SYNUTRA INTERNATIONAL, INC. REGISTRATION RIGHTS AGREEMENT
Exhibit
4.3
This
Registration Rights Agreement (the “Agreement”)
is
made as of April 19, 2007, by and between SYNUTRA INTERNATIONAL, INC., a
Delaware corporation (the “Company”)
and
ABN AMRO BANK N.V., HONG KONG BRANCH (the “Initial
Holder”)
in
connection with the issuance of warrants to purchase shares of common stock,
par
value US$0.0001 per share (the “Common
Stock”),
of
the Company (each individually, a “Warrant”,
and
collectively, the “Warrants”)
pursuant to the Warrant Agreement dated as of the date hereof (the “Warrant
Agreement”) among the Company, the Bank of New York, as warrant agent and the
Initial Holder.
WHEREAS,
the Company proposes to issue Warrants to purchase shares of Common Stock in
order to induce ABN AMRO Bank N.V., Hong Kong Branch to enter into the Loan
Agreement to dated as of the date hereof among the Company, Xxxxx Xxxxx, Xxxxxxx
Xxxx and ABN AMRO Bank N.V., Hong Kong Branch as Lender and Collateral
Agent.
WHEREAS,
the Company and the Initial Holder desire to document the terms under which
the
Initial Holder can participate in or demand the registration of the Common
Stock
issued pursuant to the exercise of Warrants.
NOW,
THEREFORE, in consideration of the mutual promises and covenants hereinafter
set
forth, all parties hereto agree as follows:
ARTICLE
1
CERTAIN
DEFINITIONS
As
used
in this Agreement, the following terms shall have the following respective
meanings:
“Commission”
shall
mean the United States Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
“Exchange
Act”
shall
mean the United States Securities Exchange Act of 1934, as amended, or any
similar Federal rule or statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
“Holder”
means
the Initial Holder, or any person holding Registrable Securities or Warrants
to
whom the rights under this Agreement have been transferred in accordance with
Section 5.10 hereof.
“Initial
Holder”
has
the
meaning assigned to such term in the Recitals.
“Initiating
Holders”
means
any Holder or Holders who, in the aggregate hold not less than 30% of the
Registrable Securities, assuming for the purpose of the calculation of this
percentage at any relevant time of determination, the exercise of all
Warrants.
“Registrable
Securities” means (i) the Warrant Shares and (ii) any Common Stock of the
Company issued or issuable in respect of the foregoing upon any exercise, stock
split, stock dividend, recapitalization, or similar event; provided, however,
that securities shall only be treated as Registrable Securities if and so long
as (i) they have not been registered or sold to or through a broker or dealer
or
underwriter in a public distribution or a public securities transaction and
(ii)
the registration rights with respect to such securities have not terminated
pursuant to Section 5.11.
The
terms
“register,”
“registered”
and
“registration”
refer
to a registration effected by preparing and filing a registration statement
in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such registration statement.
“Registration
Expenses”
shall
mean (i) all expenses, except as otherwise stated below, incurred by the Company
in complying with Sections 5.01, 5.02 and 5.03 hereof, 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 accountants’ fees and expenses including the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company which shall be paid in
any
event by the Company) and (ii) all reasonable fees and expenses incurred by
one
joint special counsel for the Holders (chosen by Holders of a majority of the
Registrable Securities included in the relevant registration) exercising
registration rights under Section 5.01, Section 5.02 or Section
5.03.
“Restricted
Securities”
shall
mean the securities of the Company required to bear the legends set forth in
Article 3 hereof.
“Securities
Act”
shall
mean the United States Securities Act of 1933, as amended, or any similar
Federal rule or statute and the rules and regulations of the Commission
thereunder, all as the same shall be in effect from time to time.
“Selling
Expenses”
shall
mean all underwriting discounts, selling commissions and stock transfer taxes
applicable to the securities registered by the Holders and, all fees and
disbursements of counsel for any Holder (other than the fees and expenses of
one
special counsel as set forth above in the definition of “Registration
Expenses”).
“Warrant
Shares”
shall
mean the Common Stock issued or issuable on exercise of Warrants.
“Warrant”
and
“Warrants”
have
the respective meanings assigned to such terms in the Recitals.
