SINOFRESH HEALTHCARE, INC.
COMMON STOCK REGISTRATION RIGHTS AGREEMENT
THIS COMMON STOCK REGISTRATION RIGHTS AGREEMENT (this "Agreement") is
entered into this 9th day of September, 2003, by and between SinoFresh
HealthCare, Inc., a Florida corporation (the "Company") and the undersigned
shareholder of the Company's common stock, D&J Properties, LLC, a Florida
limited liability company (the "Common Stock Shareholder");
WHEREAS, the Company desires to provide certain registration rights to
the Common Stock Shareholder and the Common Stock Shareholder desires to obtain
registration rights from the Company.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein contained, the Common Stock Shareholder and the Company hereby agree as
follows:
1. Definitions.
As used herein:
(a) The term "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(b) The terms "register," "registered," and "registration" refer to a
registration effected by preparing and filing the Registration Statement in
compliance with the Securities Act, and the declaration or ordering of the
effectiveness of such Registration Statement.
(c) The term "Person" shall have the meaning set forth in Section 2(2)
of the Securities Act.
(d) The term "Prospectus" shall have the meaning set forth in Section
2(10) of the Securities Act.
(e) The term "Registration Expenses" shall mean any and all expenses
incident to the performance of or compliance by the Company with this Agreement,
including without limitation: (i) all Securities and Exchange Commission ("SEC")
or National Association of Securities Dealers, Inc. (the "NASD") registration
and filing fees, (ii) all fees and expenses incurred in connection with
compliance with state securities or blue sky laws (including reasonable fees and
disbursements of one counsel for any underwriters or Common Stock Shareholder in
connection with blue sky qualification of any of the Registration Stock) and
compliance with the rules of the NASD, (iii) all expenses of any Persons in
preparing or assisting in preparing, word processing, printing and distributing
the Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and distributing
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) the fees
and disbursements of counsel for the Company and of the independent certified
public accountants of the Company, including the expenses of any "cold comfort"
letters required by or incident to such performance and compliance, (v) the fees
and expenses of any exchange agent or custodian, (vi) all fees and expenses
incurred in connection with the listing, if any, of any of the Registration
Stock on any securities exchange or exchanges, and (vii) the reasonable fees and
expenses of any special experts retained by the Company in connection with the
Registration Statement.
(f) The term "Registration Statement" shall mean the Registration
Statement of the Company that covers the Registration Stock pursuant to the
provisions of this Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
(g) The term "Securities Act" shall mean the Securities Act of 1933, as
amended.
2. Company Registration.
(a) Prior to the expiration of the One Hundred and Eighty (180) day
period upon which the Merger Agreement between the Company and SinoFresh
HealthCare, Inc., a Delaware corporation ("HealthCare"), closes, the Company
shall provide the Common Stock Shareholder with the right to register (i) the
Fifty Thousand (50,000) shares of common stock underlying the D&J Newco Warrant
Agreement/1/, and (ii) an additional Fifty Thousand (50,000) shares of common
stock in the Company purchased in a private transaction (or transactions, as the
case may be) (the "Registration Stock") pursuant to the Securities Act of 1933
(the "Registration").
(b) The Company shall promptly give written notice of the Registration
to the Common Stock Shareholder.
(c) The Common Stock Shareholder shall have ten (10) days (or such
longer period as shall be set forth in the notice) from the receipt of the
notice to deliver to the Company a written request specifying the number of
shares of common stock the Common Stock Shareholder intends to register.
(d) Upon receipt of a written request pursuant to Section 2(c), the
Company shall promptly use its best efforts to cause all such common stock
entitled to be included in the Registration to be registered to the extent
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1 Pursuant to the Merger Agreement between HealthCare and the Company, the
Warrant Agreement between HealthCare was exchanged for a Warrant Agreement
pursuant to which the Common Stock Shareholder was given the right to purchase
50,000 shares of common stock of the Company for $1.00 per share ("D&J Newco
Warrant Agreement").
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required to permit sale or disposition as set forth in the written request.
3. Effectiveness.
A Registration Statement will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the Registration Statement is interfered
with by any stop order, injunction or other order or requirement of the SEC or
any other governmental agency or court, such Registration Statement will be
deemed not to have been effective during the period of such interference. The
Company will be deemed not to have used best efforts to cause the Registration
Statement to become, or to remain, effective during the requisite period if it
voluntarily takes any action that would result in any such Registration
Statement not being declared effective or that would result in the Common Stock
Shareholder not being able to offer and sell the Registration Stock during that
period unless such action is required by applicable laws and regulations or
currently prevailing interpretations of the staff of the SEC. The Company shall
use best efforts to maintain the effectiveness for up to one hundred eighty
(180) days of the Registration Statement and from time to time will amend or
supplement such Registration Statement and the Prospectus contained therein to
the extent necessary to comply with the Securities Act and any applicable state
securities laws or regulations. The Company shall also provide the Common Stock
Shareholder with as many copies of the Prospectus contained in any such
Registration Statement as the Common Stock Shareholder may reasonably request.
4. Expenses of Registration.
All Registration Expenses incurred in connection with any registration,
qualification or compliance pursuant to this Agreement shall be borne by the
Company. Except as provided herein, the Common Stock Shareholder shall pay all
fees and expenses of its legal counsel, underwriters' fees, discounts or
commissions or transfer taxes, if any, relating to the sale or disposition of
the Common Stock Shareholder's Registration Stock.
5. Registration Procedures.
In the case of each registration, qualification, or compliance effected
by the Company pursuant to this Agreement, the Company will keep the Common
Stock Shareholder advised in writing as to the initiation of each registration,
qualification and compliance and as to the completion thereof. At its expense,
the Company will:
(a) Prepare and file with the SEC the Registration Statement with
respect to such Registration Stock as described in Section 2 and use its best
efforts to cause such Registration Statement to become effective and to remain
effective in accordance with Section 3;
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(b) Prepare and file with the SEC such amendments and supplements to
such Registration Statement and the Prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective and current for a
period of not less than one hundred eighty (180) days and comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such Registration Statement during such period in
accordance with the intended methods of disposition by the sellers thereof as
set forth in such Registration Statement;
(c) (i) Furnish to the Common Stock Shareholder, without charge, such
number of copies of such Registration Statement, each amendment and supplement
thereto, the Prospectus included in such Registration Statement (including each
preliminary Prospectus), and such other documents as the Common Stock
Shareholder or underwriters may reasonably request in order to facilitate the
disposition of the Registration Stock owned by the Common Stock Shareholder; and
(ii) consent to the use of the Prospectus or any amendment or supplement thereto
by the Common Stock Shareholder of Registration Stock included in the
Registration Statement in connection with the offering and sale of the
Registration Stock covered by the Prospectus or any amendment or supplement
thereto;
(d) Notify the Common Stock Shareholder, its counsel, and the managing
underwriters, if any, promptly, and promptly confirm such notice in writing, (i)
when the Registration Statement has become effective and when any post-effective
amendments and supplements thereto become effective, (ii) of the issuance by the
SEC or any state securities authority of any stop order suspending the
effectiveness of the Registration Statement or the qualification of the
Registration Stock or the initiation of any proceedings for that purpose, (iii)
the Company's reasonable determination that a post-effective amendment to the
Registration Statement would be appropriate;
(e) If applicable, use its best efforts to cause all such Registration
Stock to be listed or quoted on each securities exchange or interdealer
quotation system on which similar securities issued by the Company are then
listed or quoted;
(f) Provide a transfer agent for all such Registration Stock not later
than the effective date of such Registration Statement;
(g) If necessary, obtain a CUSIP number for the Registration Stock not
later than the effective date of the Registration Statement; and
(h) Cooperate with the Common Stock Shareholder to facilitate the
timely preparation and delivery of certificates representing Registration Stock
to be sold and not bearing any restrictive legends and registered in such names
as the Common Stock Shareholder or the underwriters may reasonably request at
least two Business Days prior to the closing of any sale of Registration Stock
pursuant to such Registration Statement;
(i) Cooperate with each seller of Registration Stock covered by the
Registration Statement and each underwriter, if any, participating in the
disposition of such Registration Stock and their respective counsel in
connection with any filings required to be made with the NASD; and
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(j) Use best efforts to take all other steps necessary to effect the
registration of the Registration Stock covered by the Registration Statement
contemplated hereby.
