SUPPLEMENTAL WARRANT CLARIFICATION AGREEMENT
SUPPLEMENTAL
WARRANT CLARIFICATION AGREEMENT
This
Supplemental Warrant Clarification Agreement (this “Agreement”), dated
November 28, 2006, is to the Warrant Agreement, dated as of August 2, 2005
(the “Warrant Agreement”), by and between Chardan North China Acquisition
Corporation, a Delaware corporation (“Company”), and Continental Stock Transfer
& Trust Company, a New York corporation (“Warrant Agent”).
WHEREAS,
Section
3.3.2 of the Warrant Agreement provides that Company shall not be obligated
to
deliver any securities pursuant to the exercise of a warrant unless a
registration statement under the Securities Act of 1933, as amended (“Securities
Act”), with respect to the common stock is effective.
WHEREAS,
in
furtherance of the foregoing, the Company’s final prospectus, dated August 2,
2005, indicated (i) that no warrant would be exercisable unless at the time
of
exercise a prospectus relating to the common stock issuable upon exercise of
the
warrant is current and the common stock has been registered under the Securities
Act or qualified or deemed to be exempt under the securities laws of the state
of residence of the holder of the warrant and (ii) that the warrant may be
deprived of any value and the market for the warrant may be limited if the
prospectus relating to the common stock issuable upon the exercise of the
warrant is not current or if the common stock is not qualified or exempt from
qualification in the jurisdictions in which the holder of the warrant
resides.
WHEREAS,
the
parties hereto previously entered into a Warrant Clarification Agreement (the
"First Clarification Agreement") dated as of August 24, 2006 to clarify certain
terms of the Warrant Agreement.
WHEREAS,
as a
result of certain questions that have arisen regarding the accounting treatment
applicable to the warrants, the parties hereto deem it necessary and desirable
to amend the Warrant Agreement to further clarify that the registered holders
do
not have the right to receive a net cash settlement in the event the Company
does not maintain a current prospectus relating to the common stock issuable
upon exercise of the warrants at the time such warrants are
exercisable.
NOW,
THEREFORE,
in
consideration of the mutual agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto
agree
to amend the Warrant Agreement as set forth herein.
1. Warrant
Agreement.
The
Warrant Agreement is hereby clarified by deleting the sentence added to Section
3.3.2 by the First Clarification Agreement and by adding the following sentence
as the penultimate sentence of Section 3.3.2:
“Accordingly,
the Warrants may expire unexercised or unredeemed if there is no effective
registration statement and the Company would have no obligation to pay such
registered holder any cash or other consideration or otherwise “net cash settle”
the Warrant.”
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2. Miscellaneous.
(a) Governing
Law.
The
validity, interpretation, and performance of this Agreement and of the Warrants
shall be governed in all respects by the laws of the State of New York, without
giving effect to conflicts of law principles that would result in the
application of the substantive laws of another jurisdiction. The Company hereby
agrees that any action, proceeding or claim against it arising out of or
relating in any way to this Agreement shall be brought and enforced in the
courts of the State of New York or the United States District Court for the
Southern District of New York, and irrevocably submits to such jurisdiction,
which jurisdiction shall be exclusive. The Company hereby waives any objection
to such exclusive jurisdiction and that such courts represent an inconvenience
forum. Any such process or summons to be served upon the Company may be served
by transmitting a copy thereof by registered or certified mail, return receipt
requested, postage prepaid, addressed to it at the address set forth in Section
9.2 of the Warrant Agreement. Such mailing shall be deemed personal service
and
shall be legal and binding upon the Company in any action, proceeding or
claim.
(b) Binding
Effect.
This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and to their respective heirs, legal representatives, successors and
assigns.
(c) Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding between the parties
as to the subject matter thereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among them.
Except as set forth in this Agreement, provisions of the Warrant Agreement
which
are not inconsistent with this Agreement shall remain in full force and effect.
This Agreement may be executed in counterparts.
(d) Severability.
This
Agreement shall be deemed severable, and the invalidity or unenforceability
of
any term or provision hereof shall not affect the validity or enforceability
of
this Agreement or of any other term or provision hereof. Furthermore, in lieu
of
any such invalid or unenforceable term or provision, the parties hereto intend
that there shall be added as part of this Agreement a provision as similar
in
terms to such invalid or unenforceable provision as may be possible and be
valid
and enforceable.
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IN
WITNESS WHEREOF, the parties hereto have executed this Warrant Clarification
Agreement as of the date first written above.
| CHARDAN NORTH CHINA ACQUISITION CORPORATION | ||
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| By: | /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ | |
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer |
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| CONTINENTAL STOCK TRANSFER & TRUST COMPANY | ||
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| By: | /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ | |
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, President |
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