EXHIBIT 10.1
SUBSCRIPTION AGREEMENT
FOR REGULATION S INVESTORS
This Subscription Agreement (the "Agreement") dated as of April 27, 2006,
has been executed by the undersigned (the "Subscriber") in connection with a
private offer and sale (the "Offering") of shares (the "Shares") of common
stock, $.0001 par value per share (the "Common Stock"), of Global Pharmatech,
Inc., a Delaware corporation (the "Company"), at the per Share price listed on
the signature page hereto. The Offering is being made in reliance upon the
provisions of Regulation S ("Regulation S") promulgated by the Securities and
Exchange Commission (the "SEC") under the Securities Act of 1933, as amended
(the "Securities Act"). Upon the terms and subject to the conditions set forth
herein, the Subscriber hereby agrees to purchase, and the Company hereby agrees
to issue and sell, the Shares. In consideration of the mutual promises,
representations and warranties set forth herein, the Company and the Subscriber
hereby agree as follows:
1. AGREEMENT TO SUBSCRIBE
1.1 Purchase and Issuance of the Common Stock. The Subscriber is hereby
subscribing for the number of shares of Common Stock indicated on the signature
page hereto by the caption, "Common Stock Being Subscribed" (the "Subscriber's
Common Stock").
The price per Share for the Subscriber's Common Stock is indicated on the
signature page hereto by the caption, "Share Consideration (per Share)" ("Share
Consideration").
Concurrently with the execution and delivery of this Agreement to the
Company, the Subscriber is delivering to the Company at its offices at 00 Xxxxxx
Xxxx Xxxxx, Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxx X0X 0X0 this subscription agreement
and is hereby instructed by the Company to wire transfer to Natural Pharmatech,
Inc., a wholly-owned subsidiary of the Company, the amount of the Share
Consideration multiplied by the Subscriber's Common Stock being subscribed (the
"Purchase Price"). The Company will not accept subscriptions from persons who
are not qualified as "accredited investors", as that term is defined in Rule 501
of Regulation D under the Securities Act. Any subscriptions for shares of Common
Stock made by Subscribers who are not accredited investors will be returned to
such subscriber without interest.
1.2 Closing. The closing for the sale of the Shares to the Subscriber shall
take place at the offices of the Company no later than April 27, 2006 (the
"Closing"), or at such other time and/or such other place as the Company may
determine in its sole and absolute discretion. If the Closing shall not have
occurred by April 27, 2006, the Purchase Price, shall be returned promptly to
the Subscriber without deduction therefrom and without interest thereon.
2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER
The Subscriber represents and warrants to the Company that:
2.1 No Government Recommendation or Approval. The Subscriber understands
that no United States federal or state agency or similar agency of any other
country, has passed upon or made any recommendation or endorsement of the
Company or the Offering of the Shares.
2.2 Not a "U.S. Person". The Subscriber is not a "U.S. Person" as defined
in Rule 902 of Regulation S promulgated under the Securities Act, was not
organized under the laws of any United States jurisdiction, and was not formed
for the purpose of investing in securities not registered under the Securities
Act. At the time the purchase order for this transaction was originated, the
Subscriber was outside the United States.
2.3 Intent. The Subscriber is purchasing the Shares solely for investment
purposes, for the Subscriber's own account and not for the account or benefit of
any U.S. or other person, and not with a view towards the distribution or
re-transfer thereof and the Subscriber has no arrangement to sell the Shares to
or through any person or entity. The Subscriber understands that the Shares must
be held indefinitely unless such Shares are resold in accordance with the
provisions of Regulation S, are subsequently registered under the Securities Act
or an exemption from registration is available.
2.4 Restrictions on Transfer. The Subscriber understands that the Shares
are being offered in a transaction not involving a public offering in the United
States within the meaning of the Securities Act.
The Shares have not been registered under the Securities Act, and, if in
the future the Subscriber decides to offer, resell, pledge or otherwise transfer
the Shares, such Shares may be offered, resold, pledged or otherwise transferred
only:
(A) pursuant to an effective registration statement filed under the
Securities Act,
(B) to a non-U.S. person in an offshore transaction in accordance with Rule
903 or Rule 904 of Regulation S of the Securities Act,
(C) pursuant to the resale limitations set forth in Rule 905 of Regulation
S,
(D) pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available); or
(E) pursuant to any other exemption from the registration requirements of
the Securities Act, and in each case in accordance with any applicable
securities laws of any state of the United States or any other jurisdiction.
