EXHIBIT 4.3
FORM OF
SUBSCRIPTION AGREEMENT,
AS AMENDED
The undersigned subscriber or subscribers (the "INVESTOR" and, after purchase of
Shares and Warrants as herein defined, the Investor is referred to as a
"STOCKHOLDER"), intending to be legally bound, hereby irrevocably subscribes (or
subscribe) for and agrees to purchase the number of Investment Units (defined
below) for the aggregate purchase price set forth in Section 22 of this
Subscription Agreement. The Investor agrees to purchase the number of Investment
Units (defined below) as provided herein, and to become a Stockholder of BEIJING
MED-PHARM CORPORATION, a Delaware corporation (the "COMPANY"), on the terms and
conditions described herein and in the Company's Confidential Private Placement
Memorandum dated September 7, 2005, as amended and supplemented by the First
Supplement to Confidential Memorandum dated September 30, 2005, and all
exhibits, amendments and supplements thereto (including any further supplements
and amendments thereto) (collectively, the "MEMORANDUM"). A copy of the
Memorandum, as amended or supplemented through the date hereof, has been
received, carefully read and understood by the Investor. All capitalized terms
used but not defined herein have the same meanings as contained in the
Memorandum.
1. PURCHASE AND CLOSING.
(a) The Company has authorized the sale and issuance of up to:
(i) 6,666,667 shares (the "SHARES") of common stock of the
Company, $.001 par value per share (the "COMMON
STOCK"),
(ii) warrants (the "SERIES A WARRANTS") to purchase up to
833,200 shares of Common Stock at an exercise price of
$1.875 per share (the "SERIES A WARRANT SHARES"), and
(iii) warrants (the "SERIES B WARRANTS") to purchase up to
833,200 shares of Common Stock at an exercise price of
$2.25 per share (the "SERIES B WARRANT SHARES", and
together with the Series A Warrant Shares collectively
referred to as the "WARRANT SHARES"),
to certain investors in a private placement as described in the
Memorandum (the "OFFERING"). The Series A Warrants and the Series B
Warrants are sometimes referred to herein as the "WARRANTS".
(b) The Common Stock, the Series A Warrants and the Series B Warrants are
being offered and sold only in investment units comprised of 33,333
Shares, 4,166 Series A Warrants and 4,166 Series B Warrants (an
"INVESTMENT UNIT") at a purchase price of $50,000 per Investment Unit.
The minimum subscription amount is One (1) Investment Unit for a
minimum aggregate subscription price of $50,000.00. The minimum
subscription amount may be waived in the discretion of the Company and
the Placement Agent with respect to any particular Investor.
(c) The Company may enter into the same form of Subscription Agreement
with other investors (the "OTHER INVESTORS") and expects to complete
sales of Shares and Warrants to such Other Investors. (The Investor
and the Other Investors are hereinafter sometimes collectively
referred to as the "INVESTORS," and the Subscription Agreement
executed by the Other Investors are hereinafter sometimes collectively
referred to as the "AGREEMENTS.")
(d) The Company may accept subscriptions from Investors in one or more
closings at any time after the Company has received Agreements for the
Minimum Offering and prior to October 7, 2005.
(e) The Investor agrees that the Placement Agent and its Affiliates may
purchase and resell any number of Shares and Warrants for their own
account on such terms as the Placement Agent shall determine. As used
herein, the term "AFFILIATE" means, as to any named person or entity:
(i) any such person or entity, or with respect to any natural person,
a member of his or her immediate family (i.e. spouse, siblings,
children, and parents); (ii) the legal representative, successor or
assignee of, or any general partner, or their respective officers and
directors for the benefit of, any such person or entity (or with
respect to any natural person, member of his or her immediate family);
(iii) any entity of which a majority of the voting equity ownership is
owned by any one or more of the persons or entities referred to in the
preceding clauses (i) and (ii); (iv) any officer, director, general
partner, employee, stockholder holding ten percent (10%) or more or
partner of any person or entity referred to in the preceding clauses
(i), (ii) and (iii); and (v) any person or entity directly or
indirectly controlling, or under direct or indirect common control
with, any person or entity referred to in any of the preceding
clauses.
(f) The Company's obligation to issue and deliver the Shares and Warrant
to the Investor shall be subject to the following conditions, any one
or more of which may be waived by the Company: (i) receipt by the
Company of a wire transfer of funds in the full amount of the purchase
price for the Shares and Warrant being purchased hereunder, (ii)
completion of the purchases and sales under the Agreements with the
Other Investors, and (iii) the accuracy of the representations and
warranties made by the Investors and the fulfillment of those
undertakings of the Investors to be fulfilled prior to the Closing.
(g) The Investor shall deliver to the Company the consideration required
to purchase the number of Investment Units subscribed for in this
Subscription Agreement (the "PURCHASE PRICE") by delivery of
immediately available funds in the amount of the aggregate purchase
price set forth in Paragraph 22 of the Subscription Agreement, by wire
transfer per the following: JPMorgan Chase Bank, ABA #▇▇▇-▇▇▇-▇▇▇,
Acct Name: Incoming Wire DDA, Acct #507198883, Ref:
Beijing/Philadelphia Subscription Escrow #10222919.1, Attn: ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇.
(h) The Investor also shall deliver to the Company the following
subscription documents completed and signed:
(i) one (1) copy of this Subscription Agreement;
(ii) if the Investor is relying on the advice of a Purchaser
Representative, a Purchaser Representative Letter and
Questionnaire (in the form to be furnished by the Company upon
request by the Investor); and
(iii) any other documentation reasonably requested by the Company or
the Placement Agent.
2. RECEIPT AND REVIEW OF MEMORANDUM. The Investor acknowledges that he or she
has been furnished and has carefully read and understands the Memorandum.
