American Lorain Corporation: Exhibit 4.1 - Prepared by TNT Filings
Inc.




  




Exhibit 4.1


NEITHER THIS SECURITY NOR THE SECURITIES FOR 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 AND, UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT, 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. THIS SECURITY AND THE SECURITIES ISSUABLE UPON
EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER BONA FIDE LOAN SECURED BY SUCH SECURITIES.


SERIES A COMMON STOCK PURCHASE
WARRANT


AMERICAN
LORAIN CORPORATION



  

	
 

	
 


	
Warrant Shares: _______

	
Issuance Date: October
  --, 2009





  



          THIS
SERIES A 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 six (6) month anniversary of the date
hereof (the “Initial Exercise Date”) and on or prior to the close of
business on the five year anniversary of the Initial Exercise Date (the “Termination
Date”) but not thereafter, to subscribe for and purchase from American
Lorain Corporation, a Delaware corporation (the “Company”), up to ______
shares (the “Warrant Shares”) of Common Stock. The purchase price of one
share of Common Stock under this Warrant shall be equal to the Exercise Price,
as defined in Section 2(b). 


          Section
1. Definitions. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth
in that certain Securities Purchase Agreement (the “Purchase Agreement”),
dated October 27, 2009, among
the Company and the purchasers signatory thereto.


          Section 2. Exercise.


	
 

	
 





1





	
 

	
 


	
 

	
          a)
  Exercise of Warrant. Exercise of the purchase rights represented by
this Warrant may be made, in whole or in part, at any time or times on or after
the Initial Exercise Date and on or before the Termination Date 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 the Holder
appearing on the books of the Company) of a duly executed facsimile copy of the
Notice of Exercise Form annexed hereto; and, within three (3) Trading Days of
the date said Notice of Exercise is delivered to the Company, the Company shall
have received payment of the aggregate Exercise Price of the shares thereby
purchased by wire transfer or, if available, pursuant to the cashless exercise
procedure specified in Section 2(c) below. Notwithstanding anything herein to
the contrary, the Holder shall not be required to physically surrender this
Warrant to the Company until the Holder has purchased all of the Warrant Shares
available hereunder and the Warrant has been exercised in full, in which case,
the Holder shall surrender this Warrant to the Company for cancellation within
three (3) Trading Days of the date the final Notice of Exercise is delivered to
the Company. Partial exercises of this Warrant resulting in purchases of a
portion of the total number of Warrant Shares available hereunder shall have the
effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased. The Holder may not exercise this Warrant more than four times. The
Holder and the Company shall maintain records showing the number of Warrant
Shares purchased and the date of such purchases. The Company shall deliver any
objection to any Notice of Exercise Form within 1 Business Day of receipt of
such notice. In the event of any dispute or discrepancy, the records of the
Holder shall be controlling and determinative in the absence of manifest error. 
The Holder and any assignee, by acceptance of this Warrant, acknowledge and
agree that, by reason of the provisions of this paragraph, following the
purchase of a portion of the Warrant Shares hereunder, the number of Warrant
Shares available for purchase hereunder at any given time may be less than the
amount stated on the face hereof.


	
 

	
 


	
 

	
          b)
  Exercise Price. The
  exercise price per share of the Common Stock under this Warrant shall be $3.70,
  subject to adjustment hereunder (the “Exercise Price”).


	
 

	
 


	
 

	
          c)
  Cashless Exercise. If at any time after the Initial Exercise Date
  there is no effective Registration Statement registering, or no current
  prospectus available for, and exemption from registration under Rule 144
  would not then be available for, the resale of the Warrant Shares by the
  Holder, then this Warrant may also be exercised, in whole or in part, at such
  time by means of a “cashless exercise” in which the Holder shall be entitled
  to receive a certificate for the number of Warrant Shares equal to the
  quotient obtained by dividing [(A-B) (X)] by (A), where:








	
 

	
 


	
 

	
(A) = the VWAP on the
  Trading Day immediately preceding the date on which Holder elects to exercise
  this Warrant by means of a “cashless exercise,” as set forth in the
  applicable Notice of Exercise;


	
 

	
(B) = the Exercise
  Price of this Warrant, as adjusted hereunder; and 


	
 

	
(X) = the number of
  Warrant Shares that would be issuable upon exercise of this Warrant in
  accordance with the terms of this Warrant if such exercise were by means of a
  cash exercise rather than a cashless exercise.





          d)
Mechanics of Exercise. 


