Registration Rights Agreement (2008)Full Document 

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REGISTRATION RIGHTS AGREEMENT
 
THIS REGISTRATION RIGHTS AGREEMENT (this “Agreement”) is made and entered into as of July 25, 2007 among Origin Agritech Ltd., a British Virgin Islands limited liability company (the “Company”), State Harvest Holdings Limited, a British Virgin Islands limited liability company wholly-owned by the Company (the “Guarantor”) and Citadel Equity Fund Ltd., as the initial purchaser (the “Purchaser”) of the Notes (defined below).
 
This Agreement is made pursuant to the Notes Purchase Agreement dated July 25, 2007 (the “Purchase Agreement”) among the Purchaser, the Company, the Guarantor, other subsidiaries of the Company named therein and certain other individuals named therein, which provides for, among other things, the issuance and sale of the Company’s 1.0% Guaranteed Senior Secured Convertible Notes Due 2012 (the “Notes”), each with a principal amount of US$100,000, for an aggregate principal amount of US$40,000,000, to the Purchaser, which are guaranteed (the “Guarantees”) by each of the Guarantors pursuant to the terms of the Indenture. Capitalized terms used but not defined herein shall have the meanings given to such terms in the Purchase Agreement.
 
As an inducement to the Purchaser to enter into the Purchase Agreement, and in satisfaction of a condition to the obligations of the Purchaser thereunder, the Company and the Guarantor agree with the Purchaser, for the benefit of the holders (including the Purchaser) of the Notes and the Shares (as defined below) (collectively, the “Holders”), as follows:
 
 
1.
Certain Definitions.
 
For purposes of this Registration Rights Agreement the following terms shall have the following meanings:
 
(a) Affiliate” of any specified Person means:
 
(i) any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person, or
 
(ii) any other Person who is a director or officer of:
 
(1) such specified Person,
(2) any Subsidiary of such specified Person, or
(3) any Person described in clause (a) above.

For the purposes of this definition, “control” when used with respect to any Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
 
 
 

 
 
(b) Additional Guarantor” means any subsidiary of the Company that executes a Guarantee under the Indenture after the date of this Agreement.
 
(c) Additional Interest” has the meaning assigned thereto in Section 2(d).
 
(d) Additional Interest Payment Date” has the meaning assigned thereto in Section 2(d).
 
(e) Agreement” means this Registration Rights Agreement, as the same may be amended from time to time pursuant to the terms hereof.
 
(f) Authorized Agent” has the meaning assigned thereto in Section 11(g).
 
(g) Blue Sky” means the statutes of any state regulating the sale of corporate securities within that state.
 
(h) Business Day” means any day other than a Saturday, a Sunday, or a day on which banking institutions in New York, New York are authorized or required by law or executive order to remain closed.
 
(i) Closing Date” means the date on which any Notes are initially issued.
 
(j) Commission” means the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.
 
(k) Company” has the meaning specified in the first paragraph of this Agreement.
 
(l) Deferral Notice” has the meaning assigned thereto in Section 4(b).
 
(m) Deferral Period” has the meaning assigned thereto in Section 4(b).
 
(n) Effective Period” has the meaning assigned thereto in Section 2(a).
 
(o) Eligibility Date” has the meaning assigned thereto in Section 2(a).
 
(p) Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
 
(q) Free Writing Prospectusmeans each free writing prospectus (as defined in Rule 405 under the Securities Act) prepared by or on behalf of the Company or used or referred to by the Company in connection with the sale of the Securities.
 
(r) Guarantees” has the meaning specified in the second paragraph of this Agreement.
 
(s) Guarantors” has the meaning set forth in the first paragraph of this Agreement and also includes any Guarantor’s successors and any Additional Guarantors.
 
 
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(t) Holder” means each holder, from time to time, of Registrable Securities (including the Purchaser).
 
(u) Incidental Registration” means a registration required to be effected by the Company pursuant to Section 3.
 
(v) Incidental Registration Statement” means the registration statement referred to in Section 3(a), as amended or supplemented by any amendment or supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such registration statement.
 
(w) Indenture” means the Indenture dated as of the date hereof among the Company, the Guarantor, certain other subsidiaries of the Company and The Bank of New York, as Trustee, pursuant to which the Notes and the Guarantees are being issued.
 
(x) Issuer Information” has the meaning set forth in Section 7(a) hereof.
 
(y) Material Event” has the meaning assigned thereto in Section 4(a)(iv).
 
(z) Majority Holders” shall mean, on any date, holders of the majority of the Shares constituting Registrable Securities; for the purposes of this definition, Holders of Notes constituting Registrable Securities shall be deemed to be the Holders of the number of Shares into which such Notes are or would be convertible as of such date.
 
(aa) NASD” shall mean the National Association of Securities Dealers, Inc.
 
(bb) NASD Rules” shall mean the Conduct Rules and the By-Laws of the NASD.
 
(cc) Notes” has the meaning specified in the first paragraph of this Agreement.
 
(dd) Notice and Questionnaire” means a written notice delivered to the Company containing substantially the information called for by the Form of Selling Securityholder Notice and Questionnaire attached as Annex A hereto.
 
