REGISTRATION RIGHTS AGREEMENT
This
Registration Rights Agreement (this “Agreement”)
is
made and entered into as of _______, 2008, by and between China Agri-Business,
Inc., a Maryland corporation (the “Company”)
and
each of the several purchasers signatory hereto (each such purchaser, a
“Purchaser”
or
“Holder”
and,
collectively, the “Purchasers”,
or
“Holders”).
This
Agreement is made pursuant to the Private Placement Memorandum, dated as of
September 8, 2008, between the Company and each Purchaser (the “PPM”).
The
Company and each Purchaser hereby agrees as follows:
1.
Definitions.
Capitalized terms used and not otherwise defined herein that are defined in
the
PPM shall have the meanings given such terms in the PPM. As used in this
Agreement, the following terms shall have the following meanings:
“Commission”
means
the Securities and Exchange Commission or any successor agency
thereto.
“Effectiveness
Date”
means,
with respect to the Registration Statement required to be filed hereunder,
the
90th calendar day following the Filing Date (or, in the event of a review by
the
Commission, the 120th calendar day following the Filing Date).
“Effectiveness
Period”
shall
have the meaning set forth in Section 2.
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended.
“Filing
Date”
means,
with respect to the Registration Statement required hereunder, the 60th Trading
Day following the closing date of the first private placement consummated by
the
Company following the date hereof.
“Holder”
or
“Holders”
means
the holder or holders, as the case may be, from time to time of Registrable
Securities.
“Plan
of Distribution”
shall
have the meaning set forth in Section 2.
“Prospectus”
means
the prospectus included in the Registration Statement, as amended or
supplemented by any prospectus supplement, 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,
as of the date in question, (i) the Conversion Shares, assuming on the date
of
determination the Notes are converted in full without regard to any conversion
limitations therein, (ii) and the Series C Warrant Shares, assuming on the
date
of determination the Warrants are exercised in full without regard to any
exercise limitations therein.
“Registration
Statement”
means
the registration statement required to be filed hereunder.
“Rule
144”
means
Rule 144 as promulgated under the Securities Act.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Rule
424”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Rule
461”
means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as such
Rule may be amended or interpreted from time to time, or any similar rule or
regulation hereafter adopted by the Commission having substantially the same
purpose and effect as such Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended.
“Selling
Shareholder Questionnaire”
shall
have the meaning set forth in Section 3(a).
“SEC
Guidance”
means
(i) any publicly-available written or oral guidance, comments, requirements
or
requests of the Commission staff, and (ii) the Securities Act and the rules
and
regulations promulgated thereunder.
“Trading
Day”
shall
mean a day on which the New York Stock Exchange is open for
trading.
2.
Shelf
Registration.
(a) On
or
prior to the Filing Date, the Company shall prepare and file with the Commission
a “Shelf” Registration Statement covering the resale of all or such portion of
the Registrable Securities as permitted by SEC Guidance (provided that the
Company shall use diligent efforts to advocate with the Commission for the
registration of the Registrable Securities in accordance with the SEC Guidance,
including without limitation, the Manual of Publicly Available Telephone
Interpretations D.29) that are not then registered on an effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule
415;
provided,
however,
that if
100% of the Registrable Securities hereunder shall equal or exceed 30% of the
issued and outstanding Common Stock of the Company (less any shares of Common
Stock held by “affiliates” of the Company as that term is defined and
interpreted for purposes of Rule 144) on the Filing Date, the Registration
Statement shall register a number of shares of Common Stock which is equal
to
30% of the issued and outstanding shares of Common Stock of the Company (less
any shares of Common Stock held by “affiliates” of the Company as that term is
defined and interpreted for purposes of Rule 144) on the Filing Date minus
10,000 shares of Common Stock. In such event, the number of Registrable
Securities to be registered for each Holder shall be reduced pro-rata among
all
Holders, and unless
otherwise directed in writing by a Holder as to its Registrable Securities,
the
number of Registrable Securities will first be reduced by Registrable Securities
represented by Conversion Shares (applied, in the case that some Conversion
Shares may be registered, to the Holders on a pro rata basis based on the total
number of unregistered Conversion Shares held by such Holders), and second
by
Registrable Securities represented by Series C Warrant Shares (applied, in
the
case that some Series C Warrant Shares may be registered, to the Holders on
a
pro rata basis based on the total number of unregistered Conversion Shares
held
by such Holders).