6. Indemnification and Contribution.
(a) In connection with the Registration Statement, the Company shall
indemnify and hold harmless the Common Stock Shareholder and each underwriter
who participates in an offering of the Registration Stock, each Person, if any,
who controls any of such parties within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act and each of their respective
directors, officers, employees and agents, as follows:
(i) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, arising
out of any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement (or any amendment thereto)
covering Registration Stock, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in
any Prospectus (or any amendment or supplement thereto) or the omission
or alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) from and against any and all loss, liability, claim,
damage and expense whatsoever, joint or several, as incurred, to the
extent of the aggregate amount paid in settlement of any litigation, or
any investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or of any claim whatsoever based upon
any such untrue statement or omission, or any such alleged untrue
statement or omission, if such settlement is effected with the prior
written consent of the Company; and
(iii) from and against any and all expenses whatsoever, as
incurred (including reasonable fees and disbursements of counsel chosen
by Common Stock Shareholder or any underwriter (except to the extent
otherwise expressly provided in Section 6(c) hereof)), incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 6(a);
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provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Company by the Common Stock Shareholder, or any underwriter with respect to the
Common Stock Shareholder, or any underwriter, as the case may be, expressly for
use in the Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto) and (ii) the Company shall not be
liable to the Common Stock Shareholder, any underwriter or controlling Person,
with respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such loss,
liability, claim, damage or expense of the Common Stock Shareholder, any
underwriter or controlling Person results from the fact that the Common Stock
Shareholder or any underwriter, sold Registration Stock to a Person to whom
there was not sent or given, at or prior to the written confirmation of such
sale, a copy of the final Prospectus as then amended or supplemented if the
Company had previously furnished copies thereof to the Common Stock Shareholder
or any underwriter or controlling Person and the loss, liability, claim, damage
or expense of the Common Stock Shareholder or underwriter, or controlling Person
results from an untrue statement or omission of a material fact contained in the
preliminary Prospectus which was corrected in the final Prospectus. Any amounts
advanced by the Company to an indemnified party pursuant to this Section 6 as a
result of such losses shall be returned to the Company if it shall be finally
determined by such a court in a judgment not subject to appeal or final review
that such indemnified party was not entitled to indemnification by the Company.
(b) A selling Common Stock Shareholder agrees to indemnify and hold
harmless the Company, any underwriter and each of their respective directors,
officers (including each officer of the Company who signed the Registration
Statement), employees and agents, any underwriter or any other selling Common
Stock Shareholder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all loss, liability,
claim, damage and expense whatsoever described in the indemnity contained in
Section 6(a) hereof, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement or any Prospectus in reliance upon and in conformity with written
information furnished to the Company by such selling Common Stock Shareholder
with respect to such Common Stock Shareholder expressly for use in such
Registration Statement, or any such Prospectus.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers properly
served on such indemnified party, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability which it may have
under this Section 6, except to the extent that it is materially prejudiced by
such failure. An indemnifying party may participate at its own expense in the
defense of such action, or, if it so elects within a reasonable time after
receipt of such notice, assume the defense of any suit brought to enforce any
such claim; but if it so elects to assume the defense, such defense shall be
conducted by counsel chosen by it and approved by the indemnified party or
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parties, which approval shall not be unreasonably withheld. In the event that an
indemnifying party elects to assume the defense of any such suit and retain such
counsel, the indemnified party or parties shall bear the fees and expenses of
any additional counsel thereafter retained by such indemnified party or parties;
provided, however, that the indemnified party or parties shall have the right to
employ counsel (in addition to local counsel) to represent the indemnified party
or parties who may be subject to liability arising out of any action in respect
of which indemnity may be sought against the indemnifying party if, in the
reasonable judgment of counsel for the indemnified party or parties, there may
be legal defenses available to such indemnified party or parties which are
different from or in addition to those available to the indemnifying party, in
which event the fees and expenses of appropriate separate counsel shall be borne
by the indemnifying party. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one counsel (in addition to local
counsel), separate from its own counsel, for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (i)
includes an unconditional release in form and substance satisfactory to the
indemnified parties of each indemnified party from ail liability arising out of
such litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 6 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company and the Common
Stock Shareholder shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company and the Common Stock Shareholder, as incurred; provided,
however, that no Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company and the Common Stock Shareholder, such
parties shall contribute to such aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement in such
proportion as shall be appropriate to reflect the relative fault of the Company,
on the one hand, and the Common Stock Shareholder, on the other hand, with
respect to the statements or omissions which resulted in such loss, liability,
claim, damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault of the Company, on the one
hand, and of the Common Stock Shareholder, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
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untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, on the one hand,
or by or on behalf of the Common Stock Shareholder, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company and the Common Stock
Shareholder agree that it would not be just and equitable if contribution
pursuant to this Section 6 were to be determined by pro rata allocation or by
any other method of allocation that does not take into account the relevant
equitable considerations. For purposes of this Section 6, each affiliate of the
Common Stock Shareholder, and each director, officer, employee, agent and
Person, if any, who controls a Common Stock Shareholder or such affiliate within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Common Stock Shareholder,
and each director of the Company, each officer of the Company who signed the
Registration Statement, and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company.
(e) The obligations of the Company and the Common Stock Shareholders
under this Section 6 shall survive the completion of an offering of Registration
Stock pursuant to the Registration Statement. Notwithstanding the foregoing, to
the extent that the indemnification and contribution provisions contained in the
underwriting agreement executed in connection with such Registration Statement
conflict with the foregoing provisions, the provisions in such underwriting
agreement shall control.
7. Information by Common Stock Shareholder.
The Common Stock Shareholder or Common Stock Shareholders of
Registration Stock included in any registration shall furnish to the Company
such written information regarding such Common Stock Shareholder or Common Stock
Shareholders and the distribution proposed by such Common Stock Shareholder or
Common Stock Shareholders as the Company may reasonably request in writing and
as shall be required in connection with any registration, qualification, or
compliance referred to in this paragraph.
8. Suspension Rights.
The Company shall have the right, which right may be exercised by the
Company only twice during any twelve (12) month period, to extend, suspend or
delay the effectiveness of the Registration Statement for a period of up to
ninety (90) days if, upon advice of counsel to the Company, effectiveness of
such Registration Statement would interfere with any then currently active
acquisition, financing or similar transaction of the Company by requiring the
premature disclosure of any material corporate development or otherwise.
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9. Postponement Rights.
The Company shall have the right to postpone the filing of the
Registration Statement if, upon the advice of counsel to the Company, the filing
of such Registration Statement would interfere with any then current active
acquisition, financing or similar transaction of the Company or require the
premature disclosure of any material non-public information or because the
Company's board of directors determines in good faith that it would be seriously
detrimental to the Company and its stockholders for such Registration Statement
to be filed.
10. Termination of Registration.
Notwithstanding any other provision in this Agreement, at any time
before or after the filing of the Registration Statement, the Company may, in
its sole discretion, abandon or terminate such registration without the consent
of the Common Stock Shareholders with no liability to the Common Stock
Shareholders or any third party arising therefrom.
11. Assignability.
This Agreement shall be binding upon and inure to the benefit of the
respective heirs, successors and assigns of the parties hereto.
12. Changes in Capital Stock.
If, and as often as, there is any change in the common stock by way of
a stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the common
stock as so changed.
13. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of Florida, without regard to the conflict of laws provisions thereof.
14. Severability.
In the event that any one or more of the provisions contained herein,
or the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.
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15. Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the
successors, assigns and transferees of the Common Stock Shareholder. If any
transferee of the Common Stock Shareholder shall acquire Registration Stock in
any manner, whether by operation of law or otherwise, such Registration Stock
shall be held subject to all of the terms of this Agreement, and by taking and
holding such Registration Stock such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits hereof.
16. Entire Agreement.
This Agreement and the other writings referred to herein contain the
entire understandings among the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings among the parties
with respect to its subject matter.
17. Headings.
The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.
18. Counterparts.
This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which together shall constitute one
instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement on the day and
year first above written.
THE COMPANY:
SINOFRESH HEALTHCARE, INC.
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By:
Its:
THE COMMON STOCK SHAREHOLDER:
D&J PROPERTIES, LLC:
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By:
Its:
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