REGISTRATION RIGHTS AGREEMENT
Exhibit
10.4
THIS
REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered into
effective as of March 22, 2006, by and among China-Biotics, Inc., a Delaware
corporation ("China-Biotics"), and the undersigned persons who have acquired
shares of common stock of China-Biotics (the "Shareholders").
BACKGROUND.
Each Shareholder has acquired shares of common stock of China-Biotics, $.0001
par value. China-Biotics has agreed to grant to the Shareholders the
registration rights set out in this Agreement relating to the shares of common
stock acquired by the Shareholders.
THEREFORE,
in consideration of the premises and agreements contained herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
SECTION
1. Definitions. For the purpose of this Agreement:
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1.1
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"Common
Shares" means shares of common stock, $.0001 par value, of China-Biotics,
as the same may be authorized and issued from time to
time.
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1.2
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The
terms "register," "registered" and "registration" refer to a registration
effected by filing with the U.S. Securities and Exchange Commission
(the
"SEC") a registration statement or statements or similar documents
in
compliance with the Securities Act of 1933, as amended (the "Securities
Act"), and the declaration or ordering by the SEC of the effectiveness
of
such registration statement, as applicable given the particular
context.
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1.2
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"Registrable
Securities" means (a) the Common Shares listed on Schedule A and
(b) any
Common Shares issued as a dividend, stock split or other distribution
with
respect to, or in exchange for, upon reclassification or in replacement
of, the foregoing; provided that Common Shares that are considered
to be
Registrable Securities shall cease to be Registrable Securities (i)
upon
the sale thereof pursuant to an effective registration statement,
(ii)
upon the sale thereof pursuant to Rule 144 (or successor rule) under
the
Securities Act or (iii) when such Common Shares cease to be outstanding.
In the event of any recapitalization by China-Biotics, whether by
stock
split, reverse stock split, stock dividend or otherwise, the number
of
shares of Registrable Securities shall be proportionately increased
or
decreased.
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1.3
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"Registration
Expenses" include all expenses incurred by China-Biotics in complying
with
the terms of Section 2 hereof, including all registration and filing
fees,
printing expenses, fees and disbursements of counsel and independent
public accountants for China-Biotics, fees and expenses incurred
in
connection with complying with state securities laws, fees of any
securities exchange or automated quotation system upon which the
Common
Shares are to be listed, fees of National Association of Securities
Dealers, Inc., fees of any transfer agent, registrar and depositary,
but
excluding Selling Expenses related to Registrable Securities held
by each
Shareholder.
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1.5
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"Selling
Expenses" means all underwriting discounts and fees and selling
commissions and transfer taxes, if any, attributable to the sale
of
securities.
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SECTION
2. Shareholder Registration Rights
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China-Biotics
shall file a registration statement for all Registrable Securities
with
the SEC on Form SB-2 as
soon as practical, and in any event on or before April 7,
2006.
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2.2
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If,
for any reason, any Registrable Securities are not included in the
Registration Statement as described in Section 2.1 above, and if
China-Biotics, at any time thereafter, proposes to register China-Biotics
Common Shares under the Securities Act for sale to the public, either
for
its own account or for the account of any of its other shareholders
(except with respect to registration statements on Forms X-0, X-0
or such
other form which is not available for registering China-Biotics Common
Shares for sale to the public), each such time it will give written
notice
to the Shareholders of its intention so to do on or before the earlier
of
(a) 10 days after filing of a registration statement and (b)15 days
prior
to effectiveness of such registration statement. Upon the written
request
of the Shareholders, received by China-Biotics within 5 days after
the
giving of any such notice by China-Biotics, to register any of the
Registrable Securities (which request shall state the intended method
of
disposition thereof), China-Biotics will use its commercially reasonable
efforts to cause such Registrable Securities to be included in the
securities to be covered by the registration statement proposed to
be
filed by China-Biotics, all to the extent requisite to permit the
sale or
other disposition by the Shareholders (in accordance with its written
request) of such Registrable Securities.
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2.3
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If
any registration pursuant to Section 2.2 shall be, in whole or in
part, an
underwritten public offering of Common Shares for the account of
China-Biotics and if the managing underwriter advises China-Biotics
that
the inclusion of all Common Shares proposed to be included in such
registration could adversely affect the marketability of the offering
or
adversely affect the price or price range at which the Common Shares
could
be sold, China-Biotics will include Common Shares in the registration
in
the following order of priority: (i) first, all Common Shares which
China-Biotics proposes to sell for its own account (if any) and (ii)
second, the Registrable Securities requested by the Shareholders
to be
included in the registration, together with all other Common Shares
held
by any other shareholders, requested to be included in such registration,
with the number of shares held by each shareholder included on a
pro rata
basis based upon the number of Common Shares held by such shareholder
as a
percent of all Common Shares requested to be included in such registration
statement by all China-Biotics shareholders. In the event that the
managing underwriter advises China-Biotics that an underwriters'
over-allotment option is necessary or advisable, the preceding priority
shall apply to the determination of which securities are to be included
in
the primary portion of such registration. Except as set forth above,
there
shall be no limit to the number of registrations that may be requested
pursuant to Section 2.2.
