Longhai Steel Inc.: Exhibit 4.6 - Filed by newsfilecorp.com











Exhibit 4.6 



WARRANT AGREEMENT 


This Warrant Agreement (the “Agreement”) is made as of
______________, 2010 between Longhai Steel Inc., a Nevada corporation, with offices at No. 1 Jingguang Road, Neiqiu County, Xingtai City, Hebei Province, China (the
“Company”), and Pacific Stock Transfer, LLC, a Nevada corporation, with offices at 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119 (the “Warrant Agent”). 


WHEREAS, the Company is engaged in a public offering (the “Public Offering”) of units (the “Units”) and, in connection therewith, has determined to issue and deliver up to 1,250,000
warrants to the public investors (the “Warrants”) evidencing the right of the holder thereof to purchase shares of the Company’s common stock, $0.0001 par value per share (the “Common Stock”), as described herein;



WHEREAS, the Company has filed with the Securities and Exchange Commission a Registration Statement on Form S-1, No. 333- 168226, as amended, (the “Registration Statement”), for the
registration, under the Securities Act of 1933, as amended (the “Act”) of, among other securities, the Warrants and the Common Stock issuable upon exercise of the Warrants; WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so act, in connection with the issuance, registration, transfer, exchange, cancellation and exercise of the Warrants; WHEREAS, the Company desires to provide for the form and
provisions of the Warrants, the terms upon which they shall be issued and exercised, and the respective rights, limitation of rights, and immunities of the Company, the Warrant Agent, and the holders of the Warrants; and WHEREAS, all acts and
things have been done and performed which are necessary to make the Warrants, when executed on behalf of the Company and countersigned by or on behalf of the Warrant Agent as provided herein, the valid, binding and legal obligations of the Company,
and to authorize the execution and delivery of this Agreement. 


NOW, THEREFORE, in consideration of the mutual agreements herein contained, the parties hereto agree as follows: 


1. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act
as agent for the Company for the Warrants, and the Warrant Agent hereby accepts such appointment and agrees to perform the same in accordance with the terms and conditions set forth in this Agreement. 


2. Warrants. 


2.1 Form of Warrant. Each Warrant shall be issued in registered form only, shall be in substantially the form of Exhibit A hereto, the provisions of which are incorporated herein, and shall be
signed by, or bear the facsimile signature of, the President and the Secretary of the Company or such other officer(s) of the Company designated by its board of directors. In the event the person whose facsimile signature has been placed upon any
Warrant shall have ceased to serve in the capacity in which such person signed the Warrant before such Warrant is issued, it may be issued with the same effect as if he or she had not ceased to be such at the date of issuance. 


2.2 Effect of Countersignature. Unless and until countersigned by the Warrant Agent pursuant to this Agreement, a Warrant shall be invalid and of no effect and may not be exercised by the holder thereof.



2.3 Registration. 


2.3.1 Warrant Register. The Warrant Agent shall maintain books (the “Warrant Register”), for the registration of original issuance and the registration of transfer of the Warrants. Upon the
initial issuance of the
Warrants, the Warrant Agent shall issue and register the Warrants in the names of the respective holders thereof in such denominations and otherwise in accordance with instructions delivered to the Warrant Agent by the Company. 











2.3.2 Registered Holder. Prior to due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the person in whose name such Warrant shall be registered
upon the Warrant Register (the “registered holder”), as the absolute owner of such Warrant and of each Warrant represented thereby (notwithstanding any notation of ownership or other writing on the Warrant made by anyone other than the
Company or the Warrant Agent), for the purpose of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent shall be affected by any notice to the contrary. 


3. Terms and Exercise of Warrants. 


3.1 Warrant Price. One Warrant shall, when countersigned by the Warrant Agent, entitle the registered holder thereof, subject to the provisions of such Warrant and of this Agreement, to purchase from the
Company one share of Common Stock, at the price of $ per whole share, subject to the adjustments provided in Section 4 hereof and in the last sentence of this Section 3.1. The term “Warrant Price” as used in this Agreement refers to
the price per share at which Common Stock may be purchased at the time a Warrant is exercised. The Company in its sole discretion may lower the Warrant Price at any time prior to the Expiration Date. 


3.2 Duration of Warrants. A Warrant may be exercised only during the period (the “Exercise Period”) commencing on , 2010 and terminating at 5:00 p.m., New York City time on , 2014
(“Expiration Date”). Each Warrant not exercised on or before the Expiration Date shall become void, and all rights thereunder and all rights in respect thereof under this Agreement shall cease at the close of business on the Expiration
Date.


3.3 Exercise of Warrants. 


3.3.1 Payment. Subject to the provisions of the Warrant and this Agreement, a Warrant, when countersigned by the Warrant Agent, may be exercised by the registered holder thereof by surrendering it, at the
office of the Warrant Agent, or at the office of its successor as Warrant Agent, with the subscription form, as set forth in the Warrant, duly executed, and by paying in full, in lawful money of the United States, in cash, good certified check or
good bank draft payable to the order of the Company (or as otherwise agreed to by the Company), the Warrant Price for each full share of Common Stock as to which the Warrant is exercised and any and all applicable taxes due in connection with the
exercise of the Warrant, the exchange of the Warrant for the Common Stock, and the issuance of the Common Stock. 


3.3.2 Issuance of Certificates. As soon as practicable after the exercise of any Warrant and the clearance of the funds in payment of the Warrant Price, the Company shall issue to the registered holder of
such Warrant a certificate or certificates for the number of full shares of Common Stock to which such holder is entitled, registered in such name or names as may be directed by such holder, and if such Warrant shall not have been exercised in full,
a new countersigned Warrant for the number of shares as to which such Warrant shall not have been exercised. Notwithstanding the foregoing, the Company shall not be obligated to deliver any securities pursuant to the exercise of a Warrant unless a
registration statement under the Act with respect to the Common Stock is effective. Warrants may not be exercised by, or securities issued to, any registered holder in any state in which such exercise would be unlawful. 


3.3.3 Valid Issuance. All shares of Common Stock issued upon the proper exercise of a Warrant in conformity with this Agreement shall be validly issued, fully paid and nonassessable. 


3.3.4 Date of Issuance. Each person in whose name any such certificate for shares of Common Stock is issued shall for all purposes be deemed to have become the holder of record of such shares on the date
on which the Warrant was surrendered and payment of the Warrant Price was made, irrespective of the date of delivery of such certificate, except that, if the date of such surrender and payment is a date when the stock transfer books of the Company
are closed, such person shall be deemed to have become the holder of such shares at the close of business on the next succeeding date on which the stock transfer books are open. 


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4. Adjustments. 


4.1 Stock Dividends — Split-Ups. If after the date hereof, and subject to the provisions of Section 4.6 below, the number of outstanding shares of Common Stock is increased by a stock dividend
payable in shares of Common Stock, or by a split-up of shares of Common Stock, or other similar event, then, on the effective date of such stock dividend, split-up or similar event, the number of shares of Common Stock issuable upon exercise of each
Warrant shall be increased in proportion to such increase in outstanding shares of Common Stock. 


4.2 Aggregation of Shares. If after the date hereof, and subject to the provisions of Section 4.6, the number of outstanding shares of Common Stock is decreased by a consolidation, combination, reverse
stock split or reclassification of shares of Common Stock or other similar event, then, on the effective date of such consolidation, combination, reverse stock split, reclassification or similar event, the number of shares of Common Stock issuable
upon exercise of each Warrant shall be decreased in proportion to such decrease in outstanding shares of Common Stock. 


4.3 Adjustments in Exercise Price. Whenever the number of shares of Common Stock purchasable upon the exercise of the Warrants is adjusted, as provided in Section 4.1 and 4.2 above, the Warrant Price shall
be adjusted (to the nearest cent) by multiplying such Warrant Price immediately prior to such adjustment by a fraction (x) the numerator of which shall be the number of shares of Common Stock purchasable upon the exercise of the Warrants immediately
prior to such adjustment, and (y) the denominator of which shall be the number of shares of Common Stock so purchasable immediately thereafter. 


