Document:

Henry County Plywood Corporation: Exhibit 4.4 - Prepared by TNT Filings
Inc.

  

 

Exhibit 4.4

THE SALE AND ISSUANCE OF THE SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. THESE SECURITIES, INCLUDING THE SHARES OF STOCK ISSUABLE UPON CONVERSION OF THIS NOTE, HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE DISTRIBUTION THEREOF AND MAY NOT BE OFFERED, SOLD, ASSIGNED, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS (I) A REGISTRATION STATEMENT UNDER THE ACT IS IN EFFECT AS TO THESE SECURITIES AND SUCH DISPOSITION IS IN COMPLIANCE WITH APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER JURISDICTION OR (II) THERE IS AN OPINION OF COUNSEL OR OTHER EVIDENCE, IN EITHER CASE, SATISFACTORY TO THE COMPANY, THAT AN EXEMPTION THEREFROM IS AVAILABLE AND THAT SUCH DISPOSITION IS IN COMPLIANCE WITH APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.

ORGANIC REGION GROUP LTD.

CONVERTIBLE PROMISSORY NOTE

April 23, 2008

$____________

ORGANIC REGION GROUP LTD., a company organized under the laws of Hong Kong (together with its successors and assigns, “Issuer”), for value received, hereby promises to pay on the Maturity Date (as defined below) to ___________________ (“Noteholder”) and his successors, transferees and assigns, by wire transfer of immediately available funds to an account designated by Noteholder by written notice to Issuer the principal sum of ___________________ Dollars ($________) or, if less, the aggregate unpaid principal amount outstanding on the Maturity Date, together with interest as provided below in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts.

This Note (the “Note”) is one of a duly authorized issue of Convertible Promissory Notes of Issuer, in aggregate principal amount of up to ______________________ Dollars ($____________) (the “Promissory Notes”).  The Promissory Notes rank equally and ratably without priority over one another. No payment, including any prepayment, shall be made hereunder unless payment, including any prepayment, is made with respect to the other Promissory Notes in an amount which bears the same ratio to the then unpaid principal amount of such Promissory Notes as the payment made hereon bears to the then unpaid principal amount under this Note.  

 

Issuer agrees to issue to Noteholder or any transferee of Noteholder from time to time a replacement note or notes in the form hereof and in such denominations as such Person may request to facilitate such transfers and assignments.  In addition, after delivery of an indemnification agreement in form and substance satisfactory to Issuer, Issuer also agrees to issue a replacement note if this Note has been lost, stolen, mutilated or destroyed.
 

Issuer shall keep at its principal office a register (the “Register”) in which shall be entered the name and address of the registered holder of this Note and of all transfers of this Note.  References to the “Holder” shall mean the Person listed in the Register as the payee of the Note.  The ownership of this Note shall be proven by the Register.  For the purpose of paying principal and any interest on this Note, Issuer shall be entitled to rely on the name and address in the Register and notwithstanding anything to the contrary contained in this Note, no Event of Default shall occur under Section 3(a) or 3(b) if payment of principal and any interest is made in accordance with the name and address contained in the Register.

1.

Certain Definitions.  The following terms (except as otherwise expressly provided) for all purposes of this Note shall have the respective meanings specified below.  The terms defined in this Section 1 include the plural as well as the singular.

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with, such Person. For the purposes of this definition, “control” when used with respect to any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

“Business Day” means any day except Saturday, Sunday and any day which is a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Default” means any condition or event which constitutes an Event of Default or which with the giving of notice or lapse of time or both would, unless cured or waived, become an Event of Default.

“Financing” means the consummation of one or more equity financings by the Acquiror with aggregate gross proceeds of at least Three Million Dollars ($3,000,000) (inclusive of amounts under the Promissory Notes that are converted into Securities in connection with the Financing) concurrently with or following the consummation of the Going Public Transaction.

“Going Public Transaction” means the consummation of (i) the acquisition of a controlling interest (more than 50% of the voting power) in the Issuer (through merger, sale of stock or other transaction or series of related transactions) by a U.S. entity whose equity securities are eligible for trading on NASDAQ’s Over the Counter Bulletin Board (OTCBB) (the “Acquiror”), or (ii) the sale or transfer of all or substantially all of the Issuer’s assets or business to an Acquiror.

 

“Maturity Date” means April 23, 2009, subject to acceleration as provided in Section 3 hereof or the conversion of this Note as set forth in Section 6 hereof.  “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Securities” means the securities of the Acquiror issued to investors in the Financing.

