REGISTRATION RIGHTS AGREEMENT
Exhibit
10.2
THIS REGISTRATION RIGHTS
AGREEMENT (the “Agreement”)
is made and entered into as of the 30th day of
May, 2008, between China For-Gen Corp., a Delaware corporation (the “Company”),
and Professional Offshore
Opportunity Fund, Ltd., a company organized under the laws of the British Virgin
Islands (the “Investor”).
Unless defined otherwise herein, capitalized terms herein shall have the
identical meaning as in the Securities Purchase Agreement of even date herewith
(the “Purchase
Agreement”), between the Company and the Investor.
PRELIMINARY
STATEMENT
WHEREAS, pursuant to the
Purchase Agreement, the Investor is purchasing 500,000 shares of Series A
Preferred Stock, and 1,000,000 Warrants, which entitle the Investor to receive
1,500,000 shares of Common Stock upon conversion or exercise thereof (“the
Company Shares”); and
WHEREAS, the Company Shares
are to be exchanged into shares of a Qualifying Shell Company’s shares upon a
Qualifying Reverse Merger (as defined below) pursuant to the Certificate of
Designations of Preferences, Rights and Limitations of Series A Convertible
Preferred Stock of the Company and such shares as issued by the Qualifying Shell
Company as a result of the share exchange with the Company are being referred to
as the “Shares”;
and
WHEREAS, the ability of the
Investor to sell its Shares is subject to certain restrictions under the 1933
Act; and
WHEREAS, as a condition to the
purchase of the Series A Preferred Stock and Warrants pursuant to the Purchase
Agreement, the Company has agreed to provide the Investor with a mechanism that
will permit the Investor to sell the Shares in the future.
NOW, THEREFORE, in
consideration of the premises and of the mutual covenants and agreements, and
subject to the terms and conditions herein contained, the parties hereto agree
as follows:
ARTICLE
I
INCORPORATION BY
REFERENCE
1.1. Incorporation
by Reference. The foregoing recitals and the exhibits attached hereto and
referred to herein, are hereby acknowledged to be true and accurate, and are
incorporated herein by this reference.
1.2. Supersedes
Other Agreements. This Agreement, to the extent that it is inconsistent
with any other instrument or understanding among the parties relating to the
subject matter of this Agreement, shall supersede such instrument or
understanding to the fullest extent permitted by law. A copy of this Agreement
shall be filed at the Company’s principal office.
1.3. Definitions.
All terms defined in the Purchase Agreement and used in this Agreement shall
have the same meanings in this Agreement as in the Purchase Agreement. As used
in this Agreement the following terms shall have the meanings hereinafter set
forth.
(i)
“Commission”
shall mean the United States Securities and Exchange Commission.
(ii) “Excusable
Reason” shall have the meaning set forth in Section 2.6 of this
Agreement.
(iii) “Filing
Date” shall mean the date upon which the Company agrees to file the
Initial Registration Statement with the Commission for the investors in a
Qualifying Financing Agreements.
(iv) “Initial
Registration Statement” shall mean the first Registration Statement filed
pursuant to the Qualifying Financing Agreements.
(v) “Qualifying
Financing Agreements” means a financing agreement and its affiliated
agreements in an amount equal to or greater than Nine Million Five Hundred
Thousand ($9,500,000) Dollars between a Qualifying Shell Company and investors
the closing of which is subject to the consummation of a Qualifying Reverse
Merger.
(vi) “Qualifying
Reverse Merger” means a merger, share exchange, asset sale, or other
transaction whereby the Company becomes the subsidiary of a Qualifying Shell
Company and the Company, or its subsidiary or affiliate has signed such
agreements with Liaoning Shengsheng Biotechnology Co., Ltd. (“Liaoning
Shengsheng”) that causes the Qualifying Shell Company to have the right to treat
Liaoning Shengsheng as a subsidiary for accounting purposes.
(vii) “Qualifying
Company Registration Statement” means the registration statement(s) of a
Qualifying Shell Company filed with the Commission pursuant to the terms of the
Qualifying Financing Agreements, including Initial Registration Statement and
Subsequent Registration Statements and in each case including the Prospectus,
amendments and supplements to such registration statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement.
(viii) “Qualifying
Shell Company” means a shell company as such term is defined in Rule
12h-2 of the Securities Exchange Act of 1934, as amended.
(ix) “Required
Effective Date” means the required effective date of the Qualifying
Registration Statements as set forth in the Qualifying Financing
Agreements.
(x) “Registrab1e
Securities” shall mean the Shares. As to any particular Registrable
Securities such securities will cease to be Registrable Securities when (a) they
have been effectively registered under the 1933 Act and disposed of in
accordance with the registration statement covering them, (b) they arc or may be
freely traded without registration pursuant to Rule 144, or (c) they have been
otherwise transferred and new certificates for them not bearing a restrictive
legend have been issued by the Qualifying Shell Company and the Qualifying Shell
Company shall not have “stop transfer” instructions against
them.
(xi) “Registration
Expenses” shall mean all expenses incident to the Qualifying Shell
Company’s performance of or compliance with its obligations under this
Agreement, including, without limitation, all registration, tiling, listing,
stock exchange and FINRA (formerly NASD) fees, all fees and expenses of
complying with state securities or blue sky laws (including fees, disbursements
and other charges of counsel only in connection with blue sky filings), all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees, disbursements and other charges of counsel for the Qualifying Shell
Company and of its independent public accountants, including the expenses
incurred in connection with “cold comfort” letters required by or incident to
such performance and compliance, any fees and disbursements of underwriters
customarily paid by the issuer of securities, but excluding from the definition
of Registration Expenses brokerage commissions and applicable transfer taxes, if
any, or legal and other expenses incurred by the Investor, which discounts,
commissions, transfer taxes and legal and other expenses shall be borne by the
seller or sellers of Registrable Securities in all cases.
(xii) “Rule
144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended Of interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
(xiii) “Rule
415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
(xiv) “Rule
424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.
(xv) “Subsequent
Registration Statements” shall mean one or more registration statements
filed pursuant to Section 2.3 of this Agreement
(xvi) “SEC
Guidance” means (i) any publicly-available written or oral guidance,
comments, requirements or requests of the Commission staff and (ii) the
Securities Act.
ARTICLE
II
REQUIRED REGISTRATION OF
REGISTRABLE SECURITIES
2.1. Registrable
Securities. The Company shall cause the Qualifying Shell Company to file
one or more Qualifying Company Registration Statements covering the Registrable
Securities as provided in Section 2.2 of this Agreement.
2.2. Registration
of Registrable Securities. Company agrees to cause the Qualifying Shell
Company to include it its Qualifying Company Registration Statement the sale of
such number of shares of the Registrable Securities as the Investor shall elect
by written notice to the Company, and absent such election, covering the sale of
all of the Registrable Securities permitted by the Commission pursuant to the
then current SEC Guidance relating to Rule 415. The Company shall use its
commercially reasonable best efforts to cause the Qualifying Shell Company to
have the Initial Registration Statement to be declared effective by the SEC by
the Required Effective Date of the Initial Registration Statement.
Notwithstanding anything to the contrary contained in this Agreement, if the
Company receives Commission comments, and following discussions with and
responses to the Commission in which the Qualifying Shell Company uses its
reasonable best efforts and time to cause as many Registrable Securities as
possible to be included in the Qualifying Company Registration Statements, the
Qualifying Shell Company is unable to cause the inclusion of all Registrable
Shares, the failure to include all the Registrable Securities into the Initial
Registration Statement shall not constitute a breach of this Agreement.
..
2.3. Subsequent
Registration. Subject to the limitations of Section 2.2, at any time and
from time to time, the Investor may request the registration under the 1933 Act
on a Subsequent Registration Statement of all or part of the Registrable
Securities. Subject to the conditions of Section 2.6 of this Agreement, the
Company shall use its commercially reasonable best efforts to file such
registration statement under the 1933 Act by the Filing Date and have the
Subsequent Registration Statement declared effective by the Required Effective
Date of the Subsequent Registration Statement. The Company shall notify the
Investor promptly when any such Subsequent Registration Statement has been
declared effective. The parties intend that all Registrable Securities are to be
registered pursuant to Section 2.2. and that this Section 2.3 is intended to
provide the Investor with registration rights in the event that all of the
Registrable Securities arc not included in the Initial Registration Statement
required by Section 2.2, either because the number of Registrable Securities had
to be reduced in order for the offering to be deemed a secondary offering under
Rule 415 based on SEC Guidance or because the Investor believed that the SEC
Guidance would not permit the registration of all of the Registrable Securities.
If more than eighty percent (80%) of the Registrable Securities have been
registered and sold (either pursuant to the Registration Statement or Rule 144)
the Company’s obligations under this Article 2.3 shall terminate.
2.4. Registration
Statement Form. Registrations under Section 2.2 and Section 2.3 shall be
on the appropriate registration form of the Commission as shall permit the
disposition of such Registrable Securities in accordance with the intended
method or methods of disposition specified in the Qualifying Company
Registration Statement; provided, however, such
intended method of disposition shall not include an underwritten offering of the
Registrable Securities.
2.5. Expenses.
The Company will pay all Registration Expenses in connection with any Initial or
Subsequent Registration Statement and any registration statement in which
Registrable Securities are included pursuant to Article 2.3 of this
Agreement.
2.6. Effective
Registration Statement. An Initial or Subsequent Registration Statement
shall not be deemed to have been effected, other than for an Excusable Reason
(as hereinafter defined): (i) unless a registration statement with respect
thereto has become effective, provided that a registration statement which does
not become effective after the Qualifying Shell Company files a registration
statement with respect thereto solely by reason of the refusal to proceed of any
holder of Registrable Securities (other than a refusal to proceed based upon the
advice of counsel in the form of a letter signed by such counsel and provided to
the Company relating to a disclosure matter unrelated to such holder) shall be
deemed to have been effected by the Qualifying Shell Company; (ii) if, after it
bas become effective, such registration statement becomes subject to any slap
order, injunction or other order or extraordinary requirement of the Commission
or other governmental agency or court for any reason and such slop order or
other action continues in effect for five trading days; or (iii) if, after it
has become effective, such registration ceases to be effective other than for an
Excusable Reason.
An “Excusable Reason”
means (i) the occurrence of negotiations with respect to a material agreement
prior to either the announcement of the execution of the agreement or the
termination of the negotiations with respect to such proposed agreement or (ii)
other similar material corporate events to which the Qualifying Shell Company
and any of its subsidiaries or affiliated companies is a party or expects to be
a party if, in the reasonable judgment of the Qualifying Shell Company,
disclosure of the negotiations or other event would be adverse to the best
interests of the Qualifying Shell Company provided that the Qualifying Shell
Company is continuing to treat such negotiations as confidential and provided
further that the period during which the Qualifying Shell Company is precluded
from filing the registration statement (or suspended the use of an effective
registration statement) as a result thereof bas not exceeded twenty (20) trading
days in the aggregate, and provided further that the Qualifying Shell Company
shall not be permitted to avoid filing a registration statement (or to suspend
the use of an effective registration statement) for an Excusable Reason more
than twice in anyone-year period. An Excusable Reason shall also include Acts of
God and closure of the Commission.
2.7. Plan of
Distribution. The Company hereby agrees that the Qualifying Company
Registration Statement shall include a plan of distribution section reasonably
acceptable to the Investor; provided, however, such plan of
distribution section shall be modified by the Qualifying Shell Company so as to
not provide for the disposition of the Registrable Securities on the basis of an
underwritten offering.
2.8. Qualifying
Company Registration Statement. Investor shall become a party to the
agreement governing the Qualifying Company Registration Statement by and among
the Qualifying Shell Company and investors that are party to the Qualifying
Financing Agreements.
ARTICLE
III
MISCELLANEOUS
3.1. Amendments
And Waivers. This Agreement may be amended and the Company may take any
action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company shall have obtained the written consent to
such amendment, action or omission to act, of the holder or holders of fifty-one
percent (51%) or more of the sum of the Registrable Securities. Each holder of
any Registrable Securities at the time or thereafter outstanding shall be bound
by any consent authorized by this Section 3.1, whether or not such Registrable
Securities shall have been marked to indicate such consent.
3.2. Nominees
For Beneficial Owners. In the event that any Registrable Securities are
held by a nominee for the beneficial owner thereof, the beneficial owner thereof
shall be treated as the holder of such Registrable Securities for purposes of
any request or other action by any holder or holders of Registrable Securities
pursuant to this Agreement or any determination of any number of percentage of
shares of Registrable Securities held by a holder or holders of Registrable
Securities contemplated by this Agreement. The Company may require assurances
reasonably satisfactory to it of such owner’s beneficial ownership or such
Registrable Securities.
3.3. Notices.
Except as otherwise provided in this Agreement, all notices, requests and other
communications to any Person provided for hereunder shall be in writing and
shall be given to such Person (a) in the case of a party hereto other than the
Company, addressed to such party in the manner set forth in the Purchase
Agreement or at such other address as such party shall have furnished to the
Company in writing, or (b) in the case of any other holder of Registrable
Securities, at the address that such holder shall have furnished to the Company
in writing, or, until any such other holder so furnishes to the Company an
address, then to and at the address of the last holder of such Registrable
Securities who has furnished an address to the Company, or (c) in the case of
the Company, at the address set forth all the signature page hereto, to the
attention of its Chief Executive Officer, President, or at such other address,
or to the attention of such other officer, as the Company shall have furnished
to each holder of Registrable Securities at the time outstanding. Each such
notice, request or other communication shall be effective (i) upon receipt after
such communication is deposited in the mail with first class postage prepaid,
addressed as aforesaid or (ii) if given by any other means (including, without
limitation, by fax, email or air courier), when delivered at the address
specified above, provided that any such notice, request or communication shall
not be effective until received, and provided, further, that notice by fax shall
not be deemed received unless receipt is acknowledged.
3.4. Assignment.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the parties hereto. In addition, and whether or not any express
assignment shall have been made, the provisions of this Agreement which are for
the benefit of the parties hereto other than the Company shall also be for the
benefit of and enforceable by any subsequent holder of any Registrable
Securities. Each of the holders of the Registrable Securities agrees, by
accepting any portion of the Registrable Securities after the date hereof, to
the provisions of this Agreement including, without limitation, appointment of a
representative (the “Investor’s
Representative”) to act on behalf of such holder pursuant to the terms
hereof which such actions shall be made in the good faith discretion of the
Investor’s Representative and be binding on all persons tar all
purposes.
3.5. Descriptive
Headings. The descriptive headings of the several sections and paragraphs
of this Agreement are inserted for reference only and shall not limit or
otherwise affect the meaning hereof
3.6. Governing
Law. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to applicable
principles of conflicts of law.
3.7. Jurisdiction.
If any action is brought among the parties with respect to this Agreement or
otherwise, by way of a claim or counterclaim, the parties agree that in any such
action, and on all issues, the parties irrevocably waive their right to a trial
by jury. Exclusive jurisdiction and venue for any such action shall be the State
or Federal Courts serving the City, County and State of New York. In the event
suit or action is brought by any party under this Agreement to enforce any of
its terms, or in any appeal therefrom, it is agreed that the prevailing party
shall be entitled to reasonable attorneys fees to be fixed by the arbitrator,
trial court and for appellate court if such party prevails on substantially all
disputed matters.
3.8. Entire
Agreement. This Agreement, together with the Purchase Agreement and the
agreements incidental thereto, embodies the entire agreement and understanding
between the Company and each other xxxxx hereto relating to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
3.9. Severability.
If any provision of this Agreement, or the application of any such provision to
any Person or circumstance, shall be held invalid, the remainder of this
Agreement, or the application of such provision lo Persons or circumstances
other than those to which it is held invalid, shall not be affected
thereby.
3.10. Binding
Effect. All the terms and provisions of this Agreement whether so
expressed or not, shall be binding upon, inure to the benefit of, and be
enforceable by the patties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.
3.11. Preparation
of Agreement. This Agreement shall not be construed more strongly against
any party regardless of who is responsible for its preparation. The parties
acknowledge each contributed and is equally responsible for its
preparation.
3.12. Failure
or Indulgence Not Waiver; Remedies Cumulative. No failure or delay on the
part of any party hereto in the exercise of any right hereunder shall impair
such right or be construed to be a waiver of, or acquiescence in, any breach of
any representation, warranty, covenant or agreement herein, nor shall any single
or partial exercise of any such right preclude other or further exercise thereof
or of any other right. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise
available,
3.13. Counterparts.
This Agreement may be executed in one or more counterparts, and by the different
parties hereto in separate counterparts, each of which when executed shall be
deemed to be an original, but all of which taken together shall constitute one
and the same agreement. A facsimile transmission of this signed Agreement shall
he legal and binding on all parties hereto.
[SIGNATURES
ON FOLLOWING PAGE]
IN WITNESS WHEREOF, the
Investor and the Company have as of the date first written above executed this
Agreement.
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By:
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/s/ Xxxxxx Xxx Xx |
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Name:
Xxxxxx Xxx Xx
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Title:
President
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INVESTOR
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PROFESSIONAL
OFFSHORE OPPORTUNITY FUND, LTD
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By:
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/s/ Xxxxxx Xxxxxx |
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Name:
Xxxxxx Xxxxxx
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Title:
Manager
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