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ARTICLE
2
RESTRICTIONS
ON TRANSFERABILITY
The
Warrant Shares and any other securities of the Company issued in respect of
such
shares upon any stock split, stock dividend, recapitalization, merger, or
similar event, shall not be sold, assigned, transferred or pledged except upon
the conditions specified in this Agreement, which conditions are intended to
ensure compliance with the provisions of the Securities Act. Except to the
extent contemplated by Article 4 below, each Holder or transferee will cause
any
proposed purchaser, assignee, transferee, or pledgee of any such shares or
other
securities held by the Holder or transferee to agree to take and hold such
securities subject to the restrictions and upon the conditions specified in
this
Agreement, including without limitation the restrictions set forth in Article
4.
ARTICLE
3
RESTRICTIVE
LEGEND
Each
certificate representing Warrant Shares or any other securities of the Company
issued in respect of such shares upon any stock split, stock dividend,
recapitalization, merger, or similar event, shall (unless otherwise permitted
by
the provisions of Article 4 below) be stamped or otherwise imprinted with a
legend in substantially the following form (in addition to any legends required
by applicable state securities laws):
“THE
SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”),
AND
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF
A
REGISTRATION UNDER THE SECURITIES ACT UNLESS SUCH OFFER, SALE, PLEDGE OR
TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF
THE SECURITIES ACT.
THIS
RESTRICTED LEGEND SHALL CEASE TO BE IN EFFECT AND BE REMOVED WHEN THE SHARES
REPRESENTED HEREBY HAVE BECOME UNRESTRICTED SECURITIES IN ACCORDANCE WITH THE
PROVISIONS OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT.”
Each
Holder consents to the Company making a notation on its records and giving
instructions to any transfer agent of its capital stock in order to implement
the restrictions on transfer established in this Agreement. Subject to
compliance with Article 4, upon receipt of instructions from a Holder in
connection with a transfer pursuant to Rule 144 under the Securities Act,
Regulation S under the Securities Act or other exemption from registration
under
the Securities Act that results in such securities becoming unrestricted
securities, the Company shall instruct the transfer agent to remove this
legend.
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ARTICLE
4
NOTICE
OF PROPOSED TRANSFERS
The
Holder of each certificate representing Restricted Securities by acceptance
thereof agrees to comply in all respects with the provisions of this Article
4.
No sale, assignment, transfer or pledge of Restricted Securities shall be made
by any Holder thereof to any person unless such person shall agree in writing
to
be bound by the limitations of this Article 4; provided that this requirement
shall only apply to the extent such Restricted Securities shall continue to
be
Restricted Securities after such sale, assignment, transfer or pledge. Prior
to
any such proposed sale, assignment, transfer or pledge of any Restricted
Securities the Holder thereof shall give written notice to the Company of such
Holder’s intention to effect such transfer, sale, assignment or pledge. Each
such notice shall, describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and, if reasonably
requested by the Company, the Holder shall also provide, at such Holder’s
expense, a written opinion addressed to the Company of legal counsel who shall
be, and whose legal opinion shall be, reasonably satisfactory to the Company,
to
the effect that the proposed transfer of the Restricted Securities may be
effected without registration under the Securities Act, whereupon the Holder
of
such Restricted Securities shall be entitled to transfer such Restricted
Securities in accordance with the terms of the notice delivered by the Holder
to
the Company; provided, however, that the Company shall not request an opinion
of
counsel with respect to (i) a transfer not involving a change in beneficial
ownership, (ii) a transaction involving the transfer or distribution without
consideration of Restricted Securities by the Holder to its constituent partners
(or former partners) or members (or former members) or stockholders, or
affiliated partnerships or funds managed by it or any of its respective
directors, officer or partners, or to its affiliates (including branches) or
(iii) a transaction involving the transfer without consideration of Restricted
Securities by an individual Holder during such Holder’s lifetime by way of bona
fide gift or on death by will or intestacy. Each certificate evidencing the
Restricted Securities transferred as above provided shall bear, except if such
transfer is made pursuant to Rule 144 under the Securities Act, the appropriate
restrictive legend set forth in Article 3 above, except that such certificate
shall not bear such restrictive legend if upon the delivery to the Company
of a
written opinion of counsel for such Holder reasonably satisfactory to the
Company and counsel for the Company such legend is not required in order to
ensure compliance with any provision of the Securities Act.
ARTICLE
5
REGISTRATION
Section
5.01. Piggyback.
(a) Notice
of Registration.