4.4 Replacement of Securities Upon Reorganization, Etc. In case of any reclassification or reorganization of the outstanding shares of Common Stock (other than a change covered by Section 4.1 or 4.2
hereof or that solely affects the par value of such shares of Common Stock), or in the case of any merger or consolidation of the Company with or into another corporation (other than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or reorganization of the outstanding shares of Common Stock), or in the case of any sale or conveyance to another corporation or entity of the assets or other property of the Company as an
entirety or substantially as an entirety in connection with which the Company is dissolved, the Warrant holders shall thereafter have the right to purchase and receive, upon the basis and upon the terms and conditions specified in the Warrants and
in lieu of the shares of Common Stock of the Company immediately theretofore purchasable and receivable upon the exercise of the rights represented thereby, the kind and amount of shares of stock or other securities or property (including cash)
receivable upon such reclassification, reorganization, merger or consolidation, or upon a dissolution following any such sale or transfer, that the Warrant holder would have received if such Warrant holder had exercised his, her or its Warrant(s)
immediately prior to such event; and if any reclassification also results in a change in shares of Common Stock covered by Section 4.1 or 4.2, then such adjustment shall be made pursuant to Sections 4.1, 4.2, 4.3 and this Section 4.4. The provisions
of this Section 4.4 shall similarly apply to successive reclassifications, reorganizations, mergers or consolidations, sales or other transfers. 


4.5 Notices of Changes in Warrant. Upon every adjustment of the Warrant Price or the number of shares issuable upon exercise of a Warrant, the Company shall give written notice thereof to the Warrant
Agent, which notice shall state the Warrant Price resulting from such adjustment and the increase or decrease, if any, in the number of shares purchasable at such price upon the exercise of a Warrant, setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based. Upon the occurrence of any event specified in Sections 4.1, 4.2, 4.3 or 4.4, then, in any such event, the Company shall give written notice to each Warrant holder, at the last address
set forth for such holder in the Warrant Register, of the record date or the effective date of the event. Failure to give such notice, or any defect therein, shall not affect the legality or validity of such event. 


4.6 No Fractional Shares. Notwithstanding any provision contained in this Agreement to the contrary, the Company shall not issue fractional shares upon exercise of Warrants and no payment will be made with
respect to any fractional share of Common Stock to which any holder of Warrants might otherwise be entitled upon exercise of Warrants. 


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4.7 Form of Warrant. The form of Warrant need not be changed because of any adjustment pursuant to this Section 4, and Warrants issued after such adjustment may state the same Warrant Price and the same
number of shares as is stated in the Warrants initially issued pursuant to this Agreement. However, the Company may at any time in its sole discretion make any change in the form of Warrant that the Company may deem appropriate and that does not
affect the substance thereof, and any Warrant thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant or otherwise, may be in the form as so changed. 


5. Transfer and Exchange of Warrants. 


5.1 Registration of Transfer. The Warrant Agent shall register the transfer, from time to time, of any outstanding Warrant upon the Warrant Register, upon surrender of such Warrant for transfer, properly
endorsed with signatures properly guaranteed and accompanied by appropriate instructions for transfer. Upon any such transfer, a new Warrant representing an equal aggregate number of Warrants shall be issued and the old Warrant shall be cancelled by
the Warrant Agent. The Warrants so cancelled shall be delivered by the Warrant Agent to the Company from time to time upon request. 


5.2 Procedure for Surrender of Warrants. Warrants may be surrendered to the Warrant Agent, together with a written request for exchange or transfer, and thereupon the Warrant Agent shall issue in exchange
therefor one or more new Warrants as requested by the registered holder of the Warrants so surrendered, representing an equal aggregate number of Warrants; provided, however, that in the event that a Warrant surrendered for transfer bears a
restrictive legend, the Warrant Agent shall not cancel such Warrant and issue new Warrants in exchange therefor until the Warrant Agent has received an opinion of counsel for the Company stating that such transfer may be made and indicating whether
the new Warrants must also bear a restrictive legend. 


5.3 Fractional Warrants. The Warrant Agent shall not be required to effect any registration of transfer or exchange which will result in the issuance of a warrant certificate for a fraction of a warrant.



5.4 Service Charges. No service charge shall be made for any exchange or registration of transfer of Warrants. 


5.5 Warrant Execution and Countersignature. The Warrant Agent is hereby authorized to countersign and to deliver, in accordance with the terms of this Agreement, the Warrants required to be issued pursuant
to the provisions of this Section 5, and the Company, whenever required by the Warrant Agent, will supply the Warrant Agent with Warrants duly executed on behalf of the Company for such purpose. 


6. Other Provisions Relating to Rights of Holders of Warrants. 


6.1 No Rights As Shareholder. A Warrant does not entitle the registered holder thereof to any of the rights of a shareholder of the Company, including, without limitation, the right to receive dividends,
or other distributions, to exercise any preemptive rights to vote or to consent or to receive notice as shareholders in respect of the meetings of shareholders or the election of directors of the Company or any other matter. 


