REGISTRATION RIGHTS AGREEMENT
Exhibit
4.5
REGISTRATION
RIGHTS AGREEMENT, dated as of February 16, 2007 (this “Agreement”),
among
the persons executing this Agreement as holders (the “Holders”)
below
and CONCEPT VENTURES CORPORATION, a Nevada corporation (the “Company”).
BACKGROUND
The
Holders made certain loans to the Company’s indirect Chinese subsidiary in the
aggregate principal amount of approximately $762,500. In order to induce the
Holders to make those loans Mr. Jiada Hu, the Company’s Chairman, Chief
Executive Officer and largest stockholder granted to the Holders warrants (the
“Warrants”)
to
purchase an aggregate of 161,408 shares of the Common Stock of the Company
held
by Xx. Xx and the Company agreed to grant to the Holders the registration rights
provided for in this Agreement.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual promises herein contained and for
other good and valuable consideration, the receipt and sufficiency of which
is
hereby acknowledged, the parties hereto, hereby agree as follows:
1. Piggyback
Registration Rights.
If the
Company shall determine to proceed with the preparation and filing of a
registration statement, in connection with the proposed offer and sale of any
of
its securities by it or any of its security holders for cash (other than a
registration statement on Form X-0, X-0 or other similar limited purpose
form), the Company will give written notice of its determination to the Holders.
Upon receipt of a written request from the Holders within thirty calendar days
after receipt of any such notice from the Company, the Company will, except
as
herein provided, cause all the shares of Common Stock issuable upon exercise
of
the Warrants (the “Registrable
Securities”),
to
the extent requested by the Holders, to be included in such registration
statement, all to the extent required to permit the sale or other disposition
by
the Holders of such shares of Common Stock. If any registration pursuant to
this
Section 1 shall be underwritten in whole or in part, the Company may
require that the Registrable Securities requested for inclusion pursuant to
this
Section 1 be included in the underwriting on the same terms and conditions
as the securities otherwise being sold through the underwriters. In the event
that the Registrable Securities requested for inclusion pursuant to this Section
1 together with any other shares would, in the good faith judgment of the
managing underwriter of such public offering, reduce the number of shares to
be
offered by the Company or interfere with the successful marketing of the
securities offered by the Company, the Company will include in such registration
the number of the Holders shares of Common Stock which is pro rata, based on
the
number of securities which in the opinion of such underwriters can be sold
and
on the number of securities which all holders request be included in the
registration, provided that any shares of Common Stock proposed to be included
in such registration statement that are owned by directors or officers of the
Company or their Affiliates shall be excluded prior to exclusion of any shares
of Common Stock requested to be included by the Holders. The obligation of
the
Company under this Section 1 shall be unlimited as to the number of
Registration Statements to which it applies. Notwithstanding the foregoing,
the
Holders shall not be entitled to exercise the registration rights provided
for
under this Section 1 except to the extent that the Holder has exercised his
or
her Warrant.
2. Demand
Registration Right.
Upon
the written request of Holders who hold a majority of the Registrable
Securities, the Company shall prepare and file a registration statement (the
“Registration
Statement”)
with
the Securities and Exchange Commission (the “SEC”)
under
the Securities Act of 1933, as amended (the “Securities
Act”)
to
register the offer and resale of the Registrable Securities, and shall use
its
best efforts to cause such Registration Statement to become effective. The
Company shall pay all Registration Expenses (as defined below) in connection
with any registration, qualification or compliance hereunder, and Holders shall
pay all Selling Expenses (as defined below) and other expenses that are not
Registration Expenses relating to the Registrable Securities resold by the
Holders. “Registration
Expenses”
shall
mean all expenses, except for Selling Expenses, incurred by the Company in
complying with the registration provisions herein described, including, without
limitation, all registration, qualification and filing fees, printing expenses,
escrow fees, fees and disbursements of counsel for the Company, blue sky fees
and expenses and the expense of any special audits incident to or required
by
any such registration. “Selling
Expenses”
shall
mean all selling commissions, underwriting fees and stock transfer taxes
applicable to the Registrable Securities and all fees and disbursements of
counsel for the Holders, if any. Notwithstanding the foregoing, the Holders
shall not be entitled to exercise the registration rights provided for under
this Section 2 except to the extent that the Holder has exercised his or her
Warrant.
