WARRANT AGREEMENT
Exhibit
4.4
This
Warrant Agreement (this “Agreement”) made as of ____ __, 2008 between China
Resources Ltd., a Delaware corporation, with offices at Xxxx Xxxx China Xxx
Xxx
Trading Co., Ltd., Room 921, Block A, Golden Central Tower, Jintian Road, Futian
District, Shenzhen, P.R. China.
(the
“Company”), and American Stock Transfer & Trust Company, a New York
corporation, with offices at 00 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000 (the
“Warrant Agent”).
WHEREAS,
the Company is engaged in a public offering (“Public Offering”) of Units
(“Units”) and, in connection therewith, has determined to issue and deliver up
to (i) 4,600,000 Warrants (“Public Warrants”) to investors in the Public
Offering, each of such Public Warrants evidencing the right of the holder
thereof to purchase one share of the Company’s common stock, par value $.0001
per share (“Common Stock”), for $7.50, subject to adjustment as described herein
and (ii) 280,000 warrants to Maxim Group LLC (“Maxim” or the “Representative”),
as representative of the underwriters, or its designees (the “Representative’s
Warrants”), with each of such Representative’s Warrants evidencing the right of
the holder thereof to purchase one share of Common Stock for $7.00; and
WHEREAS,
the Company has filed with the Securities and Exchange Commission a Registration
Statement, No. 333-145901 on Form S-1 (“Registration Statement”), for the
registration, under the Securities Act of 1933, as amended (“Act”) of, among
other securities, the Public Warrants and the Common Stock issuable upon
exercise of the Public Warrants; and
WHEREAS,
the Company is issuing 2,600,000 warrants, in a private placement prior to
the
Public Offering, which Warrants (the “Private Warrants,” together with the
Public Warrants and the Representative’s Warrants shall be referred to
collectively as the “Warrants”) will be identical to the Public Warrants;
and
WHEREAS,
the Company desires the Warrant Agent to act on behalf of the Company, and
the
Warrant Agent is willing to so act, in connection with the issuance,
registration, transfer, exchange, redemption and exercise of the Warrants;
and
WHEREAS,
the Company desires to provide for the form and provisions of the Warrants,
the
terms upon which they shall be issued and exercised, and the respective rights,
limitation of rights, and immunities of the Company, the Warrant Agent, and
the
holders of the Warrants; and
WHEREAS,
all acts and things have been done and performed which are necessary to make
the
Warrants, when executed on behalf of the Company and countersigned by or on
behalf of the Warrant Agent, as provided herein, the valid, binding and legal
obligations of the Company, and to authorize the execution and delivery of
this
Agreement.
NOW,
THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
1. Appointment
of Warrant Agent. The Company hereby appoints American Stock Transfer &
Trust Company, the Warrant Agent to act as agent for the Company for the
Warrants, and the Warrant Agent hereby accepts such appointment and agrees
to
perform the same in accordance with the terms and conditions set forth in this
Agreement.
2. Warrants.
2.1 Form
of Warrant.
Each
Warrant shall be issued in registered form only, and shall be in substantially
the form of Exhibit A-1 hereto, the provisions of which are incorporated herein
and shall be signed by, or bear the facsimile signature of, the Chairman of
the
Board or President and Treasurer, Secretary or Assistant Secretary of the
Company and shall bear a facsimile of the Company’s seal. In the event the
person whose facsimile signature has been placed upon any Warrant shall have
ceased to serve in the capacity in which such person signed the Warrant before
such Warrant is issued, it may be issued with the same effect as if he or she
had not ceased to be such at the date of issuance.
2.2 Effect
of Countersignature.
Unless
and until countersigned by the Warrant Agent pursuant to this Agreement, a
Warrant shall be invalid and of no effect and may not be exercised by the holder
thereof.
2.3 Registration.
2.3.1 Warrant
Register.
The
Warrant Agent shall maintain books (“Warrant Register”) for the registration of
original issuance and the registration of transfer of the Warrants. Upon the
initial issuance of the Warrants, the Warrant Agent shall issue and register
the
Warrants in the names of the respective holders thereof in such denominations
and otherwise in accordance with instructions delivered to the Warrant Agent
by
the Company.
2.3.2 Registered
Holder.
Prior
to due presentment for registration or transfer of any Warrant, the Company
and
the Warrant Agent may deem and treat the person in whose name such Warrant
shall
be registered upon the Warrant Register (“registered holder”), as the absolute
owner of such Warrant and of each Warrant represented thereby (notwithstanding
any notation of ownership or other writing on the Warrant certificate made
by
anyone other than the Company or the Warrant Agent), for the purpose of any
exercise thereof, and for all other purposes, and neither the Company nor the
Warrant Agent shall be affected by any notice to the contrary.
2.4 Trading
The
Common Stock and Warrants comprising the Units represented by a Unit certificate
will begin separate trading ten (10) business days following the earlier to
occur of the expiration of the underwriters’ over-allotment option in the Public
Offering or its exercise in full, subject to the Company having filed a Current
Report on Form 8-K, which includes an audited balance sheet reflecting the
receipt by the Company of the gross proceeds of the Public Offering including
the proceeds received by the Company from the exercise of the underwriters’
over-allotment option, if any, and having issued a press release announcing
when
such separate trading will begin.
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3. Terms
and Exercise of Warrants
3.1 Warrant
Price.
Each
Warrant shall, when countersigned by the Warrant Agent, entitle the registered
holder thereof, subject to the provisions of such Warrant and of this Warrant
Agreement, to purchase from the Company the number of shares of Common Stock
stated therein, at the price of $7.50 per whole share, subject to the
adjustments provided in Section 4 hereof and in the last sentence of this
Section 3.1. The term “Warrant Price” as used in this Warrant Agreement refers
to the price per share at which Common Stock may be purchased at the time a
Warrant is exercised. The Company in its sole discretion may lower the Warrant
Price at any time prior to the Expiration Date for a period of not less than
ten
business days; provided, that any such reduction shall be identical among all
of
the Warrants.
3.2 Duration
of Warrants.
A
Warrant may be exercised only during the period commencing on the later of
(i)
the completion by the Company of a Business Combination (as defined below)
and
(ii) ___, 2009, (“Exercise Period”) and terminating at 5:00 p.m., New York City
time on the earlier to occur of (i) ___, 2012, or (ii) the date fixed for
redemption of the Warrants as provided in Section 6 of this Agreement (as
applicable, “Expiration Date”). Except with respect to the right to receive the
Redemption Price (as set forth in Section 6 hereunder), each Warrant not
exercised on or before the Expiration Date shall become void, and all rights
thereunder and all rights in respect thereof, whether or not under this
Agreement, shall cease at the close of business on the Expiration Date. The
Company in its sole discretion may extend the duration of the Warrants by
delaying the Expiration Date; provided, however, that the Company will provide
notice to registered holders of the Warrants of such extension not less than
20
days prior to the applicable Expiration Date; provided, further, that any such
extension shall be identical in duration among all of the Public and Private
Warrants, as applicable.
3.3 Exercise
of Warrants.
3.3.1 Payment.
Subject
to the provisions of the Warrant and this Warrant Agreement, a Warrant, when
countersigned by the Warrant Agent, may be exercised by the registered holder
thereof by surrendering it, at the office of the Warrant Agent, or at the office
of its successor as Warrant Agent, in the Borough of Manhattan, City and State
of New York, with the subscription form, as set forth in the Warrant, duly
executed, and by paying in full, in lawful money of the United States, by good
certified check or good bank draft payable to the order of the Company (or
as
otherwise agreed to by the Company), the Warrant Price for each full share
of
Common Stock as to which the Warrant is exercised and any and all applicable
taxes due in connection with the exercise of the Warrant, the exchange of the
Warrant for the Common Stock, and the issuance of the Common Stock.
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3.3.2 Issuance
of Certificates.
As soon
as practicable after the exercise of any Warrant and the clearance of the funds
in payment of the Warrant Price, the Company shall issue to the registered
holder of such Warrant a certificate or certificates for the number of full
shares of Common Stock to which he is entitled, registered in such name or
names
as may be directed by him, her or it, and if such Warrant shall not have been
exercised in full, a new countersigned Warrant exercisable for the number of
shares of Common Stock as to which such Warrant shall not have been exercised.
Notwithstanding the foregoing, the Company shall not be obligated to deliver
any
securities pursuant to the exercise of a Warrant and shall have no obligation
to
settle any Warrant exercise unless a registration statement under the Act with
respect to the Common Stock underlying such Warrant is effective, subject to
the
Company satisfying its obligations under Section 7.4 to use its best efforts.
In
the event a registration statement with respect to the Common Stock underlying
a
Warrant is not effective under the Act, the holder of such Warrant shall not
be
entitled to exercise such Warrant. Notwithstanding anything to the contrary
contained in this Warrant Agreement, under no circumstances will the Company
be
required to net cash settle the exercise of the Warrants. Warrants may not
be
exercised by, or securities issued to, any registered holder in any state in
which such exercise would be unlawful. As a result of the provisions of this
Section 3.3.2, any or all of the Warrants may expire unexercised.
3.3.3 Valid
Issuance.
All
shares of Common Stock issued upon the proper exercise of a Warrant in
conformity with this Agreement shall be validly issued, fully paid and
nonassessable.
3.3.4 Date
of Issuance.
Each
person in whose name any such certificate for shares of Common Stock is issued
shall for all purposes be deemed to have become the holder of record of such
shares on the date on which the Warrant was surrendered and payment of the
Warrant Price was made, irrespective of the date of delivery of such
certificate, except that, if the date of such surrender and payment is a date
when the stock transfer books of the Company are closed, such person shall
be
deemed to have become the holder of such shares at the close of business on
the
next succeeding date on which the stock transfer books are open.
3.3.5 Private
Warrants.
The
Private Warrants may not be transferred until the earlier of (i) the
consummation of a Business Combination (as that term is defined in the
Registration Statement) or (ii) the Company’s dissolution and
liquidation.
3.3.6 Warrant
Solicitation and Warrant Solicitation Fee.
(a)
The
Company has engaged Maxim Group LLC (“Maxim”), on a non-exclusive basis, as its
agent for the solicitation of the exercise of the Public Warrants. The Company,
at its cost, will (i) assist Maxim with respect to such solicitation, if
requested by Maxim, and (ii) provide Maxim, and direct the Company’s
transfer agent and the Warrant Agent to deliver to Maxim, lists of the record
and, to the extent known, beneficial owners of the Company’s Public Warrants.
The Company hereby instructs the Warrant Agent to cooperate with Maxim in every
respect in connection with Maxim’s solicitation activities, including, but not
limited to, providing to Maxim, at the Company’s cost, a list of record and
beneficial holders of the Public Warrants and circulating a prospectus or
offering circular disclosing the compensation arrangements referenced in
Section 3.3.6(b) below to holders of the Public Warrants at the time of
exercise of the Public Warrants. In addition to the conditions set forth in
Section 3.3.6(b), Maxim shall accept payment of the warrant solicitation
fee provided in Section 3.3.6(b) only if it has provided bona fide services
to the Company in connection with the exercise of the Public Warrants and only
to the extent that an investor who exercises his Public Warrants specifically
designates, in writing, that Maxim solicited his, her or its exercise. In
addition to soliciting, either orally or in writing, the exercise of Public
Warrants by a Public Warrant holder, such services may also include
disseminating information, either orally or in writing, to Public Warrant
holders about the Company or the market for the Company’s securities, or
assisting in the processing of the exercise of Public Warrants.
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(b) In
each instance in which a Public Warrant is exercised, the Warrant Agent shall
promptly give written notice of such exercise to the Company and Maxim (“Warrant
Agent’s Exercise Notice”). If, upon the exercise of any Public Warrant more than
one year from the Effective Date, (i) the market price of the Company’s
Common Stock is greater than the Warrant Price, (ii) disclosure of
compensation arrangements between the Company and Maxim with respect to the
solicitation of the exercise of the Public Warrants was made both at the time
of
the Public Offering and at the time of exercise (by delivery of the Prospectus
or as otherwise required by applicable law, rule or regulation), (iii) the
holder of the Public Warrant confirms in writing that the exercise of the Public
Warrant was solicited by Maxim, (iv) the Public Warrant was not held in a
discretionary account, and (v) the solicitation of the exercise of the
Public Warrant was not in violation of Regulation M (as such rule or any
successor rule may be in effect as of such time of exercise) promulgated under
the Securities Exchange Act of 1934, as amended, then the Warrant Agent,
simultaneously with the distribution of the Common Stock underlying the Public
Warrants so exercised in accordance with the instructions from the Company
following receipt of the proceeds to the Company received upon exercise of
such
Public Warrant(s), shall, on behalf of the Company, pay a fee of 5% of the
Warrant Price to Maxim, provided that Maxim delivers to the Warrant Agent within
ten (10) business days from the date on which Maxim has received the
Warrant Agent’s Exercise Notice, a certificate that the conditions set forth in
the preceding clauses (iii), (iv) and (v) have been satisfied.
Notwithstanding the foregoing, no fee will be paid to Maxim with respect to
the
exercise by the Underwriters or their affiliates or the Company’s officers or
directors of Public Warrants purchased by it or them and still held by them
for
its or their own account. Maxim and the Company may, at any time during business
hours, examine the records of the Warrant Agent, including its ledger of
original Public Warrant certificates returned to the Warrant Agent upon exercise
of Warrants.
(c)
The
provisions of this Section 3.3.6 may not be modified, amended or deleted without
the prior written consent of Maxim.
4. Adjustments.
4.1 Stock
Dividends Split Ups.
If
after the date hereof, and subject to the provisions of Section 4.6 below,
the
number of outstanding shares of Common Stock is increased by a stock dividend
payable in shares of Common Stock, or by a split-up of shares of Common Stock,
or other similar event, then, on the effective date of such stock dividend,
split-up or similar event, the number of shares of Common Stock issuable on
exercise of each Warrant shall be increased in proportion to such increase
in
outstanding shares of Common Stock.
4.2 Aggregation
of Shares.
If
after the date hereof, and subject to the provisions of Section 4.6, the number
of outstanding shares of Common Stock is decreased by a consolidation,
combination, reverse stock split or reclassification of shares of Common Stock
or other similar event, then, on the effective date of such consolidation,
combination, reverse stock split, reclassification or similar event, the number
of shares of Common Stock issuable on exercise of each Warrant shall be
decreased in proportion to such decrease in outstanding shares of Common Stock.
4.3 Adjustments
in Exercise Price.
Whenever the number of shares of Common Stock purchasable upon the exercise
of
the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant
Price shall be adjusted (to the nearest cent) by multiplying such Warrant Price
immediately prior to such adjustment by a fraction (x) the numerator of which
shall be the number of shares of Common Stock purchasable upon the exercise
of
the Warrants immediately prior to such adjustment, and (y) the denominator
of
which shall be the number of shares of Common Stock so purchasable immediately
thereafter.
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4.4 Replacement
of Securities upon Reorganization, etc.
In case
of any reclassification or reorganization of the outstanding shares of Common
Stock (other than a change covered by Section 4.1 or 4.2 hereof or that solely
affects the par value of such shares of Common Stock), or in the case of any
merger or consolidation of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization
of the outstanding shares of Common Stock), or in the case of any sale or
conveyance to another corporation or entity of the assets or other property
of
the Company as an entirety or substantially as an entirety in connection with
which the Company is dissolved, the Warrant holders shall thereafter have the
right to purchase and receive, upon the basis and upon the terms and conditions
specified in the Warrants and in lieu of shares of Common Stock immediately
theretofore purchasable and receivable upon the exercise of the rights
represented thereby, the kind and amount of shares of stock or other securities
or property (including cash) receivable upon such reclassification,
reorganization, merger or consolidation, or upon a dissolution following any
such sale or transfer, that the Warrant holder would have received if such
Warrant holder had exercised his, her or its Warrant(s) immediately prior to
such event; and if any reclassification also results in a change in shares
of
Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made
pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions of
this
Section 4.4 shall similarly apply to successive reclassifications,
reorganizations, mergers or consolidations, sales or other transfers.
4.5 Notices
of Changes in Warrant.
Upon
every adjustment of the Warrant Price or the number of shares issuable upon
exercise of a Warrant, the Company shall give written notice thereof to the
Warrant Agent and the Representatives, which notice shall state the Warrant
Price resulting from such adjustment and the increase or decrease, if any,
in
the number of shares purchasable at such price upon the exercise of a Warrant,
setting forth in reasonable detail the method of calculation and the facts
upon
which such calculation is based. Upon the occurrence of any event specified
in
Section 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give
written notice to each Warrant holder, at the last address set forth for such
holder in the warrant register, of the record date or the effective date of
the
event. Failure to give such notice, or any defect therein, shall not affect
the
legality or validity of such event.
4.6 No
Fractional Shares.
Notwithstanding any provision contained in this Warrant Agreement to the
contrary, the Company shall not issue fractional shares upon exercise of
Warrants. If, by reason of any adjustment made pursuant to this Section 4,
the
holder of any Warrant would be entitled, upon the exercise of such Warrant,
to
receive a fractional interest in a share, the Company shall, upon such exercise,
round up to the nearest whole number the number of the shares of Common Stock
to
be issued to the Warrant holder.
4.7 Form
of Warrant.
The
form of Warrant need not be changed because of any adjustment pursuant to this
Section 4, and Warrants issued after such adjustment may state the same Warrant
Price and the same number of shares as is stated in the Warrants initially
issued pursuant to this Agreement. However, the Company may at any time in
its
sole discretion make any change in the form of Warrant the Company may deem
appropriate and which does not affect the substance thereof, and any Warrant
thereafter issued or countersigned, whether in exchange or substitution for
an
outstanding Warrant or otherwise, may be in the form as so changed.
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4.8 Notice
of Certain Transactions.
