Document:

Unassociated Document

 

EXHIBIT 10.5

REGISTRATION
RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”) is
made and entered into as of August 26, 2004, by and among China World Trade
Corporation (the “Company”), and
the investors signatory hereto (each a “Purchaser” and
collectively, the “Purchasers”).

 

This
Agreement is made pursuant to the Securities Purchase Agreement, dated as of the
date hereof among the Company and the Purchasers (the “Purchase
Agreement”).

 

The
Company and the Purchasers hereby agree as follows:

 

1. Definitions.
Capitalized terms used and not otherwise defined herein that are defined in the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:

 

“Effectiveness
Period” shall
have the meaning set forth in Section 2(a).

 

“Escrow
Date” means
the date that funds are released by the Escrow Agent to the
Company.

 

“Filing
Date” means,
with respect to the Registration Statement required to be filed hereunder, forty
five (45) days following the Escrow Date.

 

“Holder” or
“Holders” means
the holder or holders, as the case may be, from time to time of Registrable
Securities (including any permitted assignee).

 

“Indemnified
Party” shall
have the meaning set forth in Section 5(c).

 

“Indemnifying
Party” shall
have the meaning set forth in Section 5(c).

 

“Losses” shall
have the meaning set forth in Section 5(a).

 

“Proceeding” means
an action, claim, suit, investigation or proceeding (including, without
limitation, an investigation or partial proceeding, such as a deposition),
whether commenced or threatened.

 

“Prospectus” means
the prospectus included in the Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by the Registration Statement, and
all other amendments and supplements to the Prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.

 

1

 

“Registrable
Securities” means
the Firm Shares, Option Shares, Agent Shares and the Warrant Shares together
with any shares of Common Stock issued or issuable upon any stock split,
dividend or other distribution, recapitalization or similar event with respect
to the foregoing or in connection with any anti-dilution provisions in the
applicable Warrant.

 

“Registration
Statement” means
the registration statements required to be filed hereunder, including (in each
case) the Prospectus, amendments and supplements to the registration statement
or Prospectus, including pre- and post-effective amendments, all exhibits
thereto, and all material incorporated by reference or deemed to be incorporated
by reference in the registration statement.

 

“Rule 415” means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar Rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.

 

“Rule 424” means
Rule 424 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar Rule or
regulation hereafter adopted by the Commission having substantially the same
effect as such Rule.

 

Warrants” means
the Common Stock purchase warrants issued to the Purchasers and the Agent
pursuant to the Purchase Agreement.

 

“Securities
Act” means
the Securities Act of 1933, as amended.

 

2. Mandatory
Registration.

 

(a) On or
prior to the Filing Date, the Company shall prepare and file with the Commission
the Registration Statement covering the resale of all of the Registrable
Securities for an offering to be made on a continuous basis pursuant to
Rule 415. The Registration Statement required hereunder shall be on Form
SB-2 (except if the Company is not then eligible to register for resale the
Registrable Securities on Form SB-2, in which case the Registration shall be on
another appropriate form in accordance herewith). The Registration Statement
required hereunder shall contain (except if otherwise directed by the Holders)
the “Plan
of Distribution”
attached hereto as Annex
A. The
Company shall cause the Registration Statement to become effective and remain
effective as provided herein. The Company shall use its commercially reasonable
efforts to cause the Registration Statement to be declared effective under the
Securities Act as promptly as possible after the filing thereof and shall use
its commercially reasonable efforts to keep the Registration Statement
continuously effective under the Securities Act until the date when all
Registrable Securities covered by the Registration Statement (a) have been sold
pursuant to the Registration Statement or an exemption from the registration
requirements of the Securities Act or (b) may be sold without volume
restrictions pursuant to Rule 144(k) as determined by the counsel to the
Company pursuant to a written opinion letter to such effect, addressed and
acceptable to the Company’s transfer agent and the affected Holders (the
“Effectiveness
Period”).

 

2

 

(b) If a
Registration Statement is not filed on or prior to sixty (60) days from the
Escrow Date, then in addition to any other rights the Holders may have hereunder
or under applicable law, the Company shall pay to each Holder an amount in cash
until the date a Registration Statement is filed, as liquidated damages and not
as a penalty, equal to (i) one (1%) percent of the aggregate purchase price paid
by such Holder pursuant to the Purchase Agreement for the first thirty (30) days
or any part thereof, and each thirty (30) day period subsequent thereto, such
payment(s) to be made within seven (7) days after the initial date of each such
failure to file.