2.

Principal and Interest.  

(a)

Interest.  The aggregate outstanding principal balance of this Note shall bear interest accruing from the date made to the date this Note shall have been converted or repaid in full at the rate of eighteen percent (18%) per annum, subject to adjustment as set forth in Section 3 hereof.  All computations of interest payable hereunder shall be on the basis of a 360-day year and actual days elapsed in the period for which such interest is payable.  Interest shall be due and payable on the Maturity Date.

(b)

Payment Obligation.  No provision of this Note shall alter or impair the obligations of Issuer, which are absolute and unconditional, to pay the principal of and interest on this Note at the place, times and rate, and in the currency herein prescribed, subject to the conversion provisions of this Note as provided herein.

(c)

Prepayment.  The principal hereunder and all interest accrued thereon may not be prepaid by the Issuer without the consent of the holders of at least a majority in interest of the outstanding principal amount of the Promissory Notes.  Any such prepayment shall be without penalty or premium.

 

3.

Events of Default and Remedies.  In case one or more of the following events (each, an “Event of Default”) (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body) shall have occurred and be continuing:

(a)

default in the payment of all or any part of the principal of any of this Note as and when the same shall become due and payable, at maturity, by declaration or otherwise; or

(b)

default in the payment of all or any part of the interest on any of this Note as and when same shall become due and payable; or

(c)

(i) failure of the Issuer to retain U.S. auditors and U.S. legal counsel reasonably satisfactory to Noteholder within fifteen (15) days of the date of this Note, or (ii) any of such professionals or Hickey Freihofner resigns as a result of a material dispute with the Issuer (other than principally involving the amount of professional fees or the performance or competence of such professionals) within nine (9) months of the date of this Note; provided, that the Noteholder agrees that Thelen Reid Brown Raysman & Steiner LLP shall be acceptable as U.S. legal counsel and Kabani & Co. shall be acceptable as U.S. Auditors; or

 

(d)

failure of the Issuer to obtain a U.S. audit (under generally accepted accounting principals in the United States) within nine (9) months of the date of this Note; or
 

(e)

failure on the part of Issuer duly to observe or perform any other of the covenants or agreements on the part of Issuer contained in this Note, the warrant issued by the Issuer to the Noteholder dated as of April 23, 2008, or the Securities Purchase Agreement by and among the Issuer and the investors party thereto, including the Noteholder, dated as of April 23, 2008 (the “Transaction Documents”) (other than those covered by clauses (a) and (b) above) for a period of fifteen (15) Business Days after the date on which written notice specifying such failure, stating that such notice is a “Notice of Default” hereunder and demanding that Issuer remedy the same, shall have been given by registered or certified mail, return receipt requested, to Issuer; or

(f)

the Going Public Transaction or Financing is prohibited by any governmental authority in the Peoples’ Republic of China or any law or regulation promulgated by such authority; or
 

(g)

Issuer pursuant to or within the meaning of Title 11, U.S. Code or any similar federal or state law for the relief of debtors (“Bankruptcy Law”):

(i)

commences a voluntary case or proceeding,

(ii)

consents to the entry of an order for relief against it in an involuntary case or proceeding,

(iii)

consents to the appointment of any receiver, trustee, assignee, liquidator or similar official under any Bankruptcy Law (a “Custodian”) of it or for all or substantially all of its property,

(iv)

makes a general assignment for the benefit of its creditors, or

(v)

admits in writing its inability to pay its debts as the same become due; or

(h)

a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i)

is for relief against Issuer in an involuntary case,

(ii)

appoints a Custodian of Issuer or for all or substantially all of the property of Issuer, or

(iii)

orders the liquidation of Issuer,

and such order or decree remains unstayed and in effect for 30 days;

 

(i)

any representation, warranty or other statement in this Note or any of the other Transaction Documents, shall be false, incorrect, incomplete or misleading in any material respect when made or furnished; or

 

(j)

any Transaction Document or any material term thereof shall cease to be a legal, valid and binding obligation of Issuer enforceable in accordance with its terms;
 

then, in each case where an Event of Default occurs, the holders (the “Majority Holders”) of a majority in principal amount of the Promissory Notes, by notice in writing to Issuer (the “Acceleration Notice”), may, at their option, declare the outstanding principal hereunder and under all of the other Promissory Notes and all accrued and unpaid interest hereon and thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable; provided that if an Event of Default specified in Section 3(g) or 3(h) occurs, the principal hereunder and under all of the other Promissory Notes and all accrued and unpaid interest hereon and thereon shall become and be immediately due and payable without any declaration or other act on the part of the Noteholder or the Majority Holders.  

