Contract
THIS
WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
AND
THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO ALPHA NUTRA, INC., D/B/A CHINA BROADBAND THAT SUCH REGISTRATION
IS NOT REQUIRED.
COMMON
STOCK PURCHASE WARRANT
|
No. 2007-B-1
|
Issue
Date: January 23, 2007
|
ALPHA
NUTRA, INC., d/b/a China Broadband, a corporation organized under the laws
of
the State of Nevada and doing business as China Broadband (the “Company”),
hereby certifies that, for value received [BCGU, LLC], with an address at
_________________________________, or its assigns (the “Holder”),
is
entitled, subject to the terms set forth below, to purchase from the Company
at
any time after the Issue Date until 5:00 p.m., E.S.T on March 24, 2009 (the
“Expiration
Date”),
up to
Five Hundred Thousand (500,000) fully paid and non-assessable shares of the
common stock of the Company (the “Common
Stock”),
$.001
par value per share at a per share purchase price of $.60 (as adjusted from
time
to time, the “Warrant
Exercise Price”).
The
number and character of such shares of Common Stock and the Warrant Exercise
Price issuable upon the exercise of this warrant (the “Warrant”)
are
subject to adjustment as provided herein. The shares underlying these warrants
are subject to certain lock up provisions pursuant to a separate lock up
agreement among the parties.
As
used herein the following terms, unless the context otherwise requires, have
the
following respective meanings:
(a) The
term “Company”
shall include Alpha Nutra, Inc., d/b/a China Broadband and any corporation
which
shall succeed or assume the obligations of Alpha Nutra, Inc. hereunder.
(b) The
term “Common
Stock”
includes (a) the Company's Common Stock as authorized on the date hereof,
and (b) any other securities into which or for which any of the securities
described in (a) may be converted or exchanged pursuant to a plan of
recapitalization, reorganization, merger, sale of assets or
otherwise.
(c) 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 pursuant to Section 4 or
otherwise.
1. Exercise
of Warrant.
1.1. Number
of Shares Issuable upon Exercise.
From
and after the Issue Date through and including the Expiration Date, the Holder
hereof shall be entitled to receive, upon exercise of this Warrant in whole
in
accordance with the terms of subsection 1.2 or upon exercise of this
Warrant in part in accordance with subsection 1.3, shares of Common Stock
of the Company, subject to adjustment pursuant to Section 4.
1.2. Full
Exercise.
This Warrant may be exercised in full by the Holder hereof by delivery of an
original or facsimile copy of the form of subscription attached as Exhibit A
hereto (the “Subscription
Form”)
duly executed by such Holder and surrender of the original Warrant within three
(3) days of exercise, to the Company at its principal office or at the office
of
its Warrant Agent (as provided hereinafter), accompanied by payment, in cash,
wire transfer or by certified or official bank check payable to the order of
the
Company, in the amount obtained by multiplying the number of shares of Common
Stock for which this Warrant is then exercisable by the Warrant Exercise Price
then in effect.
1.3. Partial
Exercise.
This Warrant may be exercised in whole or in part from time to time (but not
for
a fractional share) by surrender of this Warrant in the manner and at the place
provided in subsection 1.2 except that the amount payable by the Holder on
such partial exercise shall be the amount obtained by multiplying (a) the
number of whole shares of Common Stock designated by the Holder in the
Subscription Form by (b) the Warrant Exercise Price then in effect. On any
such partial exercise, the Company, at its expense, will forthwith issue and
deliver to or upon the order of the Holder hereof a new Warrant of like tenor,
in the name of the Holder hereof or as such Holder (upon payment by such Holder
of any applicable transfer taxes) may request, the whole number of shares of
Common Stock for which such Warrant may still be exercised.
1.4. Fair
Market Value.
Fair Market Value of a share of Common Stock as of a particular date (the
“Determination
Date”)
shall mean:
(a) If
the Company's Common Stock is traded on an exchange or is quoted on the National
Association of Securities Dealers, Inc. Automated Quotation (“Nasdaq”),
National Market System, the NASDAQ SmallCap Market or the American Stock
Exchange, LLC, then the closing or last sale price, respectively, reported
for
the last business day immediately preceding the Determination Date;
(b) If
the Company's Common Stock is not traded on an exchange or on the NASDAQ
National Market System, the NASDAQ SmallCap Market or the American Stock
Exchange, Inc., but is traded in the over-the-counter market or Pink Sheets
or
similar market, then the average of the closing bid and ask prices reported
for
the last business day immediately preceding the Determination Date;
(c) Except
as provided in clause (d) below, if the Company's Common Stock is not
publicly traded, then as the Holder and the Company agree, or in the absence
of
such an agreement, by a valuation to be provided by an independent valuation
firm selected by the Company; or
(d) If
the Determination Date is the date of a liquidation, dissolution or winding
up,
or any event deemed to be a liquidation, dissolution or winding up pursuant
to
the Company's charter, then all amounts to be payable per share to holders
of
the Common Stock pursuant to the charter in the event of such liquidation,
dissolution or winding up, plus all other amounts to be payable per share in
respect of the Common Stock in liquidation under the charter, assuming for
the
purposes of this clause (d) that all of the shares of Common Stock then
issuable upon exercise of all of the Warrants are outstanding at the
Determination Date.
Notwithstanding
the foregoing, for purposes of determining Fair Market Value pursuant to
Section
1.8
below, only the value of the Common Stock as set forth in Subsection
1.4(a),
1.4(b)
or 1.4(c)
above may be considered.
1.5. Company
Acknowledgment.
The Company will, at the time of the exercise of the Warrant, upon the request
of the Holder hereof acknowledge in writing its continuing obligation to afford
to such Holder any rights to which such Holder shall continue to be entitled
after such exercise in accordance with the provisions of this Warrant. If the
Holder shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such Holder any such
rights.
1.6. Trustee
for Warrant Holders.
In the event that a bank or trust company shall have been appointed as trustee
for the Holder of the Warrants pursuant to Subsection 3.2, 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 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 this Section 1.
1.7 Delivery
of Stock Certificates, etc. on Exercise.
The Company agrees that the shares of Common Stock purchased upon exercise
of
this Warrant shall be deemed to be issued to the Holder hereof as the record
owner of such shares as of the close of business on the date on which this
Warrant shall have been surrendered and payment made for such shares as
aforesaid. As soon as practicable after the exercise of this Warrant in full
or
in part, and in any event within three (3) business
days thereafter, the Company at its expense (including the payment by it of
any
applicable issue taxes) will cause to be issued in the name of and delivered
to
the Holder hereof, or as such Holder (upon payment by such Holder of any
applicable transfer taxes) may direct in compliance with applicable securities
laws, a certificate or certificates for the number of duly and validly issued,
fully paid and non-assessable shares of Common Stock (or Other Securities)
to
which such Holder shall be entitled on such exercise, plus, in lieu of any
fractional share to which such Holder would otherwise be entitled, cash equal
to
such fraction multiplied by the then Fair Market Value of one full share of
Common Stock, together with any other stock or other securities and property
(including cash, where applicable) to which such Holder is entitled upon such
exercise pursuant to Section 1 or otherwise.
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2. Notwithstanding
anything in this Warrant to the contrary, in no event shall the Holder of this
Warrant be entitled to exercise a number of Warrants (or portions thereof)
in
excess of the number of Warrants (or portions thereof) upon exercise of which
the sum of (i) the number of shares of Common Stock beneficially owned by the
Holder and its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unexercised Warrants and the
unexercised or unconverted portion of any other securities of the Company)
and
(ii) the number of shares of Common Stock issuable upon exercise of the Warrants
(or portions thereof) with respect to which the determination described herein
is being made, would result in beneficial ownership by the Holder and its
affiliates of more than 4.99% of the outstanding shares of Common Stock. For
purposes of the immediately preceding sentence, beneficial ownership shall
be
determined in accordance with Section 13(d) of the Securities Exchange Act
of
1934, as amended, and Regulation 13D-G thereunder, except as otherwise provided
in clause (i) of the preceding sentence. Notwithstanding anything to the
contrary contained herein, the limitation on exercise of this Warrant set forth
herein may be amended at the sole discretion of the Holder upon providing 61
days written notice to the Company, said notice specifying the exact amount
of
shares beneficially owned as calculated under Section 13(d) and the exact number
of shares for which this Warrant is to be exercised. Holder shall, in the event
of such waiver, be responsible for its own securities and related filings.
3. Adjustment
for Reorganization, Consolidation, Merger, etc.
3.1. Reorganization,
Consolidation, Merger, etc.
In case at any time or from time to time, the Company shall (a) effect a
reorganization, (b) consolidate with or merge into any other person or
(c) transfer all or substantially all of its properties or assets to any
other person under any plan or arrangement contemplating the dissolution of
the
Company, then, in each such case, as a condition to the consummation of such
a
transaction, proper and adequate provision shall be made by the Company whereby
the Holder of this Warrant, on the exercise hereof as provided in
Section 1, at any time after the consummation of such reorganization,
consolidation or merger or the effective date of such dissolution, as the case
may be, shall receive, in lieu of the Common Stock (or Other Securities)
issuable on such exercise prior to such consummation or such effective date,
the
stock and other securities and property (including cash) to which such Holder
would have been entitled upon such consummation or in connection with such
dissolution, as the case may be, if such Holder had so exercised this Warrant,
immediately prior thereto, all subject to further adjustment thereafter as
provided in Section 4.
3.2. Dissolution.
In the event of any dissolution of the Company following the transfer of all
or
substantially all of its properties or assets, the Company, prior to such
dissolution, shall at its expense deliver or cause to be delivered the stock
and
other securities and property (including cash, where applicable) receivable
by
the Holder of the Warrants after the effective date of such dissolution pursuant
to this Section 3 to a bank or trust company (a “Trustee”)
having its principal office in New York, NY, as trustee for the Holder of
the Warrants.
3.3. Continuation
of Terms.
Upon any reorganization, consolidation, merger or transfer (and any dissolution
following any transfer) referred to in this Section 3, this Warrant shall
continue in full force and effect and the terms hereof shall be applicable
to
the Other Securities 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 in Section 4. In
the event this Warrant does not continue in full force and effect after the
consummation of the transaction described in this Section 3, then only in
such event will the Company's securities and property (including cash, where
applicable) receivable by the Holder of the Warrants be delivered to the Trustee
as contemplated by Section 3.2.
3
4. Extraordinary
Events Regarding Common Stock.
In the event that the Company shall (a) issue additional shares of the
Common Stock as a dividend or other distribution on outstanding Common Stock,
(b) subdivide its outstanding shares of Common Stock, or (c) combine
its outstanding shares of the Common Stock into a smaller number of shares
of
the Common Stock, then, in each such event, the Warrant Exercise Price shall,
simultaneously with the happening of such event, be adjusted by multiplying
the
then Warrant Exercise Price by a fraction, the numerator of which shall be
the
number of shares of Common Stock outstanding immediately prior to such event
and
the denominator of which shall be the number of shares of Common Stock
outstanding immediately after such event, and the product so obtained shall
thereafter be the Warrant Exercise Price then in effect. The Warrant Exercise
Price, as so adjusted, shall be readjusted in the same manner upon the happening
of any successive event or events described herein in this Section 4. The
number of shares of Common Stock that the Holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be adjusted to a number determined by multiplying the number
of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the
numerator is the Warrant Exercise Price that would otherwise (but for the
provisions of this Section 4) be in effect, and (b) the denominator is
the Warrant Exercise Price in effect on the date of such exercise.
5. Certificate
as to Adjustments Corresponding Changes to Call Right.
In each case of any adjustment or readjustment in the shares of Common Stock
(or
Other Securities) 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 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
(or Other Securities) issued or sold or deemed to have been issued or sold,
(b) the number of shares of Common Stock (or Other Securities) outstanding
or deemed to be outstanding, and (c) the Warrant 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 11 hereof).
6. Reservation
of Stock, etc. Issuable on Exercise of Warrant; Financial
Statements.
The Company will at all times reserve and keep available, solely for issuance
and delivery on the exercise of the Warrants, all shares of Common Stock (or
Other Securities) from time to time issuable on the exercise of the Warrant.
This Warrant entitles the Holder hereof to receive copies of all financial
and
other information distributed or required to be distributed to the holders
of
the Company's Common Stock.
7. Assignment;
Exchange of Warrant.
Subject to compliance with applicable securities laws, this Warrant, and the
rights evidenced hereby, may be transferred by any registered holder hereof
(a
“Transferor”).
On the surrender for exchange of this Warrant, with the Transferor's endorsement
in the form of Exhibit B
attached hereto (the “Transferor
Endorsement Form”)
and together with an opinion of counsel reasonably satisfactory to the Company
that the transfer of this Warrant will be in compliance with applicable
securities laws, the Company at its expense, but with payment by the Transferor
of any applicable transfer taxes, will issue and deliver to or on the order
of
the Transferor thereof a new Warrant or Warrants of like tenor, in the name
of
the Transferor and/or the transferee(s) specified in such Transferor Endorsement
Form (each a “Transferee”),
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock called for on the face or faces of the Warrant so surrendered
by
the Transferor. No such transfers shall result in a public distribution of
the
Warrant.
8. Replacement
of Warrant.
On receipt of evidence reasonably satisfactory to the Company of the loss,
theft, destruction or mutilation of this Warrant and, in the case of any such
loss, theft or destruction of this Warrant, on delivery of an indemnity
agreement or security reasonably satisfactory in form and amount to the Company
or, in the case of any such mutilation, on surrender and cancellation of this
Warrant, the Company at its expense, will execute and deliver, in lieu thereof,
a new Warrant of like tenor.
9. Registration
Rights.
The Holder of this Warrant has been granted certain registration rights by
the
Company. These registration rights are set forth in the Registration Rights
Agreement. The terms of the Registration Rights Agreement are incorporated
herein by this reference.
