REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of October 31, 2008, by and among Lihua International.
Inc., a Delaware corporation (the “Company”)
and
each of the several purchasers signatory hereto (each such purchaser, a
“Purchaser”
and,
collectively, the “Purchasers”).
This
Agreement is being entered into pursuant to the Securities Purchase Agreement,
dated as of the date hereof, between the Company and each Purchaser (the
“Purchase
Agreement”).
The
Company and each Purchaser hereby agrees as follows:
1.
Definitions
Capitalized
terms used and not otherwise defined herein that are defined in the Purchase
Agreement shall have the meanings given such terms in the Purchase
Agreement.
As used
in this Agreement, the following terms shall have the following
meanings:
“Advice”
shall
have the meaning set forth in Section 6(d).
“Broadband
Warrants”
means
the warrants to purchase up to 250,000 shares of Common Stock in the aggregate
issued by the Company to Broadband Capital Management LLC, as placement agent,
and/or its employees.
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
the Common Stock, $0.0001 par value per share, of the Company and any other
Common Stock into which such stock may hereafter be changed.
“Conversion
Shares”
means
the shares of Common Stock issuable upon conversion of outstanding shares of
Preferred Shares.
“Demand
Notice”
shall
have the meaning set forth in Section 2A(a).
“Effectiveness
Date”
means,
with respect to the Initial Registration Statement required to be filed
hereunder, the 150th
calendar
day following the date hereof (or, in the event the Company receives a “full
review” of its Initial Registration Statement by the Commission, the
180th
calendar
day following the date hereof) and with respect to any additional Registration
Statements which may be required pursuant to Section 3(c) or 2A, the
60th
calendar
day following the date on which an additional Registration Statement is required
to be filed hereunder; provided,
however,
that in
the event the Company is notified by the Commission that one or more of the
above Registration Statements will not be reviewed or is no longer subject
to
further review and comments, the Effectiveness Date as to such Registration
Statement shall be the fifth Trading Day following the date on which the Company
is so notified if such date precedes the dates otherwise required
above.
“Effectiveness
Period”
shall
have the meaning set forth in Section 2(a).
“Event”
shall
have the meaning set forth in Section 2(b).
“Event
Date”
shall
have the meaning set forth in Section 2(b).
1
“Filing
Date”
means,
with respect to the Initial Registration Statement required hereunder, the
45th
calendar
day following the date hereof and, with respect to any additional Registration
Statements which may be required pursuant to Section 3(c), the earliest
practical date on which the Company is permitted by SEC Guidance to file such
additional Registration Statement related to the Registrable
Securities.
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Indemnified
Party”
shall
have the meaning set forth in Section 5(c).
“Indemnifying
Party”
shall
have the meaning set forth in Section 5(c).
“Initial
Registration Statement”
means
the initial Registration Statement covering the Registrable Securities filed
pursuant to Section 2(a) of this Agreement.
“Initiating
Purchasers”
shall
have the meaning set forth in Section 2A(a).
“Original
Shareholders”
means
Xxxxxxx Xxxx, Xxxxxx Xxxxxxxxx. Xxxxxxxx Xxxxxxx, Penumbra Worldwide LTD.,
Xxxxxx Xxxxx Xxxxxxx, Xxxxxxx Xxxxx, Xxx Xxxxxx, Xxxx Xxxxx and Xxxxx
Xxxxxx.
“Listing
Penalty and Escrow Securities”
shall
have the meaning set forth in Section 2A(a).
“Losses”
shall
have the meaning set forth in Section 5(a).
“National
Stock Exchange”
means,
the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select
Market, the American Stock Exchange or the New York Stock Exchange.
“Penumbra
Warrants”
means
the warrants to purchase 250,000shares of Common Stock issued by the Company
to
Penumbra Worldwide Ltd. and/or its employees.
"Person"
means
an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.
“Plan
of Distribution”
shall
have the meaning set forth in Section 2(a).
“Preferred
Shares”
means
shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001
per share, purchased by the Purchasers pursuant to the Purchase Agreement.
"Proceeding"
means
an action, claim, suit, investigation or proceeding (including, without
limitation, an informal investigation or partial proceeding, such as a
deposition), whether commenced or threatened.
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from
a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated by the Commission pursuant to the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by a
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such
Prospectus.
2
“Registrable
Securities”
means
(a) all of the Conversion Shares, (b) all Warrant Shares, (c) any additional
shares of Common Stock issuable in connection with any anti-dilution provisions
in the Series A Certificate of Designation or the Warrants, (d) the shares
of
Common Stock underlying the Broadband Warrants; (e) the shares of Common Stock
underlying the Penumbra Warrants; (f) the shares of Common Stock owned by the
Original Shareholders; (g) any securities issued or issuable upon any stock
split, dividend or other distribution, recapitalization or similar event with
respect to the foregoing; and (h), in the event that a Demand Notice is
delivered to the Company to register the Listing Penalty and Escrow Securities
disbursed to the purchasers, such Listing Penalty and Escrow Securities shall
be
considered Registrable Securities.
“Registration
Statement”
means
any registration statement required to be filed hereunder pursuant to Section
2(a) and any additional registration statements contemplated by Section 3(c),
including (in each case) the Prospectus, amendments and supplements to any
such
registration statement or Prospectus, including pre- and post-effective
amendments, all exhibits thereto, and all material incorporated by reference
or
deemed to be incorporated by reference in any such registration
statement.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“SEC
Guidance”
means
(i) any publicly-available written or oral guidance, comments, requirements
or
requests of the Commission staff, including the SEC’s Manual of Publicly
Available Telephone Interpretations D.29, and (ii) the Securities
Act.
