CHINA BROADBAND, INC. COMMON STOCK PURCHASE WARRANT
Exhibit
4.1
NEITHER
THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT IS EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL,
IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO
RULE 144 UNDER THE SECURITIES ACT.
CHINA
BROADBAND, INC.
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Initial
Holder: [ ]
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Original Issue
Date: ____________, 2010
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No. of Shares Subject to
Warrant:
[ ]
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Exercise Price Per
Share: $0.05
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Expiration
Time: 5:00 p.m., New York City time, on ________,
2015
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China Broadband, Inc., a Nevada
corporation (the “Company”), hereby certifies that,
for value received, the Initial Holder shown above, or its permitted registered
assigns (the “Holder”),
is entitled to purchase from the Company up to the number of shares of its
common stock, par value $0.001 per share (the “Common Stock”), shown
above (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”) at the exercise price shown above (as may be adjusted from time
to time as provided herein, the “Exercise Price”), at any time
and from time to time on or original issue date indicated above (the “Original Issue Date”) and
through and including the expiration time shown above (the “Expiration Time”), and subject
to the following terms and conditions:
This
Warrant is being issued pursuant to a Securities Purchase Agreement, dated May
20, 2010 (the “SPA”), by
and between the Company, the Holder and the other parties
thereto.
1.
Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
SPA.
2.
List of Warrant
Holders. The Company shall register this Warrant, upon records to
be maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder (which shall include the Holder or, as the case may
be, any registered assignee to which this Warrant is permissibly assigned
hereunder from time to time). The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
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3.
List of Transfers;
Restrictions on Transfer. The Company shall register any transfer of all
or any portion of this Warrant in the Warrant Register, upon surrender of this
Warrant, with the Form of Assignment attached hereto duly completed and signed,
to the Company at its address specified herein. Upon any such registration or
transfer, a new Warrant to purchase Common Stock, in substantially the form
of this Warrant (any such new Warrant, a “New Warrant”), evidencing the
portion of this Warrant so transferred shall be issued to the transferee and a
New Warrant evidencing the remaining portion of this Warrant not so transferred,
if any, shall be issued to the transferring Holder. The acceptance of the
New Warrant by the transferee thereof shall be deemed the acceptance by such
transferee of all of the rights and obligations in respect of the New Warrant
that the Holder has in respect of this Warrant.
4.
Exercise and Duration of
Warrant.
(a)
All or any part of this Warrant
shall be exercisable by the registered Holder in any manner permitted by
Section 10 of this Warrant at any time and from time to time on or after
the Original Issue Date and through and including the Expiration Time. Subject
to Section 11 hereof, at the Expiration Time, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value and this
Warrant shall be terminated and shall no longer be outstanding.
(b)
The Holder may exercise this Warrant by delivering to the Company: (i) an
exercise notice, in the form attached hereto (the “Exercise Notice”), completed
and duly signed, and (ii) payment by wire transfer of immediately available
funds to an account designated by the Company of the Exercise Price for the
number of Warrant Shares as to which this Warrant is being exercised. The
date such items are delivered to the Company (as determined in accordance with
the notice provisions hereof) is an “Exercise Date.” The
Holder shall be required to deliver the original Warrant, or any New Warrant
that may have been previously issued, in order to effect an exercise
hereunder. Execution and delivery of the Exercise Notice shall have
the same effect as cancellation of the original Warrant, or any New Warrant that
may have been previously issued, and issuance of a New Warrant evidencing the
right to purchase the remaining number of Warrant Shares.
(c)
The Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant pursuant to the terms
hereof.
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5.
Delivery of Warrant
Shares.
(a)
Upon exercise of this Warrant, the Company shall promptly (but in no event later
than three (3) Trading Days after the Exercise Date) issue or cause to be issued
and cause to be delivered to or upon the written order of the Holder and in such
name or names as the Holder may designate, a certificate for the Warrant Shares
issuable upon such exercise, free of restrictive legends. “Trading Day” shall mean a date
on which the Company’s Common Stock trades on its principal trading market.
The Holder, or any Person permissibly so designated by the Holder to
receive Warrant Shares, shall be deemed to have become the holder of record of
such Warrant Shares as of the Exercise Date. The Company shall, upon the
written request of the Holder, use its best efforts to deliver, or cause to
be delivered, Warrant Shares hereunder electronically through the Depository
Trust and Clearing Corporation (“DTCC”) or another established
clearing corporation performing similar functions, if available; provided, that, the Company
may, but will not be required to, change its transfer agent if its current
transfer agent cannot deliver Warrant Shares electronically through DTCC or
another established clearing corporation performing similar functions, if
available. If as of the time of exercise the Warrant Shares constitute
restricted or control securities, the Holder, by exercising, agrees not to
resell them except in compliance with all applicable securities
laws.
(b)
To the extent permitted by law, the Company’s obligations to issue and deliver
Warrant Shares in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce
the same, any waiver or consent with respect to any provision hereof, the
recovery of any judgment against any Person or any action to enforce the same,
or any setoff, counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by the Holder or any other Person of any obligation to
the Company or any violation or alleged violation of law by the Holder or any
other Person, and irrespective of any other circumstance that might otherwise
limit such obligation of the Company to the Holder in connection with the
issuance of Warrant Shares. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in
equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.
(c)
If the Company fails to cause its transfer agent
to transmit to the Holder a certificate or the certificates (or, if
electronically, a book-entry position) representing the Warrant Shares pursuant
to the terms hereof by applicable delivery date, then the Holder will have the
right to rescind such exercise.
6.
Charges, Taxes and
Expenses. Issuance and delivery of certificates (or, if electronically, a
book-entry position) representing the Warrant Shares shall be made without
charge to the Holder for any issue or transfer tax, withholding tax, transfer
agent fee or other incidental tax or expense in respect of the issuance of such
certificates, all of which taxes and expenses shall be paid by the
Company; provided,
however, that
the Company shall not be required to pay any tax that may be payable in respect
of any transfer involved in the registration of any certificates for Warrant
Shares or the Warrants in a name other than that of the Holder. The Holder shall
be responsible for all other tax liability that may arise as a result of holding
or transferring this Warrant or receiving Warrant Shares upon exercise
hereof.
7.
Replacement of
Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation hereof, or in lieu of and substitution for this Warrant, a
New Warrant, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and
pay such other reasonable third-party costs as the Company may prescribe. If a
New Warrant is requested as a result of a mutilation of this Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as a condition
precedent to the Company’s obligation to issue the New Warrant.
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8.
Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and
keep available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares that are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase
rights of persons other than the Holder (taking into account the adjustments and
restrictions of Section 9). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.
9.
Certain Adjustments to
Exercise Price. The Exercise Price and number of Warrant
Shares issuable upon exercise of this Warrant are subject to adjustment from
time to time as set forth in this Section 9.
(a)
Adjustments for Stock Splits
and Combinations and Stock Dividends. If the Company
shall at any time or from time to time after the date hereof, effect a stock
split or combination of the outstanding Common Stock or pay a stock dividend in
shares of Common Stock, then the Exercise Price shall be proportionately
adjusted. Any adjustments under this Section 9(a) shall be effective
at the close of business on the date the stock split or combination becomes
effective or the date of payment of the stock dividend, as
applicable.
(b
) Merger Sale,
Reclassification, etc. In case of any: (i)
consolidation or merger (including a merger in which the Company is the
surviving entity), (ii) sale or other disposition of all or substantially all of
the Company’s assets or distribution of property to shareholders (other than
distributions payable out of earnings or retained earnings), or
reclassification, change or conversion of the outstanding securities of the
Company or of any reorganization of the Company (or any other corporation the
stock or securities of which are at the time receivable upon the exercise of
this Warrant) or any similar corporate reorganization on or after the date
hereof, then and in each such case the Holder of this Warrant, upon the exercise
hereof at any time thereafter shall be entitled to receive, in lieu of the stock
or other securities and property receivable upon the exercise hereof prior to
such consolidation, merger, sale or other disposition, reclassification, change,
conversion or reorganization, the stock or other securities or property to which
such Holder would have been entitled upon such consummation if such Holder had
exercised this Warrant immediately prior thereto.
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10.
Right of
Redemption. In the event that (i) the closing price of the
Common Stock as reported by the applicable Trading Market shall equal or exceed
$0.125 (subject to adjustment for any stock splits, combinations or similar
events with respect to the Common Stock after the Original Issue Date) per share
for twenty (20) consecutive Trading Days and (ii) there is an effective
registration statement covering the Warrant Shares on file with the SEC (or all
of the Warrant Shares may be sold pursuant to Rule 144 of the Securities Act
without restriction), the Company shall, upon thirty (30) days’ written notice
to the Holder (during which time the Holder may exercise all or any portion of
this Warrant), be entitled to redeem all, but not less than all, of the
then outstanding Warrants for an amount, with respect to each Warrant, equal to
the product of the number of Warrant Shares issuable upon exercise of such
outstanding Warrant and $0.001 per Warrant Share (the “Redemption
Price”). The Holder agrees to return the redeemed Warrants to
the Company, or to provide evidence of the mutilation, loss, theft or
destruction of the Warrant, including any requested indemnity, in accordance
with Section 7 hereof, upon notice
of such redemption and payment of the Redemption Price. Payment of
the Redemption Price shall be made by the Company in the form of a certified
check or through any other means acceptable to the Holder within two (2) Trading
Days of the Company’s receipt of the Warrant or evidence of the mutilation,
loss, theft or destruction of the Warrant, including any requested indemnity, in
accordance with Section 7
hereof.
11.
No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any
exercise of this Warrant. In lieu of any fractional shares that would otherwise
be issuable, the Company shall pay cash equal to the product of such fraction
multiplied by the closing price of the Company’s Common Stock as reported by the
applicable Trading Market on the Exercise Date.
12.
Notices.
Any and all notices or other communications or deliveries hereunder
(including, without limitation, any Exercise Notice) shall be delivered in
accordance with the procedures set forth in Section 10.2 of the
SPA.
13.
Warrant Agent. The
Company shall serve as warrant agent under this Warrant. Upon thirty (30) days’
notice to the Holder, the Company may appoint a new warrant agent. Any
corporation into which the Company or any new warrant agent may be merged or any
corporation resulting from any consolidation to which the Company or any new
warrant agent shall be a party or any corporation to which the Company or any
new warrant agent transfers substantially all of its corporate trust or
shareholders services business shall be a successor warrant agent under this
Warrant without any further act. Any such successor warrant agent shall promptly
cause notice of its succession as warrant agent to be mailed (by first class
mail, postage prepaid) to the Holder at the Holder’s last address as shown on
the Warrant Register.
14.
Miscellaneous.
(a)
This Warrant shall be binding on and inure to the benefit of the parties hereto
and their respective successors and assigns. Subject to the preceding sentence,
nothing in this Warrant shall be construed to give to any Person other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing signed by
the Company and the Holder, or their successors and assigns.
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(b)
Each party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Warrant
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced exclusively in
the state and federal courts sitting in the City of New York. Each
party hereto hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts sitting in the City of New York, New York for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of this Warrant, and hereby irrevocably waives, and agrees not
to assert in any suit, action or proceeding, any claim that it is not personally
subject to the jurisdiction of any such court, that such suit, action or
proceeding is improper. Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Note and agrees that such service
shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way
any right to serve process in any manner permitted by law. EACH PARTY
HERETO (INCLUDING ITS AFFILIATES, AGENTS, OFFICERS, DIRECTORS AND EMPLOYEES)
HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW,
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(c) The
headings herein are for convenience only, do not constitute a part of this
Warrant and shall not be deemed to limit or affect any of the provisions
hereof.
(d) In
case any one or more of the provisions of this Warrant shall be invalid or
unenforceable in any respect, the validity and enforceability of the remaining
terms and provisions of this Warrant shall not in any way be affected or
impaired thereby and the parties will attempt in good faith to agree upon a
valid and enforceable provision which shall be a commercially reasonable
substitute therefore, and upon so agreeing, shall incorporate such substitute
provision in this Warrant.
(e) Prior
to exercise of this Warrant, the Holder hereof shall not, by reason of by being
a Holder, be entitled to any rights of a stockholder with respect to the Warrant
Shares.
(f)
No provision hereof, in
the absence of any affirmative action by Holder to exercise this Warrant to
purchase Warrant Shares, and no enumeration herein of the rights or privileges
of Holder, shall give rise to any liability of Holder for the purchase price of
any Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
[Signature
Page Follows]
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IN WITNESS WHEREOF, the
Company has caused this Warrant to be duly executed by its authorized officer as
of the date first indicated above.
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CHINA
BROADBAND, INC.
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By:
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Name:
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Title:
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Signature
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Warrant
CHINA
BROADBAND, INC.
EXERCISE
NOTICE
Ladies
and Gentlemen:
(1)
The undersigned hereby elects to exercise its Warrant with respect to
______________ shares of Common Stock. Capitalized terms used herein
and not otherwise defined herein have the respective meanings set forth in the
Warrant.
(2)
The holder hereby tenders the sum of $ ______________ to the Company in
accordance with the terms of the Warrant.
(3)
Pursuant to this Exercise Notice, the Company shall deliver to the Holder the
number of Warrant Shares determined in accordance with the terms of the Warrant
and, in lieu of any fractional shares, cash.
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Dated:
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HOLDER:
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name
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By:
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Title:
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Signature
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Warrant
CHINA
BROADBAND, INC.
FORM
OF ASSIGNMENT
To be
completed and signed only upon transfer of Warrant
FOR VALUE RECEIVED, the
undersigned hereby sells, assigns and transfers unto _________________ the right
represented by the within Warrant to purchase _________________ shares of Common
Stock to which the within Warrant relates and appoints __________________
attorney to transfer said right on the books of the Company with full power of
substitution in the premises.
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Dated:
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TRANSFEROR:
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name
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Title:
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TRANSFEREE:
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name
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By:
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Title:
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WITNESS:
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Address
of Transferee:
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name
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Signature
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Warrant