The Issuer shall reimburse the Noteholder, on demand, for any and all costs and expenses, including (but not limited to) reasonable attorney fees and court costs, incurred by the Noteholder in collecting or otherwise enforcing this Note or in attempting to do any of the foregoing.  During any period in which an Event of Default has occurred and is continuing, Issuer shall pay interest on the unpaid principal balance hereof at an aggregate rate per annum equal to the 24% per annum or the maximum rate permitted by applicable law, whichever is highest.
 

Notwithstanding anything contained herein to the contrary, upon the Maturity Date, the Noteholder, by notice in writing to Issuer, may, at its option, declare the outstanding principal hereunder and all accrued and unpaid interest hereon to become due and payable immediately.

4.

Powers and Remedies Cumulative; Delay or Omission Not Waiver of Default.  No right or remedy herein conferred upon or reserved to the Noteholder is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

No delay or omission of the Noteholder to exercise any right or power accruing upon any Default or Event of Default occurring and continuing as aforesaid shall impair any such right or power or shall be construed to be a waiver of any such Default or Event of Default or an acquiescence therein; and every power and remedy given by this Note or by law may be exercised from time to time, and as often as shall be deemed expedient, by the Noteholder.

5.

Waiver of Past Defaults.  The Noteholder may waive in writing any past Default or Event of Default hereunder and its consequences.  In the case of any such waiver, Issuer and the Noteholder shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

 

Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Default or Event of Default arising therefrom shall be deemed to have been cured, and not to have occurred for every purpose of this Note, and the interest rate hereon shall not be deemed to have increased; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereon.

6.

Conversion.

(a)

Automatic.  The outstanding principal hereunder and all interest accrued thereon shall automatically be converted into fully paid and non-assessable shares of the Securities issued in the Financing.  Upon successful completion of a Financing, the Noteholder shall receive, upon conversion of this Note, pursuant to the terms of this subsection such whole number of fully paid and non-assessable shares of the Securities that is equal to the quotient of the outstanding principal hereunder but not including any interest accrued thereon, divided by fifty percent (50%) of the lowest cash purchase price paid for the Securities by the investors in the Financing.  The Noteholder along with other purchasers in the Financing and the Issuer shall negotiate in good faith as to the terms and conditions of the Financing.  In connection with such conversion, the Noteholder shall receive rights as a purchaser and holder of the Securities issued in the Financing that are no less favorable in the aggregate and in any single instance than those granted to any other purchaser of such Securities.

(b)

Optional.   If this Note has not been automatically converted pursuant to Section (a) above on or before the Maturity Date, the outstanding principal hereunder plus all interest accrued thereon may, at the Noteholder’s option, be converted on the Maturity Date, into shares of Issuer’s equity securities (“Common Shares”), at a conversion price equal to (x) three hundred percent (300%) of the Issuer’s 2007 audited after tax net income, divided by (y) the number of Common Shares outstanding immediately prior to such conversion, on a fully-diluted basis (not including the shares issuable upon conversion of the Note).  If the Noteholder opts to convert the principal balance of this Note and all accrued and unpaid interest hereunder into Common Shares as aforesaid, the Noteholder shall provide the Issuer with notice of its option to convert within seven (7) days prior to or 20 Business Days after the Maturity Date.  The Issuer shall not be obligated to issue certificates evidencing the Common Shares upon such conversion unless (i) this Note is either delivered to the Issuer or its transfer agent, or the Noteholder notifies the Issuer or its transfer agent that such Note has been lost, stolen or destroyed and executes an agreement satisfactory to the Issuer to indemnify the Issuer from any loss incurred by it in connection with such Note and (ii) if applicable, the Noteholder executes and delivers to the Issuer counterpart signature pages or joinder agreements to all of the Transaction Documents entered into by other holders of equity securities of the Issuer.  If Noteholder complies with the immediately preceding sentence, the Issuer shall, as soon as practicable and in no event more than 3 trading days after the Maturity Date, issue and deliver to such Noteholder, a certificate or certificates for the Common Shares to which the Noteholder shall be entitled.

