SUBSCRIPTION
AGREEMENT
This SUBSCRIPTION AGREEMENT (“
Subscription Agreement ”) made as of this __ day of
__________, 2009, by and among China Electric Motor, Inc. (f/k/a
SRKP 21, Inc.), a Delaware corporation (the “ Company
”), Attainment Holdings Limited, a British Virgin Islands
corporation and as of the Closing Date (as defined below) a
wholly-owned subsidiary of the Company (“ Attainment
Holdings ”); and the undersigned (the “
Subscriber ”).
WHEREAS, the Company, Attainment Holdings, Excel
Profit Global Group Limited (the sole shareholder of Attainment
Holdings) and certain designees parties to a certain Share Exchange
Agreement dated as of March 3, 2009 (the “ Exchange
Agreement ”), pursuant to which Attainment Holdings
became a wholly-owned subsidiary of the Company and 100% of the
outstanding securities of Attainment Holdings was exchanged for
securities in the Company (the “ Share Exchange
”). Immediately after the effective time of the
Share Exchange (the “ Closing Date ”), the
Company assumed the business and operations of Attainment Holdings
and its subsidiaries.
WHEREAS, as a condition to the closing of the
Share Exchange, the Company obtain subscriptions for the purchase
and sale, in a private placement transaction, and has continued to
obtain such subscriptions (the “ Offering ”)
pursuant to Regulation D promulgated under the Securities Act of
1933, as amended (the “ Act ”), of shares of
common stock (the “ Shares ”) of the Company,
par value $0.0001 per share (“ Common Stock ”)
on the terms and conditions hereinafter set forth, and the
Subscriber desires to acquire that number of Shares set forth on
the signature page hereof.
NOW, THEREFORE, for and in consideration of the
promises and the mutual covenants hereinafter set forth, the
parties hereto do hereby agree as follows:
1.
Subscription Procedure
1.1 Subject
to the terms and conditions hereinafter set forth, the Subscriber
hereby subscribes for and agrees to purchase from the Company such
number of Shares as is set forth upon the signature page hereof at
a price of $1.35 per Share (the “ Purchase Price
”). The Company agrees to sell such Shares to the
Subscriber for the Purchase Price.
1.2 The
subscription period began on April 1, 2009 and will terminate at
5:00 PM Eastern Standard Time on June 30, 2009, unless extended for
up to an additional 90 days by the Company, Attainment Holdings and
the Placement Agent (as defined below) (the “ Termination
Date ”). The Shares will be offered on a
“best efforts” basis as more particularly set forth in
a Amended and Restated Confidential Private Placement Memorandum
and any supplements thereto (the “ Offering Memorandum
”), which shall supersede in its entirety that Executive
Summary dated March 23, 2009, in addition to other offering
memoranda. The Offering may take place through an
initial closing and one or more subsequent closings, with the
closing applicable to this Agreement being referred to as the
“Closing”. The final Offering Memorandum will be
provided to Subscribers in the Offering no later than one (1) day
prior to the Closing. The consummation of the Offering
is subject to the satisfaction of a number of conditions to be
further described in the Offering Memorandum, one or more of which
conditions may not occur.
1.3 Placement
of Shares will be made by WestPark Capital, Inc. (the “
Placement Agent ”), which will receive certain
compensation therefore as will be more fully described in the
Offering Memorandum.
1.4 The
Purchase Price will be placed in escrow pursuant to an escrow
agreement (the “ Escrow Agreement ”) by and
among the Placement Agent, the Company and David Kagel, Esq. as
escrow agent, and shall be paid over to the Company at a Closing of
the purchase of the Shares in the Offering.
1.5 The
certificates for the Common Stock bearing the name of the
Subscriber will be delivered by the Company no later than thirty
(30) days following the Closing in which the Subscriber
participates. The Subscriber hereby authorizes and
directs the Company to deliver the securities to be issued to such
Subscriber pursuant to this Subscription Agreement to the
residential or business address indicated in the Investor
Questionnaire, as attached.
1.6 The
Purchase Price for the Shares purchased hereunder shall be paid by
certified check, payable to Law Offices of David L. Kagel, a
Professional Corporation, as escrow agent, or by wire transfer to
Law Offices of David L. Kagel pursuant to the following
instructions:
Law Offices of David L. Kagel, a
Professional Corporation
China Electric Motor Account
1.7 The
Company and/or Attainment Holdings may, in their sole discretion,
reject any subscription, in whole or in part, or terminate or
withdraw the Offering in its entirety at any time prior to a
closing in relation thereto. Neither the Company nor the
Placement Agent shall be required to allocate among investors on a
pro rata basis in the event of an over-subscription.