“Trading
Day”
means
(a) a day on which the Common Stock is traded on a National Stock Exchange,
or
(b) if the Common Stock is not traded on a National Stock Exchange, a day on
which the Common Stock is quoted in the over-the-counter market as reported
by
the National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided,
however
, that
in the event that the Common Stock is not listed or quoted as set forth in
(a)
or (b) hereof, then Trading Day shall mean any day except Saturday, Sunday
and
any day which shall be a legal holiday or a day on which banking institutions
in
the State of New York are authorized or required by law or other government
action to close.
3
2.
Shelf
Registration
(a) On
or
prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all of the
Registrable Securities that are not then registered on an effective Registration
Statement for an offering to be made on a continuous basis. Each Registration
Statement filed hereunder shall be on Form S-3 (except if the Company is not
then eligible to register for resale the Registrable Securities on Form S-3,
in
which case such registration shall be on another appropriate form in accordance
herewith) and shall contain (unless otherwise directed by at least an 85%
majority in interest of the Holders) substantially the “Plan
of Distribution”
attached hereto as Annex
A.
In the
event that the Commission does not permit the Company to register in any
Registration Statement all of the Registrable Securities pursuant to Rule 415,
the Company shall amend such Registration Statement to register such maximum
portion as permitted by SEC Guidance (provided that the Company shall use
diligent efforts to advocate with the Commission for the registration of all
of
the Registrable Securities in accordance with the SEC Guidance, including
without limitation, the Manual of Publicly Available Telephone Interpretations
D.29) that are not then registered on an effective Registration Statement.
Subject to the terms of this Agreement, the Company shall use its best efforts
to cause a Registration Statement to be declared effective under the Securities
Act as promptly as possible after the filing thereof, but in any event prior
to
the applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement continuously effective under the Securities Act until
all
Registrable Securities covered by such Registration Statement have been sold,
or
may be sold without volume or manner-of-sale restrictions pursuant to Rule
144
and, without the requirement for the Company to be in compliance with the
current public information requirement under Rule 144, as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Transfer Agent and the affected Holders (the
“Effectiveness
Period”).
The
Company shall submit a request for acceleration of effectiveness of a
Registration Statement as of 5:00 p.m. New York City time on or before the
fifth
Trading Day following the Commission’s notice to the Company that the Commission
will not be reviewing the Registration Statement. The Company shall immediately
notify the Holders by e-mail of the effectiveness of a Registration Statement
on
the same Trading Day that the Company telephonically confirms effectiveness
with
the Commission. The Company shall, by 9:30 a.m. New York City time on the
Trading Day after the effective date of such Registration Statement, file a
final Prospectus with the Commission as required by Rule 424. Failure to so
notify the Holders within one (1) Trading Day of such notification of
effectiveness or failure to file a final Prospectus as foresaid shall be deemed
an Event under Section 2(b). Notwithstanding any other provision of this
Agreement and subject to the payment of liquidated damages pursuant to Section
2(b)(iii), if any SEC Guidance sets forth a limitation on the number of
Registrable Securities permitted to be registered on a particular Registration
Statement (and notwithstanding that the Company used diligent efforts to
advocate with the Commission for the registration of all or a greater portion
of
Registrable Securities), unless otherwise directed in writing by a Holder as
to
its Registrable Securities, the number of Registrable Securities to be
registered on such Registration Statement will be reduced in the following
order
(1) by the total number of shares underlying the Broadband Warrants and the
Penumbra Warrants, on a pro-rata basis, (2) by the shares of Common Stock owned
by the Original Shareholders, on a pro-rata basis, and (3) pro-rata among all
other Holders, and unless otherwise directed in writing by a Holder as to its
Registrable Securities, the number of Registrable Securities to be registered
on
such Registration Statement will first be reduced by Registrable Securities
represented by the Warrant Shares (applied, in the case that some Warrant Shares
may already be registered, to the Holders on a pro rata basis based on the
total
number of unregistered Warrant Shares held by such Holders), and second by
Registrable Securities represented by the Conversion Shares (applied, in the
case that some Conversion Shares may already be registered, to the Holders
on a
pro rata basis based on the total number of unregistered Shares held by such
Holders).
4
(b) If:
(i)
the Initial Registration Statement is not filed on or prior to its Filing Date
(or if the Company files the Initial Registration Statement without affording
the Holders the opportunity to review and comment on the same as required by
Section 3(a) herein, the Company shall be deemed to have not satisfied this
clause (i)), or (ii) the Company fails to file with the Commission a request
for
acceleration of a Registration Statement in accordance with Rule 461 promulgated
by the Commission pursuant to the Securities Act, within five Trading Days
of
the date that the Company is notified (orally or in writing, whichever is
earlier) by the Commission that such Registration Statement will not be
“reviewed” or will not be subject to further review, or (iii) prior to the
Effectiveness Date of a Registration Statement, the Company fails to file a
pre-effective amendment and otherwise respond in writing to comments made by
the
Commission in respect of such Registration Statement within 15 calendar days
after the receipt of comments by or notice from the Commission that such
amendment is required in order for such Registration Statement to be declared
effective, or (iv) the Registration Statement registering for resale all of
the
Registrable Securities is not declared effective by the Commission by the
Effectiveness Date of the Initial Registration Statement, or (v) after the
effective date of a Registration Statement, such Registration Statement ceases
for any reason to remain continuously effective as to all Registrable Securities
included in such Registration Statement, or the Holders are otherwise not
permitted to utilize the Prospectus therein to resell such Registrable
Securities (subject to the periods set forth in Section 3(k)), for more than
15
consecutive calendar days or more than an aggregate of 20 calendar days (which
need not be consecutive calendar days) during any 12-month period, or (vi)
the
Company shall fail for any reason to satisfy the current public information
requirement under Rule 144 as to the applicable Registrable Securities, or
(vii)
if, after twelve months from the date hereof or such earlier time that the
Company’s Common Stock is quoted or listed and trading on a National Stock
Exchange, the Common Stock fails to be quoted or is delisted from a National
Stock Exchange for any reason for more than three (3) Trading Days in the
aggregate (any such failure or breach being referred to as an “Event”,
and
for purposes of clauses (i), (iv), (vi) and (vii), the date on which such Event
occurs, and for purpose of clause (ii) the date on which such fifth Trading
Day
is exceeded, and for the purpose of clause (iii) the date which such 15 calendar
day period is exceeded, and for purpose of clause (v) the date on which such
15
or 20 calendar day period, as applicable, is exceeded being referred to as
“Event
Date”),
then,
in addition to any other rights the Holders may have hereunder or under
applicable law, on each such Event Date and on each monthly anniversary of
each
such Event Date (if the applicable Event shall not have been cured by such
date)
until the applicable Event is cured, the Company shall pay to each Holder;
provided that such Holder (or any successor or assign) is still a beneficial
owner of the Preferred Shares, Conversion Shares, Warrants, or Warrant Shares,
an amount in cash, as partial liquidated damages and not as a penalty, equal
to
1.0% of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for any unregistered Registrable Securities then held by
such
Holder. Liquidated damages payable by the Company pursuant to this Section
2
shall be payable on an Event Date and the first (1st)
Trading
Day of each thirty (30) day period following an Event Date, provided,
however,
that
such liquidated damages shall not exceed 10% of the aggregate purchase price
paid by the Holders. The parties agree that the Company shall not be liable
for
liquidated damages under this Agreement with respect to any Registrable
Securities that the Company was not permitted to include on such Registration
Statement due solely to the Commission’s application of Rule 415. If the Company
fails to pay any partial liquidated damages pursuant to this Section in full
within seven days after the date payable, the Company will pay interest thereon
at a rate of 18% per annum (or such lesser maximum amount that is permitted
to
be paid by applicable law) to the Holder, accruing daily from the date such
partial liquidated damages are due until such amounts, plus all such interest
thereon, are paid in full. The partial liquidated damages pursuant to the terms
hereof shall apply on a daily pro rata basis for any portion of a month prior
to
the cure of an Event.
5
2A.
Demand
Registrations.
(a)
At
any time following the date on which all Registrable Securities have been
registered for resale pursuant to Section 2 hereof, a Purchaser or Purchasers
owning, in the aggregate, at least a 50% majority in interest (the “Initiating
Purchasers”)
of the
Listing Penalty Shares (as defined in the Securities Purchase Agreement) or
the
Escrow Shares (as defined in the Securities Escrow Agreement) (collectively,
the
“Listing
Penalty and Escrow Securities”)
may
request that the Company file a Registration Statement providing for the resale
of all Listing Penalty and Escrow Securities then held by the Initiating
Purchasers by giving written notice to the Company (the “Demand
Notice”).
The
Demand Notice shall describe the number of Listing Penalty and Escrow Securities
intended to be disposed of and the intended method of disposition. The Company
shall then prepare and file with the Commission a “resale” Registration
Statement providing for the resale of all Listing Penalty and Escrow Securities
included in the Demand Notice for an offering to be made on a continuous basis
pursuant to Rule 415. Each such Registration Statement shall cover to the extent
allowable under the Securities Act and the rules promulgated thereunder
(including Rules 415 and 416), such indeterminate number of additional shares
of
Common Stock resulting from stock splits, stock dividends or similar
transactions with respect to the Listing Penalty and Escrow Securities. The
Company shall (i) not permit any securities other than the Listing Penalty
and
Escrow Securities and any other unregistered Registrable Securities to be
included in any such Registration Statement, provided that such securities
shall
be registered in accordance with the cutback provisions in Section 2(a) above;
and (ii) use its reasonable best efforts to cause any such Registration
Statement to be declared effective under the Securities Act as promptly as
possible after the filing thereof, but in any event prior to the applicable
Effectiveness Date, and to keep any such Registration Statement continuously
effective under the Securities Act until such date as is the earlier of: (x)
the
date when all Registrable Securities covered by such Registration Statement
have
been sold; or (y) the date on which the Listing Penalty and Escrow Securities
may be sold without any restriction pursuant to Rule 144 as determined by the
counsel to the Company pursuant to a written opinion letter, addressed to the
Company’s transfer agent to such effect.
(b)
In
the event that the Company is unable to register for resale under Rule 415
of
Regulation C under the Securities Act all of the Listing Penalty and Escrow
Securities on any of the Registration Statements that it has agreed to file
pursuant to the first sentence of Section 2A(a) due to limits imposed by the
Commission’s interpretation of Rule 415 of Regulation C under the Securities
Act, the Company will file a Registration Statement under the Securities Act
with the Commission covering the resale by the Purchasers of such lesser amount
of the Listing Penalty and Escrow Securities as the Company is able to register
pursuant to the Commission’s interpretation of Rule 415 of Regulation C under
the Securities Act and use its reasonable best efforts to have such Registration
Statement become effective as promptly as possible, and, when permitted to
do so
by the Commission, to file subsequent registration statement(s) under the
Securities Act with the Commission covering the resale of any Listing Penalty
and Escrow Securities that were omitted from its prior Registration Statements
filed with the Commission pursuant to this Section 2A(b) and use its reasonable
best efforts to have such registration declared effective as promptly as
possible. In furtherance of the Company’s obligations set forth in the preceding
sentence, the parties hereby agree that in the event that any Purchaser shall
deliver to the Company a written notice at any time after the later of: (x)
the
date which is six months after the effectiveness date of the most recent
registration statement filed pursuant to Section 2A hereof; or (y) the date
on
which all Listing Penalty and Escrow Securities registered on all of the prior
Registration Statements filed pursuant to Section 2A hereof are sold, that
the
Company shall file, within 30 days following the date receipt of such written
notice, an additional Registration Statement registering any Listing Penalty
and
Escrow Securities that were the subject of the applicable Demand Notice that
were omitted from such Registration Statement.