 

(c)

Consents.  Upon the occurrence of the events specified in paragraphs (a) and (b) above, the Issuer shall use best efforts to obtain any and all permits, approvals, consents and amendments and take any and all other actions necessary to permit the optional conversions described in paragraphs (a) and (b) above, which conversions shall not be consummated until such permits, approvals, consents and amendments are obtained.

 

(d)

Fractional Shares.  Upon the conversion of this Note pursuant to this Section, no fractional shares or scrip representing fractional shares shall be issued.  With respect to any fraction of a share called for upon the conversion of this Note or any portion hereof, a cash amount equal to such fraction shall be paid to the Noteholder.

7.

Liquidation Rights.  In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Issuer, this Note shall be entitled to a claim in liquidation before participation by the holders of any debt subordinate hereto or of any capital stock of the Issuer.  The amount of the claim in liquidation shall equal the face amount of this  Note plus an 18% premium.  If upon such liquidation, dissolution, or winding up, the assets available for distribution among the holders of the Promissory Notes shall be insufficient to permit the payment of the full amounts of their claims in liquidation, then the entire assets of the Issuer to be distributed to the holders of the Promissory Notes shall be distributed pro-rata among the holders of the Promissory Notes based upon the amounts of their respective claims in liquidation.

9.

Assignment of Note.  This Note is transferable or assignable by the Noteholder or any transferee of the Noteholder provided that such transfer or assignment is made in compliance with the Securities Act of 1933, as amended, and any applicable state and foreign securities laws and provided that the transferee does not request any removal of any existing legends on any certificate evidencing the Note or securities issuable upon conversion hereof.  The Issuer shall cause the Acquiror in any Going Public Transaction to assume all obligations of the Issuer set forth in this Note (and the Noteholders agree that the Issuer shall be released of such obligations upon such assumption).

10.

Modification of Note.  This Note may be modified with the written consent of the Issuer and the Majority Holders.

11.

Miscellaneous.  

(a)

This Note shall be governed by and be construed in accordance with the laws of the State of New York without regard to the conflicts of law rules of such state.  Each of the Issuer and Noteholder hereby irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, in respect of actions brought against it as a defendant, in any action, suit or proceeding arising out of or relating to this Note, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action, suit or proceeding may be heard and determined in such courts.  Each of the parties hereto agrees that a final judgment in any such action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Issuer and Noteholder hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this Note, or in any court referred to above.  Each of the parties hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action, suit proceeding in any such court and waives any other right to which it may be entitled on account of its place of residence or domicile.

 

(b)

Issuer hereby waives presentment, demand, notice, protest and all other demands and notices in connection with the delivery, acceptance, performance and enforcement of this Note, except as specifically provided herein, and assent to extensions of the time of payment, or forbearance or other indulgence without notice.  

(c)

The Section headings herein are for convenience only and shall not affect the construction hereof. This Note and other Transaction Documents constitute the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and shall supersede any prior agreements and understandings between the parties hereto with respect to such subject matter. The parties agree that this Note shall be deemed to have been jointly and equally drafting by them, and that the provisions of this Note therefore should not be construed against a party or parties on the grounds that such party or parties drafted or was more responsible for the drafting of any such provision(s).

[signature page follows]

 
 
IN WITNESS WHEREOF, Issuer has caused this Convertible Promissory Note to be duly executed as of the date first set forth above.

ORGANIC REGION GROUP LTD.

By:__________________________

Name:  C M Leung

Title: CEOHenry County Plywood Corporation: Exhibit 4.5 - Prepared by TNT Filings
Inc.

  

Exhibit 4.5

NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.  THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
 

ORGANIC REGION GROUP LTD.

WARRANT TO PURCHASE COMMON STOCK

Warrant No. 2008-X

         Original Issue Date: April 23, 2008

ORGANIC REGION GROUP LTD., a company organized under the laws of Hong Kong (together with its successors and assigns, the “Company”), hereby certifies that _________________ (the “Holder”) and its successors, transferees and assigns, is entitled to purchase from the Company the securities set forth in Section 2 below and subject to the following terms and conditions:

1.

Definitions.  As used in this Warrant, the following terms shall have the respective definitions set forth in this Section 1.  

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144.

“Business Day” means any day except Saturday, Sunday and any day which is a federal legal holiday or a day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.
 

“Financing” means the consummation of one or more equity financings by the Acquiror with aggregate gross proceeds of at least Three Million Dollars ($3,000,000) (inclusive of amounts under the Promissory Notes that are converted into Securities in connection with the Financing) concurrently with or following the consummation of the Going Public Transaction.

