Contract
Exhibit
4.2
THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY
STATE SECURITIES LAWS. THIS WARRANT AND THE SHARES OF COMMON STOCK
ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND UNDER APPLICABLE
STATE SECURITIES LAWS AS TO THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE
UPON EXERCISE OF THIS WARRANT OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO YI XIN INTERNATIONAL COPPER, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
No.
__Issue Date: _____, 20__
COMMON
STOCK PURCHASE WARRANT
FOR VALUE
RECEIVED, ____________________ (the “Holder”), is entitled
to purchase, subject to the provisions of this Warrant, from Yi Xin
International Copper, Inc., a Delaware corporation (“Company”), at an
exercise price per share equal to $0.78 (the exercise price in effect being
herein called the “Exercise Price”), up
to ________ shares [to be that number of shares equal to: (50% of the initial
principal amount of the Holder’s Note divided by the Conversion Price)] (“Warrant Shares”) of
the Company’s Common Stock, par value $0.001 per share (“Common Stock”). The
number of Warrant Shares purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as described
herein.
This
Warrant is being issued pursuant to a Subscription Agreement that is one of a
series of Subscription Agreements among the Company and the initial holders of
the Company Warrants (as defined below) which Subscription Agreements
(collectively, the “Subscription
Agreements”) were entered into in connection with a Private Offering
Memorandum (“Offering
Memorandum”) prepared by the Company and dated October __, 2009.
Capitalized terms used herein and not otherwise defined have the respective
meanings ascribed thereto in the Subscription Agreement.
Section
1. Term. The term of
this Warrant shall commence on the issue date indicated above and shall expire
on the fifth anniversary thereof (the “Expiration Date”)
(such period being the “Term”), unless
terminated earlier under Section 5 below.
Section
2. Registration and
Transfers. The Company shall maintain books for the transfer and
registration of the Warrant. Upon the initial issuance of this
Warrant, the Company shall issue and register the Warrant in the name of the
Holder. Subject to the restrictions set forth in Section 11, the Company shall
transfer this Warrant from time to time upon the books to be maintained by the
Company for that purpose, upon surrender hereof for transfer, properly endorsed
(by the Holder executing an assignment in the form attached hereto) together
with the transferee’s portion of the assignment duly completed and executed by
the transferee and accompanied by such other documents as may be reasonably
required by the Company, including, if required by the Company, evidence
reasonably satisfactory to the Company that the transferee is an “accredited
investor” as defined under the Securities Act of 1933, as amended (the “Securities Act”) an
opinion of its counsel to the effect that such transfer is exempt from the
registration requirements of the Securities Act and any applicable state
securities laws, to establish that such transfer is being made in accordance
with the terms hereof, and a new Warrant shall be issued to the transferee and
the surrendered Warrant shall be canceled by the Company. This
Warrant is exchangeable at the principal office of the Company for Warrants to
purchase the same aggregate number of shares of Warrant Stock, each new Warrant
to represent the right to purchase such number of Warrant Shares as the Holder
hereof shall designate at the time of such exchange. All Warrants
issued on transfers or exchanges shall be dated as of the date hereof and shall
be identical with this Warrant except as to the number of shares of Warrant
Stock issuable pursuant thereto.
Section
3. Exercise of
Warrant.
(a) Method of Exercise.
Subject to the provisions hereof, the Holder may exercise this Warrant, in whole
or in part, at any time prior to its expiration upon surrender of the Warrant,
together with delivery of a duly executed Warrant exercise form, in the form
attached hereto as Appendix A (the “Exercise Agreement”)
and payment by cash, certified check or wire transfer of funds of the aggregate
Exercise Price for that number of Warrant Shares then being purchased, to the
Company during normal business hours on any business day at the Company’s
principal executive offices (or such other office or agency of the Company as it
may designate by notice to the Holder).
(b) Accredited Investor
Status. In no event may this Warrant be exercised unless, at
the time of such exercise, the Holder is an “accredited investor” as defined in
Regulation D under the Securities Act. This Warrant may be
transferred only to “accredited investors.”
