Contract
Exhibit 10.3
NEITHER
THESE SECURITIES NOR THE SECURITIES FOR WHICH THESE SECURITIES ARE EXERCISABLE
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, SOLD OR OTHERWISE TRANSFERRED EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR (B)
PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN COMPLIANCE WITH
APPLICABLE STATE SECURITIES OR BLUE SKY LAWS AND IN THE CASE OF (B) ABOVE, AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO CHINA GREEN MATERIAL TECHNOLOGIES,
INC. THAT SUCH REGISTRATION IS NOT REQUIRED HAS BEEN DELIVERED. THESE SECURITIES
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN
CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
SECURITIES.
WARRANT
|
Warrant
No. [WW-A-00__]
|
Dated: [______
__, 2010]
|
CHINA
GREEN MATERIAL TECHNOLOGIES, INC., a Nevada corporation (the "Company"), hereby
certifies that, for value received, Corporate Stock Transfer, Inc., or its
registered assigns, as escrow agent (the "Holder"), is entitled
to purchase from the Company up to a total of 700,000 shares of common stock,
par value $0.001 per share (the "Common Stock"), of
the Company (each such share, a "Warrant Share" and
all such shares, the "Warrant Shares") at
an exercise price equal to $0.90 per share (as adjusted from time to time as
provided in Section
10, the "Exercise Price"),
during the Exercise Period (as defined below) and subject to the terms and
conditions set forth herein. This Warrant (this "Warrant") is issued
pursuant to the Securities Purchase Agreement dated as of January 11, 2010 by
and among the Company and the purchasers identified on the signature pages
thereto (the "Purchase
Agreement").
1. Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Purchase Agreement.
2. Escrow; Exercise
Period. This Warrant will be deposited into an escrow account
maintained by the Holder, in its sole capacity as escrow agent, and may be
released in whole or in part to Company-approved investor relations firms
designated by ARC China, Inc. in its sole discretion ("IR Firms") on or
before September 30, 2010 pursuant to the terms of the Purchase Agreement and
the Escrow Agreement dated as of the date hereof by and among the Company, the
Holder, Xxxxxxx Securities LLC and United Western Bank (the "Escrow
Agreement"). The exercise period of this Warrant shall
commence on the date that the Warrant or any portion of the Warrant is assigned
by the initial Holder to an IR Firm in accordance with the Escrow Agreement and
shall continue until the one-year anniversary of the date of such direction (the
"Exercise
Period").
3. Registration of the Warrant
Shares. The Company shall register the Warrant Shares pursuant
to the terms of the registration provisions set forth in the Purchase
Agreement. 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’s transfer agent or to the Company at its address specified herein;
provided, however, that the Holder shall not transfer such Warrant or any
portion thereof unless such transfer is exempt under applicable federal and
state securities laws and which transfer will not result in any liability of any
kind to the Company where the Holder may be deemed to be a Distributor (as
defined in Regulation S under the Securities Act) of the Warrant or any portion
thereof on behalf of the Company. 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 the Holder of a Warrant.
5. Exercise and Duration of
Warrants.
(a) Exercise. This
Warrant shall be exercisable by the registered Holder at any time and from time
to time on or after the date hereof to and including the Expiration
Date. At 5:00 P.M., east coast standard time on the Expiration Date,
the portion of this Warrant not exercised prior thereto shall be and become void
and of no value.
(b) Procedures for
Exercise. The Holder may exercise this Warrant by delivering
to the Company (i) an exercise notice, in the form attached hereto (the "Exercise Notice"),
appropriately completed and duly signed, and (ii) payment of the Exercise Price
for the number of Warrant Shares as to which this Warrant is being exercised
(which may take the form of a "cashless exercise" if so indicated in the
Exercise Notice and if a "cashless exercise" may occur at such time pursuant to
Section 11
below), and the date such items are delivered to the Company (as determined in
accordance with the notice provisions hereof) is an "Exercise
Date." The Holder shall not be required to deliver the
original Warrant in order to effect an exercise hereunder. Upon the
execution and delivery of the Exercise Notice, the Company shall issue a New
Warrant to the Holder evidencing the right to purchase the remaining number of
Warrant Shares.
