WARRANT SALE AGREEMENT
Exhibit
4.11
Warrant Sale Agreement, dated
as of January 15, 2010 (“Agreement”), by and among
Chardan 2008 China Acquisition Corp., a company organized under the laws of the
British Virgin Islands (“Company”), ▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Jianghan ▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇
(collectively “Existing
Shareholders”), ________________ as agent for the Existing Shareholders
(the “Agent”) and the
Law Offices of ▇▇▇▇▇ ▇. ▇▇▇▇▇, P.A., Professional Title and Abstract Company of
Florida, Inc. and Default Servicing, Inc. (collectively, the “▇▇▇▇▇
Participants”).
Recital
WHEREAS,
the Existing Shareholders have agreed as a condition of the ▇▇▇▇▇ Participants’
closing the transactions contemplated by the Master Acquisition Agreement dated
December 10, 2009, by and among the Company, the ▇▇▇▇▇ Participants, and other
parties (the “Master
Acquisition Agreement”) to enter into this Agreement.
IT
IS AGREED:
1. Exercise or Sale of
Warrants.
(a) Following
the later of (i) six (6) months after the Closing and (ii) Registration
Statement Effective Date (the “Trigger Date”), each of the Existing Shareholders
agrees to exercise for cash or sell all of the Private Placement Warrants owned
by them (the “Covered
Warrants”). The Existing Shareholders shall exercise for cash
or sell on average for each day after the Trigger Date that the last reported
sales price of the Company’s Ordinary Shares on The Nasdaq Stock Market, LLC is
greater than $9.00 (the “Closing Price Threshold”) a
number of Covered Warrants equal to the greater of (A) ten (10%) percent of the
ADTV of the Company’s Ordinary Shares for each day after the Trigger Date that
the Closing Price Threshold was satisfied or (B) 50,000 Covered
Warrants. The average daily number of Covered Warrants exercised for
cash or sold shall be measured on a weekly basis beginning with the week in
which the Closing Price Threshold is first met after the Trigger Date and on a
cumulative basis each week thereafter. Sales of Covered Warrants
shall be included as sales for purposes of the foregoing calculation, whether
sold in a reported transaction or in a private placement
transaction.
(b) The
Existing Shareholders shall coordinate their exercises and sales of the Covered
Warrants so as to satisfy the requirements of Section 1(a) as
follows:
(i) Immediately
following the Trigger Date, each Existing Shareholder shall notify the Agent in
writing of the (A) number of Covered Warrants they elect to exercise with cash
from the sale of other such Covered Warrants (the “Cashless Exercise Warrants”);
(B) the number of such Warrants they elect to exercise from other cash resources
and the date on which they intend to exercise such Warrants; and (C) the number
of such Warrants they direct the Agent to sell on their behalf (the “Sale
Warrants”). If, based upon the notices received by the Agent
from the Existing Shareholders, the Agent determines that the Existing
Shareholders will not be able to satisfy their obligations under Section 1, it
shall revise the desired sales and exercises by the Existing Shareholders as it
deems appropriate to allow the Existing Shareholders to satisfy their
obligations under Section 1 and so shall notify the Existing Shareholders of
revisions to their notices. Each Existing Shareholder may change such
designation from time to time by written notice to the Agent; provided that such
change does not adversely impact the ability of the Existing Shareholders to
satisfy their obligations under Section 1, as determined in the sole discretion
of the Agent.
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(ii) The Agent
shall coordinate the sale of the Sale Warrants by the Existing Shareholders so
as to satisfy the requirements of Section 1(a), when taken in conjunction with
Covered Warrants exercised by the Existing Shareholders.
(iii) To the
extent an Existing Shareholder elects to exercise Cashless Exercise Warrants,
the proceeds from the first Covered Warrants owned by that Existing Shareholder
sold by the Agent shall be used to exercise such Warrants on behalf of the
Existing Shareholder.