6.2 Lost, Stolen, Mutilated, or Destroyed Warrants. If any Warrant is lost, stolen, mutilated, or destroyed, the Company and the Warrant Agent may on such terms as to indemnity or otherwise as they may in
their discretion impose (which shall, in the case of a mutilated Warrant, include the surrender thereof), issue a new Warrant of like denomination, tenor, and date as the Warrant so lost, stolen, mutilated, or destroyed. Any such new Warrant shall
constitute a substitute contractual obligation of the Company, whether or not the allegedly lost, stolen, mutilated, or destroyed Warrant shall be at any time enforceable by anyone. 


6.3 Reservation of Common Stock. The Company shall at all times reserve and keep available a number of its authorized but unissued shares of Common Stock that will be sufficient to permit the exercise in
full of all outstanding Warrants issued pursuant to this Agreement. 


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6.4 Registration of Common Stock. The Company has filed with the Securities and Exchange Commission a Registration Statement for the registration, under the Act, of, and it shall take such action as is
necessary to qualify for sale, in those states in which the Warrants were initially offered by the Company, the Common Stock issuable upon exercise of the Warrants. The Company will use its best efforts to maintain the effectiveness of such
Registration Statement until the expiration of the Warrants in accordance with the provisions of this Agreement. 


7. Concerning the Warrant Agent and Other Matters. 


7.1 Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed upon the Company or the Warrant Agent in connection with the issuance or delivery of shares
of Common Stock upon the exercise of the Warrants, but the Company shall not be obligated to pay any transfer taxes in connection with the Warrants or such shares. 


7.2 Resignation, Consolidation, or Merger of Warrant Agent. 


7.2.1 Appointment of Successor Warrant Agent. The Warrant Agent, or any successor to it hereafter appointed, may resign its duties and be discharged from all further duties and liabilities hereunder after
giving sixty (60) days’ notice in writing to the Company. If the office of the Warrant Agent becomes vacant by resignation or incapacity to act or otherwise, the Company shall appoint in writing a successor Warrant Agent in place of the
Warrant Agent. If the Company shall fail to make such appointment within a period of 30 days after it has been notified in writing of such resignation or incapacity by the Warrant Agent or by the holder of the Warrant (who shall, with such notice,
submit his Warrant for inspection by the Company), then the holder of any Warrant may apply to the Supreme Court of the State of New York for the County of New York for the appointment of a successor Warrant Agent at the Company’s cost. Any
successor Warrant Agent, whether appointed by the Company or by such court, shall be a corporation in good standing and authorized to exercise corporate trust powers and subject to supervision or examination by federal or state authority. After
appointment, any successor Warrant Agent shall be vested with all the authority, powers, rights, immunities, duties, and obligations of its predecessor Warrant Agent with like effect as if originally named as Warrant Agent hereunder, without any
further act or deed; but if for any reason it becomes necessary or appropriate, the predecessor Warrant Agent shall execute and deliver, at the expense of the Company, an instrument transferring to such successor Warrant Agent all the authority,
powers, and rights of such predecessor Warrant Agent hereunder; and upon request of any successor Warrant Agent the Company shall make, execute, acknowledge, and deliver any and all instruments in writing for more fully and effectually vesting in
and confirming to such successor Warrant Agent all such authority, powers, rights, immunities, duties, and obligations. 


7.2.2 Notice of Successor Warrant Agent. In the event a successor Warrant Agent shall be appointed, the Company shall give notice thereof to the predecessor Warrant Agent and the transfer agent for the
Common Stock not later than the effective date of any such appointment. 


7.2.3 Merger or Consolidation of Warrant Agent. Any corporation into which the Warrant Agent may be merged or with which it may be consolidated or any corporation resulting from any merger or consolidation
to which the Warrant Agent shall be a party shall be the successor Warrant Agent under this Agreement without any further act. 


7.3 Fees and Expenses of Warrant Agent. 


7.3.1 Remuneration. The Company agrees to pay the Warrant Agent reasonable remuneration for its services as such Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for all
expenditures that the Warrant Agent may reasonably incur in the execution of its duties hereunder. 


7.3.2 Further Assurances. The Company agrees to perform, execute, acknowledge, and deliver or cause to be performed, executed, acknowledged, and delivered all such further and other acts, instruments, and
assurances as may reasonably be required by the Warrant Agent for the carrying out or performing of the provisions of this Agreement. 


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7.4 Liability of Warrant Agent. 


7.4.1 Reliance on Company Statement. Whenever in the performance of its duties under this Agreement, the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established
by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a statement signed by the
President, Chairman of the Board or Secretary of the Company and delivered to the Warrant Agent. The Warrant Agent may rely upon such statement for any action taken or suffered in good faith by it pursuant to the provisions of this Agreement. 


7.4.2 Indemnity. The Warrant Agent shall be liable hereunder only for its own negligence, willful misconduct or bad faith. The Company agrees to indemnify the Warrant Agent and save it harmless against any
and all liabilities, including judgments, costs and reasonable counsel fees, for anything done or omitted by the Warrant Agent in the execution of this Agreement except as a result of the Warrant Agent’s negligence, willful misconduct, or bad
faith. 


7.4.3 Exclusions. The Warrant Agent shall have no responsibility with respect to the validity of this Agreement or with respect to the validity or execution of any Warrant (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant; nor shall it be responsible to make any adjustments required under the provisions of Section 4 hereof or
responsible for the manner, method, or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment; nor shall it by any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant or as to whether any shares of Common Stock will when issued be valid and fully paid and nonassessable. 


7.5 Acceptance of Agency. The Warrant Agent hereby accepts the agency established by this Agreement and agrees to perform the same upon the terms and conditions herein set forth and, among other things,
shall account promptly to the Company with respect to Warrants exercised and concurrently account for, and pay to the Company, all moneys received by the Warrant Agent for the purchase of shares of Common Stock through the exercise of Warrants. 


8. Miscellaneous Provisions. 


8.1 Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns.



8.2 Notices. Any notice, statement or demand authorized by this Agreement to be given or made by the Warrant Agent or by the holder of any Warrant to or on the Company shall be sufficiently given when so
delivered if by hand or overnight delivery or if sent by certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Company with the Warrant
Agent), as follows: 


Longhai Steel Inc. 

No. 1 Jingguang Road 

Neiqiu County, Xingtai City, Hebei Province, China 

Attn: Dr. Eberhard Kornotzki, CFO 


Any notice, statement or demand authorized by this Agreement to be given or made by the holder of any Warrant or by the Company to or on the Warrant Agent shall be sufficiently given when so delivered if by hand or overnight delivery or if sent by
certified mail or private courier service within five days after deposit of such notice, postage prepaid, addressed (until another address is filed in writing by the Warrant Agent with the Company), as follows: 


Pacific Stock Transfer, LLC 

4045 South Spencer Street 

Suite 403, Las Vegas, NV 89119 


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8.3 Applicable 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 and the Warrant Agent hereby agree that any action, proceeding or claim 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 submit to such jurisdiction, which jurisdiction shall be exclusive. The Warrant
Agent 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 the Warrant Agent 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 8.2 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Warrant Agent in any action, proceeding
or claim. 


8.4 Persons Having Rights Under This Agreement. Nothing in this Agreement expressed and nothing that may be implied from any of the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the parties hereto and the registered holders of the Warrants, any right, remedy, or claim under or by reason of this Agreement or any covenant, condition, stipulation, promise, or agreement herein. All
covenants, conditions, stipulations, promises, and agreements contained in this Agreement shall be for the sole and exclusive benefit of the parties hereto and their successors and assigns and of the registered holders of the Warrants. 


8.5 Examination of the Warrant Agreement. A copy of this Agreement shall be available at all reasonable times at the office of the Warrant Agent for inspection by the registered holder of any Warrant. The
Warrant Agent may require any such holder to submit his Warrant for inspection by it. 


8.6 Counterparts. This Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument. 


8.7 Effect of Headings. The Section headings herein are for convenience only and are not part of this Agreement and shall not affect the interpretation thereof. 


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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the day and year first above written. 

	
Attest:
		
 	
LONGHAI STEEL INC.
	
	
 
		
 	
 
	
	
 
		
 	
By:
	
	
 
		
 	
Name:
	
	
 
		
 	
Title:
	
	
 
		
 	
 
	
	
Attest:
		
 	
PACIFIC STOCK TRANSFER, LLC
	
	
 
		
 	
 
	
	
 
		
 	
By:
	
	
 
		
 	
Name:
	
	
 
		
 	
Title:
	














EXERCISABLE ONLY IF COUNTERSIGNED BY THE WARRANT 

AGENT AS PROVIDED HEREIN 

Warrant Certificate evidencing 

Warrants to Purchase Common Stock, $0.0001 par value per share, as described herein.


Longhai Steel Inc. 

	
No. ________	
CUSIP No. ________



VOID AFTER 5:00 P.M., NEW YORK CITY TIME, 

ON ________, 2014, OR UPON EARLIER CANCELLATION 


This certifies that ________________________, or its registered assigns, is the registered holder of
___________________ warrants to purchase certain securities (each a “Warrant”). Each Warrant entitles the holder thereof, subject to the
provisions contained herein and in the Warrant Agreement (as defined below), to purchase from Longhai Steel Inc., a Nevada corporation (the “Company”), one share of the Company’s Common Stock (each, a
“Share”) at $ ____ initially (the “Exercise Price”) shall be, subject to adjustments as set forth in the Warrant Agreement (as defined below). 


Subject to the terms of the Warrant Agreement, each Warrant evidenced hereby may be exercised, as specified herein, on any Business Day (as defined below) occurring during the period (the “Exercise
Period”) commencing on ________________, 2010 and ending at 5:00 P.M., EST, on
________________, 2014 (the “Expiration Date”). Each Warrant remaining unexercised after 5:00 P.M., New York City time on the Expiration Date shall become void, and all
rights of the holder of this Warrant Certificate evidencing such Warrant shall cease. 


The holder of the Warrants represented by this Warrant Certificate may exercise a Warrant by delivering, not later than 5:00 P.M., New York City time, on any Business Day during the Exercise Period (the
“Exercise Date”) to Pacific Stock Transfer, LLC (the “Warrant Agent,” which term includes any successor warrant agent under the Warrant Agreement described below) at its corporate trust department at 4045 South
Spencer Street, Suite 403, Las Vegas, NV 89119 (i) this Warrant Certificate and the Warrants to be exercised (the “Book-Entry Warrants”) free on the records of The Depository Trust Company (the “Depository”) to
an account of the Warrant Agent at the Depository designated for such purpose in writing by the Warrant Agent to the Depository, (ii) an election to
purchase (“Election to Purchase”), properly executed (A) by the holder hereof on the reverse of this Warrant Certificate or (B) properly executed by the institution in whose account the Warrant is recorded on the records of the
Depository (the “Participant”) substantially in the form included on the reverse hereof, as applicable and (iii) the Exercise Price for each set of Warrants to be exercised in lawful money of the United States of America by
certified or official bank check or by bank wire transfer in immediately available funds. If any of (a) this Warrant Certificate or the Book-Entry Warrants, (b) the Election to Purchase, or (c) the Exercise Price therefor, is received by the Warrant
Agent after 5:00 P.M., New York City time, the Warrants will be deemed to be received and exercised on the Business Day next succeeding the date such items are received and such date shall be the Exercise Date for purposes hereof. If the date such
items are received is not a Business Day, the Warrants will be deemed to be received and exercised on the next succeeding day which is a Business Day and such date shall be the Exercise Date. If the Warrants to be exercised are received or deemed to
be received after the Expiration Date, the exercise thereof will be null and void and any funds delivered to the Warrant Agent will be returned to the holder as soon as practicable. In no event will interest accrue on funds deposited with the
Warrant Agent in respect of an exercise or attempted exercise of Warrants. The validity of any exercise of Warrants will be determined by the Warrant Agent in its sole discretion and such determination will be final and binding upon the holder of
the Warrants and the Company. Neither the Warrant Agent nor the Company shall have any obligation to inform a holder of Warrants of the invalidity of any exercise of Warrants. 


As used herein, the term “Business Day” means any day that is not a Saturday or Sunday and is not a United States federal holiday or a day on which banking institutions generally are authorized or
obligated by law or regulation to close in New York City. 











Warrants may be exercised only in whole numbers of Warrants. No fractional shares of Common Stock are to be issued upon the exercise of any Warrant and no payment will be made with respect to any fractional share of
Common Stock to which any holder of Warrants might otherwise be entitled upon exercise of Warrants. If fewer than all of the Warrants evidenced by this Warrant Certificate are exercised, a new Warrant Certificate for the number of Warrants remaining
unexercised shall be executed by the Company and countersigned by the Warrant Agent as provided in Section 2 of the Warrant Agreement, and delivered to the holder of this Warrant Certificate at the address specified on the books of the Warrant Agent
or as otherwise specified by such Registered Holder. 


