Contract
Exhibit
4.1
THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR
OTHER SECURITIES LAWS. THIS WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE
OF THIS WARRANT MAY NOT BE OFFERED, SOLD, ASSIGNED, CONVEYED, TRANSFERRED,
PLEDGED, HYPOTHICATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO EFFECTIVE
REGISTRATIONS UNDER SUCH LAWS OR PURSUANT TO AN OPINION OF COUNSEL (WHICH
COUNSEL AND OPINION SHALL BE REASONABLY SATISFACTORY TO SUNWIN INTERNATIONAL
NEUTRACEUTICALS, INC.) THAT THE PROPOSED DISPOSITION MAY BE EFFECTED IN
COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS WITHOUT SUCH
REGISTRATIONS.
COMMON
STOCK PURCHASE WARRANT
No. 2009-
W1
Date of
Issuance: February 5, 2009
1. Certain
Definitions.
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1.1
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“Business Day” means a
day other than a Saturday or Sunday or a day on which banks in New York,
NY are authorized or required by law to
close.
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1.2
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“Principal Market” means
the principal trading exchange or market for the Company’s common Stock,
which is the OTC Bulletin Board as of the Date of
Issuance.
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1.3
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“Warrant” means this
Warrant and any Warrant(s) issued to Holder and/or its successors and
assigns in replacement of this Warrant or any subsequently issued
Warrant.
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2. Issuance.
In
consideration of good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged by SUNWIN INTERNATIONAL NEUTRACEUTICALS, INC., a
Nevada corporation (the “Company”), WILD FLAVORS, INC.,
a Delaware corporation or registered assigns (the “Holder”) is hereby granted the
right to purchase at any time, on or after the Issue Date (as defined below)
until 5:00 P.M., New York City
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time, on
the date which is the last calendar day of the month during which the fifth
anniversary of the Issue Date occurs (the “Expiration Date”), Twenty-Six
Million Six Hundred Sixty-Six Thousand Six Hundred Sixty-Six (26,666,666) fully
paid and nonassessable shares of the Company's Common Stock, $0.001 par value
per share (the “Common
Stock”), at an initial exercise price per share (the “Exercise Price”) of $0.35 per
share, subject to further adjustment as set forth herein. This Warrant is being
issued pursuant to the terms of that certain Securities Purchase Agreement,
dated as of February 5, 2009 (the “Securities Purchase
Agreement”), to which the Company and Holder are parties. This Warrant is
issued to the Holder on February 5, 2009 (the “Issue Date”).
3. Exercise
of Warrants.
3.1 General.
(a) This
Warrant is exercisable in whole or in part at any time and from time to time
commencing on the date six months after the Issue Date. Such exercise shall be
effectuated by submitting to the Company or its Warrant Agent pursuant to
Section 10 hereof a completed and duly executed “Notice of Exercise”
(substantially in the form attached to this Warrant). The date such Notice of
Exercise is received by the Company shall be the “Exercise Date,” provided that,
if such exercise represents the full exercise of the outstanding balance of the
Warrant, the Holder of this Warrant tenders this Warrant to the Company within
five (5) Trading Days (as defined below) thereafter. The term “Trading Day” means any day
during which the Principal Market shall be open for business. The Notice of
Exercise shall be executed by the Holder of this Warrant and shall indicate (i)
the number of shares then being purchased pursuant to such exercise and (ii) if
applicable (as provided below), whether the exercise is a cashless
exercise.
(b) Holder
may elect to exercise this Warrant, in whole or in part, on a cashless
exchange/net issue basis, by noticing a “cashless” exercise on its Notice of
Exercise form. In the event of such election, the Holder shall thereby be
entitled to receive a number of shares of Common Stock equal to (i) the excess
of the Current Market Value (as defined below) over the total cash exercise
price of the portion of the Warrant then being exercised, divided by (ii) the
Market Price of the Common Stock. For the purposes of this Warrant, the terms
(x) “Current Market
Value” shall mean an amount equal to the Market Price of the Common
Stock, multiplied by the number of shares of Common Stock specified in the
applicable Notice of Exercise, (y) “Market Price of the Common
Stock” shall mean the average Closing Price of the Common Stock for the
three (3) Trading Days ending on the Trading Day immediately prior to the
Exercise Date, and (z)
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“Closing Price” means the 4:00
P.M. closing bid price of the Common Stock on the Principal Market on the
relevant trading day(s), as reported by Bloomberg LP (or if that service is not
then reporting the relevant information regarding the Common Stock, a comparable
reporting service of national reputation selected by the Holder and reasonably
acceptable to the Company) for the relevant date(s).
(c) If
the Notice of Exercise form elects a “cash” exercise, the Exercise Price per
share of Common Stock for the shares then being exercised shall be payable, at
the election of the Holder, in cash or by certified or official bank check or by
wire transfer in accordance with instructions provided by the Company at the
request of the Holder.
(d) Upon
the submission of a completed and duly executed Notice of Exercise, the
appropriate payment, if any, of the Exercise Price for the shares of Common
Stock purchased and, if required, the surrender of this Warrant, the Holder
shall be entitled to receive a certificate or certificates for the shares of
Common Stock so purchased (the “Warrant Shares”). The Company
shall deliver such certificates representing the Warrant Shares in accordance
with the instructions of the Holder as provided in the Notice of Exercise (the
certificates delivered in such manner, the “Warrant Share Certificates”)
within five (5) Trading Days (such third Trading Day, a “Delivery Date”) of (i) with
respect to a “cashless” exercise, the Exercise Date or the Automatic Exercise
Date, as the case may be, or, (ii) with respect to a “cash” exercise, the later
of the Exercise Date or the date the payment of the Exercise Price for the
relevant Warrant Shares is received by the Company.
(e) The
Company understands that a delay in the delivery of the Warrant Share
Certificates by the Delivery Date could result in economic loss to the Holder.
As compensation to the Holder for such loss, the Company agrees to pay late
payment fees (as liquidated damages and not as a penalty) to the Holder for late
delivery of Warrant Share Certificates in the amount of $50 per Trading Day
after the Delivery Date for each $10,000 of aggregate Exercise Price of the
Warrant Shares subject to the delivery default. The Company shall pay any
payments incurred under this Section in immediately available funds upon
demand.
(f) In
addition to any other rights available to the Holder, if the Company fails to
deliver to the Warrant Share Certificates within seven Trading Days after the
Delivery Date and the Holder purchases (in an open market transaction or
otherwise) shares of common stock (“Bought Shares”) to deliver in
satisfaction of a sale by the Holder of the shares of Common Stock which the
Holder was
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entitled
to receive from the Company on exercise of this Warrant (a “Buy-In”), then the Company
shall pay in cash to the Holder (in addition to any remedies available to or
elected by the Holder) the amount by which (A) the Holder's total purchase price
(including brokerage commissions, if any) for the Bought Shares exceeds (B) the
Exercise Price for such Warrant Shares, together with interest thereon at a rate
of 15% per annum, accruing until such amount and any accrued interest thereon is
paid in full (which amount shall be paid as liquidated damages and not as a
penalty). For example, if the Holder purchases shares of Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to $10,000 (based
on the Exercise Price) of Warrant Shares, the Company shall be required to pay
the Holder $1,000, plus interest. The Holder shall provide the Company written
notice indicating the amounts payable to the Holder in respect of the
Buy-In.
(g) The
Holder shall be deemed to be the holder of the shares issuable to it in
accordance with the provisions of this Section 3.1 on the Exercise
Date.
3.2 Automatic
Exercise.
If any
portion of this Warrant remains unexercised as of the Expiration Date and the
Market Price of the Common Stock as of the Expiration Date is greater than the
applicable Exercise Price as of the Expiration Date, then, without further
action by the Holder, this Warrant shall be deemed to have been exercised
automatically on the date (the “Automatic Exercise Date”)
which is the day immediately prior to the close of business on the Expiration
Date (or, in the event that the Expiration Date is not a Business Day, the
immediately preceding Business Day) as if the Holder had duly given a Notice of
Exercise for a “cashless” exercise as contemplated by Section 3.1(b) hereof, and
the Holder (or such other person or persons as directed by the Holder) shall be
treated for all purposes as the holder of record of such Warrant Shares as of
the close of business on such Automatic Exercise Date. This Warrant shall be
deemed to be surrendered to the Company on the Automatic Exercise Date by virtue
of this Section 3.2 without any action by the Holder.
3.3 Trustee
for Warrant Holders.