6
3.
Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) Not
less
than three (3) Trading Days prior to the filing of each Registration Statement
and not less than one (1) Trading Day prior to the filing of any related
Prospectus or any amendment or supplement thereto (including any document that
would be incorporated or deemed to be incorporated therein by reference), the
Company shall (i) furnish to each Holder copies of all such documents proposed
to be filed, which documents (other than those incorporated or deemed to be
incorporated by reference) will be subject to the review of such Holders, and
(ii) cause its officers and directors, counsel and independent registered public
accountants to respond to such inquiries as shall be necessary, in the
reasonable opinion of respective counsel to each Holder, to conduct a reasonable
investigation within the meaning of the Securities Act. The Company shall not
file a Registration Statement or any such Prospectus or any amendments or
supplements thereto to which the Holders of a majority of the Registrable
Securities shall reasonably object in good faith, provided that, the Company
is
notified of such objection in writing no later than three (3) Trading Days
after
the Holders have been so furnished copies of a Registration Statement or one
(1)
Trading Day after the Holders have been so furnished copies of any related
Prospectus or amendments or supplements thereto.
(b) (i)
Prepare and file with the Commission such amendments, including post-effective
amendments, to a Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep a Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of
the
Registrable Securities, (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus supplement (subject to the terms of
this
Agreement), and, as so supplemented or amended, to be filed pursuant to Rule
424, (iii) respond as promptly as reasonably possible to any comments received
from the Commission with respect to a Registration Statement or any amendment
thereto and provide as promptly as reasonably possible to the Holders true
and
complete copies of all correspondence from and to the Commission relating to
a
Registration Statement (provided that, the Company may excise any information
contained therein which would constitute material non-public information as
to
any Holder which has not executed a confidentiality agreement with the Company),
and (iv) comply in all material respects with the provisions of the Securities
Act and the Exchange Act with respect to the disposition of all Registrable
Securities covered by a Registration Statement during the applicable period
in
accordance (subject to the terms of this Agreement) with the intended methods
of
disposition by the Holders thereof set forth in such Registration Statement
as
so amended or in such Prospectus as so supplemented.
(c) If
the
number of Registrable Securities at any time exceeds 100% of the number of
shares of Common Stock then registered in a Registration Statement, then the
Company shall file as soon as reasonably practicable, but in any case prior
to
the applicable Filing Date, an additional Registration Statement covering the
resale by the Holders of not less than the number of such Registrable Securities
which are not then registered. If at any time prior to the filing of an
additional Registration Statement a Demand Notice is delivered to the Company
to
file the Listing Penalty and Escrow Securities, then such additional
Registration Statement shall also include the Listing Penalty and Escrow
Securities.
7
(d) Notify
the Holders of Registrable Securities to be sold (which notice shall, pursuant
to clauses (iii) through (vi) hereof, be accompanied by an instruction to
suspend the use of the Prospectus until the requisite changes have been made)
as
promptly as reasonably possible (and, in the case of (i)(A) below, not less
than
one Trading Day prior to such filing) and (if requested by any such Person)
confirm such notice in writing no later than one Trading Day following the
day
(i)(A) when a Prospectus or any Prospectus supplement or post-effective
amendment to a Registration Statement is proposed to be filed, (B) when the
Commission notifies the Company whether there will be a “review” of such
Registration Statement and whenever the Commission comments in writing on such
Registration Statement, and (C) with respect to a Registration Statement or
any
post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose; (iv) 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 Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of
any
Proceeding for such purpose, (v) of the occurrence of any event or passage
of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus,
as
the case may be, it will not contain any untrue statement of a material fact
or
omit to state any material fact required to be stated therein or necessary
to
make the statements therein, in light of the circumstances under which they
were
made, not misleading and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes
may
be material and that, in the determination of the Company, makes it not in
the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided that, any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public, unless disclosure by a Holder is required by law; provided,
further,
that
notwithstanding each Holder’s agreement to keep such information confidential,
each such Holder makes no acknowledgement that any such information is material,
non-public information.
(e) Use
its
best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of
(i) any order stopping or suspending the effectiveness of a 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) Furnish
to each Holder, without charge, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided,
that
any such item which is available on the XXXXX system need not be furnished
in
physical form.
(g) Subject
to the terms of this Agreement, the Company hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto, except
after
the giving of any notice pursuant to Section 3(d).
(h)
The
Company shall cooperate with any broker-dealer through which a Holder proposes
to resell its Registrable Securities in effecting a filing with the FINRA
Corporate Financing Department pursuant to NASD Rule 2710, as requested by
any
such Holder, and the Company shall pay the filing fee required by such filing
within two (2) Trading Days of request therefor.
8
(i) Prior
to
any resale of Registrable Securities by a Holder, the Company shall use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts
or
things reasonably necessary to enable the disposition in such jurisdictions
of
the Registrable Securities covered by each Registration Statement; provided,
that, the Company shall not be required to qualify generally to do business
in
any jurisdiction where it is not then so qualified, subject the Company to
any
material tax in any such jurisdiction where it is not then so subject or file
a
general consent to service of process in any such jurisdiction.