6. Delivery of Warrant
Shares.
(a) Upon
exercise of this Warrant, the Company shall promptly (but in no event later than
three business days after the Exercise Date) issue or cause to be issued and
cause to be delivered to or, subject to the limitations set forth in Section 4, upon the
written order of the Holder and in such name or names as the Holder may
designate, a certificate for the Warrant Shares issuable upon such exercise,
free of restrictive legends unless a registration statement covering the resale
of the Warrant Shares and naming the Holder as a selling stockholder thereunder
is not then effective and the Warrant Shares are not freely transferable without
volume restrictions pursuant to Rule 144 under the Securities
Act. The Holder, or, subject to the limitations set forth in Section 4, any Person
so designated by the Holder to receive Warrant Shares, shall be deemed to have
become the holder of record of such Warrant Shares as of the Exercise
Date. The Company shall, upon request of the Holder, use its best
efforts to deliver Warrant Shares hereunder electronically through The
Depository Trust Corporation or another established clearing corporation
performing similar functions.
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(b) This
Warrant is exercisable, either in its entirety or, from time to time, for a
portion of the number of Warrant Shares. Upon surrender of this
Warrant following one or more partial exercises, the Company shall issue or
cause to be issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares.
(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 the 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 or injunctive relief with respect to the Company's failure
to timely deliver certificates representing shares of Common Stock upon exercise
of the Warrant as required pursuant to the terms hereof.
7. Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of
Common Stock 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 or an
Affiliate thereof; and provided further, that the Holder shall be responsible
for any legal fees associated with the preparation and delivery of any opinion
of counsel that may be required to be delivered upon transfer of the Warrant or
any portion thereof. 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. Notwithstanding the
foregoing, the Company acknowledges and agrees that (i) this Warrant is being
issued to, and will be temporarily held by, the initial Holder as escrow agent
for dissemination to IR Firms pursuant to the Escrow Agreement, and (ii) the
dissemination and release of all or any portion of this Warrant to such IR Firms
shall not require the delivery of an opinion of counsel.
8. 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 bond or indemnity, 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.
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9. Reservation of Warrant
Shares. The Company covenants that it will at all times
reserve and keep available out of the aggregate of its authorized but unissued
and otherwise unreserved Common Stock, 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
10). 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. The Company will take all
such actions as may be necessary to assure that such shares of Common Stock may
be issued as provided herein without violation of any applicable law or
regulation, or of any requirements of any securities exchange or automated
quotation system upon which the Common Stock may be listed.
10. 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
10.
(a) Adjustments to the Exercise
Price.
(i) If,
at any time or from time to time after the date hereof, the Company shall issue
any Additional Stock (as defined in Section 10(a)(vi)
below) without consideration or for consideration per share less than the
Exercise Price in effect immediately prior to the issuance of such Additional
Stock, such Exercise Price in effect immediately prior to such issuance shall
(except as otherwise provided in this Section 10(a)) be adjusted to the price
per share at which such Additional Stock was issued (or if such Additional Stock
was issued for no consideration the price shall be adjusted to
$.01).
(ii) No
adjustment of the Exercise Price for any Warrant Share shall be made in an
amount less than one cent per share; provided that any adjustments which are not
required to be made by reason of this sentence shall be carried forward and
shall be taken into account in any subsequent adjustment made. Except
to the limited extent provided for in Sections 10(a)(v)(C),
10(a)(v)(D) and
10(a)(v)(E) no
adjustment of such Exercise Price pursuant to this Section 10(a) shall
have the effect of increasing the Exercise Price above the Exercise Price in
effect immediately prior to such adjustment.
(iii) In
the case of the issuance of Additional Stock for cash, the consideration shall
be deemed to be the amount of cash paid therefor before deducting any reasonable
discounts, commissions or other expenses allowed, paid or incurred by the
Company for any underwriting or otherwise in connection with the issuance and
sale thereof.
