COMMON STOCK PURCHASE WARRANT ?B?Warrant Agreement |
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CHINA KANGTAI CACTUS BIO-TECH, INC | China Kangtai Cactus Corporation | T Squared Capital LLC | T SQUARED INVESTMENTS LLC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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Exhibit 10.5
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933
ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SHARES NOR ANY INTEREST THEREIN
MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED
UNLESS (1) A REGISTRATION STATEMENT WITH RESPECT THERETO IS
EFFECTIVE UNDER THE 1933 ACT AND ANY APPLICABLE STATE SECURITIES
LAWS, OR (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
1933 ACT.
IN ADDITION, A PREFERRED STOCK PURCHASE AGREEMENT DATED AS OF MARCH
21, 2008 (THE “PURCHASE AGREEMENT”), A COPY OF WHICH
MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE,
CONTAINS CERTAIN ADDITIONAL AGREEMENTS BETWEEN THE PARTIES WITH
RESPECT TO THIS WARRANT.
China Kangtai Cactus Corporation
COMMON STOCK PURCHASE WARRANT “B”
China
Kangtai Cactus Bio-Tech, Inc., a company organized and
existing under the laws of the State of Nevada (the
“
Company ”),
hereby certifies that, for value received,
T Squared Investments LLC, or
its registered assigns (the “
Warrant Holder ”),
is entitled, subject to the terms set forth below, to purchase from
the Company up to One Million Five Hundred Thousand (1,500,000)
shares (as adjusted from time to time as provided in Section 7, the
“
Warrant Shares ”)
of common stock, $.001 par value (the “
Common Stock ”),
of the Company at a price of One Dollar ($1.00) per Warrant Share
(as adjusted from time to time as provided in Section 7, the
“
Exercise Price ”),
at any time and from time to time from and after the date thereof
and through and including 5:00 p.m. New York City time on March
21, 2011 (or eighteen months of effectiveness of a
Registration Statement subsequent to the issuance hereof (such
eighteen months to be extended by one month for each month or
portion of a month during which a Registration Statement’s
effectiveness has lapsed or been suspended), whichever is longer)
(the “Expiration Date”), and subject to the following
terms and conditions:
1.
Registration of Warrant
. 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 Warrant Holder hereof from time to time.
The Company may deem and treat the registered Warrant Holder of
this Warrant as the absolute owner hereof for the purpose of any
exercise hereof or any distribution to the Warrant Holder, and for
all other purposes, and the Company shall not be affected by notice
to the contrary.
WARRANT “B” AGREEMENT BETWEEN CHINA KANGTAI CACTUS
BIO-TECH, INC.
AND T SQUARED INVESTMENTS LLC
PAGE 1
OF 9
2.
Investment Representation
. The
Warrant Holder by accepting this Warrant represents that the
Warrant Holder is acquiring this Warrant for its own account or the
account of an affiliate for investment purposes and not with the
view to any offering or distribution and that the Warrant Holder
will not sell or otherwise dispose of this Warrant or the
underlying Warrant Shares in violation of applicable securities
laws. The Warrant Holder acknowledges that the certificates
representing any Warrant Shares will bear a legend indicating that
they have not been registered under the United States Securities
Act of 1933, as amended (the “
1933 Act ”)
and may not be sold by the Warrant Holder except pursuant to an
effective registration statement or pursuant to an exemption from
registration requirements of the 1933 Act and in accordance with
federal and state securities laws. If this Warrant was acquired by
the Warrant Holder pursuant to the exemption from the registration
requirements of the 1933 Act afforded by Regulation S thereunder,
the Warrant Holder acknowledges and covenants that this Warrant may
not be exercised by or on behalf of a Person during the one year
distribution compliance period (as defined in Regulation S)
following the date hereof.
“
Person
” means
an individual, partnership, firm, limited liability company, trust,
joint venture, association, corporation, or any other legal
entity.
3.
Validity of Warrant and Issue of Shares
. The
Company represents and warrants that this Warrant has been duly
authorized and validly issued and warrants and agrees that all of
Common Stock that may be issued upon the exercise of the rights
represented by this Warrant will, when issued upon such exercise,
be duly authorized, validly issued, fully paid and nonassessable
and free from all taxes, liens and charges with respect to the
issue thereof. The Company further warrants and agrees that during
the period within which the rights represented by this Warrant may
be exercised, the Company will at all times have authorized and
reserved a sufficient number of Common Stock to provide for the
exercise of the rights represented by this Warrant.
4.
Registration of Transfers and Exchange of
Warrants
.
a.
Subject
to compliance with the legend set forth on the face of this
Warrant, the Company shall register the transfer of 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 the office
specified in or pursuant to Section 12. 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 Warrant Holder. The acceptance of the New
Warrant by the transferee thereof shall be deemed the acceptance of
such transferee of all of the rights and obligations of a Warrant
Holder of a Warrant.
WARRANT “B” AGREEMENT BETWEEN CHINA KANGTAI CACTUS
BIO-TECH, INC.
AND T SQUARED INVESTMENTS LLC
PAGE 2
OF 9
b.
This
Warrant is exchangeable, upon the surrender hereof by the
Warrant Holder to the office of the Company specified in or
pursuant to Section 9 for one or more New Warrants, evidencing
in the aggregate the right to purchase the number of Warrant
Shares which may then be purchased hereunder. Any such New
Warrant will be dated the date of such exchange.
a.
Upon
surrender of this Warrant with the Form of Election to
Purchase attached hereto duly completed and signed to the
Company, at its address set forth in Section 12, and upon
payment and delivery of the Exercise Price per Warrant Share
multiplied by the number of Warrant Shares that the Warrant
Holder intends to purchase hereunder, in lawful money of the
United States of America, in cash or by certified or official
bank check or checks, to the Company, all as specified by the
Warrant Holder in the Form of Election to Purchase, the
Company shall promptly (but in no event later than 7 business
days after the Date of Exercise (as defined herein)) issue or
cause to be issued and cause to be delivered to or upon the
written order of the Warrant Holder and in such name or names
as the Warrant Holder may designate (subject to the
restrictions on transfer described in the legend set forth on
the face of this Warrant), a certificate for the Warrant
Shares issuable upon such exercise, with such restrictive
legend as required by the 1933 Act. Any person so designated
by the Warrant Holder to receive Warrant Shares shall be
deemed to have become holder of record of such Warrant Shares
as of the Date of Exercise of this Warrant.
b.
A
“Date of Exercise” means the date on which the
Company shall have received (i) this Warrant (or any New
Warrant, as applicable), with the Form of Election to Purchase
attached hereto (or attached to such New Warrant)
appropriately completed and duly signed, and (ii) payment of
the Exercise Price for the number of Warrant Shares so
indicated by the Warrant Holder to be purchased.
c.
This
Warrant shall be exercisable at any time and from time to time
for such number of Warrant Shares as is indicated in the
attached Form of Election To Purchase. If less than all of the
Warrant Shares which may be purchased under this Warrant are
exercised at any time, the Company shall issue or cause to be
issued, at its expense, a New Warrant evidencing the right to
purchase the remaining number of Warrant Shares for which no
exercise has been evidenced by this Warrant.
d.
(i)
Notwithstanding
anything contained herein to the contrary but subject to Section 6,
the holder of this Warrant may, should a registration statement
pursuant to the Registration Agreement not be made effective within
120 days post Closing, exercise this Warrant in whole or in part
and, in lieu of making the cash payment otherwise contemplated to
be made to the Company upon such exercise in payment of the
Aggregate Exercise Price, elect instead to receive upon such
exercise the “
Net Number ”
of shares of Common Stock determined according to the following
formula (a “
Cashless Exercise ”):
WARRANT “B” AGREEMENT BETWEEN CHINA KANGTAI CACTUS
BIO-TECH, INC.
AND T SQUARED INVESTMENTS LLC
PAGE 3
OF 9
Net
Number = (A x (B - C))/B
(ii)
For
purposes of the foregoing formula:
A=
the total number shares with respect to which this Warrant is
then being exercised.
B=
the last reported sale price (as reported by Bloomberg) of the
Common Stock on the trading day immediately preceding the date
of the Exercise Notice.
C=
the Warrant Exercise Price then in effect at the time of such
exercise.
e.
The
holder of this Warrant agrees not to elect a Cashless Exercise
for a period of twelve (12) months. The holder of this Warrant
also agrees not to elect a Cashless Exercise so long as there
is an effective registration statement for the Warrant
Shares.
f.
Provided
that the Warrant Shares are Registrable Securities (as defined
in the Registration Rights Agreement) and are registered
pursuant to an effective registration statement, at any time
commencing on the date hereof if the Company’s volume
weighted average share price over a thirty (30) day period
(“30 Day VWAP”) exceeds $2.00 per share, the
Warrant Holder shall be forced to exercise this Warrant within
thirty (30) calendar days from the date the 30 Day VWAP
exceeds $2.00 per share (“Forced Exercise
Period”). Any portion of this Warrant not exercise
du
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