If at
any time or from time to time the Company shall determine to register any of
its
equity securities under the Securities Act for offering or sale, either for
its
own account or the account of a holder (other than pursuant to this Agreement)
or other holders, other than (i) a registration relating solely to employee
benefit plans, (ii) a registration relating solely to a Rule 145 transaction,
(iii) a registration on Form S 4 relating to shares to be issued in a merger
or
similar transaction approved by the Board of Directors, or (iv) a registration
in which the only equity security being registered is Common Stock issuable
upon
conversion of convertible debt securities which are also being registered,
the
Company will:
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(i) promptly
give to each Holder written notice thereof; and
(ii) include
in such registration (and any related qualifications including compliance with
state securities laws), and in any underwriting or placement involved therein,
all the Registrable Securities specified in a written request or requests by
any
Holder made within fifteen (15) days after the date of such written notice
described in clause (i) above is mailed or delivered by the
Company.
(b) Underwriting
or Placement.
If the
registration of which the Company gives notice is for a registered public
offering involving an underwriting or placement, the Company shall so advise
the
Holders as a part of the written notice given pursuant to Section 5.01(a)(i).
In
such event, the right of any Holder to registration pursuant to this Section
5.01 shall be conditioned upon such Holder’s participation in such underwriting
or placement and the inclusion of Registrable Securities in the underwriting
or
placement shall be limited to the extent provided herein.
All
Holders proposing to distribute their securities through such underwriting
or
placement shall (together with the Company and the other holders distributing
their securities through such underwriting or placement) enter into an
underwriting agreement or placement agreement in customary form with the
managing underwriter or placement agent selected by the Company for such
underwriting or placement.
If
any
Holder disapproves of the terms of any such underwriting or placement, such
person may elect to withdraw therefrom by written notice to the
Company.
(c) Right
to Terminate Registration.
The
Company shall have the right to terminate or withdraw any registration initiated
by it under this Section 5.01 prior to the effectiveness of such registration
whether or not any Holder has elected to include securities in such
registration.
Section
5.02. Requested
Registration.
(a) Request
for Registration.
In case
the Company shall (x) receive from Initiating Holders a written request that
the
Company effect any registration with respect to Registrable Securities and
(y)
for so long as the Initial Holder holds at least 25% of Registrable Securities
or Warrants originally issued pursuant to the Warrant Agreement, a written
consent to such request from the Initial Holder, the Company will:
(i) promptly
give written notice of the proposed registration to all other Holders;
and
(ii) as
soon
as practicable, use its best efforts to effect such registration and maintain
the effectiveness of such registration pursuant to Section 5.06(a) (including,
without limitation, appropriate qualification under applicable state securities
laws and appropriate compliance with applicable regulations issued under the
Securities Act and any other governmental requirements or regulations), as
requested by the Initiating Holders as part of:
(A) a
firm
commitment underwritten public offering with underwriters selected by the
Company and reasonably acceptable to the Initiating Holders;
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(B) a
best
efforts placement with a placement agent selected by the Company and reasonably
acceptable to the Initiating Holders; or
(C) a
direct
placement by such Holders,
as
would
permit or facilitate the sale and distribution of all or such portion of such
Registrable Securities as are specified in such request, together with all
or
such portion of the Registrable Securities of any Holder or Holders joining
in
such request by delivering a written notice to such effect to the Company within
fifteen (15) days after the date of such written notice from the
Company.
(iii) Notwithstanding
Section 5.02(a)(ii), the Company shall not be obligated to take any action
to
effect or complete any such registration pursuant to this Section
5.02:
(A) Prior
to
thirty (30) days after the effective date of the Company’s first registered
public offering of its Common Stock effected after the date of this
Agreement;
(B) If
the
resale of the Company’s securities to be covered by the required registration
statement could be registered on Form S-3 and the Company is then eligible
to
use Form S-3 (in which case, the provisions of Section 5.03 would
apply);
(C) Unless
the aggregate offering price of all Registrable Securities sought to be
registered by all Holders, before the deduction of underwriting discounts and
commissions, would exceed US$1,000,000;
(D) If
the
Company delivers notice to the Holders, within fifteen (15) days of any request
for registration, of its intent to file a registration statement for a public
offering within sixty (60) days (in which case, the provisions of Section 5.01
would apply);
(E) During
the period starting with the date of filing of, and ending on the date thirty
(30) days immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a registration
of
securities in a Rule 145 transaction or with respect to an employee benefit
plan); provided that the Company is actively employing in good faith all
reasonable efforts to cause such registration statement to become effective
and
the Company complied with the relevant provisions of Section 5.01 hereof;
(F) After
the
Company has effected two (2) registrations pursuant to this Section 5.02 or
within six (6) months of a registration and offering completed pursuant to
this
Section 5.02; or
(G) If
the
Company shall furnish to the Initiating Holders a certificate signed by an
executive officer of the Company stating that in his or her good faith judgment
it would be seriously detrimental to the Company for a registration statement
to
be filed in the near future, in which case, the Company’s obligation to use its
best efforts to register, qualify or comply under this Section 5.02(a) shall
be
deferred for a period not to exceed ninety (90) days from the date of receipt
of
the written request from the Initiating Holders; provided that the Company
may
not exercise this deferral right more than three times in any twelve (12) month
period or for more than a total of ninety (90) days.
