SUBSCRIPTION AGREEMENT
China BAK
Battery, Inc.
BAK
Industrial Park
Xx.0 XXX
Xxxxxx
Xxxxxxxx
Xxxx, Xxxxxxxx Xxxxxxxx
Xxxxxxxx,
XXX 000000
Gentlemen:
The
undersigned (the “Investor”) hereby confirms
its agreement with you as follows:
1. This
Subscription Agreement, including the Terms and Conditions For Purchase of Units
attached hereto as Annex
I (collectively, this “Agreement”), is made as of
the date set forth below between China BAK Battery, Inc., a Nevada corporation
(the “Company”), and
the Investor.
2. The
Company has authorized the sale and issuance to certain investors of up to an
aggregate of 5,790,000
units (the “Units”),
each consisting of (i) one share (the “Share,” collectively the
“Shares”) of its common
stock, par value $0.001 per share (the “Common Stock”) and (ii) one
warrant (the “Warrant,”
collectively the “Warrants”) to purchase 0.25
of a share of Common Stock (the fraction amount being the “Warrant Ratio”), subject to
adjustment by the Company’s Board of Directors, or a committee thereof, for a
purchase price of $3.55 per Unit (the “Purchase
Price”). The Shares issuable upon the exercise of the Warrants
are referred to herein as the “Warrant
Shares.” The Warrant Shares, together with the Shares and the
Warrants, are referred to herein as the “Securities.”
3. The
offering and sale of the Units (the “Offering”) are being made
pursuant to (1) an effective Registration Statement on Form S-3 (including the
Prospectus contained therein (the “Base Prospectus”), the “Registration Statement”)
filed by the Company with the Securities and Exchange Commission (the “Commission”), (2) if
applicable, certain “free writing prospectuses” (as that term is defined in Rule
405 under the Securities Act of 1933, as amended (the “Act”)), that have or will be
filed with the Commission and delivered to the Investor on or prior to the date
hereof and (3) a Prospectus Supplement (the “Prospectus Supplement” and
together with the Base Prospectus, the “Prospectus”) containing
certain supplemental information regarding the Units and terms of the offering
that will be filed with the Commission and delivered to the Investor (or made
available to the Investor by the filing by the Company of an electronic version
thereof with the Commission).
4. The
Company and the Investor agree that the Investor will purchase from the Company
and the Company will issue and sell to the Investor the number of Units set
forth below for the aggregate purchase price set forth below. The
Units shall be purchased pursuant to the Terms and Conditions for Purchase of
Units attached hereto as Annex I and
incorporated herein by this reference as if fully set forth
herein. The Investor acknowledges that the Offering is not being
underwritten by the placement agent (the “Placement Agent”) named in
the Prospectus Supplement and that there is no minimum offering
amount.
5. The
manner of settlement of the Shares included in the Units purchased by the
Investor shall be as follows:
Delivery
versus payment (“DVP”)
through DTC (i.e., the Company shall deliver Shares registered in the Investor’s
name and address as set forth below and released by the Transfer Agent to the
Investor through DTC at the Closing directly to the account(s) at Xxxxx and
Company, LLC (“Cowen”)
identified by the Investor and simultaneously therewith payment shall be made by
Cowen via wire transfer to the Company). NO LATER THAN ONE (1) BUSINESS DAY
AFTER THE EXECUTION OF THIS AGREEMENT BY THE INVESTOR AND THE COMPANY, THE
INVESTOR SHALL:
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(I)
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NOTIFY COWEN OF THE ACCOUNT OR
ACCOUNTS AT COWEN TO BE CREDITED WITH THE SHARES BEING PURCHASED BY SUCH
INVESTOR, AND
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(II)
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CONFIRM
THAT THE ACCOUNT OR ACCOUNTS AT COWEN TO BE CREDITED WITH THE SHARES BEING
PURCHASED BY THE INVESTOR HAVE A MINIMUM BALANCE EQUAL TO THE AGGREGATE
PURCHASE PRICE FOR THE UNITS BEING PURCHASED BY THE
INVESTOR.
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IT IS THE INVESTOR’S
RESPONSIBILITY TO (A) MAKE THE NECESSARY WIRE TRANSFER OR CONFIRM THE PROPER
ACCOUNT BALANCE IN A TIMELY MANNER AND (B) ARRANGE FOR SETTLEMENT BY WAY OF DVP
IN A TIMELY MANNER. IF THE INVESTOR DOES NOT DELIVER THE AGGREGATE
PURCHASE PRICE FOR THE UNITS OR DOES NOT MAKE PROPER ARRANGEMENTS FOR SETTLEMENT
IN A TIMELY MANNER, THE SHARES AND WARRANTS MAY NOT BE DELIVERED AT CLOSING TO
THE INVESTOR OR THE INVESTOR MAY BE EXCLUDED FROM THE CLOSING
ALTOGETHER.
6. The
executed Warrant shall be delivered in accordance with the terms
thereof.
7. The
Investor represents that it (a) is knowledgeable, sophisticated and experienced
in making, and is qualified to make decisions with respect to, investments in
shares presenting an investment decision like that involved in the purchase of
the Units, including investments in securities issued by the Company and
investments in comparable companies, (b) has answered all questions on the
Investor Questionnaire for use in preparation of the Prospectus Supplement and
the answers thereto are true and correct as of the date hereof and will be true
and correct as of the Closing Date and (c) in connection with its decision to
purchase the number of Units set forth on Annex I, has received
and is relying solely upon (i) the Disclosure Package and the documents
incorporated by reference therein and (ii) the Offering
Information.
8. The
Investor represents that (a) no action has been or will be taken in any
jurisdiction outside the United States by the Company or the Placement Agent
that would permit an offering of the Units, or possession or distribution of
offering materials in connection with the issue of the Units in any jurisdiction
outside the United States where action for that purpose is required, (b) if the
Investor is outside the United States, it will comply with all applicable laws
and regulations in each foreign jurisdiction in which it purchases, offers,
sells or delivers securities or has in its possession or distributes any
offering material, in all cases at its own expense and (c) the Placement Agent
is not authorized to make and has not made any representation, disclosure or use
of any information in connection with the issue, placement, purchase and sale of
the Units, except as set forth or incorporated by reference in the Base
Prospectus or the Prospectus Supplement.
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9. The
Investor represents that (a) the Investor has full right, power, authority and
capacity to enter into this Agreement and to consummate the transactions
contemplated hereby and has taken all necessary action to authorize the
execution, delivery and performance of this Agreement, and (b) this Agreement
constitutes a valid and binding obligation of the Investor enforceable against
the Investor in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ and contracting parties’ rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law) and except as to the enforceability of any rights to
indemnification or contribution that may be violative of the public policy
underlying any law, rule or regulation (including any federal or state
securities law, rule or regulation).
10. The
Investor represents that nothing in this Agreement, the Prospectus or any other
materials presented to the Investor in connection with the purchase and sale of
the Units constitutes legal, tax or investment advice. The Investor
has consulted such legal, tax and investment advisors as it, in its sole
discretion, has deemed necessary or appropriate in connection with its purchase
of Units.
11. The
Investor represents that since the date on which the Placement Agent first
contacted such Investor about the Offering, Investor has not engaged in any
purchases or sales of the securities of the Company (including, without
limitation, any Short Sales (as defined below) involving the Company’s
securities). Each Investor covenants that it will not engage in any
purchases or sales of the securities of the Company (including Short Sales)
prior to the time that the transactions contemplated by this Agreement are
publicly disclosed. Each Investor agrees that it will not use any of
the Units acquired pursuant to this Agreement to cover any short position in the
Common Stock if doing so would be in violation of applicable securities
laws. For purposes hereof, “Short Sales” include, without
limitation, all “short sales” as defined in Rule 200 promulgated under
Regulation SHO under the Exchange Act, whether or not against the box, and all
types of direct and indirect stock pledges, forward sales contracts, options,
puts, calls, short sales, swaps, “put equivalent positions” (as defined in Rule
16a-1(h) under the Exchange Act) and similar arrangements (including on a total
return basis), and sales and other transactions through non-US broker dealers or
foreign regulated brokers.
