COMMON STOCK PURCHASE WARRANTS To Purchase 400,000 Shares of Common Stock of JINTAI MINING GROUP, INC.
WARRANT
NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES
LAWS.
To
Purchase 400,000 Shares of Common Stock of
|
No.
2010- 00__
|
November
26, 2010
|
THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) CERTIFIES that, for value
received, ▇▇▇▇▇▇ ▇▇▇▇▇ (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date of this
Warrant, and on or prior to the first anniversary of the date of this Warrant
(the “Termination Date”), but not thereafter, to subscribe for and purchase from
Jintai Mining Group, Inc., a Delaware corporation (the “Company”), up to 400,000
shares (the “Warrant Shares”) of the Common Stock, par value $0.0001 per share,
of the Company (the “Common Stock”). The exercise price per share of
Common Stock shall be equal to 110% of the offering price of the Company’s
Common Stock during the anticipated initial public offering (the “IPO”) to be
conducted by the Company (the “Exercise Price”). The Exercise Price
and the number of Warrant Shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. Capitalized terms used and
not otherwise defined herein shall have the meanings set forth in that certain
Subscription Agreement (the “Subscription Agreement”), between the Company and
the Holder (the date of such Agreement, the “Closing Date”). This
Warrant is being issued to the Holder, as more fully described in the
Subscription Agreement.
1. Title to
Warrant. Prior to the Termination Date and subject to
compliance with applicable laws, including transfer restrictions imposed by
applicable securities laws and Section 7 of this Warrant, this Warrant and all
rights hereunder are transferable, in whole or in part, at the office or agency
of the Company by the Holder in person or by duly authorized attorney, upon
surrender of this Warrant together with the Assignment Form annexed hereto
properly endorsed. The transferee shall sign an investment letter in
form and substance reasonably satisfactory to the Company.
2. Authorization of
Shares. Except as provided in the Subscription Agreement, the
Company covenants that all Warrant Shares which may be issued from time to time
upon the exercise of this Warrant, will, upon exercise of this Warrant, be duly
authorized, validly issued, fully paid and nonassessable and free from all
taxes, liens, and charges in respect of the issue thereof (other than taxes in
respect of any transfer occurring contemporaneously with such
issue).
3. Exercise of
Warrant.
(a) Subject
to Section 3(c), exercise of the purchase rights represented by this Warrant may
be made within five (5) years from the its issuance, at any time on or before 5
p.m., New York City time, by delivery to the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered
Holder at the address of such Holder appearing on the books of the Company) of a
duly executed Notice of Exercise Form annexed hereto, and surrender of this
Warrant, together with payment of the aggregate Exercise Price of the shares
thereby purchased by wire transfer or cashier’s check drawn on a United States
bank in immediately available funds.
Certificates
for Warrant Shares purchased hereunder shall be delivered to the Holder within
three (3) days from the delivery to the Company of the Notice of Exercise Form,
surrender of this Warrant, and payment of the aggregate Exercise Price as set
forth above (“Warrant Share Delivery Date”). This Warrant shall be
deemed to have been exercised on the later of (i) the date the Notice of
Exercise is delivered to the Company; and (ii) the date the Exercise Price is
received by the Company. The Warrant Shares shall be deemed to have
been issued, and Holder or any other person so designated to be named therein,
shall be deemed to have become a holder of record of such Warrant Shares for all
purposes, as of the date the Warrant has been exercised by payment to the
Company of the Exercise Price and all taxes required to be paid by the Holder,
if any, pursuant to Section 5 hereof, have been paid. If the Company
shall fail for any reason, or for no reason, to issue to the Holder a
certificate for the Warrant Shares to which the Holder is entitled within three
(3) days of receipt of the Notice of Exercise and the Exercise Price, the Holder
(or a broker for the Holder) may purchase (in an open market transaction or
otherwise), shares of Common Stock as replacement for the Warrant Shares and the
Company shall then pay in cash to the Holder the amount by which the Holder’s
total purchase price (including brokerage commissions, if any) for the Common
Stock so purchased exceeds the aggregate Exercise Price for the Warrant Shares
required to have been delivered to the Holder. Nothing herein shall
limit a ▇▇▇▇▇▇’s right to pursue any other remedies available to it hereunder,
at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Company’s failure to
timely deliver certificates representing the Warrant Shares upon exercise of the
Warrant, as required pursuant to the terms hereof.
(b) If
this Warrant shall have been exercised in part, the Company shall, at the time
of delivery of the certificate or certificates representing Warrant Shares,
deliver to Holder a new Warrant evidencing the rights of Holder to purchase the
un-purchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant.
4. No Fractional Shares or
Scrip. No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to such fraction multiplied by the Exercise
Price.
5. Charges, Taxes, and
Expenses. Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder provided, however, that in the event certificates for Warrant Shares
are to be issued in a name other than the name of the Holder, this Warrant when
surrendered for exercise shall be accompanied by the Assignment Form attached
hereto, duly executed by the Holder, in which instance the Company may require,
as a condition thereto, the payment by the Holder or such assignee of a sum
sufficient to reimburse it for any transfer tax incidental
thereto.
2
6. Closing of
Books. The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.
7. Transfer, Division and
Combination.
(a) Subject
to compliance with any applicable securities laws and the conditions set forth
in Sections 1 and 7(e) hereof and to the provisions of the Subscription
Agreement, this Warrant and all rights hereunder are transferable, in whole or
in part, upon surrender of this Warrant at the principal office of the Company,
together with a written assignment of this Warrant substantially in the form
attached hereto duly executed by the Holder or its agent or attorney, and funds
sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the
Company shall execute and deliver a new Warrant or Warrants in the name of the
assignee or assignees, in the denomination or denominations specified in such
instrument of assignment, and shall issue to the assignor a new Warrant
evidencing the portion of this Warrant not so assigned, and this Warrant shall
promptly be cancelled. A Warrant, if properly assigned, may be
exercised by a new holder for the purchase of Warrant Shares without having a
new Warrant issued. Notwithstanding the foregoing, the Holder will
not voluntarily and knowingly assign or transfer this Warrant or the Warrant
Shares to any direct competitor of the Company without the Company’s prior
written consent.
(b) This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the office of the Company, together with a written notice specifying the
names and denominations in which new Warrants are to be issued, signed by the
Holder or its agent or attorney. Subject to compliance with Section
7(a) as to any transfer which may be involved in such division or combination,
the Company shall execute and deliver a new Warrant or Warrants in exchange for
the Warrant or Warrants to be divided or combined in accordance with such
notice.
(c) The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.
(d) The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.
(e) The
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel reasonably acceptable to the Company (which opinion
shall be in form, substance, and scope customary for opinions of counsel in
comparable transactions) to the effect that such transfer may be made without
registration under the Securities Act and under applicable state securities or
blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company,
and (iii) that the transferee be an “accredited investor” as defined in Rule
501(a) promulgated under the Securities Act or a qualified institutional buyer
as defined in Rule 144A(a) under the Securities Act.
8. No Rights as Shareholder
until Exercise. This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof. Upon the surrender of this Warrant and the payment
of the aggregate Exercise Price, the Warrant Shares so purchased shall be and be
deemed to be issued to the Holder as the record owner of such shares as of the
close of business on the later of the date of such surrender or
payment.
3
9. Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt
by the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, receipt by the
Company of indemnity or security reasonably satisfactory to it (which, in the
case of the Warrant, shall not include the posting of any bond), and upon
surrender and cancellation of such Warrant or stock certificate, if mutilated,
the Company will make and deliver a new Warrant or stock certificate of like
tenor and dated as of such cancellation, in lieu of such Warrant or stock
certificate.
10. Saturdays, Sundays,
Holidays, etc. If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall be a
Saturday, Sunday or a legal holiday, then such action may be taken, or such
right may be exercised, on the next succeeding day not a Saturday, Sunday or
legal holiday.
11. Adjustments of Exercise
Price. In the event that the Company issues additional
securities (the “Dilutive Event”), other than (i) shares to be issued pursuant
to the initial public offering of the Company’s Common Stock; (ii) shares of
Common Stock or options to purchase such shares issued to employees,
consultants, officers or directors in accordance with stock plans or stock
options plans approved by the Company’s board of directors and existing on the
date hereof; and (iii) shares of Common Stock issuable under employment,
consulting agreements or loan agreements that are outstanding as of the date
hereof, then the Exercise Price shall be adjusted (but only if such adjustment
results in a lower exercise price) to an amount equal to the amount received or
deemed to be received by the Company pursuant to such Dilutive
Event.
12. Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to the Common Stock of the Company),
or sell, transfer or otherwise dispose of its property, assets or business to
another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation (“Other Property”), are
to be received by or distributed to the holders of Common Stock of the Company,
then, from and after the consummation of such transaction or event, the Holder
shall have the right thereafter to receive, instead of the Warrant Shares, at
the option of the Holder, (a) upon exercise of this Warrant, the number of
shares of Common Stock of the successor or acquiring corporation or of the
Company, if it is the surviving corporation, and Other Property receivable upon
or as a result of such reorganization, reclassification, merger, consolidation
or disposition of assets by a Holder of the number of shares of Common Stock for
which this Warrant is exercisable immediately prior to such event, or (b) if the
Company is acquired in an all cash transaction, cash equal to the value of this
Warrant as determined in accordance with the Black-Scholes option pricing
formula. For purposes of this Section 12, “common stock of the
successor or acquiring corporation” shall include stock of such corporation of
any class which is not preferred as to dividends or assets over any other class
of stock of such corporation and which is not subject to redemption and shall
also include any evidences of indebtedness, shares of stock, or other securities
which are convertible into or exchangeable for any such stock, either
immediately or upon the arrival of a specified date or the happening of a
specified event and any warrants or other rights to subscribe for or purchase
any such stock. The foregoing provisions of this Section 12 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.
4
13. Notice of
Adjustment. Whenever the number of Warrant Shares, or the
number or kind of securities or other property purchasable upon the exercise of
this Warrant, or the Exercise Price is adjusted, as herein provided, the Company
shall give notice thereof to the Holder, which notice shall state the number of
Warrant Shares (and other securities or property) purchasable upon the exercise
of this Warrant and the Exercise Price of such Warrant Shares (and other
securities or property) after such adjustment, setting forth a brief statement
of the facts requiring such adjustment and setting forth the computation by
which such adjustment was made.
14. Other
Adjustments. If any event occurs of the type contemplated by
the provisions of Sections 11 or 12 above but not expressly provided for by such
provisions, (including, without limitation, the granting of stock appreciation
rights, phantom stock rights, or other rights with equity features), then the
Company’s Board of Directors will make an appropriate adjustment in the Exercise
Price and/or the number of Warrant Shares and other securities or property to be
issued to the Holder upon exercise of the Warrant so as to protect the rights of
the Holder, provided that no such adjustment pursuant to Sections 11 or 12 will
increase the Exercise Price or decrease the number or amount of securities or
other property issuable or deliverable to the Holder as otherwise determined
pursuant to Sections 11 and/or 12.
15. Notice of Corporate
Action. If at any time:
(a) the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or
(b) there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company, or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation, or
(c) there
shall be a voluntary or involuntary dissolution, liquidation, or winding up of
the Company; then, in any one or more of such cases,
the
Company shall give to Holder (i) prior written notice of the date on which a
record date shall be selected for such dividend or distribution or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
liquidation, or winding up, and (ii) in the case of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation, or winding up, prior written notice of the date when
the same shall take place. Such notice in accordance with the
foregoing clause also shall specify (i) the date on which the holders of Common
Stock shall be entitled to any such dividend or distribution, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation, or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed
to Holder at the last address of ▇▇▇▇▇▇ appearing on the books of the Company
and delivered in accordance with Section 17(d).
5
16. Authorized
Shares. Except as provided in the Subscription Agreement, the
Company covenants that during the period the Warrant is outstanding, it will
take all reasonable action to ensure that the Company is authorized to issue a
sufficient number of shares to provide for the issuance of the Warrant Shares
upon the exercise of this Warrant. The Company shall also reserve
from its authorized and unissued Common Stock a sufficient number of shares to
provide for the issuance of the Warrant Shares upon the exercise of this
Warrant. The Company further covenants that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for the Warrant Shares upon the exercise of this
Warrant. The Company will take all such reasonable action as may be
necessary to assure that such Warrant Shares may be issued as provided herein
without violation of any applicable law or regulation, or of any requirements of
the trading market upon which the Common Stock may be or may become
listed.
Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or bylaws, or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities, or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such actions as may be
necessary or appropriate to protect the rights of Holder as set forth in this
Warrant against impairment. Without limiting the generality of the
foregoing, the Company will (a) not increase the par value of any Warrant Shares
above the amount payable therefore upon such exercise immediately prior to such
increase in par value, (b) take all such action as may be necessary or
appropriate in order that the Company may validly and legally issue fully paid
and non-assessable Warrant Shares upon the exercise of this Warrant, and (c) use
commercially reasonable efforts to obtain all such authorizations, exemptions or
consents from any public regulatory body having jurisdiction thereof as may be
necessary to enable the Company to perform its obligations under this
Warrant.
Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable, or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary, from any public regulatory body or bodies having
jurisdiction thereof.
17. Miscellaneous.
(a) Jurisdiction. All
questions concerning the construction, validity, enforcement, and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Subscription Agreement relating to the same.
(b) Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered for resale, will have restrictions upon resale
imposed by state and federal securities laws.
(c) Nonwaiver and
Expenses. No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers, or remedies,
notwithstanding all rights hereunder terminate on the Termination
Date. If the Company willfully and knowingly fails to comply with any
provision of this Warrant which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses, including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto, or in otherwise enforcing any of its rights,
powers, or remedies hereunder.
6
(d) Notices. Any
notice, request, or other document required or permitted to be given or
delivered to the Holder by the Company shall be delivered in accordance with the
notice provisions of the Subscription Agreement.
(e) Limitation of
Liability. No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant or purchase Warrant
Shares, and no enumeration herein of the rights or privileges of the Holder,
shall give rise to any liability of the Holder for the purchase price of any
Common Stock or as a stockholder of the Company, whether such liability is
asserted by the Company or by creditors of the Company.
(f) Successors and
Assigns. Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of,
and be binding upon, the successors of the Company and the successors and
permitted assigns of Holder. The provisions of this Warrant are
intended to be for the benefit of all Holders, from time to time, of this
Warrant and shall be enforceable by any such Holder or holder of Warrant
Shares.
(g) Amendment. This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.
(h) Severability. Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by, or be invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provisions or the remaining
provisions of this Warrant.
(i) Headings. The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.
(j) Disputes. In
the case of a dispute as to the determination of the Exercise Price or the
arithmetic calculation of the securities or other property, the Company shall
promptly issue and deliver to the Holder the securities or other property that
are not disputed.
(k) Remedies. The
Holder, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under Section 3 of this Warrant. The Company agrees that
monetary damages would not be adequate compensation for any loss incurred by
reason of a breach by it of the provisions of Section 3 of this Warrant and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.
[Remainder
of Page Intentionally Left Blank]
7
IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized.
|
Dated:
November 26, 2010
|
||
|
By:
|
/s/ ▇▇▇▇ ▇▇▇ | |
|
Name: ▇▇▇▇
▇▇▇
|
||
|
Title: Chief
Executive Officer
|
||
8
NOTICE
OF EXERCISE
(1) The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if
any.
(2) Payment
shall be made by wire transfer or cashier’s check drawn on a United States bank
in immediately available funds.
(3) Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:
The
Warrant Shares shall be delivered to the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(4) Accredited
Investor. The undersigned is an “accredited investor” as
defined in Regulation D under the Securities Act of 1933, as
amended.
|
[NAME
OF ▇▇▇▇▇▇]
|
|||
| By: |
|
||
|
Name:
|
|||
|
Title:
|
|||
|
Dated:
|
|||
9
ASSIGNMENT
FORM
(To
assign the foregoing warrant, execute this form and supply required
information. 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
company. Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing.
10