(iv) The Agent
shall sell Covered Warrants in such order, numbers, proportions, times, prices,
manner, including private sales, market trades or block purchases, and other
terms as the Agent shall determine in its sole discretion, and the Agent is not
required to sell Covered Warrants on a proportionate basis among the Existing
Shareholders.
(v) If an
Existing Shareholder fails to exercise a Covered Warrant within seven (7) days
after the date indicated in its written notice, the Agent is authorized to sell
those Covered Warrants on behalf of the Existing Shareholder.
(vi) The Agent
will remit net proceeds from the sale of Covered Warrants directly to the
Existing Shareholders who own such Warrants.
(c) A sale to
a Permitted Transferee shall not be deemed to be a sale for purposes of this
Agreement.
(d) Each of
the Existing Shareholders shall not exercise any of the Private Placement
Warrants held by them, except for cash.
(e) The
Existing Shareholders will sell the Covered Warrants only to persons who agree
in writing to exercise such warrants within fifteen (15) days after they
purchase such warrants from the Existing Shareholders and will
cooperate with the ▇▇▇▇▇ Participants as is reasonably necessary to enforce such
obligation.
(f) To the
extent permitted by applicable law, the Company agrees to allow the Agent to pay
the exercise price of the Covered Warrants sold for its own account or for the
accounts of the Existing Shareholders by delivery of a binding written
commitment, in a form reasonably acceptable to the Company, to pay the exercise
price of the Covered Warrants being exercised within fifteen (15) days following
the delivery of the subscription form required for the exercise of the
warrant.
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(g) The
Company agrees that as promptly as possible following the closing of the
transactions contemplated by the Master Acquisition Agreement, the Company shall
file with the SEC the registration statement described in the definition of
Registration Statement Effective Date and shall take such actions as are
necessary to qualify for sale the securities covered by such registration
statement in those states in which the such securities were initially offered by
the Company. The Company shall cause the such registration statement
to become effective as soon as is reasonably possible and to maintain the
effectiveness of such registration statement until at least the Termination
Date.
2. Transfer
Restrictions. The Existing Shareholders shall not transfer or
assign any of the Covered Warrants owned by them to a Permitted Transferee
unless the Permitted Transferee agrees in writing to be bound by the terms and
conditions of this Agreement.
3. Amendments to
Warrants. The Existing Shareholders will not agree to any
amendments to the Private Placement Warrants without the consent of the ▇▇▇▇▇
Participants.
4. Escrow. Prior
to the Termination Date, the outstanding Private Placement Warrants shall be
held in escrow pursuant to the terms of the Private Placement Warrant
Escrow Agreement, as amended as set forth in Exhibit
B hereto.
5. Share
Issuance. In consideration for the Existing Shareholders
entering into this Agreement, effective as of the date of the exercise for cash
or sale of each Covered Warrant prior to the Termination Date, .116505 Ordinary
Shares of the Company for each such warrant so exercised or sold will be issued
as directed by the Agent to the Existing Shareholders (the number of shares
issued to each Existing Shareholders to be determined by the Agent in its sole
discretion) pursuant to written instructions provided by the Agent to the
Company (the “Additional
Shares”). Additional Shares shall be issued to the Existing
Shareholders promptly following the end of each calendar quarter, based on the
number of Covered Warrants exercised or sold by the Existing Shareholders during
such calendar quarter. The Company shall not be required to issue
fractional Ordinary Shares and any such fractional amount shall be carried over
to the next issuance to the Existing Shareholders or, if earlier, will lapse at
the Termination Date.
6. Representations and
Warranties. Each Existing Shareholder hereby represents and
warrants to the Company and the ▇▇▇▇▇ Participants that:
(a) The
Existing Shareholder owns all of the Private Placement Warrants listed next to
his or her name on Exhibit
A.
(b) The
execution and delivery by the Existing Shareholder of this Agreement and the
fulfillment of and compliance with the respective terms hereof by the Existing
Shareholder does not conflict with or result in a breach of the terms,
conditions or provisions of any other agreement, instrument, order, judgment or
decree to which the Existing Shareholder is subject.
(c) The
Existing Shareholder is an “accredited investor” as that term is defined in Rule
501 of Regulation D promulgated under the Securities Act of 1933, as amended
(the “Securities
Act”).
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(d) The
Additional Shares are being acquired for the Existing Shareholder’s own account,
only for investment purposes and not with a view to, or for resale in connection
with, any distribution or public offering thereof within the meaning of the
Securities Act.
(e) The
Existing Shareholder has the full right, power and authority to enter into this
Agreement and this Agreement is a valid and legally binding obligation of the
Existing Shareholder enforceable against the Existing Shareholder in accordance
with its terms.
(f) The
Existing Shareholder understands that no United States federal or state agency
or any other government or governmental agency has passed on or made any
recommendation or endorsement of the securities of the Company or the fairness
or suitability of the investment in the securities of the Company nor have such
authorities passed upon or endorsed the merits of the offering of the securities
of the Company.
7. Registration
Rights. The Existing Shareholders shall have registration
rights relating to the Additional Shares pursuant to the Registration Rights
Agreement, dated as of ________, 2008, by and among the Company and the persons
listed on the signature page thereto, as amended, as if registration rights for
the Additional Shares were originally included therein.
8. Legends;
Denominations.
(a) Legend. The
Company will issue the Additional Shares in the name of the Existing
Shareholders and in such denominations to be specified by the
Agent. Certificates representing the Additional Shares will bear the
following legend and appropriate “stop transfer” instructions will be provided
to the Company’s transfer agent:
THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS AND
NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION
OF COUNSEL FOR THIS CORPORATION, IS AVAILABLE.
9. Governing
Law. This Agreement shall for all purposes be deemed to be
made under and shall be construed in accordance with the laws of the State of
New York. Each of the parties 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
in the Untied States District Court for the Southern District of New York, and
irrevocably submits to such jurisdiction, which jurisdiction shall be
exclusive. Each of the parties hereby waives any objection to such
exclusive jurisdiction and that such courts represent an inconvenient
forum. Any such process or summons to be served upon any of the
parties hereto 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 14 hereof. Such mailing shall be
deemed personal service and shall be legal and binding upon each of the parties
hereto in any action, proceeding or claim.
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10. Amendments. This
Agreement may not be modified or changed without the prior written consent of
each of the parties to this Agreement.
11. Entire
Agreement. This Agreement contains the entire agreement of the
parties hereto with respect to the subject matter hereof and, except as
expressly provided herein, may not be changed or modified except by an
instrument in writing signed by the party to be charged.
12. Headings. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation thereof.
13. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the respective parties hereto and their legal representatives,
successors and assigns.
14. Notices. Any
notice or other communication required or which may be given hereunder shall be
in writing and either be delivered personally or by private national courier
service, or be mailed, certified or registered mail, return receipt requested,
postage prepaid, and shall be deemed given when so delivered personally or, if
sent by private national courier service, on the next business day after
delivery to the courier, or, if mailed, two days after the date of mailing, as
follows:
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If
to the Company to:
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Chardan
2008 China Acquisition Corp.
c/o
Chardan Capital, LLC
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇▇▇
▇▇▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
email:
▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇▇▇▇▇.▇▇▇
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with
a copy to (which shall not constitute notice):
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Loeb
& Loeb LLP
▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇
▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
email:
▇▇▇▇▇▇▇▇▇@▇▇▇▇.▇▇▇
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If
to an Existing Shareholder, to his or her address as set forth in Exhibit
A.
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If
to the ▇▇▇▇▇ Participants:
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c/o
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇
▇. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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with
a copy (which shall not constitute notice) to:
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▇▇▇▇▇▇
▇▇▇▇▇▇▇ PLLC
▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇
▇▇▇▇▇▇
Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
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15. Counterparts. This
Agreement may be executed in several counterparts each one of which shall
constitute an original and may be delivered by facsimile transmission and
together shall constitute one instrument.
16. Attorney’s
Fees. In the event that any suit or action is instituted to
enforce any provision in this Agreement, the prevailing party in such dispute
shall be entitled to recover from the losing parties all fees, costs and
expenses of enforcing any right of such prevailing party under or with respect
to this Agreement, including without limitation, such reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.
17. Termination. The
Existing Shareholders’ obligations under this Agreement shall terminate upon the
earlier of (i) payment in full of the ▇▇▇▇▇ Deferral Note, Post-Closing Cash,
the FlatWorld Warrant Proceeds, the FlatWorld Additional Warrant Proceeds, the
Chardan Capital Fee and the Deferral Notes or (ii) the shareholders of the
Company becoming subject to Section 16 of the Securities Exchange Act of 1934
(the “Termination Date”).
18. Appointment of
Agent.
(a) Each
Existing Shareholder irrevocably constitutes and appoints Agent as such Existing
Shareholder’s true and lawful agent, proxy and attorney-in-fact and authorizes
Agent acting for such Existing Shareholder and in such Existing Shareholder
name, place and stead, in any and all capacities, to do and perform every act
and thing required or permitted to be done by such Existing Shareholder or Agent
hereunder or otherwise in connection with the agreements and transactions
contemplated by this Agreement, as fully to all intents and purposes as such
Existing Shareholder might or could do in person, including without
limitation:
(i) Direct
the escrow agent under the Private Placement Warrant Escrow Agreement to release
Existing Shareholder’s Warrants held thereunder upon their sale pursuant to the
terms of this Agreement.
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(ii) Take any
and all action on behalf of such Existing Shareholder as Agent may deem
necessary or desirable to effect this Agreement; and
(iii) Engage
and employ agents and representatives (including accountants, legal counsel and
other professionals), which may include affiliates of the Agent, and to incur
such other expenses as Agent deems necessary or prudent in connection with the
administration of the foregoing, including customary brokerage fees and
commissions.
(b) Each
Existing Shareholder grants unto Agent full power and authority to do and
perform each and every act and thing necessary or desirable to be done in
connection with the transactions contemplated by this Agreement, as fully to all
intents and purposes as such Agent might or could do in person, hereby ratifying
and confirming all that Agent may lawfully do or cause to be done by virtue
hereof. Each Existing Shareholder will, by executing this Agreement,
agree that such agency, proxy and power of attorney are coupled with an
interest, and are therefore irrevocable without the consent of Agent and the
▇▇▇▇▇ Participants and shall survive the death, incapacity, or bankruptcy of
such Existing Shareholder. Each Existing Shareholder acknowledges and
agrees that upon execution of this Agreement, the Existing Shareholder shall be
bound by any delivery by Agent of any waiver, amendment, agreement, opinion,
certificate or other documents executed by Agent or any decisions made by Agent
pursuant to this Agreement as fully as if such Existing Shareholder had executed
and delivered such documents and made such decisions.
(c) Agent
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Existing Shareholder, except in respect of amounts received on behalf of
such Existing Shareholder. Agent shall not be liable to any Existing
Shareholder for any action taken or omitted by Agent or any agent employed by it
hereunder or under or in connection with the transactions contemplated by this
Agreement, except that Agent shall not be relieved of any liability imposed by
law for gross negligence or willful misconduct. Agent shall not be
liable to any Existing Shareholder for any apportionment or distribution of
payments made by it in good faith, and if any such apportionment or distribution
is subsequently determined to have been made in error the sole recourse of any
Existing Shareholder to whom payment was due, but not made, shall be to recover
from any other Existing Shareholder any payment in excess of the amount of which
they are determined to have been entitled. Agent shall not be
required to make any inquiry concerning either the performance or observance of
any of the terms, provisions or conditions of this Agreement.
19. Definitions. The
capitalized terms used in this Agreement shall have the meaning set forth
below.
(a) “ADTV”
means the daily trading volume for the Company’s Ordinary Shares.
(b) “Additional
Shares” is defined in Section 5.
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(c) “Agent”
means ______________.
(d) “Agreement”
is defined in the Preamble.
(e) “Cashless
Exercise Warrants” is defined in Section 1(b).
(f) “Chardan
Capital Fee” is defined in the Contribution Agreement.
(g) “Closing”
is defined in the Contribution Agreement.
(h) “Closing
Price Threshold” is defined in Section 1(a).
(i) “Company”
is defined in the Preamble.
(j) “Contribution
Agreement” means the Contribution and Membership Purchase Agreement dated
January 15, 2010.
(k) “Covered
Warrants” is defined in Section 1(a).
(l) “Deferral
Notes” is defined in the Contribution Agreement.
(m) “Existing
Shareholders” is defined in the Preamble.
(n) “FlatWorld
Additional Warrant Proceeds” is defined in the Contribution
Agreement.
(o) “FlatWorld
Warrant Proceeds” is defined in the Contribution Agreement.
(p) “Master
Acquisition Agreement” is defined in the Recitals.
(q) “Permitted
Transferee” is defined in the Private Placement Warrant Escrow
Agreement.
(r) “Post-Closing
Cash” is defined in the Contribution Agreement.
(s) “Private
Placement Warrants” is defined in the Private Placement Warrants Escrow
Agreement.
(t) “Private
Placement Warrant Escrow Agreement” means the Securities Escrow Agreement dated
________, 2008, by and among Chardan and
certain of the Existing Shareholders.
(u) “Registration
Statement Effective Date” means the date that the registration statement
required to effect the registration of (i) the Private Placement Warrants that
have not previously been registered with the SEC, and under applicable state
securities laws, for resale, and (ii) the Ordinary Shares issuable upon exercise
of those Warrants that have not previously been registered for issuance upon
such exercise, becomes effective with the SEC.
(v) “Representatives”
is defined in the Securities Escrow Agreement.
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(w) “Sale
Warrants” is defined in Section 1(b).
(x) “SEC”
means the United States Securities and Exchange Commission.
(y) “Securities
Act” is defined in Section 6(c).
(z) “▇▇▇▇▇
Deferral Note” is defined in the Contribution Agreement.
(aa) “▇▇▇▇▇
Participants” is defined in the Preamble.
(bb) “Termination
Date” is defined in Section 17.
(cc) “Trigger
Date” is defined in Section 1(a).
[REMAINDER
OF PAGE
INTENTIONALLY
LEFT BLANK]
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IN
WITNESS WHEREOF, the execution of this Warrant Exercise Agreement as of the date
first above written.
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CHARDAN
2008 CHINA ACQUISITION CORP.
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By:
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Name: ▇▇▇▇▇
▇▇▇▇▇▇▇
Title: Chief
Executive Officer
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LAW
OFFICES OF ▇▇▇▇▇ ▇. ▇▇▇▇▇, PA
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By:
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Name: ▇▇▇▇▇
▇. ▇▇▇▇▇
Title: President
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PROFESSIONAL
TITLE AND ABSTRACT COMPANY OF FLORIDA, INC.
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By:
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Name: ▇▇▇▇▇
▇. ▇▇▇▇▇
Title: President
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DEFAULT
SERVICING, INC.
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By:
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Name: ▇▇▇▇▇
▇. ▇▇▇▇▇
Title: President
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[Only
those Existing Stockholders agreeing to be party to this Agreement shall execute
it. Any signature block for an Existing Stockholder who chooses not
to enter into this agreement shall be deleted]
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EXISTING
SHAREHOLDERS
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▇▇▇▇▇
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Jiangnan
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▇▇▇▇▇▇▇
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Li
Zhang
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