Notwithstanding
any provisions herein to the contrary and commencing January 23, 2009 (i.e.
two
(2) years following the original issuance date of January 24, 2007) if a
registration statement under the Securities Act providing for the resale of
the
Common Stock underlying this Warrant is not then in effect by the date such
registration statement is required to be effective pursuant to the Registration
Rights Agreement or does not remain effective until all of the Common Stock
issuable hereby may be sold, or is otherwise not in effect in accordance with
the terms of the Registration Rights Agreement, the Holder may exercise this
Warrant by a cashless exercise.
4
10. [Omitted].
11. 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 (or Other Securities) on the exercise
of
this Warrant pursuant to Section 1, exchanging this Warrant pursuant to
Section 7, and replacing this Warrant pursuant to Section 8, or any of
the foregoing, and thereafter any such issuance, exchange or replacement, as
the
case may be, shall be made at such office by such Warrant Agent.
12. 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.
13. Notices.
All notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted
to be
given hereunder shall be deemed effective (a) upon hand delivery or delivery
by
facsimile, with accurate confirmation generated by the transmitting facsimile
machine, at the address or number designated below (if delivered on a business
day during normal business hours where such notice is to be received), or the
first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be: (i) if to the Company to: China
Broadband, Inc., 0000 Xxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxx, Xxxxxxxx 00000, telecopier number: (000) 000-0000 with
a copy by telecopier only to (not
with respect to Forms of Subscription):
Xxxxxxx Xxxx, Esq. Xxxxxxx Xxxx LLP, 0000 Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, telecopier number: (000)
000-0000,
and (ii) if to the Holder, to the address and telecopier number listed on the
first paragraph of this Warrant.
14. Miscellaneous.
This Warrant and any term hereof may be changed, waived, discharged or
terminated only by an instrument in writing signed by the party against which
enforcement of such change, waiver, discharge or termination is sought. This
Warrant shall be construed and enforced in accordance with and governed by
the
laws of New York. Any dispute relating to this Warrant shall be adjudicated
in
New York County in the State of New York. The headings in this Warrant are
for
purposes of reference only, and shall not limit or otherwise affect any of
the
terms hereof. The invalidity or unenforceability of any provision hereof shall
in no way affect the validity or enforceability of any other provision. The
parties hereto hereby waived a trial by Jury.
IN
WITNESS WHEREOF, the Company has executed this Warrant as of the date first
written above.
|
ALPHA
NUTRA, INC.,
d/b/a
“China Broadband”
By:
Name:
Title:
|
||
|
Witness:
|
||
5
Exhibit A
FORM
OF SUBSCRIPTION
(to
be signed only on exercise of Warrant)
TO:
ALPHA NUTRA, INC. d/b/a “China Broadband”
The
undersigned, pursuant to the provisions set forth in the attached Warrant (No.
4), hereby irrevocably elects to purchase (check applicable box):
___ ________
shares of the Common Stock covered by such Warrant.
___ The
undersigned herewith makes payment of the full purchase price for such shares
at
the price per share provided for in such Warrant, which is $___________ in
lawful money of the United States.
___ The
undersigned elects to exercise via cashless exercise in accordance herewith,
resulting in issuance of _________ shares and the cancellation of ________
shares issuable pursuant to this Warrant.
The
undersigned requests that the certificates for such shares be issued in the
name
of, and delivered to _____________________________________________________
whose
address is
__________________________________________________________________________________________________________________________________________________________________________
Please
return a certificate representing the remaining unexercised portion of this
Warrant.
The
undersigned represents and warrants that all offers and sales by the undersigned
of the securities issuable upon exercise of the within Warrant shall be made
pursuant to registration of the Common Stock under the Securities Act of 1933,
as amended (the “Securities
Act”),
or pursuant to an exemption from registration under the Securities
Act.
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Dated:___________________
|
(Signature
must conform to name of holder as specified on the face of the
Warrant)
(Address)
|
6
Exhibit B
FORM
OF TRANSFEROR ENDORSEMENT
(To
be signed only on transfer of Warrant)
For
value received, the undersigned hereby sells, assigns, and transfers unto the
person(s) named below under the heading “Transferees”
the right represented by the within Warrant to purchase the percentage and
number of shares of Common Stock of ALPHA NUTRA, INC.,
d/b/a
China Broadband,
to which the within Warrant relates specified under the headings “Percentage
Transferred”
and “Number
Transferred,”
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of ALPHA NUTRA,
INC. with full power of substitution in the premises.
|
Transferees
|
Percentage
Transferred
|
Number
Transferred
|
|
Dated:
______________, ___________
Signed
in the presence of:
(Name)
ACCEPTED
AND AGREED:
[TRANSFEREE]
(Name)
|
(Signature
must conform to name of holder as specified on the face of the
warrant)
(address)
(address)
|
7
