Exhibit 10.2
FORM OF WARRANT
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION
IS NOT REQUIRED.
Warrant No. __________
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
CHINA EVERGREEN ENVIRONMENTAL CORPORATION
THIS CERTIFIES that, for value received, [_________] is entitled to
purchase from CHINA EVERGREEN ENVIRONMENTAL CORPORATION, a Nevada corporation
(the "Corporation"), subject to the terms and conditions hereof, [_____________]
shares (the "Warrant Shares") of common stock, $0.001 par value (the "Common
Stock"). This warrant, together with all warrants hereafter issued in exchange
or substitution for this warrant, is referred to as the "Warrant" and the holder
of this Warrant is referred to as the "Holder." The number of Warrant Shares is
subject to adjustment as hereinafter provided. Notwithstanding anything to the
contrary contained herein, this Warrant shall expire at 5:00 pm Eastern Time on
the __________________, 2010 [date that is five (5) calendar years from [the
Final Closing]] (the "Termination Date").
1. EXERCISE OF WARRANTS.
(a) The Holder may, at any time prior to the Termination Date,
exercise this Warrant in whole or in part at an exercise price per share equal
to $0.20 per share, subject to adjustment as provided herein (the "Exercise
Price"), by the surrender of this Warrant (properly endorsed) at the principal
office of the Corporation, or at such other agency or office of the Corporation
in the United States of America as the Corporation may designate by notice in
writing to the Holder at the address of such Holder appearing on the books of
the Corporation, and by payment to the Corporation of the Exercise Price in
lawful money of the United States by check or wire transfer for each share of
Common Stock being purchased. Upon any partial exercise of this Warrant, there
shall be executed and issued to the Holder a new Warrant in respect of the
shares of Common Stock as to which this Warrant shall not have been exercised.
In the event of the exercise of the rights represented by this Warrant, a
certificate or certificates for the Warrant Shares so purchased, as applicable,
registered in the name of the Holder, shall be delivered to the Holder hereof as
soon as practicable after the rights represented by this Warrant shall have been
so exercised.
(b) If, but only if, at any time after one year from the date
of grant of this Warrant there is no effective registration statement
registering the resale of the Common Stock underlying this Warrant by the
Holder, this Warrant may also be exercised at such time by means of a "cashless
exercise" in which, at any time prior to the Termination Date, the Holder of
this Warrant may, at its option, exchange this Warrant, in whole or in part (a
"Warrant Exchange"), into Warrant Shares by surrendering this Warrant at the
principal office of the Corporation, accompanied by a notice stating such
Holder's intent to effect such exchange, the number of Warrant Shares to be
exchanged and the date on which the Holder requests that such Warrant Exchange
occur (the "Notice of Exchange"). The Warrant Exchange shall take place on the
date specified in the Notice of Exchange or, if later, on the third day
following the date the Notice of Exchange is received by the Corporation (the
"Exchange Date"). Certificates for the Warrant Shares issuable upon such Warrant
Exchange and, if applicable, a new Warrant of like tenor evidencing the balance
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of the Warrant Shares remaining subject to this Warrant, shall be issued as of
the Exchange Date and delivered to the Holder within three (3) business days
following the Exchange Date. In connection with any Warrant Exchange, this
Warrant shall represent the right to subscribe for and acquire the number of
Warrant Shares (rounded to the next highest integer) equal to the quotient
obtained by dividing [(A-B) (X)] by (A), where:
(A) = the Closing Bid Price (as hereinafter defined) on the
trading day preceding the date on which the Corporation
receives the Exercise Documentation;
(B) = the exercise price of this Warrant, as adjusted; and
(X) = the number of Warrant Shares to be exchanged .
As used herein, "Closing Bid Price", shall mean the closing bid price of the
Common Stock as reported by Bloomberg Financial L.P. on the date in question
(based on a trading day from 9:30 a.m. ET to 4:02 p.m. Eastern Time) (and, if no
closing bid price is reported, the closing price as so reported, and if neither
the closing bid price nor the closing price is so reported, the last reported
price of the Common Stock as determined by an independent evaluator mutually
agreed to by the Holder and the Corporation).
2. RESERVATION OF WARRANT SHARES. The Corporation agrees that, prior to
the expiration of this Warrant, it will at all times have authorized and in
reserve, and will keep available, solely for issuance or delivery upon the
exercise of this Warrant, the number of Warrant Shares as from time to time
shall be issuable by the Corporation upon the exercise of this Warrant.
3. NO STOCKHOLDER RIGHTS. This Warrant shall not entitle the holder
hereof to any voting rights or other rights as a stockholder of the Corporation.
4. TRANSFERABILITY OF WARRANT. Prior to the Termination Date and
subject to compliance with applicable laws, this Warrant and all rights
hereunder are transferable, in whole or in part, at the office or agency of the
Corporation by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed for transfer. Any registration rights to which this Warrant
may then be subject shall be transferred together with the Warrant to the
subsequent purchaser.
5. CERTAIN ADJUSTMENTS. With respect to any rights that Holder has to
exercise this Warrant and convert into shares of Common Stock, Holder shall be
entitled to the following adjustments:
(a) MERGER OR CONSOLIDATION. If at any time there shall be a
merger or a consolidation of the Corporation with or into another corporation
when the Corporation is not the surviving corporation, then, as part of such
merger or consolidation, lawful provision shall be made so that the holder
hereof shall thereafter be entitled to receive upon exercise of this Warrant,
during the period specified herein and upon payment of the aggregate Exercise
Price then in effect, the number of shares of stock or other securities or
property (including cash) of the successor corporation resulting from such
merger or consolidation, to which the holder hereof as the holder of the stock
deliverable upon exercise of this Warrant would have been entitled in such
merger or consolidation if this Warrant had been exercised immediately before
such merger or consolidation. In any such case, appropriate adjustment shall be
made in the application of the provisions of this Warrant with respect to the
rights and interests of the holder hereof as the holder of this Warrant after
the merger or consolidation.
(b) RECLASSIFICATION, RECAPITALIZATION, ETC. If the
Corporation at any time shall, by subdivision, combination or reclassification
of securities, recapitalization, automatic conversion, or other similar event
affecting the number or character of outstanding shares of Common Stock, or
otherwise, change any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other
class or classes, this Warrant shall thereafter represent the right to acquire
such number and kind of securities as would have been issuable as the result of
such change with respect to the securities that were subject to the purchase
rights under this Warrant immediately prior to such subdivision, combination,
reclassification or other change.
(c) SPLIT OR COMBINATION OF COMMON STOCK AND STOCK DIVIDEND.
In case the Corporation shall at any time subdivide, recapitalize, split forward
or change its outstanding shares of Common Stock into a greater number of shares
or declare a dividend upon its Common Stock payable solely in shares of Common
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Stock, the Exercise Price shall be proportionately reduced and the number of
Warrant Shares proportionately increased. Conversely, in case the outstanding
shares of Common Stock of the Corporation shall be combined or reverse split
into a smaller number of shares, the Exercise Price shall be proportionately
increased and the number of Warrant Shares proportionately reduced.
(d) ISSUANCES OF ADDITIONAL SHARES OF STOCK. If at any time
prior to the exercise of this Warrant, the Corporation shall offer, sell, grant
any option to purchase or offer, sell or grant any right to reprice its
securities, or otherwise dispose of or issue (or announce any offer, sale, grant
or any option to purchase or other disposition), Additional Shares of Common
Stock (as hereinafter defined) without consideration or for a consideration per
share less than the Exercise Price in effect immediately prior to such issuance
or sale, then forthwith upon the occurrence of any such event (the "Dilutive
Issuance") the Exercise Price shall be reduced to equal the effective
conversion, exchange or purchase price for such Additional Shares of Common
Stock (including any reset provisions thereof) at issue. The Corporation shall
notify the Holder in writing, no later than three trading days following the
issuance of any Common Stock or Common Stock Equivalents subject to this
section, indicating therein the applicable issuance price, or applicable reset
price, exchange price, conversion price and other pricing terms (such notice the
"Dilutive Issuance Notice"). For clarification, whether or not the Corporation
provides a Dilutive Issuance Notice, upon the occurrence of any Dilutive
Issuance, after the date of such Dilutive Issuance the Holder is entitled to
receive a number of Warrant Shares based upon the Adjusted Exercise Price
regardless of whether the Holder accurately refers to Adjusted Exercise Price in
the Notice of Exercise
As used herein, "Additional Shares of Common Stock" shall mean all
shares of Common Stock or any securities of the Corporation which would entitle
the holder thereof to acquire at any time Common Stock (including without
limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exchangeable for, or
otherwise entitles the holder thereof to receive, Common Stock), whether by
operation of purchase price adjustments, reset provisions, floating conversion,
exercise or exchange prices or otherwise, or due to warrants, options or rights
per share which is issued in connection with such issuance, at an effective
price per share which is less than the Exercise Price then in effect. If the
Corporation issues any securities convertible or exchangeable into Common Stock,
the maximum number of shares of Common Stock issuable thereunder shall be deemed
to be Additional Shares of Common Stock issued as of the time of such issue, if
the consideration per share of such Additional Shares of Common Stock (as
hereinafter determined) is less than the Exercise Price then in effect.
Additional Shares of Common Stock, however, shall not include the issuance of
(i) shares of Common Stock or options to employees, officers or directors of the
Corporation pursuant to any stock or option plan duly adopted by a majority of
the non-employee members of the Board of Directors of the Corporation or a
majority of the members of a committee of non-employee directors established for
such purpose (ii) securities upon the exercise of or conversion of any
securities issued hereunder or other securities sold as part of the same
offering , convertible securities, options or warrants issued and outstanding on
the date of this Agreement, provided that such securities have not been amended
since the date of this Agreement to increase the number of such securities, and
(iii) securities issued pursuant to acquisitions or strategic transactions,
provided any such issuance shall only be to an entity which is, itself or
through its subsidiaries, an operating company in a business synergistic with
the business of the Corporation and in which the Corporation receives benefits
in addition to the investment of funds, but shall not include a transaction in
which the Corporation is issuing securities primarily for the purpose of raising
capital or to an entity whose primary business is investing in securities.
6. LEGEND AND STOP TRANSFER ORDERS. Unless the Warrant Shares have been
registered under the Securities Act, and then in that case subject to the
Holders' compliance with the prospectus delivery requirements of Section 5 of
the Securities Act, upon exercise of any part of the Warrant, the Corporation
shall instruct its transfer agent to enter stop transfer orders with respect to
such Warrant Shares, and all certificates or instruments representing the
Warrant Shares shall bear on the face thereof substantially the following
legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY OTHER
APPLICABLE SECURITIES LAWS AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH OTHER
SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN
MAY BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED, OR OTHERWISE DISPOSED OF, EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH
REGISTRATION IS NOT REQUIRED.
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7. MISCELLANEOUS. This Warrant shall be governed by and construed in
accordance with the laws of the State of Nevada. All the covenants and
provisions of this Warrant by or for the benefit of the Corporation shall bind
and inure to the benefit of its successors and assigns hereunder. Nothing in
this Warrant shall be construed to give to any person or corporation other than
the Corporation and the holder of this Warrant any legal or equitable right,
remedy or claim under this Warrant. This Warrant shall be for the sole and
exclusive benefit of the Corporation and the holder of this Warrant. The section
headings herein are for convenience only and are not part of this Warrant and
shall not affect the interpretation hereof. Upon receipt of evidence
satisfactory to the Corporation of the loss, theft, destruction or mutilation of
this Warrant, and of indemnity reasonably satisfactory to the Corporation, if
lost, stolen or destroyed, and upon surrender and cancellation of this Warrant,
if mutilated, the Corporation shall execute and deliver to the Holder a new
Warrant of like date, tenor and denomination.
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed by its duly authorized officers under its seal, this _____ day of
___________________, 2005.
CHINA EVERGREEN ENVIRONMENTAL CORPORATION
By:
-------------------------------------
Name:
Title:
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WARRANT EXERCISE FORM
TO BE EXECUTED BY THE HOLDER IN ORDER TO EXERCISE WARRANT
To: China Evergreen Environmental Corporation Dated ___________
5/F, Guowei Building
73 Xianlie Middle Road
Guangzhou, Guangdong
People's Republic of China
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 of China Evergreen
Environmental Corporation covered by such Warrant; or
[ ] the maximum number of shares of Common Stock covered by such Warrant
pursuant to the cashless exercise procedure set forth in subsection
1(b) (if applicable).
The undersigned herewith makes payment of the full purchase price for such
shares at the price per share provided for in such Warrant. Such payment takes
the form of (CHECK APPLICABLE BOX OR BOXES):
[ ] $__________ in lawful money of the United States; and/or
[ ] if the provisions of subsection 1(b) of this Warrant are in effect, the
cancellation of such portion of the attached Warrant as is exercisable
for a total of _________ Warrant Shares (using a Fair Market Value of
$_______ per share for purposes of this calculation); and/or
[ ] if the provisions of subsection 1(b) of this Warrant are in effect, the
cancellation of such number of Warrant Shares as is necessary, in
accordance with the formula set forth in subsection 1(b), to exercise
this Warrant with respect to the maximum number of Warrant Shares
purchasable pursuant to the cashless exercise procedure set forth in
subsection 1(b).
The undersigned hereby requests that certificates for the Warrant Shares
purchased hereby be issued in the name of:
- -------------------------------------------------------------
- -------------------------------------------------------------
(please print or type name and address)
- -------------------------------------------------------------
(please insert social security or other identifying number)
and be delivered as follows:
- -------------------------------------------------------------
- -------------------------------------------------------------
(please print or type name and address)
- -------------------------------------------------------------
(please insert social security or other identifying number)
and if such number of shares of Common Stock shall not be all the shares
evidenced by this Warrant Certificate, that a new Warrant for the balance of
such shares be registered in the name of, and delivered to, Holder.
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Signature of Holder
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ASSIGNMENT FORM
(To assign the foregoing warrant, execute
this form. Do not use this form to exercise the warrant.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights
evidenced thereby are hereby assigned to
_______________________________________________________________ whose address is
________________________________________________________________________________
________________________________________________________________________________
Dated: _____________________, _______
Holder's Signature: __________________________________
Holder's Address: __________________________________
__________________________________
Signature Guaranteed: ___________________________________________
NOTE: The signature to this Assignment Form must correspond with the name as it
appears on the face of the Warrant, without alteration or enlargement or any
change whatsoever, and must be guaranteed by a bank or trust corporation.
Officers of corporations and those acting in a fiduciary or other representative
capacity should file proper evidence of authority to assign the foregoing
Warrant.
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