Document:

Exhibit 10.3

 

CHANGE-IN-CONTROL AGREEMENT

 

Dated January 7, 2011

 

PERSONAL AND CONFIDENTIAL

 

David Berger

Executive Vice President and Chief Financial Officer

Information Services Group, Inc.

12 Byron Lane

Larchmont, NY  10538

 

Dear David:

 

Information Services Group, Inc. (the “Company”) considers it essential to the best interests of its stockholders to foster the continued employment of key management personnel.  Our Board of Directors (the “Board”) recognizes that the possibility of a change in ownership or control of the Company at some future date may result in the departure or distraction of key personnel to the detriment of the Company and our stockholders.  Therefore, the Board has determined to enter into this agreement with you (i) to encourage and reinforce your attention and dedication to your assigned duties without distraction in the face of the disruptive circumstances that can arise from a possible change in control of the Company, (ii) to enhance our ability to retain you in those circumstances, and (iii) to provide you with fair and reasonable protection from the risks of a change in ownership and control so that you will be in a position to help the Company complete a transaction that would be beneficial to stockholders.

 

You and the Company agree as follows:

 

1.         Term of Agreement and Protected Period.

 

(a)                Term of Agreement. The period during which this Agreement shall be in effect (the “Term”) shall be the period from January 7, 2011 (the “Effective Date”) through the close of business on the second anniversary of the Effective Date; provided, however, that the Term shall be automatically extended for successive one-year periods unless either party hereto gives written notice of non-renewal to the other party not later than the anniversary of the Effective Date that is one year before the then scheduled expiration of the Term; and provided  further, that if a Change in Control has occurred prior to expiration of the then current Term, the Term shall continue until the date that is at least 24 months after such occurrence of a Change in Control.

 

(b)                Protected Period. The “Protected Period” is the period from the time of occurrence of a Change in Control until the date that is 24 months after such occurrence of a Change in Control.  Notwithstanding the preceding sentence, the introductory text to Section 3 provides that certain events occurring before a Change in Control shall be deemed to have occurred during the Protected Period.

 

2.         Change in Control.

 

“Change in Control” shall mean the occurrence, during the Term, of a Change in Control as defined in the Amended and Restated 2007 Information Services Group, Inc. Equity Incentive Plan (Section 2(f) and related provisions), as in effect at the date hereof.  For purposes of the

 

 

definition of “Change in Control,” it is understood that a person will not be deemed the beneficial owner of shares such person has a right to acquire in connection with a merger, consolidation, tender or exchange offer until the consummation of such transaction.

 

3.         Termination and Resulting Compensation.

 

The Agreement provides no compensation or benefits in connection with Terminations which occur prior to a Change in Control, except that, if you are Terminated within 60 days prior to a Change in Control by the Company without Cause at the direction of a Person who has entered into an agreement with the Company the consummation of which will constitute a Change in Control, or if you Terminate with Good Reason within 60 days prior to a Change in Control (treating the entry by such a Person into such an agreement as a Change in Control in applying the definition of Good Reason) if the circumstance or event which constitutes Good Reason occurs at the direction of such Person, then your Termination shall be deemed to have been during the Protected Period and following a Change in Control and shall qualify for the compensation specified in Section 3(b).

 

(a)                Termination by the Company for Cause, by You Without Good Reason, or by Reason of Death, and Failure to Perform Duties Due to Disability. If during the Protected Period you are Terminated by the Company for Cause, you voluntarily Terminate without Good Reason, Termination occurs due to your death, or Termination results from your failure to perform your duties with the Company due to a disability, the Company will have no obligation to pay any compensation or benefits to you under this Agreement.

 

(b)               Terminations Triggering Severance Compensation. In lieu of any other severance compensation to which you may otherwise be entitled upon a termination by the Company not for Cause or a Termination by you for Good Reason under any plan, program, policy, agreement or arrangement of the Company or any subsidiary or affiliate (including any severance agreement or employment agreement), entitlement to which you hereby expressly waive, the Company will pay you the payments described in this Section 3(b) (the “Severance Payments”) upon Termination during the Protected Period and during the Term, unless such termination is (A) by the Company for Cause, (B) by reason of death, (C) due to your failure to perform your duties with the Company due to disability (for which you qualify for disability benefits), or (D) by you without Good Reason.  The compensation provided under this Section 3(b) is as follows:

 

(i)  The Company will pay you a lump sum severance payment, in cash, equal to one times your Annual Compensation.  For this purpose, your “Annual Compensation” will be the sum of (A) plus (B), where (A) is the greater of your annual base salary in effect immediately prior to the occurrence of the event or circumstance upon which the Notice of Termination is based (the “Notice Event”) or your annual base salary in effect immediately prior to the Change in Control, and (B) is the amount equal to the greater of your target annual incentive award (i.e., bonus) for the year in which the Notice Event occurred or the year in which the Change in Control occurred (if no target annual incentive was set at the relevant date, the target annual incentive at such date shall be the target annual incentive in effect for the preceding year increased by the same percentage as the percentage increase (if any) in salary over such preceding year).

 

(ii)  Other provisions of any plan or annual incentive award authorization notwithstanding, with respect to your annual incentive award for the fiscal year in progress at your Date of Termination (the “Current Annual Incentive”) and your

 

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annual incentive award for any previously completed year (the “Prior Year Annual Incentive”) for which your final annual incentive award has not yet been determined by the Board committee or other authorized decision maker with authority to make such determination (the “Committee”):

 

(A)          With regard to the Current Annual Incentive you will be paid an annual incentive equal to your target annual incentive for that year (or, if no target has been set for that year, your target annual incentive in effect in the preceding fiscal year) multiplied by a fraction the numerator of which is the number of days from the beginning of the year through your Date of Termination and the denominator of which is 365.  Any portion of your Current Annual Incentive opportunity not payable under this provision will be canceled and forfeited.

 

(B)           With regard to the Prior Year Annual Incentive, you will be paid the annual incentive that you would have received under the Company’s Annual Incentive Plan if you had remained employed by the Company through the date of determination of annual incentives by the Committee, with the determination of the amount, if any, of such annual incentive based on the Company’s performance in relation to the applicable performance targets previously established by the Company for such fiscal year, as determined in good faith by the Committee and with negative discretion exercised only in a manner consistent with such exercise for other senior executives who remain employed through the determination date.

 

(C)           If the terms of any plan, program, policy, agreement or arrangement of the Company or any subsidiary or affiliate would provide for payment of the Current Annual Incentive or the Prior Year Annual Incentive more favorable to you than under (A) and (B) above, you shall remain entitled to the additional benefit of such terms but taking into account and not duplicating the payments hereunder.

 

(iii) You will be entitled to coverage during the applicable COBRA health care continuation coverage period under Code Section 4980B, or any replacement or successor provision of United States tax law to the extent you so elect.  Accordingly, if you so elect, you will receive cash payments equal on an after-tax basis to the net monthly premium cost to you to purchase such COBRA continuation coverage for yourself, your spouse and your eligible dependents (subtracting any portion of such monthly premium (adjusted to be tax neutral to you) which you would have been required to contribute had you remained employed, to determine the net monthly premium cost), on or about the fifth day of each month for the duration of your COBRA continuation period, subject to Section 7(a).

 

(iv)  The Company will pay to you all earned and unpaid and/or vested, non-forfeitable amounts owing or accrued at your Date of Termination (including any earned but unpaid base salary and vacation) under any compensation and benefit plans, programs, and arrangements of the Company and subsidiaries or affiliates in which you theretofore participated, payable in accordance with the terms and conditions of the plans, programs, and arrangements (and agreements and documents thereunder) pursuant to which such compensation and benefits were granted or accrued, but without duplication of payments or benefits hereunder; and

 

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(v)  You will be reimbursed for any unreimbursed business expenses properly incurred by Executive in accordance with Company policy prior to the Date of Termination, at the time specified in accordance with such policy.

 

(c)                Time of Payment.

 

(i)    The Company’s obligation to make the payments provided for in Section 3(b)(i) and (ii) (the “Termination Payments”) shall be subject to your execution of a release, in the form attached as Exhibit A (modified to reflect any enhanced legal rights you may have in light of the circumstances of your Termination), which you have not revoked by the end of any applicable revocation period.  The end of such revocation period (not later than 52 days after your Termination) shall be the “Designated Payment Date.”