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The Subscriber acknowledges, agrees and covenants that it will not engage
in hedging transactions with regard to the Subscriber's Common Stock prior to
the expiration of the distribution compliance period specified in Rule 903 of
Regulation S promulgated under the Act, unless in compliance with the Securities
Act.
The Subscriber agrees that if any transfer of its Shares or any interest
therein is proposed to be made, as a condition precedent to any such transfer,
the transferor may be required to deliver to the Company an opinion of counsel
satisfactory to the Company relating to compliance with applicable securities
laws and other matters. Absent registration or another exemption from
registration, the Subscriber agrees that it will not resell the securities
constituting the Subscriber's Common Stock to U.S. Persons or within the United
States.
2.5. Accredited and Sophisticated Investor.
The Subscriber is familiar with the term "accredited investor" as defined
in Regulation D promulgated under the Securities Act and is an "accredited
investor" within the meaning of such term in Regulation D. The Subscriber has
completed the Confidential Investor Questionnaire attached hereto.
The Subscriber is sophisticated in financial matters and is able to
evaluate the risks and benefits of the investment in the Shares.
The Subscriber is able to bear the economic risk of his investment in the
Shares for an indefinite period of time because none of the Shares have been
registered under the Securities Act and therefore cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is available.
2.6 Independent Investigation. The Subscriber, in making the decision to
purchase the Shares, has relied upon an independent investigation of the Company
and has not relied upon any information or representations made by any third
parties or upon any oral or written representations or assurances from the
Company, its officers, directors or employees or any other representatives or
agents of the Company, other than as set forth in this Agreement. The Subscriber
is familiar with the business, operations and financial condition of the
Company, has reviewed the Company's publicly-available information filed with
the SEC, has had an opportunity to ask questions of, and receive answers from,
the Company's officers and directors concerning the Company and the terms and
conditions of the offering of the Shares and has had full access to such other
information concerning the Company as the Subscriber has requested.
2.7 Authority. This Agreement has been validly authorized, executed and
delivered by the Subscriber and is a valid and binding agreement enforceable in
accordance with its terms, subject to the general principles of equity and to
bankruptcy or other laws affecting the enforcement of creditors' rights
generally. The execution, delivery and performance of this Agreement by the
Subscriber does not and will not conflict with, violate or cause a breach of any
agreement, contract or instrument to which the Subscriber is a party.
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2.8 No Legal Advice from Company. The Subscriber acknowledges that he has
had the opportunity to review this Agreement and the transactions contemplated
by this Agreement with the Subscriber's own legal counsel and investment and tax
advisors. Except for any statements or representations of the Company made in
this Agreement, the Subscriber is relying solely on such counsel and advisors
and not on any statements or representations of the Company or any of its
representatives or agents for legal, tax or investment advice with respect to
this investment, the transactions contemplated by this Agreement or the
securities laws of any jurisdiction.
2.9 Reliance on Representations and Warranties. The Subscriber understands
that the Shares are being offered and sold to the Subscriber in reliance on
specific provisions of United States federal and state securities laws and that
the Company is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Subscriber set
forth in this Agreement in order to determine the applicability of such
provisions.
2.10 No Advertisements. The undersigned is not subscribing for Shares as a
result of or subsequent to any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media or
broadcast over television or radio, or presented at any seminar or meeting.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Subscriber that:
3.1 Valid Issuance of Capital Stock. The total number of shares of all
classes of capital stock which the Company has authority to issue is 95,000,000
shares of Common Stock. As of the date hereof, the Company has 18,247,935 shares
of Common Stock issued and outstanding. All of the issued shares of capital
stock of the Company have been duly authorized, validly issued, and are fully
paid and non-assessable.
3.2 Organization and Qualification. The Company is a corporation duly
incorporated and existing in good standing under the laws of the state of
Delaware and has the requisite corporate power to own its properties and assets
and to carry on its business as now being conducted.
3.3 Authorization; Enforcement.
(i) The Company has the requisite corporate power and authority to enter
into and perform its obligations under this Agreement and to issue the Common
Stock in accordance with the terms hereof,
(ii) the execution, delivery and performance of this Agreement by the
Company and the consummation by it of the transactions contemplated hereby have
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been duly authorized by all necessary corporate action, and no further consent
or authorization of the Company or its Board of Directors or stockholders is
required, and
(iii) this Agreement constitutes valid and binding obligations of the
Company enforceable against the Company in accordance with its terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, moratorium, reorganization, or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
equitable principles of general application and except as enforcement of rights
to indemnity and contribution may be limited by federal and state securities
laws or principles of public policy.