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(iv) In
the case of the issuance of the Additional Stock for a consideration in whole or
in part other than cash, the consideration other than cash shall be deemed to be
the fair value thereof as determined by the Board of Directors of the Company
irrespective of any accounting treatment.
(v) In
the case of the issuance of options to purchase or rights to subscribe for
Common Stock, securities by their terms convertible into or exchangeable for
Common Stock or options to purchase or rights to subscribe for such convertible
or exchangeable securities, the following provisions shall apply for all
purposes of this Section
10(a):
(A) The
aggregate number of shares of Common Stock deliverable upon exercise (assuming
the satisfaction of any conditions to exercisability, including but not limited
to the passage of time, but without taking into account potential antidilution
adjustments) of such options to purchase or rights to subscribe for Common Stock
shall be deemed to have been issued and outstanding at the time such options or
rights were issued and for a consideration equal to the consideration
(determined in the manner provided in Sections 10(a)(iii)
and 10(a)(iv)),
if any, received by the Company upon the issuance of such options or rights plus
the minimum exercise price provided in such options or rights (without taking
into account potential antidilution adjustments) for the Common Stock covered
thereby.
(B) The
aggregate maximum number of shares of Common Stock deliverable upon conversion
of or in exchange (assuming the satisfaction of any conditions to convertibility
or exchangeability, including but not limited to the passage of time, but
without taking into account potential antidilution adjustments) for any such
convertible or exchangeable securities or upon the exercise of options to
purchase or rights to subscribe for such convertible or exchangeable securities
and subsequent conversion or exchange thereof shall be deemed to have been
issued and outstanding at the time such securities were issued or such options
or rights were issued and for a consideration equal to the consideration, if
any, received by the Company for any such securities and related options or
rights (excluding any cash received or account of accrued interest or accrued
dividends), plus the minimum additional consideration, if any, to be received by
the Company (without taking into account potential antidilution adjustments)
upon the conversion or exchange of such securities or the exercise of any
related options or rights (the consideration in each case to be determined in
the manner provided in Sections 10(a)(iii)
and 10(a)(iv)).
(C) In
the event of any change in the number of shares of Common Stock deliverable or
in the consideration payable to the Company upon exercise of such options or
rights or upon conversion of or in exchange for such convertible or exchangeable
securities, including, but not limited to, a change resulting from the
antidilution provisions thereof, the Exercise Price, to the extent in any way
affected by or computed using such options, rights or securities, shall be
recomputed to reflect such change, but no further adjustment shall be made for
the actual issuance of Common Stock or any payment of such consideration upon
the exercise of any such options or rights or the conversion or exchange of such
securities.
(D) Upon
the expiration of any such options or rights, the termination of any such rights
to convert or exchange or the expiration of any options or rights related to
such convertible or exchangeable securities, the Exercise Price, to the extent
in any way affected by or computed using such options, rights or securities or
options or rights related to such securities, shall be recomputed to reflect the
issuance of only the number of shares of Common Stock (and convertible or
exchangeable securities which remain in effect) actually issued upon the
exercise of such options or rights, upon the conversion or exchange of such
securities or upon the exercise of the options or rights related to such
securities.
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(E) The
number of shares of Common Stock deemed issued and the consideration deemed paid
therefor pursuant to Sections 10(a)(v)(A)
and 10(a)(v)(B)
shall be appropriately adjusted to reflect any change, termination or expiration
of the type described in either Section 10(a)(v)(C)
or 10(a)(v)(D).
(vi) "Additional Stock"
shall mean any shares of Common Stock issued (or deemed to have been issued
pursuant to Section
10(a)(v)) by the Company after the date hereof, other than:
(A) shares
of Common Stock issued or so deemed to have been issued upon conversion of
shares of Series A Preferred Stock;
(B) shares
of Common Stock issued or so deemed to have been issued to officers, directors,
consultants or employees of the Company pursuant to a plan or program adopted by
the Company's Board of Directors;
(C) shares
of Common Stock (or options, warrants or other rights to purchase such Common
Stock) issued or so deemed to have been issued in connection with acquisitions,
merger transactions, consolidations or similar business
combinations;
(D) shares
of Common Stock issued or so deemed to have been issued in connection with
leases, bank financings, credit agreements or similar instruments with equipment
lessors, commercial lenders, banks, or similar financial institutions if
approved by the Board of Directors;
(E) shares
of Common Stock issued or so deemed to have been issued in connection with a
strategic alliance or corporate partnering transaction entered into by the
Company;
(F) shares
of Common Stock issued or so deemed to have been issued pursuant to options and
warrants outstanding on the date hereof; and
(G) shares
of Common Stock issued or so deemed to have been issued pursuant to a
transaction described in Section 10(a)(ii) or
Section
10(a)(iii) for which adjustments are made pursuant to such
Section.