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Subject
to the foregoing clauses (A) through (G), the Company shall file a registration
statement covering the Registrable Securities so requested to be registered
as
soon as reasonably practicable after receipt of the request or requests of
the
Initiating Holders.
(b) Underwriting
or Placement.
In the
event of a registration pursuant to this Section 5.02 involving an underwriting
or placement, the Company shall advise the Holders as part of the notice given
pursuant to Section 5.02(a)(i) that the right of any Holder to registration
pursuant to this Section 5.02 shall be conditioned upon such Holder’s
participation in the underwriting or placement arrangements required by this
Section 5.02, and the inclusion of such Holder’s Registrable Securities in the
underwriting or placement to the extent requested shall be limited to the extent
provided herein.
If
a
registration pursuant to this Section 5.02 involves an underwriting or
placement, the Company shall, together with all Holders proposing to distribute
their securities through such underwriting, enter into an underwriting agreement
or placement agreement in customary form with the managing underwriter or
placement agent selected by the Company and reasonably acceptable to a majority
in interest of the Initiating Holders who made the request for registration
under Section 5.02(a). If any Holder of Registrable Securities disapproves
of
the terms of the underwriting or placement, such Holder may elect to withdraw
therefrom by written notice to the Company.
Section
5.03. Shelf
Registration On Form S-3.
(a) Request
for Shelf Registration.
In case
the Company shall receive from Holders a written request that the Company file
a
shelf registration statement on Form S 3 (or any successor form to Form S 3)
for
a public offering of Registrable Securities the aggregate price to the public
of
which, net of underwriting discounts and commissions, would exceed US$250,000,
and the Company is a registrant entitled to use Form S 3 to register the
Registrable Securities for such an offering, the Company shall use its best
efforts to cause such Registrable Securities to be registered for the offering
on such form and to cause such Registrable Securities to be qualified in such
jurisdictions as such Holder or Holders may reasonably request; provided,
however, that the Company shall not be required to effect a registration
pursuant to this Section 5.03 if the Company has effected two (2) registrations
pursuant to this Section 5.03 within the previous twelve (12) months. If such
offer is to be an underwritten offer or placement, the underwriters or placement
agent shall be reasonably acceptable to the Company and a majority in interest
of the Holders. The Company shall inform the other Holders of the proposed
registration and offer them upon at least fifteen (15) days written notice
the
opportunity to participate. In the event the registration is proposed to be
part
of a firm commitment underwritten public offering or best efforts placement,
the
substantive provisions of Section 5.01(b) shall be applicable to each such
registration initiated under this Section 5.03.
(b) Notwithstanding
the foregoing, the Company shall not be obligated to take any action pursuant
to
this Section 5.03:
(i) During
the period starting with the date of filing of, and ending on the date thirty
(30) days immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a registration
of
securities in a Rule 145 transaction or with respect to an employee benefit
plan); provided
that the
Company is actively employing in good faith all reasonable efforts to cause
such
registration statement to become effective and the Company complied with the
provisions of Section 5.01 hereof with respect to such
registration.
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(ii) If
the
Company shall furnish to the Holders requesting such registration a certificate
signed by an executive officer of the Company stating that the Company intends
to file a registration statement, or that, in his or her good faith judgment,
it
would be seriously detrimental to the Company for a registration statement
to be
filed in the near future, in which case the Company’s obligation to use its best
efforts to file a registration statement shall be deferred for a period not
to
exceed ninety (90) days from the receipt of the request to file such
registration by such Holders; provided,
however,
that
the Company may not exercise this deferral right more than three times in any
twelve month period or for more than a total of ninety (90) days.
Section
5.04. Subsequent
Registration Rights.
(a) Without
the consent of any Holder of Registrable Securities hereunder, the Company
may
grant to any holder of securities of the Company registration rights with
priority of inclusion rights inferior to those granted hereunder.
(b) The
Company shall not enter into any agreement granting any holder or prospective
holder of any securities of the Company registration rights with priority of
inclusion rights superior to or pari passu with the rights granted the Holders
hereunder without the written consent of the Holders of at least sixty percent
(60%) of the Warrant Shares, assuming for the purpose of the calculation of
this
percentage at any relevant time of determination, the exercise of all
Warrants.
Section
5.05. Registration
Expenses.
The
Company shall bear all Registration Expenses and all other registration expenses
(other than Selling Expenses) of registrations under Sections 5.01, 5.02 and
5.03. All Selling Expenses relating to securities registered on behalf of the
Holders shall be borne by the Holders of such securities pro
rata
on the
basis of the number of shares so registered or, if the registration is closed
or
withdrawn, those shares proposed to be registered (after taking into account
any
exclusion pursuant to Section 5.01(b) or Section 5.02(b)).
Section
5.06. Registration
Procedures.
In the
case of each registration effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
such registration and as to the completion thereof. The Company shall, as
expeditiously as reasonably possible:
(a) Prepare
and file with the Commission a registration statement and such amendments and
supplements as may be necessary and use its best efforts to cause such
registration statement to become and remain effective until the distribution
described in the registration statement has been completed;
(b) Furnish
or make available to the Holders participating in such registration and, if
an
underwritten offering or placement, to the underwriters or placement agent
of
the securities being registered, such reasonable number of copies of the
registration statement, preliminary prospectus, final prospectus and such other
documents as such Holders and underwriters or placement agent may reasonably
request in order to facilitate the public offering of such securities.
8
(c) Use
its
best efforts to register and qualify the securities covered by such registration
statement under such other securities or state securities laws of such
jurisdictions in the United States as shall be reasonably requested by the
Holders; provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any relevant state or jurisdiction.
(d) Notify
each Holder of Registrable Securities covered by such registration statement
at
any time when a preliminary prospectus, “time of sale” prospectus or final
prospectus relating thereto is required to be delivered or make available under
the Securities Act of the happening of any event as a result of which the
prospectus (together with a “free writing prospectus”) included in or relating
to such registration statement, as then in effect, 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.
(e) Use
its
best efforts to furnish, on the date that such Registrable Securities are
delivered to the underwriters or placement agent for sale, if such securities
are being sold through underwriters or a placement agent, (i) an opinion, dated
as of such date, of the counsel representing the Company for the purposes of
such registration, in form and substance as is customarily given to underwriters
or a placement agent in an underwritten public offering or placement, addressed
to the underwriters or placement agent, if any, and (ii) one or more comfort
letters dated as of such date, from the independent certified public accountants
of the Company (or acquired entities), in form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering addressed to the underwriters or to placement
agents in a placement addressed to the placement agent.
(f) Provide
a
transfer agent and registrar for all Registrable Securities registered pursuant
hereunder and a CUSIP number for all such Registrable Securities, in each case
not later than the effective date of such registration.
(g) Cause
all
such Registrable Securities registered pursuant hereunder to be listed on each
securities exchange on which Common Stock issued by the Company is then
listed.
Section
5.07. Indemnification.
(a) The
Company will indemnify each Holder, each of its officers, directors, partners
and former partners, members and former members and each person controlling
such
Holder within the meaning of Section 15 of the Securities Act and any
underwriter or placement agent for such Holder, with respect to which
registration has been effected pursuant to this Agreement, against all expenses,
claims, losses, damages or liabilities (or actions in respect thereof),
including any of the foregoing incurred in settlement of any litigation,
commenced or threatened, arising out of or based on any untrue statement (or
alleged untrue statement) of a material fact contained in any registration
statement, prospectus, “free writing” prospectus, preliminary prospectus, “time
of sale” prospectus, final prospectus or other document, or any amendment or
supplement thereto, incident to any such registration, or based on any 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 in which they were made, not misleading, or any violation by
the
Company of the Securities Act, the Exchange Act, state securities laws or any
rule or regulation promulgated under such laws applicable to the Company in
connection with any such registration, and the Company will reimburse each
such
Holder, each of its officers, directors, partners and former partners, members
and former members, each person controlling such Holder within the meaning
of
Section 15 of the Securities Act, and any underwriter for such Holder for any
legal and any other expenses reasonably incurred, as such expenses are incurred,
in connection with investigating, preparing, defending or settling any such
claim, loss, damage, liability or action; provided that the Company will not
be
liable in any such case to the extent that any such claim, loss, damage,
liability or expense arises out of or is based on any untrue statement or
omission or alleged untrue statement or omission, made in such registration
statement, prospectus, “free writing” prospectus, preliminary prospectus, “time
of sale” prospectus, final prospectus or other document in reliance upon and in
conformity with written information furnished to the Company by an instrument
duly executed by such Holder or controlling person, and stated to be
specifically for use therein.