2.
Representations and Covenants of Subscriber
2.1 The
Subscriber recognizes that the purchase of Shares involves a high
degree of risk in that (i) the Company will need additional capital
to operate its business but has no assurance of additional
necessary capital; (ii) an investment in the Company is highly
speculative and only investors who can afford the loss of their
entire investment should consider investing in the Company and the
Shares; (iii) an investor may not be able to liquidate his, her or
it s investment; (iv) transferability of the securities comprising
the Shares is extremely limited; (v) an investor could sustain the
loss of his, her or its entire investment; and (vi) the Company is
and will be subject to numerous other risks and uncertainties,
including without limitation, significant and material risks
relating to the Company’s business and the business and
operations of Attainment Holdings, and the industries, markets and
geographic regions in which the Company will compete, as well as
risks associated with the Offering, the Share Exchange and the
other transactions contemplated herein, in the Offering Memorandum
and in the Exchange Agreement, all as more fully set forth herein
and in the Offering Memorandum. For the avoidance of
doubt, all references to the Company in this Section 2.1
include the Company’s business and operations after it
acquired the business and operations of Attainment Holdings through
the Share Exchange.
2.2 The
Subscriber represents that he, she or it is an “accredited
investor” as such term is defined in Rule 501 of Regulation D
promulgated under the Act, as indicated by his, her or its
responses to the Investor Questionnaire, the form of which is
attached hereto as Exhibit A , and that he, she or it is
able to bear the economic risk of an investment in the
Shares. The Subscriber must complete the applicable
Investor Questionnaire to enable the Company and Attainment
Holdings to assess the Subscriber’s eligibility for the
Offering.
2.3 The
Subscriber acknowledges that he, she or it has prior investment
experience, including without limitation, investment in non-listed
and non-registered securities, or he, she or it has
employed the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available
by the Company or Attainment Holdings both to him, her or it and to
all other prospective investors in the Shares and to evaluate the
merits and risks of such an investment on his, her or its behalf,
and that he, she or it recognizes the highly speculative nature of
this investment.
2.4 The
Subscriber acknowledges receipt and careful review of the Offering
Memorandum, this Subscription Agreement, and the attachments hereto
and thereto (collectively, the “ Offering Documents
”) and hereby represents that he, she or it has been
furnished or given access by the Company or Attainment Holdings
during the course of this Offering with or to all information
regarding the Company and Attainment Holdings and their respective
financial conditions and results of operations which he, she or it
had requested or desired to know; that all documents which could be
reasonably provided have been made available for his, her or its
inspection and review; that he, she or it has been afforded the
opportunity to ask questions of and receive answers from duly
authorized representatives of the Company and Attainment Holdings
concerning the terms and conditions of the Offering, and any
additional information which he, she or it had
requested. The Subscriber further represents and
acknowledges that the Subscriber has not seen or received any
advertisement or general solicitation with respect to the sale of
any of the securities of the Company, including, without
limitation, the Shares.
2.5 The
Subscriber acknowledges that this Offering of Shares may involve
tax consequences, and that the contents of the Offering Documents
do not contain tax advice or information. The Subscriber
acknowledges that he, she or it must retain his, her or its own
professional advisors to evaluate the tax and other consequences of
an investment in the Shares.
2.6 The
Subscriber acknowledges that this Offering of Shares has not been
reviewed or approved by the United States Securities and Exchange
Commission (“ SEC ”) because the Offering is
intended to be a nonpublic offering pursuant to Section 4(2) of the
Act. The Subscriber represents that the Shares are being
purchased for his, her or its own account, for investment and not
for distribution or resale to others. The Subscriber
agrees that he, she or it will not sell or otherwise transfer any
of the securities comprising the Shares unless they are registered
under the Act or unless an exemption from such registration is
available and, upon the Company’s request, the Company
receives an opinion of counsel reasonably satisfactory to the
Company confirming that an exemption from such registration is
available for such sale or transfer.
2.7 The
Subscriber understands that the Shares have not been registered
under the Act by reason of a claimed exemption under the provisions
of the Act which depends, in part, upon his investment
intention. The Subscriber realizes that, in the view of
the SEC, a purchase now with the intention to distribute would
represent a purchase with an intention inconsistent with his or her
representation to the Company, and the SEC might regard such a
distribution as a deferred sale to which such exemption is not
available.
2.8 The
Subscriber understands that Rule 144 (the “ Rule
”) promulgated under the Act requires, among other
conditions, no earlier than twelve months after the Form 10
information of Attainment Holdings is filed with the SEC, in
addition to a six month holding period prior to the resale (in
limited amounts) of securities acquired in a non-public offering,
such as the Offering, without having to satisfy the registration
requirements under the Act. Except as specifically set
forth in Section 4.1 , the Subscriber understands that the
Company makes no representation or warranty regarding its
fulfillment in the future of any reporting requirements under the
Securities Exchange Act of 1934, as amended (the “
Exchange Act ”), or its dissemination to the public of
any current financial or other information concerning the Company,
as is required by Rule 144 as one of the conditions of its
availability. The Subscriber consents that the Company
may, if it desires, permit the transfer of the Shares out of his,
her or its name only when his, her or its request for transfer is
accompanied by an opinion of counsel reasonably satisfactory to the
Company that neither the sale nor the proposed transfer results in
a violation of the Act, any applicable state “blue sky”
laws or any applicable securities laws of any other country,
province or jurisdiction (collectively, “ Securities
Laws ”). The Subscriber agrees to hold the
Company, Attainment Holdings and their respective directors,
officers and controlling persons and their respective heirs,
representatives, successors and assigns harmless and to indemnify
them against all liabilities, costs and expenses incurred by them
as a result of any misrepresentation made by him, her or it
contained herein or in the Investor Questionnaire or any sale or
distribution by the undersigned Subscriber in violation of any
Securities Laws.
2.9 The
Subscriber consents to the placement of one or more legends on any
certificate or other document evidencing his, her or its Shares and
the Common Stock included in the Shares stating that they have not
been registered under the Act and are subject to the terms of this
Subscription Agreement, including the lock up restriction set forth
in Section 4.10 , and setting forth or referring to the
restrictions on the transferability and sale thereof.
2.10 The
Subscriber understands that the Company and Attainment Holdings
will review this Subscription Agreement and the Investor
Questionnaire and, if the Subscriber is a natural person, the
Company and Attainment Holdings are hereby given authority by the
undersigned to call his, her or its bank or place of
employment. The Subscriber further authorizes the
Company and Attainment Holdings to review the financial standing of
the Subscriber; and the Subscriber agrees that the Company and
Attainment Holdings reserve the unrestricted right to reject or
limit any subscription and to close the offer at any
time.
2.11 The
Subscriber hereby represents that the address of Subscriber
furnished by his, her or it at the end of this Subscription
Agreement and in the Investor Questionnaire is the
undersigned’s principal residence if he or she is an
individual or its principal business address if it is a corporation
or other entity.
2.12 The
Subscriber acknowledges that if the Subscriber is a Registered
Representative of a Financial Industry Regulatory Authority
(“ FINRA ”) member firm, he, she or it must give
such firm the notice required by the FINRA Conduct Rules, or any
applicable successor rules of the FINRA, receipt of which must be
acknowledged by such firm on the signature page
hereof. The Subscriber shall also notify the Company if
the Subscriber or any affiliate of Subscriber is a registered
broker-dealer with the SEC, in which case the Subscriber represents
that the Subscriber is purchasing the Shares in the ordinary course
of business and, at the time of purchase of the Shares, has no
agreements or understandings, directly or indirectly, with any
person to distribute the Shares or any portion thereof.
2.13 The
Subscriber hereby represents that, except as set forth in the
Offering Documents, no representations or warranties have been made
to the Subscriber by either the Company or Attainment Holdings or
their agents, employees or affiliates and in entering into this
transaction, the Subscriber is not relying on any information,
other than that contained in the Offering Documents and the results
of independent investigation by the Subscriber.
2.14 The
Subscriber agrees that he or she will purchase securities in the
Offering only if his or her intent at such time is to make such
purchase for investment purposes and not with a view toward
resale.
2.15 If
the undersigned Subscriber is a partnership, corporation, trust or
other entity, such partnership, corporation, trust or other entity
further represents and warrants that: (i) it was not
formed for the purpose of investing in the Company; (ii) it is
authorized and otherwise duly qualified to purchase and hold the
Shares; and (iii) that this Subscription Agreement has been duly
and validly authorized, executed and delivered and constitutes the
legal, binding and enforceable obligation of the
undersigned.
2.16 If
the Subscriber is not a United States person, such Subscriber
hereby represents that it has satisfied itself as to the full
observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Shares or any use of this
Subscription Agreement, including (i) the legal requirements within
its jurisdiction for the purchase of the Shares, (ii) any foreign
exchange restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be obtained, and
(iv) the income tax and other tax consequences, if any, that may be
relevant to the purchase, holding, redemption, sale or transfer of
the Shares. Such Subscriber’s subscription and
payment for, and his or her continued beneficial ownership of the
Shares, will not violate any applicable securities or other laws of
the Subscriber’s jurisdiction.
2.17 The
undersigned hereby covenants and agrees that neither it nor any of
its affiliates has or will have an open position (e.g., short sale)
in the Common Stock prior to the Registration Statement (as defined
below) being declared effective by the SEC with the intent of
covering such open position with Common Stock being registered in
the Registration Statement. The undersigned hereby
acknowledges and understands that the SEC has taken the position
that such an open position would constitute a violation of Section
5 of the Act.
2.18 The
Subscriber acknowledges that (i) the Offering Memorandum contains
material, non-public information concerning the Company within the
meaning of Regulation FD promulgated by the SEC, and (ii) the
Subscriber is obtaining such material, non-public information
solely for the purpose of considering whether to purchase the
Shares pursuant to a private placement that is exempt from
registration under the Act. In accordance with
Regulation FD and other applicable provisions of the Securities
Laws, the Subscriber agrees to keep such information confidential
and not to disclose it to any other person or entity except the
Subscriber’s legal counsel, other advisors and other
representatives who have agreed (i) to keep such information
confidential, (ii) to use such information only for the purpose set
forth above, and (iii) to comply with applicable securities laws
with respect to such information. In addition, the
Subscriber further acknowledges that the Subscriber and such legal
counsel, other advisors and other representatives are prohibited
from trading in the Company’s securities while in possession
of material, non-public information and agrees to refrain from
purchasing or selling securities of the Company until such
material, non-public information has been publicly disseminated by
the Company. The Subscriber agrees to indemnify and hold
harmless the Company, Attainment Holdings and their respective
officers, directors, employees and affiliates and each other
person, if any, who controls any of the foregoing, against any
loss, liability, claim, damage and expense whatsoever (including,
but not limited to, any and all expenses whatsoever reasonably
incurred in investigating, preparing or defending against any
litigation commenced or threatened or any claim whatsoever) arising
out of or based upon any false representation or warranty by the
Subscriber, or the Subscriber’s breach of, or failure to
comply with, any covenant or agreement made by the Subscriber
herein or in any other document furnished by the Subscriber to the
Company, Attainment Holdings or their respective officers,
directors, employees or affiliates or each other person, if any,
who controls any of the foregoing in connection with this
transaction.
2.19 The
Subscriber understands and acknowledges that (i) the Shares
are being offered and sold to Subscriber without registration under
the Act in a private placement that is exempt from the registration
provisions of the Act under Section 4(2) of the Act and
(ii) the availability of such exemption depends in part on,
and that the Company will rely upon the accuracy and truthfulness
of, the foregoing representations, and such Subscriber hereby
consents to such reliance.
2.20 The
Subscriber understands and acknowledges that he, she or it will at
all times be in compliance with any and all state and federal
securities and other laws, statutes and regulations regarding his,
her or its ownership and/or any sale, transfer or hypothecation of
the Shares or shares of the Company’s Common Stock including
but not limited to those rules and regulations promulgated by the
SEC, FINRA and any exchange on which the Company’s Common
Stock is listed, and those of federal and state governments and
other agencies such as improper short selling of the
Company’s Common Stock and failure to properly file all
documents required by the SEC or otherwise.
3.
Representations by the Company
and Attainment Holdings
Except as set forth in the reports filed
by the Company pursuant to the Securities Exchange Act of 1934, as
amended (the “ SEC Reports ”), each of the
Company and, as applicable, Attainment Holdings severally represent
and warrant to the Subscriber that:
3.1
Organization and Authority . The Company and
Attainment Holdings, and each of their respective subsidiaries, (i)
is a corporation and company, respectively, validly existing and in
good standing under the laws of the jurisdiction of its
incorporation and formation, respectively, (ii) has all requisite
corporate power and company power, respectively, and authority to
own, lease and operate its properties and to carry on its business
as presently conducted, and (iii) has all requisite corporate power
and company power, respectively, and authority to execute, deliver
and perform their obligations under this Subscription Agreement and
the Offering Documents being executed and delivered by it in
connection herewith, and to consummate the transactions
contemplated hereby and thereby.
3.2
Qualifications . Each of the Company and
Attainment Holdings, and each of their respective subsidiaries, is
duly qualified to do business as a foreign corporation and foreign
company, respectively, and is in good standing in all jurisdictions
where such qualification is necessary and where failure so to
qualify could have a material adverse effect on the business,
properties, operations, condition (financial or other), results of
operations or prospects of the Company and its subsidiaries (after
the effective time of the Share Exchange), taken as a
whole.
3.3
Capitalization of the Company . Immediately after
the effective time of the Share Exchange (but before any closing of
this Offering), the authorized capital stock the
capitalization of the Company will consist of 100,000,000 shares of
Common Stock, $0.0001 par value per share and 10,000,000
shares of “blank check” Preferred Stock, par value
$0.0001 per share. Of the authorized capital stock of
the Company, immediately after the effective time of the Share
Exchange but excluding the Shares of Common Stock issued in the
Offering, there will be outstanding 19,109,630 shares of Common
Stock and 964,444 warrants to purchase shares of Common Stock, and
no options to purchase shares of Common Stock; however, Jianrong Li
shall convert approximately $1.3 million owed to her by Attainment
Holdings into shares of Common Stock of the Company on the
effective date of the Company’s proposed firm commitment
public offering (the “ Public Offering ”) which
will occur concurrently with its listing on the NYSE Amex, the
conversion price of such shares to be equal to the price per share
of the shares sold in the public offering. Except as
disclosed in the SEC Reports or the Offering Documents, there are
no additional outstanding options, warrants, script rights to
subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into
or exchangeable for, or giving any person any right to subscribe
for or acquire from the Company, any shares of Common Stock, or
contracts, commitments, understandings or arrangements by which the
Company or any subsidiary is or may become bound to issue
additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common
Stock. Except as described in the Offering Documents,
the issuance and sale of the Shares will not obligate the Company
to issue shares of Common Stock or other securities to any person
(other than the Subscribers) and will not result in a right of any
holder of Company securities to adjust the exercise, conversion,
exchange or reset price under such securities. The
shares of the Company’s capital stock outstanding immediately
after the effective time of the Share Exchange (but before the
closing of the Offering) are or will be duly authorized and validly
issued and are or will be fully paid and
nonassessable. None of the outstanding shares of Common
Stock or options, warrants, or rights or other securities entitling
the holders to acquire Common Stock has been issued in violation of
the preemptive rights of any security holder of the
Company. No holder of any of the Company’s
securities has any rights, “demand,”
“piggy-back” or otherwise, to have such securities
registered by reason of the intention to file, filing or
effectiveness of the Registration Statement (as defined below),
except as contemplated by the Exchange Agreement. The Shares to be
issued to the Subscriber have been duly authorized, and when issued
and paid for in accordance with this Subscription Agreement, the
Common Stock will be duly and validly issued, fully paid and
non-assessable will be duly and validly issued, fully paid and
non-assessable.
3.4
Authorization . The Offering Documents have been
duly and validly authorized by the Company and Attainment
Holdings. This Subscription Agreement, assuming due
execution and delivery by the Subscriber, when the Subscription
Agreement is executed and delivered by the Company, will be, valid
and binding obligations of the Company, enforceable in accordance
with their respective terms, except as the enforceability hereof
and thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter
in effect relating to or affecting creditors’ rights
generally and general principles of equity, regardless of whether
enforcement is considered in a proceeding in equity or at
law.
3.5
Non-Contravention . The execution and delivery of
the Offering Documents by the Company and Attainment Holdings, the
issuance of the Shares as contemplated by the Offering Documents
and the completion by the Company and Attainment Holdings of the
other transactions contemplated by the Offering Documents do not
and will not, with or without the giving of notice or the lapse of
time, or both, (i) result in any violation of any provision of the
articles of incorporation or by-laws or similar instruments of the
Company or Attainment Holdings or their respective subsidiaries,
(ii) conflict with or result in a breach by the Company or
Attainment Holdings or their respective subsidiaries of any of the
terms or provisions of, or constitute a default under, or result in
the modification of, or result in the creation or imposition of any
lien, security interest, charge or encumbrance upon any of the
properties or assets of the Company or Attainment Holdings or their
respective subsidiaries, pursuant to any agreements, instruments or
documents filed as exhibits to the SEC Reports or any indenture,
mortgage, deed of trust or other agreement or instrument to which
Attainment Holdings or any of its subsidiaries is a party or by
which Attainment Holdings or any of its subsidiaries or any of its
properties or assets are bound or affected, in any such case which
would have a material adverse effect on the business, properties,
operations, condition (financial or other), results of operations
or prospects of the Company and Attainment Holdings and their
respective subsidiaries, taken as a whole, or the validity or
enforceability of, or the ability of the Company or Attainment
Holdings to perform their obligations under, the Offering
Documents, (iii) violate or contravene any applicable law, rule or
regulation or any applicable decree, judgment or order of any
court, United States federal or state regulatory body,
administrative agency or other governmental body having
jurisdiction over Attainment Holdings or any of its subsidiaries or
any of its respective properties or assets that would have a
material adverse effect on the business, properties, operations,
condition (financial or other), results of operations or prospects
of the Company and its subsidiaries (after the effective time of
the Share Exchange), taken as a whole, or the validity or
enforceability of, or the ability of the Company or Attainment
Holdings to perform its obligations under, the Offering Documents,
or (iv) have any material adverse effect on any permit,
certification, registration, approval, consent, license or
franchise necessary for the Company or its subsidiaries (after the
effective time of the Share Exchange) to own or lease and operate
any of its properties and to conduct any of its business or the
ability of the Company or its subsidiaries to make use
thereof.
3.6
Information Provided . The Company hereby
represents and warrants to the Subscriber that the information set
forth in the Offering Memorandum, the SEC Reports and any other
document provided by the Company (or the Company’s authorized
representatives) to the Subscriber in connection with the
transactions contemplated by this Subscription Agreement, does not
contain any untrue statement of a material fact or omit to state
any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they are
made, not misleading, it being understood that for purposes of this
Section 3.6 , any statement contained in such information
shall be deemed to be modified or superseded for purposes of this
Section 3.6 to the extent that a statement in any document
included in such information which was prepared and furnished to
the Subscriber on a later date or filed with the SEC on a later
date modifies or replaces such statement, whether or not such later
prepared and furnished or filed statement so
states. Attainment Holdings hereby represents and
warrants to the Subscriber that the information set forth in the
Offering Memorandum and any other document provided by Attainment
Holdings (or Attainment Holdings’ authorized representatives)
to the Subscriber in connection with the transactions contemplated
by this Subscription Agreement, does not contain any untrue
statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not
misleading.
3.7
Absence of Certain Proceedings . Except as
disclosed in the SEC Reports, neither the Company nor Attainment
Holdings is aware of any action, suit, proceeding, inquiry or
investigation before or by any court, public board or body, or
governmental agency pending or threatened against or affecting the
Company or Attainment Holdings or any of their respective
subsidiaries, in any such case wherein an unfavorable decision,
ruling or finding would have a material adverse effect on the
business, properties, operations, condition (financial or other),
results of operations or prospects of the Company or Attainment
Holdings, or the transactions contemplated by the Offering
Documents or which could adversely affect the validity or
enforceability of, or the authority or ability of the Company or
Attainment Holdings to perform its obligations under, the Offering
Documents; and to the Company’s and Attainment
Holdings’ knowledge there is not pending or contemplated any,
and there has been no, investigation by the SEC involving the
Company or Attainment Holdings or any of their current or former
directors or officers.
3.8
Compliance with Law . Neither the Company nor
Attainment Holdings nor any of their respective subsidiaries is in
violation of or has any liability under any statute, law, rule,
regulation, ordinance, decision or order of any governmental agency
or body or any court, domestic or foreign, except where such
violation or liability would not individually or in the aggregate
have a material adverse effect on the business, properties,
operations, condition (financial or other), results of operations
or prospects of the Company and its subsidiaries (after the
effective time of the Share Exchange), taken as a whole; and to the
knowledge of the Company and Attainment Holdings there is no
pending investigation that would reasonably be expected to lead to
such a claim.
3.9
Tax Matters . The Company and Attainment Holdings
and each of their respective subsidiaries has filed all federal,
state and local income and franchise tax returns required to be
filed and has paid all taxes shown by such returns to be due, and
no tax deficiency has been determined adversely to the Company or
Attainment Holdings or any of their respective subsidiaries which
has had (nor does the Company or Attainment Holdings or any of
their respective subsidiaries have any knowledge of any tax
deficiency which, if determined adversely to the Company or
Attainment Holdings or any of their respective subsidiaries, might
have) a material adverse effect on the business, properties,
operations, condition (financial or other), results of operations,
or prospects of the Company or any of its subsidiaries (after the
effective time of the Share Exchange), taken as a whole.
4.
Registration Rights
4.1
Registration Requirement . Subject to the terms
and limitations hereof, the Company shall file a registration
statement on Form S-1 or other appropriate registration document
under the Act (the “ Registration Statement ”)
for resale of the Shares and all shares held by the stockholders of
the Company immediately prior to the Closing Date except those
shares held by affiliates of WestPark Capital, Inc. (the “
Registrable Securities ”) and shall use its reasonable
best efforts to maintain the Registration Statement effective for a
period of twelve (12) months at the Company’s expense (the
“ Effectiveness Period ”). The
Company shall file such Registration Statement no later than thirty
(30) days after the final Closing of the Offering (the “
Registration Filing Date ”), and shall use reasonable
best efforts to cause such Registration Statement to become
effective within one hundred and fifty (150) days after the
Registration Filing Date, or one hundred eighty (180) days after
the Registration Filing Date if the Registration Statement is
subject to a full review by the SEC.
4.2
Limitation to Registration Requirement
. Notwithstanding the foregoing, the Company shall not
be obligated to effect any registration of the Registrable
Securities or take any other action pursuant to this Section
4 : (i) in any particular jurisdiction in which the Company
would be required to execute a general consent to service of
process in effecting such registration, qualification or compliance
unless the Company is already subject to service in such
jurisdiction and except as may be required by the Act, or (ii)
during any period in which the Company suspends the rights of a
subscriber after giving the Subscriber written notification of a
Potential Material Event (defined below) pursuant to Section
4.6 hereof.
4.3
Expenses of Registration . Except as otherwise
expressly set forth, the Company shall bear all expenses incurred
by the Company in compliance with the registration obligation of
the Company, including, without limitation, all registration and
filing fees, printing expenses, fees and disbursements of counsel
for the Company incurred in connection with any registration,
qualification or compliance pursuant to this Subscription Agreement
and all underwriting discounts, selling commissions and expense
allowances applicable to the sale of any securities by the Company
for its own account in any registration. All
underwriting discounts, selling commissions and expense allowances
applicable to the sale by Subscriber of Registrable Securities and
all fees and disbursements of counsel for the Subscriber shall be
borne by the Subscriber.
(a) To
the extent permitted by law the Company will indemnify each
Subscriber, each of its officers, directors, agents, employees and
partners, and each person controlling such Subscriber, with respect
to each registration, qualification or compliance effected pursuant
to this Agreement, and each underwriter, if any, and each person
who controls any underwriter, and their respective counsel against
all claims, losses, damages and liabilities (or actions,
proceedings or settlements in respect thereof) arising out of or
based on (i) any untrue statement (or alleged untrue statement) of
a material fact contained in any prospectus, offering circular or
other document prepared by the Company (including any related
registration statement, notification or the like) incident to any
such registration, qualification or compliance, or (ii) any
omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or any violation by the Company of the Act
or any rule or regulation thereunder applicable to the Company and
relating to action or inaction required of the Company in
connection with any such registration, qualification or compliance,
and subject to the provisions of Section 4.4(c) below, will
reimburse each such Subscriber, each of its officers, directors,
agents, employees and partners, and each person controlling such
Subscriber, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses as they are
reasonably incurred in connection with investigating and defending
any such claim, loss, damage, liability or action, provided that
the Company will not be liable in any such case to the extent that
any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement (or alleged untrue statement) or
omission (or alleged omissions) based upon written information
furnished to the Company by (or on behalf of) such Subscriber or
underwriter, or if the person asserting any such loss, claim,
damage or liability (or action or proceeding in respect thereof did
not receive a copy of an amended preliminary prospectus or the
final prospectus (or the final prospectus as amended and
supplemented) at or before the written confirmation of the sale of
such Registrable Securities to such person because of the failure
of the Subscriber or underwriter to so provide such amended
preliminar
|
