of Warrants held and the dollar amount due to exercise
the
Warrants (the “Call Notice”). Each Holder shall have thirty (30) calendar
days from the receipt of the Call Notice to exercise the remaining
balance
of the Warrant (the “Call Period”). Upon the expiration of the Call
Period, any unexercised Warrant shall automatically expire.
|
| 8. |
Disposition
of Warrants or Shares; Lockup.
|
The
Holder of this Warrant, each transferee hereof and any holder and transferee
of
any Shares, by his or its acceptance thereof, agrees that no public distribution
of Warrants or Shares will be made in violation of the provisions of the
Securities Act of 1933, as amended. Furthermore, it shall be a condition to
the
transfer of this Warrant that any transferee thereof deliver to the Company
his
or its written agreement to accept and be bound by all of the terms and
conditions contained in this Warrant.
| 9. |
Merger
or Consolidation.
The Company will not merge or consolidate with or into any other
corporation, or sell or otherwise transfer its property, assets and
business substantially as an entirety to another corporation, unless
the
corporation resulting from such merger or consolidation (if not the
Company), or such transferee corporation, as the case may be, shall
expressly assume, by supplemental agreement reasonably satisfactory
in
form and substance to the Holder, the due and punctual performance
and
observance of each and every covenant and condition of this Warrant
to be
performed and observed by the
Company.
|
| 10. |
Notices.
Except as otherwise specified herein to the contrary, all notices,
requests, demands and other communications required or desired to
be given
hereunder shall only be effective if given in writing by certified
or
registered U.S. mail with return receipt requested and postage prepaid;
by
private overnight delivery service (e.g. Federal Express); by facsimile
transmission (if no original documents or instruments must accompany
the
notice); or by personal delivery. Any such notice shall be deemed
to have
been given (a) three business days immediately following the mailing
thereof, if mailed by certified or registered U.S. mail as specified
above; (b) on the business day immediately following deposit with
a
private overnight delivery service if sent by said service; (c) upon
receipt of confirmation of transmission if sent by facsimile transmission;
or (d) upon personal delivery of the notice. All such notices shall
be
sent to the following addresses (or to such other address or addresses
as
a party may have advised the other in the manner provided in this
Section 10):
|
28
if
to the Company:
West
Coast Car Company
00
Xxx
Xxxxxxxxx Xxxxx, Xxxx #0, Xxxx Xxxxxxx, XX 00000
Attention:
Xxxxx Du
Facsimile:
(000) 0000000
If
to the Holder:
____________________
____________________
____________________
____________________
Notwithstanding
the time of effectiveness of notices set forth in this Section, an Election
to
Purchase shall not be deemed effectively given until it has been duly completed
and submitted to the Company together with this original Warrant and payment
of
the Exercise Price in a manner set forth in this Section.
| 11. |
Governing
Law.
This Warrant shall be governed by and construed in accordance with
the
laws of the State of Delaware applicable to contracts made and to
be
performed in the State of Delaware.
|
| 12. |
Successors
and Assigns.
This Warrant shall be binding upon and shall inure to the benefit
of the
parties hereto and their respective successors and
assigns.
|
| 13. |
Headings.
The headings of various sections of this Warrant have been inserted
for
reference only and shall not affect the meaning or construction of
any of
the provisions hereof.
|
| 14. |
Severability.
If any provision of this Warrant is held to be unenforceable under
applicable law, such provision shall be deemed automatically modified
only
to the extent necessary to make such provision enforceable, and the
balance hereof shall be interpreted as if such provision were so
modified.
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| 15. |
Modification
and Waiver.
This Warrant and any provision hereof may be amended, waived, discharged
or terminated only by an instrument in writing signed by the Company
and
the Holder, except as provided in Section 14.
|
| 16. |
Specific
Enforcement.
The Company and the Holder acknowledge and agree that irreparable
damage
would occur in the event that any of the provisions of this Warrant
were
not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled
to
an injunction or injunctions to prevent or cure breaches of the provisions
of this Warrant and to enforce specifically the terms and provisions
hereof, this being in addition to any other remedy to which either
of them
may be entitled by law or equity.
|
29
| 17. |
Assignment.
Subject to prior written approval by the Company, this Warrant may
be
transferred or assigned, in whole or in part, at any time and from
time to
time by the then Holder by submitting this Warrant to the Company
together
with a duly executed Assignment in substantially the form and substance
of
the Form of Assignment which accompanies this Warrant, as Exhibit B
hereto, and, upon the Company’s receipt hereof, and in any event, within
three (3) business days thereafter, the Company shall issue a warrant
to
the Holder to evidence that portion of this Warrant, if any as shall
not
have been so transferred or assigned.
|
(signature
page immediately follows)
30
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed,
manually or by facsimile, by one of its officers thereunto duly
authorized.
|
WEST
COAST CAR COMPANY
|
||
| |
|
|
|
Date:
__________, 2007
|
By: | |
|
Name: Qingtai
Liu
|
||
|
Title: President
|
||
31
EXHIBIT
A
TO
WARRANT
CERTIFICATE
ELECTION
TO PURCHASE
To
Be
Executed by the Holder
in
Order
to Exercise the Warrant
The
undersigned Holder hereby elects to purchase _______ shares pursuant to the
attached Warrant, and requests that certificates for securities be issued in
the
name of:
__________________________________________________________
(Please
type or print name and address)
__________________________________________________________
__________________________________________________________
__________________________________________________________
(Social
Security or Tax Identification Number)
and
delivered to:_____________________________________________________
___________________________________________________________________.
(Please
type or print name and address if different from above)
If
such
number of Shares being purchased hereby shall not be all the Shares that may
be
purchased pursuant to the attached Warrant, a new Warrant for the balance of
such Shares shall be registered in the name of, and delivered to, the Holder
at
the address set forth below.
In
full
payment of the purchase price with respect to the Shares purchased and transfer
taxes, if any, the undersigned hereby tenders payment of $__________ by check,
money order or wire transfer payable in United States currency to the order
of
WEST COAST CAR COMPANY.
|
HOLDER:
|
||
| |
|
|
| By: | ||
|
Name:
|
||
| Title: | ||
|
Address:
|
||
|
Dated:
_______________________
|
||
32
EXHIBIT
B
TO
WARRANT
FORM
OF
ASSIGNMENT
(To
be
signed only on transfer of Warrant)
For
value
received, the undersigned hereby sells, assigns, and transfers unto
_____________ the right represented by the within Warrant to purchase ______
shares of Common Stock of West Coast Car Company, a Delaware corporation, to
which the within Warrant relates, and appoints ____________________ Attorney
to
transfer such right on the books of West Coast Car Company, a Delaware
Corporation, with full power of substitution of premises.
|
Dated:
|
By: | |
|
Name:
|
||
|
Title:
|
||
|
(signature
must conform to name of
holder as specified on
the
fact of
the Warrant)
|
||
|
Address:
|
||
Signed
in
the presence of:
Dated:
33
EXHIBIT
H
ESCROW
AGREEMENT
(See
attached)
34
