CHDT CORPORATION
(FORMERLY, "CHINA DIRECT TRADING CORPORATION")
("COMPANY" OR "ISSUER")
STOCK PURCHASE WARRANT
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE BEEN ACQUIRED FOR
INVESTMENT PURPOSES ONLY AND FOR THE INVESTOR'S OWN PERSONAL ACCOUNT AND NOT
WITH VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.
THE WARRANT AND THE UNDERLYING SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES ACT AND MAY NOT BE
SOLD OR TRANSFERRED OR OTHERWISE DISPOSED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
ACT, QUALIFICATION FOR AN EXEMPTION FROM SAID ACTS. THIS INVESTMENT MAY BE
SUBJECT TO ADDITIONAL STATE REQUIREMENTS AS SET FORTH BELOW.
THE OFFERING OF THIS WARRANT BY THE COMPANY IS MADE IN RELIANCE UPON AN
EXEMPTION FROM REGISTRATION AFFORDED UNDER FLORIDA STATUTES SECTION
517.061(11)(A).
PURCHASES BY A FLORIDA INVESTOR OF THE WARRANT ISSUED BY THE COMPANY ARE
VOIDABLE AT THE OPTION OF THE PURCHASER WITHIN THREE (3) DAYS AFTER THE FIRST
TENDER OF CONSIDERATION IS MADE BY THE PURCHASER OF THE WARRANT TO THE COMPANY
OR ITS AGENT, OR WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THE PRIVILEGE
IS COMMUNICATED TO THE PURCHASER, WHICHEVER OCCURS LATER. IF PURCHASER OF THE
WARRANT SHOULD DETERMINE TO WITHDRAW HIS OR HER OR ITS ACCEPTANCE OF THE OFFER
TO INVEST IN THE WARRANT UNDER SUCH CIRCUMSTANCES, THE PURCHASER OF THE WARRANT
MAY DO SO WITHOUT ANY LIABILITY WHATSOEVER.
RESTRICTED STOCK PURCHASE WARRANT
TO PURCHASE SHARES OF CHINA DIRECT TRADING CORPORATION
APRIL 30, 2007
THIS CERTIFIES THAT _________located at _________ (the "Holder") is
entitled, upon the terms and subject to the conditions hereinafter set forth, at
any time on or after the date first written above and on or prior to April 30,
2012, but not thereafter, to subscribe for and purchase, from China Direct
Trading Corporation, a Florida corporation (the "Company") that number of shares
of the Company's Common Stock, $0.0001 par value per share (the "Shares") that
equals the number of Shares purchased by the Holder under the April 2007 Private
Placement by the Company of its Shares to the Holder, which number of Shares is:
________________Shares. The Shares covered by this Warrant may be purchased at a
purchase price per share of $0.017 (the "Exercise Price"). "Shares" shall mean
the Common Stock, $0.0001 par value per share, of the Company.
1. Exercise of Warrant.
(a) The purchase rights represented by this Warrant are
exercisable by the Holder, in whole or in part, at any time after 9:00 a.m.,
local Miami time, on April 30, 2007, the date of this Warrant, and before 4:30
p.m., local Miami time, on April 30, 2012, by the surrender of this Warrant and
the Notice of Exercise annexed hereto duly executed at the office of the
Company, in Xxxxxx City, Florida (or such other office of the Company as it may
designate by notice in writing to the Holder at the address of the Holder
appearing on the books of the Company), and upon payment of the Exercise Price
of the Shares thereby purchased (by cash or by check or bank draft payable to
the order of the Company in an amount equal to the aggregate Exercise Price of
the Shares thereby purchased); whereupon the Holder shall be entitled to receive
a certificate for the number of Shares so purchased. The Company agrees that if
at the time of the surrender of this Warrant and purchase of the Shares, the
Holder shall be entitled to exercise this Warrant, the Shares so purchased shall
be and be deemed to be issued to such holder as the record owner of such Shares
as of the close of business on the date on which this Warrant shall have been
exercised as aforesaid.
(b) Certificates for Shares purchased hereunder shall be delivered to
the Holder within FIFTEEN (15) business days after the date on which this
Warrant shall have been exercised as aforesaid. For purposes of this Warrant,
"business day" shall mean any weekday, Monday through Friday, that the banks
located in Miami, Florida are open for business.
(c) The Company covenants that all Shares which may be issued upon the
exercise of rights represented by this Warrant will, upon exercise of the rights
represented by this Warrant, be fully paid and non-assessable and free from all
taxes, liens and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such issue). The Shares
shall be "restricted securities" as defined in Rule 144 of the Securities Act of
1933, as amended, and may not be freely transferred, sold, or disposed of, or
pledged, hypothecated or encumbered without registration of the Shares under the
Securities Act of 1933, as amended, and similar state securities laws, or by
obtaining an exemption under federal and state securities laws from such a
registration.
2. No Fractional Shares or Scrip. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant. With respect to any fraction of a Share called for upon the exercise of
this Warrant, an amount equal to such fraction multiplied by the then current
price at which each Share may be purchased hereunder shall be paid in cash to
the Holder.
3. Charges, Taxes and Expenses. Issuance of certificates for Shares
upon the exercise of this Warrant shall be made without charge to the holder
hereof for any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name of the Holder.
4. No Rights as Shareholders. This Warrant does not entitle the Holder
to any voting rights or other rights as a shareholder of the Company prior to
the exercise of the Warrant and purchase of the underlying Shares.
5. Loss, Theft, Destruction or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dated as of such cancellation,
in lieu of this Warrant.
6. Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall be a Saturday or a Sunday or shall be a legal holiday in Miami,
Florida, then such action may be taken or such right may be exercised on the
next succeeding business day not a legal holiday.
7. Automatic Exercise and Dilution.
(a) Automatic Exercise on Merger, etc. If at any time the
Company proposes (A) the acquisition of the Company by another entity by means
of any transaction or series of related transactions (including, without
limitation, any reorganization, merger, consolidation or stock issuance) that
results in the transfer of fifty percent (50%) or more of the then outstanding
voting power of the Company; or (B) a sale of all or substantially all of the
assets of the Company, then the Company shall give the Holder ten (10) days
notice of the proposed effective date of such a transaction. If, in the case of
an acquisition of the Company by an entity that has its securities publicly
traded on a national securities exchange, the Warrant has not been exercised by
the effective date of the transaction, the Warrant shall be automatically
exercised on any business day thereafter that is selected by the Holder and is
within 90 days of such effective date of the transaction.
(b) Reclassification, etc. If the Company at any time shall,
by subdivision, combination or reclassification of securities or otherwise,
change any of the securities to which purchase rights under this Warrant exist
into the same or a different number of securities of any class or classes, this
Warrant shall thereafter be to acquire such number and kind of securities as
would have been issuable as the result of such change with respect to the
securities which were subject to the purchase rights under this Warrant
immediately prior to such subdivision, combination, reclassification or other
change. If the Shares are subdivided or combined into a greater or smaller
number of Shares, the Exercise Price under this Warrant shall be proportionately
reduced in case of subdivision of shares or proportionately increased in the
case of combination of shares, in both cases by the ratio which the total number
of Shares to be outstanding immediately after such event bears to the total
number of Shares outstanding immediately prior to such event.
(c) Cash Distributions. No adjustment on account of cash
dividends or interest on the Shares or other securities purchasable hereunder
will be made to the Exercise Price under this Warrant.
8. Miscellaneous.
(a) Issue Date. The provisions of this Warrant shall be
construed and shall be given effect in all respect as if it had been issued and
delivered by the Company on April 30, 2007. This Warrant shall be binding upon
any successors or assigns of the Company. This Warrant shall constitute a
contract under the laws of the State of Florida and for all purposes shall be
construed in accordance with and governed by the laws of said state.
(b) Restrictions. The Holder acknowledges that the Shares
acquired upon the exercise of this Warrant have restrictions upon its their
resale, transfer, pledging or encumbrance imposed by state and federal
securities laws.
(c) Waivers and Amendments. This Warrant and any provisions hereof may
be changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of the same is sought.
(d) Assignment and Transferability. This Warrant may be assigned or
transferred by the Holder only with the prior written approval of the Company;
provided, however, that no such approval of the Company shall be necessary for
an assignment or transfer by a Holder to a fund, partnership, limited liability
company or other entity that is affiliated with such transferring Holder or to a
successor in interest to the Holder; provided, however, that, the transferee
agrees in writing to be subject to the terms hereof to the same extent as if he,
she or it were an original Holder hereunder.
(e) Accredited Investor. The Holder hereby represents to the Company that it, he
or she is an "Accredited Investor" (as defined in Rule 501(a) under Regulation
D, as promulgated under the Securities Act of 1933, as amended. Further, the
Holder represents to the Company that the Holder is acquiring this Stock
Purchase Warrant and the Shares that are acquired upon the exercise of this
Stock Purchase Warrant solely for the Holder's investment account and not with
any intent to resell or distribute said securities to others.
(f) Reasonable Time. The Holder has had reasonable time for the Holder
and its professional advisors to ask questions about the business, financial and
business development of the Company and to review any and all financial
statements of the Company prior to the acceptance of this Warrant by the Holder.
(g) Questionnaire. The Holder has completed the investor questionnaire attached
hereto as Exhibit One and hereby represents to the Company that all responses by
the Holder are true and complete as of the date of said questionnaire. Xxxxxx
further agrees and acknowledges that the Holder understands that the Company
will rely on the completed questionnaire submitted by the Holder to ensure
compliance with applicable federal and state securities laws and regulations in
respect of the issuance of this Warrant to the Holder.
(h) Additional Acts. The parties agree that they will take all actions
and execute all instruments and documents reasonably necessary for the issuance
of this Warrant and the issuance of any Shares to fully comply with applicable
federal and state securities laws and regulations,
IN WITNESS WHEREOF, CHINA DIRECT TRADING CORPORATION has caused this
Stock Purchase Warrant to be executed by its officers thereunto duly authorized.
Dated: April 30, 2007
CHINA DIRECT TRADING CORPORATION
000 Xxx Xxxxx Xxxx., Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
000 000 0000
By: _____________________________________________________
Xxxxx XxXxxxxxx, Chief Operating Officer.
NOTICE OF EXERCISE
TO: CHINA DIRECT TRADING CORPORATION:
(1) The undersigned hereby elects to purchase _______________________ shares of
Common Stock, $0.0001 par value per share, (the "Shares") of China Direct
Trading Corporation, a Florida corporation, pursuant to the terms of the
attached Warrant, and tenders herewith payment of the purchase price in full,
together with all applicable transfer taxes, if any.
(2) Please issue a certificate or certificates representing the Shares
in the name of the undersigned or in such other name as is specified below:
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(Print Name)
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(3) The undersigned confirms that the Shares are being acquired for the
account of the undersigned for investment only and not with a view to, or for
resale in connection with, the distribution thereof and that the undersigned has
no present intention of distributing or selling the Shares.
Name: _________________________________________
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(Signature)
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(Print Full Legal Name)
Social Security or EIN Number:____________________________________
CHINA DIRECT TRADING CORPORATION
CONFIDENTIAL ACCREDITATION CRITERIA FORM
April __, 2007
PURPOSE: The following document is a confidential preliminary questionnaire for
prospective investors in a private issuance of securities, including warrants,
or in a private placement under Regulation D of the Securities Act of 1933, as
amended, of shares of common stock of China Direct Trading Corporation, a
Florida corporation ("China Direct" or the "Company") with its common stock
quoted on OTC Bulletin Board (Symbol: CHDT). It is reviewed by legal counsel to
China Direct for the sole purpose of determining whether a prospective investor
in China Direct securities is qualified to receive offering documents for such
an investment. This form is not an offer to sell or a solicitation of an offer
to purchase any securities. Such an offer will only be made by separate offering
documents and only in those jurisdictions where China Direct is qualified to
offer its securities. By completing and submitting this form, you are not
obligated to subscribe for or purchase any securities. The information contained
in this form will be held in strict confidence and will not be disclosed to
third parties without your express, prior written consent.
SEND TO: Upon Completion, send the completed form by fax or e-mail or certified
means of delivery to:
XXXX XXXXXXX, ATTORNEY
OUTSIDE COUNSEL TO CHINA DIRECT
0000 XXXXXXXX XXXXXX XXXXXX
XXXXXXXX, XXXXXXXX 00000
E-MAIL: XXXXXXX@XXXXXXX.XXX
DO NOT SEND THIS FORM TO CHINA DIRECT.