(b) Stock Dividends and
Splits. If the Company, at any time while this Warrant is
outstanding, (i) pays a stock dividend on its Common Stock or otherwise makes a
distribution on any class of capital stock that is payable in shares of Common
Stock, (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, or (iii) combines outstanding shares of Common Stock 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 Common
Stock outstanding immediately before such event and of which the denominator
shall be the number of shares of Common Stock 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.
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(c) Pro Rata
Distributions. If the Company, at any time while this Warrant
is outstanding, distributes to all holders of Common Stock (i) evidences of its
indebtedness, (ii) any security (other than a distribution of Common Stock
covered by Section
10(b)), (iii) rights or warrants to subscribe for or purchase any
security, or (iv) any other asset (in each case, "Distributed
Property"), then in each such case the Exercise Price in effect
immediately prior to the record date fixed for determination of stockholders
entitled to receive such distribution shall be adjusted (effective on such
record date) to equal the product of such Exercise Price times a fraction of
which the denominator shall be the average of the closing price of the Company’s
Common Stock (as reflected on the American Stock Exchange, the New York Stock
Exchange, the Nasdaq Stock Market or the Over-the-Counter Bulletin Board, as
applicable (the "Listed Stock
Exchange")) for the five trading days immediately prior to (but not
including) such record date and of which the numerator shall be such average
less the then fair market value of the Distributed Property distributed in
respect of one outstanding share of Common Stock, as determined by the Company's
independent certified public accountants that regularly examine the financial
statements of the Company (an "Appraiser"). In
such event, the Holder, after receipt of the determination by the Appraiser,
shall have the right to select an additional appraiser (which shall be a
nationally recognized accounting firm), in which case such fair market value
shall be deemed to equal the average of the values determined by each of the
Appraiser and such appraiser. As an alternative to the foregoing adjustment to
the Exercise Price, at the request of the Holder delivered before the 90th day
after such record date, the Company will deliver to the Holder, within five
business days after such request (or, if later, on the effective date of such
distribution), the Distributed Property that the Holder would have been entitled
to receive in respect of the Warrant Shares for which this Warrant could have
been exercised immediately prior to such record date. If such
Distributed Property is not delivered to the Holder pursuant to the preceding
sentence, then upon expiration of or any exercise of the Warrant that occurs
after such record date, the Holder shall remain entitled to receive, in addition
to the Warrant Shares otherwise issuable upon such exercise (if applicable),
such Distributed Property.
(d) Fundamental
Transactions. If, at any time while this Warrant is
outstanding, (i) the Company effects any merger or consolidation of the Company
with or into another Person, (ii) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,
(iii) 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 (iv)
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 (other than as a result of a
subdivision or combination of shares of Common Stock covered by Section 10(b) above)
(in any such case, 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"). The aggregate Exercise Price for this Warrant
will not be affected by any such Fundamental Transaction, but the Company shall
apportion such aggregate 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 Common Stock 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. In the event of a Fundamental Transaction,
the Company or the successor or purchasing Person, as the case may be, shall
execute with the Holder a written agreement providing that:
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(x) this
Warrant shall thereafter entitle the Holder to purchase the Alternate
Consideration in accordance with this Section
10(d);
(y) in
the case of any such successor or purchasing Person, upon such consolidation,
merger, statutory exchange, combination, sale or conveyance, such successor or
purchasing Person shall be jointly and severally liable with the Company for the
performance of all of the Company's obligations under this Warrant and the
Purchase Agreement; and
(z) if
registration or qualification is required under the Securities Act or applicable
state law for the public resale by the Holder of shares of stock and other
securities so issuable upon exercise of this Warrant, all rights applicable to
registration of the Common Stock issuable upon exercise of this Warrant shall
apply to the Alternate Consideration.
