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Exhibit 10.2
 
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR ANY STATE SECURITIES
LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT
WITH RESPECT THERETO IS EFFECTIVE UNDER THE 1933 ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
1933 ACT.

IN ADDITION, A PREFERRED STOCK PURCHASE AGREEMENT DATED AS OF JUNE 10, 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 WARRANT.

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CHINA SWINE GENETICS, INC.

COMMON STOCK PURCHASE WARRANT “A”

Number of Shares:
 
Holder:
     
Original Issue Date:
June 11, 2010
Attn:
   
Title:
Expiration Date:
June 10, 2013
       
Exercise Price per Share:
$3.00
Tel:
   
Fax:

China Swine Genetics, Inc., a company organized and existing under the laws of
the State of Delaware (the “Company”), hereby certifies that, for value
received, ________, or its registered assigns (the “Warrant Holder”), is
entitled, subject to the terms set forth below, to purchase from the Company up
to ________ (_______) shares (as adjusted from time to time as provided in
Section 7, the “Warrant Shares”) of common stock, $.001 par value (the “Common
Stock”), of the Company at a price of Three Dollars ($3.00) per Warrant Share
(as adjusted from time to time as provided in Section 7, the “Exercise Price”),
at any time and from time to time from and after the Original Issue Date and
through and including 5:00 p.m. New York City time on June 10, 2013 (the
“Expiration Date”), and subject to the following terms and conditions:

 
 

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1.           Registration of Warrant. The Company shall register this Warrant
upon records to be maintained by the Company for that purpose (the “Warrant
Register”), in the name of the Warrant Holder from time to time.  The Company
may deem and treat the registered Warrant Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Warrant Holder, and for all other purposes, and the Company shall not be
affected by notice to the contrary.
 
2.           Investment Representation. The Warrant Holder by accepting this
Warrant represents that the Warrant Holder is acquiring this Warrant for its own
account or the account of an affiliate for investment purposes and not with the
view to any offering or distribution and that the Warrant Holder will not sell
or otherwise dispose of this Warrant or the underlying Warrant Shares in
violation of applicable securities laws.  The Warrant Holder acknowledges that
the certificates representing any Warrant Shares will bear a legend indicating
that they have not been registered under the United States Securities Act of
1933, as amended (the “1933 Act”) and may not be sold by the Warrant Holder
except pursuant to an effective registration statement or pursuant to an
exemption from the registration requirements of the 1933 Act and in accordance
with federal and state securities laws.  If this Warrant was acquired by the
Warrant Holder pursuant to the exemption from the registration requirements of
the 1933 Act afforded by Regulation S thereunder, the Warrant Holder
acknowledges and covenants that this Warrant may not be exercised by or on
behalf of a Person during the one year distribution compliance period (as
defined in Regulation S) following the date hereof.  “Person” means an
individual, partnership, firm, limited liability company, trust, joint venture,
association, corporation, or any other legal entity.
 
3.           Validity of Warrant and Issue of Shares. The Company represents and
warrants that this Warrant has been duly authorized and validly issued and
warrants and agrees that all of Common Stock that may be issued upon the
exercise of the rights represented by this Warrant will, when issued upon such
exercise, be duly authorized, validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issue thereof.  The
Company further warrants and agrees that during the period within which the
rights represented by this Warrant may be exercised, the Company will at all
times have authorized and reserved a sufficient number of shares of Common Stock
to provide for the exercise of the rights represented by this Warrant.
 
4.           Registration of Transfers and Exchange of Warrants.
 
a.           Subject to compliance with the legend set forth on the face of this
Warrant, the Company shall register the transfer of any portion of this Warrant
in the Warrant Register, upon surrender of this Warrant with the Form of
Assignment attached hereto duly completed and signed, to the Company at the
office specified in or pursuant to Section 13.  Upon any such registration or
transfer, a new warrant to purchase Common Stock, in substantially the form of
this Warrant (any such new warrant, a “New Warrant”), evidencing the portion of
this Warrant so transferred shall be issued to the transferee and a New Warrant
evidencing the remaining portion of this Warrant not so transferred, if any,
shall be issued to the transferring Warrant Holder.  The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance of such
transferee of all of the rights and obligations of a Warrant Holder.

 
 

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b.           This Warrant is exchangeable, upon the surrender hereof by the
Warrant Holder to the office of the Company specified in or pursuant to Section
9 for one or more New Warrants, evidencing in the aggregate the right to
purchase the number of Warrant Shares which may then be purchased
hereunder.  Any such New Warrant will be dated the date of such exchange.
 
5.          Exercise of Warrants.
 
a.           Upon surrender of this Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the Company, at its
address set forth in Section 13, and upon payment and delivery of the Exercise
Price per Warrant Share multiplied by the number of Warrant Shares that the
Warrant Holder intends to purchase hereunder, in lawful money of the United
States of America, in cash or by certified or official bank check or checks, to
the Company, all as specified by the Warrant Holder in the Form of Election to
Purchase, the Company shall promptly (but in no event later than 7 business days
after the Date of Exercise (as defined herein)) issue or cause to be issued and
cause to be delivered to or upon the written order of the Warrant Holder and in
such name or names as the Warrant Holder may designate (subject to the
restrictions on transfer described in the legend set forth on the face of this
Warrant), a certificate for the Warrant Shares issuable upon such exercise, with
such restrictive legend as required by the 1933 Act.  Any person so designated
by the Warrant Holder to receive Warrant Shares shall be deemed to have become
holder of record of such Warrant Shares as of the Date of Exercise of this
Warrant.
 
b.           A “Date of Exercise” means the date on which the Company shall have
received (i) this Warrant (or any New Warrant, as applicable), with the Form of
Election to Purchase attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares so indicated by the Warrant Holder to be
purchased.
 
c.           This Warrant shall be exercisable at any time and from time to time
for such number of Warrant Shares as is indicated in the attached Form of
Election To Purchase.  If less than all of the Warrant Shares which may be
purchased under this Warrant are exercised at any time, the Company shall issue
or cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares for which no exercise has been
evidenced by this Warrant.
 
d.           (i) Notwithstanding anything contained herein to the contrary but
subject to Section 6, the holder of this Warrant may, at its election exercised
in its sole discretion, exercise this Warrant in whole or in part and, in lieu
of making the cash payment otherwise contemplated to be made to the Company upon
such exercise in payment of the Aggregate Exercise Price, elect instead to
receive upon such exercise the “Net Number” of shares of Common Stock determined
according to the following formula (a “Cashless Exercise”):
 
Net Number = (A x (B - C))/B
 
(ii)           For purposes of the foregoing formula:
 
A= the total number shares with respect to which this Warrant is then being
exercised.

 
 

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B= the last reported sale price (as reported by Bloomberg) of the Common Stock
on the trading day immediately preceding the date of the Exercise Notice.
 
C= the Warrant Exercise Price then in effect at the time of such exercise.
 
e.           The Warrant Holder agrees not to elect, and acknowledges it shall
be prohibited from electing, a Cashless Exercise for a period of twelve (12)
months post Closing or so long as there is an effective registration statement
for the Warrant Shares.
 
6.           Maximum Exercise. The Warrant Holder shall not be entitled to
exercise this Warrant on a Date of Exercise in connection with that number of
shares of Common Stock which would be in excess of the sum of (i) the number of
shares of Common Stock beneficially owned by the Warrant Holder and its
affiliates on an exercise date, and (ii) the number of shares of Common Stock
issuable upon the exercise of this Warrant with respect to which the
determination of this limitation is being made on an exercise date, which would
result in beneficial ownership by the Warrant Holder and its affiliates of more
than 4.99% of the outstanding shares of Common Stock on such date.  If the
Warrant Holder is unable to exercise this Warrant as a result that it would put
them over the 4.99% limitation, this Warrant shall be extended until such time
as the Warrant Holder is able to exercise this warrant and stay below the 4.99%
limitation. This Section 6 may be waived or amended only with the consent of the
Holder upon not less than 61 days’ prior written notice to the Company.  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 Regulation 13d-3 thereunder.
 
7.           Adjustment of Exercise Price and Number of Shares.  The character
of the shares of stock or other securities at the time issuable upon exercise of
this Warrant and the Exercise Price therefore, are subject to adjustment upon
the occurrence of the following events, and all such adjustments shall be
cumulative:
 
a.           Adjustment for Stock Splits, Stock Dividends, Recapitalizations,
Etc.  The Exercise Price of this Warrant and the number of shares of Common
Stock or other securities at the time issuable upon exercise of this Warrant
shall be appropriately adjusted to reflect any stock dividend, stock split,
combination of shares, reclassification, recapitalization or other similar event
affecting the number of outstanding shares of stock or securities.
 
b.           Adjustment for Reorganization, Consolidation, Merger, Etc.  In case
of any consolidation or merger of the Company with or into any other
corporation, entity or person, or any other corporate reorganization, in which
the Company shall not be the continuing or surviving entity of such
consolidation, merger or reorganization (any such transaction being hereinafter
referred to as a "Reorganization"), then, in each case, the holder of this
Warrant, on exercise hereof at any time after the consummation or effective date
of such Reorganization (the "Effective Date"), shall receive, in lieu of the
shares of stock or other securities at any time issuable upon the exercise of
the Warrant issuable on such exercise prior to the Effective Date, the stock and
other securities and property (including cash) to which such holder would have
been entitled upon the Effective Date if such holder had exercised this Warrant
immediately prior thereto (all subject to further adjustment as provided in this
Warrant).

 
 

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c.           Certificate as to Adjustments.  In case of any adjustment or
readjustment in the price or kind of securities issuable on the exercise of this
Warrant, the Company will promptly give written notice thereof to the holder of
this Warrant in the form of a certificate, certified and confirmed by the Board
of Directors of the Company, setting forth such adjustment or readjustment and
showing in reasonable detail the facts upon which such adjustment or
readjustment is based.
 
d.           The Company fails to meet certain earnings per share projections.
 
i.           In the event the Company’s after-tax net income earnings per share
as reported in the 10-K filed with the Securities and Exchange Commission (the
“Earnings”) are between $0.55 and $0.27 per share, as reported by the Company
for its audited fiscal year ended June 30, 2010, the then-current warrant
exercise price shall decrease proportionately; by 0% if the Earnings are $0.55
per share or greater and by 50% if the Earnings are $0.27 per share.  For
example if the Earnings are $0.44 per share or less (a 20% decline), then the
then-current warrant exercise price shall be reduced by 20%. Such adjustment
shall be made automatically within five Trading Days of the audited numbers
being publicly reported by the Company.
 
ii.         In the event the Company’s Earnings are between $0.67 and $0.33 per
share, as reported by the Company for its audited fiscal year ended June 30,
2011, the then-current warrant exercise price shall decrease proportionately; by
0% if the Earnings are $0.67 per share or greater and by 50% if the Earnings are
$0.33 per share.  For example if the Earnings are $0.53 per share or less (a 20%
decline), then the then-current warrant exercise price shall be reduced by 20%.
Such adjustment shall be made automatically within five Trading Days of the
audited numbers being publicly reported by the Company.
 
e.           The Company sells, grants or issues any shares, options, warrants,
or any instrument convertible into shares or equity in any form below the
exercise price per share of the warrant.  In the event the Company sells, grants
or issues any shares, options, warrants, or any instrument convertible into
Common Stock in any form below the current exercise price per share of this
Warrant, then the current Exercise Price shall be reduced to such lower price
per share. Such reduction shall be made at the time such transaction is
executed.
 
8.           Fractional Shares.  The Company shall not be required to issue or
cause to be issued fractional Warrant Shares on the exercise of this
Warrant.  The number of full Warrant Shares that shall be issuable upon the
exercise of this Warrant shall be computed on the basis of the aggregate number
of Warrants Shares purchasable on exercise of this Warrant so presented.  If any
fraction of a Warrant Share would, except for the provisions of this Section 8,
be issuable on the exercise of this Warrant, the Company shall, at its option,
(i) pay an amount in cash equal to the Exercise Price multiplied by such
fraction or (ii) round the number of Warrant Shares issuable, up to the next
whole number.

 
 

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9.           Subsequent Equity Sales.  From the date hereof until such time as
no Warrant Holder holds any of the Warrant Shares, the Company shall be
prohibited from effecting or entering into an agreement to effect any subsequent
financing involving a “Variable Rate Transaction” or an “MFN Transaction” (each
as defined below).  The term “Variable Rate Transaction” shall mean a
transaction in which the Company issues or sells (i) any debt or equity
securities that are convertible into, exchangeable or exercisable for, or
include the right to receive additional shares of Common Stock either (A) at a
conversion, exercise or exchange rate or other price that is based upon and/or
varies with the trading prices of or quotations for the shares of Common Stock
at any time after the initial issuance of such debt or equity securities, or (B)
with a conversion, exercise or exchange price that is subject to being reset at
some future date after the initial issuance of such debt or equity security
other than any financing similar to those contemplated by Section 7(e)
hereof.  The term “MFN Transaction” shall mean a transaction in which the
Company issues or sells any securities in a capital raising transaction or
series of related transactions which grants to an investor the right to receive
additional shares based upon future transactions of the Company on terms more
favorable than those granted to such investor in such offering.  Any Warrant
Holder shall be entitled to obtain injunctive relief against the Company to
preclude any such issuance, which remedy shall be in addition to any right to
collect damages. Notwithstanding the foregoing, this Section 9 shall not apply
in respect of an Exempt Issuance (as defined in the Preferred Stock Purchase
Agreement), except that no Variable Rate Transaction or MFN Transaction shall be
an Exempt Issuance.
 
10.         Sale or Merger of the Company.  Upon a Change in Control, the
restriction contained in Section 6 shall immediately be released and the Warrant
Holder will have the right to exercise this Warrant concurrently with such
Change in Control event.  For purposes of this Warrant, the term “Change in
Control” shall mean a consolidation or merger of the Company with or into
another company or entity in which the Company is not the surviving entity or
the sale of all or substantially all of the assets of the Company to another
company or entity not controlled by the then-existing stockholders of the
Company in a transaction or series of transactions.
 
11.         Notice of Intent to Sell or Merge the Company.  The Company will
give Warrant Holder ten (10) business days notice before the event of a sale of
all or substantially all of the assets of the Company or the merger or
consolidation of the Company in a transaction in which the Company is not the
surviving entity.
 
12.         Issuance of Substitute Warrant. In the event of a merger,
consolidation, recapitalization or reorganization of the Company or a
reclassification of Company shares of stock, which results in an adjustment to
the number of shares subject to this Warrant and/or the Exercise Price
hereunder, the Company agrees to issue to the Warrant Holder a substitute
Warrant reflecting the adjusted number of shares and/or Exercise Price upon the
surrender of this Warrant to the Company.
 
13.         Notice.  All notices and other communications hereunder shall be in
writing and shall be deemed to have been given (i) on the date they are
delivered if delivered in person; (ii) on the date initially received if
delivered by facsimile transmission followed by registered or certified mail
confirmation; (iii) on the date delivered by an overnight courier service; or
(iv) on the third business day after it is mailed by registered or certified
mail, return receipt requested with postage and other fees prepaid as follows:

 
 

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If to the Company:
 
1077 Ala Napunani Street
Honolulu, HI 96818
Attn: Mr. Ligang Shang

If to the Warrant Holder:

To the addresses listed in Schedule A of the Preferred Stock Purchase Agreement

 
14.         Miscellaneous.
 
a.           This Warrant shall be binding on and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.  This
Warrant may be amended only by a writing signed by the Company and the Warrant
Holder.
 
b.           Nothing in this Warrant shall be construed to give to any person or
corporation other than the Company and the Warrant Holder any legal or equitable
right, remedy or cause of action under this Warrant.  This Warrant shall be for
the sole and exclusive benefit of the Company and the Warrant Holder.
 
c.           This Warrant shall be governed by, construed and enforced in
accordance with the internal laws of the State of New York without regard to the
principles of conflicts of law thereof.
 
d.           The headings herein are for convenience only, do not constitute a
part of this Warrant and shall not be deemed to limit or affect any of the
provisions hereof.
 
e.           In case any one or more of the provisions of this Warrant shall be
invalid or unenforceable in any respect, the validity and enforceablilty of the
remaining terms and provisions of this Warrant shall not in any way be affected
or impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonably
substitute therefor, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
 
f.           The Warrant Holder shall not, by virtue hereof, be entitled to any
voting or other rights of a stockholder of the Company, either at law or equity,
and the rights of the Warrant Holder are limited to those expressed in this
Warrant.
 

 
[SIGNATURES ON FOLLOWING PAGE]
 

 
 
 

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
the authorized officer as of the date first above stated.

China Swine Genetics, Inc., a Delaware corporation

By:                                                               
Name:  Zhenyu Shang
Title:   President and Chief Executive Officer

 
 

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FORM OF ELECTION TO PURCHASE

(To be executed by the Warrant Holder to exercise the right to purchase shares
of Common Stock under the foregoing Warrant)
 
To:  China Swine Genetics, Inc.:

In accordance with the Warrant enclosed with this Form of Election to Purchase,
the undersigned hereby irrevocably elects to purchase ______________ shares of
common stock (“Common Stock”), $.001 par value, of China Swine Genetics, Inc.
and encloses the warrant and $____ for each Warrant Share being purchased or an
aggregate of $________________ in cash or certified or official bank check or
checks, which sum represents the aggregate Exercise Price (as defined in the
Warrant) together with any applicable taxes payable by the undersigned pursuant
to the Warrant.
 

The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of:

_______________________________________________
 
_______________________________________________
 
_______________________________________________
(Please print name and address)
 
_______________________________________________
(Please insert Social Security or Tax Identification Number)

If the number of shares of Common Stock issuable upon this exercise shall not be
all of the shares of Common Stock which the undersigned is entitled to purchase
in accordance with the enclosed Warrant, the undersigned requests that a New
Warrant (as defined in the Warrant) evidencing the right to purchase the shares
of Common Stock not issuable pursuant to the exercise evidenced hereby be issued
in the name of and delivered to:
 
_______________________________________________
 
_______________________________________________
 
_______________________________________________
(Please print name and address)

Dated:   ______________

Name of Warrant Holder:

(Print)                                                 
                         

(By:)                                                                   
          

 (Name:)                                                                        

 (Title:)                                                                          
Signature must conform in all respects to name of Warrant Holder as specified on
the face of the Warrant
 
 

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