This Warrant Certificate is issued under and in accordance with the Warrant Agreement, dated as of , 2010 (the “Warrant Agreement”), between the Company and the Warrant Agent and is subject to the
terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the holder of this Warrant Certificate and the beneficial owners of the Warrants represented by this Warrant Certificate consent by acceptance hereof.
Copies of the Warrant Agreement are on file and can be inspected at the above-mentioned office of the Warrant Agent and at the office of the Company at No. 1 Jingguang Road, Neiqiu County, Xingtai City, Hebei Province, China. 


The accrual of dividends, if any, on the Shares issued upon the valid exercise of any Warrant will be governed by the terms generally applicable to such Shares. From and after the issuance of such Shares, the former
holder of the Warrants exercised will be entitled to the benefits generally available to other holders of Shares and such former holder’s right to receive payments of dividends and any other amounts payable in respect of the Shares shall be
governed by, and shall be subject to, the terms and provisions generally applicable to such Shares. 


The Exercise Price and the number of Shares purchasable upon the exercise of each set of two Warrants shall be subject to adjustment as provided pursuant to Section 4 of the Warrant Agreement. 


Upon due presentment for registration of transfer or exchange of this Warrant Certificate at the stock transfer division of the Warrant Agent, the Company shall execute, and the Warrant Agent shall countersign and
deliver, as provided in Section 5 of the Warrant Agreement, in the name of the designated transferee one or more new Warrant Certificates of any authorized denomination evidencing in the aggregate a like number of unexercised Warrants, subject to
the limitations provided in the Warrant Agreement. 


Neither this Warrant Certificate nor the Warrants evidenced hereby shall entitle the holder hereof or thereof to any of the rights of a holder of the Shares, including, without limitation, the right to receive
dividends, if any, or payments upon the liquidation, dissolution or winding up of the Company or to exercise voting rights, if any. 


The Warrant Agreement and this Warrant Certificate may be amended as provided in the Warrant Agreement including, under certain circumstances described therein, without the consent of the holder of this Warrant
Certificate or the Warrants evidenced thereby. 


THIS WARRANT CERTIFICATE AND ALL RIGHTS HEREUNDER AND UNDER THE WARRANT
AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS FORMED AND TO BE
PERFORMED ENTIRELY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS
OF LAW PROVISIONS THEREOF TO THE EXTENT SUCH PRINCIPLES OR RULES WOULD REQUIRE
OR PERMIT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION. 


This Warrant Certificate shall not be entitled to any benefit under the Warrant Agreement or be valid or obligatory for any purpose, and no Warrant evidenced hereby may be exercised, unless this Warrant Certificate has
been countersigned by the manual signature of the Warrant Agent. 


 2








IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.





	
Dated as of ________, 2010
	





	
 LONGHAI STEEL INC.
	
	
 
	
	
 By:
	
	
 Name:
	
	
 Title:
	
	
 
	




	
PACIFIC STOCK TRANSFER, LLC
	
	
COMPANY, AS WARRANT AGENT
	
	
 
	
	
By:
	
	
Name:
	
	
Title:
	



3











[REVERSE]  

Instructions for Exercise of Warrant 


To exercise the Warrants evidenced hereby, the holder or Participant must, by 5:00 P.M., New York City time, on the specified Exercise Date, deliver to the Warrant Agent at its stock transfer division, a certified or
official bank check or a wire transfer in immediately available funds, in each case payable to the Warrant Agent at Account No.
___________________, in an amount equal to the Exercise Price in full for the Warrants exercised. In addition, the Warrant holder or
Participant must provide the information required below and deliver this Warrant Certificate to the Warrant Agent at the address set forth below and the Book-Entry Warrants to the Warrant Agent in its account with the Depository designated for such
purpose. The Warrant Certificate and this Election to Purchase must be received by the Warrant Agent by 5:00 P.M., New York time, on the specified Exercise Date.











ELECTION TO PURCHASE 

TO BE EXECUTED IF WARRANT HOLDER DESIRES 

TO EXERCISE THE WARRANTS EVIDENCED HEREBY 


The undersigned hereby irrevocably elects to exercise, on ___________________,
_______  (the “Exercise Date”),  ___________________ Warrants, evidenced by this Warrant Certificate, to purchase,
___________________ of the shares of Common Stock (each a
“Share”) of Longhai Steel Inc., a Nevada corporation (the “Company”), and represents that, on or before the Exercise Date, such holder has tendered payment for such Shares by certified or official bank check or
bank wire transfer in immediately available funds to the order of the Company c/o Pacific Stock Transfer, LLC, 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119, in the amount of $
_______  in accordance with the terms hereof. The undersigned
requests that said number of Shares be in fully registered form, registered in such names and delivered, all as specified in accordance with the instructions set forth below.