If, in
the case of any Fundamental Transaction, the Alternate Consideration includes
shares of stock, other securities, other property or assets of a Person other
than the Company or any such successor or purchasing Person, as the case may be,
in such Fundamental Transaction, then such written agreement shall also be
executed by such other Person and shall contain such additional provisions to
protect the interests of the Holder as the Board of Directors of the Company
shall reasonably consider necessary by reason of the foregoing. At
the Holder's request, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant 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 Subsection (d) and
insuring that the Warrant (or any such replacement security) will be similarly
adjusted upon any subsequent transaction analogous to a Fundamental
Transaction. If any Fundamental Transaction constitutes or results in
a change of control, the Company (or any such successor or surviving entity)
will purchase the Warrant from the Holder for a purchase price, payable in cash
within five business days after such request (or, if later, on the effective
date of the Fundamental Transaction), equal to the Black-Scholes value of the
remaining unexercised portion of this Warrant on the date of such
request.
(e) Number of Warrant
Shares. Simultaneously with any adjustments to the Exercise
Price pursuant to Subsections (a),
(b) or (c), the number of
Warrant Shares that may be purchased upon exercise of this Warrant shall be
increased or decreased proportionately, so that after such adjustment the
aggregate Exercise Price payable hereunder for the increased or decreased number
of Warrant Shares shall be the same as the aggregate Exercise Price in effect
immediately prior to such adjustment.
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(f) Calculations. All
calculations under this Section 10 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.
(g) Notice of
Adjustments. Upon the occurrence of each adjustment pursuant
to this Section
10, 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.
(h) Notice of Corporate
Events. If the Company (i) declares a dividend or any other
distribution of cash, securities or other property in respect of its Common
Stock, including without limitation any granting of rights or warrants to
subscribe for or purchase any capital stock of the Company or any Subsidiary,
(ii) authorizes or approves, enters into any agreement contemplating or solicits
stockholder approval for any Fundamental Transaction, or (iii) authorizes the
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, at least 20 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.
11. Cashless
Exercise. Provided that the Company's Common Stock is listed
on a Listed Stock Exchange, the Holder may satisfy its obligation to pay the
Exercise Price through a "cashless exercise," in which event the Company shall
issue to the Holder the number of Warrant Shares determined as
follows:
X = Y
[(A-B)/A]
where:
X = the
number of Warrant Shares to be issued to the Holder.
Y = the
number of Warrant Shares with respect to which this Warrant is being
exercised.
A = the
arithmetic average of the closing prices for the five trading days (as reflected
on such Listed Stock Exchange) immediately prior to (but not including) the
Exercise Date.
B = the
Exercise Price.
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For
purposes of Rule 144 promulgated under the Securities Act, it is intended,
understood and acknowledged that the Warrant Shares issued in a cashless
exercise transaction shall be deemed to have been acquired by the Holder, and
the holding period for the Warrant Shares shall be deemed to have commenced, on
the date this Warrant was originally issued.
12. Fractional
Shares. The Company shall not be required to issue or cause to
be issued fractional Warrant Shares upon the exercise of this
Warrant. If any fraction of a Warrant Share would, except for the
provisions of this Section, be issuable upon exercise of this Warrant, the
number of Warrant Shares to be issued will be rounded up to the nearest whole
share.
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 5:00 p.m. (Los Angeles, California 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 5:00
p.m. (Los Angeles, California time) on any business day, (iii) the 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 address for such notices or communications
shall be as set forth in the Purchase Agreement.
14. Warrant
Agent. The Company shall serve as warrant agent under this
Warrant. Upon 30 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 stockholders 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) Assignment; Successors;
Amendment. Subject to the restrictions on transfer set forth
on the first page hereof, this Warrant may be assigned by the
Holder. This Warrant may not be assigned by the Company except to a
successor in the event of a Fundamental Transaction. This Warrant
shall be binding on and inure to the benefit of the parties hereto and their
respective successors and permitted 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.
(b) Further
Actions. The Company will not, by amendment of its governing
documents or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such action as may be necessary or
appropriate in order to protect the rights of the Holder against
impairment. Without limiting the generality of the foregoing, the
Company (i) will not increase the par value of any Warrant Shares above the
amount payable therefor on such exercise, (ii) will take all such action as may
be reasonably necessary or appropriate in order that the Company may validly and
legally issue fully paid and nonassessable Warrant Shares on the exercise of
this Warrant, and (iii) will not close its stockholder books or records in any
manner which interferes with the timely exercise of this Warrant.
11
(c) Governing Law; Venue; Waiver
of Jury Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Warrant shall be governed by
and construed and enforced in accordance with the internal laws of the State of
Nevada, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Warrant (whether brought against a party hereto or its respective
Affiliates, directors, officers, stockholders, employees or agents) shall be
commenced exclusively in the state and federal courts sitting in the City of Las
Vegas, Nevada. Each party hereto hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
Las Vegas, Nevada for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein
(including with respect to the enforcement of any of this Warrant), and hereby
irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is improper. Each party
hereto hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Warrant and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner permitted
by law. Each party hereto hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Warrant or the transactions
contemplated hereby. If either party shall commence an action or
proceeding to enforce any provisions of this Warrant, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its
reasonable attorneys fees and other reasonable costs and expenses incurred with
the investigation, preparation and prosecution of such action or
proceeding.
(d) Headings. The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(e) Severability. 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.
[Remainder
of This Page Intentionally Left Blank; Signature Page to Follow]
12
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.
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By:
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| Name: | Xx Xxxxxxxx | ||
| Title: | Chief Executive Officer | ||
13
FORM
OF EXERCISE NOTICE
(To be
executed by the Holder to exercise the right to purchase shares of Common Stock
under the foregoing Warrant)
The
undersigned is the Holder of Warrant No. [WW-A-00__] (the "Warrant") issued by
China Green Material Technologies, Inc., a Nevada corporation (the "Company"). Capitalized
terms used herein and not otherwise defined have the respective meanings set
forth in the Warrant.
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1.
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The
Warrant is currently exercisable to purchase a total of ______________
Warrant Shares.
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2.
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The
undersigned Holder hereby exercises its right to purchase
_________________ Warrant Shares pursuant to the
Warrant.
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3.
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The
Holder intends that payment of the Exercise Price shall be made as (check
one):
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____
"Cash Exercise" under Section 5(b);
or
____
"Cashless Exercise" under Section 11 (if
permitted).
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4.
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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.
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5.
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Pursuant
to this exercise, the Company shall deliver to the Holder _______________
Warrant Shares in accordance with the terms of the
Warrant.
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6.
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Following
this exercise, the Warrant shall be exercisable to purchase a total of
______________ Warrant Shares.
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Dated: ________________,
________
|
Name of
Xxxxxx:
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(Print)
|
________________________________________________ | |
| By: | ________________________________________________ | |
| Name: | ________________________________________________ | |
| Title: | ________________________________________________ |
FORM
OF ASSIGNMENT
(To be
completed and signed only upon transfer of the Warrant)
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
________________________________ the right represented by the within Warrant to
purchase ____________ shares of Common Stock of China Green Material
Technologies, Inc. to which the within Warrant relates and appoints
________________ attorney to transfer said right on the books of China Green
Material Technologies, Inc. with full power of substitution in the
premises.
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Dated:
_______________, __________
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Name of
Holder:
|
|
|
Name:
|
________________________________________________ | |
| By: | ________________________________________________ | |
| Name: | ________________________________________________ | |
| Title: | ________________________________________________ | |
|
(Signature
must conform in all respects to name of the Holder as specified on the
face of the Warrant)
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||
|
|
Address: |
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_________________________________________________________________
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_________________________________________________________________
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_________________________________________________________________
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In
the presence of:
________________________________________________
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