In the
event that a qualified bank or trust company shall have been appointed as
Trustee pursuant to Subsection 7.3, such bank or trust company shall have all
the powers and duties of a warrant agent (as hereinafter described) and shall
accept, in its own name for the account of the Company or such successor person
as may
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be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to Section
3.1.
4. Reservation
of Shares.
The
Company hereby agrees that, at all times during the term of this Warrant, there
shall be reserved for issuance upon exercise of this Warrant, one hundred
percent (100%) of the number of shares of its Common Stock as shall be required
for issuance of the Warrant Shares for the then unexercised portion of this
Warrant. For the purposes of such calculations, the Company should assume that
the outstanding portion of this Warrant was exercisable in full at any time,
without regard to any restrictions which might limit the Holder's right to
exercise all or any portion of this Warrant held by the Holder.
5. Mutilation
or Loss of Warrant.
Upon
receipt by the Company of evidence reasonably satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and (in the case of loss,
theft or destruction) receipt of reasonably satisfactory indemnification, and
(in the case of mutilation) upon surrender and cancellation of this Warrant, the
Company will execute and deliver a new Warrant of like tenor and date and any
such lost, stolen, destroyed or mutilated Warrant shall thereupon become
void.
6. Rights
of the Holder.
The
Holder shall not, by virtue hereof, be entitled to any rights of a stockholder
in the Company, either at law or equity, and the rights of the Holder are
limited to those expressed in this Warrant and are not enforceable against the
Company except to the extent set forth herein.
7. Protection
Against Dilution and Other Adjustments.
7.1 Adjustment
Mechanism.
If an
adjustment of the Exercise Price is required pursuant to this Section 7 (other
than pursuant to Section 7.4), the Holder shall be entitled to purchase such
number of shares of Common Stock as will cause (i) (x) the total number of
shares of Common Stock Holder is entitled to purchase pursuant to this Warrant
following such adjustment, multiplied by (y) the adjusted Exercise Price per
share, to equal the result of (ii) (x) the total number of shares of Common
Stock Holder is entitled to purchase before adjustment, multiplied by (y) the
Exercise Price per share before adjustment.
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7.2 Capital
Adjustments.
In case
of any stock split or reverse stock split, stock dividend, reclassification of
the Common Stock, recapitalization, merger or consolidation (where the Company
is not the surviving entity), the provisions of this Section 7 shall be applied
as if such capital adjustment event had occurred immediately prior to the date
of this Warrant and the original Exercise Price had been fairly allocated to the
stock resulting from such capital adjustment; and in other respects the
provisions of this Section shall be applied in a fair, equitable and reasonable
manner so as to give effect, as nearly as may be, to the purposes hereof. A
rights offering to stockholders shall be deemed a stock dividend to the extent
of the bargain purchase element of the rights. The Company will not effect any
consolidation or merger, unless prior to the consummation thereof, the successor
or acquiring entity (if other than the Company) and, if an entity different from
the successor or acquiring entity, the entity whose capital stock or assets the
holders of the Common Stock of the Company are entitled to receive as a result
of such consolidation or merger assumes by written instrument the obligations
under this Warrant (including under this Section 7) and the obligations to
deliver to the holder of this Warrant such shares of stock, securities or assets
as, in accordance with the foregoing provisions, the holder may be entitled to
acquire.
7.3 Dissolution.
In the
event of any dissolution of the Company following the transfer of all or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock and
other securities and property (including cash, where applicable) receivable in
accordance with Section 7.2 by the Holder upon their exercise after the
effective date of such dissolution pursuant to this Section 7.3 to a bank or
trust company (a “Trustee”) having its principal
office in New York, NY, as trustee for the Holder.
7.4 Adjustment
for Spin Off.
If, for
any reason, prior to the exercise of this Warrant in full, the Company spins off
or otherwise divests itself of a part of its business or operations or disposes
all or a part of its assets in a transaction (the “Spin Off”) in which the
Company does not receive compensation for such business, operations or assets,
but causes securities of another entity (the “Spin Off Securities”) to be
issued to security holders of the Company, then the Company shall cause (i) to
be reserved Spin Off Securities equal to the number thereof which would have
been issued to the
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Holder
had all of the Holder's unexercised Warrants outstanding on the record date (the
“Record Date”) for
determining the amount and number of Spin Off Securities to be issued to
security holders of the Company (the “Outstanding Warrants”) been
exercised as of the close of business on the Trading Day immediately before the
Record Date (the “Reserved Spin
Off Shares”), and (ii) to be issued to the Holder on the exercise of all
or any of the Outstanding Warrants, such amount of the Reserved Spin Off Shares
equal to (x) the Reserved Spin Off Shares, multiplied by (y) a fraction, of
which (i) the numerator is the amount of the Outstanding Warrants then being
exercised, and (ii) the denominator is the amount of the Outstanding
Warrants.
7.5 Continuation
of Terms.
Upon any
reorganization, consolidation, merger or transfer (and any dissolution following
any transfer) referred to in this Section 7, this Warrant shall continue in full
force and effect and the terms hereof shall be applicable to the Other
Securities (as defined below) and property receivable on the exercise of this
Warrant after the consummation of such reorganization, consolidation or merger
or the effective date of dissolution following any such transfer, as the case
may be, and shall be binding upon the issuer of any Other Securities, including,
in the case of any such transfer, the person acquiring all or substantially all
of the properties or assets of the Company, whether or not such person shall
have expressly assumed the terms of this Warrant as provided elsewhere in this
Section 7. In the event this Warrant does not continue in full force and effect
after the consummation of the transaction described in this Section 7, the
Company's securities and property (including cash, where applicable) receivable
by the Holder of the Warrants will be delivered to the Trustee as contemplated
by Section 7.3. The term “Other
Securities” refers to any stock (other than Common Stock) and other
securities of the Company or any other person (corporate or otherwise) which the
Holder of the Warrant at any time shall be entitled to receive, or shall have
received, on the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities.
8. Certificate
as to Adjustments.
In each
case of any adjustment or readjustment in the shares of Common Stock issuable on
the exercise of the Warrants, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting
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forth
such adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based, including a statement of (a) the
consideration received or receivable by the Company for any additional shares of
Common Stock issued or sold or deemed to have been issued or sold, (b) the
number of shares of Common Stock outstanding or deemed to be outstanding, and
(c) the Exercise Price and the number of shares of Common Stock to be received
upon exercise of this Warrant, in effect immediately prior to such adjustment or
readjustment and as adjusted or readjusted as provided in this Warrant. The
Company will forthwith mail a copy of each such certificate to the Holder of the
Warrant and any Warrant Agent of the Company (appointed pursuant to Section 10
hereof).
9. Compliance
with Securities Laws; Disposition of Warrant or Warrant Shares.
9.1 Compliance
with Securities Laws.
Holder,
by acceptance of this Warrant, represents to the Company that this Warrant and
the Warrant Shares to be issued upon exercise hereof are being acquired for its
own account, for investment purposes only and not with a view to distribution,
and that Holder will not offer, sell, assign, convey, pledge, hypothecate,
transfer or otherwise dispose of this Warrant or any Warrant Shares except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended (the “Securities
Act”), or any state or other securities laws. Except as provided below in
Section 9.2, this Warrant, any Warrant subsequently issued to Holder, and all
certificates representing the Warrant Shares issued hereunder, unless registered
under the Securities Act and any applicable state or other securities law, shall
be stamped or imprinted with a legend in substantially the following
form:
[THIS
WARRANT HAS] [THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE] NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE OR OTHER SECURITIES
LAWS AND MAY NOT BE OFFERED, SOLD, ASSIGNED, CONVEYED, TRANSFERRED, PLEDGED,
HYPOTHICATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO EFFECTIVE REGISTRATIONS
UNDER SUCH LAWS OR PURSUANT TO AN OPINION OF COUNSEL (WHICH COUNSEL AND OPINION
SHALL BE REASONABLY SATISFACTORY TO THE COMPANY) THAT THE PROPOSED DISPOSITION
MAY BE EFFECTED IN COMPLIANCE WITH ALL APPLICABLE SECURITIES LAWS WITHOUT SUCH
REGISTRATIONS.
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9.2 Disposition
of Warrant or Warrant Shares.
With
respect to any sale or other disposition of this Warrant or any of the Warrant
Shares issued hereunder before registration thereof, the then current Holder
shall give written notice to the Company prior thereto, describing briefly the
manner of the sale and/or other disposition and, if requested by the Company, a
written opinion of Holder’s counsel to the effect that the sale or other
disposition may be effected without registration under the Securities Act as
then in effect and under any state or other securities laws then in effect
(which opinion shall be reasonably satisfactory to the Company). Promptly upon
receiving such an opinion, if so requested, the Company shall promptly
effectuate the requested transfer of this Warrant or the Warrant Shares.
Notwithstanding the foregoing, this Warrant and any Warrant Shares issued
hereunder may, as to federal securities laws, be sold or otherwise disposed of
in accordance with Rule 144 or any successor rule under the Securities Act,
provided that Holder furnishes the Company with all information the Company may
reasonably request to provide reasonable assurance that the provisions of Rule
144 or any successor rule have been satisfied and further provided that nothing
herein shall require the Company to meet the public information requirements of
Rule 144. Each certificate representing this Warrant or any Warrant Shares
issued hereunder so transferred shall bear the legend set forth above as to the
applicable restrictions on transferability to ensure compliance with federal,
state and other securities laws, unless the Company determines, after receiving
an opinion of counsel for Holder, that the legend is not required to ensure
compliance with those laws. The Company may issue stop-transfer instructions to
its transfer agent in connection with the enforcement of any such
restrictions.
9.3 Registration
Rights.
The
Holder shall have registration rights with respect to the Warrant Shares or then
subject to issuance upon exercise of this Warrant (collectively, the “Remaining Warrant Shares”) as
set forth in the Securities Purchase Agreement.
10. Warrant
Agent.
The
Company may, by written notice to the Holder of the Warrant, appoint an agent (a
“Warrant Agent”) for the
purpose of issuing Common Stock on the exercise of this Warrant pursuant hereto,
exchanging this Warrant pursuant hereto, and replacing this Warrant pursuant
hereto, or any of the foregoing, and thereafter any such issuance,
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exchange
or replacement, as the case may be, shall be made at such office by such Warrant
Agent.
11. Transfer
on the Company's Books.
Until
this Warrant is transferred on the books of the Company, the Company may treat
the registered holder hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.
12. Notices.
Any
notice required or permitted hereunder shall be given to the Company as
follows:
Attention:
Dongdon Lin, CEO
0
Xxxxxxxxx Xxxxxx
Xxxx,
Xxxxxxxx, Xxxxx 000000
Telecopy
No. 00-000-000-0000
With
copies to:
Xxxxx
Xxxxxxxxx, Esq.
Xxxxxxxxx
Xxxxxxxxxx & Beilly LLP
0000
Xxxxxxxxx Xxxx, Xxxxx 000
Xxxx
Xxxxx, XX 00000
Telecopy
No. 561.362.9612
13. Supplements
and Amendments; Whole Agreement.
This
Warrant may be amended or supplemented only by an instrument in writing signed
by the parties hereto. This Warrant contains the full understanding of the
parties hereto with respect to the subject matter hereof and thereof and there
are no representations, warranties, agreements or understandings other than
expressly contained herein and therein.
14. Governing
Law.
This
Warrant shall be deemed to be a contract made under the laws of the State of New
York for contracts to be wholly performed in such state and without giving
effect to the principles thereof regarding the conflict of laws. Each of the
parties consents to the jurisdiction of the federal courts whose districts
encompass any part of the County of New York or the state courts of the State of
New York sitting in the County of New York
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in
connection with any dispute arising under this Warrant and hereby waives, to the
maximum extent permitted by law, any objection, including any objection based on
forum non conveniens,
to the bringing of any such proceeding in such jurisdictions. To the extent
determined by such court, the Company shall reimburse the Holder for any
reasonable legal fees and disbursements incurred by the Holder in enforcement of
or protection of any of its rights hereunder.
15. Remedies.
The
Company stipulates that the remedies at law of the Holder of this Warrant in the
event of any default or threatened default by the Company in the performance of
or compliance with any of the terms of this Warrant are not and will not be
adequate and that, to the fullest extent permitted by law, such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
16. Counterparts.
This
Warrant may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
17. Descriptive
Headings.
Descriptive
headings of the several Sections of this Warrant are inserted for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
[Signature page follows
immediately.]
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IN
WITNESS WHEREOF, the Company has caused this instrument to be duly executed by
an officer thereunto duly authorized.
Dated:
February 5, 2009
| SUNWIN INTERNATIONAL NEUTRACEUTICALS, INC. | ||||
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/s/
Xxxxxxxx Xxx
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Name:
Xxxxxxxx Xxx
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Title:
Chief Executive Officer
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| Witness: | ||||
| /s/ Junzheng Li |
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