CHINA SWINE GENETICS, INC. 10% SECURED CONVERTIBLE NOTE DUE FEBRUARY 22, 2011
NEITHER
THIS SECURITY NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”). THE SECURITIES ARE RESTRICTED AND MAY NOT BE
OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN EXEMPTION FROM SUCH
REGISTRATION REQUIREMENTS.
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[No.
___]
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[US
$___________]
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10%
SECURED CONVERTIBLE NOTE DUE FEBRUARY 22, 2011
THIS NOTE (“Note”) is issued by CHINA SWINE GENETICS, INC., a
Delaware corporation (the “Company”), and is designated as its
10% Secured Convertible Note. This Note has been issued by the
Company pursuant to the terms of an offering described in the Subscription
Agreement dated as of February 22, 2010.
FOR VALUE RECEIVED, the Company
promises to pay to the order of ___________________, or permitted assigns
(the “Holder”), the principal sum of
_________________ (US $__________) Dollars. Payment shall be due in
full on February 22, 2011 (the “Payment Date”),
unless the principal amount has been converted in accordance with Section 2
hereof prior to that date. In the event a Qualified Financing is not
consummated prior to the Payment Date, on the Payment Date the Company
shall also issue to the Holder a Compensation Warrant in the form annexed hereto
as Appendix A, which shall permit the Holder to purchase that number of whole
shares of the Company’s Common Stock equal to the principal amount of this Note
divided by One Dollar and Fifty Cents ($1.50).
Interest shall accrue on the principal
balance outstanding at a rate of 10% per annum from the date of
issuance. Accrued interest will be payable on July 1, 2010, October
1, 2010, January 1, 2011 and on the Conversion Date or the Payment Date, as
applicable. The Company may not prepay any part of the principal
amount of this Note.
The Company’s obligations under this
Note are guaranteed by Ligang Shang for the benefit of the Holders under a
Limited Recourse Guaranty which guaranty will be secured by a pledge of stock as
set forth in a Pledge Agreement made by ▇▇▇▇▇ ▇▇▇▇▇ for the benefit of the
Holders.
This Note is subject to the following
additional provisions:
1. Definitions. As
used herein, the following terms shall have the following meanings:
(a) “Event of Default”
shall have the meaning set forth in Section 3 hereof.
(b) “Holders” shall mean
the holders of this Note and the other 10% Secured Convertible Notes issued by
the Company in February 2010.
(c) “Holders’ Agent” shall
mean Primary Capital, LLC, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
1
(d) “PRC Subsidiary” shall
mean Heilongjiang SenYu Animal Husbandry Co., Ltd.
(e) “Qualified Financing”
shall mean the closing of any equity or equity related financings resulting in
gross proceeds to the Company of at least Five Million US Dollars
($5,000,000).
2.
Conversion.
(a) Trigger for
Conversion. On the closing date of a Qualified Financing (the
“Conversion Date”) that will be accounted for as a sale of equity on the
Company’s balance sheet, the principal amount of the Note shall be automatically
converted into securities of like kind to the securities sold in the Qualified
Financing (the “Conversion
Securities”). On the closing date of a Qualified Financing
(also, the “Conversion Date”) that will be accounted for as a sale of debt on
the Company’s balance sheet, the principal amount of the Note shall be converted
into securities of like kind to the securities sold in the Qualified Financing
(also, the “Conversion
Securities”) if the Holder notifies the Company in writing within thirty
days after the Conversion Date of its desire to so convert . The
conversion price used for determining the quantity of Conversion Securities to
be exchanged for the principal amount of the Notes shall be equal to fifty
percent (50%) of the gross purchase price paid by the investors in the Qualified
Financing.
(b) Effect of
Conversion. The rights of the Holder of this Note shall cease,
and the Holder shall be deemed to have become the holder of record of the
Conversion Securities on the Conversion Date.
(c) Issuance of
Certificates At any time after the Conversion
Date, the Holder may surrender this Note to the Company. Promptly
after receipt of this Note, the Company shall cause to be issued and delivered
to the Holder, registered in such name or names as the Holder may direct, a
certificate or certificates for the Conversion Securities. Any
fractional share of common stock resulting from the conversion formula will be
rounded up or down to the nearest full share. Issuance of Conversion
Securities that are requested to be registered in a name other than that of the
registered Holder shall be subject to compliance with all applicable federal and
state securities laws.
3.
Events of
Default.
(a) An
“Event of
Default,” wherever used herein, means any one of the following events
(whatever the reason and whether it shall be voluntary or involuntary or
effected by operation of law or pursuant to any judgment, decree or order of any
court, or any order, rule or regulation of any administrative or governmental
body):
i.
The Company's failure to pay to the Holder
any amount of principal, interest, or other amounts when and as due under this
Note;
ii. The
Company or the PRC Subsidiary shall commence, or there shall be commenced
against the Company under any applicable bankruptcy or insolvency laws any
bankruptcy, insolvency or other proceeding which remains undismissed for a
period of 61 days; or the Company or the PRC Subsidiary is adjudicated insolvent
or bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Company or the PRC Subsidiary suffers
any appointment of any custodian, private or court appointed receiver or the
like for it or any substantial part of its property which continues undischarged
or unstayed for a period of sixty one (61) days; or the Company or the PRC
Subsidiary makes a general assignment for the benefit of creditors; or the
Company or the PRC Subsidiary shall fail to pay, or shall state that it is
unable to pay, or shall be unable to pay, its debts generally as they become
due; or the Company or the PRC Subsidiary shall call a meeting of its creditors
with a view to arranging a composition, adjustment or restructuring of its
debts; or the Company or the PRC Subsidiary shall by any act or failure to act
expressly indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other action is taken by the Company or the PRC
Subsidiary for the purpose of effecting any of the foregoing;
2
iii. The
Company or the PRC Subsidiary shall default in any of its obligations under any
other debenture or any mortgage, credit agreement or other facility, indenture
agreement, factoring agreement or other instrument under which there may be
issued, or by which there may be secured or evidenced any indebtedness for
borrowed money or money due under any long term leasing or factoring arrangement
of the Company or the PRC Subsidiary in an amount exceeding $50,000, whether
such indebtedness now exists or shall hereafter be created and such default
shall result in such indebtedness becoming or being declared due and payable,
except that a default by the PRC Subsidiary in any obligation for money shall
not be deemed an Event of Default unless the creditor commences legal or
equitable action to enforce the obligation;
iv. The
Company or the PRC Subsidiary shall incur any indebtedness that is senior in
priority to the Notes;
v. The
common stock of the Company shall not be listed for trading on one of the
following: (a) the NYSE Amex, (b) New York Stock Exchange, (c) the
Nasdaq Global Market, (d) the Nasdaq Capital Market, or (e) the OTC Bulletin
Board;
vi. Any
Event of Default occurs with respect to any other Notes.
(b) Acceleration. During
the time that this Note is outstanding, if any Event of Default has occurred,
One Hundred and Fifty Percent (150%) of the full unpaid principal amount of this
Note, together with accrued and unpaid interest, to the date of acceleration
shall become, at the Holder’s election, immediately due and payable in
cash. The Holders’ Agent is hereby authorized to exercise the
election on behalf of the Holder by giving written notice of acceleration (the
“Acceleration
Notice”) to the Company at its U.S. executive offices. The
Holder need not provide and the Company hereby waives any presentment, demand,
protest or other notice of any kind, and the Holder may immediately and without
expiration of any grace period enforce any and all of its rights and remedies
hereunder and all other remedies available to it under applicable
law. Such declaration may be rescinded and annulled by the Holders’
Agent at any time prior to payment hereunder. No such rescission or annulment
shall affect any subsequent Event of Default or impair any right consequent
thereon.
(c) Remedies. During
the continuance of any Event of Default, the following remedies shall be
available to the Holder, in addition to any other remedies available under
applicable law.
i. The
interest rate on all amounts due to the Holder shall be fifteen percent (15%)
per annum from the date of the Event of Default until payment in full of all
amounts due.
ii. Within
three (3) business days after the occurrence of an Event of Default the Company
shall redeem the Note at 150% of the principal amount outstanding plus accrued
interest.
iii. The
Company shall issue to the Holder a Warrant in the form annexed hereto as
Appendix A, which shall permit the Holder to purchase that number of whole
shares equal to the principal amount of this Note (prior to acceleration)
divided by One Dollar and Fifty Cents ($1.50).
3
iv. Upon
the written demand of the Holders’ Agent, the members of the Board of Directors
of the Company shall appoint to the Board such additional directors as are
designated by the Holders’ Agent, and shall then immediately resign from the
Board.
v. Upon
the written demand of the Holders’ Agent, the officers and directors of the PRC
Subsidiary shall resign from their positions and shall cause such persons as are
designated by the Holders’ Agent to be vested with the powers of their
offices.
4.
No Rights as
Stockholder. No provision of this Note shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive notice as a stockholder in respect of any meeting of
stockholders or any rights whatsoever as a stockholder of the Company, unless
and to the extent converted in accordance with the terms hereof.
5.
Governing Law. This Note shall be
governed by and construed in accordance with the laws of the State of New
York.
IN WITNESS WHEREOF, the
Company has caused this instrument to be duly executed by an officer thereunto
duly authorized.
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Dated: February
22, 2010
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By:______________________________________
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▇▇▇▇▇▇
▇▇▇▇▇, Vice President
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APPENDIX
A: COMPENSATION WARRANT
THIS WARRANT AND THE COMMON SHARES
ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT AND THE COMMON SHARES ISSUABLE
UPON EXERCISE OF THIS WARRANT 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 CHINA SWINE GENETICS,
INC. THAT SUCH REGISTRATION IS NOT REQUIRED.
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Right
to Purchase ____________ shares of Common Stock of China Swine Genetics,
Inc. (subject to adjustment as provided
herein)
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COMMON
STOCK PURCHASE WARRANT
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No.
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Issue
Date: ___________, 2011
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China
Swine Genetics, Inc., a corporation organized under the laws of the State of
Delaware (the “Company”), hereby
certifies that, for value received, _______________________________ or its
assigns (the “Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company at
any time after the Issue Date until 5:00 p.m., E.S.T on the third anniversary of
the Payment Date (as defined in the Note) (the “Expiration Date”), up
to ____________ fully paid and nonassessable shares of the common stock of the
Company (the “Common Stock”), $.001 par value per share at an exercise
price per share of $1.50 (the “Purchase
Price”). The number and character of such shares of Common
Stock and the Purchase Price are subject to adjustment as provided
herein. This Warrant has been issued pursuant to the terms of the 10%
Secured Convertible Note issued in February 2010 by the Company to the Holder
(the “Note”), which was one of several notes of like tenor issued by the Company
(the “Notes”). This Warrant and all other Warrants issued pursuant to
the terms of the Notes are collectively identified as the “Compensation
Warrants.”
As used
herein the following terms, unless the context otherwise requires, have the
following respective meanings:
(a) The
term “Company”
shall include China Swine Genetics, Inc. and any corporation which shall succeed
or assume the obligations of China Swine Genetics, Inc. hereunder.
(b) The
term “Common
Stock” includes (i) the Company's Common Stock, $.001 par value per
share, as authorized on the date of the Note, and (ii) any other securities into
which or for which any of the securities described in (i) may be converted
or exchanged pursuant to a plan of recapitalization, reorganization, merger,
sale of assets or otherwise.
(c) The
term “Other
Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities pursuant to
Section 4 or otherwise.
5
1. Exercise of
Warrant.
1.1. Number of Shares Issuable
upon Exercise. From and after the Issue Date through and
including the Expiration Date, the Holder hereof shall be entitled to receive,
upon exercise of this Warrant in whole in accordance with the terms of
subsection 1.2 or upon exercise of this Warrant in part in accordance with
subsection 1.3, shares of Common Stock of the Company, subject to
adjustment as described herein.
1.2. Full
Exercise. This Warrant may be exercised in full by the Holder
hereof by delivery of an original or facsimile copy of the form of subscription
attached as Exhibit A hereto (the “Subscription Form")
duly executed by such ▇▇▇▇▇▇ and surrender of the original Warrant to the
Company at its principal office in the U.S. or at the office of its Warrant
Agent (as provided hereinafter), accompanied by payment in cash, wire transfer
or by certified or official bank check payable to the order of the Company, in
the amount obtained by multiplying the number of shares of Common Stock for
which this Warrant is then exercisable by the Purchase Price then in
effect.
1.3. Partial
Exercise. This Warrant may be exercised in part (but not for a
fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on
such partial exercise shall be the amount obtained by multiplying (a) the
number of whole shares of Common Stock designated by the Holder in the
Subscription Form by (b) the Purchase Price then in effect. On
any such partial exercise, the Company, at its expense, will forthwith issue and
deliver to or upon the order of the Holder hereof a new Warrant of like tenor,
in the name of the Holder hereof or as such Holder (upon payment by such Holder
of any applicable transfer taxes) may request, the whole number of shares of
Common Stock for which such Warrant may still be exercised.
1.4. Fair Market Value.
Fair Market Value of a share of Common Stock as of a particular date (the
"Determination Date") shall mean:
(a) If
the Common Stock is traded on an exchange or is quoted on the NASDAQ Stock
Market or the OTC Bulletin Board or the American Stock Exchange, LLC, then the
average of the closing or last sale price, respectively, reported for the five
business days immediately preceding the Determination Date;
(b) If
the Common Stock is not traded on an exchange or on the NASDAQ Stock Market or
the OTC Bulletin Board, but is traded in the over-the-counter market, then the
average of the closing bid and ask prices reported for the last business day
immediately preceding the Determination Date;
(c) Except
as provided in clause (d) below, if the Common Stock is not publicly
traded, then as the Holder and the Company agree, or in the absence of such an
agreement, by arbitration in accordance with the rules then standing of the
American Arbitration Association, before a single arbitrator to be chosen from a
panel of persons qualified by education and training to pass on the matter to be
decided; or
(d) If
the Determination Date is the date of a liquidation, dissolution or winding up,
or any event deemed to be a liquidation, dissolution or winding up pursuant to
the Company's charter, then all amounts to be payable per share to holders of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.
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1.5. Delivery of Stock
Certificates, etc. on Exercise. The Company agrees that the shares of
Common Stock purchased upon exercise of this Warrant shall be deemed to be
issued to the Holder hereof as the record owner of such shares as of the close
of business on the date on which this Warrant shall have been surrendered and
payment made for such shares as aforesaid. As soon as practicable after the
exercise of this Warrant in full or in part, and in any event within five (5)
days thereafter, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered to
the Holder hereof, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct in compliance with applicable securities
laws, a certificate or certificates for the number of duly and validly issued,
fully paid and nonassessable shares of Common Stock (or Other Securities) to
which such Holder shall be entitled on such exercise, together with any other
stock or other securities and property (including cash, where applicable) to
which such Holder is entitled upon such exercise pursuant to Section 1 or
otherwise.
2.
Cashless
Exercise.
(a)
If a Registration Statement as defined in
the Subscription Agreement (“Registration Statement”) is effective and the
Holder may sell its shares of Common Stock upon exercise hereof, this Warrant
may be exercisable in whole or in part for cash only as set forth in Section 1
above. If no such Registration Statement is available, payment upon
exercise may be made at the option of the Holder either in (i) cash, wire
transfer or by certified or official bank check payable to the order of the
Company equal to the applicable aggregate Purchase Price, (ii) by delivery of
Common Stock issuable upon exercise of the Warrants in accordance with
Section (b) below (“Cashless Exercise”)
or (iii) by a combination of any of the foregoing methods, for the number
of shares of Common Stock specified in such form (as such exercise number shall
be adjusted to reflect any adjustment in the total number of shares of Common
Stock issuable to the holder per the terms of this Warrant) and the holder shall
thereupon be entitled to receive the number of duly authorized, validly issued,
fully paid and nonassessable shares of Common Stock (or Other Securities)
determined as provided herein.
(b)
If the Fair Market Value of one share of Common Stock is greater than the
Purchase Price (at the date of calculation as set forth below) and no
Registration Statement relating to the shares of Common Stock underlying this
Warrant is effective, in lieu of exercising this Warrant for cash, the holder
may elect to receive shares equal to the value (as determined below) of this
Warrant (or the portion thereof being cancelled) by surrender of this Warrant at
the principal office of the Company together with the properly endorsed
Subscription Form in which event the Company shall issue to the holder a number
of shares of Common Stock computed using the following formula:
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X=Y
(A-B)
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A
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Where
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X=
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the
number of shares of Common Stock to be issued to the
holder
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Y=
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the
number of shares of Common Stock purchasable under the Warrant or, if only
a portion of the Warrant is being exercised, the portion of the Warrant
being exercised (at the date of such calculation)
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A=
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the
Fair Market Value of one share of the Company’s Common Stock (at the date
of such calculation)
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B=
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Purchase
Price (as adjusted to the date of such
calculation)
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3.
Adjustment for
Reorganization, Consolidation, Merger, Share Issuance, etc.
3.1. Reorganization,
Consolidation, Merger, etc. In case at any time or from time
to time, the Company shall (a) effect a reorganization,
(b) consolidate with or merge into any other person or (c) transfer
all or substantially all of its properties or assets to any other person under
any plan or arrangement contemplating the dissolution of the Company, then, in
each such case, as a condition to the consummation of such a transaction, proper
and adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1, at any time after
the consummation of such reorganization, consolidation or merger or the
effective date of such dissolution, as the case may be, shall receive, in lieu
of the Common Stock (or Other Securities) issuable on such exercise prior to
such consummation or such effective date, the stock and other securities and
property (including cash) to which such Holder would have been entitled upon
such consummation or in connection with such dissolution, as the case may be, if
such Holder had so exercised this Warrant, immediately prior thereto, all
subject to further adjustment thereafter as provided in
Section 4.
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3.2 Share
Issuance. Until the Expiration Date, if the Company shall
issue any Common Stock except for the Excepted Issuances, prior to the complete
exercise of this Warrant, for a consideration less than the Purchase Price that
would be in effect at the time of such issue, then, and thereafter successively
upon each such issue, the Purchase Price shall be reduced to such other lower
issue price. “Excepted Issuances”
shall be any (i) issuance to employees of the Company or its subsidiaries
pursuant to the 2009 Stock and Stock Option Plan and (ii) any issuance as full
or partial consideration in connection with any merger, consolidation or
purchase of substantially all of the securities or assets of any corporation or
other entity. For purposes of this adjustment, the issuance of any
security or debt instrument of the Company carrying the right to convert such
security or debt instrument into Common Stock or of any warrant, right or option
to purchase Common Stock shall result in an adjustment to the Purchase Price
upon the issuance of the above-described security, debt instrument, warrant,
right, or option. The reduction of the Purchase Price described in
this Section 3.2 is in addition to the other rights of the Holder described in
the Subscription Agreement.
4.
Extraordinary Events
Regarding Common Stock. In the event that the Company shall
(a) issue additional shares of the Common Stock as a dividend or other
distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Purchase Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Purchase Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Purchase Price then in effect. The
Purchase Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this
Section 4. The number of shares of Common Stock that the Holder of this
Warrant shall thereafter, on the exercise hereof as provided in Section 1,
be entitled to receive shall be adjusted to a number determined by multiplying
the number of shares of Common Stock that would otherwise (but for the
provisions of this Section 4) be issuable on such exercise by a fraction of
which (a) the numerator is the Purchase Price that would otherwise (but for
the provisions of this Section 4) be in effect, and (b) the
denominator is the Purchase Price in effect on the date of such
exercise.
5.
Certificate as to
Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company
for any additional shares of Common Stock (or Other Securities) issued or sold
or deemed to have been issued or sold, (b) the number of shares of Common
Stock (or Other Securities) outstanding or deemed to be outstanding, and
(c) the Purchase Price and the number of shares of Common Stock to be
received upon exercise of this Warrant, in effect immediately prior to such
adjustment or readjustment and as adjusted or readjusted as provided in this
Warrant. The Company will forthwith mail a copy of each such certificate to the
Holder of the Warrant and any Warrant Agent of the Company.
8
6.
Reservation of Stock, etc.
Issuable on Exercise of Warrant. The Company will at all
times reserve and keep available, solely for issuance and delivery on the
exercise of the Warrants, all shares of Common Stock (or Other Securities) from
time to time issuable on the exercise of the Warrant. This Warrant
entitles the Holder hereof to receive copies of all financial and other
information distributed or required to be distributed to the holders of the
Company's Common Stock.
7.1 Registration
Rights. The Company hereby grants the following registration
rights to holders of the Compensation Warrants.
(i)
On one occasion, for a period commencing on
the Issue Date, at any time prior to the expiration date (“Request Date”), upon
a written request therefor from the Holders’ Agent (as identified in the Note),
the Company shall prepare and file with the Securities and Exchange Commission a
registration statement under the 1933 Act registering the shares of common stock
issuable upon exercise of the Compensation Warrants (the “Warrant
Shares”).
(ii) If
the Company at any time proposes to register any of its securities under the
1933 Act for sale to the public, whether for its own account or for the account
of other security holders or both, except with respect to registration
statements on Forms S-4, S-8 or another form not available for registering the
Compensation Warrants for sale to the public, provided the Compensation Warrants
are not otherwise registered for resale by the Subscribers or Holder pursuant to
an effective registration statement, each such time it will give at least
fifteen (15) days' prior written notice to the Holders’ Agent of its intention
so to do. Upon the written request of the Holders’ Agent, received by the
Company within ten (10) days after the giving of any such notice by the Company,
to register any of the Compensation Warrants not previously registered, the
Company will cause such Compensation Warrants as to which registration shall
have been so requested to be included with the securities to be covered by the
registration statement proposed to be filed by the Company, all to the extent
required to permit the sale or other disposition of the Compensation Warrants so
registered by the holder of such Compensation Warrants (the “Seller” or
“Sellers”). In the event that any registration pursuant to this Section 7.1(ii)
shall be, in whole or in part, an underwritten public offering of common stock
of the Company, the number of shares of Compensation Warrants to be included in
such an underwriting may be reduced by the managing underwriter if and to the
extent that the Company and the underwriter shall reasonably be of the opinion
that such inclusion would adversely affect the marketing of the securities to be
sold by the Company therein; provided, however, that the Company shall notify
the Seller in writing of any such reduction provide further however that no
shares held by any officer, director, affiliate or person other
than Holders and his successor and assigns shall be registered
without the consent of a majority of the Holders and their
successors and assigns voting as a class until all of the Warrant
Shares shall have been registered pursuant to an effective registration
statement.
7.2. Registration
Procedures. If and whenever the Company is required by the provisions of
Section 7.1(i) or 7.1(ii) to effect the registration of any Compensation
Warrants under the 1933 Act, the Company will, as expeditiously as
possible:
(a) prepare
and file with the Commission a registration statement required by Section 7 with
respect to such securities and use its best efforts to cause such registration
statement to become and remain effective for the period of the distribution
contemplated thereby (as herein provided);
(b) prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective until such registration
statement has been effective for a period of two (2) years, and comply with the
provisions of the 1933 Act with respect to the disposition of all of the
Compensation Warrants covered by such registration statement in accordance with
the Sellers’ intended method of disposition set forth in such registration
statement for such period;
9
(c) furnish
to the Sellers, at the Company’s expense, such number of copies of the
registration statement and the prospectus included therein (including each
preliminary prospectus) as such persons reasonably may request in order to
facilitate the public sale or their disposition of the securities covered by
such registration statement;
(d) use
its best efforts to register or qualify the Sellers’ Compensation Warrants
covered by such registration statement under the securities or “blue sky” laws
of such jurisdictions as the Sellers shall request in writing, provided,
however, that the Company shall not for any such purpose be required to qualify
generally to transact business as a foreign corporation in any jurisdiction
where it is not so qualified or to consent to general service of process in any
such jurisdiction;
(e) if
applicable, list the Warrant Shares covered by such registration statement with
any securities exchange on which the Common Stock of the Company is then listed;
and
(f)
immediately notify the Sellers
when a prospectus relating thereto is required to be delivered under the 1933
Act, of the happening of any event of which the Company has knowledge as a
result of which the prospectus contained in such registration statement, as then
in effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing.
7.3. Provision of
Documents. In connection with each registration described in
this Section 7, each Seller will furnish to the Company in writing such
information and representation letters with respect to itself and the proposed
distribution by it as reasonably shall be necessary in order to assure
compliance with federal and applicable state securities
laws. The failure of a Seller to comply with this provision
shall effect a waiver of the Company’s obligation to effect a registration of
that Seller’s Warrant Shares.
8.
Warrant
Agent. The Company may, by written notice to the Holder of the
Warrant, appoint an agent (a “Warrant Agent”) for the purpose of issuing Common
Stock (or Other Securities) on the exercise of this Warrant pursuant to
Section 1, and for purpose of effecting transfers of the Warrant or
replacing lost or damaged Warrants, and thereafter any such issuance, transfer
or replacement, as the case may be, shall be made at such office by such Warrant
Agent.
9.
Transfer on the Company's
Books. Until this Warrant is transferred on the books of the
Company, the Company may treat the registered holder hereof as the absolute
owner hereof for all purposes, notwithstanding any notice to the
contrary.
10. 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 (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or
permitted to be given hereunder shall be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated below (if
delivered on a business day during normal business hours where such notice is to
be received), or the first business day following such delivery (if delivered
other than on a business day during normal business hours where such notice is
to be received) or (b) on the second business day following the date of mailing
by express courier service, fully prepaid, addressed to such address, or upon
actual receipt of such mailing, whichever shall first occur. The
addresses for such communications shall be: (i) if to the Company to: China
Swine Genetics, Inc. at its U.S. executive offices, with a copy by telecopier
only to: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq., telecopier number: (▇▇▇) ▇▇▇-▇▇▇▇ and
(ii) if to the Holder, to the address and telecopier number listed in the
Subscription Agreement between the Company and the Holder, unless the receiving
party has given written notice to the sender of a different address or
telecopier number.
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11. 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 such change, waiver, discharge or termination is sought. This Warrant shall
be construed and enforced in accordance with and governed by the laws of New
York. Any dispute relating to this Warrant shall be adjudicated in
New York County in the State of New York.
IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
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By: _________________________________________
Name:
Title:
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11
Exhibit A
FORM OF
SUBSCRIPTION
(to be
signed only on exercise of Warrant)
TO: CHINA
SWINE GENETICS, INC.
The
undersigned, pursuant to the provisions set forth in the attached Warrant
(No.____), hereby irrevocably elects to purchase (check applicable
box):
___ ________
shares of the Common Stock covered by such Warrant; or
___ the
maximum number of shares of Common Stock covered by such Warrant pursuant to the
cashless exercise procedure set forth in Section 2.
The
undersigned herewith makes payment of the full purchase price for such shares at
the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or
boxes):
___ $__________
in lawful money of the United States; and/or
___ the
cancellation of such portion of the attached Warrant as is exercisable for a
total of _______ shares of Common Stock (using a Fair Market Value of $_______
per share for purposes of this calculation); and/or
___ the
cancellation of such number of shares of Common Stock as is necessary, in
accordance with the formula set forth in Section 2, to exercise this
Warrant with respect to the maximum number of shares of Common Stock purchasable
pursuant to the cashless exercise procedure set forth in
Section 2.
The
undersigned requests that the certificates for such shares be issued in the name
of, and delivered to
_________________________________________________________________ whose address
is
________________________________________________________________________________
________________________________________________________________________________.
The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the "Securities Act"), or pursuant to an exemption from registration
under the Securities Act.
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Dated:___________________
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________________________________________
(Signature
must conform to name of holder as specified on the face of the
Warrant)
________________________________________
________________________________________
(Address)
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12
Exhibit B
FORM OF
TRANSFEROR ENDORSEMENT
(To be
signed only on transfer of Warrant)
For value
received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees” the right represented by
the within Warrant to purchase the number of shares of Common Stock of CHINA
SWINE GENETICS, INC. to which the within Warrant relates specified under the
heading “Number Transferred,” opposite the name(s) of such person(s) and
appoints each such person Attorney to transfer its respective right on the books
of CHINA SWINE GENETICS, INC. with full power of substitution in the
premises.
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Transferees
|
Number
Transferred
|
|
Dated: ______________,
___________
Signed
in the presence of:
_______________________________________
(Name)
ACCEPTED
AND AGREED:
[TRANSFEREE]
______________________________________
(Name)
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(Signature
must conform to name of holder as specified on the face of the
warrant)
_________________________________________
_________________________________________
(address)
_________________________________________
_________________________________________
(address)
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