REGISTRATION RIGHTS AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

 

(1)

SYNUTRA INTERNATIONAL, INC., a Delaware corporation (the Company),

(2)

BEAMS POWER INVESTMENT LIMITED, a company with limited liability registered under the BVI Business Companies Act, 2004 (as amended) of the British Virgin Islands (the Pledgor), and

(3)

DEUTSCHE BANK AG, HONG KONG BRANCH (including its successors, permitted assigns and transferees, the Facility Agent), in connection with a Facility Agreement dated as of February 21, 2014 (said Facility Agreement, as it may hereafter be amended, restated, novated, supplemented or otherwise modified from time to time, being the Facility Agreement), by and among the Pledgor and the Facility Agent (the Company, the Pledgor and the Facility Agent are each individually also referred to as a Party and together referred to as the Parties).

(A)

The Facility Agent has entered into the Facility Agreement with the Pledgor, as borrower thereunder, pursuant to which the Lenders (as defined in the Facility Agreement) have made certain commitments, subject to the terms and conditions set forth in the Facility Agreement, to extend a senior secured credit facility to Pledgor;

(B)

The New York Security Agent (as defined in the Facility Agreement) has entered into a Pledge Agreement, dated as of March 3, 2014 (as may be amended or restated from time to time, the Pledge Agreement) with the Pledgor, pursuant to which Pledgor pledges, assigns, and grants to the New York Security Agent a security interest in all of the Pledgor’s right, title and interest in the Pledged Collateral (as defined in the Pledge Agreement);

(C)

As a condition to the Facility Agreement, the Pledgor agrees to execute and deliver this Agreement; and

(D)

The Company and Facility Agent wish to provide for certain arrangements with respect to the registration of the Registrable Securities by the Company under the Securities Act.

 

(a)

 

(i)

If a Registration Event has occurred the Company shall, as soon as reasonably practicable after but, in any event, no later than sixty (60) days after a Registration Event (the Filing Deadline), the Company shall prepare and file with the SEC a Registration Statement on Form S−3 or, in the event the Company is not eligible to use Form S−3, on Form S−1, covering the resale of the Shares.  Such Registration Statement also shall cover, to the extent permitted by Rule 416 under the Securities Act, such indeterminate number of additional shares of Common Stock resulting from stock splits, stock dividends or similar transactions with respect to the Shares.  Such Registration Statement (and each amendment or supplement thereto, and each request for acceleration of effectiveness thereof) shall be provided in accordance with Section 4(c) to the Facility Agent and its counsel prior to its filing or other submission.

 

(ii)

Notwithstanding the registration obligations set forth in Section 2(a)(i) above, in the event the SEC informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415 under the Securities Act, be registered for resale on a single registration statement initially filed by the Company pursuant to Section 2(a)(i) above (the Initial Registration Statement), the Company shall promptly (A) inform the Facility Agent and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the SEC and/or (B) withdraw the Initial Registration Statement and file a new registration statement (a New Registration Statement), in either case, covering the maximum number of Registrable Securities permitted by the SEC to be registered on Form S−3 or Form S−1, as applicable.  In the event that the Company amends the Initial Registration Statement or files a New Registration Statement in accordance with the foregoing, the Company shall use its commercially reasonable efforts to file with the SEC, as promptly as allowed by the SEC or staff guidance provided from time to time to the Company or to registrants of securities in general, one or more registration statements on Form S−3 or Form S−1, as applicable, or such other form to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended, or the New Registration Statement (the Remainder Registration Statements); provided, however, that the Company shall not, without the Facility Agent's prior written consent (which consent may be withheld, delayed or conditioned at the discretion of the Facility Agent) file or request acceleration of the effectiveness of any Registration Statement under this Section 2(a) if the SEC has informed the Company in the SEC review process that the Facility Agent would be deemed an underwriter under the Securities Act in connection therewith, and the Company in so refraining from filing or requesting acceleration, shall not be in violation or breach of this Agreement.