PLEASE PRINT ALL RESPONSES. PLEASE INDICATE (BY CHECK) WHICH CRITERIA APPLY TO
YOU and then sign this form and send it to Xxxx Xxxxxxx, Attorney, at the above
address by fax, e-mail with electronic signature, or certified means of
delivery.
A. IDENTITY. If you are an INDIVIDUAL INVESTOR who is a natural person, please
print your full legal name and the address of your primary residence and its
telephone and fax numbers as well as any e-mail address:
1. Your Full Legal Name:
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2. If a natural person, and your spouse's Full Legal Name if he/she will be a
co-owner/co-buyer of any securities:
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3. Primary Residence/Principal Place of Business:
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Telephone #: ______________________________________
Cell #:__________________________________________________
e-mail: ________________________________________________
B. SUITABILITY.
* For an INDIVIDUAL INVESTOR (a natural person), please indicate (by a check)
which criteria apply - if none apply to you, check "None" at the end of the
list:
[ ] (1) Individual income in excess of $200,000 in each of the two most
recent years or joint income (with such investor's spouse) in excess of $300,000
in each of those years and a reasonable expectation of reaching the same income
level in the current year.
[ ] (2) Individual net worth, or joint net worth (with such investor's
spouse) of $1,000,000 or more.
[ ] (3) A director or executive officer of the Company or one of its
subsidiaries.
[ ] NONE
* For a LEGAL ENTITY (other than a natural person), please indicate (by
a check) which criteria apply - if none apply, check "None" at end of list:
[ ] (1) A bank, savings and loan association or similar institution, as
defined in the Securities Act of 1933, whether acting in its individual or
fiduciary capacity.
[ ] (2) A broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934.
[ ] (3) An insurance company as defined in the Securities Act of 1933.
[ ] (4) An investment company registered under the Investment Company
Act of 1940.
[ ] (5) A business development company as defined in the Investment
Company Act of 1940.
[ ] (6) A private business development company as defined in the
Investment Advisors Act of 1940.
[ ] (7) A Small Business Investment Company licensed by the U.S. Small
Business Administration under the Small Business Investment Act of 1958.
[ ] (8) An organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
[ ] (9) A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000.
[ ] (10) An employee benefit plan within the meaning of Title I of the
Employment Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in such Act, which is either a bank,
savings and loan association, insurance company, or registered investment
advisor, or if the employee benefit plan has total assets in excess of
$5,000,000, or if a self-directed an, the investment decisions are made solely
by persons that are accredited investors.
[ ] (11) A trust with total assets in excess of $5,000,000, not formed
for the specific purpose of acquiring the Securities offered, whose purchase is
directed by a "sophisticated" person. the person or persons making the
investment decisions of the trust should complete Part I (unless B(1) or B(2)
also apply).
[ ] (12) An entity in which all of the equity owners are "accredited
investors"
[ ] NONE
C. Prior Investment Experience.
(1) Have you invested in a private placement of small public companies' equity
securities or "xxxxx" stocks in the past five years?
[ ] YES [___] NO
If "YES", please describe in general the typical dollar amount and the years in
which such investments were made.
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(2) Do you use professional advisors (e.g. brokers, financial planners,
accountants, lawyers) in making a decision about investments in stocks? [____]
YES [____] NO
(3) If you invest in China Direct securities, is it your intent to hold that
investment for your own account? [ ] YES [ ] NO
(4) If you currently have investments in the stocks of public companies, is the
fair market value of those investments:
[ ] Less than $25,000
[ ] More than $25,000 but less than $100,000
[ ] Over $100,000 but less than $500,000
[ ] Over $500,000
CERTIFICATION
I, the undersigned, do hereby certify and represent to China Direct Trading
Corporation and its legal counsel that the foregoing answers and responses are
true and accurate. I understand that my answers and responses above will be used
by and relied upon by legal counsel to said corporation to ascertain what legal
compliance is necessary to make a lawful offering of investment securities.
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Signature
Name:_________________________________
Date: April __, 2007
