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.
________
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.
1.
Vesting of
Warrant. This Warrant shall vest and become exercisable on the six month
anniversary of the Base Date (the “Vesting Date”). For purposes of this
Warrant, the “Base Date”
shall mean the date of effectiveness of registration statement number
333-166868. Except as otherwise provided for herein or as permitted by
applicable rules of the Financial Industry Regulatory Authority (“FINRA”), this
Warrant shall not be sold, transferred, assigned, pledged or hypothecated prior
to the Vesting Date.
2.
Expiration
of Warrant. This Warrant shall expire on the five (5) year anniversary of
the Base Date (the “Expiration
Date”).
3.
Exercise of Warrant.
This Warrant shall be exercisable pursuant to the terms of this Section
3.
3.1 Manner
of Exercise.
(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.
3.2 When Exercise
Effective. Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the Business Day on which
this Warrant shall have been duly surrendered to the Company as provided in
Sections 3.1 and 12 hereof, and, at such time, the Holder in whose name any
certificate or certificates for Warrant Shares shall be issuable upon exercise
as provided in Section 3.3 hereof shall be deemed to have become the holder or
holders of record thereof of the number of Warrant Shares purchased upon
exercise of this Warrant.
3.3 Delivery of Common Stock
Certificates and New Warrant. As soon as reasonably practicable after
each exercise of this Warrant, in whole or in part, and in any event within five
(5) Business Days thereafter, the Company, at its expense (including the payment
by it of any applicable issue taxes), will cause the name of the Holder (or as
Holder may direct) to be entered in the register of members in respect of the
Warrant Shares and further cause to be issued in the name of and delivered to
the Holder hereof or, subject to Sections 9 and 10 hereof, as the Holder (upon
payment by the Holder of any applicable transfer taxes) may direct:
(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).
4. Certain Adjustments.
For so long as this Warrant is outstanding:
4.1 Mergers or
Consolidations. If at any time after the date hereof there shall be a
capital reorganization (other than a combination or subdivision of the Common
Stock otherwise provided for herein) resulting in a reclassification to or
change in the terms of securities issuable upon exercise of this Warrant (a
“Reorganization”), or a merger or
consolidation of the Company with another corporation, association, partnership,
organization, business, individual, government or political subdivision thereof
or a governmental agency (a “Person” or the “Persons”) (other than a merger
with another Person in which the Company is a continuing corporation and which
does not result in any reclassification or change in the terms of securities
issuable upon exercise of this Warrant or a merger effected exclusively for the
purpose of changing the domicile of the Company) (a “Merger”), then, as a part of such
Reorganization or Merger, lawful provision and adjustment shall be made so that
the Holder shall thereafter be entitled to receive, upon exercise of this
Warrant, the number of shares of stock or any other equity or debt securities or
property receivable upon such Reorganization or Merger by a holder of the number
of Common Stock which might have been purchased upon exercise of this Warrant
immediately prior to such Reorganization or Merger. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the Holder after the
Reorganization or Merger to the end that the provisions of this Warrant
(including adjustment of the Exercise Price then in effect and the number of
Warrant Shares) shall be applicable after that event, as near as reasonably may
be, in relation to any shares of stock, securities, property or other assets
thereafter deliverable upon exercise of this Warrant. The provisions of this
Section 4.1 shall similarly apply to successive Reorganizations and/or
Mergers.
4.2 Splits and Subdivisions;
Dividends. In the event the Company should at any time or from time to
time effectuate a split or subdivision of the outstanding Common Stock or pay a
dividend in or make a distribution payable in additional Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive, directly or indirectly, additional Common Stock (hereinafter referred
to as the “Common Stock
Equivalents”) without payment of any
consideration by such holder for the additional Common Stock or Common Stock
Equivalents (including the additional Common Stock issuable upon conversion or
exercise thereof), then, as of the applicable record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per share
Exercise Price shall be appropriately decreased and the number of Warrant Shares
shall be appropriately increased in proportion to such increase (or potential
increase) of outstanding shares; provided, however, that no adjustment shall be
made in the event the split, subdivision, dividend or distribution is not
effectuated.