 

(iii)

Subject to the forgoing, the Company shall use commercially reasonable efforts to have the Initial Registration Statement, any New Registration Statement, and any Remainder Registration Statements declared effective as soon as practicable after the initial filing thereof.  The Company shall notify the Facility Agent by facsimile or email as promptly as practicable, and in any event, within one (1) Business Day, after any such Registration Statement is declared effective and shall provide the Facility Agent with

 

(iv)

During the period beginning on the date of the Registration Event and ending sixty (60) days after the Effectiveness Date, the Company shall refrain from filing, any registration statement other than (i) a Registration Statement filed hereunder or (ii) a registration statement on Form S−8 with respect to stock option plans and agreements and stock plans then in effect.  In addition, during the term of this Agreement, in no event shall the Company include any securities other than the Registrable Securities in any Registration Statement filed by the Company on behalf of the Facility Agent pursuant to the terms of this Section 2(a).

 

(v)

Deferral.  If (A) in the good faith judgment of the Board of Directors of the Company (excluding any interested directors), the filing of a registration statement under this Section 2(a) covering the Registrable Securities would be materially detrimental to the Company and the Board of Directors of the Company (excluding any interested directors) concludes, as a result, that it is in the best interests of the Company to defer the filing of such registration statement at such time, and (B) the Company shall furnish to the Facility Agent a certificate signed by the Chief Executive Officer or the Chief Financial Officer of the Company and a certified copy of the board resolution or any other appropriate authorization (in form and substance satisfactory to the Facility Agent) of the Company stating that in the good faith judgment of the Board of Directors of the Company (excluding any interested directors), it would be materially detrimental to the Company for such registration statement to be filed in the near future and that it is, therefore, in the best interests of the Company as determined by the Board of Directors to defer the filing of such registration statement , then the Company shall have the right to defer such filing (but not the preparation of the Registration Statement or the other activities related thereto required by this agreement) for a period of not more than forty-five (45) consecutive days, and, provided further, that the Company shall not defer its obligation in this manner more than once in any twelve (12) month period.

 

(b)

 

(i)

 

(ii)

 

(A)

If the Facility Agent proposes to sell Registrable Securities and such other securities (if any) at an aggregate offering price (after deduction of underwriters’ discounts and expenses related to issuance) of less than U.S.$10,000,000;

 

(B)

After the Company has initiated two (2) such registrations pursuant to this Section 2(b) (counting for these purposes only (I) registrations which have been declared or ordered effective and pursuant to which securities have been sold, and (II) a demand registration right under this Section 2(b) that the Facility Agent has affirmatively forfeited; or

 

(C)

During the period starting with the date sixty (60) days prior to the Company's good faith estimate of the date of filing of, and ending on a date one hundred eighty (180) days after the effective date of, a Company−initiated registration; provided that the Company is actively employing in good faith commercially reasonable efforts to cause such registration statement to become effective.

 

(iii)

 

(iv)

 

(v)

 

(A)

If the Facility Agent intends to distribute the Registrable Securities covered by their request by means of an underwriting, it shall so advise the Company as a part of its request made pursuant to this Section 2(b).  If the Company shall request inclusion in any registration pursuant to this Section 2(b) of securities being sold for its own account, the Facility Agent shall offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Company in such underwriting and the inclusion of the Company's securities and its acceptance of the further applicable provisions of this Section 2.  The Company shall (together with the Facility Agent) enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company, which underwriters are reasonably acceptable to the Facility Agent.

 

(B)

Notwithstanding any other provision of this Section 2(b), if the underwriters advise the Facility Agent in writing that marketing factors require a limitation on the number of shares to be underwritten, the number of Registrable Securities and Other Shares that may be so included shall be allocated as follows:

 

I.

first, to the Facility Agent; and

 

II.

second, to the Company which the Company may allocate, at its discretion, for its own account, or for the account of employees of the Company.

 

(c)

 

(i)

 

(ii)

 

(A)

If the Registration of which the Company gives notice is for a registered public offering involving an underwriting, the Company shall so advise the Facility Agent as part of the written notice given pursuant to 2(c)(i).  In such event, the right of the Facility Agent to include all or any portion of its Registrable Securities in such registration pursuant to this Section 2(c) shall be conditioned upon the Facility Agent's participation in such underwriting and the inclusion of the Facility Agent's Registrable Securities to the extent provided herein.  If the Facility Agent shall request inclusion in any registration pursuant to this Section 2(c) of its Registrable Securities, the Company shall offer to include such securities in the underwriting and such offer shall be conditioned upon the participation of the Facility Agent and the inclusion of the Facility Agent's Registrable Securities and its acceptance of the further applicable provisions of this Section 2(c).  The Facility Agent shall enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by the Company.

 

(B)

Notwithstanding any other provision of this Section 2(c), if the underwriters advise the Company in writing that marketing factors require a limitation on the number of shares to be underwritten, the Company shall be obligated to include in the registration statement only such limited portion of the Registrable Securities with respect to which the Facility Agent has requested inclusion hereunder as such underwriter(s) shall permit.  Any exclusion of Registrable Securities shall be made pro rata among each Holder (as defined in Section 3(a)(v) below) and holders of Other Shares seeking to include securities in a registration statement in proportion to the number of Registrable Securities sought to be included by such Holders and holders of Other Shares; provided, however, that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in the registration statement or are not entitled to pro rata inclusion with the Registrable Securities.

 

(C)

If a Holder who has requested inclusion in a registration pursuant to this Section 2(c) does not agree to the terms of any underwriting in accordance with this Section 2(c)(ii), such Holder shall be excluded from the underwriting by written notice from the Company or the underwriter.  The Registrable Securities so excluded shall also be withdrawn from registration.  If shares are so withdrawn from the registration and if the number of shares to be included in such registration was previously reduced as a result of marketing factors pursuant to Section 2(c)(ii)(B) above, then the Company shall then offer to all Holders and holders of Other Shares who have elected to include, and retained rights to include, securities in the registration the right to include additional Registrable Securities or Other Shares, as applicable, in the registration in an aggregate amount equal to the number of shares so withdrawn, with such shares to be allocated to the Facility Agent as set forth in Section 2(c)(ii)(B) above.

 

(d)

 

(e)

 

(a)

Subject to Section 3(b) 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 the Registration Statement or related prospectus or for additional information so that the 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 or otherwise fail to comply with the applicable rules and regulations of the federal securities laws;

 

(ii)

of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of the 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 Registrable Securities for resale in any jurisdiction or the initiation of any proceeding for such purpose, provided that, considering the advice of its counsel, the Company reasonably believes that it must qualify in such jurisdiction;

 

(iv)

of any event or circumstance that, considering the advice of its counsel, the Company reasonably believes necessitates the making of any changes in the Registration Statement or related 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 a related 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; or

 

(v)

that the Company reasonably believes, considering the advice of its counsel, that the Company may, in the absence of a suspension described hereunder, be required under state or federal securities laws to disclose any corporate development, the disclosure of which could reasonably be expected to have a material adverse effect upon the

 

(b)

Notwithstanding the foregoing, the Company shall not suspend any Registration Statement or related prospectus for more than forty-five (45) consecutive days or for a total of more than ninety (90) consecutive days in any twelve (12) month period (each a Permitted Suspension and together the Permitted Suspensions).

 

(c)

The Company will use commercially reasonable efforts to terminate a Suspension as promptly as practicable after delivery of a Suspension Notice to the Holders.

 

(a)

use commercially reasonable efforts to cause such Registration Statement to become effective and to remain continuously effective for a period that will terminate upon the earliest of (i) the date on which all Registrable Securities have been sold pursuant to the Registration Statement, as amended from time to time, (ii) the date on which all Registrable Securities covered by such Registration Statement have been sold pursuant to Rule 144, or (iii) four years from the date hereof (the Effectiveness Period) and advise the Holders in writing of when the Effectiveness Period has expired.

 

(b)

prepare and file with the SEC such amendments and post−effective amendments to the Registration Statement and such supplements to the Prospectus as may be necessary to keep the Registration Statement effective for the Effectiveness Period and to comply with the provisions of the Securities Act and the Exchange Act with respect to the distribution of all of the Registrable Securities covered thereby;

 

(c)

provide copies to and permit counsel designated by the Facility Agent to review the Registration Statement and any amendments or supplements thereto and any comments made by the staff of the SEC and the Company's responses thereto a reasonable period of time prior to its filing with the SEC or its receipt from the SEC as applicable and shall duly consider comments made by such counsel thereon;

 

(d)

furnish to the Facility Agent and their legal counsel (i) promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company (but not later than two (2) Business Days after the filing date, receipt date or sending date, as the case may be) one (1) copy of any Registration Statement and any amendment thereto, each preliminary prospectus and Prospectus and each amendment or supplement thereto, and each letter written by or on behalf of the Company to the SEC or the staff of the SEC, and each item of correspondence from the SEC or the staff of the SEC, in each case relating to such Registration Statement (other than any portion of any thereof which contains information for which the Company has sought confidential treatment), and (ii) an electronic copy of a Prospectus, including a preliminary prospectus, and all amendments and supplements thereto and such other documents as the Facility Agent may reasonably request in connection with the disposition of the Registrable Securities owned by the Facility Agent that are covered by the related Registration Statement;

 

(e)

use commercially reasonable efforts to (i) prevent the issuance of any stop order or other suspension of effectiveness and, (ii) if such order is issued, obtain the withdrawal of any such order at the earliest practicable time and to notify the Facility Agent of the issuance of such an order and the resolution thereof;

 

(f)

prior to any public offering of Registrable Securities, use commercially reasonable efforts to register or qualify or cooperate with the Facility Agent and its counsel in connection with the registration or qualification of such Registrable Securities for offer and sale under the securities or blue sky laws of such jurisdictions requested by the Facility Agent and do any and all other commercially reasonable acts or things necessary or advisable to enable the distribution in such jurisdictions of the Registrable Securities covered by the Registration Statement; provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (i) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 4(f), (ii) subject itself to general taxation in any jurisdiction where it would not otherwise be so subject but for this Section 4(f), or (iii) file a general consent to service of process in any such jurisdiction;

 

(g)

use commercially reasonable efforts to cause all Registrable Securities covered by a Registration Statement to be listed on the primary securities exchange, interdealer quotation system or other market on which similar securities issued by the Company are then listed;

 

(h)

as soon as reasonably practicable notify the Facility Agent, at any time when a Prospectus relating to Registrable Securities is required to be delivered under the Securities Act, upon discovery that, or upon the happening of any event as a result of which, the Prospectus included in a Registration Statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and at the request of any such holder, as soon as practicable, and subject to the Company's right to delay or refrain from filing as contemplated herein, prepare and furnish to such holder an electronic copy of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such Prospectus shall not include 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 in light of the circumstances then existing;

 

(i)

otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the Securities Act and the Exchange Act, take such other actions as

 

(j)

with a view to making available to the Facility Agent the benefits of Rule 144 (or its successor rule) and any other rule or regulation of the SEC that may at any time permit the Facility Agent to sell shares of Common Stock to the public without registration, the Company covenants and agrees to:

 

(i)

make and keep public information available, as those terms are understood and defined in Rule 144, during the Effectiveness Period;

 

(ii)

file with the SEC in a timely manner all reports and other documents required of the Company under the Exchange Act; and

 

(iii)

as soon as reasonably practicable furnish to the Facility Agent upon written request, as long as the New York Security Agent owns any Registrable Securities, (A) a written statement by the Company that it has complied with the reporting requirements of the Exchange Act, (B) a copy of the Company's most recent Annual Report on Form 10−K or Quarterly Report on Form 10−Q, and (C) such other information as may be reasonably requested in order to avail the Facility Agent of any rule or regulation of the SEC that permits the selling of any such Registrable Securities without registration;

 

(k)

hold in confidence and not make any disclosure of information concerning the Facility Agent provided to the Company if at the time such information is provided the Company is notified of the confidential nature of such information unless (i) disclosure of such information is necessary to comply with federal or state securities laws, (ii) the disclosure of such information is necessary to avoid or correct a misstatement or omission in any Registration Statement that includes the Facility Agent's Registrable Securities, (iii) the release of such information is ordered pursuant to a subpoena or other order from a court or governmental body of competent jurisdiction, (iv) such information has been made generally available to the public other than by disclosure in violation of this or any other agreement, or (v) the Facility Agent consents to the form and content of any such disclosure, which consent shall not be unreasonably withheld or delayed.  The Company shall, upon learning that disclosure of any information concerning the Facility Agent is sought in or by a court or governmental body of competent jurisdiction or through other means, to the fullest extent permitted under applicable law give prompt notice to the Facility Agent;

 

(l)

provide a transfer agent and registrar, which may be a single entity, for the Registrable Securities not later than the effective date of the Registration Statement;

 

(m)

if, following any registration pursuant to Sections 2(a)(i), 2(b)(i) or 2(c)(i), the Facility Agent believes, after consultation with its counsel, that it could reasonably be deemed to be an underwriter of Registrable Securities, or if the Facility Agent intends to distribute the Registrable Securities covered by means of an underwriting, at the request of the Facility Agent, the Company shall (i) cause to be prepared and shall furnish to the Facility Agent or underwriter, on the date of the effectiveness of a Registration Statement and thereafter from time to time on such date as the Facility Agent or underwriter may reasonably request (A) a customary "comfort letter", dated as of such date, from the Company's independent certified public accountants to underwriters in an underwritten public offering, addressed to the Facility Agent or underwriters, and (B) an opinion, dated as of such date, of legal counsel representing the Company for purposes of such Registration Statement, in form, scope and substance as is customarily given in an underwritten public offering, addressed to the Facility Agent or underwriters, (ii) make available to the Facility Agent or underwriters, their legal counsel and one firm of accountants or other agents retained by the Facility Agent or underwriters (collectively, the Inspectors) during regular business hours and upon reasonable written notice, all pertinent financial and other records, and pertinent corporate documents and properties of the Company (collectively, the Records), as shall be reasonably deemed necessary or appropriate by each Inspector, and cause the Company's officers, directors and employees to supply all information which any Inspector may reasonably request and which is customarily supplied in an underwritten public offering; provided, however, that each Inspector shall agree to hold in strict confidence and shall not make any disclosure (except to the Facility Agent or underwriters and the other Inspectors) or use of any Record or other information which the Company determines in good faith to be confidential, and of which determination the Inspectors are so notified, unless (x) the disclosure of such Records is necessary to avoid or correct a misstatement or omission in any Registration Statement or is otherwise required under the Securities Act, (y) ordered by a court of competent jurisdiction or (z) the information in such Records has been made generally available to the public other than by disclosure in violation of this Agreement, and (iii) in the event of an underwritten offering, enter into an underwriting agreement in customary form with the representative of the underwriter. Nothing herein (or in any other confidentiality agreement between the Company and the Facility Agent) shall be deemed to limit the Facility Agent's ability to sell Registrable Securities in a manner which is otherwise consistent with applicable laws and regulations; and

 

(n)

if requested by the Facility Agent, the Company shall, as soon as practicable (i) incorporate in a prospectus supplement or post−effective amendment such information as the Facility Agent reasonably requests to be included therein relating to the sale and distribution of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being offered or sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering, (ii) make all required filings of such prospectus supplement or post−effective amendment and (iii) supplement or make amendments to any Registration Statement if reasonably requested by the Facility Agent holding any Registrable Securities.

 

(a)

The Facility Agent shall furnish in writing to the Company such information regarding itself, the New York Security Agent, the Registrable Securities held by it and the intended method of disposition of the Registrable Securities held by it, as shall be required to effect the registration of such Registrable Securities and as shall be necessary so that the Registration Statement, the

 

(b)

The Facility Agent, by its acceptance of the Registrable Securities, agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of a Registration Statement hereunder, unless the Facility Agent has notified the Company in writing of its election to exclude all of its Registrable Securities from such Registration Statement.

 

(c)

The Facility Agent agrees that, upon receipt of any notice from the Company of the commencement of a Suspension pursuant to Section 3, the Facility Agent will immediately discontinue disposition of Registrable Securities pursuant to the Registration Statement covering such Registrable Securities, until such Suspension ends in accordance with the terms of this Agreement and, if so directed by the Company, the Facility Agent shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Facility Agent's possession of the Prospectus covering the Registrable Securities current at the time of receipt of such notice.

 

(a)

(b)

Indemnification by the Facility Agent.

 

(c)

 

(d)

 

(a)

 

(b)

 

(c)

 

(d)

 

(e)

 

(f)

 

(g)

 

(h)

 

(k)

 

(l)

 

 

By:

Name:

Title:

 

 

By:

Name:

Title:

 

By:

Name:

Title: