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.
REDEEMABLE
COMMON STOCK PURCHASE WARRANT
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No. 2007-C-___
|
Issue
Date: January 23, 2007
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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_________________________,
_____________________________________________, Fax: (___) _______________,
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
_________ 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.
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, 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.
2
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.
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.
3
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.
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.
4
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.
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ALPHA
NUTRA, INC.,
d/b/a
“China Broadband”
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| By: | ||
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Name: |
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| Title: | ||
| Witness: | |||
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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.____), 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 requests that the certificates for such shares be issued in the
name
of, and delivered to _____________________________________________________
whose
address is
___________________________________________________________________________________________________________________________________
_________________________________________________________________________________
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:___________________
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(Signature
must conform to name of holder as specified on
the
face of the Warrant)
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(Address)
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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. 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.
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Transferees
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Percentage
Transferred
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Number
Transferred
|
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Dated:
______________, ___________
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(Signature
must conform to name of holder as specified on
the face of the warrant)
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| Signed in the presence of: | ||
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(Name)
|
(address)
|
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ACCEPTED AND AGREED:
[TRANSFEREE]
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(address)
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(Name)
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