(j) If
requested by a Holder, cooperate with such Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
to
be delivered to a transferee pursuant to a Registration Statement, which
certificates shall be free of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as any such Holder may request.
(k) Upon
the
occurrence of any event contemplated by Section 3(d), as promptly as reasonably
possible under the circumstances taking into account the Company’s good faith
assessment of any adverse consequences to the Company and its stockholders
of
the premature disclosure of such event, prepare a supplement or amendment,
including a post-effective amendment, to a Registration Statement or a
supplement to the related Prospectus or any document incorporated or deemed
to
be incorporated therein by reference, and file any other required document
so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will 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. If the Company notifies the Holders in accordance with
clauses (iii) through (vi) of Section 3(d) above to suspend the use of any
Prospectus until the requisite changes to such Prospectus have been made, then
the Holders shall suspend use of such Prospectus. The Company will use its
best
efforts to ensure that the use of the Prospectus may be resumed as promptly
as
is practicable. The Company shall be entitled to exercise its right under this
Section 3(k) to suspend the availability of a Registration Statement and
Prospectus, for a period not to exceed 30 calendar days (which need not be
consecutive days) in any 12 month period.
(l) Comply
with all applicable rules and regulations of the Commission.
(m) The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by
such
Holder and, if required by the Commission, the natural persons thereof that
have
voting and dispositive control over the shares. In the event of the failure
by
such Holder to comply with the Company’s request within fifteen (15) days from
the date of such request, the Company shall be permitted to exclude such Holder
from a Registration Statement, without being subject to the payment of
liquidated damages to such Holder. At such time that such Holder complies with
the Company’s request the Company shall use its best efforts to include such
Holder on the Registration Statement.
(n) Use
its
best efforts to cause all Registrable Securities relating to the Registration
Statement to continue to be listed or quoted on a National Exchange or to be
listed or quoted on any other national securities exchange, quotation system
or
market, if any, on which similar securities issued by the Company are then
listed or traded.
(o) Within
two (2) Trading Days after a Registration Statement which covers the Registrable
Securities is ordered effective by the Commission, the Company shall deliver,
and shall cause legal counsel for the Company to deliver, to the transfer agent
for such Registrable Securities (with copies to the Holders whose Registrable
Securities are included in such Registration Statement) confirmation that such
Registration Statement has been declared effective by the Commission in the
form
attached hereto as Exhibit
B.
9
4.
Registration
Expenses.
All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to a Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses of the Company’s counsel and independent registered public
accountants) (A) with respect to filings made with the Commission, (B) with
respect to filings required to be made with any National Stock Exchange on
which
the Common Stock is then listed for trading, (C) in compliance with applicable
state securities or Blue Sky laws reasonably agreed to by the Company in writing
(including, without limitation, fees and disbursements of counsel for the
Company in connection with Blue Sky qualifications or exemptions of the
Registrable Securities) and (D) with respect to any filing that may be required
to be made by any broker through which a Holder intends to make sales of
Registrable Securities with the FINRA pursuant to NASD Rule 2710, so long as
the
broker is receiving no more than a customary brokerage commission in connection
with such sale, (ii) printing expenses (including, without limitation, expenses
of printing certificates for Registrable Securities), (iii) messenger, telephone
and delivery expenses, (iv) fees and disbursements of counsel for the Company,
(v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated
by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation,
all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder. In no event shall the Company be
responsible for any broker or similar commissions of any Holder or, except
to
the extent provided for in the Transaction Documents, any legal fees or other
costs of the Holders.
5.
Indemnification.
(a) Indemnification
by the Company.
The
Company shall, notwithstanding any termination of this Agreement, indemnify
and
hold harmless each Holder, the officers, directors, members, partners, agents,
brokers (including brokers who offer and sell Registrable Securities as
principal as a result of a pledge or any failure to perform under a margin
call
of Common Stock), investment advisors and employees (and any other Persons
with
a functionally equivalent role of a Person holding such titles, notwithstanding
a lack of such title or any other title) of each of them, each Person who
controls any such Holder (within the meaning of Section 15 of the Securities
Act
or Section 20 of the Exchange Act) and the officers, directors, members,
stockholders, partners, agents and employees (and any other Persons with a
functionally equivalent role of a Person holding such titles, notwithstanding
a
lack of such title or any other title) of each such controlling Person, to
the
fullest extent permitted by applicable law, from and against any and all losses,
claims, damages, liabilities, costs (including, without limitation, reasonable
attorneys’ fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to (1) any untrue or alleged untrue
statement of a material fact contained in a Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the Company of
the
Securities Act, the Exchange Act or any state securities law, or any rule or
regulation thereunder, in connection with the performance of its obligations
under this Agreement, except to the extent, but only to the extent, that (i)
such untrue statements or omissions are based solely upon information regarding
a Holder furnished in writing to the Company by such Holder expressly for use
therein, or to the extent that such information relates to a Holder or such
Holder’s proposed method of distribution of Registrable Securities and was
reviewed and expressly approved in writing by such Holder expressly for use
in a
Registration Statement, such Prospectus or in any amendment or supplement
thereto (it being understood that the Holder has approved Annex A hereto for
this purpose) or (ii) the Holder used an outdated or defective Prospectus which
the Company had previously notified such Holder was outdated or defective
pursuant to Sections 3(d)(iii)-(vi) and for which the Company had not yet
provided the Advice contemplated in Section 6(d). The Company shall notify
the
Holders promptly of the institution, threat or assertion of any Proceeding
arising from or in connection with the transactions contemplated by this
Agreement of which the Company is aware.
10
(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling Persons, to the fullest extent permitted by applicable law,
from and against all Losses, as incurred, to the extent arising out of or based
solely upon: (x) such Holder’s failure to comply with the prospectus delivery
requirements of the Securities Act or (y) any untrue or alleged untrue statement
of a material fact contained in any Registration Statement, any Prospectus,
or
in any amendment or supplement thereto or in any preliminary prospectus, or
arising out of or relating to any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading (i) to the extent, but only to the extent, that such untrue
statement or omission is contained in any information so furnished in writing
by
such Holder to the Company specifically for inclusion in such Registration
Statement or such Prospectus or (ii) to the extent that such information relates
to such Holder’s proposed method of distribution of Registrable Securities and
was reviewed and expressly approved in writing by such Holder expressly for
use
in a Registration Statement (it being understood that the Holder has approved
Annex A hereto for this purpose), such Prospectus or in any amendment or
supplement thereto or (iii) in the case of an occurrence of an event of the
type
specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated
or
defective Prospectus after the Company has notified such Holder in writing
that
the Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice contemplated in Section 6(d). In no event shall the liability
of
any selling Holder hereunder be greater in amount than the dollar amount of
the
net proceeds received by such Holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) Conduct
of Indemnification Proceedings.
If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”),
such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”)
in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided,
that,
the failure of any Indemnified Party to give such notice shall not relieve
the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have prejudiced the Indemnifying
Party.
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses, (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to
such
Indemnified Party in any such Proceeding, or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified
Party
and the Indemnifying Party, and counsel to the Indemnified Party shall
reasonably believe that a material conflict of interest is likely to exist
if
the same counsel were to represent such Indemnified Party and the Indemnifying
Party (in which case, if such Indemnified Party notifies the Indemnifying Party
in writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to assume
the defense thereof and the reasonable fees and expenses of no more than one
separate counsel shall be at the expense of the Indemnifying Party). The
Indemnifying Party shall not be liable for any settlement of any such Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld or delayed. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending
Proceeding in respect of which any Indemnified Party is a party, unless such
settlement includes an unconditional release of such Indemnified Party from
all
liability on claims that are the subject matter of such Proceeding.
Subject
to the terms of this Agreement, all reasonable fees and expenses of the
Indemnified Party (including reasonable fees and expenses to the extent incurred
in connection with investigating or preparing to defend such Proceeding in
a
manner not inconsistent with this Section) shall be paid to the Indemnified
Party, as incurred, within ten Trading Days of written notice thereof to the
Indemnifying Party; provided, that, the Indemnified Party shall promptly
reimburse the Indemnifying Party for that portion of such fees and expenses
applicable to such actions for which such Indemnified Party is judicially
determined not to be entitled to indemnification hereunder.
11
(d) Contribution.
If the
indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
Party or insufficient to hold an Indemnified Party harmless for any Losses,
then
each Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material
fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in this Agreement, any reasonable attorneys’ or other fees or expenses incurred
by such party in connection with any Proceeding to the extent such party would
have been indemnified for such fees or expenses if the indemnification provided
for in this Section was available to such party in accordance with its
terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which
the
net proceeds actually received by such Holder from the sale of the Registrable
Securities subject to the Proceeding exceeds the amount of any damages that
such
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission.
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6.
Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, shall be entitled to
specific performance of its rights under this Agreement. The Company and each
Holder agree that monetary damages would not provide adequate compensation
for
any losses incurred by reason of a breach by it of any of the provisions of
this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall not assert or shall
waive the defense that a remedy at law would be adequate.
(b) No
Piggyback on Registrations; Prohibition on Filing Other Registration
Statements.
With
the exception of a bona fide public offering of the Company’s Common Stock for
aggregate gross proceeds of no less than $5,000,000, neither the Company nor
any
of its security holders (other than the Holders in such capacity pursuant
hereto) may include securities of the Company in any Registration Statements
other than the Registrable Securities. The Company shall not file any other
registration statements until all Registrable Securities are registered pursuant
to a Registration Statement that is declared effective by the
Commission.
(c) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to a Registration Statement.
12
(d) Discontinued
Disposition.
By its
acquisition of Registrable Securities, each Holder agrees that, upon receipt
of
a notice from the Company of the occurrence of any event of the kind described
in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue
disposition of such Registrable Securities under a Registration Statement until
it is advised in writing (the “Advice”)
by the
Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed. The Company will use its best efforts
to ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company agrees and acknowledges that any periods during which
the Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section
2(b).
(e) Piggy-Back
Registrations.
If, at
any time during the Effectiveness Period, there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under
the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with the Company’s stock option or other employee benefit plans, then
the Company shall deliver to each Holder a written notice of such determination
and, if within fifteen days after the date of the delivery of such notice,
any
such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered; provided,
however,
that
the Company shall not be required to register any Registrable Securities
pursuant to this Section 6(e) that are eligible for resale without volume or
manner-of-sale restrictions pursuant to Rule 144 promulgated by the Commission
pursuant to the Securities Act or that are the subject of a then effective
Registration Statement.
(f) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence, may
not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and the Holders of 50% or more of the then outstanding
Registrable Securities (including, for this purpose, any Registrable Securities
issuable upon exercise of the Warrants), provided,
that
such Holders shall include Vision Opportunity China LP, so long as Vision
Opportunity China (or any of its affiliates) holds more than 5% of its original
investment, and CMHJ Technology Fund II, L.P., (or any of its affiliate), so
long as CMHJ Technology Fund II, L.P., (or any of its affiliates) holds more
than 5% of its original investment. If a Registration Statement does not
register all of the Registrable Securities pursuant to a waiver or amendment
done in compliance with the previous sentence, then the number of Registrable
Securities to be registered for each Holder shall be reduced pro rata among
all
Holders and each Holder shall have the right to designate which of its
Registrable Securities shall be omitted from such Registration Statement.
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of a
Holder or some Holders and that does not directly or indirectly affect the
rights of other Holders may be given by such Holder or Holders of all of the
Registrable Securities to which such waiver or consent relates; provided,
however,
that
the provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the first sentence of this Section
6(f).
(g) Notices.
All
notices, demands, consents, requests, instructions and other communications
to
be given or delivered or permitted under or by reason of the provisions of
this
Agreement or in connection with the transactions contemplated hereby shall
be in
writing and shall be deemed to be delivered and received by the intended
recipient as follows: (i) if personally delivered, on the business day of such
delivery (as evidenced by the receipt of the personal delivery service), (ii)
if
mailed certified or registered mail return receipt requested, two (2) business
days after being mailed, (iii) if delivered by overnight courier (with all
charges having been prepaid), on the business day of such delivery (as evidenced
by the receipt of the overnight courier service of recognized standing), or
(iv)
if delivered by facsimile transmission, on the business day of such delivery
if
sent by 6:00 p.m. in the time zone of the recipient, or if sent after that
time,
on the next succeeding business day (as evidenced by the printed confirmation
of
delivery generated by the sending party’s telecopier machine). If any notice,
demand, consent, request, instruction or other communication cannot be delivered
because of a changed address of which no notice was given (in accordance with
this Section 6), or the refusal to accept same, the notice, demand, consent,
request, instruction or other communication shall be deemed received on the
second business day the notice is sent (as evidenced by a sworn affidavit of
the
sender). All such notices, demands, consents, requests, instructions and other
communications will be sent to the following addresses or facsimile numbers
as
applicable.:
13
|
If
to the Company:
|
|
Lihua
International, Inc.
c/o
Lihua Holdings Limited
Houxiang
Five-Star Industry District
Danyang
City, Jiangsu Province, PRC
Attention:
Xx. Xxx Xxxxxxx
Tel.
No.: x00 000 0000 0000
Fax
No.: x00 000 0000 0000
|
|
|
|
|
|
with
copies (which
shall
not constitute
notice)
to:
|
|
Loeb
& Loeb LLP
000
Xxxx Xxxxxx
Xxx
Xxxx, Xxx Xxxx 00000
Attention:
Xxxxxxxx X. Xxxxxxxx, Esq.
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
|
|
|
|
|
If
to any Purchaser:
|
|
At
the address of such Purchaser set forth on Exhibit
A and
Exhibit
B
to
the Purchase Agreement or as specified in writing by such Purchaser.
|
|
|
|
|
|
With
copies (which copies shall not constitute notice) to:
|
|
Xxxxxx
& Jaclin LLP
000
Xxxxx 0 Xxxxx, Xxxxx 000
Xxxxxxxxx,
Xxx Xxxxxx 00000
Attn:
Xxxxxx X. Xxxxxxx, Esq.
Tel.
No.: (000) 000-0000
Fax
No.: (000) 000-0000
|
Any
party
hereto may from time to time change its address for notices by giving at least
ten (10) days written notice of such changed address to the other party hereto.
(h) Assignment
of Registration Rights.
The
rights of each Holder hereunder, including the right to have the Company
register for resale Registrable Securities in accordance with the terms of
this
Agreement, shall be automatically assignable by each Holder to any Person who
acquires all or a portion of
the
Registrable Securities if: (i) the Holder agrees in writing with the transferee
or assignee to assign such rights, and a copy of such agreement, along with
an
investor questionnaire completed by the transferee or assignee is furnished
to
the Company within a reasonable time after such assignment, (ii) the Company
is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee,
and
(b) the securities with respect to which such registration rights are being
transferred or assigned, (iii) following such transfer or assignment the further
disposition of such securities by the transferee or assignees is restricted
under the Securities Act and applicable state securities laws unless such
securities are registered in a Registration Statement under this Agreement
(in
which case the Company shall be obligated to amend such Registration Statement
to reflect such transfer or assignment) or are otherwise exempt from
registration, and (iv) at or before the time the Company receives the written
notice contemplated by clause (ii) of this Section, the transferee or assignee
agrees in writing with the Company to be bound by all of the provisions of
this
Agreement. The rights to assignment shall apply to the Holders (and to
subsequent) successors and assigns.
14
(i) Successors
and Assigns.
This
Agreement shall inure to the benefit of and be binding upon the successors
and
permitted assigns of each of the parties and shall inure to the benefit of
each
Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then
outstanding Registrable Securities. Each Holder may assign their respective
rights hereunder in the manner and to the Persons as permitted under the
Purchase Agreement.
(j) No
Inconsistent Agreements.
Neither
the Company nor any of its Subsidiaries has entered, as of the date hereof,
nor
shall the Company or any of its Subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that would
have the effect of impairing the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof.
(k) Execution
and Counterparts.
This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
(l) Governing
Law.
All
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be determined in accordance with the provisions of
the
Purchase Agreement.
(m) Cumulative
Remedies.
The
remedies provided herein are cumulative and not exclusive of any other remedies
provided by law.
(n) Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may
be
hereafter declared invalid, illegal, void or unenforceable.
(o) Headings.
The
headings in this Agreement are for convenience only, do not constitute a part
of
the Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
(p) Independent
Nature of Holders’ Obligations and Rights.
The
Company acknowledges that the obligations of each Holder under this Agreement
are several and not joint with the obligations of any other Holder, and no
Holder shall be responsible in any way for the performance of the obligations
of
any other Holder under this Agreement. The Company acknowledges that nothing
contained herein, and no action taken by any Holder pursuant hereto (including,
but not limited to, the (i) inclusion of a Holder in the Registration Statement
and (ii) review by, and consent to, such Registration Statement by a Holder)
shall be deemed to constitute the Holders as a partnership, an association,
a
joint venture or any other kind of entity, or create a presumption that the
Holders are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement. The Company
acknowledges that each Holder shall be entitled to independently protect and
enforce its rights, including without limitation, the rights arising out of
this
Agreement, and it shall not be necessary for any other Holder to be joined
as an
additional party in any proceeding for such purpose. The Company acknowledges
that it has elected to provide all Holders with the same terms for the
convenience of the Company and not because it was required or requested to
do so
by the Holders. The Company acknowledges that such procedure with respect to
this Agreement in no way creates a presumption that the Holders are in any
way
acting in concert or as a group with respect to this Agreement or the
transactions contemplated hereby.
********************
(Signature
Pages Follow)
15
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
|
|
LIHUA
INTERNATIONAL, INC.
|
|
|
|
|
|
|
By:
|
/s/
Xxx
Xxxxxxx
|
|
|
|
Name:
Xxx Xxxxxxx
|
|
|
|
Title:
Chief Executive Officer and
President
|
|
[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
16
[SIGNATURE
PAGE OF HOLDERS TO LIHUA RRA]
Name
of
Holder: __________________________
Signature
of Authorized Signatory of Holder:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
[SIGNATURE
PAGES CONTINUE]
17
Annex
A
Plan
of Distribution
Each
Selling Stockholder (the “Selling
Stockholders”)
of the
common stock and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their shares of common stock on
the
National Stock Exchange or any other stock exchange, market or trading facility
on which the shares are traded or in private transactions. These sales may
be at
fixed or negotiated prices. A Selling Stockholder may use any one or more of
the
following methods when selling shares:
|
·
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
|
·
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
·
|
privately
negotiated transactions;
|
|
·
|
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a part;
|
|
·
|
broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
|
|
·
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
|
·
|
a
combination of any such methods of sale;
or
|
|
·
|
any
other method permitted pursuant to applicable
law.
|
The
Selling Stockholders may also sell shares under Rule 144 under the Securities
Act of 1933, as amended (the “Securities
Act”),
if
available, rather than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance
with
FINRA NASD Rule 2440; and in the case of a principal transaction a markup or
markdown in compliance with NASD IM-2440.
In
connection with the sale of the common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
18
The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In
no
event shall any broker-dealer receive fees, commissions and markups which,
in
the aggregate, would exceed eight percent (8%).
The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder. In addition, any securities
covered by this prospectus which qualify for sale pursuant to Rule 144 under
the
Securities Act may be sold under Rule 144 rather than under this prospectus.
There is no underwriter or coordinating broker acting in connection with the
proposed sale of the resale shares by the Selling Stockholders.
We
agreed
to keep this prospectus effective until the earlier of (i) the date on which
the
shares may be resold by the Selling Stockholders without registration and
without regard to any volume or manner-of-sale limitations by reason of Rule
144, without the requirement for the Company to be in compliance with the
current public information under Rule 144 under the Securities Act or any other
rule of similar effect or (ii) all of the shares have been sold pursuant to
this
prospectus or Rule 144 under the Securities Act or any other rule of similar
effect. The resale shares will be sold only through registered or licensed
brokers or dealers if required under applicable state securities laws. In
addition, in certain states, the resale shares may not be sold unless they
have
been registered or qualified for sale in the applicable state or an exemption
from the registration or qualification requirement is available and is complied
with.
Under
applicable rules and regulations under the Exchange Act, any person engaged
in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases
and
sales of shares of the common stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including
by
compliance with Rule 172 under the Securities Act).
19
EXHIBIT
A
FORM
OF NOTICE OF EFFECTIVENESS
OF
REGISTRATION STATEMENT
[TRANSFER
AGENT]
_____________________________
_____________________________
Attn:
_________________
Re: ,
INC.
Ladies
and Gentlemen:
We
are
counsel to Lihua
International, Inc., a Delaware corporation (the “Company”).
The
Company entered into a Registration Rights Agreement, dated October 31, 2008
(the “Registration
Rights Agreement”),
with
_________, ____________ and ________________ (collectively, the “Stockholders”),
pursuant to which the Company agreed, among other things, to register the
Registrable Securities (as defined in the Registration Rights Agreement), under
the Securities Act of 1933, as amended (the “1933
Act”).
In
connection with the Company’s obligations under the Registration Rights
Agreement, on ________________, 2008, the Company filed a Registration Statement
on Form S-1 (File No. 333-________) (the “Registration
Statement”)
with
the Securities and Exchange Commission (the “SEC”)
relating to the resale of the Registrable Securities which names each of the
Stockholders as a selling stockholder thereunder.
In
connection with the foregoing, we advise you that a member of the SEC’s staff
has advised us by telephone that the Commission has entered an order declaring
the Registration Statement effective under the 1933 Act at [ENTER TIME OF
EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge, after
telephonic inquiry of a member of the SEC’s staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the Commission and accordingly,
the Registrable Securities are available for resale under the 1933 Act pursuant
to the Registration Statement.
|
|
Very
truly yours,
[COUNSEL]
|
|
|
|
|
|
|
|
By:
|
|
|
|
||
|
cc: [STOCKHOLDERS]
|
|
|
20