(c) Issuance of
Certificates. Certificates for the Warrant Shares so purchased shall be
delivered to the Holder within a reasonable time, not exceeding ten (10)
business days, after this Warrant shall have been so exercised. The certificates
so delivered shall be in such denominations as may be requested by the Holder
and shall be registered in the name of the Holder or such other name as shall be
designated by the Holder, as specified in the Exercise Agreement. If
this Warrant shall have been exercised only in part, then, unless this Warrant
has expired, the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the Holder a new Warrant representing the right to
purchase the number of shares with respect to which this Warrant shall not then
have been exercised. As used herein, “business day” means a day, other than a
Saturday or Sunday, on which banks in New York City are open for the general
transaction of business. Each exercise hereof shall constitute the
re-affirmation by the Holder that the representations and warranties contained
in the Subscription Agreement are true and correct in all material respects with
respect to the Holder as of the time of such exercise.
2
Section
4. Beneficial Ownership
Limitation. Notwithstanding anything to the contrary set forth herein, at
no time may the Holder exercise all or a portion of this Warrant if the number
of Warrant Shares to be issued pursuant to such exercise, when aggregated with
all other shares of Common Stock beneficially owed by the Holder at such time
(including pursuant to any other convertible securities of the Company), would
result in the Holder beneficially owning (as determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended and the rules
thereunder) more than 9.9% of all of the Common Stock outstanding at such time.
Notwithstanding anything to the contrary contained herein, the limitation on
exercise of this Warrant may be waived by written agreement between the Holder
and the Company; provided, however, such waiver may not be effective less than
sixty-one (61) days from the date thereof.
Section
5. Payment of Taxes. The
Company shall not be required to pay any tax or taxes which may be payable in
respect of any transfer involved in the issuance or delivery of any certificates
for Warrant Shares in a name other than that of the Holder in respect of which
such shares are issued, and in such case, the Company shall not be required to
issue or deliver any certificate for Warrant Shares or any Warrant until the
person requesting the same has paid to the Company the amount of such tax or has
established to the Company’s reasonable satisfaction that such tax has been
paid. The Holder shall be responsible for income taxes due under federal, state
or other law, if any such tax is due.
Section
6. Mutilated or Missing
Warrants. In case this Warrant shall be mutilated, lost, stolen, or
destroyed, the Company shall issue in exchange and substitution of and upon
surrender and cancellation of the mutilated Warrant, or in lieu of and
substitution for the Warrant lost, stolen or destroyed, a new Warrant of like
tenor and for the purchase of a like number of Warrant Shares, but only upon
receipt of evidence reasonably satisfactory to the Company of such loss, theft
or destruction of the Warrant, and with respect to a lost, stolen or destroyed
Warrant, reasonable indemnity or bond with respect thereto, if requested by the
Company.
Section
7. Reservation of Warrant
Shares. The Company shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock, solely for the purpose of
providing for the exercise of the Company Warrants, such number of shares of
Common Stock as shall from time to time equal the number of shares sufficient to
permit the exercise of the Company Warrants in accordance with their respective
terms. The Company agrees that all Warrant Shares issued upon due exercise of
the Warrant shall be, at the time of delivery of the certificates for such
Warrant Shares, duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock of the Company.
Section
8. Adjustments. Subject
and pursuant to the provisions of this Section, the Exercise Price and number of
Warrant Shares subject to this Warrant shall be subject to adjustment from time
to time as set forth hereinafter.
3
(a) Reorganization,
Consolidation, Merger, etc. In case at any time or from time to time, the
Company shall effect any merger, reorganization, restructuring, reverse stock
split, consolidation, sale of all or substantially all of the Company’s assets
or any similar transaction or related transactions (each such transaction, a
“Fundamental
Change”), then, in each such case, as a condition to the consummation of
such a transaction, proper and adequate provision shall be made by the Company
whereby the Holder of this Warrant, on the exercise hereof, at any time after
the consummation of such Fundamental Change, shall receive, in lieu of the
Warrant Shares issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation of a
Fundamental Change if such Holder had so exercised this Warrant, immediately
prior thereto, all subject to further adjustment thereafter as provided
herein.
If the
Company at any time shall, by reclassification or otherwise, change the Common
Stock into the same or a different number of securities of any class or classes
that may be issued or outstanding, this Warrant, as to the unexercised portion
thereof, shall thereafter be deemed to evidence the right to purchase an
adjusted number of such securities and kind of securities as would have been
issuable as the result of such change with respect to the Common Stock
immediately prior to such reclassification or other change.