 

(c) If (1) a
Registration Statement is not declared effective on or prior to one hundred
twenty (120) days from the Escrow Date, or (2) a Registration Statement has been
declared effective and subsequent thereto is not effective (or does not permit
the resale of the Registrable Securities thereby) for a period of more than
thirty (30) days consecutively until the Shares may be sold pursuant to Rule
144(k) (an “Effectiveness
Default”), then
in addition to any other rights the Holders may have hereunder or under
applicable law, the Company shall pay to each Holder an amount in cash until the
date a Registration Statement is declared effective and/or the Registrable
Securities may be sold pursuant to Rule 144(k) pursuant to subprovision (1)
above, or if previously declared effective then in the situation covered by
subprovision (2) above until the date the Registration Statement becomes
effective again or otherwise permits the resale of the Registrable Securities
covered thereby, as liquidated damages and not as a penalty, equal to one (1%)
percent of the aggregate purchase price paid by such Holder pursuant to the
Purchase Agreement for the first thirty (30) days or any part thereof, and for
each thirty (30) day period subsequent thereto, such payment(s) to be made
within seven (7) days after the date of each such Effectiveness
Default.

 

3. Registration
Procedures. In
connection with the Company's registration obligations hereunder, the Company
shall:

 

(a) Not less
than three (3) Trading Days, which shall not be included in the calculation of
time period for the purposes of the Company’s obligations under this Agreement
or under the Purchase Agreement, prior to the filing of the Registration
Statement or any related Prospectus or any amendment or supplement thereto, the
Company shall, (i) furnish to the Holders copies of all such documents proposed
to be filed (including documents incorporated or deemed incorporated by
reference to the extent requested by such Person) which documents will be
subject to the review of such Holders, and (ii) cause its officers and
directors, counsel and independent certified public accountants to respond to
such inquiries as shall be necessary, in the reasonable opinion of respective
counsel to conduct a reasonable investigation within the meaning of the
Securities Act.

 

(b) Prepare
and file with the Commission such amendments, including post-effective
amendments, to the Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep the Registration Statement continuously
effective as to the applicable Registrable Securities for the Effectiveness
Period; (ii) cause the related Prospectus to be amended or supplemented by any
required Prospectus supplement, and as so supplemented or amended to be filed
pursuant to Rule 424; (iii) respond as promptly as reasonably possible to
any comments received from the Commission with respect to the Registration
Statement or any amendment thereto and, as promptly as reasonably possible, upon
request, provide the Holders true and complete copies of all correspondence from
and to the Commission relating to the Registration Statement; and (iv) comply in
all material respects with the provisions of the Securities Act and the Exchange
Act with respect to the disposition of all Registrable Securities covered by the
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the Holders thereof set forth in the
Registration Statement as so amended or in such Prospectus as so
supplemented.

 

3

 

(c) Notify
the Holders of Registrable Securities to be sold as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than two (2) Trading Days
prior to such filing) and (if requested by any such Person) confirm such notice
in writing promptly following the day (i)(A) when a Prospectus or any Prospectus
supplement or post-effective amendment to the Registration Statement is proposed
to be filed; (B) when the Commission notifies the Company whether there will be
a “review” of the Registration Statement and whenever the Commission comments in
writing on the Registration Statement (the Company shall upon request provide
true and complete copies thereof and all written responses thereto to each of
the Holders); and (C) with respect to the Registration Statement or any
post-effective amendment, when the same has become effective; (ii) of any
request by the Commission or any other Federal or state governmental authority
during the period of effectiveness of the Registration Statement for amendments
or supplements to the Registration Statement or Prospectus or for additional
information; (iii) of the issuance by the Commission or any other federal or
state governmental authority of any stop order suspending the effectiveness of
the Registration Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings for that purpose; (iv) of the receipt by the
Company of any notification with respect to the suspension of the qualification
or exemption from qualification of any of the Registrable Securities for sale in
any jurisdiction, or the initiation or threatening of any Proceeding for such
purpose; and (v) of the occurrence of any event or passage of time that makes
the financial statements included in the Registration Statement ineligible for
inclusion therein or any statement made in the Registration Statement or
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires any revisions to the
Registration Statement, Prospectus or other documents so that, in the case of
the Registration Statement or the Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.

 

(d) Use its
commercially reasonable efforts to avoid the issuance of, or, if issued, obtain
the withdrawal of (i) any order suspending the effectiveness of the Registration
Statement, or (ii) any suspension of the qualification (or exemption from
qualification) of any of the Registrable Securities for sale in any
jurisdiction, at the earliest practicable moment.

 

(e) Furnish
to each Holder, without charge, at least one conformed copy of the Registration
Statement and each amendment thereto, including financial statements and
schedules, all documents incorporated or deemed to be incorporated therein by
reference to the extent requested by such Person, and all exhibits to the extent
requested by such Person (including those previously furnished or incorporated
by reference) promptly after the filing of such documents with the
Commission.

 

4

 

(f) Promptly
deliver to each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request in connection with
resales by the Holder of Registrable Securities. The Company hereby consents to
the use of such Prospectus and each amendment or supplement thereto by each of
the selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to
Section 3(c).

 

(g) Prior to
any resale of Registrable Securities by a Holder, use its commercially
reasonable efforts to register or qualify or cooperate with the selling Holders
in connection with the registration or qualification (or exemption from the
registration or qualification) of such Registrable Securities for the resale by
the Holder under the securities or Blue Sky laws of such jurisdictions within
the United States as any Holder reasonably requests in writing, to keep such
registration or qualification (or exemption therefrom) effective during the
Effectiveness Period and to do any and all other acts or things reasonably
necessary to enable the disposition in such jurisdictions of the Registrable
Securities covered by the Registration Statement; provided, that
the Company shall not be required to qualify generally to do business in any
jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.

 

(h) If
requested by the Holders, cooperate with the Holders to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be delivered to a transferee pursuant to the Registration Statement, which
certificates shall be free, to the extent permitted by the Purchase Agreement,
of all restrictive legends, and to enable such Registrable Securities to be in
such denominations and registered in such names as any such Holders may
request.

 

(i) Upon the
occurrence of any event contemplated by Section 3(c)(v), as promptly as
reasonably possible, prepare a supplement or amendment, including a
post-effective amendment, to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered, neither the Registration Statement nor such Prospectus
will contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.

 

(j) Comply
with all applicable rules and regulations of the Commission.

 

(k) The
Company may require each selling Holder to furnish to the Company a certified
statement as to the number of shares of Common Stock beneficially owned by such
Holder and, if required by the Commission, the person thereof that has voting
and dispositive control over the shares. Each Holder agrees to reasonably
cooperate with the Company in the preparation of the Registration Statement and
response by the Company to any comments by the Commission.

 

5

 

4. Registration
Expenses. All
fees and expenses incident to the performance of or compliance with this
Agreement by the Company shall be borne by the Company whether or not any
Registrable Securities are sold pursuant to the Registration Statement. The fees
and expenses referred to in the foregoing sentence shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (A) with respect to filings required to be made with the
Trading Market on which the Common Stock is then listed for trading, and (B) in
compliance with applicable state securities or Blue Sky laws), (ii) printing
expenses (including, without limitation, expenses of printing certificates for
Registrable Securities and of printing prospectuses if the printing of
prospectuses is reasonably requested by the holders of a majority of the
Registrable Securities included in the Registration Statement), (iii) messenger,
telephone and delivery expenses, (iv) fees and disbursements of counsel for the
Company, (v) Securities Act liability insurance, if the Company so desires such
insurance, and (vi) fees and expenses of all other Persons retained by the
Company in connection with the consummation of the transactions contemplated by
this Agreement. In addition, the Company shall be responsible for all of its
internal expenses incurred in connection with the consummation of the
transactions contemplated by this Agreement (including, without limitation, all
salaries and expenses of its officers and employees performing legal or
accounting duties), the expense of any annual audit and the fees and expenses
incurred in connection with the listing of the Registrable Securities on any
securities exchange as required hereunder.

 

5. Indemnification

 

(a) Indemnification
by the Company. The
Company shall, notwithstanding any termination of this Agreement, indemnify and
hold harmless each Holder, the officers, directors, agents and employees of each
of them, each Person who controls any such Holder (within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, agents and employees of each such controlling
Person, to the fullest extent permitted by applicable law, from and against any
and all losses, claims, damages, liabilities, costs (including, without
limitation, reasonable attorneys' fees) and expenses (including the cost
(including without limitation, reasonable attorneys’ fees) and expenses relating
to an Indemnified Party’s actions to enforce the provisions of this Section 5)
(collectively, “Losses”), as
incurred, to the extent arising out of or relating to any untrue or alleged
untrue statement of a material fact contained in the Registration Statement, any
Prospectus or any form of prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein (in the case of any Prospectus or form
of prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading, except to the extent, but only to the extent,
that (1) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by or on behalf of
such Holder expressly for use therein, or to the extent that such information
relates to such Holder or such Holder's proposed method of distribution of
Registrable Securities and was reviewed and expressly approved in writing by
such Holder expressly for use in the Registration Statement, such Prospectus or
such form of Prospectus or in any amendment or supplement thereto (it being
understood that the Holder has approved Annex A hereto for this purpose) or (2)
in the case of an occurrence of an event of the type specified in
Section 3(c)(ii)-(v), the use by such Holder of an outdated or defective
Prospectus after the Company has notified such Holder in writing that the
Prospectus is outdated or defective and prior to the receipt by such Holder of
the Advice contemplated in Section 6(d). The Company shall notify the
Holders promptly of the institution, threat or assertion of any Proceeding of
which the Company is aware in connection with the transactions contemplated by
this Agreement.

