CHINA CARBON GRAPHITE GROUP, INC. COMMON STOCK PURCHASE WARRANT
Exhibit
99.5
NEITHER
THIS WARRANT NOR THE SECURITIES INTO WHICH THIS WARRANT 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 AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO
THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY
ACCEPTABLE TO THE COMPANY. THESE SECURITIES AND THE SECURITIES
ISSUABLE UPON EXERCISE OF THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A
BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
COMMON
STOCK PURCHASE WARRANT
|
Initial
Holder: [ ]
|
Original
Issue Date: December 22, 2009
|
|
|
No.
of Shares Subject to Warrant:
[ ]
|
||
|
Exercise
Price Per Share: $1.30
|
||
|
Expiration
Time: 5:00 p.m., New York time, on December 22, 2014 (subject
to acceleration as provided herein)
|
||
China Carbon Graphite Group, Inc., a
Nevada corporation (the “Company”), hereby certifies
that, for value received, the Initial Holder shown above, or its permitted
registered assigns (the “Holder”), is entitled to
purchase from the Company up to the number of shares of its common stock shown
above (the “Common
Stock”) (each such share, a “Warrant Share” and all such
shares, the “Warrant
Shares”) at the exercise price shown above (as may be adjusted from time
to time as provided herein, the “Exercise Price”), at any time
and from time to time on or after the Original Issue Date shown above and
through and including the expiration time shown above (the “Expiration Time”), and subject
to the following terms and conditions:
This
Warrant is being issued pursuant to a Subscription Agreement, dated December 22,
2009 (the “Subscription
Agreement”), by and between the Company and the Initial Holder, and is
part of the Units described in the Subscription Agreement.
1. Definitions. In
addition to the terms defined elsewhere in this Warrant, capitalized terms that
are not otherwise defined herein have the meanings given to such terms in the
Subscription Agreement.
1
2. List of Warrant
Holders. 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 Holder (which shall include the Initial Holder or, as the
case may be, any registered assignee to which this Warrant is permissibly
assigned hereunder from time to time). The Company may deem and treat the
registered Holder of this Warrant as the absolute owner hereof for the purpose
of any exercise hereof or any distribution to the Holder, and for all other
purposes, absent actual notice to the contrary.
3. List of Transfers;
Restrictions on Transfer. Subject to the restrictions on transfer
contained herein, the Company shall register any transfer of all or 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 its address specified herein. 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
Holder. The acceptance of the New Warrant by the transferee thereof
shall be deemed the acceptance by such transferee of all of the rights and
obligations in respect of the New Warrant that the Holder has in respect of this
Warrant.
4. Exercise and Duration of
Warrant.
(a)
All or any part of this Warrant
shall be exercisable by the registered Holder in the manner permitted by
Section 10 of this Warrant and as set for the below at any time and from
time to time on or after the Original Issue Date and through and including the
Expiration Time. At the Expiration Time, the portion of this Warrant not
exercised prior thereto shall be and become void and of no value and this
Warrant shall be terminated and shall no longer be outstanding.
(b)
The Holder may exercise this Warrant by delivering to the Company (i) an
exercise notice, in the form attached hereto (the “Exercise Notice”), completed
and duly signed, and (ii) payment of the Exercise Price for the number of
Warrant Shares as to which this Warrant is being exercised. The date such
items are delivered to the Company (as determined in accordance with the notice
provisions hereof) is an “Exercise Date.” The
Holder shall not be required to deliver the original Warrant in order to effect
an exercise hereunder, but if it is not so delivered, then such exercise shall
constitute an undertaking by the Holder to deliver the original Warrant to the
Company as soon as practicable thereafter. Execution and delivery of the
Exercise Notice with respect to less than all of the Warrant Shares hereof shall
have the same effect as cancellation of the original Warrant and issuance of a
New Warrant evidencing the right to purchase the remaining number of Warrant
Shares.
(c)
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.
2
5.
Delivery of Warrant
Shares.
(a)
Upon exercise of this
Warrant, the Company shall promptly (but in no event later than three (3)
Business Days after the Exercise Date) issue or cause to be issued and cause to
be delivered to and in such name or names as the Holder may designate (subject
to the restrictions on transfer contained herein), a certificate for the Warrant
Shares issuable upon such exercise. “Business Day” shall mean any
day other than a week-end or United States national holiday or other day on
which banks in New York City are not open to the public for the regular conduct
of business. The Holder, or any person or entity permissibly so designated by
the Holder to receive Warrant Shares, shall be deemed to have become the holder
of record of such Warrant Shares as of the Exercise Date. The Company
shall, upon the written request of the Holder, use its best efforts to deliver,
or cause to be delivered, Warrant Shares hereunder electronically through the
Depository Trust and Clearing Corporation or another established clearing
corporation performing similar functions, if available; provided, that, the Company
may, but will not be required to, change its transfer agent if its current
transfer agent cannot deliver Warrant Shares electronically through the
Depository Trust and Clearing Corporation. If as of the time of exercise
the Warrant Shares constitute restricted or control securities, the Holder, by
exercising, agrees not to resell them except in compliance with all applicable
securities laws.
(b)
To the extent permitted
by law, the Company’s obligations to issue and deliver Warrant Shares in
accordance with the terms hereof are absolute and unconditional, irrespective of
any action or inaction by the Holder to enforce the same, any waiver or consent
with respect to any provision hereof, the recovery of any judgment against any
person or entity or any action to enforce the same, or any setoff, counterclaim,
recoupment, limitation or termination, or any breach or alleged breach by the
Holder or any other person or entity of any obligation to the Company or any
violation or alleged violation of law by the Holder or any other person or
entity, and irrespective of any other circumstance that might otherwise limit
such obligation of the Company to the Holder in connection with the issuance of
Warrant Shares. Nothing herein shall limit a Holder’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 shares of Common Stock upon exercise of the Warrant as required
pursuant to the terms hereof.
(c)
If the Company fails to
cause its transfer agent to transmit to the Holder a certificate or the
certificates (either physical or electronic) representing the Warrant Shares
pursuant to the terms hereof by the applicable delivery date, then, the Holder
will have the right to rescind such exercise prior to the issuance of the
Warrant Shares and provided that the Holder or transferee did not receive any
benefit as a holder of the Warrant Shares.
6.
Charges, Taxes and
Expenses. Issuance and delivery of certificates for shares of Common
Stock upon exercise of this Warrant shall be made without charge to the Holder
for any issue or transfer tax, withholding tax, transfer agent fee or other
incidental tax or expense in respect of the issuance of such certificates, all
of which taxes and expenses shall be paid by the Company; provided, however, that the
Company shall not be required to pay any tax that may be payable in respect of
any transfer involved in the registration of any certificates for Warrant Shares
or the Warrants in a name other than that of the Holder. The Holder shall be
responsible for all other tax liability that may arise as a result of holding or
transferring this Warrant or receiving Warrant Shares upon exercise
hereof.
3
7.
Replacement of
Warrant. If this Warrant is mutilated, lost, stolen or destroyed,
the Company shall issue or cause to be issued in exchange and substitution for
and upon cancellation hereof, or in lieu of and substitution for this Warrant, a
New Warrant, but only upon receipt of evidence reasonably satisfactory to the
Company of such loss, theft or destruction and customary and reasonable
indemnity, if requested. Applicants for a New Warrant under such circumstances
shall also comply with such other reasonable regulations and procedures and pay
such other reasonable third-party costs, including the cost of an indemnity bond
as the transfer agent may require. If a New Warrant is requested as a result of
a mutilation of this Warrant, then the Holder shall deliver such mutilated
Warrant, to the extent reasonably practicable, to the Company as a condition
precedent to the Company’s obligation to issue the New Warrant.
8.
Reservation of Warrant
Shares. The Company covenants that it will at all times reserve and keep
available out of the aggregate of its authorized but unissued and otherwise
unreserved Common Stock, solely for the purpose of enabling it to issue Warrant
Shares upon exercise of this Warrant as herein provided, the number of Warrant
Shares that are then issuable and deliverable upon the exercise of this entire
Warrant, free from preemptive rights or any other contingent purchase rights of
persons or entities other than the Holder (taking into account the adjustments
and restrictions of Section 9). The Company covenants that all Warrant Shares so
issuable and deliverable shall, upon issuance and the payment of the applicable
Exercise Price in accordance with the terms hereof, be duly and validly
authorized, issued and fully paid and nonassessable.
9.
Certain Adjustments;
Termination Under Certain Circumstances. The Exercise Price and number of
Warrant Shares issuable upon exercise of this Warrant are subject to adjustment
from time to time as set forth in this Section 9.
(a)
Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(i) pays a stock dividend on its Common Stock or makes a stock distribution with
respect to its Common Stock, (ii) subdivides or splits outstanding shares of
Common Stock into a larger number of shares, or (iii) combines outstanding
shares of Common Stock into a smaller number of shares or otherwise effects a
reverse split, then in each such case the Exercise Price shall be multiplied by
a fraction of which the numerator shall be the number of shares of Common Stock
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event.
Any adjustment made pursuant to clause (i) of this paragraph shall become
effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution, and any
adjustment pursuant to clause (ii) or (iii) of this paragraph shall become
effective immediately after the effective date of such subdivision or
combination.
4
(b)
Pro Rata
Distributions. If the Company, at any time while this Warrant is
outstanding, distributes to all holders of Common Stock for no consideration:
(i) evidences of its indebtedness, (ii) any security (other than a distribution
of Common Stock covered by the preceding paragraph), (iii) rights or warrants to
subscribe for or purchase any security, or (iv) any other asset besides cash (in
each case, “Distributed
Property”), then either upon any exercise of this Warrant that occurs
after the record date fixed for determination of stockholders entitled to
receive such distribution or, at the option of the Company, concurrently with
such distribution, the Holder shall be entitled to receive, in addition to the
Warrant Shares otherwise issuable upon such exercise (if applicable), the
Distributed Property that such Holder would have been entitled to receive in
respect of such number of Warrant Shares had the Holder been the record holder
of such Warrant Shares immediately prior to such record date.
(c)
Fundamental
Transactions. As used herein, “Fundamental Transaction” means
at any time while this Warrant is outstanding: (i) the Company effects any
merger or consolidation of the Company into another person or entity, in which
the shareholders of the Company immediately prior to the transaction own
immediately after the transaction less than a majority of the outstanding stock
of the successor entity, or its parent if applicable, (ii) the Company effects
any sale of all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer approved or authorized by
the Company’s Board of Directors is completed pursuant to which holders of at
least a majority of the outstanding Common Stock tender or exchange their shares
for other securities, cash or property, or (iv) the Company effects any
reclassification or recombination or similar action of or with respect to the
Common Stock or any compulsory share exchange pursuant to which the Common Stock
is effectively converted into or exchanged for other securities, cash or
property. In the event of a Fundamental Transaction pursuant to which
the securities, cash or property issuable with respect to the outstanding Common
Stock consist solely of cash and/or securities traded on a national securities
exchange or an established over-the-counter market (the “Alternate Consideration”),
this Warrant shall expire immediately prior to the closing or effective time of
the Fundamental Transaction and the Holder of this Warrant shall receive the
amount by which the Alternate Consideration per share of Common Stock exceeds
the Exercise Price per share (the “Warrant Buyout Payment”). The
Company shall not effect any such Fundamental Transaction unless prior to or
simultaneously with the consummation thereof, any successor to the Company,
surviving entity or the corporation purchasing or otherwise acquiring such
assets or other appropriate corporation or entity shall assume the obligation to
deliver to the Holder, the Warrant Buyout Payment in accordance with the
foregoing provisions. If the value of the Alternate Consideration
shall be less than the Exercise Price, the Warrants shall terminate on the
closing date or the effective time of the Fundamental Transaction and no payment
shall be due to the Holder in respect of this Warrant. In the event of a
Fundamental Transaction in which the consideration does not entirely consist of
the Alternate Consideration, the Company (or the successor entity) shall
purchase this Warrant from the Holder by paying to the Holder, within ten (10)
Business Days after the closing of such Fundamental Transaction cash in an
amount equal to the Black Scholes Value of the remaining unexercised portion of
this Warrant on the date of such Fundamental Transaction determined as of the
day immediately following the public announcement of the applicable Fundamental
Transaction. For purposes hereof, the term “Black Scholes Value” means
value of this Warrant based on the Black Scholes Option Pricing Model obtained
from the “OV” function on Bloomberg, L.P. (“Bloomberg”) determined as of
the day of consummation of the applicable Fundamental Transaction for pricing
purposes and reflecting (A) a risk-free interest rate corresponding to the U.S.
