THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THIS WARRANT AND THE SHARES OF COMMON STOCK
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
SATISFACTORY TO CHINA AGRI-BUSINESS, INC. THAT SUCH REGISTRATION IS
NOT REQUIRED.
CHINA AGRI-BUSINESS
INC.
FORM OF SERIES D COMMON
STOCK PURCHASE WARRANT
FOR VALUE
RECEIVED, ____________________ (“ Holder ”), is
entitled to purchase, subject to the provisions of this Warrant,
from China Agri-Business, Inc., a Maryland corporation (“
Company ”), at an exercise price per share equal to
$2.00 (the exercise price in effect being herein called the “
Exercise Price ”), up to __________ shares (“
Warrant Shares ”) of the Company’s Common Stock,
par value $0.001 per share (“ Common Stock ”).
The number of Warrant Shares purchasable upon exercise of this
Warrant and the Exercise Price shall be subject to adjustment from
time to time as described herein.
This Warrant is
being issued pursuant to the Private Placement Memorandum, dated
September 8, 2008 (the “ PPM ”), among the
Company and the initial holders of the Company Warrants (as defined
below). Capitalized terms used herein have the respective meanings
ascribed thereto in the PPM unless otherwise defined
herein.
Section
1. Term .
The term of this Warrant shall commence on the issue date indicated
above and shall expire on the third anniversary thereof (the
“ Expiration Date ”) (such period being the
"Term"), unless terminated earlier under Section 5
below.
Section
2. Registration and Transfers
. The Company shall maintain books
for the transfer and registration of the Warrant. Upon the initial
issuance of this Warrant, the Company shall issue and register the
Warrant in the name of the Holder. Subject to the restrictions set
forth in Section 12, the Company shall transfer this Warrant from
time to time upon the books to be maintained by the Company for
that purpose, upon surrender hereof for transfer, properly endorsed
or accompanied by appropriate instructions for transfer and such
other documents as may be reasonably required by the Company,
including, if required by the Company, an opinion of its counsel to
the effect that such transfer is exempt from the registration
requirements of the Securities Act, to establish that such transfer
is being made in accordance with the terms hereof, and a new
Warrant shall be issued to the transferee and the surrendered
Warrant shall be canceled by the Company.
Section
3. Exercise of Warrant .
(a)
Method of Exercise
. Subject to the provisions hereof,
the Holder may exercise this Warrant, in whole or in part, at any
time prior to its expiration upon surrender of the Warrant,
together with delivery of a duly executed Warrant exercise form, in
the form attached hereto as Appendix A (the “
Exercise Agreement ”) and payment by cash, certified
check or wire transfer of funds of the aggregate Exercise Price for
that number of Warrant Shares then being purchased, to the Company
during normal business hours on any business day at the
Company’s principal executive offices (or such other office
or agency of the Company as it may designate by notice to the
Holder).
(b)
Issuance of
Certificates .
Certificates for the Warrant Shares so purchased shall be delivered
to the Holder within a reasonable time, not exceeding ten (10)
business days, after this Warrant shall have been so exercised. The
certificates so delivered shall be in such denominations as may be
requested by the Holder and shall be registered in the name of the
Holder or such other name as shall be designated by the Holder, as
specified in the Exercise Agreement. If this Warrant shall have
been exercised only in part, then, unless this Warrant has expired,
the Company shall, at its expense, at the time of delivery of such
certificates, deliver to the Holder a new Warrant representing the
right to purchase the number of shares with respect to which this
Warrant shall not then have been exercised. As used herein,
“business day” means a day, other than a Saturday or
Sunday, on which banks in New York City are open for the general
transaction of business. Each exercise hereof shall constitute the
re-affirmation by the Holder that the representations and
warranties contained in the Subscription Agreement are true and
correct in all material respects with respect to the Holder as of
the time of such exercise. Upon partial exercise of this Warrant, a
new Warrant containing the same date and provisions of this Warrant
shall, at the request of the Holder, be issued by the Company to
the Holder for the remaining portion of this Warrant which shall
not have been exercised.
Section
4. Ownership Limitation . Notwithstanding anything to the contrary set
forth herein, at no time may the Holder exercise all or a portion
of this Warrant if the number of Warrant Shares to be issued
pursuant to such exercise would result in the Holder beneficially
owning (as determined in accordance with Section 13(d) of the
Exchange Act and the rules thereunder) more than 9.99% of all of
the Common Stock outstanding at such time. Notwithstanding anything
to the contrary contained herein, the limitation on exercise of
this Warrant may be waived by written agreement between the Holder
and the Company; provided , however , such waiver may
not be effective less than sixty-one (61) days from the date
thereof.
Section
5. Call Provision . Upon completion of a subsequent financing by
the Company for gross proceeds of not less than seven million five
hundred thousand dollars ($7,500,000), the Company may, at any time
during the Term, call for the termination of all or any unexercised
portion of this Warrant ("Call"). To exercise this right, the
Company must deliver to the Holder, registered on the books of the
Company, a written notice (a "Call Notice") indicating that this
Company is making a Call and that all Holders have thirty (30) days
to exercise any unexercised portion of their Warrants. If the
conditions set forth above for such Call are satisfied from the
period from the date of the Call Notice through and including the
Call Date (as defined below), then any portion of this Warrant
subject to such Call Notice for which a notice of exercise shall
not have been received by the Call Date will be cancelled at 6:30
p.m. (New York City time) on the thirtieth calendar day after the
date of the Call Notice (the "Call Date").
Section
6. Payment of Taxes . The Company shall not be required to pay any
tax or taxes which may be payable in respect of any transfer
involved in the issuance or delivery of any certificates for
Warrant Shares in a name other than that of the Holder in respect
of which such shares are issued, and in such case, the Company
shall not be required to issue or deliver any certificate for
Warrant Shares or any Warrant until the person requesting the same
has paid to the Company the amount of such tax or has established
to the Company’s reasonable satisfaction that such tax has
been paid. The Holder shall be responsible for income taxes due
under federal, state or other law, if any such tax is
due.
Section
7. Mutilated or Missing Warrants
. In case this Warrant shall be
mutilated, lost, stolen, or destroyed, the Company shall issue in
exchange and substitution of and upon surrender and cancellation of
the mutilated Warrant, or in lieu of and substitution for the
Warrant lost, stolen or destroyed, a new Warrant of like tenor and
for the purchase of a like number of Warrant Shares, but only upon
receipt of evidence reasonably satisfactory to the Company of such
loss, theft or destruction of the Warrant, and with respect to a
lost, stolen or destroyed Warrant, reasonable indemnity or bond
with respect thereto, if requested by the Company.
Section
8. Reservation of Common Stock
. The Company shall at all times
reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of providing for the
exercise of the Company Warrants, such number of shares of Common
Stock as shall from time to time equal the number of shares
sufficient to permit the exercise of the Company Warrants (as
defined below) in accordance with their respective terms. The
Company agrees that all Warrant Shares issued upon due exercise of
the Warrant shall be, at the time of delivery of the certificates
for such Warrant Shares, duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock of the
Company.
Section
9. Adjustments . Subject and pursuant to the prov
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