1

 

“Fundamental Transaction” means any of the following that may occur following the Going Public Transaction: (1) the Company effects any merger or consolidation of the Company with or into another Person, (2) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (3) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of common stock are permitted to tender or exchange their shares for other securities, cash or property, or (4) the Company effects any reclassification of the common stock or any compulsory share exchange pursuant to which the common stock is effectively converted into or exchanged for other securities, cash or property.

“Going Public Transaction” means the consummation of (i) the acquisition of a controlling interest (more than 50% of the voting power) in the Issuer (through merger, sale of stock or other transaction or series of related transactions) by a U.S. entity whose equity securities are eligible for trading on NASDAQ’s Over the Counter Bulletin Board (OTCBB) (the “Acquiror”), or (ii) the sale or transfer of all or substantially all of the Issuer’s assets or business to an Acquiror.

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

“Rule 144” means Rule 144 promulgated by the Securities and Exchange Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Securities and Exchange Commission having substantially the same effect as such Rule.

“Securities” and “Common Stock” means the common stock or other securities of the Acquiror issued to investors in the Financing.

“Securities Act” means the Securities Act of 1933, as amended.

“Trading Day” means (i) a day on which the Common Stock is traded on a Trading Market (other than the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading Market (other than the OTC Bulletin Board), a day on which the Common Stock is traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is not quoted on any Trading Market, a day on which the Common Stock is quoted in the over-the-counter market as reported by the Pink Sheets LLC (or any similar organization or agency succeeding to its functions of reporting prices); provided, that in the event that the Common Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then Trading Day shall mean a Business Day.

“Trading Market” means whichever of the New York Stock Exchange, the American Stock Exchange, the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or OTC Bulletin Board on which the Common Stock is listed or quoted for trading on the date in question.

2.

Warrant Shares; Exercise of Warrant.   Any time and from time to time from and after the consummation of the Financing by the Company and through and including the fifth anniversary of the consummation of the Financing (the “Expiration Date”), the Holder shall be entitled to purchase up to ____________________________ Dollars ($____________) of Securities at a per share price equal to One Hundred Fifteen Percent (115%) of the lowest cash purchase price paid for the Securities by the investors in the Financing (each such share, a “Warrant Share” and all such shares, the “Warrant Shares”).  At 6:30 p.m., New York City time on the Expiration Date, the portion of this Warrant not exercised prior thereto shall be and become void and of no value.  The Company may not call or redeem any portion of this Warrant without the prior written consent of the affected Holder.   Not withstanding the foregoing, this Warrant shall be void on April 23, 2015.  The Company shall cause the Acquiror in any Going Public Transaction to assume all obligations of the Company set forth in this Warrant (and the Holders agree that the Company shall be released of such obligations upon such assumption).

2

 

3.

Registration of Warrant.  The Company shall register this Warrant upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the Holder hereof from time to time.  The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

4.

Registration of Transfers.  The Company shall register the transfer of any portion of this Warrant in the Warrant Register, upon surrender of this Warrant, with the Form of Assignment attached hereto duly completed and signed, to the Company at its address specified herein.  Upon any such registration or transfer, a new Warrant to purchase Common Stock, in substantially the form of this Warrant (any such new Warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred shall be issued to the transferee and a New Warrant evidencing the remaining portion of this Warrant not so transferred, if any, shall be issued to the transferring Holder. The acceptance of the New Warrant by the transferee thereof shall be deemed the acceptance by such transferee of all of the rights and obligations of a holder of a Warrant.
 

5.

Delivery of Warrant Shares.

(a)

The Holder shall not be required to physically surrender this Warrant unless the aggregate Warrant Shares represented by this Warrant are being exercised.  To effect exercises hereunder, the Holder shall duly execute and deliver to the Company at its address for notice set forth herein (or such to such other address as the Company may designate by notice in writing to the Holder), an Exercise Notice in the form of Annex A hereto, along with a Warrant Shares Exercise Log in the form of Annex B hereto, and shall pay the Exercise Price, if applicable, multiplied by the number of Warrant Shares that the Holder intends to purchase hereunder. The Company shall promptly (but in no event later than three Trading Days after the Date of Exercise (as defined herein)) issue and deliver to the Holder, a certificate for the Warrant Shares issuable upon such exercise.  The Company shall, upon request of the Holder and subsequent to the date on which a registration statement covering the resale of the Warrant Shares has been declared effective by the Securities and Exchange Commission, use its reasonable best efforts to deliver Warrant Shares hereunder electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions, if available, provided, that, the Company may, but will not be required to change its transfer agent if its current transfer agent cannot deliver Warrant Shares electronically through the Depository Trust Corporation.  A “Date of Exercise” for purposes of this Warrant, means the date on which the Holder shall have delivered to the Company: (i) the Exercise Notice (with the Warrant Exercise Log attached to it), appropriately completed and duly signed and (ii) if such Holder is not utilizing the cashless exercise provisions set forth in this Warrant, payment of the Exercise Price for the number of Warrant Shares so indicated by the Holder to be purchased.