Treasury rate for a period equal to the time between the date of the public
announcement of the applicable Fundamental Transaction and the Termination Date,
(B) an expected volatility equal to the greater of 100% and the 100 day
volatility obtained from the HVT function on Bloomberg as of the Trading Day
immediately following the public announcement of the applicable Fundamental
Transaction, (C) if applicable, the underlying price per share used in such
calculation shall be the sum of the price per share being offered in cash, if
any, plus the value of any non-cash consideration, if any, being offered in such
Fundamental Transaction and (D) a remaining option time equal to the time
between the date of the public announcement of the applicable Fundamental
Transaction and the Expiration Time.
5
(d)
Number of Warrant
Shares. Simultaneously with any adjustment to the Exercise
Price pursuant to paragraph (a) of this Section 9, the number of Warrant Shares
that may be purchased upon exercise of this Warrant shall be increased or
decreased proportionately, so that after such adjustment the aggregate Exercise
Price payable hereunder for the adjusted number of Warrant Shares shall be the
same as the aggregate Exercise Price in effect immediately prior to such
adjustment.
(e)
Calculations. All
calculations under this Section 9 shall be made to the nearest cent or the
nearest 1/100th of a share, as applicable. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Company, and the disposition of any such shares shall be
considered an issue or sale of Common Stock.
(f)
Notice of
Adjustments. Upon the occurrence of each adjustment pursuant to this
Section 9, the Company at its expense will, at the written request of the
Holder, promptly compute such adjustment in accordance with the terms of this
Warrant and prepare a certificate setting forth such adjustment, in good faith,
including a statement of the adjusted Exercise Price and adjusted number or type
of Warrant Shares or other securities issuable upon exercise of this Warrant (as
applicable), describing the transactions giving rise to such adjustments and
showing in detail the facts upon which such adjustment is based. Upon written
request, the Company will promptly deliver a copy of each such certificate to
the Holder and to the Company’s transfer agent for the Common
Stock.
(g)
Notice of Corporate
Events. If, while this Warrant is outstanding, the Company (i) declares a
dividend or any other distribution of cash (other than a dividend payable out of
current earnings), securities or other property in respect of its Common Stock,
including without limitation any granting of rights or warrants to subscribe for
or purchase any capital stock of the Company or any Subsidiary to all holders of
Common Stock, (ii) authorizes or approves, enters into any agreement
contemplating or solicits stockholder approval for any Fundamental Transaction
or (iii) authorizes the voluntary dissolution, liquidation or winding up of the
affairs of the Company, then, except if such notice and the contents thereof
shall be deemed to constitute material non-public information, the Company shall
deliver to the Holder a notice describing the material terms and conditions of
such transaction at least ten (10) Business Days prior to the applicable record
or effective date on which a person would need to hold Common Stock in order to
participate in or vote with respect to such transaction, and the Company will
take all reasonable steps to give Holder the practical opportunity to exercise
this Warrant prior to such time; provided, however, that the
failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such
notice.
6
10.
Payment of Exercise
Price. The Holder shall pay the Exercise Price by delivery to the Company
(to an account of the Company specified in writing to the Holder promptly
following the Company’s receipt of an Exercise Notice) of immediately available
funds by wire transfer.
11.
No Fractional Shares.
No fractional Warrant Shares will be issued in connection with any exercise of
this Warrant. In lieu of any fractional shares that would otherwise be issuable,
the Company shall pay cash equal to the product of such fraction multiplied by
the closing price of one Warrant Share as reported by the applicable trading
market on the Exercise Date.
12.
Notices. Any
and all notices or other communications or deliveries hereunder (including,
without limitation, any Exercise Notice) shall be delivered in accordance with
the procedures set forth in Section 6(f) of the Subscription Agreement,
including by e-mail.