In the
event the Company shall propose to (a) offer the holders of its Common Stock
rights to subscribe for or to purchase any securities convertible into shares
of
Common Stock or shares of stock of any class or any other securities, rights
or
options, (b) issue any rights, options or warrants entitling the holders of
Common Stock to subscribe for shares of Common Stock or (c) make a tender offer
or exchange offer with respect to the Common Stock, the Company shall send
to
the Warrant holders a notice of such proposed action or offer. Such notice
shall
be mailed to the registered holders at their addresses as they appear in the
Warrant Register, which shall specify the record date for the purposes of such
dividend, distribution or rights, or the date such issuance or event is to
take
place and the date of participation therein by the holders of Common Stock,
if
any such date is to be fixed, and shall briefly indicate the effect of such
action on the Common Stock and on the number and kind of any other shares of
stock and on other property, if any, and the number of shares of Common Stock
and other property, if any, issuable upon exercise of each Warrant and the
Warrant Price after giving effect to any adjustment pursuant to this Article
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which would be required as a result of such action. Such notice shall be given
as promptly as practicable after the Board of Directors of the Company (the
“Board”) has determined to take any such action and (x) in the case of any
action covered by clause (a) or (b) above at least 10 days prior to the record
date for determining the holders of the Common Stock for purposes of such action
or (y) in the case of any other such action at least 20 days prior to the date
of the taking of such proposed action or the date of participation therein
by
the holders of Common Stock, whichever shall be the earlier.
4.9 Other
Events.
If any
event occurs as to which the foregoing provisions of this Article 4 are not
strictly applicable or, if strictly applicable, would not, in the good faith
judgment of the Board, fairly and adequately protect the purchase rights of
the
registered holders of the Warrants in accordance with the essential intent
and
principles of such provisions, then the Board shall make such adjustments in
the
application of such provisions, in accordance with such essential intent and
principles, as shall be reasonably necessary, in the good faith opinion of
the
Board, to protect such purchase rights as aforesaid.
5. Transfer
and Exchange of Warrants.
5.1 Registration
of Transfer.
The
Warrant Agent shall register the transfer, from time to time, of any outstanding
Warrant upon the Warrant Register, upon surrender of such Warrant for transfer,
properly endorsed with signatures properly guaranteed and accompanied by
appropriate instructions for transfer. Upon any such transfer, a new Warrant
representing an equal aggregate number of Warrants shall be issued and the
old
Warrant shall be cancelled by the Warrant Agent. The Warrants so cancelled
shall
be delivered by the Warrant Agent to the Company from time to time upon request.
5.2 Procedure
for Surrender of Warrants.
Warrants may be surrendered to the Warrant Agent, together with a written
request for exchange or transfer, and thereupon the Warrant Agent shall issue
in
exchange therefor one or more new Warrants as requested by the registered holder
of the Warrants so surrendered, representing an equal aggregate number of
Warrants; provided, however, in the event a Warrant surrendered for transfer
bears a restrictive legend, the Warrant Agent shall not cancel such Warrant
and
issue new Warrants in exchange therefor until the Warrant Agent has received
an
opinion of counsel for the Company stating such transfer may be made and
indicating whether the new Warrants must also bear a restrictive legend.
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5.3 Fractional
Warrants.
The
Warrant Agent shall not be required to effect any registration of transfer
or
exchange which will result in the issuance of a warrant certificate for a
fraction of a warrant.
5.4 Service
Charges.
No
service charge shall be made for any exchange or registration of transfer of
Warrants.
5.5 Warrant
Execution and Countersignature.
The
Warrant Agent is hereby authorized to countersign and to deliver, in accordance
with the terms of this Agreement, the Warrants required to be issued pursuant
to
the provisions of this Section 5, and the Company, whenever required by the
Warrant Agent, will supply the Warrant Agent with Warrants duly executed on
behalf of the Company for such purpose.
6. Redemption.
6.1 Redemption.
Subject
to Section 6.4 hereof, not less than all of the outstanding Warrants may be
redeemed, at the option of the Company, at any time after they become
exercisable and prior to their expiration, at the office of the Warrant Agent,
upon the notice referred to in Section 6.2, at the price of $.01 per Warrant
(“Redemption Price”), provided that the last sales price of the Common Stock has
been at least $14.25 per share, on each of twenty (20) trading days within
any
thirty (30) trading day period ending on the third business day prior to the
date on which notice of redemption is given and provided that the Warrants
and
shares of Common Stock underlying the Warrants are covered by a registration
statement that is effective under the Act. Because redemption is at the option
of the Company and because such redemption is subject to conditions, any or
all
of the Warrants may expire unredeemed. The provisions of this Section 6.1 may
not be modified, amended or deleted without the prior written consent of the
Representatives.
6.2 Date
Fixed for, and Notice of, Redemption.
In the
event the Company shall elect to redeem all of the Warrants, the Company shall
fix a date for the redemption. Notice of redemption shall be mailed by first
class mail, postage prepaid, by the Company not less than 30 days prior to
the
date fixed for redemption to the registered holders of the Warrants to be
redeemed at their last addresses as they shall appear on the registration books.
Any notice mailed in the manner herein provided shall be conclusively presumed
to have been duly given whether or not the registered holder received such
notice.
6.3 Exercise
After Notice of Redemption.
The
Warrants may be exercised in accordance with Section 3 of this Agreement at
any time after notice of redemption shall have been given by the Company
pursuant to Section 6.2 hereof and prior to the time and date fixed for
redemption. On and after the redemption date, the record holder of the Warrants
shall have no further rights except to receive, upon surrender of the Warrants,
the Redemption Price.
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6.4 Outstanding
Warrants Only.
The
Company understands that the redemption rights provided for by this Section
6
apply only to outstanding Warrants and only during the Exercise Period. To
the
extent a person holds rights to purchase Warrants, such purchase rights shall
not be extinguished by redemption. However, once such purchase rights are
exercised, the Company may redeem the Warrants issued upon such exercise
provided that the criteria for redemption is met, including the opportunity
of
the Warrant holder to exercise prior to redemption pursuant to Section 6.3.
The
provisions of this Section 6.4 may not be modified, amended or deleted without
the prior written consent of the Representatives.
7. Other
Provisions Relating to Rights of Holders of Warrants.
7.1 No
Rights as Stockholder.
A
Warrant does not entitle the registered holder thereof to any of the rights
of a
stockholder of the Company, including, without limitation, the right to receive
dividends, or other distributions, exercise any preemptive rights to vote or
to
consent or to receive notice as stockholders in respect of the meetings of
stockholders or the election of directors of the Company or any other matter.
7.2 Lost,
Stolen, Mutilated, or Destroyed Warrants.
If any
Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant
Agent may on such terms as to indemnity or otherwise as they may in their
discretion impose (which shall, in the case of a mutilated Warrant, include
the
surrender thereof), issue a new Warrant of like denomination, tenor, and date
as
the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant
shall
constitute a substitute contractual obligation of the Company, whether or not
the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any
time
enforceable by anyone.
7.3 Reservation
of Common Stock.
The
Company shall at all times reserve and keep available a number of its authorized
but unissued shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Warrants issued pursuant to this Agreement.
7.4 Registration
of Common Stock.
The
Company agrees that prior to the commencement of the Exercise Period, it shall
use its best efforts to prepare and file with the Securities and Exchange
Commission a post-effective amendment to the Registration Statement, or a new
registration statement, for the registration, under the Act, of all shares
of
Common Stock issuable upon exercise of the Warrants, and it shall use its best
efforts to take such action as is necessary to qualify for sale in those states
in which the Warrants were initially offered by the Company and the Common
Stock
issuable upon exercise of the Warrants. In either case, the Company will use
its
best efforts to cause the same to become effective on or prior to the
commencement of the Exercise Period and use its best efforts to maintain the
effectiveness of such registration statement until the expiration of the
Warrants in accordance with the provisions of this Agreement; provided, however,
that the Company shall not be obligated to deliver securities and shall not
have
penalties for failure to deliver securities, if a registration statement is
not
effective at the time of exercise by the holder. The provisions of this
Section 7.4 may not be modified, amended or deleted without the prior
written consent of the Representatives. In addition, the Company agrees to
use
its best efforts to register such securities under the blue sky laws of the
states of residence of the exercising warrant holders to the extent an exemption
is not available.
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8. Concerning
the Warrant Agent and Other Matters.
8.1 Payment
of Taxes.
The
Company will from time to time promptly pay all taxes and charges that may
be
imposed upon the Company or the Warrant Agent in respect of the issuance or
delivery of shares of Common Stock upon the exercise of Warrants, but the
Company shall not be obligated to pay any transfer taxes in respect of the
Warrants or such shares.
8.2 Resignation,
Consolidation, or Merger of Warrant Agent.
8.2.1 Appointment
of Successor Warrant Agent.
The
Warrant Agent, or any successor to it hereafter appointed, may resign its duties
and be discharged from all further duties and liabilities hereunder after giving
sixty (60) days’ notice in writing to the Company. If the office of the Warrant
Agent becomes vacant by resignation or incapacity to act or otherwise, the
Company shall appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment within a
period of 30 days after it has been notified in writing of such resignation
or
incapacity by the Warrant Agent or by the holder of the Warrant (who shall,
with
such notice, submit his Warrant for inspection by the Company), then the holder
of any Warrant may apply to the Supreme Court of the State of New York for
the
County of New York for the appointment of a successor Warrant Agent at the
Company’s cost. Any successor Warrant Agent, whether appointed by the Company or
by such court, shall be a corporation organized and existing under the laws
of
the State of New York, in good standing and having its principal office in
the
Borough of Manhattan, City and State of New York, and authorized under such
laws
to exercise corporate trust powers and subject to supervision or examination
by
federal or state authority. After appointment, any successor Warrant Agent
shall
be vested with all the authority, powers, rights, immunities, duties, and
obligations of its predecessor Warrant Agent with like effect as if originally
named as Warrant Agent hereunder, without any further act or deed; but if for
any reason it becomes necessary or appropriate, the predecessor Warrant Agent
shall execute and deliver, at the expense of the Company, an instrument
transferring to such successor Warrant Agent all the authority, powers, and
rights of such predecessor Warrant Agent hereunder; and upon request of any
successor Warrant Agent the Company shall make, execute, acknowledge, and
deliver any and all instruments in writing for more fully and effectually
vesting in and confirming to such successor Warrant Agent all such authority,
powers, rights, immunities, duties, and obligations.
8.2.2 Notice
of Successor Warrant Agent.
In the
event a successor Warrant Agent shall be appointed, the Company shall give
notice thereof to the Representatives and the predecessor Warrant Agent and
the
transfer agent for the Common Stock not later than the effective date of any
such appointment.
8.2.3 Merger
or Consolidation of Warrant Agent.
Any
corporation into which the Warrant Agent may be merged or with which it may
be
consolidated or any corporation resulting from any merger or consolidation
to
which the Warrant Agent shall be a party shall be the successor Warrant Agent
under this Agreement without any further act on the part of the Company or
the
Warrant Agent.
10
8.3 Fees
and Expenses of Warrant Agent.
8.3.1 Remuneration.
The
Company agrees to pay the Warrant Agent reasonable remuneration for its services
as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand
for all expenditures that the Warrant Agent may reasonably incur in the
execution of its duties hereunder.
8.3.2 Further
Assurances.
The
Company agrees to perform, execute, acknowledge, and deliver or cause to be
performed, executed, acknowledged, and delivered all such further and other
acts, instruments, and assurances as may reasonably be required by the Warrant
Agent for the carrying out or performing of the provisions of this Agreement.
8.4 Liability
of Warrant Agent.
8.4.1 Reliance
on Company Statement.
Whenever in the performance of its duties under this Warrant Agreement, the
Warrant Agent shall deem it necessary or desirable that any fact or matter
be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a statement signed by the President or Chairman of the Board
of
the Company and delivered to the Warrant Agent. The Warrant Agent may rely
upon
such statement for any action taken or suffered in good faith by it pursuant
to
the provisions of this Agreement.
8.4.2 Indemnity.
The
Warrant Agent shall be liable hereunder only for its own negligence, willful
misconduct or bad faith. The Company agrees to indemnify the Warrant Agent
and
save it harmless against any and all liabilities, including judgments, costs
and
reasonable counsel fees, for anything done or omitted by the Warrant Agent
in
the execution of this Agreement except as a result of the Warrant Agent’s
negligence, willful misconduct, or bad faith.
8.4.3 Exclusions.
The
Warrant Agent shall have no responsibility with respect to the validity of
this
Agreement or with respect to the validity or execution of any Warrant (except
its countersignature thereof); nor shall it be responsible for any breach by
the
Company of any covenant or condition contained in this Agreement or in any
Warrant; nor shall it be responsible to make any adjustments required under
the
provisions of Section 4 hereof or responsible for the manner, method, or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment; nor shall it by any act hereunder be deemed to
make
any representation or warranty as to the authorization or reservation of any
shares of Common Stock to be issued pursuant to this Agreement or any Warrant
or
as to whether any shares of Common Stock will when issued be valid and fully
paid and nonassessable.
8.5 Acceptance
of Agency.
The
Warrant Agent hereby accepts the agency established by this Agreement and agrees
to perform the same upon the terms and conditions herein set forth and among
other things, shall account promptly to the Company with respect to Warrants
exercised and concurrently account for, and pay to the Company, all moneys
received by the Warrant Agent for the purchase of shares of Common Stock through
the exercise of Warrants.
11
9. Miscellaneous
Provisions.
9.1 Successors.
All the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Warrant Agent shall bind and inure to the benefit of their respective
successors and assigns.
9.2 Notices.
Any
notice, statement or demand authorized by this Warrant Agreement to be given
or
made by the Warrant Agent or by the holder of any Warrant to or on the Company
shall be sufficiently given when so delivered if by hand or overnight delivery
or if sent by certified mail or private courier service within five days after
deposit of such notice, postage prepaid, addressed (until another address is
filed in writing by the Company with the Warrant Agent), as follows:
Xxxx
Xxxx
China Xxx Xxx Trading Co., Ltd.
Xxxx
000,
Xxxxx X, Xxxxxx Xxxxxxx Xxxxx, Xxxxxxx Xxxx
Futian
District, Shenzhen, P.R. China
Attn:
Xxxx Xxxx, President and Chief Executive Officer
Any
notice, statement or demand authorized by this Agreement to be given or made
by
the holder of any Warrant or by the Company to or on the Warrant Agent shall
be
sufficiently given when so delivered if by hand or overnight delivery or if
sent
by certified mail or private courier service five days after deposit of such
notice, postage prepaid, addressed (until another address is filed in writing
by
the Warrant Agent with the Company), as follows:
American
Stock Transfer & Trust Company
00
Xxxxxx
Xxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Compliance Department
with
a
copy in each case to:
Xxxxx
& Xxx Xxxxxx LLP
Three
Park Avenue, 16th
floor
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx X. XxXxxx, Esq.
and
Ellenoff
Xxxxxxxx & Schole LLP
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx X. Xxxxxxxx, Esq.
and
Maxim
Group LLC
000
Xxxxxxxxx Xxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxxx X. Xxxxxx, Managing Director
12
9.3 Applicable
Law.
The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflict of laws. The Company hereby agrees that any action,
proceeding or claim against it arising out of or relating in any way to this
Agreement shall be brought and enforced in the courts of the State of New York
or the United States District Court for the Southern District of New York,
and
irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive.
The Company hereby waives any objection to such exclusive jurisdiction and
that
such courts represent an inconvenience forum. Any such process or summons to
be
served upon the Company may be served by transmitting a copy thereof by
registered or certified mail, return receipt requested, postage prepaid,
addressed to it at the address set forth in Section 9.2 hereof. Such mailing
shall be deemed personal service and shall be legal and binding upon the Company
in any action, proceeding or claim.
9.4 Persons
Having Rights under this Agreement.
Nothing
in this Agreement expressed and nothing that may be implied from any of the
provisions hereof is intended, or shall be construed, to confer upon, or give
to, any person or corporation other than the parties hereto and the registered
holders of the Warrants and, for the purposes of Sections 2.4, 3.3.5, 3.3.6,
6.1, 6.4, 7.4, 9.2 and 9.8 hereof, the Representatives, any right, remedy,
or
claim under or by reason of this Warrant Agreement or of any covenant,
condition, stipulation, promise, or agreement hereof. The Representatives shall
be deemed to be a third-party beneficiary of this Agreement with respect to
Sections 2.4, 3.3.5, 3.3.6, 6.1, 6.4, 7.4, 9.2 and 9.8 hereof. All covenants,
conditions, stipulations, promises, and agreements contained in this Warrant
Agreement shall be for the sole and exclusive benefit of the parties hereto
(and
the Representatives with respect to the Sections 2.4, 3.3.5, 3.3.6, 6.1, 6.4,
7.4, 9.2 and 9.8 hereof) and their successors and assigns and of the registered
holders of the Warrants. Sections 3.3.6 and 9.4 shall not be modified or amended
without the prior written consent of the Representative.
9.5 Examination
of the Warrant Agreement.
A copy
of this Agreement shall be available at all reasonable times at the office
of
the Warrant Agent in the Borough of Manhattan, City and State of New York,
for
inspection by the registered holder of any Warrant. The Warrant Agent may
require any such holder to submit his Warrant for inspection by it.
9.6 Counterparts.
This
Agreement may be executed in any number of original or facsimile 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.
9.7 Effect
of Headings.
The
Section headings herein are for convenience only and are not part of this
Warrant Agreement and shall not affect the interpretation thereof.
9.8 Amendments.
This
Agreement may be amended by the parties hereto without the consent of any
registered holder for the purpose of curing any ambiguity, or of curing,
correcting or supplementing any defective provision contained herein or adding
or changing any other provisions with respect to matters or questions arising
under this Agreement as the parties may deem necessary or desirable and that
the
parties deem shall not adversely affect the interest of the registered holders.
All other modifications or amendments, including any amendment to increase
the
Warrant Price or shorten the Exercise Period, shall require the written consent
of each of the Representatives and the registered holders of a majority of
the
then outstanding Warrants. Notwithstanding the foregoing, the Company may lower
the Warrant Price or extend the duration of the Exercise Period in accordance
with Sections 3.1 and 3.2, respectively, without such consent.
13
9.9 Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible and be
valid
and enforceable.
(Remainder
of the document intentionally left blank. Signature page to
follow)
14
IN
WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto
as
of the day and year first above written.
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By:
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Name:
Title:
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Xxxx
Xxxx
President
and Chief Executive Officer
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Attest:
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AMERICAN
STOCK TRANSFER & TRUST COMPANY
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By:
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Name:
Title:
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