REGISTRATION RIGHTS AGREEMENT
EXHIBIT
10.9
This
Registration Rights Agreement (this “Agreement”) is made and
entered into as of August __, 2008, by and among Yi Xin International Copper,
Inc., a Delaware corporation (previously known as AFH Holding I, Inc.) (the
“Acquiror Company”), the
shareholders of the Acquiror Company listed on Schedule A attached
hereto (the “Acquiror Company
Principal Shareholders”).
The
Acquiror Company, and the Acquiror Company Principal Shareholders agree as
follows:
1.
Definitions. Capitalized
terms as used in this Agreement shall have the respective meanings set forth in
this Section 1:
“Advice” has
the meaning set forth in Section 6(d).
“Commission” means the
U.S. Securities and Exchange Commission.
“Commission
Comments” means
written comments pertaining
solely to Rule 415
which are received by the Acquiror Company from the Commission to a filed
Registration Statement, a copy of which shall have been provided by the Acquiror
Company to the Acquiror Company Principal Shareholders, which either (i)
requires the Acquiror Company to limit the number of Registrable Securities
which may be included therein to a number which is less than the number sought
to be included thereon as filed with the Commission or (ii) requires the
Acquiror Company to either exclude Registrable Securities held by the Acquiror
Company Principal Shareholders or deem any of the Acquiror Company Principal
Shareholders to be an underwriter with respect to Registrable Securities it
seeks to include in such Registration Statement.
“Coordinated
Registration Notice” has the meaning set forth in Section 2(a)(2).
“Coordinated
Registration Statement” means a Registration Statement registering any
Registrable Securities in accordance with Section 2(a).
“Cut Back
Shares” has the meaning set forth in Section 2(c).
“Demand Registration
Notice” has the meaning set forth in Section 2(b)(1).
“Demand Registration
Statement” means a Registration Statement registering any Registrable
Securities in accordance with Section 2(b).
“Effective
Date” means, as to a Registration Statement, the date on which such
Registration Statement is first declared effective by the
Commission.
“Effectiveness
Date” means the date on or prior to which the Acquiror Company is
obligated to cause a Registration Statement to become effective, according to
any agreement or arrangement with holders of Acquiror Company securities
including but not limited to any such agreement or arrangement made by the
Acquiror Company in connection with a Financing, as such date may be amended or
compliance therewith waived by the parties to such agreement or
arrangement.
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“Effectiveness
Period” means, as to any Registration filed by the Acquiror Company, the
period commencing on the Effective Date of such Registration Statement and
ending on the earlier of (a) such time as all of the Registrable Securities
covered by such Registration Statement have been publicly sold by the Acquiror
Company Principal Shareholders, or (b) such time as all of the Registrable
Securities covered by such Registration Statement may be sold by the Acquiror
Company Principal Shareholders without holding or volume restrictions pursuant
to Rule 144, in each case as determined by the counsel to the Acquiror Company
pursuant to a written opinion letter to such effect, addressed and acceptable to
the Acquiror Company’s transfer agent and the Shareholders
Representative.
“Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
“Financing”
shall mean, for purposes of this Agreement, a private placement of the Acquiror
Company’s equity securities resulting in gross aggregate proceeds to the
Acquiror Company in excess of $4.5 million.
“Holder”
or “Holders”
means the holder or holders, as the case may be, from time to time of
Registrable Securities.
“Indemnified
Party” has the meaning set forth in Section 5(c).
“Indemnifying
Party” has the meaning set forth in Section 5(c).
“Initiating Holders”
has the meaning set forth in Section 2(b)(1).
“Losses”
has the meaning set forth in Section 5(a).
“majority-in-interest
of the Acquiror Company Principal Shareholders” means Acquiror Company
Principal Shareholders holding a majority of the
Shares.
“New York
Courts” means the state and federal courts sitting in the City of New
York, Borough of Manhattan.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.
“Prospectus”
means the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
“Registrable
Securities” means: (i) the Shares and (ii) any securities issued or
issuable upon any stock split, combination, recapitalization or similar
event.
“Registration
Statement” means any registration statement filed on Form X-0, X-0 or
similar form and excluding any registration statement filed on Form S-8 or S-4
or similar form, filed by the Acquiror Company with the Commission in
order to register shares of capital stock of the Acquiror Company, and any
additional registration statements required to be filed under any agreement with
security holders of the Acquiror Company, including in each case the Prospectus,
amendments and supplements to such registration statements or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference
therein.
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“Response
Deadline” has the meaning set forth in Section 2(b)(1).
“Restriction
Termination Date” has the meaning set forth in Section 2(c).
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.
“Rule 415”
means Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.
“Rule 424”
means Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as such
Rule.
“SEC
Restrictions” has
the meaning set forth in Section 2(c).
“Selling
Securityholder Questionnaire” means a questionnaire in the
form attached to this Agreement as Annex
A.
“Selling
Securityholder Registration Statement” has the meaning set forth in
Section 2(a)(1).
“Securities
Act” means the Securities Act of 1933, as amended.
“Shareholder
Representative” shall mean AFH
Holding and Advisory, LLC.
