EX-10.7
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS 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 OR SOLD EXCEPT PURSUANT TO AN
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EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES
CHINA WORLD TRADE CORPORATION
SERIES A WARRANT TO PURCHASE 50,000 SHARES OF COMMON STOCK
(SUBJECT TO ADJUSTMENT)
(VOID AFTER AUGUST 26, 2009)
PPW -
------
THIS SERIES A COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value
received, TCMP3 Partners (the "HOLDER"), is entitled, upon the terms and subject
------
to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after the date hereof (the "INITIALEXERCISE DATE")or prior to the
--------------------
close of business on August 26, 2009 (the "TERMINATION DATE") but not
-----------------
thereafter, to subscribe for and purchase from China World Trade Corporation, a
Nevada corporation (the "COMPANY"), up to 50,000 shares (the "WARRANT SHARES")
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of Common Stock, $.001 par value per share, of the Company (the "COMMON STOCK").
------------
The purchase price of one share of Common Stock (the "EXERCISE PRICE") under
--------------
this Warrant shall be $2.50, subject to adjustment hereunder. The Exercise
Price and the number of Warrant Shares for which the Warrant is exercisable
shall be subject to adjustment as provided herein. CAPITALIZED TERMS USED AND
NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS SET FORTH IN THAT CERTAIN
SECURITIES PURCHASE AGREEMENT DATED AS OF AUGUST 26, 2004, BETWEEN THE COMPANY
AND THE PURCHASERS SET FORTH ON SCHEDULE 1 THERETO(THE "PURCHASE AGREEMENT").
------------------ ------------------
1. Title to Warrant. Prior to the Termination Date and subject to
------------------
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
---------
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.
2. Authorization of Shares. The Company covenants that all Warrant Shares
-------------------------
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable 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).
3. Exercise of Warrant.
---------------------
(a) Exercise of the purchase rights represented by this Warrant may be made
at any time or times on or after the Initial Exercise Date and on or before the
Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company), and upon payment of the Exercise Price of the Warrant Shares thereby
purchased by wire transfer or cashier's check drawn on a United States bank or
internationally recognized bank, the Holder shall be entitled to receive a
certificate for the number of Warrant Shares so purchased. Certificates for
Warrant Shares purchased hereunder shall be delivered to the Holder within seven
(7) Trading Days after the date on which this Warrant shall have been
exercised as aforesaid. This Warrant shall be deemed to have been exercised and
such certificate or certificates shall be deemed to have been issued, and the
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been properly exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by the Holder, if any, pursuant
to Section 5 have been paid. If such conditions by the Holder have been met, and
---------
the Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 3(a) by the close of
------------
business on the 7th Trading Day after the date of such conditions being met by
the Holder, then the Holder will have the right to rescind such exercise. In
addition to any other rights available to the Holder, if the Company fails to
deliver to the Holder a certificate or certificates representing the Warrant
Shares pursuant to a proper exercise, and all conditions being met by the
Holder, by the close of business on the 10th Trading Day after the date of
exercise, and if after such 10th Trading Day the Holder is required by its
broker to purchase (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
which the Holder anticipated receiving upon such exercise (a "BUY-IN"), then the
------
Company shall (1) pay in immediately available funds to the Holder the amount by
which (x) the Holder's total purchase price (including brokerage commissions, if
any) for the Warrant Shares so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (B) the
price at which the sell order giving rise to such purchase obligation was
executed, and (2) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $100 to cover a Buy-In with respect to an
attempted exercise of Warrant Shares with an aggregate sale price giving rise to
such purchase obligation of $80, under clause (1) of the immediately preceding
sentence the Company shall be required to pay the Holder $20. The Holder shall
provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Company. Nothing herein shall limit a
Xxxxxx's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing Warrant Shares as required pursuant to the terms
hereof.
(b) If this Warrant shall have been exercised in part, the Company shall, at
the time of delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
(c) The Company shall not effect any exercise of this Warrant, and the
Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 3(a) or otherwise, to the extent that after giving effect to
------------
such issuance after exercise, the Holder (together with the Holder's
Affiliates), as set forth on the applicable Notice of Exercise, would
beneficially own in excess of 4.9% of the number of shares of the Common Stock
issued and outstanding immediately after giving effect to such issuance. For
purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (A) exercise of
the remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its Affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 3(c), beneficial ownership
------------
shall be calculated in accordance with Section 13(d) of the Exchange Act. For
-------------
purposes of this Section 3(c), in determining the number of outstanding shares
------------
of Common Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company's most recent Form 10-Q or Form
10-K, as the case may be, (y) a more recent public announcement by the Company
or (z) any other notice by the Company or the Company's transfer agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral
request of the Holder, the Company shall within four Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Company Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its
Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The provisions of this Section 3(c) may be waived by
------------
the Holder upon, at the election of the Holder, not less than 61 days' prior
notice to the Company, and the provisions of this Section 3(c) shall continue to
------------
apply until such 61st day (or such later date, as determined by the Holder, as
may be specified in such notice of waiver). The Holder is solely responsible for
all calculations required in this Section 3(c). The Company shall have no
-------------
liability for any issuances of Warrant Shares that exceed the 5% amount and the
Company is entitled to rely on all calculations by the Holder and/or its agents.