3. Company
Obligations.
If the
Registration Statement becomes effective, the Company will use its best efforts
to: (a) keep such registration effective until the earlier of (i) the second
anniversary of the date such Registration Statement is declared effective,
(ii)
such date as all of the Registrable Securities have been resold pursuant to
a
registration statement, or (iii) such date as all Registrable Securities may
be
sold pursuant to Rule 144 of the Securities Act (or any successor rule); (b)
except as otherwise provided herein, prepare and file with the SEC such
amendments and supplements to the Registration Statement and the prospectus
used
in connection with the Registration Statement as may be necessary to comply
with
the provisions of the Securities Act with respect to the disposition of the
Registrable Securities; (c)
furnish such number of prospectuses and other documents incident thereto,
including any amendment of or supplement to the prospectus, as Holder from
time
to time may reasonably request;
and (d)
file the documents required of the Company for normal blue sky clearance in
states specified in writing by Holder and otherwise use its best efforts to
maintain such blue sky clearance during the period the Company is required
to
maintain the effectiveness of the Registration Statement pursuant to (a) above,
provided,
however,
that
the Company shall not be required to qualify to do business or consent to
service of process in any jurisdiction in which it is not now so qualified
or
has not so consented.
4. Suspension
of Use of Registration Statement.
Holder
hereby acknowledges that there may occasionally be times when the Company must
suspend the use of the prospectus forming a part of the Registration Statement
until such time as an amendment to such Registration Statement has been filed
by
the Company and declared effective by the SEC or until the Company has amended
or supplemented such prospectus. The Holder hereby covenants that it will not
sell any securities pursuant to said prospectus during the period commencing
at
the time at which the Company gives the Holder notice of the suspension of
the
use of said prospectus and ending at the time the Company gives the Holder
notice that Holder may thereafter effect sales pursuant to said prospectus.
Notwithstanding anything herein to the contrary, the Company shall not suspend
use of the Registration Statement by Holder unless such suspension is (a)
required by any federal or state governmental authority or (b) in the opinion
of
the Company’s counsel, necessary to make changes in the Registration Statement
or prospectus, or any document incorporated or deemed to be incorporated therein
by reference, so that, in the case of the Registration Statement, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and that in the case of the prospectus, it will not
contain any untrue statement of a material fact or any omission to state a
material fact required to be stated therein, in light of the circumstances
under
which they were made, not misleading.
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5. Indemnification.
(a) Subject
to the conditions set forth below, the Company agrees to indemnify and hold
harmless the Holders, their employees, agents, and counsel, and each person,
if
any, who controls any such person within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Securities and Exchange Act of 1934,
as
amended (the “Exchange
Act”)
from
and against any and all loss, liability, charge, claim, damage, and expense
whatsoever (which shall include, for all purposes of this Section 5, but not
be
limited to, attorneys’ fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all amounts paid
in settlement of any claim or litigation) as and when incurred, arising out
of,
based upon, or in connection with (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented) or any amendment or supplement thereto, relating to the sale
of
any of the Registrable Securities or (B) in any application or other document
or
communication (in this Section 5 collectively called an “application”)
executed by or on behalf of the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order
to
register or qualify any of the Registrable Securities under the securities
or
blue sky laws thereof or filed with the SEC or any securities exchange; or
any
omission or alleged omission to state a material fact required to be stated
therein or necessary to make the statements made therein not misleading, unless
(x) such statement or omission was made in reliance upon and in conformity
with
written information furnished to the Company with respect to the Holder by
or on
behalf of the Holder expressly for inclusion in any registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, as the case may be, or (y) such loss, liability,
charge, claim, damage or expense arises out of any Holder’s failure to comply
with the terms and provisions of this Agreement, or (ii) any breach of any
representation, warranty, covenant, or agreement of the Company contained in
this Agreement. The foregoing agreement to indemnify shall be in addition to
any
liability the Company may otherwise have, including liabilities arising under
this Agreement.