“Shares” means two million shares of the Acquiror
Company’s common stock held by the Acquiror Company Principal Shareholders on
the date hereof as adjusted for any stock split, combination, recapitalization
or similar event.
“Trading Day” means any day on which the Acquiror Company’s
common stock is traded on the principal securities exchange or securities market
on which such common stock is then traded. If the Acquiror Company’s
stock is not traded on any securities market or exchange it will mean any day on
which stocks listed on the American Stock Exchange are traded.
2.
Registration.
(a)
Coordinated
Registration.
(1) The
Acquiror Company agrees to use its commercially reasonable efforts to include
the Acquiror Company Principal Shareholders as “selling shareholders” in any
Registration Statement filed by the Acquiror Company with the Commission
registering securities of Acquiror Company for the benefit of parties other than
Acquiror Company as "selling security shareholders” pursuant to registration
rights granted in a Financing (a “Selling Securityholder Registration
Statement”), and to cause such Selling Securityholder Registration
Statement to cover the resale of all Registrable Securities held by the Acquiror
Company Principal Shareholders.
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(2) If
the Acquiror Company intends to file a Selling Securityholder Registration
Statement it shall send notice to the Acquiror Company Principal Shareholders
prior to the filing of such Registration Statement (a “Coordinated Registration
Notice”). An Acquiror Company Principal Shareholder may
elect to have its Registrable Securiteis included in such Coordinated
Registration Statement by giving written notice to Acquiror Company within
fifteen (15) days after Acquiror Company has given the Coordinated Registration
Notice, which notice will indicate the number of Registrable Securities such
Acquiror Company Principal Shareholder elects to have included in the
Coordinated Registration Statement, together with a true and complete
Selling Securityholder Questionnaire with respect to such Company Principal
Shareholder. The Acquiror Company shall include in the Coordinated
Registration Statement those Registrable Securities which the Acquiror Company
Principal Shareholders have so elected for inclusion and will include the
Acquiror Company Principal Shareholders as “selling shareholders” in such
Coordinated Registration Statement to be filed by Acquiror Company
with the Commission.
(3) The
Acquiror Company shall cause each Registration Statement required to be filed to
be declared effective under the Securities Act as soon as possible but, in any
event, no later than its Effectiveness Date, and shall use its
commercially reasonable efforts to keep each such Registration
Statement continuously effective during its entire Effectiveness
Period. By 5:00 p.m. (New York City time) on the Business Day
immediately following the Effective Date of each Registration Statement, the
Acquiror Company shall file with the Commission in accordance with Rule 424
under the Securities Act the final Prospectus to be used in connection with
sales pursuant to such Registration Statement (if such filing is required under
such Rule).
(4) Nothing
herein shall prohibit the Acquiror Company from withdrawing a Coordinated
Registration Statement at any time if permitted by the agreement or arrangement
pursuant to which the Acquiror Company granted investors registration rights in
the Financing or with the consent of the required parties to such agreement or
arrangement.
(b)
Demand
Registration.
(1) Notwithstanding
anything to the contrary, if no Coordinated Registration Statement shall have
been filed pursuant to Section 2(a)
for a period of six (6) months after the closing of the first Financing of the
Acquiror Company to occur after the date of this Agreement, the Acquiror Company
Principal Shareholders shall be entitled to request registration in accordance
with this Section 2(b)
as follows: if the Acquiror Company receives a written request from
the holders of fifty percent (50%) or more of the Registrable Securities then
outstanding (the “Initiating
Holders”) that the Acquiror Company file a Registration Statement under
the Securities Act covering the registration of at least fifty percent (50%) of
the then outstanding Registrable Securities, then the Acquiror Company will
promptly, and in no event later than fifteen (15) days of the receipt thereof,
give written notice of such request to all Acquiror Company Principal
Shareholders (a “Demand
Registration Notice”). An Acquiror Company Principal
Shareholder may elect to have its Registrable Securiteis included in such Demand
Registration Statement by giving written notice to Acquiror Company within
fifteen (15) days after Acquiror Company has given the Demand Registration
Notice, which notice shall include the number of Registrable Securities such
Acquiror Company Principal Shareholder wishes to have included in the Demand
Registration Notice, together with a true and complete Selling
Securityholder Questionnaire with respect to such Company Principal Shareholder
by the Response Deadline.
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(2) Upon
request for registration pursuant to Section 2(b)(1), the Acquiror Company shall use its
commercially reasonable efforts to file with the Commission, as expeditiously as
possible but no later than sixty (60) days after the Response Deadline, a Demand
Registration Statement for the registration of all the Registrable
Securities that the Acquiror Company Principal Shareholders have elected to
include in the Demand Registration Statement, and to include the Acquiror
Company Principal Shareholders as “selling shareholders” in such Demand
Registration Statement. The Acquiror Company shall use its
commercially reasonable efforts to cause such Registration Statement to be
declared effective under the Securities Act as soon as possible, and shall use
its commercially reasonable efforts to keep each such Registration Statement
continuously effective for a period of at least one (1) year, or until all of
the Registrable Securities are eligible for resale under Rule 144. By
5:00 p.m. (New York City time) on the Business Day immediately following the
Effective Date of each Registration Statement, the Acquiror Company shall file
with the Commission in accordance with Rule 424 under the Securities Act the
final prospectus to be used in connection with sales pursuant to such
Registration Statement (if such filing is required under such
Rule).