(ee) Notice Holder” means, on any date, any Holder that has delivered a Notice and Questionnaire to the Company prior to such date.
 
(ff) Person” means a corporation, association, partnership, organization, business, individual, government or political subdivision thereof or governmental agency.
 
(gg) Prospectus” means the prospectus included in any Relevant Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Prospectus.
 
 
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(hh) Purchase Agreement” has the meaning specified in the first paragraph of this Agreement.
 
(ii) Purchaser” has the meaning specified in the first paragraph of this Agreement.
 
(jj) Registrable Securities” means
 
 
(i)
any Notes and the Guarantees until the earliest of (i) their effective registration under the Securities Act and the resale of all such Notes and Guarantees in accordance with the Relevant Registration Statement, (ii) the date on which such Notes and Guarantees are (A) sold pursuant to Rule 144 under circumstances in which any legend borne by such Notes and Guarantees relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed or (B) freely transferable without restriction under Rule 144(k) or (iii) the date on which such Notes have been converted (and the related Guarantees have been terminated) or otherwise cease to be outstanding; and
 
 
(ii)
any Shares issuable upon conversion of any Notes constituting Registrable Securities, until the earliest of (i) their effective registration under the Securities Act and the resale of all such Shares in accordance with the Relevant Registration Statement, (ii) the date on which such Shares are (A) sold pursuant to Rule 144 under circumstances in which any legend borne by such Shares relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed or (B) freely transferable without restriction under Rule 144(k) or (iii) the date on which such Shares cease to be outstanding.
 
(kk) Registration Default” has the meaning assigned thereto in Section 2(d).
 
(ll) Registration Expenses” has the meaning assigned thereto in Section 7.
 
(mm) Relevant Registration Statement” means the Shelf Registration Statement or the Incidental Registration Statement, as the context may require.
 
(nn) Rule 144,” “Rule 405” and “Rule 415” mean, in each case, such rule as promulgated under the Securities Act.
 
(oo) Securities” means, collectively, the Notes and the Shares.
 
(pp) Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
 
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(qq) Shares” means the shares of common stock of the Company, with no par value, into which the Notes are convertible or that have been issued upon a conversion from Notes into common stock of the Company.
 
(rr) Shelf Registration Statement” means the shelf registration statement referred to in Section 2(a), as amended or supplemented by any amendment or supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Shelf Registration Statement.
 
(ss) Special Counsel” shall have the meaning assigned thereto in Section 7.
 
(tt) Guarantee” means, individually, any Guarantee of payment of the Securities by a Guarantor pursuant to the terms of the Indenture and any supplemental indenture thereto and, collectively, all such Guarantees. Each such Guarantee will be in the form prescribed by the Indenture.
 
(uu) Trustee” shall have the meaning assigned such term in the Indenture.
 
(vv) Underwritten Incidental Registration” shall have the meaning assigned thereto in Section 3(b).
 
(ww) Underwritten Offering” means a sale of securities of the Company to an underwriter or underwriters for reoffering to the public.
 
Unless the context otherwise requires, any reference herein to a “Section” or “clause” refers to a Section or clause, as the case may be, of this Agreement, and the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision. Unless the context otherwise requires, any reference to a statute, rule or regulation refers to the same (including any successor statute, rule or regulation thereto) as it may be amended from time to time.
 
 
2.
Registration Under the Securities Act.
 
(a) The Company and the Guarantor agree to file under the Securities Act as promptly as practicable but in any event within 90 days after the latter of (x) the Closing Date and (y) the date on which the Company becomes eligible to so file (the latter date hereinafter being referred to as the “Eligibility Date”), a shelf registration statement providing for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission. The Company and the Guarantor agree to use their reasonable efforts to cause the Shelf Registration Statement to become effective within 180 days after the Eligibility Date; provided, however, that the Company may, upon written notice to all Holders, postpone having the Shelf Registration Statement declared effective for a reasonable period not to exceed 30 consecutive days per postponement and provided that all such postponement periods total no more than 60 days in the aggregate in any 365-day period if the Company possesses material non-public information, the disclosure of which would have a material adverse effect on the Company and its subsidiaries taken as a whole. The Company and the Guarantor shall use its reasonable efforts to keep such Shelf Registration Statement continuously effective until the earlier of (x) the date that there are no longer any Registrable Securities outstanding; (y) the expiration of the period referred to in Rule 144(k) of the Securities Act with respect to all Registerable Securities held by Persons that are not Affiliates of the Company; and (z) two years from the date (the “Effective Date”) such Registration Statement is declared effective (the “Effective Period”). Without prejudice to any registration rights, existing as of the date hereof, held by the Company’s securityholders or the Guarantors’ securityholders with respect to the Company’s securities or the Guarantors’ securities, respectively, none of the Company’s securityholders or the Guarantors’ securityholders (other than Holders of Registrable Securities) shall have the right to include any of the Company’s securities or the Guarantors’ securities in the Shelf Registration Statement.
 