(b) If
any
action is brought against a Holder or any of its employees, agents, or counsel,
or any controlling persons of such person (an “indemnified
party”)
in
respect of which indemnity may be sought against the Company pursuant to the
foregoing paragraph, such indemnified party or parties shall promptly notify
the
Company in writing of the institution of such action (but the failure so to
notify shall not relieve the Company from any liability other than pursuant
to
this Section 5(a)) and the Company shall promptly assume the defense of such
action, including the employment of counsel provided that the indemnified party
shall have the right to employ its or their own counsel in any such case, but
the fees and expenses of such counsel shall be at the expense of such
indemnified party or parties unless the employment of such counsel shall have
been authorized in writing by the Company in connection with the defense of
such
action or the Company shall not have promptly employed counsel reasonably
satisfactory to such indemnified party or parties to have charge of the defense
of such action or such indemnified party or parties shall have reasonably
concluded that there may be one or more legal defenses available to it or them
or to other indemnified parties which are different from or additional to those
available to the Company, in any of which events such fees and expenses shall
be
borne by the Company and the Company shall not have the right to direct the
defense of such action on behalf of the indemnified party or parties. Anything
in this Section 5 to the contrary not withstanding, the Company shall not be
liable for any settlement of any such claim or action effected without its
written consent, which shall not be unreasonably withheld. The Company shall
not, without the prior written consent of each indemnified party that is not
released as described in this sentence, settle or compromise any action, or
permit a default or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, in respect of which indemnity may
be
sought hereunder (whether or not any indemnified party is a party thereto)
unless such settlement, compromise, consent, or termination includes an
unconditional release of each indemnified party from all liability in respect
of
such action. The Company agrees promptly to notify the Holders of the
commencement of any litigation or proceedings against the Company or any of
its
officers or directors in connection with the sale of any Registrable Securities
or any preliminary prospectus, prospectus, registration statement, or amendment
or supplement thereto, or any application relating to any sale of any
Registrable Securities.
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(c) The
Holders, severally, but not jointly, agree to indemnify and hold harmless the
Company, each director of the Company, each officer of the Company who shall
have signed any registration statement covering Registrable Securities held
by
the Holders, each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act, and its or their respective counsel, to the same extent as the foregoing
indemnity from the Company to the Holders in Section 5(a) but only with respect
to statements or omissions, if any, made in any registration statement,
preliminary prospectus, or final prospectus (as from time to time amended and
supplemented) or any amendment or supplement thereto, or in any application,
in
reliance upon and in conformity with written information furnished to the
Company with respect to the Holders by or on behalf of the Holders, expressly
for inclusion in any such registration statement, preliminary prospectus, or
final prospectus, or any amendment or supplement thereto, or in any application,
as the case may be. If any action shall be brought against the Company or any
other person so indemnified based on any such registration statement,
preliminary prospectus, or final prospectus, or any amendment or supplement
thereto, or in any application, and in respect of which indemnity may be sought
against the Holders pursuant to this Section 5(b), the Holders shall have the
rights and duties given to the Company, and the Company and each other person
so
indemnified shall have the rights and duties given to the indemnified parties,
by the provisions of Section 5(a) and 5(b).
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(d) To
provide for just and equitable contribution, if (i) an indemnified party makes
a
claim for indemnification pursuant to Section 5(a) or 5(c) (subject to the
limitations thereof) but it is found in a final judicial determination, not
subject to further appeal, that such indemnification may not be enforced in
such
case, even though this Agreement expressly provides for indemnification in
such
case, or (ii) any indemnified or indemnifying party seeks contribution under
the
Securities Act, the Exchange Act or other wise, then the Company (including
for
this purpose any contribution made by or on behalf of any director of the
Company, any officer of the Company who signed any such registration statement,
any controlling person of the Company, and its or their respective counsel)
as
one entity, and the Holders (including for this purpose any contribution by
or
on behalf of an indemnified party) as a second entity, shall contribute to
the
losses, liabilities, claims, damages, and expenses whatsoever to which any
of
them may be subject, on the basis of relevant equitable considerations such
as
the relative fault of the Company and the Holders in connection with the facts
which resulted in such losses, liabilities, claims, damages, and expenses.
The
relative fault, in the case of an untrue statement, alleged untrue statement,
omission, or alleged omission shall be determined by, among other things,
whether such statement, alleged statement, omission or alleged omission relates
to information supplied by the Company or by the Holders, and the parties’
relative intent, knowledge, access to information, and opportunity to correct
or
prevent such statement, alleged statement, omission, or alleged omission. The
Company and the Holders agree that it would be unjust and inequitable if the
respective obligations of the Company and the Holders for contribution were
determined by pro rata or per capita allocation of the aggregate losses,
liabilities, claims, damages, and expenses (even if the Holders and the other
indemnified parties were treated as one entity for such purpose) or by any
other
method of allocation that does not reflect the equitable considerations referred
to in this Section 5(d). No person guilty of a fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to
contribution from any person who is not guilty of such fraudulent
misrepresentation. For purposes of this Section 5(d) each person, if any, who
controls the Holders within the meaning of Section 15 of the Securities Act
or
Section 20(a) of the Exchange Act and each employee, agent, and counsel of
Holders or control person shall have the same rights to contribution as the
Holders and each person, if any, who controls the Company within the meaning
of
Section 15 of the Securities Act or Section 20(a) of the Exchange Act, each
officer of the Company who shall have signed any such registration statement,
each director of the Company, and its or their respective counsel shall have
the
same rights to contribution as the Company, subject to each case to the
provisions of this Section 5(d). Anything in this Section 5(d) to the contrary
notwithstanding, no party shall be liable for contribution with respect to
the
settlement of any claim or action effected without its written consent. This
Section 5(d) is intended to supersede any right to contribution under the
Securities Act, the Exchange Act or otherwise.
6. Holder
Information.
Holder
shall provide to the Company such information regarding its ownership of
Registrable Securities and plan of distribution as shall be required for the
preparation and filing of the Registration Statement, including customary
selling stockholder questionnaires.
7. Choice
of Law.
It is
the intention of the parties that the internal laws of the State of Nevada,
without regard to the body of law controlling conflicts of law, shall govern
the
validity of this Agreement, the construction of its terms and the interpretation
of the rights and duties of the parties set forth herein.
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8. Assignment;
Parties in Interest.
This
Agreement may be pledged, assigned or otherwise transferred by the Holder.
9. Amendment.
No
amendment, modification, waiver, discharge or termination of any provision
of
this Agreement nor consent to any departure by the Holder or the Company
therefrom shall in any event be effective unless the same shall be in writing
and signed by the party to be charged with enforcement, and then shall be
effective only in the specific instance and for the purpose for which given.
No
course of dealing between the parties hereto shall operate as an amendment
of,
or a waiver of any right under, this Agreement.
10. Entire
Agreement.
This
Agreement contains the entire understanding of the parties with respect to
the
subject matter hereof and supersedes all prior agreements, understandings,
discussions and representations, oral or written, with respect to such matters,
which the parties acknowledge have been merged into this Agreement, including,
without limitation, any provision in any agreement between Mr. Jiada Hu and
the
Holders purporting to grant registration or similar rights to the
Holders.
[Signature
Page Follows]
6
IN
WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to
be duly executed and delivered by their proper and duly authorized
representatives as of the day and year first above written.
CONCEPT
VENTURES CORPORATION
| By: /s/ Jiada Hu | |||
|
Name:
Jiada Hu
Title:
CEO and President
|
HOLDERS:
| /s/ Xxxxx Xxxxxx | /s/ Zhang Xxxxxx | ||
|
Xxxxx
Xxxxxx
|
Xxxxx
Zhihao
|
||
|
Number
of Registrable Securities:
52,920
Underlying Shares
|
Number
of Registrable Securities:
34,398
Underlying Shares
|
| /s/ Xxxx Xx | /s/ Gong Xxxxxxx | ||
|
Xxxx
Xx
|
Xxxx
Maoquan
|
||
|
Number
of Registrable Securities:
13,230
Underlying Shares
|
Number
of Registrable Securities:
7,940
Underlying
Shares
|
| /s / Xx Xxx | |||
|
Xx
Xxx
|
|
||
|
Number
of Registrable Securities:
52,920
Underlying Shares
|
|
[Signature
Page to Registration Rights Agreement]