(b) Dissolution. In
the event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and
other securities and property (including cash, where applicable) receivable by
the Holder after the effective date of such dissolution pursuant to this Section
to a bank or trust company (a “Trustee”) having its
principal office in New York, New York, as trustee for the Holder.
(c) Continuation of
Terms. Upon any Fundamental Change or transfer (and any dissolution
following any transfer) referred to in this Section, this Warrant shall continue
in full force and effect and the terms hereof shall be applicable to any other
securities and property receivable on the exercise of this Warrant after the
consummation of such Fundamental Change or transfer or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any other securities, including, in the case of any
such transfer, the person acquiring all or substantially all of the properties
or assets of the Company, whether or not such person shall have expressly
assumed the terms of this Warrant as provided in Section 8(d). In the event this
Warrant does not continue in full force and effect after the consummation of the
transaction described in this Section, then only in such event will the
Company’s securities and property (including cash, where applicable) receivable
by the Holder be delivered to the Trustee as contemplated by Section
8(b).
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(d)
Extraordinary
Events Regarding Common Stock. In the event that the Company shall (a)
issue additional shares of Common Stock as a dividend or other distribution on
outstanding Common Stock, (b) subdivide its outstanding shares of Common Stock,
or (c) combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock, then, in each such event, the Exercise Price shall,
simultaneously with the happening of such event, be adjusted by multiplying the
then Exercise Price by a fraction, the numerator of which shall be the number of
shares of Common Stock outstanding immediately prior to such event and the
denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event, and the product so obtained shall thereafter be
the Exercise Price then in effect. The Exercise Price, as so adjusted, shall be
readjusted in the same manner upon the happening of any successive event or
events described in this Section 8(d). The number of Warrant Shares that the
Holder of this Warrant shall thereafter, on the exercise hereof, be entitled to
receive shall be adjusted to a number determined by multiplying the number of
Warrant Shares that would otherwise (but for the provisions of this Section) be
issuable on such exercise by a fraction of which (a) the numerator is the
Exercise Price that would otherwise (but for the provisions of this Section) be
in effect, and (b) the denominator is the Exercise Price in effect on the date
of such exercise.
(e) Subsequent Offerings.
If the Company shall, at any time prior to the second anniversary of the Issue
Date, issue any shares of its Common Stock at a price per share less than the
Exercise Price (the “Subsequent Offering
Price”), the Exercise Price shall be lowered to a price equal to the
Subsequent Offering Price. Notwithstanding the foregoing, no adjustment in the
Exercise Price shall be made for shares of Common Stock issued, or warrants or
options to purchase shares Common Stock granted in connection with any of the
following: (a) any stock option plan or other benefit plan for directors,
officers, employees, advisors or consultants of the Company, (b) payment of
interest on any outstanding notes, (c) full or partial consideration in
connection with a strategic merger, consolidation or purchase of substantially
all of the securities or assets of a corporation or other entity, (d) full or
partial consideration in connection with strategic licensing agreements or other
partnering arrangements, or (e) the issuance of any securities pursuant to the
exercise or conversion of any securities outstanding on the date hereof
(exclusive of any subsequent amendments thereto).
(f) Effectiveness of
Adjustment. An adjustment to the Exercise Price shall become effective
immediately after the payment date in the case of each dividend or distribution
and immediately after the effective date of each other event which requires an
adjustment.
(g) Notice of Adjustment.
Upon the happening of any event requiring an adjustment of the Exercise Price,
the Company shall promptly give written notice thereof to the Holder at the
address appearing in the records of the Company, stating the adjustments
resulting from such event and setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is
based. Failure to give such notice to the Holder or any defect
therein shall not affect the legality or validity of the subject
adjustment.
Section
9. Benefits. Nothing in
this Warrant shall be construed to give any person, firm or corporation (other
than the Company and the Holder) any legal or equitable right, remedy or claim,
it being agreed that this Warrant shall be for the sole and exclusive benefit of
the Company and the Holder.
Section
10. No Rights as
Stockholder. Prior to the exercise of this Warrant, the Holder shall not
have or exercise any rights as a stockholder of the Company by virtue of its
ownership of this Warrant.
Section
11. Compliance with Securities
Laws.
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(a) The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and
the Warrant Shares to be issued upon exercise hereof are being acquired solely
for the Holder’s own account and not as a nominee for any other party, and for
investment, and that the Holder will not offer, sell or otherwise dispose this
Warrant or any Warrant Shares to be issued upon exercise hereof except pursuant
to an effective registration statement, or an exemption from registration, under
the Securities Act and any applicable state securities laws.
(b) All
certificates representing the Warrant Shares shall be stamped or imprinted with
a legend in substantially the following form:
THE
SECURITIES ISSUED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED OR ANY STATE SECURITIES LAWS. THE SECURITIES ISSUED
HEREBY MAY NOT BE TRANSFERRED, SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OF 1933, AS AMENDED AND UNDER APPLICABLE STATE SECURITIES LAWS AS TO THE
SECURITIES ISSUED HEREBY OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO YI
XIN INTERNATIONAL COPPER, INC. THAT SUCH REGISTRATION IS NOT
REQUIRED.
Section
12. Notices. All notices,
demands, requests, consents, approvals, and other communications required or
permitted hereunder shall be in writing and, unless otherwise specified herein,
shall be (i) personally delivered, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii) delivered by
reputable air courier service with charges prepaid, or (iv) transmitted by hand
delivery, telegram, or facsimile, addressed as set forth below or to such other
address as such party shall have specified most recently by written notice. Any
notice or other communication required or permitted to be given hereunder shall
be deemed effective (A) upon hand delivery or delivery by facsimile, with
accurate confirmation generated by the transmitting facsimile machine, at the
address or number designated below (if delivered on a business day during normal
business hours where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day during normal
business hours where such notice is to be received), or (B) on the second
business day following the date of mailing by express courier service, fully
prepaid, addressed to such address, or upon actual receipt of such mailing,
whichever shall first occur. The addresses for such communications shall be: (x)
if to the Company, to: Yi Xin International Copper, Inc., No. 1 Guiba Road,
Guixi District, Yingtan City, 335419 Jiangxi Province, the People's Republic of
China, Attn: Chief Executive Officer, telecopier number (86) (000) 000-0000,
with a copy by telecopier only to: Blank Rome, LLP, 000 Xxxxxxxxx Xxx., 00xx Xxxxx,
Xxx Xxxx, XX 00000, Attn.: Xxxxxxx X. Xxxxx, Esq., telecopier number: (000)
000-0000, and (y) if to the Holder, to the one or more addresses and facsimile
numbers provided in the Subscription Agreement, or any other address or
facsimile number provided by the Holder in a manner consistent with this Section
12 after the date hereof.
Section
13. Assignability. This
Warrant shall be binding upon the Company and its successors and assigns, and
shall inure to the benefit of the Holder and its successors and
assigns.
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Section
14. Governing Law; Consent to
Jurisdiction. This Warrant shall be governed by and construed in
accordance with the laws of the State of New York. Any action brought
by either party against the other concerning this Warrant shall be brought only
in the state courts of New York or in the federal courts located in the state of
New York. Both parties agree to submit to the jurisdiction of such
courts. The prevailing party shall be entitled to recover from the
other party its reasonable attorney’s fees and costs.
Section
15. Amendment; Waiver.
The term “Warrant” and all
reference thereto, as used throughout this instrument, shall mean this
instrument as originally executed, or if later amended or supplemented, then as
so amended or supplemented. The Company may from time to time
supplement or amend this Warrant without the approval of any holder of Warrant
in order to cure any ambiguity or to be correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision, or to make any other provisions in regard to matters or questions
herein arising hereunder which the Company may deem necessary or desirable and
which shall not materially adversely affect the interest of the Holder. This
Warrant is one of a series of Warrants of like tenor issued by the Company
pursuant to the Subscription Agreements (collectively, the “Company Warrants”).
Any term of this Warrant may be amended or waived (including the adjustment
provisions included in Section 8 of this Warrant) upon the written consent of
the Company and the holders of Company Warrants representing over 50% of the
number of shares of Common Stock then subject to all outstanding Company
Warrants (the “Majority Holders”);
provided, that
(x) any such amendment or waiver must apply to all Company Warrants; and (y) the
number of Warrant Shares subject to this Warrant, the Exercise Price and the
Expiration Date may not be amended, and the right to exercise this Warrant may
not be altered or waived in any manner adverse to the Holder, without the
written consent of the Holder. In addition to the foregoing, this
Warrant may be amended in any respect upon the written consent of the Company
and the Holder.
Section
16. Modification and
Severability. If, in any action before any court or agency
legally empowered to enforce any provision contained herein, any provision
hereof is found to be unenforceable, then such provision shall be deemed
modified to the extent necessary to make it enforceable by such court or
agency. If any such provision is not enforceable as set forth in the
preceding sentence, the unenforceability of such provision shall not affect the
other provisions of this Warrant, but this Warrant shall be construed as if such
unenforceable provision had never been contained herein.
Section
17. Who Deemed Absolute
Owner. The Company may deem the person or entity in whose name
this Warrant shall be registered upon the registry books of the Company to be,
and may treat it as, the absolute owner of this Warrant for all purpose and the
Company shall not be affected by any notice to the contrary.
Section
18. Registration Rights
Agreement. The Warrant Shares are subject to a Registration
Rights Agreement among the Investor, certain other investors, and the Company
dated ____________ (the “Registration Rights
Agreement”) and the registration rights with respect to the Conversion
Shares issuable upon exercise of this Warrant by a Holder may be assigned only
in accordance with the terms and provisions of the Registration Rights
Agreement
Section
19. Section Headings. The
section headings in this Warrant are for the convenience of the Company and the
Holder and in no way alter, modify, amend, limit or restrict the provisions
hereof.
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Section
20. Entire Agreement.
This Warrant, the Holder’s Subscription Agreement, and any other transaction
documents executed in connection therewith (including all schedules and exhibits
thereto) constitute the entire agreement among the parties hereto with respect
to the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Warrant and the Holder’s Subscription Agreement supersede all
prior agreements and understandings among the parties hereto with respect to the
subject matter hereof and thereof.
[SIGNATURE
PAGE FOLLOWS]
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IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed, as of
the date first written above.
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By:
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Name:
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Title:
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9
APPENDIX
A WARRANT
EXERCISE
FORM
To: Yi
Xin International, Inc.:
The
undersigned hereby irrevocably elects to exercise the right of purchase
represented by the within Warrant (“Warrant”) for, and to purchase thereunder by
the payment of the Exercise Price and surrender of the Warrant, _______________
shares of Common Stock (“Warrant Shares”) and requests that certificates for the
Warrant Shares be issued as follows:
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Name
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Address
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Federal
Tax ID or Social Security No.
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and
delivered by: certified mail to the above address, or electronically
(provide DWAC Instructions:________________), or other
(specify):______________________________).
If the
number of Warrant Shares shall not be all the Warrant Shares purchasable upon
exercise of the Warrant, that a new Warrant for the balance of the Warrant
Shares purchasable upon exercise of this Warrant be registered in the name of
the undersigned Holder or the undersigned’s Assignee as below indicated and
delivered to the address stated below.
The
undersigned represents and warrants to the Company that the undersigned is an
“accredited investor” as defined in Regulation D of the Securities Act of 1933,
as amended.
Dated:
___________________, ____
Note: The
signature must correspond with Signature:______________________________ the name
of the Holder as written on the first page of the Warrant in every
_____________________ particular, without alteration or enlargement Name (please
print) or any change whatever, unless the Warrant ______________________________
has been assigned.
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Address
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Federal
Identification or Social Security
No.
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Assignee:
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ASSIGNMENT
FOR VALUE
RECEIVED, _________________ hereby sells, assigns and transfers unto
__________________ the within Common Stock Purchase Warrant and all rights
evidenced thereby and does irrevocably constitute and appoint _____________,
attorney, to transfer the said Warrant on the books of Yi Xin International
Copper, Inc. (the “Company”).
The
undersigned represents and warrants that the foregoing assignment is made in
compliance with all applicable law and the terms of the Common Stock Purchase
Warrant.
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Dated:
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Signature
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Address
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TRANSFEREE’S
REPRESENTATIONS AND WARRANTIES
The
undersigned transferee hereby represents and warrants to the Company that the
transferee is an “accredited investor” as defined by Rule 501 under the
Securities Act of 1933, as amended and that the address set forth below is the
undersigned’s principal residence (if an individual) or principal place of
business (if a corporation or other entity).
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Dated:
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Signature
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Name:
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Address
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