12. The
Investor represents that, except as set forth below, (a) it has had no position,
office or other material relationship within the past three years with the
Company or persons known to it to be affiliates of the Company, (b) it is not a
NASD member or an Associated Person (as such term is defined under the NASD
Membership and Registration Rules Section 1011) as of the Closing, and (c)
neither the Investor nor any group of Investors (as identified in a public
filing made with the Commission) of which the Investor is a part in connection
with the Offering of the Units, acquired, or obtained the right to acquire, 20%
or more of the Common Stock (or securities convertible into or exercisable for
Common Stock) or the voting power of the Company on a post-transaction
basis. Exceptions:
(If no exceptions, write “none.” If left blank, response will be deemed to be “none.”)
13. The
Investor represents that it has received (or otherwise had made available to it
by the filing by the Company of an electronic version thereof with the
Commission) the Base Prospectus, the documents incorporated by reference therein
and any free writing prospectus (collectively, the “Disclosure Package”), prior
to or in connection with the receipt of this Agreement. The Investor
acknowledges that, prior to the delivery of this Agreement to the Company, the
Investor will receive certain additional information regarding the Offering,
including pricing information (the “Offering Information”). Such
information may be provided to the Investor by any means permitted under the
Act, including in the Prospectus Supplement, a free writing prospectus or oral
communications.
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14. The
Investor represents that neither the Investor nor any person acting on behalf
of, or pursuant to any understanding with or based upon any information received
from, the Investor has, directly or indirectly, as of the date of this
Subscription Agreement, violated its obligations of confidentiality with respect
to the Offering since the time that the Investor was first contacted by the
Company or its agents with respect to the transactions contemplated
hereby.
15. The
Company represents and warrants to the Investor, that (i) the Company has full
right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement
and (ii) this Agreement constitutes a valid and binding obligation of the
Company enforceable against the Company in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ and contracting
parties’ rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and except as to the enforceability of any
rights to indemnification or contribution that may be violative of the public
policy underlying any law, rule or regulation (including any federal or state
securities law, rule or regulation).
16. The
Company covenants that it will not, for a period of sixty (60) days from the
date hereof (the “Lock-Up
Period”) without the prior written consent of the Cowen, directly or
indirectly offer, sell, assign, transfer, pledge, contract to sell, or otherwise
dispose of, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, other than the Company’s sale of
the Units hereunder and the issuance of restricted Common Stock or options to
acquire Common Stock pursuant to the Company’s employee benefit plans, qualified
stock option plans or other employee compensation plans as such plans are in
existence on the date hereof and described in the Prospectus and the issuance of
Common Stock pursuant to the valid exercises of options, warrants or rights
outstanding on the date hereof. The Company will cause Xxxxxxxxx Xx,
the Company’s Chief Executive Officer and a shareholder, to furnish to Cowen, on
or prior to the date hereof, a letter pursuant to which he shall agree, among
other things, not to directly or indirectly offer, sell, assign, transfer,
pledge, contract to sell, or otherwise dispose of, or announce the intention to
otherwise dispose of, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, not to engage in any swap,
hedge or similar agreement or arrangement that transfers, in whole or in part,
directly or indirectly, the economic risk of ownership of Common Stock or any
such securities and not to engage in any short selling of any Common Stock or
any such securities, during the Lock-Up Period, without the prior written
consent of Cowen. The Company also agrees that during such period,
other than for the sale of the Units hereunder, the Company will not file any
registration statement, preliminary prospectus or prospectus, or any amendment
or supplement thereto, under the Securities Act for any such transaction or
which registers, or offers for sale, Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock, except for a registration
statement on Form S-8 relating to employee benefit plans.