 

(ii)   The following rules will apply to the Termination Payments:

 

(A)  Separate Payments.  The amounts payable under Sections 3(b)(i), 3(b)(ii)(A) and 3(b)(ii)(B) shall each be deemed a separate payment under Code Section 409A, subject to the additional provisions in this Section 3(c)(ii)(A).  If under any other severance, employment or similar agreement you have a right to payments that constitute the same “payment” as any portion of the Termination Payment for purposes of Section 409A (a “Corresponding Payment”), if such Corresponding Payment is payable in installments, each installment shall be deemed a separate payment for purposes of Section 409A (unless otherwise provided under such separate agreement), and if such Corresponding Payment is not payable in installments, then the aggregate amount of each identifiable Corresponding Payment shall be deemed a separate payment for purposes of Section 409A.  For any given separate Termination Payment, the portion of such Termination Payment that equals the maximum aggregate amount of the Corresponding Payments to which you had a legally binding right apart from this Agreement (i.e., payable in some circumstances in the absence of a Change in Control), or the present value thereof, if such present valuing is required to comply with Section 409A, is referred to herein as the “Base Payment.” The portion of such Termination Payment that exceeds the Base Payment is referred to herein as the “Additional Payment.” Such Additional Payment in each case shall be deemed to be a separate payment for purposes of Section 409A (applied separately for each of Section 3(b)(i), (ii)(A) and (ii)(B).

 

(B)   Termination Payment Treatment Rules.  If a Corresponding Payment was potentially payable in installments, each such installment and the corresponding amount of the Base Payment, to the extent qualifying as separate payments under Code Section 409A, shall be treated as follows for purposes of Section 409A:

 

(1) Installments payable during the year of termination and by the “2 1⁄2 Month Deadline” (as hereinafter defined) shall, to the maximum extent possible, be deemed to constitute a short-term deferral under Treasury Regulation § 1.409A-1(b)(4).  The “2 1⁄2 Month Deadline” means, for a termination in a given calendar year, March 15 of the following year;

 

(2) Installments payable during the period within six months after termination, to the extent not covered by Section 3(c)(ii)(B)(1), shall, to the maximum extent possible, be deemed to constitute amounts payable under the “two-year/two-

 

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times” exclusion from being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii);

 

(3) To the extent that the “two-year/two-times” exclusion from being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii) has not been fully applied by virtue of Section 3(c)(ii)(B)(2) to payments within six months after termination, installments payable beyond six months after termination shall be excluded, to the maximum extent possible, by such “two-years/two-times” exclusion (applied in the reverse order of payment of the installments — that is, first to the latest installments (payable not later than the end of the second calendar year following the year of termination) and then to earlier installments); and

 

(4)All installments not covered by Section 3(c)(B)(1), (2) and (3) shall be paid at the applicable installment payment date in compliance with Section 409A, except that any such payment shall be subject to the six-month delay rule of Section 3(c)(iii) to the extent applicable.

 

If a Corresponding Payment was potentially payable as a lump sum and not in installments, such Corresponding Payment (i.e., the corresponding amount of the Base Payment), to the extent qualifying as separate payments under Code Section 409A, shall be treated as follows for purposes of Section 409A:

 

(5)   If the Corresponding Payment constituted a short-term deferral under Treasury Regulation § 1.409A-1(b)(4) or, to the extent that the “two-year/two-times” exclusion from being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii) has not been fully applied by virtue of Section 3(c)(ii)(B)(2) and (3), constituted amounts payable under such “two-year/two-times” exclusion, the corresponding amount of the Base Payment shall be excluded from being a deferral of compensation under Code Section 409A;

 

(6)   If the Corresponding Payment constituted a deferral of compensation under Code Section 409A, then the corresponding amount of the Base Payment shall constitute a deferral of compensation under Section 409A;

 

Portions of any Base Payment covered by Section 3(c)(ii)(B)(1), (2), (3) and/or (5) above shall be payable as a lump sum at the Designated Payment Date, and portions of the Base Payment covered by Section 3(c)(ii)(B)(4) and/or (6) above shall be payable, subject to Section 3(c)(iii) (the six-month delay rule), in a lump sum at the Designated Payment Date if such Termination has occurred within two years following a change in the ownership of the Company, a change in effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company as defined in Treasury Regulation § 1.409A-3(i)(10) (a “409A Change in Control”), and in any other case shall be payable at the applicable time the Corresponding Payment would have been payable, subject to Section 3(c)(iii) (the six-month delay rule).

 

If a Termination Payment not constituting a Base Payment (including any Additional Payment) is payable, such payment shall be treated as follows for purposes of Section 409A:

 

(7)   The Termination Payment, to the maximum extent possible, shall be deemed to constitute a short-term deferral under Treasury Regulation § 1.409A-1(b)(4);

 

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(8)  To the extent that the “two-year/two-times” exclusion from being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii) has not been fully applied by virtue of Section 3(c)(ii)(B)(2), (3) and/or (5), the Termination Payment, to the extent not covered by Section 3(c)(ii)(B)(7), shall, to the maximum extent possible, be deemed to constitute an amount payable under the “two-year/two-times” exclusion; and

 

(9) Any portion of such Termination Payment not covered by Section 3(c)(ii)(B)(7) and (8) shall be deemed to be a deferral of compensation for purposes of Section 409A

 

A Termination Payment not constituting a Base Payment (including any Additional Payment) shall be paid at the Designated Payment Date, provided that any such Termination Payment specified in Section 3(c)(ii)(B)(9) shall be subject to Section 3(c)(iii) (the six-month delay rule).

 

(iii)      Six-Month Delay Rule.

 

(A)  General Rule.  Other provisions of this Agreement notwithstanding, the six-month delay rule will apply to any payments and benefits under the Agreement if all of the following conditions are met:

 

(1)   You are a “specified employee” for purposes of Code Section 409A.

 

(2)   The payment or benefit in question is a deferral of compensation and not excepted, exempted or excluded from being such by the short-term deferral rule, or the “two-years/two-times” rule in Treasury Regulation § 1.409A-1(b)(9)(iii), or any other exception, exemption or exclusion; provided, however, that the exclusion under Treasury Regulation § 1.409A-1(b)(9)(v)(D) shall apply only if and to the extent that it is not necessary to apply to any other payment or benefit payable within six months after your termination.

 

(B)   Effect of Rule.  If it applies, the six-month delay rule will delay a payment or benefit which otherwise would be payable under this Agreement within six months after your Termination.

 

(1)   Any delayed payment or benefit shall be payable on the date six months after your Termination, without interest on any delayed cash payment.

 

(2)   During the six-month delay period, accelerated payment will occur in the event of your death but not for any other reason, except for accelerations expressly permitted under Treasury Regulation § 1.409A-1 — A-6.

 

(3)   Any payment that is not triggered by a Termination, or is triggered by a Termination but would be made more than six months after the Termination (without applying this six-month delay rule), or would be payable at a fixed date not tied to Termination that is earlier than the expiration of the six-month delay period, shall be unaffected by the six-month delay rule.

 

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(iv)   Other Provisions.

 

(A)Good Reason.  The definition of “Good Reason” under this Agreement was intended to qualify as an “involuntary separation” within the meaning of Treasury Regulation § 1.409A-1(n)(2)(i), and it shall be so construed and interpreted.

 

(B)   Non-transferability.  No right to any payment or benefit under this Agreement shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment by your creditors or the creditors of any of your beneficiaries.

 

(C)   No Acceleration.  The timing of payments and benefits under this Agreement which constitute a deferral of compensation under Code Section 409A may not be accelerated to occur before the time specified for payment hereunder, except to the extent permitted under Treasury Regulation § 1.409A-3(j)(4) or as otherwise permitted under Code Section 409A without your incurring a tax penalty.

 

(D)  Influence Over Timing of Payments.  You shall not be entitled to exercise any influence over the time of payment of any amount payable hereunder if the permitted payment period would include portions of two different tax years.

 

(E)   References to Other Plans.  References in this Agreement to the obligation of the Company to pay amounts under other plans, including your vested portion of any deferred compensation or other benefit plan, shall not be construed to modify the timing of payment, which shall be governed by such other plans.

 

(F) Setoff Timing Rule. Any amount that may be retained by the Company and applied to repay an obligation to the Company under this Agreement may only be so applied at the time it otherwise would have been payable to you, and cannot operate to relieve you of any obligation to repay at any time prior to the time such amount becomes payable.

 

(d)                Notice. During the Protected Period, any purported Termination of your employment by the Company or by you shall be communicated by written Notice of Termination to the other party hereto.

 

(e)                Certain Definitions. Except as otherwise indicated in this Agreement, all definitions in this Section 3(e) shall be applicable during the Protected Period only.

 

(i)            Cause. “Cause” for Termination by the Company of your employment, for purposes of this Agreement, shall mean (A) your willful misconduct, dishonesty, misappropriation, breach of fiduciary duty or act involving fraud or material dishonesty by you with regard to the Company and its affiliates or any of its or their assets or businesses; (B) your conviction or your pleading of nolo  contendere with regard to any felony or crime (for the purpose hereof, traffic violations and misdemeanors shall not be deemed to be a crime); or (C) any material breach by you of the provisions of this Agreement or material violation of the Company’s code of conduct or other policy which is not cured within 30 days after written notice to you of such breach or violation from the Board of Directors of the Company.

 

(ii)           Date of Termination. “Date of Termination” shall mean the date of employment termination specified in the Notice of Termination which, in the case of a

 

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Termination by the Company (other than a Termination for Cause), shall not be less than 30 days from the date such Notice of Termination is given and, in the case of a Termination by you, shall not be less than 30 nor more than 60 days from the date such Notice of Termination is given.

 

(iii)          Good Reason. “Good Reason” for Termination of your employment will mean the occurrence, without your written consent, of any one of the following, provided that you have given Notice of Termination to the Company within 90 days after the initial existence of the condition giving rise to your asserted Good Reason, and the Company has failed to fully correct the Good Reason by your Date of Termination (which must be at least 30 days after the Notice is given) specified in the Notice of Termination (such correction by the Company having the effect of canceling such Notice and the resulting Termination), and your separation from service occurs within one year after the initial existence of circumstances constituting Good Reason:

 

(A)      The assignment to you of any duties inconsistent in any material respect with your position, authority or responsibilities immediately prior to the occurrence of the Change in Control and materially adverse to you, or any other material adverse change in such position, including authority or responsibilities; for this purpose, it shall constitute “Good Reason” if you shall be required to report primarily to any person or body other than the Board of Directors of the ultimate parent company or, if you reported to the Chief Executive Officer of the Company during the 60-day period prior to the Change in Control, to a person other than the Chief Executive Officer of the Company or an equal or higher ranking senior executive officer of the ultimate parent company.

 

(B)      A material reduction by the Company in either (i) your annual base salary in effect immediately prior to the Change in Control and as such base salary thereafter may have been increased, (ii) your annual incentive opportunity as a percentage of base salary, or (iii) your annual equity award (as specified below).  For this purpose, a reduction of $20,000 in amount or value, on an annualized basis, of any of these elements of compensation or of these elements in the aggregate will be deemed “material” (other changes may be material in the particular circumstances).  The annual equity award shall be deemed to have a value determined in a manner consistent with the Company’s internal valuation method for such awards used at the time of grant.  It shall not constitute a material reduction in the annual equity grant for the Company to change the form of such award to either equity of the surviving parent corporation or cash, provided the value thereof is not materially reduced; or

 

(C)      The relocation of the principal place of your employment to a location more than thirty (30) miles from the location of such place of employment on the date of this Agreement (or other location at which you previously had agreed to work); except for required travel on the Company’s business to an extent substantially consistent with your business travel obligations prior to the Change in Control.

 

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(vi)          Notice of Termination. “Notice of Termination” shall mean notice indicating the specific termination provision in this Agreement relied upon and setting forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination of your employment under the provision so indicated.

 

(vii)         Termination.  “Termination” means an event by which your employment relationship with the Company and all subsidiaries has ended, provided that, with respect to any payment hereunder which is deemed to be a non-excluded deferral of compensation under Treasury Regulation § 1.409A-1(b), a Termination will occur at the time at which you have had a “separation from service” within the meaning of Treasury Regulation § 1.409A-1(h).

 

4.         Provisions Relating to Possible Excise Tax.

 

(a)           Cut-Back to Maximize Retained After-Tax Amounts.  The Company will reduce any payment relating to a Change in Control (with a “payment” including, without limitation, the vesting of an option or other non-cash benefit or property) pursuant to any plan, agreement or arrangement of the Company (together, “Severance Payments”) to the Reduced Amount (as defined below) if but only if reducing the Severance Payment would provide to you a greater net after-tax amount of Severance Payments than would be the case if no such reduction took place.  The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of the Severance Payments without causing any Severance Payment to be subject to the excise tax under Section 4999 (and related Section 280G) of the Code, determined in accordance with Section 280G(d)(4) of the Code.  Any reduction in Severance Payments shall be implemented in accordance with Section 4(b).

 

(b)           Implementation Rules.  Any reduction in payments under Section 4(a) shall apply to cash payments and/or vesting of equity awards so as to minimize the amount of compensation that is reduced (i.e., it applies to payments or vesting that to the greatest extent represent parachute payments), with the amount of compensation based on vesting to be measured (to be minimally reduced, for purposes of this provision) by the intrinsic value of the equity award at the date of such vesting.  You will be advised of the determination as to which compensation will be reduced and the reasons therefore, and you and your advisors will be entitled to present information that may be relevant to this determination. No reduction shall be applied to an amount that constitutes a deferral of compensation under Code Section 409A except for amounts that have become payable at the time of the reduction and as to which the reduction will not result in a non-reduction in a corresponding amount that is a deferral of compensation under Code Section 409A that is not currently payable.

 

For purposes of determining whether any of the Severance Payments will be subject to the Excise Tax and the amount of such Excise Tax:

 

(i)            The Severance Payments shall be treated as “parachute payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the written opinion of independent compensation consultants, counsel or auditors of nationally recognized standing (“Independent Advisors”) selected by the Company and reasonably acceptable to a majority of the employees who have Change in Control Agreements, the Severance Payments (in whole or in part) do not constitute parachute payments, or such excess parachute payments (in whole or in part) represent reasonable compensation for services

 

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actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to the Excise Tax.

 

(ii)           The value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.

 

For purposes of determining reductions in compensation under Section 4(b), if any, you will be deemed (A) to pay federal income taxes at the applicable rates of federal income taxation for the calendar year in which the compensation would be payable; and (B) to pay any applicable state and local income taxes at the applicable rates of taxation for the calendar year in which the compensation would be payable, taking into account any affect on federal income taxes from payment of state and local income taxes.  Compensation will be adjusted not later than the applicable deadline under Code Section 409A to provide for accurate payments under the cut-back provision of Section 4(b), but after any such deadline no further adjustment will be made if it would result in a tax penalty under Section 409A.

 

(c)           Internal Revenue Service Proceedings.  The Company shall have the right to control all proceedings with the Internal Revenue Service (or relating thereto) that may arise in connection with the determination and assessment of any Excise Tax and, at its sole option, the Company may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with any taxing authority in respect of such Excise Tax (including any interest or penalties thereon); provided, however, that the Company’s control over any such proceedings shall be limited to issues with respect to which compensation may be reduced hereunder, and you will be entitled to settle or contest any other issue raised by the Internal Revenue Service or any other taxing authority.  You agree to cooperate with the Company in any proceedings relating to the determination and assessment of any Excise Tax.

 

5.         Mitigation.

 

You will not be required to mitigate the amount of payments provided for under this Agreement by seeking other employment or otherwise, nor shall the amount of payments provided for under this Agreement be reduced by any compensation earned by you as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by you to the Company, or otherwise.

 

6.         Covenants for Protection of Company’s Business.

 

In consideration for the payments and benefits provided by the Company under this Agreement, by your execution of this agreement you agree as follows:

 

(i)            You agree that you will not (except on behalf of the Company) during your employment with the Company and during the period of 12 months thereafter (the “Restrictive Period”; this applies whether or not Termination occurs in the Protected Period) employ or retain, solicit the employment or retention of, or knowingly cause or encourage any entity to retain or solicit the employment or retention of, any person who is an employee of the Company or was an employee of the Company at any time during the period commencing 12 months prior to the Date of Termination.  After Termination of your employment, except as

 

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required by law: (A) You will refrain from disparaging, whether orally, in writing or in other media, the Company, its affiliates, the officers, directors and employees of each of them, and the products and services of each of them, and (B) the Company will not disparage you or otherwise comment upon your employment performance other than as may be requested by you.

 

(ii)           You will not at any time, directly or indirectly, without the Company’s prior written consent, disclose to any third party or use (except as authorized in the regular course of the Company’s business or in your performance of your responsibilities for the Company) any confidential, proprietary or trade secret information that was either acquired by you during your employment with the Company or thereafter, including, without limitation, sales and marketing information, information relating to existing or prospective customers and markets, business opportunities, and financial, technical and other data (collectively, the “Confidential Information”), except for disclosure required by law. After Termination of your employment with the Company for any reason and upon the written request of the Company, you shall promptly return to the Company all originals and/or copies of written or recorded material (regardless of the medium, including digital files and documents without retaining copies thereof) containing or reflecting any Confidential Information and shall promptly confirm in writing to the Company that such action has been taken.  The foregoing notwithstanding, the following shall not constitute Confidential Information: (A) Information that is already in the public domain at the time of its disclosure to you; (B) Information that, after its disclosure to you, becomes part of the public domain by publication or otherwise other than through your act; and (C) Information that you received from a third party having the right to make such disclosure without restriction on disclosure or use thereof.

 

7.         Miscellaneous.

 

(a)           Timing Rules for Reimbursements. Any reimbursements made or in-kind benefits provided under this Agreement shall be subject to the following conditions:

 

(i)  the amount of expenses eligible for reimbursement or in-kind benefits provided in any one of your taxable years shall not affect the amount of expenses eligible for reimbursement or in-kind benefits provided in any other of your taxable years;

 

(ii)  the reimbursement of any expense shall be made each calendar quarter and not later than the last day of your taxable year following the taxable year in which the expense was incurred (unless this Agreement specifically provides for reimbursement by an earlier date);

 

(iii)  the right to reimbursement of an expense or payment of an in-kind benefit shall not be subject to liquidation or exchange for another benefit.

 

Executive’s right to reimbursements under this Agreement shall be treated as a right to a series of separate payments under Treasury Regulation § 1.409A-2(b)(2)(iii) of the Regulations.

 

(b)               Successors. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such

 

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succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

(c)              Binding Agreement. This Agreement shall inure to the benefit of and be enforceable by you and your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. In the event of your death, all amounts otherwise payable to you hereunder shall, unless otherwise provided herein, be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there is no such designee, to your estate.

 

(d)               Notice. Notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when (i) personally delivered or (ii) mailed by United States certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement; provided that all notice to the Company shall be directed to the attention of the Board with a copy to the Chief Executive Officer of the Company, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

 

(e)               Modifications. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed on behalf of the Company by an authorized officer and, if adverse to you, is signed by you.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the time or at any prior or subsequent time.

 

(f)                Governing Law. THE VALIDITY, INTERPRETATION, CONSTRUCTION AND PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF CONNECTICUT  WITHOUT REGARD TO ITS CONFLICTS OF LAW PRINCIPLES.

 

(g)               Tax Withholding. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law.

 

(h)               Surviving Obligations. The obligations of the Company and your obligations under this Agreement (including under Section 6) shall survive the expiration of this Agreement to the extent necessary to give effect to this Agreement.

 

(i)                Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

 

(j)                Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

 

(k)               Entire Agreement. This Agreement sets forth the entire agreement of the parties hereto in respect of the subject matter contained herein and during the Term supersedes the provisions of all prior agreements (including any prior Change in Control Agreement between the

 

12

 

parties), promises, covenants, arrangements, communications, representations or warranties, whether oral or written, by any officer, employee or representative of any party hereof with respect to the subject matter contained herein; provided, however, that any agreement providing for severance or post-termination benefits for specified terminations not within the Protected Period is not superseded by this Agreement, except insofar as such other agreement provided for severance and other post-termination benefits for a termination which, under this Agreement, would trigger payments of severance and other post-termination benefits (and subject to any provision herein providing you with any benefit under such other Agreement in excess of the level of benefit hereunder). No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.  Anything to the contrary in this Agreement notwithstanding, the procedural provisions of this Agreement shall apply to all payments and benefits payable as a result of a Change in Control (or other change in control) under any employee benefit plan, agreement, program, policy or arrangement of the Company.

 

If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter, which will then constitute our agreement on this subject.

 

 

	
 
  	
INFORMATION SERVICES GROUP, INC.
  
	
 
  	
 
  
	
 
  	
By:
  	
/s/ Michael Connors
  
	
 
  	
 
  	
Michael Connors
  
	
 
  	
 
  	
COB & CEO
  

 

 

	
Agreed to this  7th day 
 of January, 2011.
  	
 
  
	
 
  	
 
  
	
/s/ David Berger
  	
 
  
	
David Berger
  	
 
  

 

13

 

EXHIBIT A

 

Form of Release

 

David Berger (the “Executive”) agrees for the Executive, the Executive’s spouse and child or children (if any), the Executive’s heirs, beneficiaries, devisees, executors, administrators, attorneys, personal representatives, successors and assigns, hereby forever to release, discharge, and covenant not to sue Information Services Group Inc. (the “Company”), the Company’s past, present, or future parent, affiliated, related, and/or subsidiary entities, and all of their past and present directors, shareholders, officers, general or limited partners, employees, agents, insurers and attorneys, and agents and representatives of such entities, in such capacities, and employee benefit plans in which the Executive is or has been a participant by virtue of his employment with the Company and benefit plan administrators, and the successors of the Company or any of the foregoing entities (collectively, the “Releasees”), from any and all claims, debts, demands, accounts, judgments, rights, causes of action, equitable relief, damages, costs, charges, complaints, obligations, promises, agreements, controversies, suits, expenses, compensation, responsibility and liability of every kind and character whatsoever (including attorneys’ fees and costs), whether in law or equity, known or unknown, asserted or unasserted, suspected or unsuspected, which the Executive has or may have had against the Company or the Releasees based on any events or circumstances arising or occurring on or prior to the date this Release is executed, arising directly or indirectly out of, relating to, or in any other way involving in any manner whatsoever the Executive’s employment with the Company or the termination thereof, the Executive’s status at any time as a holder of any securities of the Company, or otherwise.  This includes, but is not limited to, a release of any and all claims arising under the laws of the United States, any other country, or any state, or locality relating to employment, or securities, including, without limitation, claims of wrongful discharge, breach of express or implied contract (whether oral or written), fraud, misrepresentation, defamation, or liability in tort, common law or public policy, claims of any kind that may be brought in any court or administrative agency, any claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Fair Labor Standards Act, the Executive Retirement Income Security Act, the Family and Medical Leave Act, the Delaware Discrimination in Employment Act, the Securities Act of 1933, the Securities Exchange Act of 1934, the Sarbanes-Oxley Act, and similar statutes, ordinances, and regulations of the United States, any other country, or any state or locality.  This release of claims further includes, but is not limited to, Executive’s waiver of any right or claim to compensation, wages, back pay, reinstatement or re-employment, bonuses, or benefits of any kind or any nature arising or derivative from Executive’s employment with the Company, the termination thereof, or otherwise; provided, however, notwithstanding anything to the contrary set forth herein, that this general release shall not extend to (x) amounts owed to or rights available for the Executive under that certain Change-in-Control Agreement dated January 7, 2011, by and between the Company and the Executive (the “Change-in-Control Agreement”) and (y) benefit claims under employee pension benefit plans in which the Executive is a participant by virtue of his employment with the Company or benefit claims under employee welfare benefit plans for covered occurrences (e.g., medical care, death, or onset of disability) arising after the execution of this Release by the Executive.  This Release does not waive any rights to indemnification the Executive has under any insurance policy, by laws or other documents or agreements to which Executive may be entitled for actions taken in good faith during the term of his employment.

 

The Executive hereby represents and warrants to the Company and the Releasees that he has not filed any action, complaint, charge, grievance, arbitration or similar proceeding against the Company or the other Releasees.

 

14

 

The Executive understands that this Release includes a release of claims arising under the Age Discrimination in Employment Act (ADEA).  The Executive understands and warrants that he has been given a period of 21 days to review and consider this Release.  The Executive further acknowledges that the consideration given for this Release is in addition to anything of value to which he is already entitled.  The Executive is hereby advised to consult with an attorney prior to executing the Release.  By his signature below, the Executive warrants that he has had the opportunity to do so and to be fully and fairly advised by that legal counsel as to the terms of this Release and that this waiver and release is knowing and voluntary.  The Executive further warrants that he understands that he may use as much or all of his 21-day period as he wishes before signing, and warrants that he has done so.

 

The Executive further warrants that he understands that he has seven days after signing this Release to revoke the Release by notice in writing to the Company’s General Counsel delivered by hand, certified mail or courier service.  This Release shall be binding, effective, and enforceable upon both parties upon the expiration of this seven-day revocation period without the Company’s General Counsel having received such revocation, but if the Executive revokes the Release during such time, the Executive understands that the Executive will forfeit any rights he may have to any termination payments otherwise due under the Change-in-Control Agreement.

 

By signing this Release, the Executive acknowledges that:  he has relied entirely upon his  own judgment, and that he has had the opportunity to consult with legal, financial and other personal advisors of his own choosing in assessing whether to execute this Release; no representation, statement, promise, inducement, threat or suggestion has been made by the Company or any other Releasee to influence Executive to sign this Release except such statements as are expressly set forth herein; Executive understands that by signing this Agreement he is releasing the Company and the Releasees of all claims against them; Executive has read this Release and understands its terms; Executive has been given a reasonable period of time to consider its terms and effect; and Executive voluntarily agree to the terms of this Release.

 

 

Executed this        day of                                   , 201

 

 

	
 
  	
 
  
	
Print Name:
  	
 
  	
 
  
			

 

15THIS
WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY OTHER SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER
APPLICABLE SECURITIES LAWS, OR (2) AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

     

    CHINA
FOR-GEN CORP.

     

    WARRANT

     

    ________
Shares of Common Stock1

    January ___, 2011

     

    This
WARRANT (this “Warrant”) of China For-Gen Corp.,
a company duly organized and validly existing under the laws of the State of
Delaware (the “Company”), is being issued pursuant
to that certain Underwriting Agreement, dated as of [    ], 2011,
by and between the Company and Maxim Group LLC, the representative of the
Underwriters (the “Representative”) relating to a firm
commitment public offering (the “Offering”) of common stock,
par value $0.001 per share (the “Common Stock”), of the
Company.

     

    FOR VALUE RECEIVED, the
Company hereby grants to Maxim Group LLC and its permitted successors and
assigns (collectively, the “Holder”) the right to purchase
from the Company up to                                    
(              
) shares of Common Stock (such Common Stock underlying this Warrant, the
“Warrant Shares”), at a
per share purchase price equal to $[______] [110% OF THE PUBLIC OFFERING PRICE]
(the “Exercise
Price”), subject to the terms,
conditions and adjustments set forth below in this Warrant.

     

    1.         
  Vesting of
Warrant. This Warrant shall vest and become exercisable on the six month
anniversary of the Base Date (the “Vesting Date”). For purposes of this
Warrant, the “Base Date”
shall mean the date of effectiveness of registration statement number
333-166868. Except as otherwise provided for herein or as permitted by
applicable rules of the Financial Industry Regulatory Authority (“FINRA”), this
Warrant shall not be sold, transferred, assigned, pledged or hypothecated prior
to the Vesting Date.

     

    2.         
  Expiration
of Warrant. This Warrant shall expire on the five (5) year anniversary of
the Base Date (the “Expiration
Date”).

     

    3.     
      Exercise of Warrant.
This Warrant shall be exercisable pursuant to the terms of this Section
3.

     

    3.1           Manner
of Exercise.

     

    (a)           This
Warrant is exercisable in whole or in part at any time and from time to time.
Such exercise shall be effectuated by submitting to the Company (either by
delivery to the Company or by facsimile transmission as provided in Section 12
hereof) a completed and duly executed Notice of Exercise (substantially in the
form attached to this Warrant) as provided in this paragraph. The date such
Notice of Exercise is faxed to the Company shall be the “Exercise Date,”
provided that the Holder of this Warrant tenders this Warrant Certificate to the
Company within five (5) business days thereafter. The Notice of Exercise shall
be executed by the Holder of this Warrant and shall indicate the number of
Warrant Shares then being purchased pursuant to such exercise. Upon surrender of
this Warrant Certificate, together with appropriate payment of the Exercise
Price for the Warrant Shares purchased, the Holder shall be entitled to receive
a certificate or certificates for the Common Stock so purchased. The Exercise
Price may be paid in a “cashless” or “cash” exercise or a combination thereof
pursuant to Section 3.1(b) and/or Section 3.1(c) below.

           

    
      
        
1 An
amount equal to 5% of the Common Stock sold in the
Offering.

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    (b)           If
the Notice of Exercise form elects a “cashless” exercise, the Holder shall
thereby be entitled to receive a number of Common Stock determined as
follows:

     

    X = Y [(A
– B)/A]

     

    where:

     

    X = the
number of Warrant Shares to be issued to the Holder.

     

    Y = the
number of Warrant Shares with respect to which this Warrant is being
exercised.

     

    A = the
Fair Market Value

     

    B = the
Exercise Price.

     

    For
purposes of this Section 3.1(b), “Fair Market Value” shall be the closing price
of the Common Stock as reported by the OTC Bulletin Board, or if listed on a
national securities exchange or quoted on an automated quotation service, such
national securities exchange or automated quotation service, on the date
immediately prior to the Exercise Date. If the Common Stock are not then listed
on a national stock exchange or quoted on the OTC Bulletin Board or such other
quotation system or association, the Fair Market Value of one share of Common
Stock as of the date of determination, shall be as determined in good faith by
the Board of Directors of the Company and the Holder. If the Common Stock are
not then listed on a national securities exchange, the OTC Bulletin Board or
such other quotation system or association, the Board of Directors of the
Company shall respond promptly, in writing, to an inquiry by the Holder prior to
the exercise hereunder as to the fair market value of one share of Common Stock
as determined by the Board of Directors of the Company. In the event that the
Board of Directors of the Company and the Holder are unable to agree upon the
fair market value, the Company and the Holder shall jointly select an appraiser,
who is experienced in such matters. The decision of such appraiser shall be
final and conclusive, and the cost of such appraiser shall be borne equally by
the Company and the Holder. Such adjustment shall be made successively whenever
such a payment date is fixed.

     

    (c)           If
the Notice of Exercise form elects a “cash” exercise, the Exercise Price per
share of Common Stock for the shares then being exercised shall be payable in
cash or by certified or official bank check.

     

    3.2           When Exercise
Effective. Each exercise of this Warrant shall be deemed to have been
effected immediately prior to the close of business on the Business Day on which
this Warrant shall have been duly surrendered to the Company as provided in
Sections 3.1 and 12 hereof, and, at such time, the Holder in whose name any
certificate or certificates for Warrant Shares shall be issuable upon exercise
as provided in Section 3.3 hereof shall be deemed to have become the holder or
holders of record thereof of the number of Warrant Shares purchased upon
exercise of this Warrant.

     

    3.3           Delivery of Common Stock
Certificates and New Warrant. As soon as reasonably practicable after
each exercise of this Warrant, in whole or in part, and in any event within five
(5) Business Days thereafter, the Company, at its expense (including the payment
by it of any applicable issue taxes), will cause the name of the Holder (or as
Holder may direct) to be entered in the register of members in respect of the
Warrant Shares and further cause to be issued in the name of and delivered to
the Holder hereof or, subject to Sections 9 and 10 hereof, as the Holder (upon
payment by the Holder of any applicable transfer taxes) may direct:

     

    (a)           a
certificate or certificates (with appropriate restrictive legends, as
applicable) for the number of duly authorized, validly issued, fully paid and
nonassessable Warrant Shares to which the Holder shall be entitled upon
exercise; and

     

    (b)           in
case exercise is in part only, a new Warrant document of like tenor, dated the
date hereof, for the remaining number of Warrant Shares issuable upon exercise
of this Warrant after giving effect to the partial exercise of this Warrant
(including the delivery of any Warrant Shares as payment of the Exercise Price
for such partial exercise of this Warrant).

    
      
         

      

      
         

        
          

        

      

      
         

      

    

          

    4.           Certain Adjustments.
For so long as this Warrant is outstanding:

     

    4.1           Mergers or
Consolidations. If at any time after the date hereof there shall be a
capital reorganization (other than a combination or subdivision of the Common
Stock otherwise provided for herein) resulting in a reclassification to or
change in the terms of securities issuable upon exercise of this Warrant (a
“Reorganization”), or a merger or
consolidation of the Company with another corporation, association, partnership,
organization, business, individual, government or political subdivision thereof
or a governmental agency (a “Person” or the “Persons”) (other than a merger
with another Person in which the Company is a continuing corporation and which
does not result in any reclassification or change in the terms of securities
issuable upon exercise of this Warrant or a merger effected exclusively for the
purpose of changing the domicile of the Company) (a “Merger”), then, as a part of such
Reorganization or Merger, lawful provision and adjustment shall be made so that
the Holder shall thereafter be entitled to receive, upon exercise of this
Warrant, the number of shares of stock or any other equity or debt securities or
property receivable upon such Reorganization or Merger by a holder of the number
of Common Stock which might have been purchased upon exercise of this Warrant
immediately prior to such Reorganization or Merger. In any such case,
appropriate adjustment shall be made in the application of the provisions of
this Warrant with respect to the rights and interests of the Holder after the
Reorganization or Merger to the end that the provisions of this Warrant
(including adjustment of the Exercise Price then in effect and the number of
Warrant Shares) shall be applicable after that event, as near as reasonably may
be, in relation to any shares of stock, securities, property or other assets
thereafter deliverable upon exercise of this Warrant. The provisions of this
Section 4.1 shall similarly apply to successive Reorganizations and/or
Mergers.

     

    4.2           Splits and Subdivisions;
Dividends. In the event the Company should at any time or from time to
time effectuate a split or subdivision of the outstanding Common Stock or pay a
dividend in or make a distribution payable in additional Common Stock or other
securities or rights convertible into, or entitling the holder thereof to
receive, directly or indirectly, additional Common Stock (hereinafter referred
to as the “Common Stock
Equivalents”) without payment of any
consideration by such holder for the additional Common Stock or Common Stock
Equivalents (including the additional Common Stock issuable upon conversion or
exercise thereof), then, as of the applicable record date (or the date of such
distribution, split or subdivision if no record date is fixed), the per share
Exercise Price shall be appropriately decreased and the number of Warrant Shares
shall be appropriately increased in proportion to such increase (or potential
increase) of outstanding shares; provided, however, that no adjustment shall be
made in the event the split, subdivision, dividend or distribution is not
effectuated.

     

    4.3           Combination of
Shares. If the number of shares of Common Stock outstanding at any time
after the date hereof is decreased by a combination of the outstanding Common
Stock, the per share Exercise Price shall be appropriately increased and the
number of shares of Warrant Shares shall be appropriately decreased in
proportion to such decrease in outstanding shares.

     

    4.4           Adjustments for Other
Distributions. In the event the Company shall declare a distribution
payable in securities of other Persons, evidences of indebtedness issued by the
Company or other Persons, assets (excluding cash dividends or distributions to
the holders of Common Stock paid out of current or retained earnings and
declared by the Company’s board of directors) or options or rights not referred
to in Sections 4.1, 4.2 or 4.3, then, in each such case for the purpose of this
Section 4.4, upon exercise of this Warrant, the Holder shall be entitled to a
proportionate share of any such distribution as though the Holder was the actual
record holder of the number of Warrant Shares as of the record date fixed for
the determination of the holders of Common Stock of the Company entitled to
receive such distribution.

     

    5.       
    No Impairment. The
Company will not, by amendment of its memorandum and articles of association or
through any consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good faith assist in the carrying out of all of the
terms and in the taking of all actions necessary or appropriate in order to
protect the rights of the Holder against impairment.

     

    6.      
     Chief Financial Officer’s
Report as to Adjustments. With respect to each adjustment pursuant to
Section 4 of this Warrant, the Company, at its expense, will promptly compute
the adjustment or re-adjustment in accordance with the terms of this Warrant and
cause its Chief Financial Officer to certify the computation (other than any
computation of the fair value of property of the Company, as the case may be)
and prepare a report setting forth, in reasonable detail, the event requiring
the adjustment or re-adjustment and the amount of such adjustment or
re-adjustment, the method of calculation thereof and the facts upon which the
adjustment or re-adjustment is based, and the Exercise Price and the number of
Warrant Shares or other securities purchasable hereunder after giving effect to
such adjustment or re-adjustment, which report shall be mailed by first class
mail, postage prepaid to the Holder. The Company will also keep copies of all
reports at its office maintained pursuant to Section 10.2(a) hereof and will
cause them to be available for inspection at the office during normal business
hours upon reasonable notice by the Holder or any prospective purchaser of the
Warrant designated by the Holder thereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

             

    7.     
      Reservation of
Shares. The Company shall, solely for the purpose of effecting the
exercise of this Warrant, at all times during the term of this Warrant, reserve
and keep available out of its authorized Common Stock, free from all taxes,
liens and charges with respect to the issue thereof and not subject to
preemptive rights or other similar rights of shareholders of the Company, such
number of shares of its Common Stock as shall from time to time be sufficient to
effect in full the exercise of this Warrant. If at any time the number of
authorized but unissued Common Stock shall not be sufficient to effect in full
the exercise of this Warrant, in addition to such other remedies as shall be
available to Holder, the Company will promptly take such corporate action as
may, in the opinion of its counsel, be necessary to increase the number of
authorized but unissued Common Stock to such number of shares as shall be
sufficient for such purposes, including without limitation, using its best
efforts to obtain the requisite shareholder approval necessary to increase the
number of authorized Common Stock. The Company hereby represents and warrants
that all Common Stock issuable upon exercise of this Warrant shall be duly
authorized and, when issued and paid for upon exercise, shall be validly issued,
fully paid and nonassessable.

     

    8.         
  Registration and
Listing.

     

    8.1           Definition of Registrable
Securities; Majority. As used herein, the term “Registrable Securities” means
any Common Stock issuable upon the exercise of this Warrant, until the date (if
any) on which such shares shall have been transferred or exchanged and new
certificates for them not bearing a legend restricting further transfer shall
have been delivered by the Company and subsequent disposition of them shall not
require registration or qualification of them under the Securities Act or any
similar state law then in force. For purposes of this Warrant, the term “Majority”, in reference to the
holders of Registrable Securities, shall mean in excess of fifty percent (50%)
of the then outstanding Warrant Shares (assuming the exercise of the entire
Warrant) that (i) are not held by the Company, an affiliate, officer,
creditor, employee or agent thereof or any of their respective affiliates,
members of their family, Persons acting as nominees or in conjunction therewith
and (ii) have not be resold to the public pursuant to a registration
statement filed under the Securities Act.

     

    8.2           Required
Registration.

     

    (a)           At
any time on or after the six month anniversary of the Base Date and on or before
the five (5) year anniversary of the Base Date, but in no event on not more than
two (2) occasions (the second of which effected required registrations (as
described in Section 8.2(c)) pursuant to this Section 8.2(a) would be payable by
the Holder pursuant to Section 8.6), upon the written request of the holders of
the Registrable Securities representing a Majority of such securities, the
Company will use its best efforts to effect the registration of the respective
shares of the holders of Registrable Securities under the Securities Act to the
extent requisite to permit the disposition thereof as expeditiously as
reasonably possible, but in no event later than 120 days from the date of such
request.

     

    (b)           Registration
of Registrable Securities under this Section 8.2 shall be on such appropriate
registration form: (i) as shall be selected by the Company, and
(ii) as shall permit the disposition of such Registrable Securities in
accordance with this Section 8.2. The Company agrees to include in any such
registration statement all information which the requesting holders of
Registrable Securities shall reasonably request, which is required to be
contained therein. The Company will pay all Registration Expenses in connection
with the first, and only the first, effected required registration (as described
in Section 8.2(c)) of Registrable Securities pursuant to this Section 8.2. The
Holder or holders whose shares are being registered shall pay all expenses
associated with the second effected required registration of Registrable
Securities pursuant to Section 8.2.

     

    (c)           A
registration requested pursuant to this Section 8.2 shall not be deemed to have
been effected: (i) unless a registration statement with respect thereto has
become effective or (ii) if, after it has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Securities and Exchange Commission (the “SEC”) or other governmental
agency or court of competent jurisdiction for any reason, other than by reason
of some act or omission by a holder of Registrable Securities.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

         

    8.3           Incidental Registration
Rights.

     

    (a)           If
the Company, at any time on or after the six month anniversary of the Base Date
and on or before the seven (7) year anniversary of the Base Date, proposes to
register any of its securities under the Securities Act (other than in
connection with a registration on Form S-4 or S-8 or comparable forms used by
foreign private issuers or any successor forms) whether for its own account or
for the account of any holder or holders of its shares other than Registrable
Securities (any shares of such holder or holders (but not those of the Company
and not Registrable Securities) with respect to any registration are referred to
herein as, “Other
Shares”), the Company shall each
such time give prompt (but not less than thirty (30) days prior to the
anticipated effectiveness thereof) written notice to the holders of Registrable
Securities of its intention to do so. Upon the written request of any such
holder of Registrable Securities made within twenty (20) days after the receipt
of any such notice (which request shall specify the Registrable Securities
intended to be disposed of by such holder), except as set forth in Section
8.3(b), the Company will use its best efforts to effect the registration under
the Securities Act of all of the Registrable Securities which the Company has
been so requested to register by such holder, to the extent requisite to permit
the disposition of the Registrable Securities so to be registered, by inclusion
of such Registrable Securities in the registration statement which covers the
securities which the Company proposes to register; provided, however, that if,
at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company shall determine for any reason
in its sole discretion either to not register, to delay or to withdraw
registration of such securities, the Company may, at its election, give written
notice of such determination to such holder and, thereupon, (i) in the case
of a determination not to register, shall be relieved of its obligation to
register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith), without prejudice, however, to the rights of the holders of
Registrable Securities entitled to request that such registration be effected as
a registration under Section 8.2, (ii) in the case of a determination to
delay registration, shall be permitted to delay registering any Registrable
Securities for the same period as the delay in registering such other securities
(including the Other Shares), without prejudice, however, to the rights of the
holders of Registrable Securities entitled to request that such registration be
effected as a registration under Section 8.2 and (iii) in the case of a
determination to withdraw registration, shall be permitted to withdraw
registration, without prejudice, however, to the rights of the holders of
Registrable Securities entitled to request that such registration be effected as
a registration under Section 8.2. No registration effected under this Section
8.3 shall relieve the Company of its obligation to effect any registration upon
request under Section 8.2, nor shall any such registration hereunder be deemed
to have been effected pursuant to Section 8.2. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities pursuant to this Section 8.3.

     

    (b)           If
the Company at any time proposes to register any of its securities under the
Securities Act as contemplated by this Section 8.3 and such securities are to be
distributed by or through one or more underwriters, the Company will, if
requested by a holder of Registrable Securities, use its best efforts to arrange
for such underwriters to include all the Registrable Securities to be offered
and sold by such holder among the securities to be distributed by such
underwriters, provided that if the managing underwriter of such underwritten
offering shall inform the Company by letter of its belief that inclusion in such
distribution of all or a specified number of such securities proposed to be
distributed by such underwriters would interfere with the successful marketing
of the securities being distributed by such underwriters (such letter to state
the basis of such belief and the approximate number of such Registrable
Securities, such Other Shares and shares held by the Company proposed so to be
registered which may be distributed without such effect), then the Company may,
upon written notice to such holder, the other holders of Registrable Securities,
and holders of such Other Shares, reduce pro rata in accordance with the number
of Common Stock desired to be included in such registration (if and to the
extent stated by such managing underwriter to be necessary to eliminate such
effect) the number of such Registrable Securities and Other Shares the
registration of which shall have been requested by each holder thereof so that
the resulting aggregate number of such Registrable Securities and Other Shares
so included in such registration, together with the number of securities to be
included in such registration for the account of the Company, shall be equal to
the number of shares stated in such managing underwriter’s letter.

     

    8.4           Registration
Procedures. Whenever the holders of Registrable Securities have properly
requested that any Registrable Securities be registered pursuant to the terms of
this Warrant, the Company shall use its best efforts to effect the registration
and the sale of such Registrable Securities in accordance with the intended
method of disposition thereof, and pursuant thereto the Company shall as
expeditiously as possible:

     

    (a)           prepare
and file with the SEC a registration statement with respect to such Registrable
Securities and use its best efforts to cause such registration statement to
become effective;

    
      
         

      

      
         

        
          

        

      

      
         

      

    

            

    (b)           notify
such holders of the effectiveness of each registration statement filed hereunder
and prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may be
necessary to (i) keep such registration statement effective and the
prospectus included therein usable for a period commencing on the date that such
registration statement is initially declared effective by the SEC and ending on
the date when all Registrable Securities covered by such registration statement
have been sold pursuant to the registration statement or cease to be Registrable
Securities, and (ii) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;

     

    (c)           furnish
to such holders such number of copies of such registration statement, each
amendment and supplement thereto, the prospectus included in such registration
statement (including each preliminary prospectus) and such other documents as
such seller may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such holders;

     

    (d)           use
its best efforts to register or qualify such Registrable Securities under such
other securities or blue sky laws of such jurisdictions as such holders
reasonably request and do any and all other acts and things which may be
reasonably necessary or advisable to enable such holders to consummate the
disposition in such jurisdictions of the Registrable Securities owned by such
holders; provided,
however, that the Company shall not be required to: (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph; (ii) subject itself to
taxation in any such jurisdiction; or (iii) consent to general service of
process in any such jurisdiction;

     

    (e)           notify
such holders, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a result of
which the prospectus included in such registration statement contains an untrue
statement of a material fact or omits any material fact necessary to make the
statements therein, in light of the circumstances in which they are made, not
materially misleading, and, at the reasonable request of such holders, the
Company shall prepare a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not contain an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances in which they are made, not materially
misleading;

     

    (f)           provide
a transfer agent and registrar for all such Registrable Securities not later
than the effective date of such registration statement;

     

    (g)           make
available for inspection by any underwriter participating in any disposition
pursuant to such registration statement, and any attorney, accountant or other
agent retained by any such underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company’s officers, directors, managers, employees and independent accountants
to supply all information reasonably requested by any such underwriter,
attorney, accountant or agent in connection with such registration
statement;

     

    (h)           otherwise
use its best efforts to comply with all applicable rules and regulations of the
SEC, and make available to its security holders, as soon as reasonably
practicable, an earnings statement of the Company, which earnings statement
shall satisfy the provisions of Section 11(a) of the Securities Act and, at the
option of the Company, Rule 158 thereunder;

     

    (i)           in
the event of the issuance of any stop order suspending the effectiveness of a
registration statement, or of any order suspending or preventing the use of any
related prospectus or suspending the qualification of any Registrable Securities
included in such registration statement for sale in any jurisdiction, the
Company shall use its best efforts promptly to obtain the withdrawal of such
order;

     

    (j)           use
its best efforts to cause any Registrable Securities covered by such
registration statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the sellers
thereof to consummate the disposition of such Registrable Securities;
and

     

    (k)           if
the offering is underwritten, use its best efforts to furnish on the date that
Registrable Securities are delivered to the underwriters for sale pursuant to
such registration, an opinion dated such date of counsel representing the
Company for the purposes of such registration, addressed to the underwriters
covering such issues as are reasonably required by such
underwriters.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

          

    8.5           Listing. The Company
shall secure the listing of the Common Stock underlying this Warrant upon each
national securities exchange or automated quotation system upon which Common
Stock are then listed (subject to official notice of issuance) and shall
maintain such listing of Common Stock. The Company shall at all times comply in
all material respects with the Company’s reporting, filing and other obligations
under the by-laws or rules of the NYSE Amex Stock Exchange (or such other
national securities exchange or market on which the Common Stock may then be
listed, as applicable).

     

    8.6           Expenses. The Company
shall pay all Registration Expenses relating to the registration and listing
obligations set forth in this Section 8, except that the Holder shall be
responsible for the Registration Expenses for the second effected required
registration pursuant to Section 8.2(a). For purposes of this Warrant, the term
“Registration
Expenses” means: (a) all
registration, filing and FINRA fees, (b) all reasonable fees and expenses
of complying with securities or blue sky laws, (c) all word processing,
duplicating and printing expenses, (d) the fees and disbursements of
counsel for the Company and of its independent public accountants, including the
expenses of any special audits or “cold comfort” letters required by or incident
to such performance and compliance, (e) premiums and other costs of
policies of insurance (if any) against liabilities arising out of the public
offering of the Registrable Securities being registered if the Company desires
such insurance, if any, and (f) fees and disbursements of one counsel for
the selling holders of Registrable Securities. Registration Expenses shall not
include any underwriting discounts and commissions which may be incurred in the
sale of any Registrable Securities and transfer taxes of the selling holders of
Registrable Securities.

     

    8.7           Restrictions. The
Company shall not be obligated to effect a registration pursuant to Section 8.2
during the period beginning on the date sixty (60) days prior to the Company’s
good faith estimate of the date of filing of, and ending on a date one hundred
twenty (120) days after the effective date of, a Company-initiated registration
(other than a registration pursuant to Form S-8), provided that: (i) if the
holder of Registrable Securities elects to have all or some of its Registrable
Securities included in the registration pursuant to Section 8.3 hereof, such
Registrable Securities are included in the Company-initiated registration
statement only to the extent required hereunder and (ii) the Company is
actively employing in best efforts to cause such registration to become
effective.

     

    8.8           Information Provided by
Holders. Any holder of Registrable Securities included in any
registration shall furnish to the Company such information as the Company may
reasonably request in writing to enable the Company to comply with the
provisions hereof in connection with any registration referred to in this
Warrant. In the event that a holder of Registrable Securities fails to provide
such information on a timely basis, and in any event within seven (7) Business
Days of the Company’s written request, then the Company shall be entitled to
exclude the Registrable Securities of such holder from such registration and the
Company shall nevertheless be deemed to have satisfied its obligations hereunder
with respect to such registration.

     

    9.           Restrictions on
Transfer.

     

    9.1           Restrictive Legends.
This Warrant and each Warrant issued upon transfer or in substitution for this
Warrant pursuant to Section 10 hereof, each certificate for Common Stock issued
upon the exercise of the Warrant and each certificate issued upon the transfer
of any such Common Stock shall be transferable only upon satisfaction of the
conditions specified in this Section 9. Each of the foregoing securities shall
be stamped or otherwise imprinted with a legend reflecting the restrictions on
transfer set forth herein and any restrictions required under the Securities Act
or other applicable securities laws.

     

    9.2           Notice of Proposed
Transfer. Prior to any transfer of any securities which are not
registered under an effective registration statement under the Securities Act
(“Restricted Securities”), which
transfer may only occur if there is an exemption from the registration
provisions of the Securities Act and all other applicable securities laws, the
Holder will give written notice to the Company of the Holder’s intention to
effect a transfer (and shall describe the manner and circumstances of the
proposed transfer). The following provisions shall apply to any proposed
transfer of Restricted Securities:

     

    (i)           If
in the opinion of counsel for the Holder reasonably satisfactory to the Company
the proposed transfer may be effected without registration of the Restricted
Securities under the Securities Act (which opinion shall state in detail the
basis of the legal conclusions reached therein), the Holder shall thereupon be
entitled to transfer the Restricted Securities in accordance with the terms of
the notice delivered by the Holder to the Company. Each certificate representing
the Restricted Securities issued upon or in connection with any transfer shall
bear the restrictive legends required by Section 9.1 hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

             

    (ii)           If
the opinion called for in (i) above is not delivered, the Holder shall not
be entitled to transfer the Restricted Securities until either (x) receipt
by the Company of a further notice from such Holder pursuant to the foregoing
provisions of this Section 9.2 and fulfillment of the provisions of clause (i)
above, or (y) such Restricted Securities have been effectively registered
under the Securities Act.

     

    9.3           Certain Other Transfer
Restrictions. Notwithstanding any other provision of this Section 9:
(i) prior to the Vesting Date, this Warrant or the Restricted Securities
thereunder may only be transferred or assigned to the persons permitted under
FINRA Rule 5110(g), and (ii) no opinion of counsel shall be necessary for a
transfer of Restricted Securities by the holder thereof to any Person employed
by or owning equity in the Holder, if the transferee agrees in writing to be
subject to the terms hereof to the same extent as if the transferee were the
original purchaser hereof and such transfer is permitted under applicable
securities laws.

     

    9.4           Termination of
Restrictions. Except as set forth in Section 9.3 hereof, the restrictions
imposed by this Section 9 upon the transferability of Restricted Securities
shall cease and terminate as to any particular Restricted Securities:
(a) which shall have been effectively registered under the Securities Act,
or (b) when, in the opinions of both counsel for the holder thereof and
counsel for the Company, such restrictions are no longer required in order to
insure compliance with the Securities Act or Section 10 hereof. Whenever such
restrictions shall cease and terminate as to any Restricted Securities, the
Holder thereof shall be entitled to receive from the Company, without expense
(other than applicable transfer taxes, if any), new securities of like tenor not
bearing the applicable legends required by Section 9.1 hereof.

     

    10.           Ownership, Transfer and
Substitution of Warrant.

     

    10.1           Ownership of Warrant.
The Company may treat any Person in whose name this Warrant is registered in the
Warrant Register maintained pursuant to Section 10.2(b) hereof as the owner and
holder thereof for all purposes, notwithstanding any notice to the contrary,
except that, if and when any Warrant is properly assigned in blank, the Company
may (but shall not be obligated to) treat the bearer thereof as the owner of
such Warrant for all purposes, notwithstanding any notice to the contrary.
Subject to Sections 9 and 10 hereof, this Warrant, if properly assigned, may be
exercised by a new holder without a new Warrant first having been
issued.

     

    10.2         Office; Exchange of
Warrant.

     

    (a)           The
Company will maintain its principal office at the location identified in the
prospectus relating to the Offering or at such other offices as set forth in the
Company’s most current filing (as of the date notice is to be given) under the
Exchange Act or as the Company otherwise notifies the Holder.

     

    (b)           The
Company shall cause to be kept at its office maintained pursuant to Section
10.2(a) hereof a Warrant Register for the registration and transfer of the
Warrant. The name and address of the holder of the Warrant, the transfers
thereof and the name and address of the transferee of the Warrant shall be
registered in such Warrant Register. The Person in whose name the Warrant shall
be so registered shall be deemed and treated as the owner and holder thereof for
all purposes of this Warrant, and the Company shall not be affected by any
notice or knowledge to the contrary.

     

    (c)           Upon
the surrender of this Warrant, properly endorsed, for registration of transfer
or for exchange at the office of the Company maintained pursuant to Section
10.2(a) hereof, the Company at its expense will (subject to compliance with
Section 9 hereof, if applicable) execute and deliver to or upon the order of the
Holder thereof a new Warrant of like tenor, in the name of such holder or as
such holder (upon payment by such holder of any applicable transfer taxes) may
direct, calling in the aggregate on the face thereof for the number of Common
Stock called for on the face of the Warrant so surrendered (after giving effect
to any previous adjustment(s) to the number of Warrant Shares).

     

    10.3         Replacement of
Warrant. Upon receipt of evidence reasonably satisfactory to the Company
of the loss, theft, destruction or mutilation of this Warrant and, in the case
of any such loss, theft or destruction of this Warrant, upon delivery of
indemnity reasonably satisfactory to the Company in form and amount or, in the
case of any mutilation, upon surrender of this Warrant for cancellation at the
office of the Company maintained pursuant to Section 10.2(a) hereof, the
Company, at its expense, will execute and deliver, in lieu thereof, a new
Warrant of like tenor and dated the date hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

        

    11.           No Rights or Liabilities as
Stockholder. No Holder shall be entitled to vote or receive dividends or
be deemed the holder of any Common Stock or any other securities of the Company
which may at any time be issuable on the exercise hereof for any purpose, nor
shall anything contained herein be construed to confer upon the Holder, as such,
any of the rights of a shareholder of the Company or any right to vote for the
election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action (whether
upon any recapitalization, issuance of shares, reclassification of shares,
change of par value, consolidation, merger, conveyance, or otherwise) or to
receive notice of meetings, or to receive dividends or subscription rights or
otherwise until the Warrant shall have been exercised and the Common Stock
purchasable upon the exercise hereof shall have become deliverable, as provided
herein. The Holder will not be entitled to share in the assets of the Company in
the event of a liquidation, dissolution or the winding up of the
Company.

     

    12.           Notices. Any notice
or other communication in connection with this Warrant shall be given in writing
and directed to the parties hereto as follows: (a) if to the Holder, c/o
Maxim Group LLC, 405 Lexington Avenue, New York, NY 10174, Attn: Cliff Teller,
Fax No: (212) 895-3783; or (b) if to the Company, to the attention of its
Chief Executive Officer at its office maintained pursuant to Section 10.2(a)
hereof; provided, that
the exercise of the Warrant shall also be effected in the manner provided in
Section 3 hereof. Notices shall be deemed properly delivered and received when
delivered to the notice party (i) if personally delivered, upon receipt or
refusal to accept delivery, (ii) if sent via facsimile, upon mechanical
confirmation of successful transmission thereof generated by the sending
telecopy machine, (iii) if sent by a commercial overnight courier for
delivery on the next Business Day, on the first Business Day after deposit with
such courier service, or (iv) if sent by registered or certified mail, five
(5) Business Days after deposit thereof in the U.S. mail.

     

    13.           Payment of Taxes. The
Company will pay all documentary stamp taxes attributable to the issuance of
Common Stock underlying this Warrant upon exercise of this Warrant; provided, however, that the
Company shall not be required to pay any tax which may be payable in respect of
any transfer involved in the transfer or registration of this Warrant or any
certificate for Common Stock underlying this Warrant in a name other that of the
Holder. The Holder is responsible for all other tax liability that may arise as
a result of holding or transferring this Warrant or receiving Common Stock
underlying this Warrant upon exercise hereof.

     

    14.           Miscellaneous. This
Warrant and any term hereof may be changed, waived, discharged or terminated
only by an instrument in writing signed by the party against which enforcement
of the change, waiver, discharge or termination is sought. This Warrant shall be
construed and enforced in accordance with and governed by the laws of the State
of New York. The section headings in this Warrant are for purposes of
convenience only and shall not constitute a part hereof.

     

    [Signature
Page Follows]

          

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

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

     

    

    
      	 
      	
              CHINA
      FOR-GEN CORP.

            
	 
      	 
      
	 
      	
              By:

            	
                       

            
	 
      	 
      	
              Name:

            
	 
      	 
      	
              Title:

            

    

          

    [Signature
Page to Representative’s Warrant]

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      
        EXHIBIT
A

        FORM
OF EXERCISE NOTICE

        [To be
executed only upon exercise of Warrant]

         

        To China
For-Gen Corp.:

         

        The
undersigned registered holder of the within Warrant hereby irrevocably exercises
the Warrant pursuant to Section 3.1 of the Warrant with respect to Warrant
Shares, at an exercise price per share of $, and requests that the certificates
for such Warrant Shares be issued, subject to Sections 9 and 10, in the name of,
and delivered to:

         

        
          
            
              
                
                  
                    
                      
                        
                          	
                                     
      

                                	
                                           
      

                                
	
                                       
      

                                	
                                           
      

                                
	
                                         
      

                                	
                                            
      

                                
	
                                              
      

                                	
                                          
      

                                

                        

                      

                    

                  

                

              

            

          

        

         

        The
undersigned is hereby making payment for the Warrant Shares in the following
manner:                         [describe
desired payment method as provided for in 3.1 of the Warrant].

         

        The
undersigned hereby represents and warrants that it is, and has been since its
acquisition of the Warrant, the record and beneficial owner of the
Warrant.

         

        Dated:                                                                  

         

        
          
            
              
                
                  
                    	 
      	 
      	 
      
	
                            Print
      or Type Name

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

                          
	 
      	 
      	 
      
	
                            (Street
      Address)

                          	 
      	 
      
	 
      	 
      	 
      
	
                            (City)      (State)    (Zip
      Code)

                          	 
      	 
      

                  

                

              

            

          

        
       

        
          
             

          

          
             

            
              

            

          

          
             

          

        

      

    

     

    EXHIBIT
B

    FORM
OF ASSIGNMENT

    [To be
executed only upon transfer of Warrant]

     

    For value
received, the undersigned registered holder of the within Warrant hereby sells,
assigns and transfers unto                        
  [include name and addresses] the rights represented by the Warrant
to purchase                       
Common Stock of China For-Gen Corp. to which the Warrant relates, and
appoints                              Attorney
to make such transfer on the books of China For-Gen Corp. maintained for the
purpose, with full power of substitution in the premises.

            

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Dated:

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

                                  	 
      
	 
      	 
      	 
      
	 
      	
                                    (Street
      Address)

                                  	 
      
	 
      	 
      	 
      
	 
      	
                                     (City)            
      (State)           (Zip
      Code)

                                  	 
      
	 	 	 
	
                                    Signed
      in the presence of:

                                  	 
      
	 
      	 
      	 
      
	 
      	
                                    (Signature
      of Transferree)

                                  	 
      
	 
      	 
      	 
      
	 
      	
                                    (Street
      Address)

                                  	
                                     
      

                                  
	 
      	 
      	 
      
	 
      	
                                    (City)             
      (State)          (Zip
      Code)

                                  	 
      
	 	 	 
	
                                    Signed
      in the presence of:

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