If said number of Shares is less than all of the Shares purchasable hereunder, the undersigned requests that a new Warrant Certificate evidencing the remaining balance of the Warrants evidenced hereby be issued and
delivered to the holder of the Warrant Certificate unless otherwise specified in the instructions below. 


Dated: ___________________, _______

	
Name:
	
	
  
	
  
	
 (Please Print) 
	
	
 
	
	
 
	
(Insert Social Security or Other Identifying
Number of Holder)
	
	
 
	
 
	
Address:
	
	
 
	
 
	
 
	
	
 
	
	
Signature:
	
	
 



This Warrant may only be exercised by presentation to the Warrant Agent at the following address: Pacific Stock Transfer, LLC, 4045 South Spencer Street, Suite 403, Las Vegas, NV 89119. 


The method of delivery of this Warrant Certificate is at the option and risk of the exercising holder and the delivery of this Warrant Certificate will be deemed to be made only when actually received by the Warrant
Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to assure timely delivery.











(Instructions as to form and delivery of Shares and/or Warrant Certificates) 

	
Name in which Shares are to be registered if other
		
 
	
than in the name of the registered holder of this
		
 
	
Warrant Certificate:
		
 
	
Address to which Shares are to be mailed if other
		
 
	
than to the address of the registered holder of this
		
 
	
Warrant Certificate as shown on the books of the
		
 
	
Warrant Agent:
		
 
	
  	
  
	
 
		
 
	
  	
 (Street Address)
	
	
  	
  
	
  	
  
	
  	
 (City and State) (Zip Code)
	
	
Name in which Warrant Certificate evidencing
		
 
	
unexercised Warrants, if any, are to be registered if
		
 
	
other than in the name of the registered holder of
		
 
	
this Warrant Certificate:
		
 
	
Address to which certificate representing
		
 
	
unexercised Warrants, if any, are to be mailed if
		
 
	
other than to the address of the registered holder of
		
 
	
this Warrant Certificate as shown on the books of
		
 
	
the Warrant Agent:
		
 
	
  	
 (Street Address)
	
	
 
		
 
	
  	
  
	
 
		
(City and State) (Zip Code)
	
	
 
		
 
	
  	
 Dated:
	
	
 
		
 
	
  	
 Signature
	



Signature must conform in all respects to the name of the holder as specified on the face of this Warrant Certificate. If Shares, or a Warrant Certificate evidencing unexercised Warrants, are to be issued in a name other than that of the
registered holder hereof or are to be delivered to an address other than the address of such holder as shown on the books of the Warrant Agent, the above signature must be guaranteed by a an Eligible Guarantor Institution (as that term is defined in
Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended). 


SIGNATURE GUARANTEE 

	
Name of Firm:
	
	
 
	
Address:
	
	
 
	
Area Code and Number:
	
	
 
	
Authorized
Signature:
	
	
 
	
Name:
	
	
 
	
Title:
	
	
 
	
Dated:
	
	
 














ASSIGNMENT 

(FORM OF ASSIGNMENT TO BE EXECUTED IF WARRANT HOLDER 

DESIRES TO TRANSFER WARRANTS EVIDENCED HEREBY) 


FOR VALUE RECEIVED,  ____________________ HEREBY SELL(S), ASSIGN(S) AND TRANSFER(S) UNTO: 

	
____________________	
____________________
	
(Please print name and
		
(Please insert social
	
	
address including zip code of
		
security or other
	
	
assignee)
		
identifying number of
	
	
 
		
assignee)
	



the rights represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint
____________________ Attorney to transfer said Warrant Certificate on the books of the Warrant Agent with full power of substitution in the premises. 

	
Dated:
	



	
 Signature
	





(Signature must conform in all respects to the name of the holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by an Eligible Guarantor Institution (as that term is defined in Rule 17Ad-15 of the
Securities Exchange Act of  1934, as amended). 

	
SIGNATURE GUARANTEE
	
	
 
	


	
Name of Firm:
	
	
 
	
Address:
	
	
 
	
Area Code and Number:
	
	
 
	
Authorized
Signature:
	
	
 
	
Name:
	
	
 
	
Title:
	
	
 
	
Dated: