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EXHIBIT 4.3
FORM OF WARRANT
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 AS TO THIS WARRANT UNDER SAID
ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO CHINA LOGISTICS GROUP, INC.
THAT SUCH REGISTRATION IS NOT REQUIRED.
CHINA LOGISTICS GROUP , INC.
No.
2008-[A] [B]-1_
COMMON STOCK PURCHASE WARRANT
1.
Issuance . In consideration of good
and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged by CHINA LOGISTICS GROUP,
INC. , a
Florida corporation (the “Company”),
___________________ or registered assigns (the
“Holder”) is hereby granted the right to purchase at
any time, on or after the Issue Date (as defined below) until 5:00
P.M., New York City time, on the date which the last calendar of
the month in which the fifth anniversary of the Issue Date occurs
(the “Expiration Date”), _________________ (__________)
fully paid and nonassessable shares of the Company’s Common
Stock, $.001 par value per share (the “Common Stock”),
at an initial exercise price per share (the “Exercise
Price”) of $[0.35][0.50] per share, subject to further
adjustment as set forth herein. This Warrant is being issued
pursuant to the terms of that certain Subscription Agreement, dated
as of _____________, 2008 (the “Agreement”), to which
the Company and Holder (or Holder’s predecessor in interest)
are parties. Capitalized terms not otherwise defined herein
shall have the meanings ascribed to them in the Agreement.
This Warrant
was originally issued to the Holder of the
Holder’s predecessor in interest on ____________, 2008 (the
“Issue Date”).
2.
Exercise of Warrants .
2.1
General . (a) This Warrant is
exercisable in whole or in part at any time and from time to time
commencing on the Issue Date. Such exercise shall be
effectuated by submitting to the Company (either by delivery to the
Company or by facsimile transmission as provided in Section 8
hereof) a completed and duly executed Notice of Exercise
(substantially in the form attached to this Warrant Certificate) as
provided in the Notice of Exercise (or revised by notice given by
the Company as contemplated by the Section headed
“NOTICES” in the Agreement) or at the office of its
Warrant Agent (as provided hereinafter). The date such Notice
of Exercise is faxed to the Company shall be the “Exercise
Date,” provided that, if such exercise represents the
full
exercise of the outstanding balance of the Warrant, the
Holder of this Warrant tenders this Warrant Certificate to the
Company within five (5) Trading Days (as defined below) thereafter.
The term “Trading Day” means any day during which
the Principal Market shall be open for business. The Notice of
Exercise shall be executed by the Holder of this Warrant and shall
indicate (i) the number of shares then being purchased pursuant to
such exercise and (ii) if applicable (as provided below), whether
the exercise is a cashless exercise.
(b) The provisions of this Section 2.1(b)
shall only be applicable (i) on or after the Required Effective
Date and (ii) if, and only if, on the Exercise Date there is
a Non-Registration Event as described in Section 11 of the
Agreement, . If the Notice of Exercise form elects a
“cashless” exercise, the Holder shall thereby be
entitled to receive a number of shares of Common Stock equal to (w)
the excess of the Current Market Value (as defined below) over the
total cash exercise price of the portion of the Warrant then being
exercised, divided by (x) the Market Price of the Common Stock.
For the purposes of this Warrant, the terms (x)
“Current Market Value” shall mean an amount equal to
the Market Price of the Common Stock, multiplied by the number of
shares of Common Stock specified in the applicable Notice of
Exercise, (y) “Market Price of the Common Stock” shall
mean the average Closing Price of the Common Stock for the three
(3) Trading Days ending on the Trading Day immediately prior to the
Exercise Date, and (z) “Closing Price” means the 4:00
P.M. closing bid price of the Common Stock on the Principal Market
on the relevant trading day(s), as reported by Bloomberg LP (or if
that service is not then reporting the relevant information
regarding the Common Stock, a comparable reporting service of
national reputation selected by the Holder and reasonably
acceptable to the Company) for the relevant date.
(c) If the Notice of Exercise form elects a
“cash” exercise (or if the cashless exercise referred
to in the immediately preceding paragraph (b) is not available in
accordance with its terms), the Exercise Price per share of Common
Stock for the shares then being exercised shall be payable, at the
election of the Holder, in cash or by certified or official bank
check or by wire transfer in accordance with instructions provided
by the Company at the request of the Holder.
(d) Upon the appropriate payment, if any, of
the Exercise Price for the shares of Common Stock purchased,
together with the surrender of this Warrant Certificate (if
required), the Holder shall be entitled to receive a certificate or
certificates for the shares of Common Stock so purchased. The
Company shall deliver such certificates representing the Warrant
Shares in accordance with the instructions of the Holder as
provided in the Notice of Exercise (the certificates delivered in
such manner, the “Warrant Share Certificates”) within
three (3) Trading Days (such third Trading Day, a “Delivery
Date”) of (i) with respect to a “cashless
exercise,” the Exercise Date as the case may be, or,
(ii) with respect to a “cash” exercise, the later of
the Exercise Date or the date the payment of the Exercise Price for
the relevant Warrant Shares is received by the Company.
(e) The Company understands that a delay in
the delivery of the Warrant Share Certificates by the Delivery Date
could result in economic loss to the Holder. As
compensation to the Holder for such loss, the Company
agrees to pay late payment fees (as liquidated damages and not as a
penalty) to the Holder for late delivery of Warrant Share
Certificates in the amount of $100 per Trading Day after the
Delivery Date for each $10,000 of Exercise Price of the Warrant
Shares subject to the delivery default. The Company shall pay
any payments incurred under this Section in immediately available
funds upon demand. Furthermore, in addition to any other remedies
which may be available to the Holder, in the event that the Company
fails for any reason to effect delivery of the Warrant Share
Certificates by the Delivery Date, the Holder may revoke all or
part of the relevant Warrant exercise by delivery of a notice to
such effect to the Company, whereupon the Company and the Holder
shall each be restored to their respective positions immediately
prior to the exercise of the relevant portion of this Warrant,
except that the liquidated damages described above shall be payable
through the date notice of revocation or rescission is given to the
Company.
(f)
In addition to any other rights available to the
Holder, if the Company fails to deliver to the Warrant Share
Certificates within seven (7) Trading Days after the Delivery
Date and the Holder purchases (in an open market transaction or
otherwise) shares of common stock (“Bought Shares”) to
deliver in satisfaction of a sale by the Holder of the shares of
Common Stock which the Holder was entitled to receive from the
Company on exercise of this Warrant (a “Buy-In”), then
the Company shall pay in cash to the Holder (in addition to any
remedies available to or elected by the Holder) the amount by which
(A) the Holder’s total purchase price (including brokerage
commissions, if any) for the Bought Shares exceeds (B) the Exercise
Price for such Warrant Shares, together with interest thereon at a
rate of 15% per annum, accruing until such amount and any accrued
interest thereon is paid in full (which amount shall be paid as
liquidated damages and not as a penalty). For example, if the
Holder purchases shares of Common Stock having a total purchase
price of $11,000 to cover a Buy-In with respect to $10,000 (based
on the Exercise Price) of Warrant Shares, the Company shall be
required to pay the Subscriber $1,000, plus interest. The Holder
shall provide the Company written notice indicating the amounts
payable to the Holder in respect of the Buy-In.
(g)
The Holder shall be deemed to be the holder of the
shares issuable to it in accordance with the provisions of this
Section 2.1 on the Exercise Date.
2.2
Limitation on Exercise . Notwithstanding the
provisions of this Warrant, the Agreement or of the other
Transaction Agreements, in no event (except (i) as specifically
provided in this Warrant as an exception to this provision, (ii)
during the forty-five (45) day period prior to the Expiration Date,
or (iii) while there is outstanding a tender offer for any or all
of the shares of the Company’s Common Stock) shall the Holder
be entitled to exercise this Warrant, or shall the Company have the
obligation to issue shares upon such exercise of all or any portion
of this Warrant to the extent that, after such exercise the sum of
(1) 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 portion of the Warrants or other rights to purchase
Common Stock or through the ownership of the unconverted portion of
convertible securities), and (2) the number of shares of Common
Stock issuable upon the exercise of the Warrants with respect to
which the
determination of this proviso 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 (after taking
into account the shares to be issued to the Holder upon such
exercise). For purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended (the “1934 Act”), except as otherwise
provided in clause (1) of such sentence. The Holder, by its
acceptance of this Warrant, further agrees that if the Holder
transfers or assigns any of the Warrants to a party who or which
would not be considered such an affiliate, such assignment shall be
made subject to the transferee’s or assignee’s specific
agreement to be bound by the provisions of this Section 2.3 as if
such transferee or assignee were the original Holder hereof.
2.3
Trustee for Warrant Holders . In the
event that a qualified bank or trust company shall have been
appointed as trustee for the Holder of the Warrants pursuant to
Subsection 6.3, 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 Section 2.1.
3.
Reservation of Shares . The Company
hereby agrees that, at all times during the term of this
Warrant, there shall be reserved for issuance upon exercise of this
Warrant, one hundred percent (100%) of the number of shares of its
Common Stock as shall be required for issuance of the Warrant
Shares for the then unexercised portion of this Warrant. For
the purposes of such calculations, the Company should assume that
the outstanding portion of this Warrant was exercisable in full at
any time, without regard to any restrictions which might limit the
Holder’s right to exercise all or any portion of this Warrant
held by the Holder.
4.
Mutilation or Loss of Warrant . Upon
receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) receipt of reasonably satisfactory
indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will execute and deliver
a
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