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2.4
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China-Biotics
shall pay all Registration Expenses in connection with each registration,
including any Selling Expenses of China-Biotics. Each Shareholder
shall
pay all Selling Expenses attributable to such Shareholder’s sale of
Registrable Securities.
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SECTION
3. Obligations of China-Biotics.
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3.1
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If
and whenever China-Biotics undertakes in accordance with Section
2 hereof
to effect the registration of any Registrable Securities, China-Biotics
shall, as expeditiously as reasonably possible, comply with each
of the
following:
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3.1.1
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prepare
and file with the SEC a registration statement on the appropriate
form and
use its commercially reasonable efforts to cause the registration
statement to become effective and keep such registration statement
effective for a period of one year from the effective date (or such
shorter period in which all Registrable Securities have been sold
thereunder);
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3.1.2
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prepare
and file with the SEC such amendments and supplements to such registration
statement and the prospectus used in connection with such registration
statement as may be necessary to keep such registration statement
effective as provided in Section 3.1.1 and to comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such registration
statement;
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3.1.3
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furnish
to each Shareholder such numbers of copies of the registration statement,
the corresponding prospectus, including a preliminary prospectus,
and of
each amendment and supplement (in each case, including all exhibits),
in
conformity with the requirements of the Securities Act, and such
other
documents as such Shareholder may reasonably request in order to
facilitate the disposition of Registrable Securities owned by such
Shareholder;
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3.1.4
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use
its commercially reasonable efforts to register and qualify the
Registrable Securities under securities laws of such jurisdictions
or
states in the United States as shall be reasonably necessary to facilitate
an orderly distribution of the Registrable Securities; provided,
however,
that China-Biotics shall not be required in connection therewith
or as a
condition thereto to qualify to do business in any such jurisdiction
in
which, but for the requirements of this Section 3, it would not otherwise
be obligated to be so qualified;
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3.1.5
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enter
into such agreements (including an underwriting agreement, if applicable,
containing customary terms) and take such other actions in connection
therewith that may be reasonably required in order to expedite or
facilitate a disposition of the Registrable
Securities;
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3.1.6
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use
its commercially reasonable efforts to cause all such securities
covered
by such registration statement to be listed or quoted (as the case
may be)
on any U.S. securities exchange or automated quotation system on
which the
China-Biotics Common Shares are then listed or quoted or proposed
to be
listed or quoted;
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2
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3.1.7
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use
its commercially reasonable efforts to furnish to each Shareholder
and to
each underwriter, if any, a signed counterpart of: (i) an opinion
of
counsel for China-Biotics addressed to such Shareholder and to each
underwriter on which opinion both such Shareholder and each underwriter
are entitled to rely and (ii) a “comfort” letter signed by the independent
public accountants who have certified China-Biotics’ financial statements
included in such registration statement, each in customary form and
covering such matters of the type customarily covered by opinions
or
comfort letters, as the case may be. In this connection, China-Biotics
will use its commercially reasonable efforts to have such comfort
letters
addressed to each Shareholder holding Registrable Securities included
in
such registration statement;
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3.1.8
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upon
reasonable notice and during normal business hours, make available
for
inspection by any seller of Registrable Securities, any underwriter
participating in any disposition pursuant to such registration statement
and any attorney, accountant or other agent retained by any such
seller or
underwriter (but not more than one firm of counsel to each of such
sellers
and underwriters) all financial and other records, pertinent corporate
documents and properties of China-Biotics, in each case, reasonably
required to conduct due diligence or otherwise in connection with
an
underwritten offering, and use its commercially reasonable efforts
to
cause China-Biotics’ officers, directors, employees and independent
accountants to supply all information reasonably requested by any
such
seller, underwriter, attorney, accountant or agent in connection
with such
registration statement; provided, however, that information that
China-Biotics advises any such person is confidential shall not be
disclosed unless such person signs a confidentiality agreement reasonably
satisfactory to China-Biotics;
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3.1.9
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permit
any Shareholder which, in its reasonable judgment, might be deemed
to be
an underwriter or a controlling person of China-Biotics, to participate
in
the preparation of such registration statement and to require the
insertion therein of materials, furnished to China-Biotics in writing,
which in the reasonable judgment of such Shareholder and its counsel
should be included and which are acceptable to
China-Biotics;
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3.1.10
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notify
each Shareholder, at any time when a prospectus relating thereto
is
required to be delivered under the Securities Act, upon occurrence
of any
event as a result of which, or upon China-Biotics becoming otherwise
aware
that, the prospectus included in such registration statement, as
then in
effect, is not current or includes an untrue statement of a material
fact
or omits to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light
of
the circumstances then existing, and, if reasonably practical, prepare
a
supplement or amendment to the prospectus or any such document
incorporated therein so that thereafter the prospectus will be current
and
will not contain an untrue statement of material fact or omit to
state any
material fact necessary to make the statements therein not
misleading;
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3.1.11
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in
the event of the issuance of any stop order suspending the effectiveness
of any registration statement or of any order suspending or preventing
the
use of any prospectus or suspending the qualification of any Registrable
Securities for sale in any jurisdiction, promptly notify each Shareholder,
and use its commercially reasonable efforts promptly to obtain the
withdrawal of any such order; and
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3.1.12
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otherwise
use its commercially reasonable efforts to comply with all applicable
rules and regulations of the SEC with respect to any registration
statement filed pursuant to this Agreement.
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3.2
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From
and after the date of this Agreement until the termination of this
Agreement, China-Biotics shall not, without the prior written consent
of
the Shareholders, enter into any agreement with any holder or prospective
holder of any securities of the Company giving such holder or prospective
holder any registration rights, the terms of which are more favorable
than
the registration rights granted to the Shareholders hereunder without
also
giving the Shareholders such greater
rights.
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3
SECTION
4. Obligations of the Shareholders.
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4.1
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Each
Shareholder agrees that, upon receipt of any notice from China-Biotics
of
the happening of any event described in Section 3.1.10, such Shareholder
will forthwith discontinue disposition of such securities pursuant
to such
registration statement until such Shareholder's receipt of notice
regarding the availability of copies of the supplemental or amended
prospectus contemplated by Section 3.1.10, and, as so directed by
China-Biotics, such Shareholder will deliver to China-Biotics (at
China-Biotics' expense) all copies, other than permanent file copies
then
in such Shareholder's possession, of the prospectus covering such
securities covered by such registration statement current at the
time of
receipt of such notice. In the event China-Biotics shall give any
such
notice, the period mentioned in Section 3.1.1 shall be extended by
the
number of days during the period from the date of the giving of such
notice pursuant to Section 3.1.10 and through the date when such
Shareholder shall have received the notice regarding the public
availability of the supplemented or amended prospectus contemplated
by
Section 3.1.10. Each Shareholder agrees that upon the happening of
an
event described in Section 3.1.11, China-Biotics may terminate the
offering and the registration as to unsold securities, including
Registrable Securities, or may amend the registration statement and
prospectus.
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4.2
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In
connection with each registration hereunder, each Shareholder will
promptly furnish to China-Biotics in writing such information with
respect
to itself and the proposed distribution by it as reasonably shall
be
necessary and shall be requested by China-Biotics in order to comply
with
federal and applicable state securities
laws.
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| 4.3 |
In
connection with each registration pursuant to Section 2 hereof involving
an underwritten public offering, China-Biotics and each Shareholder
agree
to enter into a written agreement with the managing underwriter in
such
form and containing such provisions as are customary in the securities
business for such an arrangement between such underwriter and companies
of
the China-Biotics' size and investment stature as may be reasonably
required to facilitate the disposition of the Registrable
Securities.
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4.4
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Each
Shareholder shall execute and deliver to China-Biotics, contemporaneously
with this Agreement, the completed Selling Stockholder Questionnaire
in
Exhibit B.
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SECTION
5. Indemnification and Contribution.
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5.1
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In
the event of a registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, China-Biotics will indemnify
and hold harmless, to the full extent permitted by law, each Shareholder
with respect to any registration, qualification, listing or compliance
effected pursuant to this Agreement against any losses, claims, damages,
liabilities and expenses, joint or several, to which such Shareholder
may
become subject under the Securities Act, the Securities Exchange
Act of
1934, as amended (the “Exchange Act”), or other federal and state laws or
otherwise, insofar as such losses, claims, damages or liabilities
(or
actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained
in
any registration statement under which such Registrable Securities
were
registered under the Securities Act pursuant to this Agreement, any
preliminary prospectus or final prospectus contained therein, or
any
amendment or supplement thereof, or arise out of or are based upon
the
omission or alleged omission to state therein 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, and
will pay
or reimburse eachShareholder for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any
such
loss, claim, damage, liability or action; provided, however, that
China-Biotics (i) will not be liable in any such case if and to the
extent
that (A) any such loss, claim, damage liability or expense arises
out of
or is based upon an untrue statement or alleged untrue statement
or
omission or alleged omission so made in conformity with information
furnished by any Shareholder or any other shareholder holding Registrable
Securities for use in such registration statement, prospectus, amendment
or supplement, or (B) in respect to such untrue statement or alleged
untrue statement or omission or alleged omission with respect to
which
such loss, claim, damage, liability or expense directly relates,
the final
prospectus for such registration statement corrected in all material
respects such untrue statement or alleged untrue statement or omission
or
alleged omission and notice regarding the public availability of
such
final prospectus was sent or given to or on behalf of any Shareholder
(or
otherwise delivered in accordance with applicable law or regulation)
at or
prior to the confirmation of the sale of Registrable Securities of
such
Shareholder, and (ii) will not be liable for amounts paid in settlement
of
any such loss, claim, damage, liability, expense or action if such
settlement is effected without the consent of China-Biotics, such
consent
not to be unreasonably withheld or
delayed.
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4
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5.2
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In
the event of a registration of any Registrable Securities under the
Securities Act pursuant to this Agreement, each Shareholder will
indemnify
and hold harmless China-Biotics, each person, if any, who controls
China-Biotics, any underwriter retained by China-Biotics and their
respective directors, officers, employees, advisors, agents and affiliates
against all losses, claims, damages, liabilities and expenses, joint
or
several, to which China-Biotics or such other person may become subject
under the Securities Act, the Exchange Act or other federal or state
laws
or otherwise, but only insofar as such losses, claims, damages or
liabilities (or actions in respect thereof), arise out of or are
based
upon an untrue statement or alleged untrue statement or omission
or
alleged omission to state therein a material fact required to be
stated
therein or necessary to make the statements therein not misleading,
made
in reliance upon and in conformity with information pertaining to
such
Shareholder, furnished to China-Biotics by such Shareholder for use
in
such registration statement under which such Registrable Securities
were
registered under the Securities Act pursuant to this Agreement, or
in any
preliminary prospectus or final prospectus contained therein, or
any
amendment or supplement thereof, and will pay or reimburse China-Biotics
and each such other person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any
such
loss, claim, damage, liability or action; provided, however, that
(i) the
liability of such Shareholder hereunder shall be limited to the greater
of
(a) the proportion of any such loss, claim, damage, liability or
expense
which is equal to the proportion that the public offering price of
the
shares of Registrable Securities sold by such Shareholder under such
registration statement bears to the total public offering price of
all
securities sold thereunder and (b) the amount of gross proceeds received
by such Shareholder in the offering giving rise to such liability,
and
(ii) such Shareholder shall not be liable for amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement
is
effected without the consent of such Shareholder, such consent not
to be
unreasonably withheld or delayed.
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5.3
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Promptly
after receipt by an indemnified party hereunder of written notice
of any
claim or the commencement of any action or proceeding, such indemnified
party shall, if a claim in respect thereof is to be made against
the
indemnifying party hereunder, notify the indemnifying party in writing
thereof, but the failure to so notify the indemnifying party shall
not
relieve it from any liability which it may have to such indemnified
party
other than under this Section 5 and shall only relieve it from any
liability which it may have to such indemnified party under this
Section 5
if and to the extent the indemnifying party is materially prejudiced
by
such omission. In case any such action shall be brought against any
indemnified party and the indemnified party shall notify the indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate in and, to the extent it shall wish, to assume
and
undertake the defense thereof with counsel reasonably satisfactory
to such
indemnified party, and, after notice from the indemnifying party
to such
indemnified party of its election so to assume and undertake the
defense
thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 5 for any legal or other professional expenses
subsequently incurred by such indemnified party in connection with
the
defense thereof other than reasonable costs of investigation and
of
liaison with counsel so selected; provided, however, that if the
defendants in any such action include both the indemnified party
and the
indemnifying party, and the indemnified party shall have been advised
by
counsel in writing that there are reasonable defenses available to
it
which are different from or additional to those available to the
indemnifying party, the indemnified party shall have the right to
select a
separate counsel and to assume such legal defenses and otherwise
to
participate in the defense of such action, with the reasonable fees
and
expenses of such separate counsel and other expenses related to such
participation to be reimbursed by the indemnifying party; provided,
further, that in no event shall the indemnifying party be responsible
for
the fees and expenses of more than one such separate counsel. No
indemnifying party, in the defense of any such claim or litigation
against
an indemnified party, shall consent to entry of any judgment or enter
into
any settlement which does not include as an unconditional term thereof
the
giving by the claimant or plaintiff to such indemnified party of
a release
from all liability in respect of such claim or litigation, unless
such
indemnified party shall otherwise consent in writing, which consent
shall
not be unreasonably withheld or delayed. An indemnifying party who
is not
entitled to, or elects not to, assume the defense of a claim shall
not be
obligated to pay the fees and expenses of more than one counsel for
all
parties indemnified by such indemnifying party with respect to such
claim,
except as expressly provided above.