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(b) A
Holder
seeking indemnification shall give notice to the Company promptly after such
Holder has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Company to assume the defense of any such claim or any
litigation resulting therefrom; provided
that
counsel for the Company, who shall conduct the defense of such claim or
litigation, shall be approved by the Holders seeking indemnification (whose
approval shall not unreasonably be withheld or delayed), and the Holder may
participate in such defense at its expense; provided
further
that the
failure of any Holder to give notice as provided herein shall not relieve the
Company of its obligations under this Agreement except to the extent the failure
to give such notice is materially prejudicial to the Company’s ability to defend
such action; and provided
further,
that
the Company shall not assume the defense for matters as to which there is a
conflict of interest or there are separate and different defenses. The Company,
in the defense of any such claim or litigation, shall, except with the consent
of each Holder seeking indemnification (whose consent shall not be unreasonably
withheld or delayed), 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 Holder of a release from all liability in
respect to such claim or litigation.
(c) If
the
indemnification provided for in this Section 5.07 is held by a court of
competent jurisdiction to be unavailable to a Holder (other than pursuant to
its
terms) with respect to any loss, liability, claim, damage, or expense referred
to therein, then the Company, in lieu of indemnifying such Holder hereunder,
shall contribute to the amount paid or payable by such Holder as a result of
such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand and
of
such Holder on the other in connection with the statements or omissions that
resulted in such loss, liability, claim, damage, or expense as well as any
other
relevant equitable considerations; provided,
however,
that
the total amount paid or payable by a Holder pursuant to this Section 5.07(c)
shall be limited to an amount equal to the amount by which the aggregate
proceeds from the offering received by such Holder exceeds the amount paid
(including underwriters discounts and commission, if any) by such Holder in
connection with such registration. The relative fault of the Company and of
the
Holder 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 Company
or by the Holder and the parties’ relative intent, knowledge, access to
information, and opportunity to correct or prevent such statement or
omission.
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(d) Notwithstanding
the foregoing, to the extent that the provisions on indemnification and
contribution contained in the underwriting agreement or placement agreement
entered into in connection with the underwritten public offering or placement
are in conflict with the foregoing provisions relating to indemnification of
an
underwriter or placement agent, the provisions in the underwriting agreement
or
placement agreement shall control.
(e) The
obligations of the Company and Holders under this Section 5.07 shall survive
the
completion of any offering of Registrable Securities in a registration statement
and the termination of this Agreement.
Section
5.08. Information
By Holder.
The
Holders of Registrable Securities included in any registration shall furnish
to
the Company such information regarding such Holders, the Registrable Securities
held by them and the distribution proposed by such Holders as the Company may
request in writing and as shall be required by applicable law in connection
with
any registration referred to in this Agreement.
Section
5.09. Rule
144 Reporting.
With a
view to making available the benefits of certain rules and regulations of the
Commission which may at any time permit the sale of the Restricted Securities
to
the public without registration, the Company agrees to use its best efforts
to:
(a) At
all
times make and keep public information available, as those terms are understood
and defined in Rule 144 under the Securities Act;
(b) File
with
the Commission all reports and other documents required of the Company under
the
Securities Act and the Exchange Act; and
(c) So
long
as a Holder owns any Restricted Securities, to furnish to the Holder forthwith
upon request a written statement by the Company as to its compliance with the
reporting requirements of said Rule 144 (at any time after 90 days after the
effective date of the first registration statement filed by the Company for
an
offering of its securities to the general public), a copy of the most recent
annual or quarterly report of the Company, and such other reports and documents
of the Company and other information in the possession of or reasonably
obtainable by the Company as the Holder may reasonably request in availing
itself of any rule or regulation of the Commission allowing the Holder to sell
any such securities without registration.