3

 

(b)

If by the third Trading Day after a Date of Exercise the Company fails to deliver the required number of Warrant Shares in the manner required pursuant to Section 5(a), then the Holder will have the right to rescind such exercise.  

(c)

The Company's obligations to issue and deliver Warrant Shares in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of Warrant Shares.  Nothing herein shall limit a Holder's right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company's failure to timely deliver certificates representing Warrant Shares upon exercise of the Warrant as required pursuant to the terms hereof.  

6.

Charges, Taxes and Expenses.  Issuance and delivery of Warrant Shares upon exercise of this Warrant shall be made without charge to the Holder for any issue or transfer tax, withholding tax, transfer agent fee or other incidental tax or expense in respect of the issuance of such certificates, all of which taxes and expenses shall be paid by the Company; 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 registration of any certificates for Warrant Shares or Warrants in a name other than that of the Holder.  The Holder shall be responsible for all other tax liability that may arise as a result of holding or transferring this Warrant or receiving Warrant Shares upon exercise hereof.

7.

Replacement of Warrant.  If this Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation hereof, or in lieu of and substitution for this Warrant, a New Warrant, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction and customary and reasonable indemnity (which shall not include a surety bond), if requested.  Applicants for a New Warrant under such circumstances shall also comply with such other reasonable regulations and procedures and pay such other reasonable third-party costs as the Company may prescribe.  If a New Warrant is requested as a result of a mutilation of this Warrant, then the Holder shall deliver such mutilated Warrant to the Company as a condition precedent to the Company’s obligation to issue the New Warrant.

8.

Reservation of Warrant Shares.  The Company covenants that during the term that this Warrant is exercisable, the Company will at all times reserve and keep available out of the aggregate of its authorized but unissued and otherwise unreserved securities, solely for the purpose of enabling it to issue Warrant Shares upon exercise of this Warrant as herein provided, the number of Warrant Shares which are then issuable and deliverable upon the exercise of this entire Warrant, free from preemptive rights or any other contingent purchase rights of Persons other than the Holder (taking into account the adjustments and restrictions of Section 9). The Company covenants that all Warrant Shares so issuable and deliverable shall, upon issuance and the payment of the applicable Exercise Price in accordance with the terms hereof, be duly and validly authorized, issued and fully paid and nonassessable.

4

 

9.

Certain Adjustments.  The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 9.

(a)

Stock Dividends and Splits.  If, at any time while this Warrant is outstanding, (i) a stock dividend is paid on the Securities or distribution is otherwise made on any class of capital stock that is payable in such Securities, (ii) there is a subdivision of the outstanding Securities into a larger number of shares, or (iii) there is a combination of outstanding Securities into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of the Securities outstanding immediately before such event and of which the denominator shall be the number of shares of the Securities outstanding immediately after such event.  Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination.

(b)

Fundamental Transactions.  If, at any time while this Warrant is outstanding there is a Fundamental Transaction, then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of the number of Warrant Shares then issuable upon exercise in full of this Warrant (the “Alternate Consideration”).  For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of the Securities in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration.  If holders of the Securities are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction.  At the Holder's option and request, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new warrant substantially in the form of this Warrant and consistent with the foregoing provisions and evidencing the Holder's right to purchase the Alternate Consideration for the aggregate Exercise Price upon exercise thereof.  The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (b) and insuring that the Warrant (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
 

(c)

Calculations.  All calculations under this Section 9 shall be made to the nearest cent or the nearest 1/100th of a share, as applicable.  The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.

5

 

(d)

Notice of Adjustments.  Upon the occurrence of each adjustment pursuant to this Section 9, the Company at its expense will promptly compute such adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth such adjustment, including a statement of the adjusted Exercise Price and adjusted number or type of Warrant Shares or other securities issuable upon exercise of this Warrant (as applicable), describing the transactions giving rise to such adjustments and showing in detail the facts upon which such adjustment is based.  Upon written request, the Company will promptly deliver a copy of each such certificate to the Holder and to the Company's Transfer Agent.

(e)

Notice of Corporate Events.  Upon the (i) declaration of a dividend or any other distribution of cash, securities or other property in respect of the Securities, (ii) authorization or approval of any agreement contemplating or soliciting stockholder approval for any Fundamental Transaction or (iii) authorization of a voluntary dissolution, liquidation or winding up of the affairs of the Company, then the Company shall deliver to the Holder a notice describing the material terms and conditions of such transaction (but only to the extent such disclosure would not result in the dissemination of material, non-public information to the Holder) at least 10 calendar days prior to the applicable record or effective date on which a Person would need to hold common stock in order to participate in or vote with respect to such transaction, and the Company will take all steps reasonably necessary in order to insure that the Holder is given the practical opportunity to exercise this Warrant prior to such time so as to participate in or vote with respect to such transaction; provided, however, that the failure to deliver such notice or any defect therein shall not affect the validity of the corporate action required to be described in such notice.

(f)

Additional Rights Granted in Financing.   If any anti-dilution rights are granted to holders of convertible securities issued in the Financing that are superior to rights granted in this Section 9, then the Holder shall be granted, without payment of additional consideration, such additional rights with respect to this Warrant.

10.

Payment of Exercise Price. The Holder shall pay the Exercise Price in immediately available funds.

11.

Limitations on Exercise.  Notwithstanding anything to the contrary contained herein, the number of Warrant Shares that may be acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be limited to the extent necessary to insure that, following such exercise (or other issuance), the total number of shares of common stock then beneficially owned by such Holder and its Affiliates and any other Persons whose beneficial ownership of Common Stock would be aggregated with the Holder's for purposes of Section 13(d) of the Exchange Act, does not exceed 9.99% of the total number of issued and outstanding shares of Common Stock (including for such purpose the shares of Common Stock issuable upon such exercise).  For such purposes, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.  This provision shall not restrict the number of shares of common stock which a Holder may receive or beneficially own in order to determine the amount of securities or other consideration that such Holder may receive in the event of a Fundamental Transaction as contemplated in Section 9 of this Warrant.  

6

 

12.

No Fractional Shares.  No fractional shares of Warrant Shares will be issued in connection with any exercise of this Warrant.  In lieu of any fractional shares which would, otherwise be issuable, the Company shall pay cash equal to the product of such fraction multiplied by the closing price of one Warrant Share as reported by the applicable Trading Market on the date of exercise.

13.

Notices.  Any and all notices or other communications or deliveries hereunder (including, without limitation, any Exercise Notice) shall be in writing and shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section prior to 6:30 p.m. (New York City time) on a Business Day, (ii) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number specified in this Section on a day that is not a Business Day or later than 6:30 p.m. (New York City time) on any Business Day, (iii) the second Business Day following the date of mailing, if sent by nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.  The addresses for such communications shall be:  (i) if to the Company, to Organic Region Group Ltd., 6F No. 947 Qiao Xing Road
Shi Qiao Town Pan Yu District, Guangzhou, China 511400, 
Attention:  C M Leung (or to such other address as the Company shall indicate in writing in accordance with this Section), with a copy to Scott C. Kline, Esq., Thelen Reid Brown Raysman & Steiner, LLP, 101 Second Street, Suite 1800, San Francisco, CA  94105-3606, facsimile no.: (415) 369-8774, or (ii) if to the Holder, to the address or facsimile number appearing on the Warrant Register or such other address or facsimile number as the Holder may provide to the Company in accordance with this Section.

14.

Warrant Agent.  The Company shall serve as warrant agent under this Warrant.  Upon 10 days' notice to the Holder, the Company may appoint a new warrant agent.  Any corporation into which the Company or any new warrant agent may be merged or any corporation resulting from any consolidation to which the Company or any new warrant agent shall be a party or any corporation to which the Company or any new warrant agent transfers substantially all of its corporate trust or shareholders services business shall be a successor warrant agent under this Warrant without any further act.  Any such successor warrant agent shall promptly cause notice of its succession as warrant agent to be mailed (by first class mail, postage prepaid) to the Holder at the Holder's last address as shown on the Warrant Register.

15.

Miscellaneous.

(a)

This Warrant shall be binding on and inure to the benefit of the parties hereto and their respective successors and assigns.  Subject to the preceding sentence, nothing in this Warrant shall be construed to give to any Person other than the Company and the Holder any legal or equitable right, remedy or cause of action under this Warrant.  This Warrant may be amended only in writing signed by the Company and the Holder and their successors and assigns.  The foregoing sentence shall be subject to the restrictions on waivers and amendments set forth in Section 11 of this Warrant.

(b)

This Warrant shall be governed by and be construed in accordance with the laws of the State of New York without regard to the conflicts of law rules of such state.  Each of the Company and Holder hereby irrevocably and unconditionally submits, for itself and its property, to the jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, in respect of actions brought against it as a defendant, in any action, suit or proceeding arising out of or relating to this Note, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action, suit or proceeding may be heard and determined in such courts.  Each of the parties hereto agrees that a final judgment in any such action, suit or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The Company and Holder hereto irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any action, suit or proceeding arising out of or relating to this Note, or in any court referred to above.  Each of the parties hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action, suit proceeding in any such court and waives any other right to which it may be entitled on account of its place of residence or domicile.

7

 

(c)

The headings herein are for convenience only, do not constitute a part of this Warrant and shall not be deemed to limit or affect any of the provisions hereof.  

(d)

In case any one or more of the provisions of this Warrant shall be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Warrant shall not in any way be affected or impaired thereby and the parties will attempt in good faith to agree upon a valid and enforceable provision which shall be a commercially reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Warrant.

(e)

Prior to exercise of this Warrant, the Holder hereof shall not, by reason of being a Holder, be entitled to any rights of a stockholder with respect to the Warrant Shares.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK,

SIGNATURE PAGE FOLLOWS]

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

ORGANIC REGION GROUP LTD.

By: ________________________________

Name:  C M Leung

Title: CEO

 

ANNEX A

 

EXERCISE NOTICE

ORGANIC REGION GROUP LTD.

WARRANT DATED APRIL 23, 2008

 

The undersigned Holder hereby irrevocably elects to purchase  _____________ shares of common stock pursuant to the above referenced Warrant.  Capitalized terms used herein and not otherwise defined have the respective meanings set forth in the Warrant.

(1)

The undersigned Holder hereby exercises its right to purchase _________________ Warrant Shares pursuant to the Warrant.

(2)

The Holder intends that payment of the Exercise Price shall be made as (check one):

____

“Cash Exercise” under Section 10

____

“Cashless Exercise” under Section 10

(3)

If the holder has elected a Cash Exercise, the holder shall pay the sum of $____________ to the Company in accordance with the terms of the Warrant.

(4)

Pursuant to this Exercise Notice, the Company shall deliver to the holder _______________ Warrant Shares in accordance with the terms of the Warrant.

(5)

By its delivery of this Exercise Notice, the undersigned represents and warrants to the Company that in giving effect to the exercise evidenced hereby the Holder will not beneficially own in excess of the number of shares of Common Stock (determined in accordance with Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned under Section 11 of this Warrant to which this notice relates.

	
   
	
   
	
   

	
   
	
   
	
   

	
  
  Dated: ________________ , ________

	
   
	
  
  Name of Holder:

	
   
	
   
	
   

	
   
	
   
	
  
  (Print) ______________________

	
   
	
   
	
   

	
   
	
   
	
  
  By:_________________________

	
   
	
   
	
  
  Name:_______________________

	
   
	
   
	
  
  Title:________________________

	
   
	
   
	
   

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

 
ANNEX B

Warrant Shares Exercise Log

	
  
  Date

	
  
  Number of Warrant Shares Available to be Exercised

	
  
  Number of Warrant Shares Exercised

	
  
  Number of Warrant Shares Remaining to be Exercised

	
  
  

	
   
	
   
	
   

 
ANNEX C

ORGANIC REGION GROUP LTD.

WARRANT DATED APRIL 23, 2008

WARRANT NO. [ ]

FORM OF ASSIGNMENT

[To be completed and signed only upon transfer of Warrant]

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto ________________________________ the right represented by the above-captioned Warrant to purchase  ____________ shares of common stock to which such Warrant relates and appoints ________________ attorney to transfer said right on the books of the Company 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 the Warrant)

_______________________________________

Address of Transferee

_______________________________________

_______________________________________

In the presence of:

__________________________

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