17. Notwithstanding
any investigation made by any party to this Agreement or by the Placement Agent,
all covenants, agreements, representations and warranties made by the Company
and the Investor herein will survive the execution of this Agreement, the
delivery to the Investor of the Units being purchased and the payment
therefor. The Placement Agent shall be a third party beneficiary with
respect to the representations, warranties and agreements of the Investor in
Sections 7 through 14 hereof.
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18. No
offer by the Investor to buy Units will be accepted and no part of the Purchase
Price will be delivered to the Company until the Investor has received the
Offering Information and the Company has accepted such offer by countersigning a
copy of this Agreement, and any such offer may be withdrawn or revoked, without
obligation or commitment of any kind, at any time prior to the Company (or Cowen
on behalf of the Company) sending (orally, in writing or by electronic mail)
notice of its acceptance of such offer. An indication of interest
will involve no obligation or commitment of any kind until the Investor has been
delivered the Offering Information and this Agreement is accepted and
countersigned by or on behalf of the Company.
19. The
Company acknowledges that the only material, non-public information relating to
the Company or its subsidiaries that the Company, its employees or agents has
provided to the Investor in connection with the Offering prior to the date
hereof is the existence of the Offering and that neither the Company nor any
other person acting on its behalf has provided the Investor or any other
investor or its respective agents or counsel with any information that the
Company believes constitutes or might constitute material, non-public
information which is not otherwise disclosed in the Press Release.
20. In the
event the Lock-Up Period is waived by Cowen pursuant to Section 16 hereof, the
Company agrees that it will not issue or sell any Common Stock or other equity
or equity-linked securities (other than under existing equity incentive plans or
as a result of the exercise, exchange or conversion of outstanding Company
securities that are exercisable or exchangeable for, or convertible into Common
Stock) for thirty calendar days from the date of this Subscription Agreement at
less than the per share Purchase Price or equivalent.
21. The
Company and the Investor agree that the Company shall, (i) prior to the opening
of the financial markets in New York City on the business day immediately after
the date hereof issue a press release announcing the Offering and disclosing all
material information regarding the Offering (the “Press Release”) and (ii)
within the timeframe required, file a current report on Form 8-K with the
Securities and Exchange Commission including, but not limited to, a form of this
Agreement as an exhibit thereto (the “8-K”). From and
after the issuance of the Press Release and the 8-K, the Company shall have
publicly disclosed all material, non-public information delivered to the
Investor by the Company, if any, or any of its officers or directors in
connection with the transactions contemplated hereby. The Company
shall not identify any Investor by name in any press release or public filing,
or otherwise publicly disclose any Investor’s name, without such Investor’s
prior written consent, unless required by law or the rules and regulations of a
national securities exchange, provided, however, that promptly after becoming
aware of any request or requirement to so disclose (a “Disclosure Requirement”), and
in any event prior to any such disclosure, the Company will provide such
Investor with notice of such request or requirement so that such Investor may at
its election seek a protective order or other appropriate remedy and the Company
will fully cooperate with such Investor’s efforts to obtain the same; provided,
further, however, if, absent the entry of such a protective order or other
remedy, the Company is compelled by applicable law, rule or regulation or a
court order, subpoena, similar judicial process, regulatory agency or stock
exchange rule to disclose such Investor’s name, the Company may disclose only
that portion of such information that the Company is so compelled to disclose
and will use its reasonable best efforts to obtain assurance that confidential
treatment will be accorded to that portion of such information that is being
disclosed. As of the date hereof, the Company is not aware of any
Disclosure Requirement
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22. This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor. This Agreement will be governed
by the internal laws of the State of New York, without giving effect to the
principles of conflicts of law. This Subscription Agreement may be executed in
one or more counterparts, each of which will constitute an original, but all of
which, when taken together, will constitute but one instrument, and signatures
may be delivered by facsimile or by e-mail delivery of a “.pdf” format data
file.