Section
5.10. Transfer
of Registration Rights.
The
rights granted Holders under this Article 5 may be assigned to a transferee
or
assignee in connection with any transfer or assignment of Registrable Securities
or Warrants by the Holder; provided that: (i) such transfer is otherwise
effected in accordance with applicable securities laws and the terms of this
Agreement, (ii) such assignee or transferee acquires at least 50,000 shares
of
Registrable Securities or Warrants (as adjusted for stock splits, stock
dividends, stock combinations and the like) from the transferor, (iii) written
notice is promptly given to the Company and (iv) such assignee or transferee
agrees to be bound by the provisions of this Agreement. Notwithstanding the
foregoing, the rights to cause the Company to register securities may be
assigned without compliance with item (ii) above to any branch or affiliate
(as
such term is defined in Rule 405 of the Securities Act) of a Holder, provided
such transferee agrees as contemplated by clause (iv) above.
11
Section
5.11. Termination
Of Article 5 Registration Rights.
The
rights granted pursuant to Sections 5.02, 5.01 and 5.02 of this Agreement shall
terminate as to any Holder whenever such Holder is eligible to sell all of
such
Holder’s Registrable Securities in any single ninety (90) day period under Rule
144 under the Securities Act.
ARTICLE
6
FINANCIAL
INFORMATION RIGHTS
(a) If
the
Company ceases to be a reporting company under the Exchange Act, the Company
will provide the following reports to each Holder:
(i) As
soon
as practicable after the end of the fiscal year ended March 31, 2007 and each
fiscal year thereafter, financial statements of the Company, audited by an
internationally recognized public accounting firm and prepared in accordance
with United States generally accepted accounting principles (“US
GAAP”)
and
(ii) As
soon
as practicable after the end of each fiscal quarter, quarterly financial
statements of the Company, reviewed by an internationally recognized public
accounting firm and prepared in accordance with US GAAP.
(b) The
Company will keep true records and books of account in which full, true and
correct entries will be made of all dealings or transactions in relation to
its
business and affairs and such records and books shall be kept in accordance
with
US GAAP applied on a consistent basis.
(c) The
Company shall permit each Holder, at such Holder’s expense, to visit and inspect
the Company’s properties, to examine its books of account and record and to
discuss the Company’s affairs, finances and accounts with its officers, all at
such reasonable times as may be requested by such Holder.
ARTICLE
7
AGGREGATION
OF SHARES
All
shares of the Company’s Common Stock held by affiliated entities or persons
(including branches, stockholders, partners, former partners, members and former
members of an entity) shall be aggregated together for purposes of determining
the availability of any rights under this Agreement, provided,
that
upon request, the person asserting such affiliation will provide reasonable
evidence to the Company of such affiliation.
12
ARTICLE
8
AMENDMENT
Except
as
otherwise provided above, additional parties may be added to this Agreement,
any
provision of this Agreement may be amended or the observance thereof may be
waived (either generally or in a particular instance and either retroactively
or
prospectively), only with (x) the written consent of the Company and the Initial
Holder and (y) the written consent of the Holders of a majority of the
Registrable Securities, assuming for the purpose of this calculation at any
relevant time of determination, the exercise of all Warrants. Any amendment,
consent or waiver effected in accordance with Section 5.04 or Article 8, as
applicable, shall be binding upon each Holder of Registrable Securities at
the
time outstanding, each future holder of any of such securities, and the Company.
ARTICLE
9
GOVERNING
LAW
Section
9.01. Governing
Law.
(a) THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY
WITHIN SUCH STATE.
(b) ANY
LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN XXX XXXXXX
XX XXX XXXXX XX XXX XXXX SITTING IN THE BOROUGH OF MANHATTAN, NEW YORK CITY
OR
OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND
IN
RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH
PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER
DOCUMENT RELATED THERETO. EACH PARTY TO THIS AGREEMENT WAIVES PERSONAL SERVICE
OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER
MEANS
PERMITTED BY THE LAW OF SUCH STATE. THE COMPANY AGREES THAT A FINAL JUDGMENT
IN
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT SHALL BE CONCLUSIVE
AND BINDING UPON IT AND WILL BE GIVEN EFFECT IN ANY OTHER JURISDICTION TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW AND MAY BE ENFORCED IN ANY COURT
TO
THE JURISDICTION OF WHICH THE COMPANY IS OR MAY BE SUBJECT BY A SUIT UPON SUCH
JUDGMENT; PROVIDED THAT SERVICE OF PROCESS IS EFFECTED UPON IT IN ONE OF THE
MANNERS SPECIFIED HEREIN OR AS OTHERWISE PERMITTED BY LAW.
13
Section
9.02. Waiver
of Right to Trial by Jury.
EACH
PARTY TO THIS AGREEMENT HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY
OF
ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT
OR
IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO OR ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND WHETHER FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY
HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO
THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH
ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE
WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section
9.03. New
York Process Agent.
Without
prejudice to any other mode of service allowed under any relevant laws, the
Company:
(a) irrevocably
appoints CT Corporation System, located at 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX
00000, as its agent for service of process in relation to any proceedings before
the courts of the State of New York sitting in the Borough of Manhattan, New
York City or of the United States for the Southern District of such State in
connection with this Agreement; and
(b) agrees
that failure by a process agent to notify the Company of the process will not
invalidate the proceedings concerned.
ARTICLE
10
ENTIRE
AGREEMENT, ETC.
This
Agreement constitutes the full and entire understanding and Agreement among
the
parties regarding the matters set forth herein. Any prior agreements,
understandings or representations with respect to the subject matter hereof
are
superseded by this Agreement and shall have no further force or effect. Except
as otherwise expressly provided herein, the provisions hereof shall inure to
the
benefit of, and be binding upon the successors, assigns, heirs, executors and
administrators of the parties hereto (including with respect to a successor
to
the Company that result from a recapitalization or a change of
domicile).
ARTICLE
11
DELAYS
OR OMISSIONS
No
delay
or omission to exercise any right, power or remedy accruing to any Holder upon
any breach or default of the Company under this Agreement shall impair any
such
right, power or remedy of such Holder, nor shall it be construed to be a waiver
of any such breach or default or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval
of
any kind or character on the part of any Holder of any breach or default under
this Agreement, or any waiver on the part of any Holder of any provisions or
conditions of this Agreement, must be made in writing and shall be effective
only to the extent specifically set forth in such writing. All remedies, either
under this Agreement or by law or otherwise afforded to any Holder, shall be
cumulative and not alternative.
14
ARTICLE
12
NOTICES,
TERMINATION, ETC.
Section
12.01. Notices.
All
notices and other communications required or permitted hereunder shall be in
writing and shall be mailed by registered or certified mail, postage prepaid,
or
otherwise delivered by facsimile transmission, by hand or by messenger,
addressed:
| (a) |
if
to the Company, to:
|
|
0000
Xxxxxxxx Xxxx., Xxxxx 000
Xxxxxxxxx,
Xxxxxxxx 00000
Xxxxxx
Xxxxxx
Attn:
Xxxxxx Xxxxx
Facsimile:
x0-000-000-0000
|
| (b) |
if
to the Initial Holder, to:
|
|
ABN
AMRO Bank N.V., Hong Kong Branch
38/F,
Xxxxxx Kong Center
2
Queen’s Road Central
Hong
Kong
Attn: Xxxxxxx
Xxx / Xxxxx Xxx / Xxxxxx Xxxx / Xxxxxxx Xxxxx / Xxxxxxxxx
Xxx
Facsimile: x00-0-0000-0000
/ x00-0-0000-0000 / x00-0-0000-0000
|
Each
such
notice or other communication shall for all purposes of this Agreement be
treated as effective or having been given when delivered if delivered
personally, if sent by facsimile, the first business day after the date of
confirmation that the facsimile has been successfully transmitted to the
facsimile number for the party notified, or, if sent by mail, at the earlier
of
its receipt or 72 hours after the same has been deposited in a regularly
maintained receptacle for the deposit of the United States mail, addressed
and
mailed as aforesaid.
Section
12.02. Severability.
In the
event one or more of the provisions of this Agreement should, for any reason,
be
held to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal
or
unenforceable provision had never been contained herein.
Section
12.03. Termination.
This
Agreement shall terminate on the fifth anniversary hereof.
15
ARTICLE
13
COUNTERPARTS
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but all of which together shall constitute one
instrument.
[Remainder
of Page Intentionally Left Blank]
16
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
|
By:
__________________________________
Name:
Title:
|
|
|
ABN
AMRO BANK N.V., HONG-KONG-BRANCH
|
|
|
By:
__________________________________
Name:
Title:
|
|
|
By:
__________________________________
Name:
Title:
|
17