The
Registration Statement shall be on Form S-1 (except if the Company is not then
eligible to register for resale the Registrable Securities on Form S-1, in
which
case such registration shall be on another appropriate form in accordance
herewith) and shall contain substantially the “Plan
of Distribution”
attached hereto as Annex
A.
Subject
to the terms of this Agreement, the Company shall use its best efforts to cause
the Registration Statement to be declared effective under the Securities Act
as
promptly as possible after the filing thereof, but in any event prior to the
applicable Effectiveness Date, and shall use its best efforts to keep such
Registration Statement effective under the Securities Act until the earlier
of
(i) two (2) years from the date hereof (subject to customary blackout periods)
or (ii) the date as of which the Holders (other than any Holders who are
“affiliates” of the Company as that term is defined and interpreted for purposes
of Rule 144) may sell the Registrable Securities pursuant to Rule 144 (the
“Effectiveness
Period”).
The
Company shall notify the Holders via facsimile or by e-mail of the effectiveness
of the Registration Statement no later than one Trading Day after the Company
confirms effectiveness with the Commission. The Company shall file a final
Prospectus with the Commission as required by Rule 424.
(b) If:
(i)
the Registration Statement is not filed on or prior to its Filing Date, or
(ii)
the Company fails to file with the Commission a request for acceleration of
the
Registration Statement in accordance with Rule 461, within five (5) Trading
Days
of the date that the Company is notified in writing by the Commission that
such
Registration Statement will not be subject to further review or comment, or
(iii) in the aggregate among all Holders on a pro-rata basis based on their
purchase of the Units pursuant to the PPM, the Registration Statement
registering for resale the Registrable Securities is not declared effective
by
the Commission by the Effectiveness Date, or (iv) after the effective date
of
the Registration Statement, due to (x) the existence of a development that,
in
the good faith discretion of the Company’s board of directors, makes it
appropriate to suspend use of the Registration Statement, or (y) the existence
of a development which prohibits the Company from complying with any applicable
SEC requirements, such Registration Statement ceases to remain effective for
more than an aggregate of 30 Trading Days during any 12-month period, or (v)
after the effective date of the Registration Statement, such Registration
Statement ceases for any reason to remain effective as to all Registrable
Securities included in the Registration Statement, or the Holders are otherwise
not permitted to utilize the Prospectus therein to resell such Registrable
Securities, for more than an aggregate of 60 Trading Days during any 12-month
period, or (vi) prior to the effective date of the Registration Statement,
the
Company fails to file a pre-effective amendment or otherwise respond to comments
made by the Commission in respect of such Registration Statement within ten
(10)
Trading Days after the receipt of comments by or notice from the Commission
that
such amendment is required in order for such Registration Statement to be
declared effective (any such failure or breach being referred to as an
“Event”,
and
for purposes of clauses (i) and (iii) the date on which such Event occurs,
and
for purpose of clause (ii) the date on which such five Trading Day period is
exceeded, and for purpose of clause (iv) the date on which such 30 Trading
Day
period is exceeded, and for purpose of clause (v) the date on which such 60
Trading Day period is exceeded, and for purpose of clause (vi) the date on
which
such 10 Trading Day period is exceeded, being referred to as “Event
Date”),
then,
on each monthly anniversary of each such Event Date (if the applicable Event
shall not have been cured by such date) until the applicable Event is cured,
the
Company shall pay to each Holder an amount in cash (in arrears at the end of
each month during which an Event occurs and is continuing), as full liquidated
damages and not as a penalty, equal to 2% of the aggregate purchase price paid
by such Holder pursuant to the PPM for any unregistered Registrable Securities
then held by such Holder. The parties agree that (1) in no event shall the
Company be liable for liquidated damages under this Agreement in excess of
2% of
the aggregate purchase price of the Holders in any 30 day period, and (2) the
maximum aggregate liquidated damages payable to a Holder under this Agreement
shall be 24% of the aggregate purchase price paid by such Holder pursuant to
the
PPM.
(c) Notwithstanding
anything to the contrary herein, it shall not constitute a breach of this
Agreement nor shall the Company be liable in any manner (including for any
Losses (as defined below) or the liquidated damages contemplated by Section
2),
if: (A) if its failure to comply with this Agreement results directly or
indirectly from (i) the application of Rule 415, the SEC Guidance or any one
or
more of the foregoing, or (ii) any delays which are attributable to information
relating to the Holders, including, without limitation, changes to the plan
of
distribution, the failure of the Holders to conduct their review of the
Registration Statement, or the failure of the Holders to provide any information
required by the Company or the Commission, or (B) the Registrable Securities
may
be sold under Rule 144.
3.
Registration
Procedures.
In
connection with the Company’s registration obligations hereunder, the Company
shall:
(a) Not
less
than three (3) Trading Days prior to the Filing Date and not less than one
(1)
Trading Day prior to the filing of any related Prospectus or any amendment
or
supplement thereto (including any document that would be incorporated or deemed
to be incorporated therein by reference), the Company shall furnish to each
Holder copies of all such documents proposed to be filed. As a condition to
the
inclusion of a Holder’s Registrable Securities in the Registration Statement,
such Holder shall furnish to the Company a completed questionnaire in the form
attached to this Agreement as Annex
B
(a
“Selling
Shareholder Questionnaire”).
(b) (i) Prepare
and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement effective
as to
the applicable Registrable Securities for the Effectiveness Period; (ii) cause
the related Prospectus to be amended or supplemented by any required Prospectus
supplement (subject to the terms of this Agreement), and, as so supplemented
or
amended, to be filed pursuant to Rule 424; (iii) respond to any comments
received from the Commission with respect to the Registration Statement or
any
amendment thereto and provide to the Holders upon request true and complete
copies of all correspondence from and to the Commission relating to the
Registration Statement (provided that the Company may excise any information
contained therein which would constitute material non-public information as
to
any Holder which has not executed a confidentiality agreement with the Company);
and (iv) comply in all material respects with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities covered by
the
Registration Statement during the applicable period in accordance (subject
to
the terms of this Agreement) with the intended methods of disposition by the
Holders thereof set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented.
(c) Notify
the Holders (which notice shall, if appropriate, be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made) (i)(A) when the Commission notifies the Company whether there
will be a “review” of such Registration Statement and whenever the Commission
comments in writing on such Registration Statement; and (B) with respect to
the
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 the Registration
Statement or Prospectus or for additional information; (iii) of the issuance
by
the Commission or any other federal or state governmental authority of any
stop
order suspending the effectiveness of the Registration Statement covering any
or
all of the Registrable Securities; (iv) of the receipt by the 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; (v) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible
for
inclusion therein or any statement made in the 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
the
Registration Statement, Prospectus or other documents so that, in the case
of
the 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; and
(vi) of the occurrence or existence of any corporate development with respect
to
the Company that, in the determination of the Company, makes it not in the
best
interest of the Company to allow continued availability of the Registration
Statement or Prospectus, provided that any and all of such information shall
remain confidential to each Holder until such information otherwise becomes
public.
(d) Furnish
to each Holder, upon request, at least one conformed copy of each such
Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Holder, and
all exhibits to the extent requested by such Holder (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that any such item which is available
on the XXXXX system need not be furnished in physical form.
(e) Cooperate
with the selling Holders in connection with the registration or qualification
(or exemption from the registration or qualification) of such Registrable
Securities for the resale by the Holder under the securities or Blue Sky laws
of
such jurisdictions within the United States as any Holder reasonably requests
in
writing, to keep the registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts
or
things reasonably necessary to enable the disposition in such jurisdictions
of
the Registrable Securities covered by the Registration Statement; provided,
that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file
a
general consent to service of process in any such
jurisdiction.
(f) Pay
all
fees and expenses incident to the performance of this Agreement. 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 of the Company’s counsel and auditors) (A) with respect to
filings made with the Commission, (B) with respect to filings required to be
made with any exchange or trading market on which the Common Stock is then
listed for trading, (C) in compliance with applicable state securities or Blue
Sky laws reasonably agreed to by the Company in writing (including, without
limitation, fees and disbursements of counsel for the Company in connection
with
Blue Sky qualifications or exemptions of the Registrable Securities), (ii)
printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities), and (iii) fees and disbursements
of
counsel for the Company. In no event shall the Company be responsible for any
broker or similar commissions of any Holder or, except to the extent provided
for in the PPM, any legal fees or other costs of the Holders.
4.
Obligations
of the Holders.
In
connection with the Company’s registration obligations hereunder, each Holder
shall:
(a) Furnish
to the Company (i) a certified statement as to the number of shares of Common
Stock beneficially owned by such Holder and, if required by the Commission,
the
natural persons thereof that have voting and dispositive control over the
shares, and (ii) any information required by the Company or the Commission.
During any periods that the Company is unable to meet its obligations hereunder
with respect to the registration of the Registrable Securities solely because
any Holder fails to furnish such information, any liquidated damages shall
be
tolled until such information is delivered to the Company.
(b) 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.
(c) Upon
receipt of a notice from the Company of the occurrence of any event of the
kind
described in Section 3, discontinue disposition of such Registrable Securities
under the Registration Statement until it is advised in writing (the
“Advice”)
by the
Company that the use of the applicable Prospectus (as it may have been
supplemented or amended) may be resumed.
5. Indemnification.
(a) Indemnification
by the Company.
The
Company shall indemnify and hold harmless each Holder, the officers, directors,
members, partners, agents, each person who “controls” any such Holder (within
the meaning of the Exchange Act) and the officers, directors, members,
shareholders, partners, agents and employees (and any other persons with a
functionally equivalent role of a person holding such titles, notwithstanding
a
lack of such title or any other title) 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
and documented attorneys’ fees) and expenses (collectively, “Losses”),
as
incurred, arising out of or relating to (1) any untrue statement of a material
fact contained in the 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 of a material fact
required to be stated therein or necessary to make the statements therein not
misleading or (2) any material violation by the Company of the Securities Act,
the Exchange Act or any state securities law, or any rule or regulation
thereunder, in connection with the performance of its obligations under this
Agreement (the matters in the foregoing clauses (1) and (2) being, collectively,
“Company
Violations”).
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 5(b): (i) shall not apply to Losses arising
out of or based upon a Company Violation which occurs in reliance upon and
in
conformity with information furnished in writing to the Company by any Holder
or
underwriter for such Holder expressly for use in connection with the preparation
of such Registration Statement or any such amendment thereof or supplement
thereto, (ii) shall not apply to amounts paid in settlement of any Losses if
such settlement is effected without the prior written consent of the Company;
and (iii) with respect to any preliminary prospectus, shall not inure to the
benefit of any Holder if the untrue statement or omission of material fact
contained in the preliminary prospectus was corrected on a timely
basis.
(b) Indemnification
by Holders.
Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each person who controls
the Company (within the meaning 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 solely upon: (1) such Holder’s failure to comply
with the prospectus delivery requirements of the Securities Act, (2) the failure
of the Holders to provide any information required by the Company or the
Commission in connection with this Agreement or the Registration Statement,
or
(3) 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 not misleading
(the matters in the foregoing clauses (1) through (3) being, collectively,
“Holder
Violations”).
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 5(b): (i) shall apply only to Losses arising
out of or based upon a Holder Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by any Holder
or
underwriter for such Holder expressly for use in connection with the preparation
of such Registration Statement or any such amendment thereof or supplement
thereto, (ii) shall not apply to amounts paid in settlement of any Losses if
such settlement is effected without the prior written consent of the Holder;
and
(iii) with respect to any preliminary prospectus, shall not inure to the benefit
of the Company if the untrue statement or omission of material fact contained
in
the preliminary prospectus was corrected on a timely basis.
6. Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, 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, shall be entitled to
specific performance of its rights under this Agreement.
(b) No
Piggyback on Registrations.
Except
for any registration rights previously granted by the Company, neither the
Company nor any of its security holders (other than the Holders in such capacity
pursuant hereto) may include securities of the Company in the Registration
Statement other than the Registrable Securities and the shares of common stock
issuable upon exercise of the Placement Agent Warrants.
(c) Amendments
and Waivers.
This
Agreement may be amended or modified, and provisions hereof may be waived,
with
the written consent of the Company and the holders of a majority of the then
outstanding Registrable Securities; provided,
that
this Agreement may not be amended in a manner that would materially adversely
affect any Purchaser without the consent of such Purchaser. Any such amendment,
modification or waiver shall be binding on all parties, including those not
signing such amendment, modification or waiver, and such consent may be given
or
withheld for any reason or for no reason.
(d) Notices.
Any and
all notices or other communications or deliveries required or permitted to
be
provided hereunder shall be delivered as set forth in the PPM.
(e) 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 and shall inure to the benefit of
each
Holder. The Company may not assign (except by merger) its rights or obligations
hereunder without the prior written consent of all of the Holders of the then
outstanding Registrable Securities. Each Holder may assign their respective
rights hereunder in the manner and to the persons as permitted under the
PPM.
(f) No
Inconsistent Agreements.
Neither
the Company nor any of its subsidiaries has entered, as of the date hereof,
nor
shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that would
have the effect of impairing the rights granted to the Holders in this Agreement
or otherwise conflicts with the provisions hereof. Neither the Company nor
any
of its subsidiaries has previously entered into any agreement granting any
registration rights with respect to any of its securities to any person that
have not been satisfied in full.
(g) Execution
and Counterparts.
This
Agreement may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format data file, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such
facsimile or “.pdf” signature page were an original thereof.
(h) Governing
Law; Consent to Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws of
the
State of New York for all purposes and in all respects, without regard to the
conflicts of laws provisions thereof. Any suit for the enforcement of this
Agreement may be brought in the state or federal courts located in New York,
New
York, and each party hereto consents to the exclusive jurisdiction of each
such
court and to service of process in any such suit being made upon the Company
by
mail at the address specified above. Each party hereto hereby waives any
objection that it may now or hereafter have to the venue of any such suit or
any
such court or that such suit was brought in any inconvenient court.
(i) Severability.
If any
provision of this Agreement shall be declared void or unenforceable by any
judicial or administrative authority, the validity of any other provision and
of
the entire Agreement shall not be affected thereby.
(j) Headings.
The
headings in this Agreement are for convenience only, do not constitute a part
of
the Agreement and shall not be deemed to limit or affect any of the provisions
hereof.
[SIGNATURE
PAGE(S) FOLLOW]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
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COMPANY:
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By:
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Name:
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Title
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[SIGNATURE
PAGE OF HOLDERS FOLLOWS]
[SIGNATURE
PAGE OF PURCHASERS]
Name
of
Holder: __________________________
Signature
of Authorized Signatory of Holder:
__________________________
Name
of
Authorized Signatory: _________________________
Title
of
Authorized Signatory: __________________________
[SIGNATURE
PAGES CONTINUE]
Annex
A
Plan
of Distribution
Each
Selling Stockholder (the “Selling
Stockholders”)
of the
common stock and any of their pledgees, assignees and successors-in-interest
may, from time to time, sell any or all of their shares of common stock on
the
OTC Bulletin Board or any other stock exchange, market or trading facility
on
which the shares are traded or in private transactions. These sales may be
at
fixed or negotiated prices. A Selling Stockholder may use any one or more of
the
following methods when selling shares:
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·
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ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
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·
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block
trades in which the broker-dealer will attempt to sell the shares
as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
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·
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purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
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·
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an
exchange distribution in accordance with the rules of the applicable
exchange;
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·
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privately
negotiated transactions;
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·
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settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a part;
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·
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broker-dealers
may agree with the Selling Stockholders to sell a specified number
of such
shares at a stipulated price per
share;
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·
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through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
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·
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a
combination of any such methods of sale;
or
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·
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any
other method permitted pursuant to applicable
law.
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The
Selling Stockholders may also sell shares under Rule 144 if available, rather
than under this prospectus.
Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the Selling Stockholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this Prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance
with
applicable FINRA rules; and in the case of a principal transaction a markup
or
markdown in compliance with applicable FINRA rules.
In
connection with the sale of the common stock or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
Selling Stockholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker-dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. Each Selling Stockholder has informed the
Company that it does not have any written or oral agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock. In
no
event shall any broker-dealer receive fees, commissions and markups which,
in
the aggregate, would exceed eight percent (8%).
The
Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the shares. The Company has agreed to indemnify
the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
Because
Selling Stockholders may be deemed to be “underwriters” within the meaning of
the Securities Act, they will be subject to the prospectus delivery requirements
of the Securities Act including Rule 172 thereunder. In addition, any securities
covered by this prospectus which qualify for sale pursuant to Rule 144 may
be
sold under Rule 144 rather than under this prospectus. There is no underwriter
or coordinating broker acting in connection with the proposed sales by the
Selling Stockholders.
We
have
agreed to keep this prospectus effective until the earlier of (i) two (2) years
from the date hereof, or (ii) the date as of which the Holders (other than
any
Holders who are “affiliates” of the Company as that term is defined and
interpreted for purposes of Rule 144) may sell the Registrable Securities
pursuant to Rule 144. The resale shares will be sold only through registered
or
licensed brokers or dealers if required under applicable state securities laws.
In addition, in certain states, the resale shares may not be sold unless they
have been registered or qualified for sale in the applicable state or an
exemption from the registration or qualification requirement is available and
is
complied with.
Under
applicable rules and regulations under the Exchange Act, any person engaged
in
the distribution of the resale shares may not simultaneously engage in market
making activities with respect to the common stock for the applicable restricted
period, as defined in Regulation M, prior to the commencement of the
distribution. In addition, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including Regulation M, which may limit the timing of purchases
and
sales of shares of the common stock by the Selling Stockholders or any other
person. We will make copies of this prospectus available to the Selling
Stockholders and have informed them of the need to deliver a copy of this
prospectus to each purchaser at or prior to the time of the sale (including
by
compliance with Rule 172 under the Securities Act).
Annex
B
CHINA
AGRI-BUSINESS, INC.
Selling
Securityholder Notice and Questionnaire
The
undersigned beneficial owner of common stock (the “Registrable
Securities”)
of
China Agri-Business, Inc., a company organized under the laws of the State
of
Maryland (the “Company”),
understands that the Company has filed or intends to file with the Securities
and Exchange Commission (the “Commission”)
a
registration statement (the “Registration
Statement”)
for
the registration and resale under Rule 415 of the Securities Act of 1933, as
amended (the “Securities
Act”),
of
the Registrable Securities, in accordance with the terms of the Registration
Rights Agreement (the “Registration
Rights Agreement”)
to
which this document is annexed. A copy of the Registration Rights Agreement
is
available from the Company upon request at the address set forth below. All
capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Registration Rights Agreement.
Certain
legal consequences arise from being named as a selling securityholder in the
Registration Statement and the related prospectus. Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling securityholder in the Registration Statement and the related
prospectus.
NOTICE
The
undersigned beneficial owner (the “Selling
Securityholder”)
of
Registrable Securities hereby elects to include the Registrable Securities
owned
by it in the Registration Statement.
The
undersigned hereby provides the following information to the 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 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 this
Questionnaire):
|
2.
Address for Notices to Selling Securityholder:
|
Telephone:
|
|
||
|
Fax:
|
|
||
|
Contact
Person:
|
|
||
3.
Broker-Dealer Status:
|
(a)
|
Are
you a broker-dealer?
|
Yes
No
|
(b)
|
If
“yes” to Section 3(a), did you receive your Registrable Securities as
compensation for investment banking services to the
Company?
|
Yes
No
|
Note:
|
If
“no” to Section 3(b), the Commission’s staff has indicated that you should
be identified as an underwriter in the Registration
Statement.
|
|
(c)
|
Are
you an affiliate of a
broker-dealer?
|
Yes
No
|
(d)
|
If
you are an affiliate of a broker-dealer, do you certify that you
purchased
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” to Section 3(c), the Commission’s staff has indicated that you should
be identified as an underwriter in the Registration
Statement.
|
4.
Beneficial Ownership of Securities of the Company Owned by the Selling
Securityholder.
Except
as set forth below in this Item 4, the undersigned is not the beneficial
or
registered owner of any securities of the Company other than the securities
issuable pursuant to the PPM.
|
(a)
|
Type
and Amount of other securities beneficially owned by the Selling
Securityholder:
|
5.
Relationships with the 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 Company (or its predecessors or affiliates)
during the past three years.
State
any
exceptions here:
The
undersigned agrees to promptly notify the Company of any inaccuracies or
changes
in the information provided herein that may occur subsequent to the date
hereof
at any time while the Registration Statement remains effective.
By
signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of
such
information in the Registration Statement and the related prospectus
and
any
amendments or supplements thereto.
The
undersigned understands that such information will be relied upon by the
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.
|
Date:
|
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:
