Contract
Exhibit
4.6
THIS NOTE AND THE SECURITIES ISSUABLE
UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED. THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF
THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE BORROWER THAT SUCH REGISTRATION IS NOT
REQUIRED.
A
NOTE PURCHASE AGREEMENT DATED AS OF FEBRUARY 12, 2010 (THE “PURCHASE
AGREEMENT”), A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL
EXECUTIVE OFFICE, CONTAINS CERTAIN ADDITIONAL AGREEMENTS BETWEEN THE PARTIES
WITH RESPECT TO THIS NOTE.
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Date
of Issuance:
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February
12, 2010
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Principal
Amount:
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Location:
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FOR VALUE
RECEIVED, China For-Gen Corporation, a Delaware corporation (hereinafter called
“Borrower” or “Company”), hereby promises to pay to [ ]
(the “Holder”), or its order, the sum of [ ] (“Principal”),
with interest, on February 12, 2015 (the “Maturity Date”).
ARTICLE
I
GENERAL
PROVISIONS
1.1 Note
Purchase Agreement. This Convertible Note (“Note”) is one of a Series of Notes
issued pursuant to that certain Note Purchase Agreement dated as of the Date of
Issuance by and among Borrower, Holder and other purchasers named therein (the
“Purchase Agreement”) and is subject to the terms and conditions of that
agreement.
1.2 This
Note shall bear interest at a rate of ten percent (10.0%)
per annum accrued monthly in kind for the first 12 months and shall be payable
in cash or face value Convertible Notes, by the 10th day of
each month, post the initial 12 months at the election of the Holder (the
“Interest”).
1.3 Payment
Grace Period. The Borrower shall have a ten (10) day grace period to pay any
monetary amounts due under this Note, after which grace period a default
interest rate of ten percent (10%) per annum shall apply to the amounts owed
hereunder.
ARTICLE
II
CONVERSION
RIGHTS
The
Holder shall have the right to convert the Principal and Interest of this Note
into shares of the Borrower’s Common Stock as set forth below.
2.1 Conversion
into Borrower’s Stock
a) Subject to the provisions of Section 2,
the Holder shall have the right, exercisable at any time from and after the date
of issuance of this Note until this Note is fully paid, to convert the entire
outstanding and unpaid Principal and Interest of this Note, in whole or in part,
upon delivery of a Notice of Conversion in the form attached hereto (the date of
giving of such Notice of Conversion being the “Conversion Date”) into fully paid
and nonassessable shares of Borrower’s Common Stock (without par value) at the
Conversion Price (defined below). The Borrower shall issue and
deliver to the Holder, within three (3) trading days from the Conversion Date
(“Delivery Date”), that number of shares of Common Stock, as applicable, that
equals the Principal and or Interest divided by the Conversion Price. Upon
partial conversion of the Note, a new Note containing the same date and
provisions of this Note shall be issued by the Borrower to the Holder for the
principal balance and accrued interest of this Note which shall not have been
converted or paid. Upon full conversion of this Note, the Note shall be
cancelled and the Holder shall deliver the Note to the
Borrower.
b) Subject to clause (c) below, the
“Conversion Price” per share of Borrower’s stock shall be the Conversion Price
stated in the Purchase Agreement.
c) The character and amount of securities
or other property issuable upon conversion of this Note and the Conversion Price
are subject to adjustment upon the occurrence of the events stated in the
Purchase Agreement, and all such adjustments shall be
cumulative.
d) In case of any adjustment or
readjustment in the price or kind of securities issuable on the conversion of
this Note pursuant to clause (c) above, the Company will promptly give written
notice within three (3) business days thereof to the Holder in the form of a
certificate, certified and confirmed by an officer of the Company, setting forth
such adjustment or readjustment and showing in reasonable detail the facts upon
which such adjustment or readjustment is based.
e) Borrower covenants and agrees at all
times to reserve out of its authorized and unissued Common Stock that number of
shares of capital stock into which this Note may be converted. Borrower
represents that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable. Borrower agrees that its issuance of this Note
shall constitute full authority to its officers, agents, and transfer agents who
are charged with the duty of executing and issuing stock certificates to execute
and issue the necessary certificates for shares upon the conversion of this
Note.
2.2 Method
of Conversion. This Note may be converted by the Holder in whole or in part at
any time.
2.3 Covenants
and Terms: All terms in the Purchase Agreement shall be extended to this
Note.
2.4 Prepayment:
Except as provided herein, the Note Principal or Interest may not be repaid at
any time unless approved by the Holder of this Note.
2.5 Note
Extension: The maturity date of this Note can be extended for a period of twelve
(12) months at the sole option of the Holder of this Note.
2.6 Maximum
Exercise.
a) The Holder shall not be entitled to
convert this Note, into such number of shares of
Common Stock which, when added to the number of shares of Common Stock
“beneficially owned” (defined below) by the Holder and its Affiliates
immediately prior to conversion of the Note, would result in “beneficial
ownership” by the Holder and its Affiliates of more than 4.99% of the
outstanding shares of Common Stock on the Conversion Date. For the purposes of
the immediately preceding sentence, “beneficial ownership” shall be determined
in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Rule 13d-3 thereunder.
b) This
Section 2.6 may be waived or amended only with the consent of the Holder and the
consent of holders of a majority of the shares of outstanding Common Stock of
the Company who are not Affiliates. Solely for purposes of the foregoing, the
term “Affiliate” shall mean any person: (a) that directly, or indirectly through
one or more intermediaries, controls or is controlled by, or is under common
control with the Company.
ARTICLE
III
EVENT
OF DEFAULT
The
occurrence of any of the following events of default (“Event of Default”) shall,
at the option of the Holder hereof, make all sums of Principal then remaining
unpaid hereon and all other amounts payable hereunder immediately due and
payable, upon demand, without presentment, all of which hereby are expressly
waived, except as set forth below:
3.1 Failure
to Pay Principal. The Borrower fails to pay the Principal or other sum due under
this Note when due as set forth in Section 1.3 herein.
3.2 Receiver
or Trustee. The Borrower shall make an assignment for the benefit of creditors,
or apply for or consent to the appointment of a receiver or trustee for it or
for a substantial part of its property or business; or such a receiver or
trustee shall otherwise be appointed.
3.3 Bankruptcy.
Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings or relief under any bankruptcy law or any law, or the issuance of
any notice in relation to such event, for the relief of debtors shall be
instituted by or against the Borrower and if instituted against Borrower are not
dismissed within 45 days of initiation.
ARTICLE
IV
MISCELLANEOUS
4.1 Failure
or Indulgence Not Waiver. No failure or delay on the part of Holder hereof in
the exercise of any power, right or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise
available.
4.2 Notices.
All notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be delivered in the manner and to the address specified
in the Purchase Agreement.
4.3 Amendment
Provision. The term “Note” and all reference thereto, as used throughout this
instrument, shall mean this instrument as originally executed, or if later
amended or supplemented, then as so amended or supplemented. The term of this
Note and all other Notes issued further to the Purchase Agreement may be amended
only with the consent of the Company and holders of One Hundred Percent (100%)
of the outstanding principal amount of Notes issued further to the Purchase
Agreement then outstanding.
4.4 Assignability.
The Borrower may not assign its rights and obligations hereunder without the
Holder’s prior written consent, which may be withheld in its sole discretion.
This Note shall be binding upon the Borrower and its successors and permitted
assigns, and shall inure to the benefit of the Holder and its successors and
assigns.
4.5 Cost
of Collection. If default is made in the payment of this Note, Borrower shall
pay the Holder hereof reasonable costs of collection, including reasonable
attorneys’ fees.
4.6 Governing
Law. This Note shall be governed by and construed in accordance with the laws of
the State of New York without regard to the choice of law principles thereof to
the extent that the general application of the laws of another jurisdiction
would be required thereby. Any action brought by either party against the other
concerning the transactions contemplated by this Note shall be brought only in
the state courts of New York or in the federal courts located in the State of
New York, County of New York. The Borrower and the Holder agree to submit to the
jurisdiction of such courts. If any action is brought between the parties with
respect to this Note or otherwise, by way of a claim or counterclaim, the
parties irrevocably waive their right to a trial by jury in any such action and
on all issues. The prevailing party shall be entitled to recover from the other
party its reasonable attorney’s fees and costs.
4.7 Shareholder
Status. The Holder shall not have rights as a shareholder of the Borrower prior
to conversion of this Note. However, after the Conversion Date, the Holder will
have the right of a shareholder of the Borrower with respect to the shares of
Common Stock to be received upon conversion of this Note.
IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an
authorized officer as of this 12 day of February, 2010.
CHINA
FOR-GEN CORPORATION
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By:
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Chief
Executive Officer
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By:
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Chairman
of the Board
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NOTICE
OF CONVERSION
(To
be executed by the Registered Holder in order to convert the Note)
The
undersigned hereby elects to convert the principal of the Note issued by China
For-Gen Corp. on ____________ __, 20__ into____________ shares of Common Stock
of __________________________ (the “Borrower”) according to the terms set forth
in such Note, as of the date written below.
Date of
Conversion: ____________, 20__
Shares To
Be Delivered: ____________ shares of Common Stock
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Signature:
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Print
Name:
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Address:
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