2





	
 

	
 


	
 

	
          i.
  Delivery of Certificates Upon Exercise. Certificates for shares
  purchased hereunder shall be transmitted by the Transfer Agent to the Holder
  by crediting the account of the Holder’s prime broker with the Depository
  Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”)
  system if the Company is then a participant in such system and either (A)
  there is an effective Registration Statement permitting the resale of the
  Warrant Shares by the Holder or (B) the shares are eligible for resale by the
  Holder without volume or manner-of-sale limitations pursuant to Rule 144, and
  otherwise by physical delivery to the address specified by the Holder in the
  Notice of Exercise by the date that is three (3) Trading Days after the
  latest of (A) the delivery to the Company of the Notice of Exercise Form, (B)
  surrender of this Warrant (if required), and (C) payment of the aggregate
  Exercise Price as set forth above (including by cashless exercise, if
  permitted) (such date, the “Warrant Share Delivery Date”). This
  Warrant shall be deemed to have been exercised on the first date on which all
  of the foregoing have been delivered to 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
  shares for all purposes, as of the date the Warrant has been exercised, with
  payment to the Company of the Exercise Price (or by cashless exercise, if permitted)
  and all taxes required to be paid by the Holder, if any, pursuant to Section
  2(d)(vi) prior to the issuance of such shares, having been paid. If the
  Company fails for any reason to deliver to the Holder certificates evidencing
  the Warrant Shares subject to a Notice of Exercise by the third Trading Day
  following the Warrant Share Delivery Date, the Company shall pay to the
  Holder, in cash, as liquidated damages and not as a penalty, for each $1,000
  of Warrant Shares subject to such exercise (based on the VWAP of the Common
  Stock on the date of the applicable Notice of Exercise), $10 per Trading Day
  (increasing to $20 per Trading Day on the fifth Trading Day after such
  liquidated damages begin to accrue) for each Trading Day after such Warrant
  Share Delivery Date until such certificates are delivered or Holder rescinds
  such exercise. Notwithstanding anything herein to the contrary, the Company
  shall not be obligated to pay liquidated damages following the date of a
  Buy-In (as hereinafter defined) by the holder. 


	
 

	
 


	
 

	
          ii.
  Delivery of New Warrants Upon Exercise. If this Warrant shall have
  been exercised in part, the Company shall, at the request of a Holder and
  upon surrender of this Warrant certificate, 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 unpurchased
  Warrant Shares called for by this Warrant, which new Warrant shall in all
  other respects be identical with this Warrant.





3





	
 

	
 


	
 

	
          iii.
  Rescission Rights. If the Company fails to cause the Transfer Agent to
  transmit to the Holder a certificate or the certificates representing the
  Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery
  Date, then, the Holder will have the right to rescind such exercise.


	
 

	
 


	
 

	
          iv.
  Compensation for Buy-In on Failure to Timely Deliver Certificates Upon
  Exercise. In addition to any other rights available to the Holder, if the
  Company fails to cause the Transfer Agent to transmit to the Holder a
  certificate or the certificates representing the Warrant Shares pursuant to
  an exercise on or before the third Trading Day following the Warrant Share
  Delivery Date, and if after such date the Holder is required by its broker to
  purchase (in an open market transaction or otherwise) or the Holder’s
  brokerage firm otherwise purchases, shares of Common Stock to deliver in
  satisfaction of a sale by the Holder of the Warrant Shares which the Holder
  anticipated receiving upon such exercise (a “Buy-In”), then the
  Company shall , within three (3) Trading Days after the Holder’s request and
  in the Holder’s discretion, either (i) pay cash to the Holder in an amount
  [if any, by which (x) the Holders’ total purchase price (including brokerage
  commissions, if any) for the shares of Common Stock so purchased exceeds (y)
  the amount obtained by multiplying (1) the number of Warrant Shares that the
  Company was required to deliver to the Holder in connection with the exercise
  at issue times (2) the price at which the sell order giving rise to such
  purchase obligation was executed, and (B) at the option of the Holder, either
  reinstate the portion of the Warrant and equivalent number of Warrant Shares
  for which such exercise was not honored (in which case such exercise shall be
  deemed rescinded) or deliver to the Holder the number of shares of Common
  Stock that would have been issued had the Company timely complied with its
  exercise and delivery obligations hereunder. For example, if the Holder
  purchases Common Stock having a total purchase price of $11,000 to cover a
  Buy-In with respect to an attempted exercise of shares of Common Stock with
  an aggregate sale price giving rise to such purchase obligation of $10,000,
  under clause (A) of the immediately preceding sentence the Company shall be
  required to pay the Holder $1,000. The Holder shall provide the Company
  written notice indicating the amounts payable to the Holder in respect of the
  Buy-In and, upon request of the Company, evidence of the amount of such loss.
  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.





4





	
 

	
 


	
 

	
          v.
  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 the Holder would otherwise be
  entitled to purchase upon such exercise, the Company shall, at its election,
  either pay a cash adjustment in respect of such final fraction in an amount
  equal to such fraction multiplied by the Exercise Price or round up to the
  next whole share.


	
 

	
 


	
 

	
          vi.
  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 and the Company may require, as a condition thereto, the payment of a
  sum sufficient to reimburse it for any transfer tax incidental thereto.


	
 

	
 


	
 

	
          vii.
  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.








	
 

	
 





5





	
 

	
 


	
 

	
          e)
  Holder’s Exercise Limitations. The Company shall not effect any
  exercise of this Warrant, and a Holder shall not have the right to exercise
  any portion of this Warrant, pursuant to Section 2 or otherwise, to the
  extent that after giving effect to such issuance after exercise as set forth
  on the applicable Notice of Exercise, the Holder (together with the Holder’s
  Affiliates, and any other Persons acting as a group together with the Holder
  or any of the Holder’s Affiliates), would beneficially own in excess of the
  Beneficial Ownership Limitation (as defined below). For purposes of the
  foregoing sentence, the number of shares of Common Stock beneficially owned
  by the Holder and its Affiliates shall include the number of shares of Common
  Stock issuable upon exercise of this Warrant with respect to which such
  determination is being made, but shall exclude the number of shares of Common
  Stock which would be issuable upon (i) exercise of the remaining,
  nonexercised portion of this Warrant beneficially owned by the Holder or any
  of its Affiliates and (ii) exercise or conversion of the unexercised or
  nonconverted portion of any other securities of the Company (including,
  without limitation, any other Common Stock Equivalents) subject to a
  limitation on conversion or exercise analogous to the limitation contained
  herein beneficially owned by the Holder or any of its Affiliates. Except as set
  forth in the preceding sentence, for purposes of this Section 2(e),
  beneficial ownership shall be calculated in accordance with Section 13(d) of
  the Exchange Act and the rules and regulations promulgated thereunder, it
  being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with
  Section 13(d) of the Exchange Act and the Holder is solely responsible for
  any schedules required to be filed in accordance therewith. To the extent
  that the limitation contained in this Section 2(e) applies, the determination
  of whether this Warrant is exercisable (in relation to other securities owned
  by the Holder together with any Affiliates) and of which portion of this
  Warrant is exercisable shall be in the sole discretion of the Holder, and the
  submission of a Notice of Exercise shall be deemed to be the Holder’s
  determination of whether this Warrant is exercisable (in relation to other
  securities owned by the Holder together with any Affiliates) and of which
  portion of this Warrant is exercisable, in each case subject to the
  Beneficial Ownership Limitation, and the Company shall have no obligation to
  verify or confirm the accuracy of such determination. In addition, a
  determination as to any group status as contemplated above shall be
  determined in accordance with Section 13(d) of the Exchange Act and the rules
  and regulations promulgated thereunder. For purposes of this Section 2(e), in
  determining the number of outstanding shares of Common Stock, a Holder may
  rely on the number of outstanding shares of Common Stock as reflected in (A)
  the Company’s most recent periodic or annual report filed with the
  Commission, as the case may be, (B) a more recent public announcement by the
  Company or (C) a more recent written notice by the Company or the Transfer
  Agent setting forth the number of shares of Common Stock outstanding. Upon
  the written or oral request of a Holder, the Company shall within two Trading
  Days confirm orally and in writing to the Holder the number of shares of
  Common Stock then outstanding. In any case, the number of outstanding shares
  of Common Stock shall be determined after giving effect to the conversion or
  exercise of securities of the Company, including this Warrant, by the Holder
  or its Affiliates since the date as of which such number of outstanding
  shares of Common Stock was reported. The “Beneficial Ownership Limitation”
  shall be 4.99% of the number of shares of the Common Stock outstanding
  immediately after giving effect to the issuance of shares of Common Stock
  issuable upon exercise of this Warrant. The Holder may decrease or, upon not
  less than 61 days’ prior notice to the Company, may increase the Beneficial
  Ownership Limitation provisions of this Section 2(e), provided that the
  Beneficial Ownership Limitation in no event exceeds 9.99% of the number of
  shares of the Common Stock outstanding immediately after giving effect to the
  issuance of shares of Common Stock upon exercise of this Warrant held by the
  Holder and the provisions of this Section 2(e) shall continue to apply. Any such increase will not be
  effective until the 61st
  day after such notice is delivered to the Company. The provisions of
  this paragraph shall be construed and implemented in a manner otherwise than
  in strict conformity with the terms of this Section 2(e) to correct this
  paragraph (or any portion hereof) which may be defective or inconsistent with
  the intended Beneficial Ownership Limitation herein contained or to make
  changes or supplements necessary or desirable to properly give effect to such
  limitation. The limitations contained in this paragraph shall apply to a
  successor holder of this Warrant.





          Section
3. Certain Adjustments.


6





          a)
Stock Dividends and Splits. If the Company, at any time while this
Warrant is outstanding: (i) pays a stock dividend or otherwise makes a
distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock (which, for
avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon exercise of this Warrant), (ii) subdivides outstanding shares of
Common Stock into a larger number of shares, (iii) combines (including by way
of reverse stock split) outstanding shares of Common Stock into a smaller
number of shares or (iv) issues by reclassification of shares of the Common
Stock any shares of capital stock of the Company, then in each case the
Exercise Price shall be multiplied by a fraction of which the numerator shall
be the number of shares of Common Stock (excluding treasury shares, if any)
outstanding immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event,
and the number of shares issuable upon exercise of this Warrant shall be
proportionately adjusted such that the aggregate Exercise Price of this Warrant
shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become
effective immediately after the effective date in the case of a subdivision,
combination or re-classification.


          b)
Subsequent Equity Sales. If the Company or any Subsidiary thereof, as
applicable, at any time while this Warrant is outstanding, shall sell or grant
any option to purchase, or sell or grant any right to reprice, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to
purchase or other disposition) any Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock, at an effective price
per share less than the then Exercise Price (such lower price, the “Base
Share Price” and such issuances collectively, a “Dilutive Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection
with such issuance, be entitled to receive shares of Common Stock at an
effective price per share that is less than the Exercise Price, such issuance
shall be deemed to have occurred for less than the Exercise Price on such date
of the Dilutive Issuance), then, the Exercise Price shall be reduced to a price
equal to the Base Share Price (but in no event below $3.00, adjusted for any
subsequent stock splits, reverse splits and similar capital adjustments). Such
adjustment shall be made whenever such Common Stock or Common Stock Equivalents
are issued. Notwithstanding the foregoing, no adjustments shall be made, paid
or issued under this Section 3(b) in respect of an Exempt Issuance. The Company
shall notify the Holder, in writing, no later than the Trading Day following
the issuance of any Common Stock or Common Stock Equivalents subject to this
Section 3(b), indicating therein the applicable issuance price, or applicable
reset price, exchange price, conversion price and other pricing terms (such
notice, the “Dilutive Issuance Notice”).


7





          c)
Pro Rata Distributions. If the Company, at any time while this Warrant is
outstanding, shall distribute to all holders of Common Stock (and not to the
Holders) evidences of its indebtedness or assets (including cash and cash
dividends) or rights or warrants to subscribe for or purchase any security other
than the Common Stock (which shall be subject to Section 3(b)), then in each
such case the Exercise Price shall be adjusted by multiplying the Exercise Price
in effect immediately prior to the record date fixed for determination of
stockholders entitled to receive such distribution by a fraction of which the
denominator shall be the VWAP determined as of the record date mentioned above,
and of which the numerator shall be such VWAP on such record date less the then
per share fair market value at such record date of the portion of such assets or
evidence of indebtedness or rights or warrants so distributed applicable to one
outstanding share of the Common Stock as determined by the Board of Directors in
good faith. In either case the adjustments shall be described in a statement
provided to the Holder of the portion of assets or evidences of indebtedness so
distributed or such subscription rights applicable to one share of Common Stock.
Such adjustment shall be made whenever any such distribution is made and shall
become effective immediately after the record date mentioned above.


          d)
Fundamental Transaction. If, at any time while this Warrant is
outstanding, (i) the Company, directly or indirectly, in one or more
related transactions effects any merger or consolidation of the Company
with or into another Person, (ii) the Company, directly or indirectly, effects
any sale of all or substantially all of its assets in one or a series of related
transactions, (iii) any, direct or indirect, purchase offer, tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to sell, tender or exchange
their shares for other securities, cash or property and has been accepted by
the holders of 50% or more of the outstanding Common Stock, (iv) the Company,
directly or indirectly, in one or more related transactions effects any
reclassification, reorganization or recapitalization of 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, (not
including a migratory merger) or (v) the Company, directly or indirectly, in one or
more related transactions consummates a stock or share purchase
agreement or other business
combination (including, without limitation, a reorganization, recapitalization,
spin-off or scheme of arrangement) with another Person (not including a
migratory merger) whereby such other Person acquires more than 50% of the outstanding shares of
Common Stock (not including any shares of Common Stock held by the other
Person or other Persons making or party to, or associated or affiliated with
the other Persons making or party to, such stock or share purchase agreement or other business combination), (each
a “Fundamental Transaction”), then, upon any subsequent exercise of this
Warrant, the Holder shall have the right to receive, for each Warrant Share
that would have been issuable upon such exercise immediately prior to the
occurrence of such Fundamental Transaction, at the option of the Holder
(without regard to any limitation in Section 2(e) on the 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 any additional
consideration (the “Alternate Consideration”) receivable as a result of
such Fundamental Transaction by a holder of the number of shares of Common
Stock for which this Warrant is exercisable immediately prior to such
Fundamental Transaction (without regard to any limitation in Section 2(e) on
the exercise of this Warrant). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration issuable in
respect of one share of Common Stock in such Fundamental Transaction, and the
Company shall apportion the Exercise Price among the Alternate Consideration in
a reasonable manner reflecting the relative value of any different components
of the Alternate Consideration. If holders of Common Stock are given any choice
as to the securities, cash or property to be received in a Fundamental
Transaction, then the Holder shall be given the same choice as to the Alternate
Consideration it receives upon any exercise of this Warrant following such
Fundamental Transaction. To the extent necessary to effectuate the foregoing
provisions, any successor to the Company or surviving entity in such
Fundamental Transaction shall issue to the Holder a new warrant consistent with
the foregoing provisions and evidencing the Holder’s right to exercise such
warrant into Alternate Consideration. The terms of any agreement pursuant to
which a Fundamental Transaction is effected shall include terms requiring any
such successor or surviving entity to comply with the provisions of this Section
3(e) and insuring that this Warrant (or any such replacement security) will
be similarly adjusted upon any subsequent transaction analogous to a
Fundamental Transaction. Notwithstanding anything to the contrary, in the event
of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule
13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act or (3) a
Fundamental Transaction involving a Person not traded on a national securities
exchange, the Company or any successor entity shall pay at the Holder’s option,
exercisable at any time concurrently with or within 30 days after the
consummation of the Fundamental Transaction, an amount of cash equal to the
value of this Warrant as determined in accordance with the Black-Scholes option
pricing formula using an expected volatility equal to the 100-day historical
price volatility obtained from the HVT function on Bloomberg L.P. as of the
trading day immediately prior to the public announcement of the Fundamental
Transaction.


8





          e)
Calculations. All calculations under this Section 3 shall be made to the
nearest cent or the nearest 1/100th of a share, as the case may be. For
purposes of this Section 3, the number of shares of Common Stock deemed to be
issued and outstanding as of a given date shall be the sum of the number of
shares of Common Stock (excluding treasury shares, if any) issued and
outstanding.


          f)
Notice to Holder. 


	
 

	
 


	
 

	
          i.
  Adjustment to Exercise Price. Whenever the Exercise Price is adjusted
  pursuant to any provision of this Section 3, the Company shall promptly mail
  to the Holder a notice setting forth the Exercise Price after such adjustment
  and setting forth a brief statement of the facts requiring such adjustment. 


	
 

	
 





9





	
 

	
 


	
 

	
          ii.
  Notice to Allow Exercise by Holder. If (A) the Company shall declare a
  dividend (or any other distribution in whatever form) on the Common Stock,
  (B) the Company shall declare a special nonrecurring cash dividend on or a
  redemption of the Common Stock, (C) the Company shall authorize the granting
  to all holders of the Common Stock rights or warrants to subscribe for or
  purchase any shares of capital stock of any class or of any rights, (D) the approval of any
  stockholders of the Company shall be required in connection with any
  reclassification of the Common Stock, any consolidation or merger to which
  the Company is a party, any sale or transfer of all or substantially all of
  the assets of the Company, or any compulsory share exchange whereby the
  Common Stock is converted into other securities, cash or property, or (E) the
  Company shall authorize the voluntary or involuntary dissolution, liquidation
  or winding up of the affairs of the Company, then, in each case, the Company
  shall cause to be mailed to the Holder at its last address as it shall appear
  upon the Warrant Register of the Company, at least 20 calendar days prior to
  the applicable record or effective date hereinafter specified, a notice
  stating (x) the date on which a record is to be taken for the purpose of such
  dividend, distribution, redemption, rights or warrants, or if a record is not
  to be taken, the date as of which the holders of the Common Stock of record
  to be entitled to such dividend, distributions, redemption, rights or
  warrants are to be determined or (y) the date on which such reclassification,
  consolidation, merger, sale, transfer or share exchange is expected to become
  effective or close, and the date as of which it is expected that holders of
  the Common Stock of record shall be entitled to exchange their shares of the
  Common Stock for securities, cash or other property deliverable upon such
  reclassification, consolidation, merger, sale, transfer or share exchange;
  provided that the failure to mail such notice or any defect therein or in the
  mailing thereof shall not affect the validity of the corporate action
  required to be specified in such notice. To the extent that any notice
  provided hereunder constitutes, or contains, material, non-public information
  regarding the Company or any of the Subsidiaries, the Company shall
  simultaneously file such notice with the Commission pursuant to a Current
  Report on Form 8-K. The Holder shall remain entitled to exercise this Warrant
  during the period commencing on the date of such notice to the effective date
  of the event triggering such notice except as may otherwise be expressly set
  forth herein.


	
 

	
 





          Section
4. Transfer of
Warrant.


          a)
Transferability. Subject to compliance with any applicable securities
laws and the conditions set forth in Section 4(d) hereof and to the provisions
of Section 4.1 of the Purchase Agreement, this Warrant and all rights hereunder
(including, without limitation, any registration rights) are transferable, in
whole or in part, upon five (5) days written notice to the Company and the
surrender of this Warrant at the principal office of the Company or its
designated agent, 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, as applicable, and 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. The Warrant, if
properly assigned in accordance herewith, may be exercised by a
new holder for the purchase of Warrant Shares without having a new Warrant
issued. 


10





          b)
New Warrants. This Warrant may be divided or combined with other
Warrants upon presentation hereof at the aforesaid 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 4(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. All Warrants issued on transfers or
exchanges shall be dated the Issuance Date and shall be identical with this
Warrant except as to the number of Warrant Shares issuable pursuant thereto. 


          c)
Warrant Register. 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 hereof 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.


          d)
Transfer Restrictions. If, at the time of the surrender of this Warrant
in connection with any transfer of this Warrant, the transfer of this Warrant
shall not be either (i) registered pursuant to an effective registration
statement under the Securities Act and under applicable state securities or
blue sky laws or (ii) eligible for resale without volume or manner-of-sale
restrictions or current public information requirements pursuant to Rule 144,
the Company may require, as a condition of allowing such transfer, that the
Holder or transferee of this Warrant, as the case may be, comply with the
provisions of Section 4.1 of the Purchase Agreement.


          e)
 Representation by the Holder.
Unless the Holder exercises this Warrant by cashless exercise pursuant to
Section 2(c), the Holder, by the acceptance hereof, represents and warrants
that it is acquiring this Warrant and, upon any exercise hereof, will acquire
the Warrant Shares issuable upon such exercise, for its own account and not
with a view to or for distributing or reselling such Warrant Shares or any part
thereof in violation of the Securities Act or any applicable state securities
law, except pursuant to sales registered or exempted under the Securities Act.


Section
5. Miscellaneous.


          a)
No Rights as Stockholder Until Exercise. This Warrant does not entitle
the Holder to any voting rights, dividends or other rights as a stockholder of
the Company prior to the exercise hereof as set forth in Section 2(d)(i). 


11





          b)
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, 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.


          c)
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 not be a Business Day, then, such action may be taken or such right may
be exercised on the next succeeding Business Day.


          d)
Authorized Shares. 


	
 

	
 


	
 

	
          The
  Company covenants that, during the period the Warrant is outstanding, it will
  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
  any purchase rights under 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
  the purchase rights under 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 listed. The Company covenants that all Warrant Shares
  which may be issued upon the exercise of the purchase rights represented by
  this Warrant will, upon exercise of the purchase rights represented by this
  Warrant and payment for such Warrant Shares in accordance herewith, be duly
  authorized, validly issued, fully paid and nonassessable and free from all
  taxes, liens and charges created by the Company in respect of the issue
  thereof (other than taxes in respect of any transfer occurring
  contemporaneously with such issue).


	
 

	
 


	
 

	
          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 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 (i) not increase the par value of any Warrant
  Shares above the amount payable therefor upon such exercise immediately prior
  to such increase in par value, (ii) take all such action as may be necessary
  or appropriate in order that the Company may validly and legally issue fully
  paid and nonassessable Warrant Shares upon the exercise of this Warrant and
  (iii) use reasonable best 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.





12





	
 

	
 


	
 

	
 


	
 

	
          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.





          e)
Jurisdiction. All questions concerning the construction, validity,
enforcement and interpretation of this Warrant shall be determined in
accordance with the provisions of the Purchase Agreement.


          f)
Restrictions. The Holder acknowledges that the Warrant Shares acquired
upon the exercise of this Warrant, if not registered and the Holder does not
utilize cashless exercise, will have restrictions upon resale imposed by state
and federal securities laws.


          g)
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 the fact that 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.


          h)
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 Purchase Agreement.


          i)
Limitation of Liability. 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.


          j)
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 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 this Warrant and hereby agrees to
waive and not to assert the defense in any action for specific performance that
a remedy at law would be adequate.


13





          k)
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 and permitted assigns of the
Company and the successors and permitted assigns of Holder. The provisions of
this Warrant are intended to be for the benefit of any Holder from time to time
of this Warrant and shall be enforceable by the Holder or holder of Warrant
Shares.


          l)
Amendment. This Warrant may be modified or amended or the provisions
hereof waived with the written consent of the Company and the
Holder. 


          m)
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 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.


          n)
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.


********************


(Signature Pages Follow)


14





          IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above indicated.


	
 

	
 


	
 

	
AMERICAN LORAIN CORPORATION


	
 

	
 


	
By:

	
 


	
 

	 


	
 

	
Name:


	
 

	
Title:





15





NOTICE OF EXERCISE


TO: AMERICAN LORAIN
CORPORATION


                    (1)
The undersigned hereby elects to purchase ________ Warrant Shares of the
Company pursuant to the terms of the attached Warrant (only if exercised in
full), and tenders herewith payment of the exercise price in full, together
with all applicable transfer taxes, if any.


                    (2)
Payment shall take the form of (check applicable box):


	
 

	
 


	
 

	
o in lawful money of the United States;
  or


	
 

	
 


	
 

	
o  [if permitted] the cancellation of
  such number of Warrant Shares as is necessary, in accordance with the formula
  set forth in subsection 2(c), to exercise this Warrant with respect to the
  maximum number of Warrant Shares purchasable pursuant to the cashless
  exercise procedure set forth in subsection 2(c).





                    (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
DWAC Account Number or by physical delivery of a certificate to:


	
 

	
 


	 


	
 


	 


	
 


	 





                    
(4) Accredited Investor. Unless the undersigned exercises this Warrant by
cashless exercise pursuant to Section 2(c) of the Warrant, the undersigned
hereby represents and warrants that it is an “accredited investor” as defined
in Regulation D promulgated under the Securities Act of 1933, as amended, and
satisfies the criteria set forth in Rule 501(a) therein.


                    (5)
Legend. Unless otherwise permitted under the Securities Purchase
Agreement, dated October __, 2009, by and between the Company and each
purchaser signatory thereto, the certificates representing these securities
will bear a legend restricting transfer under the Securities Act and applicable
state securities laws.


[SIGNATURE OF HOLDER]


	
 


	
Name of Investing Entity:
  ________________________________________________________________________


	
Signature
  of Authorized Signatory of Investing Entity:
  _________________________________________________


	
Name of Authorized Signatory:
  ___________________________________________________________________


	
Title of Authorized Signatory:
  ____________________________________________________________________


	
Date:
  ________________________________________________________________________________________


	
 









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, [____] all of or [_______] shares of 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 Warrant.