(c)
Cut-Back
of Registered Shares. Notwithstanding anything to the contrary
contained in this Section 2,
if the Acquiror Company receives Commission Comments relating to a Coordinated
Registration or a Demand Registration, and following discussions with and
responses to the Commission in which the Acquiror Company uses its commercially
reasonable efforts to cause as many Registrable Securities as possible to be
included in the Coordinated Registration Statement or
Demand Registration Statement, as the case may be, without
characterizing any of the Acquiror Company Principal Shareholders as
underwriters (and in such regard timely conveys relevant information concerning
such issue with the Acquiror Company Principal Shareholders or its respective
counsel), the Acquiror Company is unable to cause the inclusion of all
Registrable Securities which Acquiror Company Principal Shareholders have
elected to have included in such Registration Statement, then the Acquiror
Company may, following not less than three (3) Trading Days prior to written
notice to the Acquiror Company Principal Shareholders (i) remove from the
Registration Statement such Registrable Securities (the “Cut Back Shares”) on a pro
rata basis based upon the relative number of Registrable Securities included in
the Coordinated Registration Statement or the Demand Registration Statement, as
the case may be and beneficially owned by all of the selling shareholders whose
shares are being registered by such Registration Statement, calculated on a
fully diluted basis, and/or (ii) agree to such restrictions and limitations on
the registration and resale of the Registrable Securities, in each case as the
Commission may require in order for the Commission to allow such Registration
Statement to become effective; provided, that in no
event may the Acquiror Company name any of the Acquiror Company Principal
Shareholders as underwriters without such Acquiror Company Principal
Shareholder’s prior written consent (collectively, the “SEC
Restrictions”). The required Effectiveness Date for such
Registration Statement will be tolled, until such time as the Acquiror Company
is able to effect the registration of the Cut Back Shares in accordance with any
SEC Restrictions (such date, the “Restriction Termination
Date”). From and after the Restriction Termination Date, all
provisions of Section 2 shall again be applicable
to the Cut Back Shares (which, for avoidance of doubt, retain their character as
“Registrable Securities”) so that the Acquiror Company will be required to file
with and cause to be declared effective by the Commission such additional
Registration Statements in the time frames set forth herein as necessary to
ultimately cause to be covered by effective Registration Statements all
Registrable Securities (if such Registrable Securities cannot at such time be
resold by the Acquiror Company Principal Shareholders without limitations
pursuant to Rule 144).
(d)
Selling Security Holder
Information.
(1) Each
of the Acquiror Company Principal Shareholders agrees to furnish to the Acquiror
Company a true and completed Selling Securityholder Questionnaire in accordance
with the terms of this Section 2. If
any Selling Securityholder Questionaire is not true and complete when sent to
the Acquiror Company, the Acquiror Company may send notice to Acquiror Company
Principal Shareholder whose Selling Securityholder Questionnaire is incomplete
or otherwise defective which notice will identify the defect with reasonable
specificity. If the Selling Securityholder fails to submit a
corrected and complete Selling Securityholder Questionnaire within 7 days
thereafter, the Registrable Securities of such Company Principal Shareholder may
be excluded form the Coordinated Registration Statement or the Demand
Registration Statement, as the case may be.
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(2)
Upon the request of the Acquiror Company, each Acquiror Company Principal
Shareholder will provide promptly all information about itself as the Acquiror
Company may reasonably request in order that the Acquiror Company may cause any
Registration Statement in which such Acquiror Principal Shareholder’s
Registrable Securities are being registered to comply with the Securities Act or
the rules promulgated thereunder or to respond to comments from the Commission
relating to such Registration Statement.
(e)
Notwithstanding anything to the contrary in this Agreement, the
Acquiror Company will not be required to effect a Coordinated Registration
pursuant to Section 2(a) or Demand Registration pursuant to this
Section 2(b):
(1)
after the Acquiror Company has effected one (1) Demand Registration
pursuant to Section 2(b)
or one (1) Coordinated Registration pursuant to Section 2(a) and such
registration has been declared or ordered effective and either, (i) such
Registration Statement is effective and no stop order suspending the
effectiveness of such registration statement or prospectus or any amendment or
supplement has been issued; provided that this
subclause (i) will not effect the Accquiror Company’s obligation to register
Cut-Back Shares in accordance with Section 2(c),
or (ii) all sales thereunder have been consummated.
(2)
during the period starting with the date sixty (60) days prior to the Acquiror
Company’s good faith estimate of the date of the filing of, and ending on a date
one hundred eighty (180) days following the effective date of, an Acquiror
Company Registration, provided that the Acquiror Company is actively employing
in good faith all commercially reasonable efforts to cause such registration
statement to become effective; or
(3)
if the Acquiror Company furnishes to Acquiror Company
Principal Shareholders requesting a registration pursuant to this Section 2(b),
a certificate signed by the Acquiror Company’s Chief Executive Officer or
Chairman of the Board stating that in the good faith judgment of the Board of
Directors of the Acquiror Company, it would be seriously detrimental to the
Acquiror Company and its stockholders for such registration to be effected at
such time, in which event the Acquiror Company will have the right to defer such
filing for a period of not more than ninety (90) days after receipt of the
request of the Initiating Holders, provided, that such
right to delay a request will be exercised by the Acquiror Company not more than
once in any six (6) month period and provided, further, that the
Acquiror Company will not register any other of its shares for its own account
or for the account of others during such ninety (90) day period.
(4)
If, in the opinion of independent counsel, all of the Registrable
Securities are eligible for resale under Rule 144 or other exemption from
registration under the Securities Act.
(f)
No registration initiated by the request of Acquiror Company Principal
Shareholders hereunder will count as a Demand Registration under Section 2(b),
and no Coordinated Registration pursuant to Section 2(a)
will count as a registration under Section 2(a),
in the event that:
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(1) such
registration is withdrawn by the Acquiror Company Principal Shareholders because
of material adverse information relating to the business, operations, assets,
condition (financial or other) or prospects of the Acquiror Company and its
subsidiaries taken as a whole,
(2) if
the effect of any cut-back pursuant to Section 2(c)
is to reduce the number of shares requested by the Acquiror Company Principal
Shareholders to be included in the registration below fifty percent (50%),
or
(3) if
the related Registration Statement filed with the SEC is not declared effective
or is declared effective but is subject to a stop order or is withdrawn by the
Acquiror Company before at least ninety percent (90%) of the securities so
registered are sold.
(g) Lockup.
(1) The
Acquiror Company Principal Shareholders agree that they shall not sell any
Registrable Securities held by them for a period of ninety (90) days following
the effective date of a Registration Statement filed pursuant to Section
2(a).
(2) AFH
Holding & Advisory, LLC agrees that it shall not sell any Registrable
Securities held by it for a period of ninety (90) days following the effective
date of a Registration Statement filed pursuant to Section
2(b).
3.
Registration
Procedures.
In
connection with the Acquiror Company’s registration obligations hereunder, the
Acquiror Company shall:
(a) Not
less than four Trading Days prior to the filing of a Registration Statement or
any related Prospectus or any amendment or supplement thereto, the Acquiror
Company shall furnish to the Acquiror Company Principal Shareholders copies of
the “Selling Shareholders” section of such document, the “Plan of Distribution”
and any risk factor contained in such document that addresses specifically this
transaction or the Selling Shareholders, as proposed to be filed, which
documents will be subject to the review of the Acquiror Company Principal
Shareholders. The Acquiror Company shall not file a Registration
Statement, any Prospectus or any amendments or supplements thereto in which the
“Selling Shareholder” section thereof differs from the disclosure received from
the Acquiror Company Principal Shareholders in its Selling Securityholder
Questionnaire (as amended or supplemented). The Acquiror Company
shall not file a Registration Statement, any Prospectus or any amendments or
supplements thereto in which it (i) characterizes any of the Acquiror
Company Principal Shareholders as an underwriter, (ii) excludes an Acquiror
Company Principal Shareholder due to the Acquiror Company Principal Shareholder
refusing to be named as an underwriter, or (iii) reduces the number of
Registrable Securities being registered on behalf of an Acquiror Company
Principal Shareholder except pursuant to, in the case of subsection (iii), the
Commission Comments, without, in each case, the Acquiror Company Principal
Shareholder’s express written authorization.
(b) (i) Prepare
and file with the Commission such amendments, including post-effective
amendments, to each Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement continuously
effective as to the applicable Registrable Securities for its Effectiveness
Period and prepare and file with the Commission such additional Registration
Statements in order to register for resale under the Securities Act all of the
Registrable Securities; (ii) cause the related Prospectus to be amended or
supplemented by any required Prospectus
supplement, and as so supplemented or amended to be filed pursuant to Rule 424;
(iii) respond as promptly as reasonably possible to any comments received from
the Commission with respect to each Registration Statement or any amendment
thereto and, as promptly as reasonably possible provide the Acquiror Company
Principal Shareholders true and complete copies of all correspondence from and
to the Commission relating to such Registration Statement that would not result
in the disclosure to the Acquiror Company Principal Shareholders of material and
non-public information concerning the Acquiror Company; and (iv) comply in all
material respects with the provisions of the Securities Act and the Exchange Act
with respect to the Registration Statement(s) and the disposition of all
Registrable Securities covered by each Registration
Statement.
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(c) Notify
the applicable Acquiror Company Principal Shareholders as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than three Trading Days
prior to such filing and, in the case of (v) below, not less than three Trading
Days prior to the financial statements in any Registration Statement becoming
ineligible for inclusion therein) and (if requested by an Acquiror Company
Principal Shareholder) confirm such notice in writing no later than one Trading
Day following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed;
(B) when the Commission notifies the Acquiror Company whether there will be a
“review” of such Registration Statement and whenever the Commission comments in
writing on such Registration Statement (the Acquiror Company shall provide true
and complete copies thereof and all written responses thereto to the Acquiror
Company Principal Shareholders that pertain to the Acquiror Company Principal
Shareholders as Selling Shareholders or to the Plan of Distribution, but not
information which the Acquiror Company believes would constitute material and
non-public information); and (C) with respect to each Registration Statement or
any post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of a Registration Statement covering any or
all of the Registrable Securities or the initiation of any Proceedings for that
purpose; (iv) of the receipt by the Acquiror Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction, or the
initiation or threatening of any Proceeding for such purpose; and (v) of the
occurrence of any event or passage of time that makes the financial statements
included in a Registration Statement ineligible for inclusion therein or any
statement made in such Registration Statement or Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in any
material respect or that requires any revisions to such Registration Statement,
Prospectus or other documents so that, in the case of such Registration
Statement or the Prospectus, as the case may be, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(d) Use
its commercially efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order suspending the effectiveness of a Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.
(e) Promptly
deliver to the Shareholder Representative, without charge, a printer-ready
electronic copy of the complete Prospectus or Prospectuses and each amendment
and supplement thereto, to the e-mail address of the Shareholder Representative
under Section 6(f). The Acquiror Company hereby consents to the use
of such prospectus and each amendment or supplement thereto by the Acquiror
Company Principal Shareholders in connection with the offering or sale of the
Registrable Securities covered by such prospectus and any amendment or
supplement thereto.
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(f) Prior
to any public offering of Registrable Securities, register or qualify such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of all jurisdictions within the United States as the Acquiror Company Principal
Shareholders may reasonably request, to keep each such registration or
qualification (or exemption therefrom) effective during the Effectiveness Period
and to do any and all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Registrable Securities covered by the
Registration Statement(s).
(g) Cooperate
with the Acquiror Company Principal Shareholders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to the Registration Statement(s), which
certificates shall be free, of all restrictive legends, and to enable such
Registrable Securities to be in such denominations and registered in such names
as the Acquiror Company Principal Shareholders may request.
(h) Upon
the occurrence of any event contemplated by Section 3(c)(v), as promptly as reasonably possible,
prepare a supplement or amendment, including a post-effective amendment, to the
affected Registration Statements or a supplement to the related Prospectus or
any document incorporated or deemed to be incorporated therein by reference, and
file any other required document so that, as thereafter delivered, no
Registration Statement nor any Prospectus will contain an untrue statement of a
material fact or omit to state 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.
4.
Registration
Expenses. All fees and expenses incident to the performance of
or compliance with this Agreement by the Acquiror Company shall be borne by the
Acquiror Company whether or not any Registrable Securities are sold pursuant to
a Registration Statement. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses (A) with respect
to filings required to be made with any Trading Market on which the Common Stock
is then listed for trading, and (B) in compliance with applicable state
securities or Blue Sky laws), (ii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Acquiror Company, and (iii) fees
and expenses of all other Persons retained by the Acquiror Company in connection
with the consummation of the transactions contemplated by this
Agreement. In addition, the Acquiror Company shall be responsible for
all of its internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.
5.
Indemnification.
(a) Indemnification by the
Acquiror Company. The Acquiror Company shall, notwithstanding
any termination of this Agreement, indemnify and hold harmless the Acquiror
Company Principal Shareholders, the officers, directors, agents, investment
advisors, partners, members and employees of thereof, each Person who controls
the Acquiror Company Principal Shareholders (within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable costs of
preparation and reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising
out of or relating to any untrue or alleged untrue statement of a material fact
contained in any Registration Statement, any Prospectus or any form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein (in the case of any Prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading, except to the extent, but only to the extent, that (1) such
untrue statements or omissions are based upon information regarding the Acquiror
Company Principal Shareholders furnished in writing to the Acquiror Company by
the Acquiror Company Principal Shareholders expressly for use therein, or to the
extent that such information relates to the Acquiror Company Principal
Shareholders or its proposed method of distribution of Registrable Securities
and was reviewed and expressly approved in writing by the Acquiror Company
Principal Shareholders expressly for use in the Registration Statement, such
Prospectus or such form of Prospectus or in any amendment or supplement thereto
or (2) in the case of an occurrence of an event of the type specified in Section
3(c)
(ii)-(v), the use by the Acquiror Company Principal Shareholders of an outdated
or defective Prospectus after the Acquiror Company has notified the Acquiror
Company Principal Shareholders in writing that the Prospectus is outdated or
defective and prior to the receipt by the Acquiror Company Principal
Shareholders of an Advice or an amended or supplemented Prospectus, but only if
and to the extent that following the receipt of the Advice or the amended or
supplemented Prospectus the misstatement or omission giving rise to such Loss
would have been corrected. The Acquiror Company shall notify the
Acquiror Company Principal Shareholders promptly of the institution, threat or
assertion of any Proceeding of which the Acquiror Company is aware in connection
with the transactions contemplated by this Agreement.
-9-
(b) Indemnification by the
Acquiror Company Principal Shareholders. Each Acquiror Company Principal
Shareholder shall indemnify and hold harmless the Acquiror Company, its
directors, officers, agents and employees, each Person who controls the Acquiror
Company (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from and
against all Losses, as incurred, to the extent arising out of or based upon: (x)
each Acquiror Company Principal Shareholder’s failure to comply with the
prospectus delivery requirements of the Securities Act or (y) any untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement
thereto, or arising solely out of or based solely upon any omission of a
material fact required to be stated therein or necessary to make the statements
therein not misleading to the extent, but only to the extent that, (1) such
untrue statements or omissions are based upon information regarding the Acquiror
Company Principal Shareholder furnished in writing to the Acquiror Company by
the Acquiror Company Principal Shareholder expressly for use therein, or to the
extent that such information relates to the Acquiror Company Principal
Shareholder or such its proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by the Acquiror
Company Principal Shareholder expressly for use in the Registration Statement,
such Prospectus or such form of Prospectus or in any amendment or supplement
thereto or (2) in the case of an occurrence of an event of the type specified in
Section 3(c)
(ii)-(v), the use by the Acquiror Company Principal Shareholder of an outdated
or defective Prospectus after the Acquiror Company has notified the Acquiror
Company Principal Shareholder in writing that the Prospectus is outdated
or defective and prior to the receipt by the Acquiror Company
Principal Shareholder of an Advice or an amended or supplemented Prospectus, but
only if and to the extent that following the receipt of the Advice or the
amended or supplemented Prospectus the misstatement or omission giving rise to
such Loss would have been corrected. In no event shall the liability
of an Acquiror Company Principal Shareholder hereunder be greater in amount than
the dollar amount of the net proceeds received by the Acquiror Company Principal
Shareholder upon the sale of the Registrable Securities giving rise to such
indemnification obligation.
(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against any
Person entitled to indemnity hereunder (an “Indemnified Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”) in writing, and the Indemnifying Party shall assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that the failure of any Indemnified
Party to give such notice shall not relieve the Indemnifying Party of its
obligations or liabilities pursuant to this Agreement, except (and only) to the
extent that it shall be finally determined by a court of competent jurisdiction
(which determination is not subject to appeal or further review) that such
failure shall have proximately and materially adversely prejudiced the
Indemnifying Party.
-10-
An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such
fees and expenses; (2) the Indemnifying Party shall have failed promptly to
assume the defense of such Proceeding and to employ counsel reasonably
satisfactory to such Indemnified Party in any such Proceeding; or (3) the named
parties to any such Proceeding (including any impleaded parties) include both
such Indemnified Party and the Indemnifying Party, and such Indemnified Party
shall have been advised by counsel that a conflict of interest is likely to
exist if the same counsel were to represent such Indemnified Party and the
Indemnifying Party (in which case, if such Indemnified Party notifies the
Indemnifying Party in writing that it elects to employ separate counsel at the
expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense thereof and such counsel shall be at the expense of
the Indemnifying Party). The Indemnifying Party shall not be liable
for any settlement of any such Proceeding effected without its written consent,
which consent shall not be unreasonably withheld. No Indemnifying
Party shall, without the prior written consent of the Indemnified Party, effect
any settlement of any pending Proceeding in respect of which any Indemnified
Party is a party, unless such settlement includes an unconditional release of
such Indemnified Party from all liability on claims that are the subject matter
of such Proceeding.
(d) Contribution. If
a claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission of a
material fact, has been taken or made by, or relates to information supplied by,
such Indemnifying Party or Indemnified Party, and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party
as a result of any Losses shall be deemed to include, subject to the limitations
set forth in Section 5(c), any
reasonable attorneys’ or other reasonable fees or expenses incurred by such
party in connection with any Proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Section was available to such party in accordance with its
terms.
The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by any other
method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding
paragraph. Notwithstanding the provisions of this Section 5(d), no Acquiror Company Principal Shareholder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by the Acquiror Company Principal
Shareholder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that the Acquiror Company Principal
Shareholder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission.
-11-
The
indemnity and contribution agreements contained in this Section are in addition
to any liability that the Indemnifying Parties may have to the Indemnified
Parties.
6.
Miscellaneous.
(a) Remedies. In
the event of a breach by the Acquiror Company or by an Acquiror Company
Principal Shareholder, of any of their obligations under this Agreement, the
Acquiror Company or the applicable Acquiror Company Principal Shareholder, as
the case may be, in addition to being entitled to exercise all rights granted by
law and under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement. The Acquiror
Company and the Acquiror Company Principal Shareholders agree that monetary
damages would not provide adequate compensation for any losses incurred by
reason of a breach by it of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for specific performance in
respect of such breach, it shall waive the defense that a remedy at law would be
adequate.
(b) No Primary Shares Included
in Registrations. The Acquiror Company may not
include securities of the Acquiror Company in a Demand Registration Statement or
Coordinated Registration Statement for its own account.
(c) Compliance. Each
Acquiror Company Principal Shareholder covenants and agrees that it will comply
with the prospectus delivery requirements of the Securities Act as applicable to
it in connection with sales of Registrable Securities pursuant to the
Registration Statement.
(d) Discontinued
Disposition. Each Acquiror Company Principal Shareholder
agrees that, upon receipt of a notice from the Acquiror Company of the
occurrence of any event of the kind described in Section 3(c),
the Acquiror Company Principal Shareholder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement
until the Acquiror Company Principal Shareholder’s receipt of the copies of the
supplemented Prospectus and/or amended Registration Statement or until it is
advised in writing (the “Advice”) by the Acquiror
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Acquiror Company may provide appropriate
stop orders to enforce the provisions of this paragraph.
(e) Amendments and
Waivers. The provisions of this Agreement, including the
provisions of this Section 6(e),
may not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, unless the same shall be
in writing and signed by the Acquiror Company and the Shareholder
Representative. The Shareholder Representative shall not
amend, modify, supplement, waive or consent to departures form the provisions
hereof without having received the written authorization to do so by
majority-in-interest of the Acquiror Company Principal
Shareholders.
(f) Notices. Any
and all notices or other communications or deliveries required or permitted to
be provided hereunder shall be in writing and shall be deemed given and
effective on the earliest of (a) the date of transmission, if such notice or
communication is delivered via facsimile (provided the sender receives a
machine-generated confirmation of successful transmission) at the facsimile
number specified in this Section prior to 6:30 p.m. (New York City time) on a
Trading Day, (b) the next Trading Day after the date of transmission, if such
notice or communication is delivered via facsimile at the facsimile number
specified in this Section on a day that is not a Trading Day or later than 6:30
p.m. (New York City time) on any Trading Day, (c) the Trading Day following the
date of mailing, if sent by U.S. nationally recognized overnight courier
service, or (d) upon actual receipt by the party to whom such notice is required
to be given. The address for such notices and communications shall be
as follows:
-12-
| If to the Acquiror Company: |
Xxxxxxx
Xxxx LLP
|
|
0000
Xxxxxxxx, 00xx Xxxxx
|
|
|
Xxx
Xxxx, XX 00000-0000
|
|
|
Facsimile: (000)
000-0000
|
|
|
Attn: Xxxxxx
X. Xxxxxxxx, Esq. and Xxxxxxx Xxxxx
|
|
|
If to
the Acquiror Company
|
To
the address of such shareholder(s) set
forth
|
|
Principal
Shareholders:
|
on
the signature pages hereto
|
|
With a
copy to:
|
Xxxxxxxxxx
& Xxxxx, LLP
|
| Xxxxxxx Plaza | |
| 00000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000 | |
| Xxx Xxxxxxx, Xxxxxxxxxx 00000 | |
|
Facsimile: (000)
000-0000
|
|
|
Attn.: Xxxxx
X. Xxxxx, Esq.
|
|
| If to the Shareholder | |
| Representative, to: | AFH Holding & Advisory, LLC |
| 0000 Xxxxxxxx Xxxxxxxxx, Xxxxx 000 | |
| Xxxxxxx Xxxxx, XX 00000 | |
| Facsimile: (000) 000-0000 | |
| E-mail: xxxx@xxxxxxxxxx.xxx |
or such
other address as may be designated in writing hereafter, in the manner provided
in this subparagraph (g), by such Person.
(g) Successors and
Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the
parties. The Acquiror Company may not assign its rights or
obligations hereunder without the prior written consent of the Shareholder
Representative. The Shareholder Representative shall not grant such
consent unless it shall have received the prior written consent of a
majority-in-interest of the Acquiror Company Principal
Shareholders.
(h) Execution and
Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed to be an original
and, all of which taken together shall constitute one and the same
Agreement. In the event that any signature is delivered by facsimile
or other electronic transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.
-13-
(i)
Governing
Law. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law
thereof. Each party agrees that all Proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Agreement (whether brought against a party hereto or its respective
Affiliates, employees or agents) will be commenced in the New York
Courts. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any Proceeding, any claim that it is not personally subject to the
jurisdiction of any New York Court, or that such Proceeding has been commenced
in an improper or inconvenient forum. Each party hereto hereby
irrevocably waives personal service of process and consents to process being
served in any such Proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. Each party
hereto hereby irrevocably waives, to the fullest extent permitted by applicable
law, any and all right to trial by jury in any Proceeding arising out of or
relating to this Agreement or the transactions contemplated
hereby. If either party shall commence a Proceeding to enforce any
provisions of this Agreement, then the prevailing party in such Proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
Proceeding.
(j)
Cumulative
Remedies. The remedies provided herein are cumulative and not
exclusive of any remedies provided by law.
(k) Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their reasonable efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention
of the parties that they would have executed the remaining terms, provisions,
covenants and restrictions without including any of such that may be hereafter
declared invalid, illegal, void or unenforceable.
(l)
Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.
(m) Exculpation of Shareholder
Representative. The Acquiror Company Principal Shareholders
(other than Shareholder Representative) hereby agree and acknowledge that
Shareholder Representative shall act as a representative on behalf the other
Acquiror Company Principal Shareholders strictly for purposes of facilitating
communications (sending and receiving notices) as a matter of administrative
convenience and not for any other purpose, and the Shareholder Representative
shall bear no duty under this Agreement, fiduciary or otherwise, to the other
Acquiror Company Principal Shareholders.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE
PAGES TO FOLLOW]
-14-
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as
of the date first written above.
| ACQUIROR COMPANY: | YI XIN INTERNATIONAL COPPER, INC. | ||
|
|
By:
|
/s/ | |
| Name | |||
| Title | |||
ACQUIROR
COMPANY
PRINCIPAL
SHAREHOLDERS: /s/________________________________
Signature
___________________________________
Name of Shareholder
___________________________________
Authorized Representative
___________________________________
Title
Address:
___________________________
___________________________________
Fax: (______) _______________________
-15-
ANNEX
A
YI XIN
INTERNATIONAL COPPER, INC.
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock (the “Common Stock”), of Yi Xin
International Copper, Inc., a Delaware corporation (previously known as AFH
Holding I, Inc.) (the “Acquiror
Company”), understands that the Acquiror Company has filed or intends to
file with the Securities and Exchange Commission (the “Commission”) a Registration
Statement for the registration and resale of the Registrable
Securities. All capitalized terms used and not otherwise defined
herein shall have the meanings ascribed thereto in the Registration Rights
Agreement to which this Annex A is a part.
The
undersigned hereby provides the following information to the Acquiror Company
and represents and warrants that such information is accurate:
QUESTIONNAIRE
1.
Name.
|
|
(a)
|
Full
Legal Name of Selling
Securityholder
|
|
|
(b)
|
Full
Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities Listed in Item 3 below are
held:
|
|
|
(c)
|
Full
Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose
of the securities covered by the
questionnaire):
|
2. Address
for Notices to Selling Securityholder:
|
Telephone:________________________________
|
|
Fax:______________________________________
|
|
Contact
Person:_____________________________
|
3. Beneficial
Ownership of Registrable Securities:
|
|
Type
and Principal Amount of Registrable Securities beneficially
owned:
|
-16-
|
|
|
4. Broker-Dealer
Status:
|
|
(a)
|
Are
you a broker-dealer?
|
Yes ¨ No ¨
|
Note:
|
If
yes, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration Statement.
|
|
|
|
(b)
|
Are
you an affiliate of a
broker-dealer?
|
Yes ¨ No ¨
|
|
(c)
|
If
you are an affiliate of a broker-dealer, do you certify that you bought
the Registrable Securities in the ordinary course of business, and at the
time of the purchase of the Registrable Securities to be resold, you had
no agreements or understandings, directly or indirectly, with any person
to distribute the Registrable
Securities?
|
Yes ¨ No ¨
|
Note:
|
If
no, the Commission’s staff has indicated that you should be identified as
an underwriter in the Registration
Statement.
|
5. Beneficial
Ownership of Other Securities of the Acquiror Company Owned by the Selling
Securityholder.
Except
as set forth below in this Item 5, the undersigned is not the beneficial or
registered owner of any securities of the Acquiror Company other than the
Registrable Securities listed above in Item 3.
|
|
Type
and Amount of Other Securities beneficially owned by the Selling
Securityholder:
|
6. Relationships
with the Acquiror Company:
Except
as set forth below, neither the undersigned nor any of its affiliates, officers,
directors or principal equity holders (owners of 5% of more of the equity
securities of the undersigned) has held any position or office or has had any
other material relationship with the Acquiror Company (or its predecessors or
affiliates) during the past three years.
|
|
State
any exceptions here:
|
-17-
7. The Acquiror
Company has advised the Selling Shareholder that it may not use shares
registered on the Registration Statement to cover short sales of Common Stock
made prior to the date on which the Registration Statement is declared effective
by the Commission, in accordance with 1997 Securities and Exchange Commission
Manual of Publicly Available Telephone Interpretations Section
A.65. If a Selling Shareholder uses the prospectus for any sale of
the Common Stock, it will be subject to the prospectus delivery requirements of
the Securities Act. The Selling Shareholders will be responsible to
comply with the applicable provisions of the Securities Act and Exchange Act,
and the rules and regulations thereunder promulgated, including, without
limitation, Regulation M, as applicable to such Selling Shareholders in
connection with resales of their respective shares under the Registration
Statement.
The
undersigned agrees to promptly notify the Acquiror Company of any inaccuracies
or changes in the information provided herein that may occur subsequent to the
date hereof and prior to the Effective Date for the Registration
Statement.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 6 and the inclusion of such
information in the Registration Statement and the related
prospectus. The undersigned understands that such information will be
relied upon by the Acquiror Company in connection with the preparation or
amendment of the Registration Statement and the related prospectus.
IN
WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice
and Questionnaire to be executed and delivered either in person or by its duly
authorized agent.
| Dated: | Beneficial Owner: | |||
|
|
By:
|
|||
| Name | ||||
| Title | ||||
PLEASE
FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
THE ORIGINAL BY OVERNIGHT MAIL, TO:
[ ]
000160/09953
BFLODOCS 2379283v2
-18-
SCHEDULE
A
ACQUIROR
COMPANY PRINCIPAL SHAREHOLDERS
|
000160/09953
BFLODOCS 2383789v1
|