13.
Miscellaneous.
(a)
This Warrant shall be
binding on and inure to the benefit of the parties hereto and their respective
successors and assigns. Subject to the preceding sentence, nothing in this
Warrant shall be construed to give to any person or entity other than the
Company and the Holder any legal or equitable right, remedy or cause of action
under this Warrant. This Warrant may be amended only in writing
signed by the Company and the Holder, or their successors and
assigns.
(b)
All questions concerning
the construction, validity, enforcement and interpretation of this Warrant shall
be governed by and construed and enforced in accordance with the internal laws
of the State of New York, without regard to the principles of conflicts of law
thereof. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of this Warrant and the transactions
herein contemplated (whether brought against a party hereto or its respective
affiliates, employees or agents) shall be adjudicated in accordance with the
provisions set forth in Section 6 of the Subscription Agreement.
(c)
The headings herein are
for convenience only, do not constitute a part of this Warrant and shall not be
deemed to limit or affect any of the provisions hereof.
(d)
In case any one or more
of the provisions of this Warrant shall be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Warrant shall not in any way be affected or impaired thereby and the
parties will attempt in good faith to agree upon a valid and enforceable
provision which shall be a commercially reasonable substitute therefore, and
upon so agreeing, shall incorporate such substitute provision in this
Warrant.
7
(e)
Prior to exercise of this
Warrant, the Holder hereof shall not, by reason of by being a Holder, be
entitled to any rights of a stockholder with respect to the Warrant
Shares.
(f)
This Warrant may be redeemed by the Company for $0.01 per Warrant Share (the
“Redemption Price”) if,
for 20 trading days during any 30 trading day period, the price of the Common
Stock exceeds $2.60. The Company shall provide the Holder with
written notice given not less than 20 trading days. Such notice shall
state that the Company has exercised its right of redemption pursuant to this
Section 13(f) and shall set forth the date (the “Redemption Date”) as of which
the Warrant shall be redeemed and the address to which this Warrant should be
delivered. This Warrant, to the extent not exercised by 5:30 PM, New
York City time, on the Redemption Date shall terminate, and the Holder of this
Warrant shall have no right under this Warrant other than to receive the
Redemption Price upon presentation of this Warrant to the Company or its
transfer agent.
(g)
No provision hereof, in
the absence of any affirmative action by Holder to exercise this Warrant to
purchase Warrant Shares, and no enumeration herein of the rights or privileges
of Holder, shall give rise to any liability of 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.
IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its
authorized officer as of the date first indicated above.
|
By:
|
||
|
Name:
|
||
|
Title
|
||
8
EXERCISE
NOTICE
WARRANT
ORIGINALLY ISSUED DECEMBER 22, 2009
Ladies
and Gentlemen:
(1)
The undersigned hereby elects to exercise the above-referenced Warrant with
respect to shares of Common Stock. Capitalized terms used herein and
not otherwise defined herein have the respective meanings set forth in the
Warrant.
(2)
The Holder shall pay the sum of $ ______________ to the Company in
accordance with the terms of the Warrant.
(4)
Pursuant to this Exercise Notice, the Company shall deliver to the Holder the
number of Warrant Shares determined in accordance with the terms of the
Warrant.
|
Dated:
|
HOLDER:
|
|||
|
Print
name ↑
|
||||
|
By:
|
||||
|
Title:
|
||||
9
WARRANT
ORIGINALLY ISSUED SEPTEMBER __, 2009
FORM
OF ASSIGNMENT
To be
completed and signed only upon transfer of Warrant
FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
_________________ the right represented by the within Warrant to purchase
_________________ shares of Common Stock to which the within Warrant relates and
appoints __________________ attorney to transfer said right on the books of the
Company with full power of substitution in the premises.
|
Dated:
|
TRANSFEROR:
|
|||
|
Print
name ↑
|
||||
|
By:
|
||||
|
Title:
|
||||
|
TRANSFEREE:
|
||||
|
Print
name ↑
|
||||
|
By:
|
||||
|
Title:
|
||||
|
WITNESS:
|
||||
|
Address
of Transferee:
|
||||
|
Print
name ↑
|
||||
10