The Investor further acknowledges that he or she is aware that:
(a) there are substantial risks incident to investing in the Shares and
Warrants including, but not limited to, those risks summarized under
the caption "RISK FACTORS" in the Memorandum;
(b) no federal or state agency has passed upon the Shares and Warrants or
made any finding or determination concerning the merits or fairness of
investing in the Shares and Warrants; and
(c) the offering and sale of the Shares and Warrants is intended to be
exempt from registration under (i) Sections 4(2) of the Securities Act
of 1933, as amended (the "SECURITIES ACT"), and Rule 506 of Regulation
D of the Securities Act and (ii) the securities laws of certain
states.
3. INDEPENDENT ADVICE. The Investor acknowledges that he or she has reviewed
the risks and merits of an investment in the Shares and Warrants with tax,
legal and investment counsel and with a Purchaser Representative to the
extent deemed advisable by the Investor.
4. REPRESENTATIONS OF THE INVESTOR. The Investor acknowledges, represents and
warrants to the Company as follows:
(a) THE INVESTOR UNDERSTANDS THAT THE REPRESENTATIONS, WARRANTIES,
COVENANTS AND AGREEMENTS CONTAINED IN THIS SUBSCRIPTION AGREEMENT ARE
MADE AS AN INDUCEMENT TO THE COMPANY TO ACCEPT THE INVESTOR AS A
STOCKHOLDER AND TO SELL TO THE INVESTOR THE INVESTMENT UNITS, AND WILL
BE RELIED UPON BY THE COMPANY, THE PLACEMENT AGENT AND
THEIR RESPECTIVE AFFILIATES AS THE BASIS FOR CLAIMING EXEMPTIONS FROM
THE REGISTRATION REQUIREMENTS OF FEDERAL AND STATE SECURITIES LAWS FOR
THE SALE OF INVESTMENT UNITS.
(b) If the Investor is an individual, he or she: (i) is at least
twenty-one (21) years of age, and (ii) is a bona fide resident and
domiciliary (not a temporary or transient resident) of the state set
forth as his other legal residence below his or her signature on the
signature page hereof and has no present intention of becoming a
resident of any other state or jurisdiction.
(c) If the Investor is an entity, the Investor's principal place of
business, which constitutes the jurisdiction in which the Investor
made its investment decision to purchase the securities being
subscribed for hereunder, below the Investor's signature line on the
signature page hereof
(d) The Investor is not in the class of persons to which sales of the
Shares and Warrants would be prohibited under Rule 2110 of the NASD
Conduct Rules and the corresponding interpretative material,
IM-2110-1.
(e) Any information that the Investor has furnished to the Company or the
Placement Agent with respect to his or her financial position and
business experience, and in any financial statements provided by the
Investor to the Company or the Placement Agent, is correct and
complete as of the date of this Subscription Agreement, and, further,
the Investor will immediately furnish revised or corrected information
to the Company or the Placement Agent should there be any material
change in such information prior to the Investor's acquisition of
Shares and Warrants.
(f) The Investor understands that no federal or state agency has passed
upon the accuracy of the Memorandum nor made any finding or
determination as to the merits or fairness of this investment.
(g) The Investor will acquire and hold the Shares and Warrants solely for
his or her own account, as principal, for investment purposes only,
with no present intention, agreement or arrangement to divide his or
her participation with others or to resell, assign, transfer or
otherwise dispose of all or any part of the Shares and Warrants
subscribed for, and, further, that no other person or entity has any
interest in the right to receive income in respect of the Investor's
interest in the Company.
(h) In making his or her decision to purchase the Shares and Warrants
herein subscribed for, the Investor has relied solely upon the
information contained in the Memorandum, documents requested from the
Company and the Investor's own independent investigations, and has not
relied upon any advertisement, article, notice, television/radio
broadcast or other similar published communication or any seminar or
meeting whose attendees are invited through any of the
above-referenced published communications. Prior to the Investor's
initial communication with the Company in regards to the purchase of
Investment Units the Investor did not learn of the opportunity to
acquire Investment Units as a result of any article published or
notification broadcast by any news media.
(i) The Investor has been furnished with, and has reviewed, a copy of the
Memorandum and any documents requested from the Company and has
evaluated and considered the risks of a purchase of Investment Units
(as set forth in the Memorandum under "RISK FACTORS," and other
sections) and is aware that there are substantial risks associated
with an investment in the Investment Units.
(j) The Investor has been given the opportunity:
(i) to ask questions of the Company or the Placement Agent concerning
the terms and conditions of the Offering and other matters
pertaining to this investment and all such questions have been
answered to the satisfaction of the Investor; and
(ii) to obtain such additional information necessary to verify the
accuracy of the information contained in the Memorandum or other
provided materials, except such information that the Investor has
requested in writing and that the Company or the Placement Agent
has indicated it either does not possess and cannot acquire
without unreasonable effort or expense or which is proprietary
and confidential.
(k) The Investor has not been furnished with any offering literature
except the Memorandum or any requested information, and the Investor
has not received any oral representations, warranties or other
information from the Company, the Placement Agent or any of the
Placement Agent's Affiliates in connection with the Offering.
(l) The Investor fully understands and agrees that any certificate
evidencing the Investment Units will bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AND MAY NOT BE SOLD, EXCHANGED,
TRANSFERRED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT (I) PURSUANT TO A REGISTRATION STATEMENT EFFECTIVE UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR (II)
PURSUANT TO AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT."
(m) The Investor has no knowledge of any pending or threatened litigation
the possible outcome of which may adversely affect the Investor's
responses and other representations contained in this Subscription
Agreement or the Investor's ability to perform his or her obligations
in connection with his or her purchase of the Investment Units.
(n) If the Investor's Investment Units are held jointly either by a
husband and wife or otherwise, or by more than one person as tenants
in common, then each and every representation, warranty, covenant and
agreement made in this Section 4 is made on behalf of each co-owner
individually and is binding upon each such person and his heirs,
executors, administrators, successors and assigns.
(o) The Investor acknowledges, represents and agrees that no action has
been or will be taken in any jurisdiction outside the United States by
the Company that would permit an offering of the Shares, Warrant or
Warrant Shares or possession or distribution of offering materials in
connection with the issue of the Shares, Warrant or Warrant Shares in
any jurisdiction outside the United States where legal action by the
Company for that purpose is required. Each Investor outside the United
States will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers
Shares, the Warrant or Warrant Shares or has in its possession or
distributes any offering material, in all cases at its own expense.
(p) The Investor hereby covenants with the Company that the Investor shall
not make any sale of the Shares, Warrant or Warrant Shares without
complying with the provisions of this Agreement and without causing
the prospectus delivery requirement under the Securities Act to be
satisfied (whether by delivery of the Prospectus or pursuant to and in
compliance with an exemption from such requirement), and the Investor
acknowledges that the certificates evidencing the Shares and Warrant
Shares will be imprinted with a legend that prohibits their transfer
except in accordance therewith.
(q) If requested by the Company, the Investor will provide for
presentation in the Registration Statement, the names of the persons
with investment and voting authority over the Shares or Warrant Shares
acquired hereunder and register thereon and such other information as
is required by the SEC or reasonably requested by the Company in
connection with the Registration Statement.
(r) The Investor further represents and warrants to, and covenants with,
the Company that:
(i) the Investor has full right, power, authority and capacity
to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance
of this Agreement; and
(ii) this Agreement constitutes a valid and binding obligation of
the Investor enforceable against the Investor in accordance
with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and
except as enforceability may be subject to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at
law) and except as the indemnification agreements of the
Investors herein may be legally unenforceable.
(s) Neither the Investor nor any person acting on the Investor's behalf or
at its direction has engaged in any purchase or sale of Shares
(including without limitation any short sale, pledge, transfer,
establish an open "put equivalent position" within the meaning of Rule
16a-1(h) under the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT")), during the ten (10) trading days immediately
preceding the date of this Agreement. Subscriber agrees with the
Company that the Company will be irreparably harmed if the Investor
engages in short sales and similar hedging transactions. Therefore,
Investor agrees that it will not directly or indirectly make or
participate in any sale of the Shares, including "short sales" as
defined in Rule 200 under Regulation SHO, whether or not exempt, until
the earlier of (i) the effective date of the Registration Statement
(defined below) or (ii) the 120th day after the Closing Date.
Subscriber will not use any of the restricted Shares or the Warrant
acquired pursuant to this Agreement, or the Warrant Shares acquired
pursuant to the Warrant, to cover any short position in the Shares if
doing so would be in violation of applicable securities laws and
otherwise will comply with federal securities laws in the holding and
sale of the Shares.
(t) The Investor understands that nothing in the Memorandum, the Company's
filings with the SEC, this Agreement or any other materials presented
to the Investor in connection with the purchase and sale of the Shares
and the Warrants constitutes legal, tax or investment advice. The
Investor has consulted such legal, tax and investment advisors as it,
in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Shares and the Warrants.
5. REGISTRATION OF THE SHARES; COMPLIANCE WITH THE SECURITIES ACT.
(a) The Company shall:
(i) subject to receipt in a timely manner of necessary
information from the Investors (after prompt request from
the Company to the Investors to provide such information),
including the information required to be provided pursuant
to Section 4(p) of this Agreement, prepare and file with the
SEC, within 60 days after the Closing Date, a registration
statement on Form S-1 (the "REGISTRATION STATEMENT") to
enable the resale of the Shares and the Warrant Shares by
the Investors from time to time in accordance with the plan
of distribution to be described therein;
(ii) subject to receipt of necessary information from the
Investors (after prompt request from the Company to the
Investors to provide such information), use its reasonable
commercial efforts to cause the Registration Statement to
become effective within one hundred eighty (180) days
following the Closing Date;
(iii) use its reasonable commercial efforts to prepare and file
with the SEC such amendments and supplements to the
Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration
Statement current, effective and free from any material
misstatement or omission to state a material fact for a
period (the "REGISTRATION PERIOD") not exceeding, with
respect to each Investor's Shares purchased hereunder and
the Warrant Shares purchased under the Warrants, the earlier
of: (i) the date on which all Shares and Warrant Shares then
held by the Investor may be immediately sold to the public
under Rule 144(k) of the Securities Act; or (ii) such time
as all Shares purchased by such Investor in this Offering
and Warrant Shares issuable pursuant to the Warrants have
been sold pursuant to a registration statement;
(iv) furnish to the Investor with respect to the Shares and the
Warrant Shares registered under the Registration Statement
such number of copies of the Registration Statement and
Prospectuses in conformity with the requirements of the
Securities Act
(which may be provided electronically) as the Investor may
reasonably request in order to facilitate the public sale or
other disposition of all or any of the Shares or Warrant
Shares by the Investor; provided, however; that the
obligation of the Company to deliver copies of Prospectuses
to the Investor shall be subject to the receipt by the
Company of reasonable assurances from the Investor that the
Investor will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws
as may be applicable in connection with any use of such
Prospectuses;
(v) bear all expenses in connection with the procedures in
paragraph (i) through (iv) of this Section 5 (other than
underwriting discounts or commissions, brokers' fees and
similar selling expenses, and any other fees or expenses
incurred by the Investor, including attorney fees of the
Investor) and the registration of the Shares and Warrant
Shares pursuant to the Registration Statement; and
(vi) advise the Investor, promptly (which advice may be provided
electronically) after it shall receive notice or obtain
knowledge of the issuance of any stop order by the SEC
delaying or suspending the effectiveness of the Registration
Statement or of the initiation or threat of any proceeding
for that purpose, and it will promptly use its reasonable
commercial efforts to prevent the issuance of any stop order
or to obtain its withdrawal as soon as practicable if such
stop order should be issued.
(b) The Company understands that the Investor disclaims being an
underwriter, but if the SEC deems the Investor to be an underwriter
the Company shall not be relieved of any obligations it has hereunder;
provided, however, that if the Company receives notification from the
SEC that the Investor is deemed an underwriter, then the period by
which the Company is obligated to submit an acceleration request to
the SEC shall be extended to the earlier of (i) the 90th day after
such SEC notification, or (ii) 120 days after the initial filing of
the Registration Statement with the SEC. If required by the rules and
regulations promulgated by the SEC, the Company may disclose the names
of those Investors that may be deemed underwriters in the Registration
Statement.
6. TRANSFER OF SHARES AFTER REGISTRATION; SUSPENSION.
(a) The Investor agrees that it will not effect any disposition of the
Shares or its right to purchase the Shares or the Warrant Shares that
would constitute a sale within the meaning of the Securities Act
except as contemplated in the Registration Statement or as otherwise
permitted by law, and in all cases in accordance with the procedures
reasonably requested by the Company to ensure compliance with the
securities laws, and that it will promptly notify the Company of any
changes in the information set forth in the Registration Statement
regarding the Investor.
(b) Except in the event that paragraph (c) below applies, the Company
shall: (i) if deemed necessary by the Company, prepare and file from
time to time with the SEC a post-effective amendment to the
Registration Statement or 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 such
Registration Statement will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
and so that, as thereafter delivered to purchasers of the Shares and
Warrant Shares being sold thereunder, such Prospectus will not contain
an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, (ii) provide the Investor copies (which may be provided
electronically) of any documents filed pursuant to Section 6(b)(i) as
the Investor may reasonably request, and (iii) inform the Investor
that the Company has complied with its obligations in Section 6(b)(i)
(or that, if the Company has filed a post-effective amendment to the
Registration Statement that has not yet been declared effective, the
Company will notify the Investor to that effect, will use its
reasonable commercial efforts to secure the effectiveness of such
post-effective amendment as promptly as possible and will promptly
notify the Investor when the amendment has become effective).
(c) Subject to paragraph (d) below, in the event (i) of any request by the
SEC or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement for amendments
or supplements to a Registration Statement or related Prospectus or
for additional information, (ii) of the issuance by the SEC or any
other federal or state governmental authority of any stop order
suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iii) 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 Shares
or the Warrant Shares for sale in any jurisdiction or the initiation
or threatening of any proceeding for such purpose, or (iv) of any
event or circumstance which, upon the advice of its counsel,
necessitates the making of any changes in the Registration Statement
or Prospectus, or any document incorporated or deemed to be
incorporated therein by reference, so that, in the case of the
Registration Statement, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and that in the case of the Prospectus, it will not
contain any untrue statement of a material fact or any omission to
state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; then the Company shall deliver
(which delivery may occur electronically) a certificate in writing to
the Investor (the "SUSPENSION NOTICE") to the effect of the foregoing
and, upon receipt of such Suspension Notice, the Investor will refrain
from selling any Shares and Warrant Shares pursuant to the
Registration Statement (a "SUSPENSION") until the Investor's receipt
of copies (which may be provided electronically) of a supplemented or
amended Prospectus prepared and filed by the Company, or until it is
advised in writing by the Company that the current Prospectus may be
used, and has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in
any such Prospectus. In the event of any Suspension, the Company will
use its reasonable commercial efforts to cause the use of the
Prospectus so suspended to be resumed as soon as reasonably
practicable within twenty (20) business days after the delivery of a
Suspension Notice to the Investor. In addition to and without limiting
any other remedies (including, without limitation, at law or at
equity) available to the Investor, the Investor shall be entitled to
specific performance in the event that the Company fails to comply
with the provisions of this Section 6(c).
(d) Provided that a Suspension is not then in effect, the Investor may
sell Shares under the Registration Statement, provided that it
arranges for delivery of a current Prospectus to the transferee of
such Shares and otherwise complies with applicable federal and state
securities laws in connection with such sale.
(e) In the event of a sale of Shares or Warrant Shares by the Investor
pursuant to the Registration Statement, the Investor shall deliver to
the Company's transfer agent such documentation as reasonably required
to effect such transfer.
7. INDEMNIFICATION.
(a) For the purpose of this Section 7:
(i) the term "Selling Stockholder" means the Investor and any
affiliate of such Investor;
(ii) the term "Registration Statement" shall include the
Prospectus in the form filed with the SEC pursuant to Rule
424(b) of the Securities Act or filed as part of the
Registration Statement at the time of effectiveness if no
Rule 424(b) filing is required, and any exhibit, supplement
or amendment included in or relating to such Registration
Statement or Prospectus; and
(iii) the term "Untrue Statement" means any untrue statement or
alleged untrue statement, or any omission or alleged
omission to state in the Registration Statement a material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(b) The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or
liabilities to which such Selling Stockholder may become subject
(under the Securities Act or otherwise) insofar as such losses,
claims, damages or liabilities (or actions or proceedings in respect
thereof) arise out of, or are based upon: (i) any breach of the
representations or warranties of the Company contained herein or
failure to comply with the covenants and agreements of the Company
contained herein, or (ii) any Untrue Statement, and the Company will
reimburse such Selling Stockholder for any reasonable legal or other
out-of-pocket expenses reasonably incurred in investigating, defending
or preparing to defend any such action, proceeding or claim, or
preparing to defend any such action, proceeding or claim, provided,
however, that the Company shall not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of, or is
based upon, an Untrue Statement made in reliance upon and in
conformity with written information furnished to the Company by or on
behalf of such Selling Stockholder specifically for use in preparation
of the Registration Statement, as amended or supplemented from time to
time (including, without limitation, information set forth in this
Subscription Agreement), or the failure of such Selling Stockholder to
comply with its covenants and agreements contained in this Agreement.