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Please confirm that the foregoing
correctly sets forth the agreement between us by signing in the space provided
below for that purpose.
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Dated
as of: October 21, 2009
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INVESTOR
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By:
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Print
Name:
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Title:
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Address:
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Agreed
and Accepted
this 21st
day of October, 2009:
ANNEX I
TERMS
AND CONDITIONS FOR PURCHASE OF UNITS
OF
CHINA
BAK BATTERY, INC.
1. Authorization and Sale of the
Units. Subject to the terms and conditions of this Agreement,
the Company has authorized the sale of the Units, which consists of the Shares
and the Warrants.
2.
Agreement to Sell and Purchase
the Units; Placement Agent.
2.1 At
the Closing (as defined in Section 3.1), the
Company will sell to the Investor, and the Investor will purchase from the
Company, upon the terms and conditions set forth herein, the number of Units at
the purchase price set forth below:
Number of
Units:
Purchase
Price Per Unit: $
Aggregate
Purchase Price: $
2.2 The
Company proposes to enter into substantially this same form of Subscription
Agreement with certain other investors (the “Other Investors”) and expects
to complete sales of Units to them. The Investor and the Other
Investors are hereinafter sometimes collectively referred to as the “Investors,” and this
Agreement and the Subscription Agreements executed by the Other Investors are
hereinafter sometimes collectively referred to as the “Agreements.”
2.3 The
Investor acknowledges that the Company has agreed to pay Xxxxx and Company, LLC
(“Cowen” or the “Placement Agent”) a fee in
respect of the sale of Units to the Investor.
2.4 The
Company has entered into a Placement Agent Agreement, dated October 21, 2009
(the “Placement
Agreement”), with the Placement Agent that contains certain
representations, warranties, covenants and agreements of the Company that may be
relied upon by the Investor, which shall be a third party beneficiary
thereof.
3. Closings
and Delivery of the Units and Funds.
3.1 The
completion of the purchase and sale of the Units (the “Closing”) shall occur at a
place and time (the “Closing
Date”) to be specified by the Company and the Placement Agent, and of
which the Investors will be notified in advance by the Placement Agent, in
accordance with Rule 15c6-1 promulgated under the Securities Exchange Act of
1934, as amended (the “Exchange Act”). At
the Closing, (a) the Company shall cause the Transfer Agent to deliver to the
Investor the number of Shares (and Units) set forth above registered in the name
of the Investor or, if so indicated on the Investor Questionnaire attached
hereto as Exhibit
A, in the name of a nominee designated by the Investor, (b) the Company
shall cause to be delivered to the Investor a Warrant to purchase a number of
whole Warrant Shares determined by multiplying the number of Shares (and Units)
set forth above by the Warrant Ratio and rounding down to the nearest whole
number, and (c) the aggregate purchase price for the Units being purchased by
the Investor will be delivered by or on behalf of the Investor to the
Company.
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3.2 The
Company’s obligation to issue and sell the Units to the Investor shall be
subject to: (a) the receipt by the Company of the purchase price for the Units
being purchased hereunder as set forth above and (b) the accuracy of the
representations and warranties made by the Investor and the fulfillment of those
undertakings of the Investor to be fulfilled prior to the Closing
Date.
3.3 The
Investor’s obligation to purchase the Units will be subject to the satisfaction
(or waiver by the Investor) of the following: (i) the delivery by the Company of
the Units in accordance with the provisions of this Agreement, (ii) the accuracy
of the representations and warranties made by the Company and the fulfillment of
those undertakings of the Company to be fulfilled prior to the Closing Date,
including without limitation, those contained in the Placement Agreement, (iii)
the satisfaction of the conditions to the closing set forth in the Placement
Agreement. The Investor’s obligations are expressly not conditioned
on the purchase by any or all of the Other Investors of the Units that they have
agreed to purchase from the Company; provided, however, that the right of the
Investor to waive any of such condition to closing shall be conditioned upon a
duly authorized, executed and delivered and legally binding and unconditional
written commitment of the Investor, in form and substance reasonably acceptable
to the Placement Agent, (a) not to assert or pursue any claim or seek any remedy
against the Placement Agent related or in connection with the failure by the
Company to perform any such condition waived by the Investor and (b) to hold
harmless and indemnify the Placement Agent against any loss, expense (including
without limitation the reasonable fees and expenses of its counsel), damages or
other obligation incurred as a result of the assertion or pursuit by the
Investor of any claim or the seeking by the Investor of any remedy in violation
of clause (a) of this Section 3.3.
3.4 No later than one (1) business day
after the execution of this Agreement by the Investor and the Company,
the Investor shall confirm that the account or accounts at Cowen to be credited
with the Shares being purchased by the Investor have a minimum balance equal to
the aggregate purchase price for the Shares being purchased by the
Investor.
3.5 No later than one (1) business day
after the execution of this Agreement by the Investor and the Company,
the Investor shall notify Cowen of the account or accounts at Cowen to be
credited with the Shares being purchased by such Investor. On the
Closing Date, the Company shall deliver the Shares to the Investor through DTC
directly to the account or accounts at Cowen identified by Investor and
simultaneously therewith payment shall be made by Cowen via wire transfer to the
Company.
4. Participation
Rights
4.1 For
purposes of this Section 4, the following terms shall have the respective
meanings set forth below:
“Approved Stock Plan” means
any employee benefit plan in existence on the date hereof and described in the
Prospectus and any other employee benefit plan providing for the issuance of
shares of the Company’s Common Stock, or Options to purchase shares of the
Company’s Common Stock pursuant to any stock option, stock bonus, employee
benefit plan or other stock plan or arrangement that has been approved by the
Board of Directors of the Company.
“Common Stock Equivalents”
means, collectively, Options and Convertible Securities.
“Convertible
Securities” means any stock or securities (other than Options)
convertible into or exercisable or exchangeable for shares of Common
Stock.
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“Excluded Securities” means
Common Stock, Options and Convertible Securities issued or issuable: (i) in
connection with any Approved Stock Plan, (ii) upon exercise of the Warrants,
(iii) upon conversion or exercise of any Options or Convertible Securities that
are outstanding on the day immediately preceding the Closing Date, provided that
the terms of such Options or Convertible Securities are not amended, modified or
changed on or after the date hereof, (iv) in connection with strategic
transactions involving the Company and other entities, including without
limitation, joint venture, licensing, collaboration, manufacturing, development,
marketing, co-promotion or distribution arrangements, (v) pursuant to a bona
fide firm commitment underwritten public offering with a nationally recognized
underwriter which generates gross proceeds to the Company in excess of
$40,000,000 where no investors are contacted privately prior to the public
announcement of such offering (other than an "at-the-market offering" as defined
in Rule 415(a)(4) under the Act), or (vi)
to customers or suppliers of the
Company.
“Options” means any rights,
warrants or options to subscribe for or purchase Common Stock or Convertible
Securities.
4.2 From
the date hereof until the date which is two years after the date hereof, the
Company shall not, directly or indirectly, offer, sell, grant any option to
purchase, or otherwise dispose of (or announce any offer, sale, grant or any
option to purchase or other disposition of) any of its or its subsidiaries’
equity or equity equivalent securities, including without limitation any debt,
preferred stock or other instrument or security that is, at any time during its
life and under any circumstances, convertible into or exchangeable or
exercisable for shares of Common Stock or Common Stock Equivalents (any such
offer, sale, grant, disposition or announcement being referred to as a “Subsequent Placement”),
unless the Company shall have first complied with this Section 4.