The Holder's exercise notice shall be deemed a representation of the Holder that
the number of Warrant Shares to be acquired pursuant to such exercise notice
shall be in compliance with the provisions of this Section 3(c).
(d) If, but only if, at any time after one year from the date of issuance of
this Warrant there is no effective Registration Statement registering the resale
of the Warrant Shares by the Holder, this Warrant may also be exercised at such
time by means of a "cashless exercise" in which the Holder shall be entitled to
receive a certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the Closing Price on the Trading Day preceding the date of such
election;
(B) = the Exercise Price of the Warrants, as adjusted; and
(X) = the number of Warrant Shares issuable upon exercise of the Warrants
in accordance with the terms of this Warrant.
4. No Fractional Shares or Scrip. No fractional shares or scrip representing
-----------------------------
fractional shares shall be issued upon the exercise of this Warrant. As to
any fraction of a share which Holder would otherwise be entitled to purchase
upon such exercise, the Company shall pay a cash adjustment in respect of such
final fraction in an amount equal to such fraction multiplied by the Exercise
Price.
5. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares
----------------------------
shall be made without charge to the Holder 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 or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
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Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
6. Closing of Books. The Company will not close its stockholder books or
------------------
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
7. Transfer, Division and Combination.
-------------------------------------
(a) Subject to compliance with any applicable securities laws and the
conditions set forth in Section 1 and Section 7(e) hereof and to the provisions
--------- ----
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder
-----------
are transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
------------
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own expense (other
than transfer taxes) the new Warrant or Warrants under this Section 7.
---------
(d) The Company agrees to maintain, at its aforesaid office, books for the
registration and the registration of transfer of the Warrants.
(e) If, at the time of the surrender of this Warrant in connection with any
transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effective registration statement under the Securities Act and
under applicable state securities or blue sky laws, the Company may require, as
a condition of allowing such transfer (i) that the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that such transfer may be made
without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to
the Company and (iii) that the transferee be an "accredited investor" as defined
in Rule 501(a) promulgated under the Securities Act.
8. No Rights as Shareholder Until Exercise. This Warrant does not entitle
------------------------------------------
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price, the Warrant 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 later of the date of such surrender or payment.
9. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
--------------------------------------------------
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
10. 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, Sunday or a legal holiday in the State of New York, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday in the State of New York.
11. Adjustments to Exercise Price and Number of Warrant Shares.
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For purposes of this Section 11, references to Common Stock shall include
----------
shares of Common Stock, par value $.0001 of the Company (and any other classes
of common stock issued by the Company).
(a) Stock Splits, Etc. The number and kind of securities purchasable upon
-------------------
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In case
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder pursuant to this Section 11(a), the Holder shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.
(b) Anti-Dilution Provisions. From the Initial Exercise Date until one year
------------------------
following the Closing Date, the Exercise Price and the number of Warrant Shares
issuable hereunder and for which this Warrant is then exercisable pursuant to
Section 1 hereof shall be subject to adjustment from time to time as provided in
---------
this Section 11(b). In the event that any adjustment of the Exercise Price as
--------------
required herein results in a fraction of a cent, such Exercise Price shall be
rounded up or down to the nearest cent.
(i) Effect on Exercise Price of Certain Events. For purposes of determining
------------------------------------------
the adjusted Exercise Price under Section 11(b) hereof, the following will
--------------
be applicable:
(A) If at any time from Closing Date until the first anniversary thereof,
the Company shall grant any warrants to any person or entity with an exercise
price which shall be less than the Exercise Price, without the consent of each
Holder, the Exercise Price (of the Warrants which have not been exercised) shall
be adjusted to equal to such lower exercise price
(B) Exceptions to Adjustment of Exercise Price. Notwithstanding anything to
-------------------------------------------
the contrary herein, this Section 11(b) shall not apply to the following (1) the
-------------
granting of warrants to employees, officers, directors or consultants of the
Company pursuant to any stock option plan or other written compensatory
agreement, or (2) the issuance of warrants in connection with acquisitions,
joint ventures, arrangements related to the Company's operations and strategic
relationships, or other strategic investments, the primary purpose of which is
not to raise capital.
(ii) Minimum Adjustment of Exercise Price. No adjustment of the Exercise
----------------------------------------
Price shall be made in an amount of less than 1% of the Exercise Price in effect
at the time such adjustment is otherwise required to be made, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
12. Reorganization, Reclassification, Merger, Consolidation or Disposition
-------------------------------------------------------------------------
of Assets. In case the Company shall reorganize its capital, reclassify its
-----------
capital stock (other than as set forth in Section 11), consolidate or merge with
or into another corporation (where the Company is not the surviving
corporation or where there is a change in or distribution with respect to any
class of common stock of the Company), or sell, transfer or otherwise dispose of
all or substantially all its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification, merger,
consolidation or disposition of assets, shares of common stock of the successor
or acquiring corporation, or any cash, shares of stock or other securities or
property of any nature whatsoever (including warrants or other subscription or
purchase rights) in addition to or in lieu of common stock of the successor or
acquiring corporation ("OTHER PROPERTY"), are to be received by or distributed
--------------
to the holders of Common Stock of the Company, then the Holder shall have the
right thereafter to receive, upon exercise of this Warrant, the number of shares
of Common Stock of the successor or acquiring corporation or of the Company, if
it is the surviving corporation, and Other Property receivable upon or as a
result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event. In case of
any such reorganization, reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12. For purposes of this Section 12, "COMMON STOCK OF THE SUCCESSOR OR
----------- ---------- --------------------------------
ACQUIRING CORPORATION" shall include stock of such corporation of any class
----------------------
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 12 shall similarly apply to successive
-----------
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
13. Voluntary Adjustment by the Company. The Company may at any time during
------------------------------------
the term of this Warrant reduce the then current Exercise Price to any amount
and for any period of time deemed appropriate by the Board of Directors of the
Company.
14. Notice of Adjustment. Whenever the number of Warrant Shares or number or
--------------------
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
15. Notice of Corporate Action. If at any time:
-----------------------------
(a) the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend or other distribution, or
any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or
(b) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,
(c) there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Xxxxxx appearing on the books of the Company and delivered in
accordance with Section 17(d).
--------------
16. Authorized Shares. The Company covenants that during the period the
------------------
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the principal Trading
Market upon which the Common Stock may be listed.
(a) Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation 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 actions as may
be necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefore upon such exercise immediately prior to such increase
in par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
(b) Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
17. Miscellaneous.
-------------
(a) Jurisdiction. This Agreement shall be governed by and construed in
------------
accordance with the internal laws of the State of New York without regard to the
conflicts of laws principles thereof. The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Agreement, shall be brought solely in a federal or state court
located in the City, County and State of New York. By its execution hereof, the
parties hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto waive any claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with respect
thereto. In the event of any such action or proceeding, the party prevailing
therein shall be entitled to payment from the other party hereto of its
reasonable counsel fees and disbursements in an amount judicially determined.
(b) Restrictions. The Holder acknowledges that the Warrant Shares acquired
------------
upon the exercise of this Warrant, if not registered for resale under the
Securities Act, will have legends imprinted upon any stock certificates
evidencing such Warrant Shares and the Company will notify its transfer agent of
restrictions upon resale imposed by the applicable state and federal securities
laws.
(c) Nonwaiver and Expenses. No course of dealing or any delay or failure to
-----------------------
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(d) Notices. Any notice, request or other document required or permitted to
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be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement; provided, upon
--------
any permitted assignment of this Warrant, the assignee shall promptly provide
the Company with its contact information.
(e) Limitation of Liability. No provision hereof, in the absence of any
-------------------------
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(f) Remedies. Holder, in addition to being entitled to exercise all rights
--------
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
(g) Successors and Assigns. Subject to applicable securities laws, this
------------------------
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(h) Amendment. This Warrant may be modified or amended or the provisions
---------
hereof waived with the written consent of the Company and the Holder.
(i) Severability. Wherever possible, each provision of this Warrant shall be
------------
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.
(j) Headings. The headings used in this Warrant are for the convenience of
--------
reference only and shall not, for any purpose, be deemed a part of this Warrant.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: August 26, 2004
CHINA WORLD TRADE CORPORATION
By: /s/ Xxxx X.X. Xxx
--------------------
Name: Xxxx X.X. Xxx
Title: Chief Executive Officer and
Vice Chairman
HOLDER
By: ------------------
Name:
Title:
NOTICE OF EXERCISE
To: China World Trade Corporation
1. The undersigned hereby elects to purchase ________ Series A Warrant
Shares of China World Trade Corporation pursuant to the terms of the attached
Series A Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
2. Payment shall take the form of in lawful money of the United States; or
3. Please issue a certificate or certificates representing said Series A
Warrant Shares in the name of the undersigned or in such other name as is
specified below:
---------------------------
The Series A Warrant Shares shall be delivered to the following:
---------------------------
4. Accredited Investor. The undersigned is an "accredited investor" as
--------------------
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[PURCHASER]
By: ------------------------
Name:
Title:
ASSIGNMENT FORM
(To assign the foregoing warrant, execute this form and supply required
information. Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Series A Warrant and all rights evidenced
thereby are hereby assigned to
____________________________, whose address is:
_________________________________________________
_________________________________________________
Dated:________________, 200_
Holder's Signature:______________________
Holder's Address:________________________
Signature Guaranteed:____________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Series A Warrant, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing Series
A Warrant.
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS 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 OR SOLD EXCEPT PURSUANT TO AN
---
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES
CHINA WORLD TRADE CORPORATION
SERIES A WARRANT TO PURCHASE 25,000 SHARES OF COMMON STOCK
(SUBJECT TO ADJUSTMENT)
(VOID AFTER DECEMBER 3, 2009)
PPW -
------
THIS SERIES A COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value
received, TCMP3 Partners (the "HOLDER"), is entitled, upon the terms and subject
------
to the limitations on exercise and the conditions hereinafter set forth, at any
time on or after the date hereof (the "INITIALEXERCISE DATE")or prior to the
--------------------
close of business on December 3, 2009 (the "TERMINATION DATE") but not
-----------------
thereafter, to subscribe for and purchase from China World Trade Corporation, a
Nevada corporation (the "COMPANY"), up to 25,000 shares (the "WARRANT SHARES")
------- --------------
of Common Stock, $.001 par value per share, of the Company (the "COMMON STOCK").
------------
The purchase price of one share of Common Stock (the "EXERCISE PRICE") under
--------------
this Warrant shall be $2.50, subject to adjustment hereunder. The Exercise
Price and the number of Warrant Shares for which the Warrant is exercisable
shall be subject to adjustment as provided herein. CAPITALIZED TERMS USED AND
NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE MEANINGS SET FORTH IN THAT CERTAIN
SECURITIES PURCHASE AGREEMENT DATED AS OF AUGUST 26, 2004, BETWEEN THE COMPANY
AND THE PURCHASERS SET FORTH ON SCHEDULE 1 THERETO(THE "PURCHASE AGREEMENT").
------------------ ------------------
12. Title to Warrant. Prior to the Termination Date and subject to
------------------
compliance with applicable laws and Section 7 of this Warrant, this Warrant and
---------
all rights hereunder are transferable, in whole or in part, at the office or
agency of the Company by the Holder in person or by duly authorized attorney,
upon surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in form and
substance reasonably satisfactory to the Company.
13. Authorization of Shares. The Company covenants that all Warrant Shares
-------------------------
which may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable 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).
14. Exercise of Warrant.
---------------------
(a) Exercise of the purchase rights represented by this Warrant may be made
at any time or times on or after the Initial Exercise Date and on or before the
Termination Date by the surrender of this Warrant and the Notice of Exercise
Form annexed hereto duly executed, at the office of the Company (or such other
office or agency of the Company as it may designate by notice in writing to the
registered Holder at the address of such Holder appearing on the books of the
Company), and upon payment of the Exercise Price of the Warrant Shares thereby
purchased by wire transfer or cashier's check drawn on a United States bank or
internationally recognized bank, the Holder shall be entitled to receive a
certificate for the number of Warrant Shares so purchased. Certificates for
Warrant Shares purchased hereunder shall be delivered to the Holder within seven
(7) Trading Days after the date on which this Warrant shall have been
exercised as aforesaid. This Warrant shall be deemed to have been exercised and
such certificate or certificates shall be deemed to have been issued, and the
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been properly exercised by payment to the Company of the
Exercise Price and all taxes required to be paid by the Holder, if any, pursuant
to Section 5 have been paid. If such conditions by the Holder have been met, and
---------
the Company fails to deliver to the Holder a certificate or certificates
representing the Warrant Shares pursuant to this Section 3(a) by the close of
------------
business on the 7th Trading Day after the date of such conditions being met by
the Holder, then the Holder will have the right to rescind such exercise. In
addition to any other rights available to the Holder, if the Company fails to
deliver to the Holder a certificate or certificates representing the Warrant
Shares pursuant to a proper exercise, and all conditions being met by the
Holder, by the close of business on the 10th Trading Day after the date of
exercise, and if after such 10th Trading Day the Holder is required by its
broker to purchase (in an open market transaction or otherwise) shares of Common
Stock to deliver in satisfaction of a sale by the Holder of the Warrant Shares
which the Holder anticipated receiving upon such exercise (a "BUY-IN"), then the
------
Company shall (1) pay in immediately available funds to the Holder the amount by
which (x) the Holder's total purchase price (including brokerage commissions, if
any) for the Warrant Shares so purchased exceeds (y) the amount obtained by
multiplying (A) the number of Warrant Shares that the Company was required to
deliver to the Holder in connection with the exercise at issue times (B) the
price at which the sell order giving rise to such purchase obligation was
executed, and (2) at the option of the Holder, either reinstate the portion of
the Warrant and equivalent number of Warrant Shares for which such exercise was
not honored or deliver to the Holder the number of shares of Common Stock that
would have been issued had the Company timely complied with its exercise and
delivery obligations hereunder. For example, if the Holder purchases Common
Stock having a total purchase price of $100 to cover a Buy-In with respect to an
attempted exercise of Warrant Shares with an aggregate sale price giving rise to
such purchase obligation of $80, under clause (1) of the immediately preceding
sentence the Company shall be required to pay the Holder $20. The Holder shall
provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Company. Nothing herein shall limit a
Xxxxxx's right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company's failure to timely deliver
certificates representing Warrant Shares as required pursuant to the terms
hereof.
(b) If this Warrant shall have been exercised in part, the Company shall, at
the time of delivery of the certificate or certificates representing Warrant
Shares, deliver to Holder a new Warrant evidencing the rights of Holder to
purchase the unpurchased Warrant Shares called for by this Warrant, which new
Warrant shall in all other respects be identical with this Warrant.
(c) The Company shall not effect any exercise of this Warrant, and the
Holder shall not have the right to exercise any portion of this Warrant,
pursuant to Section 3(a) or otherwise, to the extent that after giving effect to
------------
such issuance after exercise, the Holder (together with the Holder's
Affiliates), as set forth on the applicable Notice of Exercise, would
beneficially own in excess of 4.9% of the number of shares of the Common Stock
issued and outstanding immediately after giving effect to such issuance. For
purposes of the foregoing sentence, the number of shares of Common Stock
beneficially owned by the Holder and its Affiliates shall include the number of
shares of Common Stock issuable upon exercise of this Warrant with respect to
which the determination of such sentence is being made, but shall exclude the
number of shares of Common Stock which would be issuable upon (A) exercise of
the remaining, nonexercised portion of this Warrant beneficially owned by the
Holder or any of its Affiliates and (B) exercise or conversion of the
unexercised or nonconverted portion of any other securities of the Company
(including, without limitation, any other Warrants) subject to a limitation on
conversion or exercise analogous to the limitation contained herein beneficially
owned by the Holder or any of its Affiliates. Except as set forth in the
preceding sentence, for purposes of this Section 3(c), beneficial ownership
------------
shall be calculated in accordance with Section 13(d) of the Exchange Act. For
-------------
purposes of this Section 3(c), in determining the number of outstanding shares
------------
of Common Stock, the Holder may rely on the number of outstanding shares of
Common Stock as reflected in (x) the Company's most recent Form 10-Q or Form
10-K, as the case may be, (y) a more recent public announcement by the Company
or (z) any other notice by the Company or the Company's transfer agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral
request of the Holder, the Company shall within four Trading Days confirm orally
and in writing to the Holder the number of shares of Common Stock then
outstanding. In any case, the number of outstanding shares of Company Common
Stock shall be determined after giving effect to the conversion or exercise of
securities of the Company, including this Warrant, by the Holder or its
Affiliates since the date as of which such number of outstanding shares of
Common Stock was reported. The provisions of this Section 3(c) may be waived by
------------
the Holder upon, at the election of the Holder, not less than 61 days' prior
notice to the Company, and the provisions of this Section 3(c) shall continue to
------------
apply until such 61st day (or such later date, as determined by the Holder, as
may be specified in such notice of waiver). The Holder is solely responsible for
all calculations required in this Section 3(c). The Company shall have no
-------------
liability for any issuances of Warrant Shares that exceed the 5% amount and the
Company is entitled to rely on all calculations by the Holder and/or its agents.
The Holder's exercise notice shall be deemed a representation of the Holder that
the number of Warrant Shares to be acquired pursuant to such exercise notice
shall be in compliance with the provisions of this Section 3(c).
(d) If, but only if, at any time after one year from the date of issuance of
this Warrant there is no effective Registration Statement registering the resale
of the Warrant Shares by the Holder, this Warrant may also be exercised at such
time by means of a "cashless exercise" in which the Holder shall be entitled to
receive a certificate for the number of Warrant Shares equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the Closing Price on the Trading Day preceding the date of such
election;
(B) = the Exercise Price of the Warrants, as adjusted; and
(X) = the number of Warrant Shares issuable upon exercise of the Warrants
in accordance with the terms of this Warrant.
15. No Fractional Shares or Scrip. No fractional shares or scrip
---------------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant. As to any fraction of a share which Holder would otherwise be entitled
to purchase upon such exercise, the Company shall pay a cash adjustment in
respect of such final fraction in an amount equal to such fraction multiplied by
the Exercise Price.
16. Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares
---------------------------
shall be made without charge to the Holder 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 or in such name or names as may be
directed by the Holder; provided, however, that in the event certificates for
-------- -------
Warrant Shares are to be issued in a name other than the name of the Holder,
this Warrant when surrendered for exercise shall be accompanied by the
Assignment Form attached hereto duly executed by the Holder; and the Company may
require, as a condition thereto, the payment of a sum sufficient to reimburse it
for any transfer tax incidental thereto.
17. Closing of Books. The Company will not close its stockholder books or
------------------
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
18. Transfer, Division and Combination.
-------------------------------------
(a) Subject to compliance with any applicable securities laws and the
conditions set forth in Section 1 and Section 7(e) hereof and to the provisions
--------- ----
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder
-----------
are transferable, in whole or in part, upon surrender of this Warrant at the
principal office of the Company, together with a written assignment of this
Warrant substantially in the form attached hereto duly executed by the Holder or
its agent or attorney and funds sufficient to pay any transfer taxes payable
upon the making of such transfer. Upon such surrender and, if required, such
payment, the Company shall execute and deliver a new Warrant or Warrants in the
name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued.
(b) This Warrant may be divided or combined with other Warrants upon
presentation hereof at the aforesaid office of the Company, together with a
written notice specifying the names and denominations in which new Warrants are
to be issued, signed by the Holder or its agent or attorney. Subject to
compliance with Section 7(a), as to any transfer which may be involved in such
------------
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.
(c) The Company shall prepare, issue and deliver at its own expense (other
than transfer taxes) the new Warrant or Warrants under this Section 7.
---------
(d) The Company agrees to maintain, at its aforesaid office, books for the
registration and the registration of transfer of the Warrants.
(e) If, at the time of the surrender of this Warrant in connection with any
transfer of this Warrant, the transfer of this Warrant shall not be registered
pursuant to an effectiveregistration statement under the Securities Act and
under applicable state securities or blue sky laws, the Company may require, as
a condition of allowing such transfer (i) that the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that such transfer may be made
without registration under the Securities Act and under applicable state
securities or blue sky laws, (ii) that the holder or transferee execute and
deliver to the Company an investment letter in form and substance acceptable to
the Company and (iii) that the transferee be an "accredited investor" as defined
in Rule 501(a) promulgated under the Securities Act.
19. No Rights as Shareholder Until Exercise. This Warrant does not entitle
-----------------------------------------
the Holder to any voting rights or other rights as a shareholder of the Company
prior to the exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price, the Warrant 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 later of the date of such surrender or payment.
20. Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants
-------------------------------------------------
that upon receipt by the Company of evidence reasonably satisfactory to it of
the loss, theft, destruction or mutilation of this Warrant or any stock
certificate relating to the Warrant Shares, and in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to it (which, in
the case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
21. 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, Sunday or a legal holiday in the State of New York, then
such action may be taken or such right may be exercised on the next succeeding
day not a Saturday, Sunday or legal holiday in the State of New York.
22. Adjustments to Exercise Price and Number of Warrant Shares.
------------------------------------------------------------------
For purposes of this Section 11, references to Common Stock shall include
----------
shares of Common Stock, par value $.0001 of the Company (and any other classes
of common stock issued by the Company).
(a) Stock Splits, Etc. The number and kind of securities purchasable upon
-------------------
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time upon the happening of any of the following. In case
the Company shall (i) pay a dividend in shares of Common Stock or make a
distribution in shares of Common Stock to holders of its outstanding Common
Stock, (ii) subdivide its outstanding shares of Common Stock into a greater
number of shares, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue any shares of its
capital stock in a reclassification of the Common Stock, then the number of
Warrant Shares purchasable upon exercise of this Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive the
kind and number of Warrant Shares or other securities of the Company which it
would have owned or have been entitled to receive had such Warrant been
exercised in advance thereof. Upon each such adjustment of the kind and number
of Warrant Shares or other securities of the Company which are purchasable
hereunder pursuant to this Section 11(a), the Holder shall thereafter be
entitled to purchase the number of Warrant Shares or other securities resulting
from such adjustment at an Exercise Price per Warrant Share or other security
obtained by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of Warrant Shares purchasable pursuant hereto
immediately prior to such adjustment and dividing by the number of Warrant
Shares or other securities of the Company resulting from such adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.
(b) Anti-Dilution Provisions. From the Initial Exercise Date until one year
------------------------
following the Closing Date, the Exercise Price and the number of Warrant Shares
issuable hereunder and for which this Warrant is then exercisable pursuant to
Section 1 hereof shall be subject to adjustment from time to time as provided in
---------
this Section 11(b). In the event that any adjustment of the Exercise Price as
--------------
required herein results in a fraction of a cent, such Exercise Price shall be
rounded up or down to the nearest cent.
(i) Effect on Exercise Price of Certain Events. For purposes of determining
------------------------------------------
the adjusted Exercise Price under Section 11(b) hereof, the following will
-------------
be applicable:
(A) If at any time from Closing Date until the first anniversary thereof,
the Company shall grant any warrants to any person or entity with an exercise
price which shall be less than the Exercise Price, without the consent of each
Holder, the Exercise Price (of the Warrants which have not been exercised) shall
be adjusted to equal to such lower exercise price
(B) Exceptions to Adjustment of Exercise Price. Notwithstanding anything to
-------------------------------------------
the contrary herein, this Section 11(b) shall not apply to the following (1) the
-------------
granting of warrants to employees, officers, directors or consultants of the
Company pursuant to any stock option plan or other written compensatory
agreement, or (2) the issuance of warrants in connection with acquisitions,
joint ventures, arrangements related to the Company's operations and strategic
relationships, or other strategic investments, the primary purpose of which is
not to raise capital.
(ii) Minimum Adjustment of Exercise Price. No adjustment of the Exercise
----------------------------------------
Price shall be made in an amount of less than 1% of the Exercise Price in effect
at the time such adjustment is otherwise required to be made, but any such
lesser adjustment shall be carried forward and shall be made at the time and
together with the next subsequent adjustment which, together with any
adjustments so carried forward, shall amount to not less than 1% of such
Exercise Price.
17. Reorganization, Reclassification, Merger, Consolidation or Disposition
-------------------------------------------------------------------------
of Assets. In case the Company shall reorganize its capital, reclassify its
---------
capital stock (other than as set forth in Section 11), consolidate or merge with
or into another corporation (where the Company is not the surviving
corporation or where there is a change in or distribution with respect to any
class of common stock of the Company), or sell, transfer or otherwise dispose of
all or substantially all its property, assets or business to another corporation
and, pursuant to the terms of such reorganization, reclassification, merger,
consolidation or disposition of assets, shares of common stock of the successor
or acquiring corporation, or any cash, shares of stock or other securities or
property of any nature whatsoever (including warrants or other subscription or
purchase rights) in addition to or in lieu of common stock of the successor or
acquiring corporation ("OTHER PROPERTY"), are to be received by or distributed
--------------
to the holders of Common Stock of the Company, then the Holder shall have the
right thereafter to receive, upon exercise of this Warrant, the number of shares
of Common Stock of the successor or acquiring corporation or of the Company, if
it is the surviving corporation, and Other Property receivable upon or as a
result of such reorganization, reclassification, merger, consolidation or
disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event. In case of
any such reorganization, reclassification, merger, consolidation or disposition
of assets, the successor or acquiring corporation (if other than the Company)
shall expressly assume the due and punctual observance and performance of each
and every covenant and condition of this Warrant to be performed and observed by
the Company and all the obligations and liabilities hereunder, subject to such
modifications as may be deemed appropriate (as determined in good faith by
resolution of the Board of Directors of the Company) in order to provide for
adjustments of Warrant Shares for which this Warrant is exercisable which shall
be as nearly equivalent as practicable to the adjustments provided for in this
Section 12. For purposes of this Section 12, "COMMON STOCK OF THE SUCCESSOR OR
----------- ---------- --------------------------------
ACQUIRING CORPORATION" shall include stock of such corporation of any class
----------------------
which is not preferred as to dividends or assets over any other class of stock
of such corporation and which is not subject to redemption and shall also
include any evidences of indebtedness, shares of stock or other securities which
are convertible into or exchangeable for any such stock, either immediately or
upon the arrival of a specified date or the happening of a specified event and
any warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 12 shall similarly apply to successive
-----------
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.
18. Voluntary Adjustment by the Company. The Company may at any time during
------------------------------------
the term of this Warrant reduce the then current Exercise Price to any amount
and for any period of time deemed appropriate by the Board of Directors of the
Company.
19. Notice of Adjustment. Whenever the number of Warrant Shares or number or
--------------------
kind of securities or other property purchasable upon the exercise of this
Warrant or the Exercise Price is adjusted, as herein provided, the Company shall
give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
20. Notice of Corporate Action. If at any time:
-----------------------------
(d) the Company shall take a record of the holders of its Common Stock for
the purpose of entitling them to receive a dividend or other distribution, or
any right to subscribe for or purchase any evidences of its indebtedness, any
shares of stock of any class or any other securities or property, or to receive
any other right, or
(e) there shall be any capital reorganization of the Company, any
reclassification or recapitalization of the capital stock of the Company or any
consolidation or merger of the Company with, or any sale, transfer or other
disposition of all or substantially all the property, assets or business of the
Company to, another corporation or,
(f) there shall be a voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then, in any one or more of such cases, the Company shall give to Holder (i) at
least 10 days' prior written notice of the date on which a record date shall be
selected for such dividend, distribution or right or for determining rights to
vote in respect of any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, liquidation or winding up, and (ii)
in the case of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, dissolution, liquidation or winding up, at least 10
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Warrant Shares for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding up. Each
such written notice shall be sufficiently given if addressed to Holder at the
last address of Xxxxxx appearing on the books of the Company and delivered in
accordance with Section 17(d).
--------------
21. Authorized Shares. The Company covenants that during the period the
------------------
Warrant is outstanding, it will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Warrant
Shares upon the exercise of any purchase rights under this Warrant. The Company
further covenants that its issuance of this Warrant shall constitute full
authority to its officers who are charged with the duty of executing stock
certificates to execute and issue the necessary certificates for the Warrant
Shares upon the exercise of the purchase rights under this Warrant. The Company
will take all such reasonable action as may be necessary to assure that such
Warrant Shares may be issued as provided herein without violation of any
applicable law or regulation, or of any requirements of the principal Trading
Market upon which the Common Stock may be listed.
(c) Except and to the extent as waived or consented to by the Holder, the
Company shall not by any action, including, without limitation, amending its
certificate of incorporation 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 actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the foregoing,
the Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefore upon such exercise immediately prior to such increase
in par value, (b) take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this Warrant.
(d) Before taking any action which would result in an adjustment in the
number of Warrant Shares for which this Warrant is exercisable or in the
Exercise Price, the Company shall obtain all such authorizations or exemptions
thereof, or consents thereto, as may be necessary from any public regulatory
body or bodies having jurisdiction thereof.
18. Miscellaneous.
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(k) Jurisdiction. This Agreement shall be governed by and construed in
------------
accordance with the internal laws of the State of New York without regard to the
conflicts of laws principles thereof. The parties hereto hereby irrevocably
agree that any suit or proceeding arising directly and/or indirectly pursuant to
or under this Agreement, shall be brought solely in a federal or state court
located in the City, County and State of New York. By its execution hereof, the
parties hereby covenant and irrevocably submit to the in personam jurisdiction
of the federal and state courts located in the City, County and State of New
York and agree that any process in any such action may be served upon any of
them personally, or by certified mail or registered mail upon them or their
agent, return receipt requested, with the same full force and effect as if
personally served upon them in New York City. The parties hereto waive any claim
that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in personam jurisdiction with respect
thereto. In the event of any such action or proceeding, the party prevailing
therein shall be entitled to payment from the other party hereto of its
reasonable counsel fees and disbursements in an amount judicially determined.
(l) Restrictions. The Holder acknowledges that the Warrant Shares acquired
------------
upon the exercise of this Warrant, if not registered for resale under the
Securities Act, will have legends imprinted upon any stock certificates
evidencing such Warrant Shares and the Company will notify its transfer agent of
restrictions upon resale imposed by the applicable state and federal
securities laws.
(m) Nonwaiver and Expenses. No course of dealing or any delay or failure to
-----------------------
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder's rights, powers or remedies,
notwithstanding all rights hereunder terminate on the Termination Date. If the
Company willfully and knowingly fails to comply with any provision of this
Warrant, which results in any material damages to the Holder, the Company shall
pay to Holder such amounts as shall be sufficient to cover any costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.
(n) Notices. Any notice, request or other document required or permitted to
-------
be given or delivered to the Holder by the Company shall be delivered in
accordance with the notice provisions of the Purchase Agreement; provided, upon
--------
any permitted assignment of this Warrant, the assignee shall promptly provide
the Company with its contact information.
(o) Limitation of Liability. No provision hereof, in the absence of any
-------------------------
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
(p) Remedies. Holder, in addition to being entitled to exercise all rights
--------
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under this Warrant. The Company agrees that monetary
damages would not be adequate compensation for any loss incurred by reason of a
breach by it of the provisions of this Warrant and hereby agrees to waive the
defense in any action for specific performance that a remedy at law would be
adequate.
(q) Successors and Assigns. Subject to applicable securities laws, this
------------------------
Warrant and the rights and obligations evidenced hereby shall inure to the
benefit of and be binding upon the successors of the Company and the successors
and permitted assigns of Holder. The provisions of this Warrant are intended to
be for the benefit of all Holders from time to time of this Warrant and shall be
enforceable by any such Holder or holder of Warrant Shares.
(r) Amendment. This Warrant may be modified or amended or the provisions
---------
hereof waived with the written consent of the Company and the Holder.
(s) Severability. Wherever possible, each provision of this Warrant shall be
------------
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provisions
or the remaining provisions of this Warrant.
(t) Headings. The headings used in this Warrant are for the convenience of
--------
reference only and shall not, for any purpose, be deemed a part of this Warrant.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by
its officer thereunto duly authorized.
Dated: December 3, 2004
CHINA WORLD TRADE CORPORATION
By: /s/ Xxxx X.X. Xxx
--------------------
Name: Xxxx X.X. Xxx
Title: Chief Executive Officer and
Vice Chairman
HOLDER
By: --------------------
Name:
Title:
NOTICE OF EXERCISE
To: China World Trade Corporation
5. The undersigned hereby elects to purchase ________ Series A Warrant
Shares of China World Trade Corporation pursuant to the terms of the attached
Series A Warrant (only if exercised in full), and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if any.
6. Payment shall take the form of in lawful money of the United States; or
7. Please issue a certificate or certificates representing said Series A
Warrant Shares in the name of the undersigned or in such other name as is
specified below:
------------------------------------------
The Series A Warrant Shares shall be delivered to the following:
------------------------------------------
8. Accredited Investor. The undersigned is an "accredited investor" as
--------------------
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.
[PURCHASER]
By: ----------------------
Name:
Title:
ASSIGNMENT FORM
(To assign the foregoing warrant, execute this form and supply required
information. Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Series A Warrant and all rights evidenced
thereby are hereby assigned to
_______________________________, whose address is:
_____________________________________________________
_____________________________________________________
Dated:_______________, 200_
Holder's Signature:________________________
Holder's Address:__________________________
____________________________________________
Signature Guaranteed:______________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Series A Warrant, without alteration or enlargement
or any change whatsoever, and must be guaranteed by a bank or trust company.
Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing Series
A Warrant.