4.3 Combination of
Shares. If the number of shares of Common Stock outstanding at any time
after the date hereof is decreased by a combination of the outstanding Common
Stock, the per share Exercise Price shall be appropriately increased and the
number of shares of Warrant Shares shall be appropriately decreased in
proportion to such decrease in outstanding shares.
4.4 Adjustments for Other
Distributions. In the event the Company shall declare a distribution
payable in securities of other Persons, evidences of indebtedness issued by the
Company or other Persons, assets (excluding cash dividends or distributions to
the holders of Common Stock paid out of current or retained earnings and
declared by the Company’s board of directors) or options or rights not referred
to in Sections 4.1, 4.2 or 4.3, then, in each such case for the purpose of this
Section 4.4, upon exercise of this Warrant, the Holder shall be entitled to a
proportionate share of any such distribution as though the Holder was the actual
record holder of the number of Warrant Shares as of the record date fixed for
the determination of the holders of Common Stock of the Company entitled to
receive such distribution.
5.
No Impairment. The
Company will not, by amendment of its memorandum and articles of association or
through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all of the
terms and in the taking of all actions necessary or appropriate in order to
protect the rights of the Holder against impairment.
6.
Chief Financial Officer’s
Report as to Adjustments. With respect to each adjustment pursuant to
Section 4 of this Warrant, the Company, at its expense, will promptly compute
the adjustment or re-adjustment in accordance with the terms of this Warrant and
cause its Chief Financial Officer to certify the computation (other than any
computation of the fair value of property of the Company, as the case may be)
and prepare a report setting forth, in reasonable detail, the event requiring
the adjustment or re-adjustment and the amount of such adjustment or
re-adjustment, the method of calculation thereof and the facts upon which the
adjustment or re-adjustment is based, and the Exercise Price and the number of
Warrant Shares or other securities purchasable hereunder after giving effect to
such adjustment or re-adjustment, which report shall be mailed by first class
mail, postage prepaid to the Holder. The Company will also keep copies of all
reports at its office maintained pursuant to Section 10.2(a) hereof and will
cause them to be available for inspection at the office during normal business
hours upon reasonable notice by the Holder or any prospective purchaser of the
Warrant designated by the Holder thereof.
7.
Reservation of
Shares. The Company shall, solely for the purpose of effecting the
exercise of this Warrant, at all times during the term of this Warrant, reserve
and keep available out of its authorized Common Stock, free from all taxes,
liens and charges with respect to the issue thereof and not subject to
preemptive rights or other similar rights of shareholders of the Company, such
number of shares of its Common Stock as shall from time to time be sufficient to
effect in full the exercise of this Warrant. If at any time the number of
authorized but unissued Common Stock shall not be sufficient to effect in full
the exercise of this Warrant, in addition to such other remedies as shall be
available to Holder, the Company will promptly take such corporate action as
may, in the opinion of its counsel, be necessary to increase the number of
authorized but unissued Common Stock to such number of shares as shall be
sufficient for such purposes, including without limitation, using its best
efforts to obtain the requisite shareholder approval necessary to increase the
number of authorized Common Stock. The Company hereby represents and warrants
that all Common Stock issuable upon exercise of this Warrant shall be duly
authorized and, when issued and paid for upon exercise, shall be validly issued,
fully paid and nonassessable.
8.
Registration and
Listing.
8.1 Definition of Registrable
Securities; Majority. As used herein, the term “Registrable Securities” means
any Common Stock issuable upon the exercise of this Warrant, until the date (if
any) on which such shares shall have been transferred or exchanged and new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of them shall not
require registration or qualification of them under the Securities Act or any
similar state law then in force. For purposes of this Warrant, the term “Majority”, in reference to the
holders of Registrable Securities, shall mean in excess of fifty percent (50%)
of the then outstanding Warrant Shares (assuming the exercise of the entire
Warrant) that (i) are not held by the Company, an affiliate, officer,
creditor, employee or agent thereof or any of their respective affiliates,
members of their family, Persons acting as nominees or in conjunction therewith
and (ii) have not be resold to the public pursuant to a registration
statement filed under the Securities Act.
8.2 Required
Registration.
(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.
8.3 Incidental Registration
Rights.
(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.
8.4 Registration
Procedures. Whenever the holders of Registrable Securities have properly
requested that any Registrable Securities be registered pursuant to the terms of
this Warrant, the Company shall use its best efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company shall as
expeditiously as possible:
(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.
8.5 Listing. The Company
shall secure the listing of the Common Stock underlying this Warrant upon each
national securities exchange or automated quotation system upon which Common
Stock are then listed (subject to official notice of issuance) and shall
maintain such listing of Common Stock. The Company shall at all times comply in
all material respects with the Company’s reporting, filing and other obligations
under the by-laws or rules of the NYSE Amex Stock Exchange (or such other
national securities exchange or market on which the Common Stock may then be
listed, as applicable).
8.6 Expenses. The Company
shall pay all Registration Expenses relating to the registration and listing
obligations set forth in this Section 8, except that the Holder shall be
responsible for the Registration Expenses for the second effected required
registration pursuant to Section 8.2(a). For purposes of this Warrant, the term
“Registration
Expenses” means: (a) all
registration, filing and FINRA fees, (b) all reasonable fees and expenses
of complying with securities or blue sky laws, (c) all word processing,
duplicating and printing expenses, (d) the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of any special audits or “cold comfort” letters required by or incident
to such performance and compliance, (e) premiums and other costs of
policies of insurance (if any) against liabilities arising out of the public
offering of the Registrable Securities being registered if the Company desires
such insurance, if any, and (f) fees and disbursements of one counsel for
the selling holders of Registrable Securities. Registration Expenses shall not
include any underwriting discounts and commissions which may be incurred in the
sale of any Registrable Securities and transfer taxes of the selling holders of
Registrable Securities.
8.7 Restrictions. The
Company shall not be obligated to effect a registration pursuant to Section 8.2
during the period beginning on 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
twenty (120) days after the effective date of, a Company-initiated registration
(other than a registration pursuant to Form S-8), provided that: (i) if the
holder of Registrable Securities elects to have all or some of its Registrable
Securities included in the registration pursuant to Section 8.3 hereof, such
Registrable Securities are included in the Company-initiated registration
statement only to the extent required hereunder and (ii) the Company is
actively employing in best efforts to cause such registration to become
effective.
8.8 Information Provided by
Holders. Any holder of Registrable Securities included in any
registration shall furnish to the Company such information as the Company may
reasonably request in writing to enable the Company to comply with the
provisions hereof in connection with any registration referred to in this
Warrant. In the event that a holder of Registrable Securities fails to provide
such information on a timely basis, and in any event within seven (7) Business
Days of the Company’s written request, then the Company shall be entitled to
exclude the Registrable Securities of such holder from such registration and the
Company shall nevertheless be deemed to have satisfied its obligations hereunder
with respect to such registration.
9. Restrictions on
Transfer.
9.1 Restrictive Legends.
This Warrant and each Warrant issued upon transfer or in substitution for this
Warrant pursuant to Section 10 hereof, each certificate for Common Stock issued
upon the exercise of the Warrant and each certificate issued upon the transfer
of any such Common Stock shall be transferable only upon satisfaction of the
conditions specified in this Section 9. Each of the foregoing securities shall
be stamped or otherwise imprinted with a legend reflecting the restrictions on
transfer set forth herein and any restrictions required under the Securities Act
or other applicable securities laws.
9.2 Notice of Proposed
Transfer. Prior to any transfer of any securities which are not
registered under an effective registration statement under the Securities Act
(“Restricted Securities”), which
transfer may only occur if there is an exemption from the registration
provisions of the Securities Act and all other applicable securities laws, the
Holder will give written notice to the Company of the Holder’s intention to
effect a transfer (and shall describe the manner and circumstances of the
proposed transfer). The following provisions shall apply to any proposed
transfer of Restricted Securities:
(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.
9.3 Certain Other Transfer
Restrictions. Notwithstanding any other provision of this Section 9:
(i) prior to the Vesting Date, this Warrant or the Restricted Securities
thereunder may only be transferred or assigned to the persons permitted under
FINRA Rule 5110(g), and (ii) no opinion of counsel shall be necessary for a
transfer of Restricted Securities by the holder thereof to any Person employed
by or owning equity in the Holder, if the transferee agrees in writing to be
subject to the terms hereof to the same extent as if the transferee were the
original purchaser hereof and such transfer is permitted under applicable
securities laws.
9.4 Termination of
Restrictions. Except as set forth in Section 9.3 hereof, the restrictions
imposed by this Section 9 upon the transferability of Restricted Securities
shall cease and terminate as to any particular Restricted Securities:
(a) which shall have been effectively registered under the Securities Act,
or (b) when, in the opinions of both counsel for the holder thereof and
counsel for the Company, such restrictions are no longer required in order to
insure compliance with the Securities Act or Section 10 hereof. Whenever such
restrictions shall cease and terminate as to any Restricted Securities, the
Holder thereof shall be entitled to receive from the Company, without expense
(other than applicable transfer taxes, if any), new securities of like tenor not
bearing the applicable legends required by Section 9.1 hereof.
10. Ownership, Transfer and
Substitution of Warrant.
10.1 Ownership of Warrant.
The Company may treat any Person in whose name this Warrant is registered in the
Warrant Register maintained pursuant to Section 10.2(b) hereof as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary,
except that, if and when any Warrant is properly assigned in blank, the Company
may (but shall not be obligated to) treat the bearer thereof as the owner of
such Warrant for all purposes, notwithstanding any notice to the contrary.
Subject to Sections 9 and 10 hereof, this Warrant, if properly assigned, may be
exercised by a new holder without a new Warrant first having been
issued.
10.2 Office; Exchange of
Warrant.
(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).
10.3 Replacement of
Warrant. Upon receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and, in the case
of any such loss, theft or destruction of this Warrant, upon delivery of
indemnity reasonably satisfactory to the Company in form and amount or, in the
case of any mutilation, upon surrender of this Warrant for cancellation at the
office of the Company maintained pursuant to Section 10.2(a) hereof, the
Company, at its expense, will execute and deliver, in lieu thereof, a new
Warrant of like tenor and dated the date hereof.
11. No Rights or Liabilities as
Stockholder. No Holder shall be entitled to vote or receive dividends or
be deemed the holder of any Common Stock or any other securities of the Company
which may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the Holder, as such,
any of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of shares, reclassification of shares,
change of par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise until the Warrant shall have been exercised and the Common Stock
purchasable upon the exercise hereof shall have become deliverable, as provided
herein. The Holder will not be entitled to share in the assets of the Company in
the event of a liquidation, dissolution or the winding up of the
Company.
12. Notices. Any notice
or other communication in connection with this Warrant shall be given in writing
and directed to the parties hereto as follows: (a) if to the Holder, c/o
Maxim Group LLC, 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attn: Xxxxx Xxxxxx,
Fax No: (000) 000-0000; or (b) if to the Company, to the attention of its
Chief Executive Officer at its office maintained pursuant to Section 10.2(a)
hereof; provided, that
the exercise of the Warrant shall also be effected in the manner provided in
Section 3 hereof. Notices shall be deemed properly delivered and received when
delivered to the notice party (i) if personally delivered, upon receipt or
refusal to accept delivery, (ii) if sent via facsimile, upon mechanical
confirmation of successful transmission thereof generated by the sending
telecopy machine, (iii) if sent by a commercial overnight courier for
delivery on the next Business Day, on the first Business Day after deposit with
such courier service, or (iv) if sent by registered or certified mail, five
(5) Business Days after deposit thereof in the U.S. mail.
13. Payment of Taxes. The
Company will pay all documentary stamp taxes attributable to the issuance of
Common Stock underlying this Warrant upon exercise of this Warrant; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the transfer or registration of this Warrant or any
certificate for Common Stock underlying this Warrant in a name other that of the
Holder. The Holder is responsible for all other tax liability that may arise as
a result of holding or transferring this Warrant or receiving Common Stock
underlying this Warrant upon exercise hereof.
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.
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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.
Dated:
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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.
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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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