 
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(b) The Company and the Guarantor further agree that they shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act; and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading, and the Company and the Guarantors agree to furnish to the Holders of the Registrable Securities copies of any supplement or amendment prior to its being used or promptly following its filing with the Commission; provided, however, that the Company shall have no obligation to deliver to Holders of Registrable Securities copies of any amendment consisting exclusively of an Exchange Act report or other Exchange Act filing otherwise publicly available on the Company’s website. If the Shelf Registration Statement, as amended or supplemented from time to time, ceases to be effective for any reason at any time during the Effective Period (other than because all Registrable Securities registered thereunder shall have been sold pursuant thereto or shall have otherwise ceased to be Registrable Securities), the Company and the Guarantor shall use their reasonable best efforts to obtain the prompt withdrawal of any order suspending the effectiveness thereof.
 
(c) Each Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to the Shelf Registration Statement and related Prospectus, it will do so only in accordance with this Section 2(c) and Section 4(b). From and after the date the Shelf Registration Statement is declared or becomes effective, the Company and the Guarantor shall, as promptly as is practicable after the date a Notice and Questionnaire is delivered, and in any event within fifteen (15) days after the date of receipt of such Notice and Questionnaire, or if the use of the Prospectus has been suspended by the Company under Section 4(b) hereof at the time of receipt of the Notice and Questionnaire, fifteen (15) days after the expiration of the period during which the use of the Prospectus is suspended:
 
(i) if required by applicable law, file with the Commission a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that the Holder delivering such Notice and Questionnaire is named as a selling security holder in the Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company and the Guarantor shall file a post-effective amendment to the Shelf Registration Statement, use their reasonable efforts to cause such post-effective amendment to be declared or to otherwise become effective under the Securities Act as promptly as is practicable. Notwithstanding the foregoing, the Company and the Guarantor shall not be required to file more than one post-effective amendment to the Shelf Registration Statement or supplement to the related Prospectus during any thirty (30) day period;
 
 
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(ii) provide such Holder copies of any documents filed pursuant to Section 2(c)(i); and
 
(iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(c)(i);
 
provided that if such Notice and Questionnaire is delivered during a Deferral Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 4(b). Notwithstanding anything contained herein to the contrary, the Company and the Guarantor shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Shelf Registration Statement or related Prospectus; provided, however, that any Holder that becomes a Notice Holder pursuant to the provisions of this Section 2(c) (whether or not such Holder was a Notice Holder at the time the Shelf Registration Statement was declared or otherwise became effective) shall be named as a selling securityholder in the Shelf Registration Statement or related Prospectus in accordance with the requirements of this Section 2(c).
 
(d) If any of the following events (any such event a “Registration Default”) shall occur, then additional interest (the “Additional Interest”) shall become payable jointly and severally by the Company and the Guarantor to Holders in respect of the Notes as follows:
 
(i) if the Shelf Registration Statement is not filed with the Commission within 90 days following the Eligibility Date, then commencing on the 91st day after the Eligibility Date, Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such 91st day and at a rate of 0.50% per annum thereafter; or
 
(ii) if the Shelf Registration Statement is not declared effective and does not otherwise become effective within 180 days following the Eligibility Date, then commencing on the 181st day after the Eligibility Date, Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such 181st day and at a rate of 0.50% per annum thereafter; or
 
 
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(iii) if the Company and the Guarantor have failed to perform their obligations set forth in Section 2(c) hereof within the time periods required therein, then commencing on the first day after the date by which the Company and the Guarantor were required to perform such obligations, Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days and at a rate of 0.50% per annum thereafter;
 
(iv) if the Shelf Registration Statement has been declared effective or has otherwise become effective but such Shelf Registration Statement ceases to be effective at any time during the Effective Period (other than pursuant to Section 4(b) hereof), then commencing on the day such Shelf Registration Statement ceases to be effective, Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such date on which the Shelf Registration Statement ceases to be effective and at a rate of 0.50% per annum thereafter; or
 
(v) if the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 4(b) hereof, then commencing on the day the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period (and again on the first day of any subsequent Deferral Period during such period), Additional Interest shall accrue on the principal amount of the outstanding Notes that are Registrable Securities at a rate of 0.25% per annum for the first 90 days and at a rate of 0.50% per annum thereafter;
 
provided, however, that the Additional Interest rate on the Notes shall not exceed in the aggregate 0.50% per annum and shall not be payable under more than one clause above for any given period of time, except that if Additional Interest would be payable under more than one clause above, but at a rate of 0.25% per annum under one clause and at a rate of 0.50% per annum under the other, then the Additional Interest rate shall be the higher rate of 0.50% per annum; provided further, however, that (1) upon the filing of the Shelf Registration Statement (in the case of clause (i) above), (2) upon the effectiveness of the Shelf Registration Statement (in the case of clause (ii) above), (3) upon the performance by the Company and the Guarantor of their obligations set forth in Section 2(c) hereof within the time periods required therein (in the case of clause (iii) above), (4) upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (iv) above), (5) upon the termination of the Deferral Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in Section 4(b) to be exceeded (in the case of clause (v) above) or (6) upon the termination of certain transfer restrictions on the Securities as a result of the application of Rule 144(k) or any successor provision, Additional Interest on the Notes as a result of such clause, as the case may be, shall cease to accrue.
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