4.3 The
Company shall deliver to the Investor an irrevocable written notice (the “Offer Notice”) of any
proposed or intended issuance or sale (the “Offer”) of the Common Stock
or Common Stock Equivalent being offered (the “Offered Securities”) in a
Subsequent Placement, which Offer Notice shall (1) identify and describe the
Offered Securities, (2) describe the price and other terms upon which they are
to be issued or sold or exchanged, and the number or amount of the Offered
Securities to be issued or sold or exchanged, (3) identify the persons or
entities (if known) to which or with which the Offered Securities are to be
offered, issued or sold and (4) offer to issue and sell to the Investor at least
its pro rata portion of
35% of the Offered Securities actually sold in such Subsequent Placement. The
Investor’s pro rata
portion shall be determined based upon the percentage of the total amount
of Units purchased by the Investor in the Offering.
4.4 To
accept an Offer, in whole or in part, the Investor must deliver a written notice
to the Company prior to the end of the second (2nd) Business Day after the
Investor's receipt of the Offer Notice (the “Offer Period”), setting forth
the portion that the Investor elects to purchase (the “Notice of Acceptance”). If no
Notice of Acceptance is received by the Company from the Investor during the
Offer Period, then the Investor shall be deemed to have declined the
Offer.
4.5 The
Company shall have twenty-five (25) Business Days from the expiration of the
Offer Period above, subject to extension at the discretion of the Company with
the consent of the Investor, such consent not to be unreasonably withheld, to
offer, issue or sell all or any part of such Offered Securities as to
which a Notice of Acceptance has not been given by the eligible Investor (the
“Refused Securities”),
but only to the offerees described in the Offer Notice (if so described therein)
and only upon terms and conditions (including, without limitation, Unit prices
and interest rates) that are not more favorable to the acquiring person or
persons or less favorable to the Company than those set forth in the Offer
Notice.
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4.6 Upon
the closing of the Subsequent Placement, the Investor shall acquire from the
Company, and the Company shall issue to the Investor, the number or amount of
Offered Securities specified in the Notices of Acceptance upon the terms and
conditions specified in the Offer. If the Company does not consummate the
closing of the Subsequent Placement within twenty-five (25) Business Days of the
expiration of the Offer Period, the Company shall not be required to issue to
the Investor any of the Offered Securities. The purchase by the Investor of any
Offered Securities is subject in all cases to the preparation, execution and
delivery by the Company and the Investor of a purchase agreement relating to
such Offered Securities reasonably satisfactory in form and substance to the
Investor and its counsel.
4.7 Any
Offered Securities not acquired by the Investor or other persons in accordance
with this Section 4 may not be issued, sold or exchanged until they are again
offered to the Investor under the procedures specified in this Agreement,
provided that, with respect to any such re-offer, in accordance with Section
4.4, the Offer Period shall only be one (1) Business Day.
4.8 Notwithstanding
anything to the contrary in this Section 4 and unless otherwise agreed to by the
Investor, the Company shall either confirm in writing to the Investor that the
transaction with respect to the Subsequent Placement has been abandoned or shall
publicly disclose its intention to issue the Offered Securities, in either case
in such a manner such that the Investor will not be in possession of material
non-public information, by the twentieth (20th) Business Day, subject to
extension at the discretion of the Company with the consent of the Investor,
such consent not to be unreasonably withheld following delivery of the Offer
Notice. If by the twentieth (20th) Business Day following delivery of the Offer
Notice, or later day if extended as set forth above, no public disclosure
regarding a transaction with respect to the Offered Securities has been made,
and no notice regarding the abandonment of such transaction has been received by
the Investor, such transaction shall be deemed to have been abandoned and the
Investor shall not be deemed to be in possession of any material, non-public
information with respect to the Company. Should the Company decide to pursue
such transaction with respect to the Offered Securities, the Company shall
provide the Investor with another Offer Notice and the Investor will again have
the right of participation set forth in this Section 4. The Company shall not be
permitted to deliver more than one such Offer Notice to the Investor in any 60
day period.
4.9 The
restrictions contained in this Section 4 shall not apply in connection with the
issuance of any Excluded Securities.
5. Notices. All
notices, requests, consents and other communications hereunder will be in
writing, will be mailed (a) if within the domestic United States by first-class
registered or certified airmail, or nationally recognized overnight express
courier, postage prepaid, or by facsimile or (b) if delivered from outside the
United States, by International Federal Express or facsimile, and will be deemed
given (i) if delivered by first-class registered or certified mail domestic,
three business days after so mailed, (ii) if delivered by nationally recognized
overnight carrier, one business day after so mailed, (iii) if delivered by
International Federal Express, two business days after so mailed and (iv) if
delivered by facsimile, upon electric confirmation of receipt and will be
delivered and addressed as follows:
- 4
-
if to the
Company, to:
China BAK
Battery, Inc.
BAK
Industrial Park
Xx.0 XXX
Xxxxxx
Xxxxxxxx
Xxxx, Xxxxxxxx Xxxxxxxx
Xxxxxxxx,
XXX 000000
Attention:
Chief Financial Officer
with
copies to:
Pillsbury
Xxxxxxxx Xxxx Xxxxxxx LLP
0000 X
Xxxxxx, X.X.
Xxxxxxxxxx,
X.X. 00000
Attention:
Xxxxx X. Xxxxxxxxxx
if to the
Investor, to the address on the signature page hereto, or at such other address
or addresses as may have been furnished to the Company in writing.
6. Changes. This
Agreement may not be modified or amended except pursuant to an instrument in
writing signed by the Company and the Investor.
7. Headings. The
headings of the various sections of this Agreement have been inserted for
convenience of reference only and will not be deemed to be part of this
Agreement.
8. Severability. In
case any provision contained in this Agreement should be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein will not in any way be affected or
impaired thereby.
9. Governing Law. This
Agreement will be governed by, and construed in accordance with, the internal
laws of the State of New York, without giving effect to the principles of
conflicts of law that would require the application of the laws of any other
jurisdiction.
10. Counterparts. This
Agreement may be executed in two or more counterparts, each of which will
constitute an original, but all of which, when taken together, will constitute
but one instrument, and will become effective when one or more counterparts have
been signed by each party hereto and delivered to the other
parties. The Company and the Investor acknowledge and agree that the
Company shall deliver its counterpart to the Investor along with the Prospectus
Supplement (or the filing by the Company of an electronic version thereof with
the Commission).
11. Confirmation of
Sale. The Investor acknowledges and agrees that such
Investor’s receipt of the Company’s counterpart to this Agreement, together with
the Prospectus Supplement (or the filing by the Company of an electronic version
thereof with the Commission), shall constitute written confirmation of the
Company’s sale of Units to such Investor.
12. Termination. In the
event that the Placement Agreement is terminated by the Placement Agent pursuant
to the terms thereof, this Agreement shall terminate without any further action
on the part of the parties hereto.
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Exhibit
A
CHINA
BAK BATTERY, INC.
INVESTOR
QUESTIONNAIRE
Pursuant
to Section 3 of
Annex I to the
Agreement, please provide us with the following information:
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1.
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The
exact name that your Shares and Warrants are to be registered in. You may
use a nominee name if appropriate:
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||
|
|
|||
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2.
|
The
relationship between the Investor and the registered holder listed in
response to item 1 above:
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||
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3.
|
The
mailing address of the registered holder listed in response to item 1
above:
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||
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4.
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The
Social Security Number or Tax Identification Number of the registered
holder listed in the response to item 1 above:
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|||
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5.
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Account
at Xxxxx to be credited
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