3.4 No Conflicts. To the knowledge of the Company, the execution, delivery
and performance of this Agreement and the consummation by the Company of the
transactions contemplated hereby do not materially
(i) result in a violation of the Company's Articles of Incorporation or
By-Laws or
(ii) conflict with, or constitute a default under any agreement, indenture
or instrument to which the Company is a party. Other than any SEC or state
securities filings which may be required to be made by the Company subsequent to
the Closing, and any registration statement which may be filed pursuant thereto,
the Company is not required under federal, state or local law, rule or
regulation to obtain any consent, authorization or order of, or make any filing
or registration with, any court or governmental agency or self-regulatory entity
in order for it to perform any of its obligations under this Agreement or issue
the Common Stock in accordance with the terms hereof.
4. LEGENDS; DENOMINATIONS
4.1 Legend. The Company will issue the Shares purchased by the Subscriber
in the name of the Subscriber and in such denominations to be specified by the
Subscriber prior to the Closing. The Shares will bear the following legend (the
"Legend"), and appropriate "stop transfer" instructions:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND THESE SECURITIES MAY NOT BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
(A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
FILED UNDER THE SECURITIES ACT, (B) TO A NON-U.S.
PERSON IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH
RULE 903 OR RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (C) PURSUANT TO THE RESALE LIMITATIONS
SET FORTH IN RULE 905 OF REGULATIONS S UNDER THE
SECURITIES ACT, (D) PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
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ACT (IF AVAILABLE) OR (E) PURSUANT TO ANY OTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES OR ANY OTHER JURISDICTION. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT.
4.2 Subscriber's Compliance. Nothing in this Section 4 shall affect in any
way the Subscriber's obligations and agreement to comply with all applicable
securities laws upon resale of the Shares.
4.3 Company's Refusal to Register Transfer of Shares. The Company shall
refuse to register any transfer of the Shares not made in accordance with the
provisions of Regulation S, pursuant to an effective registration statement
filed under the Securities Act, or pursuant to an available exemption from the
registration requirements of the Securities Act.
5. GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York. The parties hereto hereby waive any right to a
jury trial in connection with any litigation pursuant to this Agreement and the
transactions contemplated hereby.
6. ASSIGNMENT; ENTIRE AGREEMENT; AMENDMENT
6.1 Assignment. Neither this Agreement nor any rights hereunder may be
assigned by any party to any other person other than by Subscriber to a person
agreeing to be bound by the terms hereof.
6.2 Entire Agreement; Amendment. This Agreement and any other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subject matter hereof, and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth in
this Agreement. Except as expressly provided in this Agreement, neither this
Agreement nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against whom enforcement
of any such amendment, waiver, discharge, or termination is sought.
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7. NOTICES; INDEMNITY
7.1 Notices. Unless otherwise provided herein, any notice or other
communication to a party hereunder shall be sufficiently given if in writing and
personally delivered or sent by facsimile with copy sent in another manner
herein provided or sent by courier (which for all purposes of this Agreement
shall include Federal Express, UPS or other recognized overnight courier) or
mailed to said party by certified mail, return receipt requested, at its address
provided for herein or such other address as either may designate for itself in
such notice to the other and communications shall be deemed to have been
received when delivered personally on the scheduled arrival date when sent by
next day or 2-day courier service or if sent by facsimile upon receipt of
confirmation of transmittal or, if sent by mail, then three days after deposit
in the mail.
7.2 Indemnification. Each party shall indemnify the other against any loss,
cost or damages (including reasonable attorney's fees and expenses) incurred as
a result of such party's breach of any representation, warranty, covenant or
agreement in this Agreement.
8. COUNTERPARTS
This Agreement may be executed in any number of counterparts, each of which
shall be enforceable against the parties actually executing such counterparts,
and all of which together shall constitute one instrument.
9. SURVIVAL; SEVERABILITY
The representations, warranties, covenants and agreements of the parties
hereto shall survive the Closing. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that no such severability shall be
effective if it materially changes the economic benefit of this Agreement to any
party.
10. TITLES AND SUBTITLES
The titles and subtitles used in this Agreement are used for convenience
only and are not to be considered in construing or interpreting this Agreement.
11. CHINESE TRANSLATION OF THIS AGREEMENT IS COMPLETE AND ACCURATE
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GLOBAL PHARMATECH, INC.
By: /s/ Lianqin Qu
------------------------------
Name: Lianqin Qu
Title: Chairwoman
/s/ Zhenyou Zhang
------------------------------
(Please sign here)
Zhenyou Zhang
(Please print your name here)
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