REGISTRATION RIGHTS AGREEMENT
Exhibit
10.8
THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”)
is
entered into as of the [ ]
day of
February [______] 2008, by and among China Resources Ltd., a Delaware
corporation (the “Company”),
and
the undersigned parties listed under Investors on the signature page hereto
(each, an “Investor”
and
collectively, the “Investors”).
WHEREAS,
the Investors currently hold all of the issued and outstanding securities of
the
Company; and
WHEREAS,
the Investors and the Company desire to enter into this Agreement to provide
the
Investors with certain rights relating to the registration of (i) shares of
Common Stock held by Investors; (ii) Warrants; and (iii) shares of Common Stock
underlying Warrants held by Investors.
NOW,
THEREFORE, in consideration of the mutual covenants and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS.
The following capitalized terms used herein have the following
meanings:
“Agreement”
means
this Agreement, as amended, restated, supplemented, or otherwise modified from
time to time.
“Commission”
means
the Securities and Exchange Commission, or any other federal agency then
administering the Securities Act or the Exchange Act.
“Common
Stock”
means
the common stock, par value $0.0001 per share, of the Company.
“Company”
is
defined in the preamble to this Agreement.
“Demand
Registration”
is
defined in Section 2.1.1.
“Demanding
Holder”
is
defined in Section 2.1.1.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and the rules and regulations
of the Commission promulgated thereunder, all as the same shall be in effect
at
the time.
“Form
S-3”
is
defined in Section 2.3.
“Indemnified
Party”
is
defined in Section 4.3.
“Indemnifying
Party”
is
defined in Section 4.3.
“Investor”
is
defined in the preamble to this Agreement.
“Investor
Indemnified Party”
is
defined in Section 4.1.
“Majority
in interest”
of
Registrable Securities means a majority of the shares of Common Stock and shares
of Common Stock underlying the Warrants included in the Registrable
Securities.
“Maximum
Number of Shares”
is
defined in Section 2.1.4.
“Notices”
is
defined in Section 6.3.
“Piggy-Back
Registration”
is
defined in Section 2.2.1.
“Register,”
“registered”
and
“registration”
mean
a
registration with respect to the Registrable Securities effected by preparing
and filing a registration statement or similar document in compliance with
the
requirements of the Securities Act, and the applicable rules and regulations
promulgated thereunder, and such registration statement becoming
effective.
“Registrable
Securities”
mean
all of (i) the shares of Common Stock owned or held by Investors as reflected
on
the signature page hereto; (ii) the Warrants; and (iii) the shares of Common
Stock issuable upon exercise of the Warrants. Registrable Securities
include any warrants, shares of capital stock or other securities of the Company
issued or issuable as a dividend or other distribution with respect to or in
exchange for or in replacement of such Registrable Securities. As to any
particular Registrable Securities, such securities shall cease to be Registrable
Securities when: (a) a Registration Statement with respect to the
sale of such securities shall have become effective under the Securities Act
and
such securities shall have been sold, transferred, disposed of or exchanged
in
accordance with such Registration Statement; (b) such securities shall have
been transferred pursuant to Rule 144 of the Securities Act (but not Rule 144A),
new certificates for them not bearing a legend restricting further transfer
shall have been delivered by the Company and subsequent public distribution
of
them shall not require registration under the Securities Act; (c) such
securities may be sold by the Investor without restriction, or (d) such
securities shall have ceased to be outstanding.
“Registration
Statement”
means
a
registration statement filed by the Company with the Commission in compliance
with the Securities Act and the rules and regulations promulgated thereunder
for
a public offering and sale of Common Stock (other than a registration statement
on Form S-4 or Form S-8, or any successor forms, or any registration
statement covering only securities proposed to be issued in exchange for
securities or assets of another entity).
“Release
Date”
means
the date on which the securities held by the Investors are disbursed from escrow
pursuant to Section 3 of that certain Securities Escrow Agreement, dated as
of February[_______], 2008, by and among the parties hereto and American
Stock Transfer & Trust Company.
“Representative”
means
Maxim Group LLC.
“Securities
Act”
means
the Securities Act of 1933, as amended, and the rules and regulations of the
Commission promulgated thereunder, all as the same shall be in effect at the
time.
“Underwriter”
means
a
securities dealer who purchases any Registrable Securities as principal in
an
underwritten offering and not as part of such dealer’s market-making
activities.
“Warrants”
means
the 2,600,000 Warrants purchased by the certain of the Investors at $1.00 per
warrant ($2,600,000 in the aggregate).
2. REGISTRATION
RIGHTS.
2.1 Demand
Registration.
2.1.2 Effective
Registration.
A
registration will not count as a Demand Registration until the Registration
Statement filed with the Commission with respect to such Demand Registration
has
been declared effective and the Company has complied with all of its obligations
with respect thereto;
provided, however,
that,
if after such Registration Statement has been declared effective, the offering
of Registrable Securities pursuant to a Demand Registration is interfered with
by any stop order or injunction of the Commission or any other governmental
agency or court, the Registration Statement with respect to such Demand
Registration will be deemed not to have been declared effective, unless and
until (i) such stop order or injunction is removed, rescinded or otherwise
terminated, and (ii) a majority-in-interest of the Demanding Holders thereafter
elect to continue to have their Registrable Securities included therein;
provided,
further,
that
the Company shall not be obligated to file a second Registration Statement
until
a Registration Statement that has been filed is counted as a Demand Registration
or is terminated.
2.1.3 Underwritten
Offering.
If a majority-in-interest of the Demanding Holders so elect and such holders
so
advise the Company as part of their written demand for a Demand Registration,
the offering of such Registrable Securities pursuant to such Demand Registration
shall be in the form of an underwritten offering. In such event, the right
of
any holder of Registrable Securities to include its Registrable Securities
in
such registration shall be conditioned upon such holder’s participation in such
underwriting and the inclusion of such holder’s Registrable Securities in the
underwriting to the extent provided herein. All Demanding Holders
proposing to distribute their securities through such underwriting shall enter
into an underwriting agreement in customary form with the Underwriter or
Underwriters selected for such underwriting by a majority-in-interest of the
Demanding Holders initiating the Demand Registration.
2.1.4 Reduction
of Offering.
If the managing Underwriter or Underwriters for a Demand Registration that
is to
be an underwritten offering advises the Company and the Demanding Holders in
writing that the dollar amount or number of Registrable Securities which the
Demanding Holders desire to sell, taken together with all other shares of Common
Stock or other securities which the Company desires to sell and the shares
of
Common Stock or other Securities, if any, as to which registration has been
requested pursuant to written contractual piggy-back registration rights held
by
other security holders of the Company who desire to sell, exceeds the maximum
dollar amount or maximum number of securities that can be sold in such offering
without adversely affecting the proposed offering price, the timing, the
distribution method, or the probability of success of such offering (such
maximum dollar amount or maximum number of securities, as applicable, the
“Maximum
Number of Shares”),
then
the Company shall include in such registration: (i) first, the shares of
Common Stock or other securities that the Company desires to sell that can
be
sold without exceeding the Maximum Number of Shares; (ii) second, the
Registrable Securities as to which Demand Registration has been requested by
the
Demanding Holders (pro
rata
in
accordance with the number of shares of Registrable Securities which such
Demanding Holder has requested be included in such registration, regardless
of
the number of Registrable Securities held by each Demanding Holder) that can
be
sold without exceeding the Maximum Number of Shares; (iii) third, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clauses (i) and (ii), the shares of Common Stock or other securities for the
account of other persons that the Company is obligated to register pursuant
to
written contractual arrangements with such persons and that can be sold without
exceeding the Maximum Number of Shares; and (iv) fourth, to the extent that
the
Maximum Number of Shares has not been reached under the foregoing clauses (i),
(ii), and (iii), the shares of Common Stock or other securities that other
security holders desire to sell that can be sold without exceeding the Maximum
Number of Shares.
2.1.5 Withdrawal.
If a
majority-in-interest of the Demanding Holders disapprove of the terms of any
underwriting or are not entitled to include all of their Registrable Securities
in any offering, such majority-in-interest of the Demanding Holders may elect
to
withdraw from such offering by giving written notice to the Company and the
Underwriter or Underwriters of their request to withdraw prior to the
effectiveness of the Registration Statement filed with the Commission with
respect to such Demand Registration. In such event, the Company need not
seek effectiveness of such Registration Statement for the benefit of other
Investors. If the majority-in-interest of the Demanding Holders withdraws from
a
proposed offering relating to a Demand Registration, then such registration
shall not count as a Demand Registration provided for in
Section 2.1.1.
2.2 Piggy-Back
Registration.
2.2.1 Piggy-Back
Rights.
If at any time on or after the Release Date the Company proposes to file a
Registration Statement under the Securities Act with respect to an offering
of
equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into, equity securities, by the Company for
its
own account or for securityholders of the Company for their accounts (or by
the
Company and by security holders of the Company including, without limitation,
pursuant to Section 2.1), other than a Registration Statement (i) filed in
connection with any employee stock option or other benefit plan, (ii) for an
exchange offer or offering of securities solely to the Company’s existing
security holders, (iii) for an offering of debt that is convertible into equity
securities of the Company or (iv) for a dividend reinvestment plan, then
the Company shall (x) give written notice of such proposed filing to the holders
of Registrable Securities as soon as practicable but in no event less than
ten
(10) days before the anticipated filing date, which notice shall describe the
amount and type of securities to be included in such offering, the intended
method(s) of distribution, and the name of the proposed managing Underwriter
or
Underwriters, if any, of the offering, and (y) offer to the holders of
Registrable Securities in such notice the opportunity to register the sale
of
such number of shares of Registrable Securities as such holders may request
in
writing within five (5) days following receipt of such notice (a “Piggy-Back
Registration”).
The Company shall cause such Registrable Securities to be included in such
registration and shall use its best efforts to cause the managing Underwriter
or
Underwriters of a proposed underwritten offering to permit the Registrable
Securities requested to be included in a Piggy-Back Registration to be included
on the same terms and conditions as any similar securities of the Company and
to
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. All
holders of Registrable Securities proposing to distribute their securities
through a Piggy-Back Registration that involves an Underwriter or Underwriters
shall enter into an underwriting agreement in customary form with the
Underwriter or Underwriters selected for such Piggy-Back
Registration.
2.2.2 Reduction
of Offering.
If the managing Underwriter or Underwriters for a Piggy-Back Registration that
is to be an underwritten offering advises the Company and the holders of
Registrable Securities in writing that the dollar amount or number of shares
of
Common Stock or other securities which the Company desires to sell, taken
together with shares of Common Stock or other securities, if any, as to which
registration has been demanded pursuant to written contractual arrangements
with
persons other than the holders of Registrable Securities hereunder, the
Registrable Securities as to which registration has been requested under this
Section 2.2, and the shares of Common Stock or other securities, if any, as
to which registration has been requested pursuant to the written contractual
piggy-back registration rights of other security holders of the Company, exceeds
the Maximum Number of Shares, then the Company shall include in any such
registration:
(i) If
the
registration is undertaken for the Company’s account: (A) first, the shares of
Common Stock or other securities that the Company desires to sell that can
be
sold without exceeding the Maximum Number of Shares; (B) second, to the extent
that the Maximum Number of Shares has not been reached under the foregoing
clause (A), the shares of Common Stock and other securities, if any, including
the Registrable Securities, as to which registration has been requested pursuant
to written contractual piggy-back registration rights of security holders (pro
rata in accordance with the number of shares of Common Stock and other
securities which each such person has actually requested to be included in
such
registration, regardless of the number of shares of Common Stock and other
securities with respect to which such persons have the right to request such
inclusion) that can be sold without exceeding the Maximum Number of Shares;
and
(ii) If
the
registration is a “demand” registration undertaken at the demand of persons
other than the holders of Registrable Securities pursuant to written contractual
arrangements with such persons, (A) first, the shares of Common Stock and other
securities for the account of the demanding persons that can be sold without
exceeding the Maximum Number of Shares; (B) second, to the extent that the
Maximum Number of Shares has not been reached under the foregoing clause (A),
the shares of Common Stock or other securities that the Company desires to
sell
that can be sold without exceeding the Maximum Number of Shares; and (C) third,
to the extent that the Maximum Number of Shares has not been reached under
the
foregoing clauses (A) and (B), the Registrable Securities as to which
registration has been requested under this Section 2.2 (pro
rata in
accordance with the number of shares of Registrable Securities held by each
such
holder); and (D) fourth, to the extent that the Maximum Number of Shares
has not been reached under the foregoing clauses (A), (B) and (C), the
shares of Common Stock or other securities, if any, as to which registration
has
been requested pursuant to written contractual piggy-back
registration rights which other securityholders desire to sell that can be
sold
without exceeding the Maximum Number of Shares.
2.2.3 Withdrawal.
Any holder of Registrable Securities may elect to withdraw such holder’s request
for inclusion of Registrable Securities in any Piggy-Back Registration by giving
written notice to the Company of such request to withdraw prior to the
effectiveness of the Registration Statement. The Company may also elect to
withdraw a Registration Statement at any time prior to the effectiveness of
the
Registration Statement. Notwithstanding any such withdrawal, the Company
shall pay all expenses incurred by the holders of Registrable Securities in
connection with such Piggy-Back Registration as provided in
Section 3.3.
2.3 Registrations
on Form S-3.
The holders of Registrable Securities may at any time and from time to time
after the Release Date, request in writing that the Company register the resale
of any or all of such Registrable Securities on Form S-3 or any similar
short-form registration which may be available at such time (“Form
S-3”);
provided,
however, that
the
Company shall not be obligated to effect such request through an underwritten
offering. Upon receipt of such written request, the Company will promptly
give written notice of the proposed registration to all other holders of
Registrable Securities, and, as soon as practicable thereafter, effect the
registration of all or such portion of such holder’s or holders’ Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any other holder or holders joining in such
request as are specified in a written request given within fifteen (15) days
after receipt of such written notice from the Company; provided,
however,
that
the Company shall not be obligated to effect any such registration pursuant
to
this Section 2.3: (i) if Form S-3 is not available for such offering; or
(ii) if the holders of the Registrable Securities, together with the holders
of
any other securities of the Company entitled to inclusion in such registration,
propose to sell Registrable Securities and such other securities (if any) at
any
aggregate price to the public of less than $500,000. Registrations effected
pursuant to this Section 2.3 shall not be counted as Demand Registrations
effected pursuant to Section 2.1.
2.4 No
Net
Cash Settlement Value.
In
connection with the exercise of the Warrants, the Company will not be obligated
to deliver securities, and there are no contractual penalties for failure to
deliver securities, if a registration statement is not effective at the time
of
exercise; however, the Company may satisfy its obligation by delivering
unregistered shares of Common Stock. In no event will be the Company be
required to net cash settle an exercise of a Warrant.
3. REGISTRATION
PROCEDURES.
3.1 Filings;
Information.
Whenever the Company is required to effect the registration of any Registrable
Securities pursuant to Section 2, the Company shall use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method(s) of distribution thereof as expeditiously as
practicable, and in connection with any such request:
3.1.1 Filing
Registration Statement.
The Company shall, as expeditiously as possible and in any event within sixty
(60) days after receipt of a request for a Demand Registration pursuant to
Section 2.1, prepare and file with the Commission a Registration Statement
on any form for which the Company then qualifies or which counsel for the
Company shall deem appropriate and which form shall be available for the sale
of
all Registrable Securities to be registered thereunder in accordance with the
intended method(s) of distribution thereof, and shall use its best efforts
to
cause such Registration Statement to become and remain effective for the period
required by Section 3.1.3; provided,
however,
that
the Company shall have the right to defer any Demand Registration for up to
thirty (30) days, and
any
Piggy-Back Registration for such period as may be applicable to deferment of
any
demand registration to which such Piggy-Back Registration relates, in each
case
if the Company shall furnish to the holders a certificate signed by the Chief
Executive Officer of the Company stating that, in the good faith judgment of
the
Board of Directors of the Company, it would be materially detrimental to the
Company and its stockholders for such Registration Statement to be effected
at
such time; provided
further, however,
that
the Company shall not have the right to exercise the right set forth in the
immediately preceding proviso more than once in any 180-day period in respect
of
a Demand Registration hereunder.
3.1.2 Copies.
The Company shall, prior to filing a Registration Statement or prospectus,
or
any amendment or supplement thereto, furnish without charge to the holders
of
Registrable Securities included in such registration, and such holders’ legal
counsel, copies of such Registration Statement as proposed to be filed, each
amendment and supplement to such Registration Statement (in each case including
all exhibits thereto and documents incorporated by reference therein), the
prospectus included in such Registration Statement (including each preliminary
prospectus), and such other documents as the holders of Registrable Securities
included in such registration or legal counsel for any such holders may request
in order to facilitate the disposition of the Registrable Securities owned
by
such holders.
3.1.3 Amendments
and Supplements.
The Company shall prepare and file with the Commission such amendments,
including post-effective amendments, and supplements to such Registration
Statement and the prospectus used in connection therewith as may be necessary
to
keep such Registration Statement effective and in compliance with the provisions
of the Securities Act until all Registrable Securities and other securities
covered by such Registration Statement have been disposed of in accordance
with
the intended method(s) of distribution set forth in such Registration Statement
(which period shall not exceed the sum of one hundred eighty (180) days plus
any
period during which any such disposition is interfered with by any stop order
or
injunction of the Commission or any governmental agency or court) or such
securities have been withdrawn.
3.1.4 Notification.
After the filing of a Registration Statement, the Company shall promptly, and
in
no event more than two (2) business days after such filing, notify the holders
of Registrable Securities included in such Registration Statement of such
filing, and shall further notify such holders promptly and confirm such advice
in writing in all events within two (2) business days of the occurrence of
any
of the following: (i) when such Registration Statement becomes
effective; (ii) when any post-effective amendment to such Registration
Statement becomes effective; (iii) the issuance or threatened issuance by
the Commission of any stop order (and the Company shall take all actions
required to prevent the entry of such stop order or to remove it if entered);
and (iv) any request by the Commission for any amendment or supplement to
such Registration Statement or any prospectus relating thereto or for additional
information or of the occurrence of an event requiring the preparation of a
supplement or amendment to such prospectus so that, as thereafter delivered
to
the purchasers of the securities covered by such Registration Statement, such
prospectus will not contain an untrue statement of a material fact or omit
to
state any material fact required to be stated therein or necessary to make
the
statements therein not misleading, and promptly make available to the holders
of
Registrable Securities included in such Registration Statement any such
supplement or amendment; except that before filing with the Commission a
Registration Statement or
prospectus or any amendment or supplement thereto, including documents
incorporated by reference, the Company shall furnish to the holders of
Registrable Securities included in such Registration Statement and to the legal
counsel for any such holders, copies of all such documents proposed to be filed
sufficiently in advance of filing to provide such holders and legal counsel
with
a reasonable opportunity to review such documents and comment thereon, and
the
Company shall not file any Registration Statement or prospectus or amendment
or
supplement thereto, including documents incorporated by reference, to which
such
holders or their legal counsel shall reasonably object.
3.1.5 State
Securities Laws Compliance.
The Company shall use its best efforts to (i) register or qualify the
Registrable Securities covered by the Registration Statement under such
securities or “blue sky” laws of such jurisdictions in the United States as the
holders of Registrable Securities included in such Registration Statement (in
light of their intended plan of distribution) may request, and (ii) take
such action necessary to cause such Registrable Securities covered by the
Registration Statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Company and do any and all other acts and things that may
be
necessary or advisable to enable the holders of Registrable Securities included
in such Registration Statement to consummate the disposition of such Registrable
Securities in such jurisdictions; provided,
however,
that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
paragraph (e) or subject itself to taxation in any such
jurisdiction.
3.1.6 Agreements
for Disposition.
The Company shall enter into customary agreements (including, if applicable,
an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities. The representations, warranties and covenants of
the Company in any underwriting agreement which are made to or for the benefit
of any Underwriters, to the extent applicable, shall also be made to and for
the
benefit of the holders of Registrable Securities included in such registration
statement. No holder of Registrable Securities included in such
registration statement shall be required to make any representations or
warranties in the underwriting agreement except, if applicable, with respect
to
such holder’s organization, good standing, authority, title to Registrable
Securities, lack of conflict of such sale with such holder’s material agreements
and organizational documents, and with respect to written information relating
to such holder that such holder has furnished in writing expressly for inclusion
in such Registration Statement. Holders of Registrable Securities shall agree
to
such covenants and indemnification and contribution obligations for selling
stockholders as are customarily contained in agreements of that type. Further,
such holders shall cooperate fully in the preparation of the registration
statement and other documents relating to any offering in which they include
securities pursuant to Section 2 hereof. Each holder shall also furnish to
the
Company such information regarding itself, the Registrable Securities held
by
such holder and the intended method of disposition of such securities as shall
be reasonably required to effect the registration of the Registrable
Securities.
3.1.7 Cooperation.
The principal executive officer of the Company, the principal financial officer
of the Company, the principal accounting officer of the Company and all other
officers and members of the management of the Company shall cooperate fully
in
any offering of Registrable Securities hereunder, which cooperation shall
include, without limitation, the preparation of the Registration Statement
with
respect to such offering and all other offering materials and related documents,
and participation in meetings with Underwriters, attorneys, accountants and
potential investors.
3.1.8 Records.
The Company shall make available for inspection by the holders of Registrable
Securities included in such Registration Statement, any Underwriter
participating in any disposition pursuant to such registration statement and
any
attorney, accountant or other professional retained by any holder of Registrable
Securities included in such Registration Statement or any Underwriter, all
financial and other records, pertinent corporate documents and properties of
the
Company, as shall be necessary to enable them to exercise their due diligence
responsibility, and cause the Company’s officers, directors and employees to
supply all information reasonably requested by any of them in connection with
such Registration Statement.
3.1.9 Opinions
and Comfort Letters.
The Company shall furnish to each holder of Registrable Securities included
in
any Registration Statement a signed counterpart, addressed to such holder,
of
(i) any opinion of counsel to the Company delivered to any Underwriter, and
(ii) any comfort letter from the Company’s independent public accountants
delivered to any Underwriter. In the event no legal opinion is delivered
to any Underwriter, the Company shall furnish to each holder of Registrable
Securities included in such Registration Statement, at any time that such holder
elects to use a prospectus, an opinion of counsel to the Company to the effect
that the Registration Statement containing such prospectus has been declared
effective and that no stop order is in effect.
3.1.10 Earnings
Statement.
The Company shall comply with all applicable rules and regulations of the
Commission and the Securities Act, and make available to its stockholders,
as
soon as practicable, an earnings statement covering a period of twelve (12)
months, beginning within three (3) months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions
of
Section 11(a) of the Securities Act and Rule 158
thereunder.
3.1.11 Listing.
The Company shall use its best efforts to cause all Registrable Securities
included in any registration to be listed on such exchanges or otherwise
designated for trading in the same manner as similar securities issued by the
Company are then listed or designated or, if no such similar securities are
then
listed or designated, in a manner satisfactory to the holders of a majority
of
the Registrable Securities included in such registration.
3.2 Obligation
to Suspend Distribution.
Upon receipt of any notice from the Company of the happening of any event of
the
kind described in Section 3.1.4(iv), or, in the case of a resale
registration on Form S-3 pursuant to Section 2.3 hereof, upon any
suspension by the Company, pursuant to a written xxxxxxx xxxxxxx compliance
program adopted by the Company’s Board of Directors, of the ability of all
“insiders” covered by such program to transact in the Company’s securities
because of the existence of material non-public information, each holder of
Registrable Securities included in any registration shall immediately
discontinue disposition of such Registrable Securities pursuant to the
Registration Statement covering such Registrable Securities until such holder
receives the supplemented or amended prospectus contemplated by
Section 3.1.4(iv) or the restriction on the ability of “insiders” to
transact in the Company’s securities is removed, as applicable, and, if so
directed by the Company, each such holder will deliver to the Company all
copies, other than permanent file copies then in such holder’s possession, of
the most recent prospectus covering such Registrable Securities at the time
of
receipt of such notice.
3.3 Registration
Expenses.
The Company shall bear all costs and expenses incurred in connection with any
Demand Registration pursuant to Section 2.1, any Piggy-Back Registration
pursuant to Section 2.2, and any registration on Form S-3 effected pursuant
to Section 2.3, and all expenses incurred in performing or complying with
its other obligations under this Agreement, whether or not the Registration
Statement becomes effective or whether any or all holders of Registrable
Securities withdraw from any Registration Statement, including, without
limitation: (i) all registration and filing fees; (ii) fees and
expenses of compliance with securities or “blue sky” laws (including fees and
disbursements of counsel in connection with blue sky qualifications of the
Registrable Securities); (iii) printing expenses; (iv) the Company’s
internal expenses (including, without limitation, all salaries and expenses
of
its officers and employees); (v) the fees and expenses incurred in
connection with the listing of the Registrable Securities as required by
Section 3.1.11; (vi) National Association of Securities Dealers, Inc.
fees; (vii) fees and disbursements of counsel for the Company and fees and
expenses for independent certified public accountants retained by the Company
(including the expenses or costs associated with the delivery of any opinions
or
comfort letters requested pursuant to Section 3.1.9); (viii) the fees
and expenses of any special experts retained by the Company in connection with
such registration; and (ix) the fees and expenses of one legal
counsel selected by the holders of a majority-in-interest of the Registrable
Securities included in such registration. The Company shall have no
obligation to pay any underwriting discounts or selling commissions attributable
to the Registrable Securities being sold by the holders thereof, which
underwriting discounts or selling commissions shall be borne solely by such
holders. Additionally, in an underwritten offering, all selling security
holders and the Company shall bear the expenses of the underwriter pro rata
in
proportion to the respective dollar amount of securities each is selling in
such
offering.
3.4 Information.
The holders of Registrable Securities shall provide such information as may
reasonably be requested by the Company, or the managing Underwriter, if any,
in
connection with the preparation of any Registration Statement, including
amendments and supplements thereto, in order to effect the registration of
any
Registrable Securities under the Securities Act pursuant to Section 2 and
in connection with the Company’s obligation to comply with federal and
applicable state securities laws.
3.5 Holder
Obligations.
No
holder of Registrable Securities may participate in any underwritten offering
pursuant to this Section 3 unless such holder (i) agrees to sell only such
holder’s Registrable Securities on the basis reasonably provided in any
underwriting agreement, and (ii) completes, executes and delivers any and all
questionnaires, powers of attorney, custody agreements, indemnities,
underwriting agreements and other documents reasonably required by or under
the
terms of any underwriting agreement or as reasonably requested by the
Company.
4. INDEMNIFICATION
AND CONTRIBUTION.
4.1 Indemnification
by the Company.
The Company agrees to indemnify and hold harmless each Investor and each other
holder of Registrable Securities, and each of their respective officers,
employees, affiliates, directors, partners, members, attorneys and agents,
and
each person, if any, who controls an Investor and each other holder of
Registrable Securities (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) (each, an “Investor
Indemnified Party”),
from
and against any expenses, losses, judgments, claims, damages or liabilities,
whether joint or several, arising out of or based upon any untrue statement
(or
allegedly untrue statement) of a material fact contained in any Registration
Statement under which the sale of such Registrable Securities was registered
under the Securities Act, any preliminary prospectus, final prospectus or
summary prospectus contained in the Registration Statement, or any amendment
or
supplement to such Registration Statement, or arising out of or based upon
any
omission (or alleged omission) to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or any
violation by the Company of the Securities Act or any rule or regulation
promulgated thereunder
applicable to the Company and relating to action or inaction required of the
Company in connection with any such registration; and the Company shall promptly
reimburse the Investor Indemnified Parties for any legal and any other expenses
reasonably incurred by such Investor Indemnified Parties in connection with
investigating and defending any such expense, loss, judgment, claim, damage,
liability or action; provided,
however,
that (a)
the Company will not be liable in any such case to the extent that any such
expense, loss, claim, damage or liability arises out of or is based upon any
untrue statement or allegedly untrue statement or omission or alleged omission
made in such Registration Statement, preliminary prospectus, final prospectus,
or summary prospectus, or any such amendment or supplement, in reliance upon
and
in conformity with information furnished to the Company, in writing, by such
selling holder expressly for use therein or for the use by any Investor
Indemnified Party of a prospectus in violation of any stop order or other
suspension of the Registration Statement; and (b) the foregoing indemnity shall
not inure to the benefit of any holder (or benefit of any person controlling
such holder) from whom the person asserting such expense, loss, claim, damage
or
liability purchased the Registrable Securities, if a copy of the Prospectus
(as
then amended or supplemented if the Company shall have furnished any amendments
or supplements thereto) was not sent or given by or on behalf of such holder
to
such person, if required by law so to have been delivered at or prior to the
written confirmation of the sale of the Registrable Securities to such person,
and if the Prospectus (as so amended or supplemented) would have cured the
defect giving rise to such expense, loss, claim, damage or liability, unless
such failure is the result of noncompliance by the Company with Section 3.1.3
hereof. The Company also shall indemnify any Underwriter of the
Registrable Securities, their officers, employees, affiliates, directors,
partners, members, attorneys and agents and each person who controls such
Underwriter on substantially the same basis as that of the indemnification
provided above in this Section 4.1.
4.2 Indemnification
by Holders of Registrable Securities.
Each selling holder of Registrable Securities will, in the event that any
registration is being effected under the Securities Act pursuant to this
Agreement of any Registrable Securities held by such selling holder, indemnify
and hold harmless the Company, each of its directors and officers and each
underwriter (if any), and each other person, if any, who controls the Company
or
such underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, against any losses, claims, judgments, damages
or liabilities, whether joint or several, insofar as such losses, claims,
judgments, damages or liabilities (or actions in respect thereof) arise out
of
or are based upon any untrue statement or allegedly untrue statement of a
material fact contained in any Registration Statement under which the sale
of
such Registrable Securities was registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained in
the
Registration Statement, or any amendment or supplement to the Registration
Statement, or arise out of or are based upon any omission or the alleged
omission to state a material fact required to be stated therein or necessary
to
make the statement therein not misleading, if the statement or omission was
made
in reliance upon and in conformity with information furnished in writing to
the
Company by such selling holder expressly for use therein or for the use by
any
Investor Indemnified Party of a prospectus in violation of any stop order or
other suspension of the Registration Statement, and shall reimburse the Company,
its directors and officers, and each such controlling person for any legal
or
other expenses reasonably incurred by any of them in connection with
investigation or defending any such loss, claim, damage, liability or
action. Each selling holder’s indemnification obligations hereunder shall
be several and not joint and shall be limited to the amount of any net proceeds
actually received by such selling holder in connection with the sale of the
Registrable Securities by such selling holder pursuant to the Registration
Statement containing such untrue statement or allegedly untrue
statement.
4.3 Conduct
of Indemnification Proceedings.
Promptly after receipt by any person of any notice of any loss, claim, damage
or
liability or any action in respect of which indemnity may be sought pursuant
to
Section 4.1 or 4.2, such person (the “Indemnified
Party”)
shall,
if a claim in respect thereof is to be made against any other person for
indemnification hereunder, promptly notify such other person (the “Indemnifying
Party”)
in
writing of the loss, claim, judgment, damage, liability or action; provided,
however,
that
the failure by the Indemnified Party to notify the Indemnifying Party shall
not
relieve the Indemnifying Party from any liability which the Indemnifying Party
may have to such Indemnified Party hereunder, except and solely to the extent
the Indemnifying Party is materially prejudiced by such failure. If the
Indemnified Party is seeking indemnification with respect to any claim or action
brought against the
Indemnified Party, then the Indemnifying Party shall be entitled to participate
in such claim or action, and, to the extent that it elects, jointly with all
other Indemnifying Parties, to assume control of the defense thereof with
counsel satisfactory to the Indemnified Party. After notice from the
Indemnifying Party to the Indemnified Party of its election to assume control
of
the defense of such claim or action, the Indemnifying Party shall not be liable
to the Indemnified Party for any legal or other expenses subsequently incurred
by the Indemnified Party in connection with the defense thereof other than
reasonable costs of investigation;
provided, however,
that in
any action in which both the Indemnified Party and the Indemnifying Party are
named as defendants, the Indemnified Party shall have the right to employ
separate counsel (but no more than one such separate counsel) to represent
the
Indemnified Party and its controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Indemnified Party against the Indemnifying Party, with the fees and expenses
of
such counsel to be paid by such Indemnifying Party if, based upon the written
opinion of counsel of such Indemnified Party, representation of both parties
by
the same counsel would be inappropriate due to actual or potential differing
interests between them. No Indemnifying Party shall, without the prior
written consent of the Indemnified Party, consent to entry of judgment or effect
any settlement of any claim or pending or threatened proceeding in respect
of
which the Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such judgment
or
settlement includes an unconditional release of such Indemnified Party from
all
liability arising out of such claim or proceeding.
4.4 Contribution.
4.4.1 If
the
indemnification provided for in the foregoing Sections 4.1, 4.2 and 4.3 is
unavailable to any Indemnified Party in respect of any loss, claim, damage,
liability or action referred to herein, then each such Indemnifying Party,
in
lieu of indemnifying such Indemnified Party, shall contribute to the amount
paid
or payable by such Indemnified Party as a result of such loss, claim, damage,
liability or action in such proportion as is appropriate to reflect the relative
benefits received by the Indemnified Parties and the Indemnifying Parties from
the offering. If, however, the allocation provided by the immediately preceding
sentence is not permitted by applicable law or if the Indemnified Party failed
to give the notice required under Section 4.3 above, then each Indemnifying
Parties shall contribute to such amount paid or payable by such Indemnified
Party in such proportion as is appropriate to reflect not only such relative
benefits but also the relative fault of the Indemnified Parties and the
Indemnifying Parties in connection with the actions or omissions which resulted
in such loss, claim, damage, liability or action, as well as any other relevant
equitable considerations. The relative fault of any Indemnified Party and
any Indemnifying Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Indemnified Party or such Indemnifying Party and the parties’
relative intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission.
4.4.2 The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 4.4 were determined by
pro
rata
allocation or by any other method of allocation which does not take account
of
the equitable considerations referred to in the immediately preceding
Section 4.4.1. The amount paid or payable by an Indemnified Party as
a result of any loss, claim, damage, liability or action referred to in the
immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses incurred by such
Indemnified Party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this Section 4.4, no
holder of Registrable Securities shall be required to contribute any amount
in
excess of the dollar amount
of the
net proceeds (after payment of any underwriting fees, discounts, commissions
or
taxes) actually received by such holder from the sale of Registrable Securities
which gave rise to such contribution obligation. 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.
5. OTHER
COVENANTS.
5.1 Rule 144.
The Company covenants that it shall file any reports required to be filed by
it
under the Securities Act and the Exchange Act and shall take such further action
as the holders of Registrable Securities may reasonably request, all to the
extent required from time to time to enable such holders to sell Registrable
Securities without registration under the Securities Act within the limitation
of the exemptions provided by Rule 144 under the Securities Act, as such
Rules may be amended from time to time, or any similar Rule or regulation
(but not Rule 144A) hereafter adopted by the Commission.
6. MISCELLANEOUS.
6.1 Other
Registration Rights.
The Company represents and warrants that no person, other than a holder of
the
Registrable Securities and the Representative, currently has any right to
require the Company to register any shares of the Company’s capital stock for
sale or to include shares of the Company’s capital stock in any registration
filed by the Company for the sale of shares of capital stock for its own account
or for the account of any other person. The Company shall not grant to any
other
person any right to register his, her or its securities of the Company which
are
inconsistent with the rights granted hereunder.
6.2 Assignment;
No Third Party Beneficiaries.
This Agreement and the rights, duties and obligations of the Company hereunder
may not be assigned or delegated by the Company in whole or in part. This
Agreement and the rights, duties and obligations of the holders of Registrable
Securities hereunder may be freely assigned or delegated by such holder of
Registrable Securities in conjunction with and to the extent of any transfer
of
Registrable Securities by any such holder in accordance with applicable
law. This Agreement and the provisions hereof shall be binding upon and
shall inure to the benefit of each of the parties and their respective
successors and the permitted assigns of the Investor or holder of Registrable
Securities or of any assignee of the Investor or holder of Registrable
Securities. This Agreement is not intended to confer any rights or
benefits on any persons that are not party hereto other than as expressly set
forth in Article 4 and this Section 6.2.
6.3 Notices.
All
notices, demands, requests, consents, approvals or other communications
(collectively, “Notices”)
required or permitted to be given hereunder or which are given with respect
to
this Agreement shall be in writing and shall be personally served, sent by
registered or certified mail, return receipt requested, or sent by reputable
air
courier service with charges prepaid, addressed as set forth below, or to such
other address as such party shall have specified most recently by written notice
provided in accordance with this Section 6.3. Notice shall be deemed given
on the date of service if served personally, on the third business day after
registration or certification, if sent by registered or certified mail, or
on
the next business day following timely delivery of such notice to a reputable
air courier service with an order for next-day delivery, if sent by such courier
service.
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China
Resources, Ltd.
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Xxxx
000, Xxxxx X
Xxxxxx
Xxxxxxx Xxxxx
Jintian
Road, Futian District
Shenzhen,
P.R. China
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Attention: Chief
Executive Officer
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with
a copy to:
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Xxxxx
& Xxx Xxxxxx LLP
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0
Xxxx Xxxxxx
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Xxx
Xxxx, XX 00000
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Attn: Xxxxxxx
X. XxXxxx, Esq.;
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and
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To
an Investor, to the attention of the Investor at the address set
forth
opposite his, her or its respective name on the signature page
hereto.
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6.4 Severability.
This Agreement shall be deemed severable, and the invalidity or unenforceability
of any term or provision hereof shall not affect the validity or enforceability
of this Agreement or of any other term or provision hereof. Furthermore,
in lieu of any such invalid or unenforceable term or provision, the parties
hereto intend that there shall be added as a part of this Agreement a provision
as similar in terms to such invalid or unenforceable provision as may be
possible and be valid and enforceable.
6.5 Counterparts;
Facsimile Signatures.
This Agreement may be executed in multiple counterparts, each of which shall
be
deemed an original, and all of which taken together shall constitute one and
the
same instrument. Facsimile signatures shall be deemed to be original signatures
for all purposes of this Agreement.
6.6 Entire
Agreement.
This Agreement (including all agreements entered into pursuant hereto and all
certificates and instruments delivered pursuant hereto and thereto) constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersede all prior and contemporaneous agreements, representations,
understandings, negotiations and discussions between the parties, whether oral
or written.
6.7 Modifications
and Amendments.
No amendment, modification or termination of this Agreement shall be binding
upon any party unless executed in writing by such party.
6.8 Titles
and Headings.
Titles and headings of sections of this Agreement are for convenience only
and
shall not affect the construction of any provision of this
Agreement.
6.9 Waivers
and Extensions.
Any party to this Agreement may waive any right, breach or default which such
party has the right to waive, provided
that
such
waiver will not be effective against the waiving party unless it is in writing,
is signed by such party, and specifically refers to this Agreement.
Waivers may be made in advance or after the right waived has arisen or the
breach or default waived has occurred. Any waiver may be
conditional. No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or succeeding breach thereof
nor of any other agreement or provision herein contained. No waiver or
extension of time for performance of any obligations or acts shall be deemed
a
waiver or extension of the time for performance of any other obligations or
acts.
6.10 Remedies
Cumulative.
In the event that the Company fails to observe or perform any covenant or
agreement to be observed or performed under this Agreement, any Investor or
any
other holder of Registrable Securities may proceed to protect and enforce its
rights by suit in equity or action at law, whether for specific performance
of
any term contained in this Agreement or for an injunction against the breach
of
any such term or in aid of the exercise of any power granted in this Agreement
or to enforce any other legal or equitable right, or to take any one or more
of
such actions, without being required to post a bond. None of the rights,
powers or remedies conferred under this Agreement shall be mutually exclusive,
and each such right, power or remedy shall be cumulative and in addition to
any
other right, power or remedy, whether conferred by this Agreement or now or
hereafter available at law, in equity, by statute or otherwise.
6.11 Governing
Law.
This
Agreement shall be governed by, interpreted under, and construed in accordance
with the internal laws of the State of Delaware applicable to agreements made
and to be performed within the State of Delaware, without giving effect to
any
choice-of-law provisions thereof that would compel the application of the
substantive laws of any other jurisdiction.
6.12 Waiver
of Trial by Jury.
Each party hereby irrevocably and unconditionally waives the right to a trial
by
jury in any action, suit, counterclaim or other proceeding (whether based on
contract, tort or otherwise) arising out of, connected with or relating to
this
Agreement, the transactions contemplated hereby, or the actions of any Investor
in the negotiation, administration, performance or enforcement
hereof.
(The
remainder of this page intentionally left blank. Signature pages to
follow.)
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to
be executed and delivered by their duly authorized representatives as of the
date first written above.
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By:
Name:
Xxxx Xxxx
Title:
Chief Executive Officer
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INVESTORS:
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Xxxx
Xxxx
Address:
x/x Xxxxx Resources Ltd.
Xxxx
000, Xxxxx X, Xxxxxx Xxxxxxx Tower, Jintian Road, Futian District,
Shenzhen, P.R. China.
No.
of Shares: 500,000
No.
of Warrants: 1,100,000
No.
of Shares Underlying
Warrants:
1,100,000
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Gemore
& Co., Ltd.
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By:
Name:
Xxxxx Xxxxxxx Xxxx
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Title:
Managing Director
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Address:
x/x Xxxxx Resources Ltd.
Xxxx
000, Xxxxx X, Xxxxxx Xxxxxxx Tower, Jintian Road, Futian District,
Shenzhen, P.R. China
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No.
of Warrants: 1,000,000
No.
of Shares Underlying
Warrants:
1,000,000
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Name:
Xxxxx Xxxxxxx Xxxx
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Address:
x/x Xxxxx Resources Ltd.
Xxxx
000, Xxxxx X, Xxxxxx Xxxxxxx Tower, Jintian Road, Futian District,
Shenzhen, P.R. China
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No.
of Shares: 200,000
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No.
of Warrants: None
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Xxxxxx
Nugawela
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Address:
XX Xxx 000 Xxxxxxx Xxxx
Xxxxxxx
Xxxxxxxxx 0000
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No.
of Shares: 100,000
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No.
of Warrants: None
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MMK
Capital Pte Ltd.]
By:
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Name:
Xxxx Xxxx
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Title:
Managing Director
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Address:
XX Xxx 000 Xxxxxxx Xxxx
Xxxxxxx
Xxxxxxxxx 0000
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No.
of Warrants: 250,000
No.
of Shares Underlying
Warrants:
250,000
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Xxxxx
Xxxxxxxx
c/o
Xxxxxxx Xxx, Esq.
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Address:
000-00 00xx Xxxxxx, #000
Xxxxxxxx,
Xxx Xxxx 00000
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No.
of Shares: 125,000
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No.
of Warrants: 250,000
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No.
of Shares Underlying
Warrants:
250,000
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Xxxxxxxxx X. Xxxxxxxxx. |
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Address:
Xxxxx & Xxx Xxxxxx LLP
Three
Park Avenue, 16th floor
Xxx
Xxxx, Xxx Xxxx 00000
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No.
of Shares: 75,000
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No.
of Warrants: None
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