THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED, PLEDGED OR...
THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER
APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
WARRANT
________
Shares of Common Stock1
January ___, 2011
This
WARRANT (this “Warrant”) of China For-Gen Corp.,
a company duly organized and validly existing under the laws of the State of
Delaware (the “Company”), is being issued pursuant
to that certain Underwriting Agreement, dated as of [ ], 2011,
by and between the Company and Maxim Group LLC, the representative of the
Underwriters (the “Representative”) relating to a firm
commitment public offering (the “Offering”) of common stock,
par value $0.001 per share (the “Common Stock”), of the
Company.
FOR VALUE RECEIVED, the
Company hereby grants to Maxim Group LLC and its permitted successors and
assigns (collectively, the “Holder”) the right to purchase
from the Company up to
(
) shares of Common Stock (such Common Stock underlying this Warrant, the
“Warrant Shares”), at a
per share purchase price equal to $[______] [110% OF THE PUBLIC OFFERING PRICE]
(the “Exercise
Price”), subject to the terms,
conditions and adjustments set forth below in this Warrant.
(a) This
Warrant is exercisable in whole or in part at any time and from time to time.
Such exercise shall be effectuated by submitting to the Company (either by
delivery to the Company or by facsimile transmission as provided in Section 12
hereof) a completed and duly executed Notice of Exercise (substantially in the
form attached to this Warrant) as provided in this paragraph. The date such
Notice of Exercise is faxed to the Company shall be the “Exercise Date,”
provided that the Holder of this Warrant tenders this Warrant Certificate to the
Company within five (5) business days thereafter. The Notice of Exercise shall
be executed by the Holder of this Warrant and shall indicate the number of
Warrant Shares then being purchased pursuant to such exercise. Upon surrender of
this Warrant Certificate, together with appropriate payment of the Exercise
Price for the Warrant Shares purchased, the Holder shall be entitled to receive
a certificate or certificates for the Common Stock so purchased. The Exercise
Price may be paid in a “cashless” or “cash” exercise or a combination thereof
pursuant to Section 3.1(b) and/or Section 3.1(c) below.
(b) If
the Notice of Exercise form elects a “cashless” exercise, the Holder shall
thereby be entitled to receive a number of Common Stock determined as
follows:
X = Y [(A
– B)/A]
where:
X = the
number of Warrant Shares to be issued to the Holder.
Y = the
number of Warrant Shares with respect to which this Warrant is being
exercised.
A = the
Fair Market Value
B = the
Exercise Price.
For
purposes of this Section 3.1(b), “Fair Market Value” shall be the closing price
of the Common Stock as reported by the OTC Bulletin Board, or if listed on a
national securities exchange or quoted on an automated quotation service, such
national securities exchange or automated quotation service, on the date
immediately prior to the Exercise Date. If the Common Stock are not then listed
on a national stock exchange or quoted on the OTC Bulletin Board or such other
quotation system or association, the Fair Market Value of one share of Common
Stock as of the date of determination, shall be as determined in good faith by
the Board of Directors of the Company and the Holder. If the Common Stock are
not then listed on a national securities exchange, the OTC Bulletin Board or
such other quotation system or association, the Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Holder prior to
the exercise hereunder as to the fair market value of one share of Common Stock
as determined by the Board of Directors of the Company. In the event that the
Board of Directors of the Company and the Holder are unable to agree upon the
fair market value, the Company and the Holder shall jointly select an appraiser,
who is experienced in such matters. The decision of such appraiser shall be
final and conclusive, and the cost of such appraiser shall be borne equally by
the Company and the Holder. Such adjustment shall be made successively whenever
such a payment date is fixed.
(c) If
the Notice of Exercise form elects a “cash” exercise, the Exercise Price per
share of Common Stock for the shares then being exercised shall be payable in
cash or by certified or official bank check.
(a) a
certificate or certificates (with appropriate restrictive legends, as
applicable) for the number of duly authorized, validly issued, fully paid and
nonassessable Warrant Shares to which the Holder shall be entitled upon
exercise; and
(b) in
case exercise is in part only, a new Warrant document of like tenor, dated the
date hereof, for the remaining number of Warrant Shares issuable upon exercise
of this Warrant after giving effect to the partial exercise of this Warrant
(including the delivery of any Warrant Shares as payment of the Exercise Price
for such partial exercise of this Warrant).
(a) At
any time on or after the six month anniversary of the Base Date and on or before
the five (5) year anniversary of the Base Date, but in no event on not more than
two (2) occasions (the second of which effected required registrations (as
described in Section 8.2(c)) pursuant to this Section 8.2(a) would be payable by
the Holder pursuant to Section 8.6), upon the written request of the holders of
the Registrable Securities representing a Majority of such securities, the
Company will use its best efforts to effect the registration of the respective
shares of the holders of Registrable Securities under the Securities Act to the
extent requisite to permit the disposition thereof as expeditiously as
reasonably possible, but in no event later than 120 days from the date of such
request.
(b) Registration
of Registrable Securities under this Section 8.2 shall be on such appropriate
registration form: (i) as shall be selected by the Company, and
(ii) as shall permit the disposition of such Registrable Securities in
accordance with this Section 8.2. The Company agrees to include in any such
registration statement all information which the requesting holders of
Registrable Securities shall reasonably request, which is required to be
contained therein. The Company will pay all Registration Expenses in connection
with the first, and only the first, effected required registration (as described
in Section 8.2(c)) of Registrable Securities pursuant to this Section 8.2. The
Holder or holders whose shares are being registered shall pay all expenses
associated with the second effected required registration of Registrable
Securities pursuant to Section 8.2.
(c) A
registration requested pursuant to this Section 8.2 shall not be deemed to have
been effected: (i) unless a registration statement with respect thereto has
become effective or (ii) if, after it has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Securities and Exchange Commission (the “SEC”) or other governmental
agency or court of competent jurisdiction for any reason, other than by reason
of some act or omission by a holder of Registrable Securities.
(a) If
the Company, at any time on or after the six month anniversary of the Base Date
and on or before the seven (7) year anniversary of the Base Date, proposes to
register any of its securities under the Securities Act (other than in
connection with a registration on Form S-4 or S-8 or comparable forms used by
foreign private issuers or any successor forms) whether for its own account or
for the account of any holder or holders of its shares other than Registrable
Securities (any shares of such holder or holders (but not those of the Company
and not Registrable Securities) with respect to any registration are referred to
herein as, “Other
Shares”), the Company shall each
such time give prompt (but not less than thirty (30) days prior to the
anticipated effectiveness thereof) written notice to the holders of Registrable
Securities of its intention to do so. Upon the written request of any such
holder of Registrable Securities made within twenty (20) days after the receipt
of any such notice (which request shall specify the Registrable Securities
intended to be disposed of by such holder), except as set forth in Section
8.3(b), the Company will use its best efforts to effect the registration under
the Securities Act of all of the Registrable Securities which the Company has
been so requested to register by such holder, to the extent requisite to permit
the disposition of the Registrable Securities so to be registered, by inclusion
of such Registrable Securities in the registration statement which covers the
securities which the Company proposes to register; provided, however, that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
in its sole discretion either to not register, to delay or to withdraw
registration of such securities, the Company may, at its election, give written
notice of such determination to such holder and, thereupon, (i) in the case
of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of the holders of
Registrable Securities entitled to request that such registration be effected as
a registration under Section 8.2, (ii) in the case of a determination to
delay registration, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other securities
(including the Other Shares), without prejudice, however, to the rights of the
holders of Registrable Securities entitled to request that such registration be
effected as a registration under Section 8.2 and (iii) in the case of a
determination to withdraw registration, shall be permitted to withdraw
registration, without prejudice, however, to the rights of the holders of
Registrable Securities entitled to request that such registration be effected as
a registration under Section 8.2. No registration effected under this Section
8.3 shall relieve the Company of its obligation to effect any registration upon
request under Section 8.2, nor shall any such registration hereunder be deemed
to have been effected pursuant to Section 8.2. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities pursuant to this Section 8.3.
(b) If
the Company at any time proposes to register any of its securities under the
Securities Act as contemplated by this Section 8.3 and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by a holder of Registrable Securities, use its best efforts to arrange
for such underwriters to include all the Registrable Securities to be offered
and sold by such holder among the securities to be distributed by such
underwriters, provided that if the managing underwriter of such underwritten
offering shall inform the Company by letter of its belief that inclusion in such
distribution of all or a specified number of such securities proposed to be
distributed by such underwriters would interfere with the successful marketing
of the securities being distributed by such underwriters (such letter to state
the basis of such belief and the approximate number of such Registrable
Securities, such Other Shares and shares held by the Company proposed so to be
registered which may be distributed without such effect), then the Company may,
upon written notice to such holder, the other holders of Registrable Securities,
and holders of such Other Shares, reduce pro rata in accordance with the number
of Common Stock desired to be included in such registration (if and to the
extent stated by such managing underwriter to be necessary to eliminate such
effect) the number of such Registrable Securities and Other Shares the
registration of which shall have been requested by each holder thereof so that
the resulting aggregate number of such Registrable Securities and Other Shares
so included in such registration, together with the number of securities to be
included in such registration for the account of the Company, shall be equal to
the number of shares stated in such managing underwriter’s letter.
(a) prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective;
(b) notify
such holders of the effectiveness of each registration statement filed hereunder
and prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to (i) keep such registration statement effective and the
prospectus included therein usable for a period commencing on the date that such
registration statement is initially declared effective by the SEC and ending on
the date when all Registrable Securities covered by such registration statement
have been sold pursuant to the registration statement or cease to be Registrable
Securities, and (ii) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;
(c) furnish
to such holders such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other documents as
such seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such holders;
(d) use
its best efforts to register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as such holders
reasonably request and do any and all other acts and things which may be
reasonably necessary or advisable to enable such holders to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
holders; provided,
however, that the Company shall not be required to: (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph; (ii) subject itself to
taxation in any such jurisdiction; or (iii) consent to general service of
process in any such jurisdiction;
(e) notify
such holders, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement contains an untrue
statement of a material fact or omits any material fact necessary to make the
statements therein, in light of the circumstances in which they are made, not
materially misleading, and, at the reasonable request of such holders, the
Company shall prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances in which they are made, not materially
misleading;
(f) provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such registration statement;
(g) make
available for inspection by any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company’s officers, directors, managers, employees and independent accountants
to supply all information reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such registration
statement;
(h) otherwise
use its best efforts to comply with all applicable rules and regulations of the
SEC, and make available to its security holders, as soon as reasonably
practicable, an earnings statement of the Company, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and, at the
option of the Company, Rule 158 thereunder;
(i) in
the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any Registrable Securities
included in such registration statement for sale in any jurisdiction, the
Company shall use its best efforts promptly to obtain the withdrawal of such
order;
(j) use
its best efforts to cause any Registrable Securities covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities;
and
(k) if
the offering is underwritten, use its best efforts to furnish on the date that
Registrable Securities are delivered to the underwriters for sale pursuant to
such registration, an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the underwriters
covering such issues as are reasonably required by such
underwriters.
(i) If
in the opinion of counsel for the Holder reasonably satisfactory to the Company
the proposed transfer may be effected without registration of the Restricted
Securities under the Securities Act (which opinion shall state in detail the
basis of the legal conclusions reached therein), the Holder shall thereupon be
entitled to transfer the Restricted Securities in accordance with the terms of
the notice delivered by the Holder to the Company. Each certificate representing
the Restricted Securities issued upon or in connection with any transfer shall
bear the restrictive legends required by Section 9.1 hereof.
(ii) If
the opinion called for in (i) above is not delivered, the Holder shall not
be entitled to transfer the Restricted Securities until either (x) receipt
by the Company of a further notice from such Holder pursuant to the foregoing
provisions of this Section 9.2 and fulfillment of the provisions of clause (i)
above, or (y) such Restricted Securities have been effectively registered
under the Securities Act.
(a) The
Company will maintain its principal office at the location identified in the
prospectus relating to the Offering or at such other offices as set forth in the
Company’s most current filing (as of the date notice is to be given) under the
Exchange Act or as the Company otherwise notifies the Holder.
(b) The
Company shall cause to be kept at its office maintained pursuant to Section
10.2(a) hereof a Warrant Register for the registration and transfer of the
Warrant. The name and address of the holder of the Warrant, the transfers
thereof and the name and address of the transferee of the Warrant shall be
registered in such Warrant Register. The Person in whose name the Warrant shall
be so registered shall be deemed and treated as the owner and holder thereof for
all purposes of this Warrant, and the Company shall not be affected by any
notice or knowledge to the contrary.
(c) Upon
the surrender of this Warrant, properly endorsed, for registration of transfer
or for exchange at the office of the Company maintained pursuant to Section
10.2(a) hereof, the Company at its expense will (subject to compliance with
Section 9 hereof, if applicable) execute and deliver to or upon the order of the
Holder thereof a new Warrant of like tenor, in the name of such holder or as
such holder (upon payment by such holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face thereof for the number of Common
Stock called for on the face of the Warrant so surrendered (after giving effect
to any previous adjustment(s) to the number of Warrant Shares).
14. Miscellaneous. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought. This Warrant shall be
construed and enforced in accordance with and governed by the laws of the State
of New York. The section headings in this Warrant are for purposes of
convenience only and shall not constitute a part hereof.
[Signature
Page Follows]
IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed as of the date first above
written.
By:
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Name:
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Title:
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[Signature
Page to Representative’s Warrant]
EXHIBIT
A
FORM
OF EXERCISE NOTICE
[To be
executed only upon exercise of Warrant]
The
undersigned registered holder of the within Warrant hereby irrevocably exercises
the Warrant pursuant to Section 3.1 of the Warrant with respect to Warrant
Shares, at an exercise price per share of $, and requests that the certificates
for such Warrant Shares be issued, subject to Sections 9 and 10, in the name of,
and delivered to:
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The
undersigned is hereby making payment for the Warrant Shares in the following
manner: [describe
desired payment method as provided for in 3.1 of the Warrant].
The
undersigned hereby represents and warrants that it is, and has been since its
acquisition of the Warrant, the record and beneficial owner of the
Warrant.
Print
or Type Name
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(Signature
must conform in all respects to name of holder as specified on the face of
Warrant)
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(Street
Address)
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(City) (State) (Zip
Code)
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EXHIBIT
B
FORM
OF ASSIGNMENT
[To be
executed only upon transfer of Warrant]
For value
received, the undersigned registered holder of the within Warrant hereby sells,
assigns and transfers unto
[include name and addresses] the rights represented by the Warrant
to purchase
Common Stock of China For-Gen Corp. to which the Warrant relates, and
appoints Attorney
to make such transfer on the books of China For-Gen Corp. maintained for the
purpose, with full power of substitution in the premises.
Dated:
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(Signature
must conform in all respects to name of holder as specified on the face of
Warrant)
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(Street
Address)
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(City)
(State) (Zip
Code)
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Signed
in the presence of:
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(Signature
of Transferree)
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(Street
Address)
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(City)
(State) (Zip
Code)
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Signed
in the presence of:
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