The Company shall reimburse each Selling Stockholder for the
indemnifiable amounts provided for herein on demand as such expenses
are incurred.
(c) The Investor agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who
signs the Registration Statement and each director of the Company)
from and against any losses, claims, damages or liabilities to which
the Company (or any such officer, director or controlling person) may
become subject (under the Securities Act or otherwise), insofar as
such losses, claims, damages or liabilities (or actions or proceedings
in respect thereof) arise out of, or are based upon (i) any failure to
comply with the covenants and agreements contained in this Agreement,
or (ii) any Untrue Statement if such Untrue Statement was made in
reliance upon and in conformity with written information furnished by
or on behalf of the Investor specifically for use in preparation of
the Registration Statement, as amended or supplemented from time to
time (including, without limitation, information set forth in this
Subscription Agreement), and the Investor will reimburse the Company
(or such officer, director or controlling person), as the case may be,
for any legal or other out-of-pocket expenses reasonably incurred in
investigating, defending or preparing to defend any such action,
proceeding or claim. The Investor shall reimburse the Company or such
officer, director or controlling person, as the case may be, for the
indemnifiable amounts provided for herein on demand as such expenses
are incurred. Notwithstanding the foregoing, the Investor's aggregate
obligation to indemnify the Company and such officers, directors and
controlling persons shall be limited to the net amount received by the
Investor from the sale of the Shares less the amount of any other
claims, damages or liabilities paid by the Investor in connection with
such Investor's sale of the Shares.
(d) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is
to be sought against an indemnifying person pursuant to this Section
7, such indemnified person shall notify the indemnifying person in
writing of such claim or of the commencement of such action, but the
omission to so notify the indemnifying person will not relieve it from
any liability which it may have to any indemnified person under this
Section 7 (except to the extent that such omission materially and
adversely affects the indemnifying person's ability to defend such
action) or from any liability otherwise than under this Section 7.
Subject to the provisions hereinafter stated, in case any such action
shall be brought against an indemnified person, the indemnifying
person shall be entitled to participate therein, and, to the extent
that it shall elect by written notice delivered to the indemnified
person promptly after receiving the aforesaid notice from such
indemnified person, shall be entitled to assume the defense thereof,
with counsel reasonably satisfactory to such indemnified person. After
notice from the indemnifying person to such indemnified person of its
election to assume the defense thereof, such indemnifying person shall
not be liable to such indemnified person for any legal expenses
subsequently incurred by such indemnified person in connection with
the defense thereof, provided, however, that if there exists or shall
exist a conflict of interest that would make it inappropriate, in the
opinion of counsel to the
indemnified person, for the same counsel to represent both the
indemnified person and such indemnifying person or any affiliate or
associate thereof, the indemnified person shall be entitled to retain
its own counsel at the expense of such indemnifying person; provided,
however, that no indemnifying person shall be responsible for the fees
and expenses of more than one separate counsel (together with
appropriate local counsel) for all indemnified parties. In no event
shall any indemnifying person be liable in respect of any amounts paid
in settlement of any action unless the indemnifying person shall have
approved the terms of such settlement; provided that such consent
shall not be unreasonably withheld or delayed. No indemnifying person
shall, without the prior written consent of the indemnified person,
effect any settlement of any pending or threatened proceeding in
respect of which any indemnified person is or could have been a party
and indemnification could have been sought hereunder by such
indemnified person, unless such settlement includes an unconditional
release of such indemnified person from all liability on claims that
are the subject matter of such proceeding.
(e) If the indemnification provided for in this Section 7 is unavailable
to or insufficient to hold harmless an indemnified person under
subsection (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) referred
to therein, then each indemnifying person shall contribute to the
amount paid or payable by such indemnified person as a result of such
losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Investor, as well as any other
Selling Stockholders under such Registration Statement on the other in
connection with the statements or omissions or other matters which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative fault shall be determined by reference
to, among other things, in the case of an Untrue Statement, whether
the Untrue Statement relates to information supplied by the Company on
the one hand or an Investor or other Selling Stockholder on the other
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such Untrue Statement. The Company
and the Investor agree that it would not be just and equitable if
contribution pursuant to this subsection (e) were determined by pro
rata allocation (even if the Investor and other Selling Stockholders
were treated as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable
considerations referred to above in this subsection (e). The amount
paid or payable by an indemnified person as a result of the losses,
claims, damages or liabilities (or actions in respect thereof)
referred to above in this subsection (e) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified
person in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (e), the
Investor shall not be required to contribute any amount in excess of
the amount by which the net amount received by the Investor from the
sale of the Shares to which such loss relates exceeds the amount of
any damages that such Subscriber has otherwise been required to pay by
reason of such Untrue Statement. 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 who
was not guilty of such fraudulent misrepresentation. The Investor's
obligations in this subsection to contribute shall be in proportion to
its Investor sale of Shares and Warrant Shares to which such loss
relates and shall not be joint with any other Selling Stockholders.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 7, and are fully informed
regarding said provisions. They further acknowledge that the
provisions of this Section 7 fairly allocate the risks in light of the
ability of the parties to investigate the Company and its business in
order to assure that adequate disclosure is made in the Registration
Statement as required by the Securities Act and the Exchange Act. The
parties are advised that federal or state public policy as interpreted
by the courts in certain jurisdictions may be contrary to certain of
the provisions of this Section 7, and the parties hereto hereby
expressly waive and relinquish any right or ability to assert such
public policy as a defense to a claim under this Section 7 and further
agree not to attempt to assert any such defense.
8. TERMINATION OF CONDITIONS AND OBLIGATIONS. The conditions precedent
imposed by Section 6 upon the transferability of the Shares and
Warrant Shares shall cease and terminate as to any particular number
of the Shares when such Shares shall have been effectively registered
under the Securities Act and sold or otherwise disposed of in
accordance with the intended method of disposition set forth in the
Registration Statement covering such Shares or at such time as an
opinion of counsel reasonably satisfactory to the Company shall have
been rendered to the effect that such conditions are not necessary in
order to comply with the Securities Act.
9. LEGEND; RESTRICTIONS ON TRANSFER. The certificate or certificates for
the Shares and the Warrants and any securities issued in respect of or
exchange for the Shares or Warrants) shall be subject to a legend or
legends restricting transfer under the Securities Act and referring to
restrictions on transfer herein, such legend to be substantially as
follows (and any additional legend required under the Act and
otherwise):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, OR HYPOTHECATED
UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE OPINION
OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER
OF THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER OR
HYPOTHECATION IS IN COMPLIANCE THEREWITH.
The Company and the Investor acknowledge and agree that the Investor
may, as permitted by law, from time to time pledge pursuant to a bona
fide margin agreement or grant a security interest in some or all of
the Shares and Warrants and, if required under the terms of such
arrangement, Subscriber may, as permitted by law, transfer pledged or
secured Shares and Warrants to the pledgees or secured parties. So
long as Subscriber is not an affiliate of the Company, such a pledge
or transfer in compliance with all applicable federal and state
securities laws would not be subject to approval or consent of the
Company, provided that, upon the request of the Company, a legal
opinion of legal counsel to the pledgee, secured party or pledgor
shall be obtained. At the Investor's sole expense, so long as the
Shares and Warrants are subject to the legend required by this Section
9, the Company will use its reasonable commercial efforts to execute
and deliver such reasonable documentation as a pledgee or secured
party of Shares and Warrants may reasonably request in connection with
a pledge or transfer of the Shares and Warrants including such
amendments or supplements to the Registration Statement and Prospectus
as may be reasonably required. The foregoing does not affect
Subscriber's obligations pursuant to Section 6.
10. INDEMNIFICATION OF THE COMPANY AND AFFILIATES. Notwithstanding
anything else contained herein to the contrary, the Investor hereby
agrees to indemnify the Company, the Placement Agent and their
respective employees, agents, Affiliates, officers, directors, general
partners, and the employees of each of them and to hold each of them
harmless from and against any and all liability, damage, cost or
expense (including reasonable attorney's fees and costs of suit)
incurred on account of or arising out of:
(a) any inaccuracy or omission in the Investor's declarations,
representations and warranties as set forth herein;
(b) the disposition of the Investor's Shares and Warrants in a manner
contrary to his declarations, representations and warranties as
made herein; and
(c) any action, suit or proceeding based upon: (i) the claim that
said declarations, representations, or warranties were inaccurate
or misleading or otherwise cause for obtaining damages or redress
from the Company, the Placement Agent or their respective
Affiliates, officers, employees or agents; or (ii) the
disposition of any of the Shares and Warrants or any part
thereof.
11. MODIFICATION. The provisions of this Subscription Agreement shall not
be modified, discharged or terminated, except by an instrument in
writing signed by the party against whom any waiver, change, discharge
or termination is sought.
12. NOTICES. Any notice, demand or other communication that any party
hereto may be required, or may elect, to give to anyone interested
hereunder shall be sufficiently given if: (a) sent by telefax,
facsimile or electronic mail if sent during normal business hours,
and, if not on the next business day, (b) deposited, postage prepaid,
in a United States mail letter box, registered or certified mail,
return receipt requested, addressed to such address as may be given
herein; or (c) delivered personally at such address.
13. COUNTERPARTS. This Subscription Agreement may be executed through the
use of separate signature pages or in any number of counterparts
(including facsimile counterparts), and each of such counterparts
shall, for all purposes, constitute one agreement binding on all the
parties, notwithstanding that all parties are not signatories to the
same counterpart.
14. BINDING EFFECT. Except as otherwise provided herein, this Subscription
Agreement shall be binding upon and inure to the benefit of the
parties and their heirs, executors, administrators, successors, legal
representatives and assigns. If the Investor is more than one person,
the obligation of the Investor shall be joint and several, and the
agreements, representations, warranties and acknowledgments herein
contained shall be deemed to be made by and be binding upon each such
person and his heirs, executors, administrators and successors.
15. ENTIRE AGREEMENT. This Subscription Agreement contains the entire
agreement of the parties, and there are no representations, covenants
or other agreements except as stated or referred to herein (or
therein).
16. ASSIGNABILITY. This Subscription Agreement is not transferable or
assignable by the Investor except as expressly provided herein.
17. APPLICABLE LAW. This Subscription Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
18. REPRESENTATIONS SHALL SURVIVE CLOSING. All representations and
warranties set forth in Paragraphs 2, 3, 4, 19, and 20 and
understandings set forth in Paragraphs 7 and 9 or in any other written
statement or document delivered by the Investor in connection with the
transactions contemplated hereby will be true, correct and complete in
all respects on and as of the date of Closing as if made on and as of
such date and shall survive the Closing and the delivery by to the
Investor of the Shares and Warrants.
----------
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
19. INVESTOR EXPERIENCE. The Investor acknowledges, represents and warrants to
the Company and the Placement Agent that either: (i) the Investor alone has
such knowledge and experience in financial and business matters as to be
capable of making an informed decision regarding an investment in the
Investment Units; or (ii) the Investor is relying on the advice of a
Purchaser Representative, not affiliated with the Company, the Placement
Agent or their respective Affiliates, who has such knowledge and experience
in financial and business matters as to be able to advise the Investor of
the merits and risks of the investment with respect to the Investor's
individual financial circumstances and who has submitted a signed Purchaser
Representative Letter and Questionnaire (in a form satisfactory to the
Placement Agent) to the Company.
THE INVESTOR IS RELYING UPON A PURCHASER REPRESENTATIVE
(CHECK ONE): YES NO
------- -------
_________________________________________________________________
(Name of Purchaser Representative, if any)
_________________________________________________________________
(Occupation)
_________________________________________________________________
(Relationship to Subscriber)
20. ACCREDITED INVESTOR REPRESENTATION. The Investor understands that the
Investment Units may only be offered and sold to Investors who are
"Accredited Investors" and that the Investor's representation to the
Placement Agent in this regard are material inducements to the Placement
Agent's acceptance of this Subscription. IN ACCORDANCE WITH THE FOREGOING,
PLEASE INDICATE WHICH ONE OF THE FOLLOWING CATEGORIES YOU BELIEVE
APPROPRIATELY DESCRIBES THE INVESTOR'S STATUS AS AN "ACCREDITED INVESTOR"
BY INITIALING THE APPROPRIATE AFFIRMATIVE RESPONSE.
INITIAL IF
REPRESENTATION
IS CORRECT ACCREDITED INVESTOR CATEGORY
---------------- ----------------------------
(A) The Investor is a director or executive officer of the
________________ Placement Agent of the Company.
The Investor is a corporation, partnership or business
(B) ________________ trust with total assets in excess of $5,000,000.00.
The Investor is an individual whose current net worth,
(C) or joint net worth with that of the spouse of the
________________ Investor, exceeds $1,000,000.00.
The Investor is an individual who had individual income
in excess of $200,000.00 in 2003 and 2004 or joint
income with the Investor's spouse in excess of
$300,000.00 in each of those years and who reasonably
(D) ________________ expects the same income level in 2005.
The Investor is a trust with total assets in excess of
$5,000,000.00, not formed for the specific purpose of
purchasing Investment Units, whose purchase is directed
(E) ________________ by a sophisticated person.
The Investor is an employee benefit plan that meets the
(F) ________________ criteria set forth in (vi) above.
The Investor is an entity in which all of the equity
(G) ________________ owners are accredited investors.
21. REGISTRATION OF SHARE AND SHARE OWNERSHIP (CHECK ONE):
NOTE: Subscribers should seek the advice of their attorneys in
deciding in which of the below forms they should take ownership of the
Shares and Warrants, since different forms of ownership can have
varying gift tax, estate tax, income tax and other consequences,
depending on the state of the Investor's domicile and other particular
personal circumstances of the Investor.
INITIAL FOR
APPROPRIATE
REGISTRATION
INSTRUCTIONS FORM OF REGISTRATION AND OWNERSHIP
------------ ----------------------------------
____________ Individual ownership (one signature is required)
Husband and Wife or other Joint Tenants with right of
____________ survivorship (both parties must sign)
Tenants in Common with no right of survivorship (all parties must
____________ sign)
Partnership (include name of the Partnership, date the
Partnership was formed, and copy of the Partnership Agreement or
____________ other authorization)
Corporation (include name of Corporation and copy of resolution
or other authorization with respect to the purchase of Investment
____________ Units)
Limited Liability Company (including name of the Limited
Liability Company, date the Limited Liability Company was formed,
a copy of the Limited Liability Company Operating Agreement or
other authorization with respect to the purchase of Investment
____________ Units
Trust (include name of Trust, date Trust was formed, and copy of
____________ the Trust Agreement or other authorization)
PLEASE PRINT HERE THE EXACT NAME OR NAMES (REGISTRATION) SUBSCRIBER DESIRES ON
ITS ACCOUNT: _________________________________________________________________
----------
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
22. AMOUNT OF SUBSCRIPTION:
Number of Investment Units _______
Subscription price per Investment Unit X $50,000
Total subscription price payable to the Company $
=======
IN WITNESS WHEREOF, the undersigned Subscriber has completed and executed this
Subscription Agreement to evidence Subscriber's subscription for Investment
Units of Common Stock and Warrants of Beijing Med-Pharm Corporation this ______
day of October, 2005.
If the Subscription Agreement is accepted by one or more individual subscribers,
use the following signature lines and format:
SUBSCRIBER: SUBSCRIBER:
------------------------------------- ----------------------------------------
NAME: NAME:
------------------------------- ----------------------------------
ADDRESS: ADDRESS:
---------------------------- -------------------------------
------------------------------------- ----------------------------------------
------------------------------------- ----------------------------------------
SOCIAL SECURITY NO. SOCIAL SECURITY NO.
OR TAX ID NO.: OR TAX ID NO.:
---------------------- -------------------------
E-MAIL ADDRESS: E-MAIL ADDRESS:
--------------------- ------------------------
If the Subscription Agreement is executed by a corporation or other entity
please use the following signature lines and format:
ATTEST/WITNESS: SUBSCRIBER:
------------------------------------- ----------------------------------------
[NAME OF ENTITY]
BY: BY:
--------------------------------- ------------------------------------
NAME: NAME:
------------------------------- ----------------------------------
TITLE: TITLE:
------------------------------ ---------------------------------
ADDRESS OR PRINCIPAL PLACE OF BUSINESS:
----------------------------------------
SOCIAL SECURITY NO.
OR TAX ID NO.:
-------------------------
E-MAIL ADDRESS:
------------------------
THE UNDERSIGNED, AS AN AUTHORIZED OFFICER OF BEIJING MED-PHARM CORPORATION (THE
"COMPANY"), HAS ACCEPTED THIS SUBSCRIPTION AGREEMENT ON BEHALF OF THE COMPANY AS
OF THE ______ DAY OF OCTOBER, 2005.
BEIJING MED-PHARM CORPORATION
BY:
------------------------------------
NAME:
----------------------------------
TITLE:
---------------------------------
(BEIJING MED-PHARM LOGO)
--------------------------------------------------------------------------------
ACKNOWLEDGEMENT
The undersigned (the "INVESTOR") has executed and delivered to the Placement
Agent the Investor's Subscription Agreement ("SUBSCRIPTION AGREEMENT") in the
form attached to the First Supplement to Confidential Private Placement
Memorandum and Subscription Documents dated September 30, 2005. The Investor
hereby acknowledges receipt of the Second Supplement to Confidential Private
Placement Memorandum dated October 7, 2005 (the "SECOND SUPPLEMENT") and hereby
consents and agrees to the extension of the Offering termination date as
described in the Second Supplement. The Investor further agrees that the
Investor's Subscription Agreement is hereby amended to the extent necessary to
reflect the amendment and supplement to the Offering pursuant to the Second
Supplement.
If this Acknowledgement is executed by one or more individual subscribers,
use the following signature lines and format:
INVESTOR: INVESTOR:
--------------------------------- ---------------------------------
NAME: NAME:
----------------------- -----------------------
ADDRESS: ADDRESS:
------------------------------ ------------------------------
------------------------------ ------------------------------
DATE: DATE:
----------------------- -----------------------
If this Acknowledgement is executed by a corporation or other entity please
use the following signature lines and format:
ATTEST/WITNESS: INVESTOR:
--------------------------------- ---------------------------------
[NAME OF ENTITY]
BY:
-----------------------
NAME: BY:
----------------------- -----------------------
TITLE: NAME:
----------------------- -----------------------
TITLE:
-----------------------
DATE:
-----------------------
(BEIJING MED-PHARM LOGO)
--------------------------------------------------------------------------------
AMENDMENT TO SUBSCRIPTION AGREEMENT
The undersigned (the "INVESTOR") has previously executed and delivered to the
Placement Agent the Investor's Subscription Agreement ("SUBSCRIPTION Agreement")
in the form attached to Beijing Med-Pharm Corporation's First Supplement to
Confidential Private Placement Memorandum and Subscription Documents dated
September 30, 2005. The Investor agrees that the Investor's Subscription
Agreement is hereby amended by deleting paragraph 5(a)(iii) of the Subscription
Agreement in its entirety and replacing it with the following:
"(iii) use its reasonable commercial efforts to prepare and file with the
SEC such amendments and supplements to the Registration Statement
and the Prospectus used in connection therewith as may be necessary
to keep the Registration Statement current, effective and free from
any material misstatement or omission to state a material fact for a
period (the "REGISTRATION PERIOD") not exceeding, with respect to
each Investor's Shares purchased hereunder and the Warrant Shares
purchased under the Warrants, the earlier of: (i) the date which is
two years after the date on which the Company accepts the Investor's
subscription for Investment Units pursuant to this Agreement; or
(ii) such time as all Shares purchased by such Investor in this
Offering and Warrant Shares issuable pursuant to the Warrants have
been sold pursuant to a registration statement;"
Except as amended hereby, the terms and provisions of the Subscription Agreement
remain unchanged, are and shall remain in full force and effect unless and until
modified or amended in writing in accordance with their terms, and are hereby
ratified and confirmed. This Amendment shall become effective upon acceptance by
Beijing Med-Pharm Corporation (the "COMPANY"). On and after the effectiveness of
this Amendment, all references to the Subscription Agreement in any agreements,
documents and/or instruments executed and/or delivered by the Company or the
Investor in connection with the Subscription Agreement shall mean the
Subscription Agreement as amended by this Amendment.
This Amendment may be signed in any number of counterpart copies, and by the
parties to this Amendment on separate counterparts, but all such copies shall
constitute one and the same instrument. Delivery of an executed counterpart of a
signature page to this Amendment by facsimile transmission shall be effective as
delivery of a manually executed counterpart. Any party so executing this
Amendment by facsimile transmission shall promptly deliver a manually executed
counterpart, provided that any failure to do so shall not affect the validity of
the counterpart executed by facsimile transmission.
---------------------
SIGNATURES APPEAR ON NEXT PAGE.
IN WITNESS WHEREOF, the undersigned Investor has completed and executed this
Amendment to Subscription Agreement this ______ day of October, 2005.
INVESTOR: INVESTOR:
--------------------------------- ---------------------------------
NAME: NAME:
----------------------- -----------------------
ADDRESS: ADDRESS:
------------------------------ ------------------------------
------------------------------ ------------------------------
THE UNDERSIGNED, AS AN AUTHORIZED OFFICER OF BEIJING MED-PHARM CORPORATION (THE
"COMPANY"), HAS ACCEPTED THIS AMENDMENT TO SUBSCRIPTION AGREEMENT ON BEHALF OF
THE COMPANY AS OF THE ______ DAY OF OCTOBER, 2005.
BEIJING MED-PHARM CORPORATION
BY:
------------------------------
NAME:
------------------------------
TITLE:
------------------------------