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5
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5.4
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If
the indemnification provided for in this Section 5 is for any reason
held
by a court of competent jurisdiction to be unavailable to an indemnified
party in respect of any claims referred to therein, then the indemnifying
party, in lieu of indemnifying such indemnified party thereunder,
shall
contribute to the amount paid or payable by such indemnified party
as a
result of such claims (i) in such proportion as is appropriate to
reflect
the relative benefits received by the indemnifying party and the
indemnified party, or (ii) if the allocation provided by clause (i)
above
is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i)
above
but also the relative fault of the indemnifying party and the indemnified
party in connection with the action or inaction which resulted in
such
claims, as well as any other relevant equitable considerations. In
connection with any registration of China-Biotics' securities, the
relative benefits received by the indemnifying party and the indemnified
party shall be deemed to be in the same respective proportions that
the
net proceeds from the offering (before deducting expenses) received
by the
indemnifying party and the indemnified party, in each case as set
forth in
the table on the cover page of the applicable prospectus, bear to
the
aggregate public offering price of the securities so offered. The
relative
fault of the indemnifying party and the indemnified 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 the
indemnifying party or the indemnified party and the parties' relative
intent, knowledge, access to information and opportunity to correct
or
prevent such statement or omission.
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SECTION
6. Rule 144 Reporting.
China-Biotics
agrees that it will:
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6.1
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make
and keep public information available, as those terms are understood
and
defined in Rule 144 under the Securities
Act;
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6.2
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use
its commercially reasonable efforts to file with the SEC in a timely
manner all reports and other documents required by the SEC under
the
Securities Act and the Exchange Act (subject to any applicable
extensions);
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6.3
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furnish
to each Shareholder and to the securities transfer agent for
China-Biotics, promptly upon request, and in any event within 5 business
days after each request, an opinion letter of counsel to China-Biotics
in
customary form to permit registration of a transfer of any Registrable
Securities; provided that such Shareholder shall have provided to
China-Biotics and its counsel any requested supporting documentation;
and
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6.4
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furnish
to each Shareholder promptly, upon request, a written statement by
China-Biotics as to its compliance with the reporting requirements
of such
Rule 144 and of the Securities Act and the Exchange Act, a copy of
the
most recent annual or quarterly report of China-Biotics, and such
other
reports and documents so filed by China-Biotics as such Shareholder
may
reasonably request in availing itself of any rule or regulation of
the
Commission allowing such Shareholder to sell any Registrable Securities
without registration.
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6
SECTION
7. General.
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7.1
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Construction.
This Agreement and the rights, duties, and obligations of the parties
to
this Agreement will be governed by and construed in accordance with
the
laws of the State of Delaware, without regard to any conflict of
laws rule
or principle that might refer the governance or the construction
of this
Agreement to the laws of another jurisdiction, and in accordance
with the
federal securities laws. This Agreement will at all times be construed
as
a whole, according to its fair meaning, and not strictly for or against
any party. The headings of the sections contained in this Agreement
are
for reference purposes only and will not in any way affect the meaning,
interpretation, or enforceability of any section, subsection, term,
or
provision of this Agreement. All personal pronouns used herein will
include the other genders whether used in the masculine, feminine,
or
neuter gender and the singular will include the plural whenever and
as
often as may be appropriate. This Agreement shall be binding upon
the
parties and their successors and permitted
assigns.
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7.2
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Entire
Agreement. This Agreement, that certain Securities Exchange Agreement
(“Exchange Agreement”) and Lockup Agreement (“Lockup Agreement”), each
dated the date hereof and entered into by the parties hereto and
the other
parties listed therein, together constitute the entire agreement
of the
parties regarding the Registrable Securities and supersede all prior
written or oral agreements, contemporaneous oral agreements,
understandings and negotiations between the parties with respect
to the
Registrable Securities.
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7.3
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Amendments
and Waivers; Assignment. This Agreement may not be modified, amended
or
waived except by written document specifically identifying this Agreement
and signed by the parties. The rights of the Shareholders hereunder
to
have China-Biotics register the Registrable Securities may be assigned
by
such Shareholder to any person or entity which is an intended or
permitted
transferee under the provisions of the Securities Exchange Agreement
and
the Lockup Agreement (if applicable), provided that such transferee
shall
execute and deliver to China-Biotics a counterpart of this Agreement
and
shall agree to become subject to the terms
hereof.
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7.4
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Notices.
All notices, requests, demands or other communications hereunder
shall be
in writing and shall be deemed to have been duly given, (a) if delivered
in person or by courier, on the date of delivery, (b) if delivered
by
telegraph, telex, or facsimile transmission on the date of transmission,
or (c) if by certified or registered mail, postage prepaid, three
(3) days
after being mailed. All communications shall be sent to the parties
at the
address specified or the facsimile number given, and to the attention
of
the person named, set out underneath the signature of each party
on the
signature pages hereto.
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7.5
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Remedies,
Waivers. No failure or delay on the part of any party in the exercise
of
any power, right or privilege hereunder shall operate as a waiver
thereof,
nor shall any single or partial exercise of any such power, right
or
privilege preclude other or further exercise thereof or of any other
right, power or privilege. Any waiver or consent shall be effective
only
in the specific instance and for the specific purpose for which it
was
given. The parties to this Agreement acknowledge and agree that the
breach
of any of the terms of this Agreement will cause irreparable injury
for
which an adequate remedy at law is not
available.
|
|
7.6
|
Severability.
Except as otherwise specifically provided in this Agreement, if any
provision of this Agreement is held to be illegal, invalid, or
unenforceable under present or future laws effective during the term
of
this Agreement, such provision will be fully severable. This Agreement
will be construed and enforced as if such illegal, invalid, or
unenforceable provision had never comprised a part of this Agreement,
and
the remaining provisions of this Agreement will remain in full force
and
effect and will not be affected by the illegal, invalid, or unenforceable
provision or by its severance from this Agreement. Furthermore, in
lieu of
each such illegal, invalid, or unenforceable provision, there will
be
added automatically, as a part of this Agreement, a provision as
similar
in terms to such illegal, invalid, or unenforceable provision as
may be
possible and be legal, valid and
enforceable.
|
|
7.7
|
[Intentionally
omitted]
|
|
7.8
|
Termination.
The provisions of this Agreement shall terminate and be of no further
effect on the earlier of (i) the mutual consent of the parties (ii)
the
second anniversary of this Agreement and (iii) the date that all
Shareholders cease to own or have rights to acquire Registrable
Securities.
|
7
|
7.9
|
Further
Assurances. Each party shall cooperate and take such action as may
be
reasonably requested by the other party in order to carry out the
provisions and purposes of this Agreement and the transactions
contemplated hereby.
|
|
7.10
|
Counterparts.
This Agreement may be executed in counterparts, each of which shall
be
deemed an original, but which together shall constitute one and the
same
instrument.
|
|
7.11
|
Authority
and Understanding. Each party warrants that such party has the full
power
and authority to enter into this Agreement and to grant the rights
granted
herein and be irrevocably bound by all terms, provisions, duties,
obligations, covenants, and agreements contained herein. Each party
represents and warrants to the other party that such party has read
and
fully understands the terms and provisions of this Agreement, has
had an
opportunity to review this Agreement with such party’s own legal counsel,
and that such party has executed this Agreement based upon the advice
of
legal counsel.
|
|
7.12
|
Registration
Rights of Other Shareholders. Nothing in this Agreement shall be
construed
to prohibit China-Biotics from extending registration rights substantially
similar to those created under this Agreement to all or any other
shareholders of China-Biotics, whether or not such shareholders are
party
to a registration rights agreement.
|
|
7.13
|
Right
to Terminate Offering. China-Biotics shall have the right, at all
times,
and in its sole discretion, to withdraw a registration statement
or to
terminate a registration prior to the effective date, without prior
notice
to or consultation with
Shareholder.
|
SECTION
8. DISPUTE RESOLUTION THROUGH BINDING ARBITRATION.
THE
PARTIES AGREE THAT ANY DISPUTE OR CONTROVERSY, REGARDLESS OF KIND OR CHARACTER,
ARISING BETWEEN ANY OF THE PARTIES TO THIS AGREEMENT ARISING OUT OF THIS
AGREEMENT, INCLUDING ANY DISPUTE OR CONTROVERSY INVOLVING THE FORMATION,
ARBITRABILITY, TERMS, OR CONSTRUCTION OF THIS AGREEMENT, WILL BE RESOLVED
THROUGH BINDING ARBITRATION. WITH RESPECT TO THE ARBITRATION OF ANY DISPUTE
OR
CONTROVERSY, EACH PARTY UNDERSTANDS THAT:
A. ARBITRATION
IS FINAL AND BINDING ON THE PARTIES;
B. EACH
PARTY IS WAIVING ITS RIGHT TO SEEK CERTAIN REMEDIES IN COURT,
INCLUDING
THE RIGHT TO A JURY TRIAL;
C. DISCOVERY
IN ARBITRATION IS DIFFERENT AND MORE LIMITED THAN DISCOVERY IN
LITIGATION;
D. AN
ARBITRATOR'S AWARD NEED NOT INCLUDE FACTUAL FINDINGS OR LEGAL REASONING, AND
ANY
PARTY'S RIGHT TO APPEAL OR TO SEEK MODIFICATION OF A RULING BY THE ARBITRATOR
IS
STRICTLY LIMITED.
EACH
PARTY TO THIS AGREEMENT AGREES TO SUBMIT SUCH DISPUTE OR CONTROVERSY TO
ARBITRATION BEFORE THE AMERICAN ARBITRATION ASSOCIATION (“AAA”) WITHIN FIVE (5)
BUSINESS DAYS AFTER RECEIVING A WRITTEN REQUEST TO DO SO FROM ANOTHER PARTY.
IF
ANY PARTY FAILS TO SUBMIT A DISPUTE OR CONTROVERSY TO ARBITRATION AS REQUESTED,
THEN THE REQUESTING PARTY MAY COMMENCE THE ARBITRATION PROCEEDING. THE FEDERAL
ARBITRATION ACT WILL GOVERN THE PROCEEDING AND ALL ISSUES RAISED BY THIS
AGREEMENT TO ARBITRATE. EACH PARTY TO THIS AGREEMENT WILL BE BOUND BY THE
DETERMINATION OF ANY ARBITRATOR OR ARBITRATION PANEL EMPANELED BY THE AAA TO
ADJUDICATE THE DISPUTE. SUCH ARBITRATION SHALL BE HELD IN DALLAS, DALLAS COUNTY,
TEXAS, WITHIN THE UNITED STATES EXCEPT AS MAY BE OTHERWISE REQUIRED BY STATUTORY
LAW OR ANY RULE OR REGULATION OF ANY AGENCY. JUDGMENT ON ANY ARBITRATION AWARD
MAY BE ENTERED IN ANY COURT OF COMPETENT JURISDICTION. ANY
PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR EXPEDITED
PROCEEDING, TO COMPEL ARBITRATION OF ANY SUCH DISPUTE OR CONTROVERSY IN A COURT
OF COMPETENT JURISDICTION AND, FURTHER, MAY SEEK PROVISIONAL OR ANCILLARY
REMEDIES, INCLUDING TEMPORARY OR INJUNCTIVE RELIEF IN CONNECTION WITH SUCH
DISPUTE OR CONTROVERSY IN A COURT OF COMPETENT JURISDICTION, PROVIDED THAT
THE
DISPUTE OR CONTROVERSY IS ULTIMATELY RESOLVED THROUGH BINDING ARBITRATION
CONDUCTED IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF THIS
SECTION.
IF ANY PARTY INSTITUTES LEGAL PROCEEDINGS IN AN EFFORT TO RESIST ARBITRATION
AND
IS UNSUCCESSFUL IN DOING SO, THE PREVAILING PARTY IS ENTITLED TO RECOVER, FROM
THE LOSING PARTY, ITS LEGAL FEES AND OUT-OF-POCKET EXPENSES INCURRED IN
CONNECTION WITH THE DEFENSE OF SUCH LEGAL PROCEEDINGS.
8
IN
WITNESS HEREOF, the parties hereto have duly executed this Agreement to take
effect on the date out above.
THIS AGREEMENT CONTAINS A PREDISPUTE ARBITRATION AGREEMENT IN SECTION
8.
| CHINA-BIOTICS, INC. | |||
| /s/ Song Jinan | |||
|
Name:
SONG JINAN
Title:
Chief Executive Officer and President
|
|||
| Name Title More Title |
| COMPANY SHAREHOLDERS: | |||
| Chinamerica Fund, L.P. | Chinamerica Sino-biotics Acquisition, LLC | ||
|
By:
Chinamerica Partners, LP
Its
General Partner
By:
Chinamerica Holdings, LLC
Its
General Partner
|
By:
Chinamerica Holdings, LLC
Its
Manager
|
||
| /s/ Xxxx Xxxxxxx | /s/ Xxxx Xxxxxxx | ||
|
Name:
Xxxx Xxxxxxx
Title:
Manager
Address:
0000 Xx. Xxxxxxx Xxxxx
Xxxxxxxxxx,
Xxxxx 00000
Facsimile
No: (000)
000-0000
|
Name:
Xxxx Xxxxxxx
Title:
Manager
Address:
0000 Xx. Xxxxxxx Xxxxx
Xxxxxxxxxx,
Xxxxx 00000
Facsimile
No: (000)
000-0000
|
| Xxxx Investments LLC | Halter/Xxxx USX China Fund | ||
| Xxxx Asset Management, LLC, Manager | |||
| /s/ Xxxxxxx X. Xxxxx | /s/ Xxxxxxx Xxxx | ||
|
Name:
Xxxxxxx X. Xxxxx
Title:
Member
Address:5100
Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Facsimile
No: 000-000-0000
|
Name:
Xxxxxxx Xxxx
Title:
Managing Member
Address:
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx,
XX 00000
Facsimile
No:
000-000-0000
|
| BFS US Special Opportunities Trust PLC | Renaissance US Growth Investment Trust PLC | ||
| /s/ Xxxxxxx Xxxxxxxxx | /s/ Xxxxxxx Xxxxxxxxx | ||
|
Name:
Xxxxxxx Xxxxxxxxx
Title: President Address:
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000
Facsimile
No: 000-000-0000
|
Name:
Xxxxxxx
Xxxxxxxxx
Title:
President
Address:
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000
Facsimile
No: 000-000-0000
|
| Xxxx Xxxxxx | Charming Leader Group Limited | ||
| /s/ Xxxx Xxxxxx | /s/ XXX Xxxx Xxxxx, Xxxxxxxxx | ||
|
Address:1298
Xxxxxxxx Xxxxxx, Xxxxx X
XxXxxxx,
XX 00000
Phone/Facsimile
No: 000-000-0000
|
Name:
XXX Xxxx Xxxxx, Xxxxxxxxx
Title:
Director
Address:
20F., Xxxxxxx Xxxxxxxx Xxxxxxxx, 0-00 Xxxxxxx Xxxxxx, Xxxx
Xxxx
Facsimile
No: 000-0000-0000
|
| Po Ka Xxxx Xxxxxxx | Master Talent Group Ltd. | ||
| /s/ Po Ka Xxxx Xxxxxxx | /s/ Tsui Xxx Xxxx, May | ||
|
Address:
Xxxx X, 00/X, Xxxxx 0, Xxxx Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxx
Telephone
No.: 000-0000 0000
Facsimile
No.: 000-0000 0000
|
Name:
Tsui Xxx Xxxx, May
Title:
Director
Address:
00/X, Xxxxxx Xxxxx, 000-000 Xxxxxxxxxx Xxxx, Xxx Xxxx, Xxxx
Xxxx
Telephone
No.: 000-0000 0000
Fax
No.: 000-0000 0000
Attention:
Xx. Xxxx Xxx Xxxx, May
|
| Bright Boom Group Ltd. | Fascinating Gain Investments | ||
| /s/ Tung Fai | /s/ XXX Xxxx Xxxxx, Xxxxxxxxx | ||
|
Name:
Tung Fai
Title:
Director
Address:
Xxxx 0000, Xxxxxxxxx Xxxxx, Xxxxxxxxxx Xxxxx, 0 Xxxxxxx Xxxx, Xxxxxxx,
Xxxx Xxxx
Telephone
No.: 000-0000 0000
Facsimile
No.: 852-3106 3822
Attention:
Xx. Xxxx Fai
|
Name:
Xxx Xxxx Xxxxx, Xxxxxxxxx
Title:
Director
Address:
00/X, Xxxxxxx Xxxxxxxx Xxxxxxxx, 0-00 Xxxxxxx Xxxxxx, Xxxx
Xxxx
Telephone
No.: 000-0000 0000
Facsimile
No.: 000-0000 0000
Attention:
Xx. Xxxxxxxxx Tai
|
| Sharpsville Investments Limited | Yui Ying Fai | ||
| /s/ Xxx Xxx Xxxx, Xxxx | /s/ Yui Ying Fai | ||
|
Name:
Xxx Xxx Xxxx, Xxxx
Title:
Director
Address:
00/X, Xxxxxx Xxxxx, 000-000 Xxxxxxxxxx Xxxx, Xxx Xxxx, Xxxx
Xxxx
Telephone
No.: 000-0000 0000
Facsimile
No.: 000-0000 0000
Attention:
Xx. Xxx Xxx Xxxx, Xxxx
|
Address:
00X, Xxxxxxx Xxxx, Xxxxxxxxx Xxx, Xxxxxx, Xxxx Xxxx
Telephone
No.: 000-0000 0000
Facsimile
No.: 852-2907 9911
|
EXHIBIT
A
Outstanding
Registrable Securities
|
Shareholder
|
Number
|
|||
|
Chinamerica
Fund, L.P.
|
1,147,585
|
|||
|
Chinamerica
Sino-biotics Acquisitions LLC
|
461,255
|
|||
|
Xxxx
Investments LLC
|
855,240
|
|||
|
Halter/Xxxx
USX China Fund
|
36,900
|
|||
|
Xxxx
Xxxxxx
|
55,351
|
|||
|
BFS
US Special Opportunities Trust PLC
|
92,251
|
|||
|
Renaissance
US Growth Investment Trust PLC
|
92,251
|
|||
|
Po
Ka Xxxx Xxxxxxx
|
221,000
|
|||
|
Master
Talent Group Ltd.
|
221,000
|
|||
|
Bright
Boom Group Ltd.
|
221,000
|
|||
|
Charming
Leader Group Limited
|
734,850
|
|||
|
Fascinating
Gain Investments
|
734,850
|
|||
|
Sharpsville
Investments Limited
|
500,650
|
|||
|
Xxx
Xxxx Fai
|
290,650
|
|||
|
Total
|
5,664,833
|
|||