 

6

 

(b) Indemnification
by Holders. Each
Holder shall, severally and not jointly, indemnify and hold harmless the
Company, its directors, officers, agents and employees, each Person who controls
the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act), and the directors, officers, agents or
employees of such controlling Persons, to the fullest extent permitted by
applicable law, from and against all Losses, as incurred, to the extent arising
out of or based upon: (x) such Holder's failure to comply with the prospectus
delivery requirements of the Securities Act or (y) any untrue or alleged untrue
statement of a material fact contained in any Registration Statement, any
Prospectus, or any form of prospectus, or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or relating to any omission
or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading (i) to the extent, but
only to the extent, that such untrue statement or omission is contained in any
information so furnished in writing by or on behalf of such Holder to the
Company specifically for inclusion in the Registration Statement or such
Prospectus or (ii) to the extent that (1) such untrue statements or omissions
are based solely upon information regarding such Holder furnished in writing to
the Company by or on behalf of such Holder expressly for use therein, or to the
extent that such information relates to such Holder or such Holder's proposed
method of distribution of Registrable Securities and was reviewed and expressly
approved in writing by such Holder expressly for use in the Registration
Statement (it being understood that the Holder has approved Annex A hereto for
this purpose), such Prospectus or such form of Prospectus or in any amendment or
supplement thereto, or (2) in the case of an occurrence of an event of the type
specified in Section 3(c)(ii)-(v), the use by such Holder of an outdated or
defective Prospectus after the Company has notified such Holder in writing that
the Prospectus is outdated or defective and prior to the receipt by such Holder
of the Advice contemplated in Section 6(d). In no event shall the liability
of any selling Holder hereunder be greater in amount than the dollar amount of
the gross proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.

 

(c) Conduct
of Indemnification Proceedings. If any
Proceeding shall be brought or asserted against any Person entitled to indemnity
hereunder (an “Indemnified
Party”), such
Indemnified Party shall promptly notify the Person from whom indemnity is sought
(the “Indemnifying
Party”) in
writing, and the Indemnifying Party shall have the right to assume the defense
thereof, including the employment of counsel reasonably satisfactory to the
Indemnified Party and the payment of all fees and expenses incurred in
connection with defense thereof; provided, that
the failure of any Indemnified Party to give such notice shall not relieve the
Indemnifying Party of its obligations or liabilities pursuant to this Agreement,
except (and only) to the extent that it shall be finally determined by a court
of competent jurisdiction (which determination is not subject to appeal or
further review) that such failure shall have materially prejudiced the
Indemnifying Party.

 

7

 

An
Indemnified Party shall have the right to employ separate counsel in any such
Proceeding and to participate in the defense thereof, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party or Parties
unless: (1) the Indemnifying Party has agreed in writing to pay such fees and
expenses; (2) the Indemnifying Party shall have failed promptly to assume the
defense of such Proceeding and to employ counsel reasonably satisfactory to such
Indemnified Party in any such Proceeding; or (3) the named parties to any such
Proceeding (including any impleaded parties) include both such Indemnified Party
and the Indemnifying Party, and such Indemnified Party shall have been advised
by counsel that a conflict of interest is likely to exist if the same counsel
were to represent such Indemnified Party and the Indemnifying Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing that
it elects to employ separate counsel at the expense of the Indemnifying Party,
the Indemnifying Party shall not have the right to assume the defense thereof
and the reasonable fees and expenses of one separate counsel for all Indemnified
Parties in any matters related on a factual basis shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding affected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party, unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such
Proceeding.

 

All
reasonable fees and expenses of the Indemnified Party (including reasonable fees
and expenses to the extent incurred in connection with investigating or
preparing to defend such Proceeding in a manner not inconsistent with this
Section) shall be paid to the Indemnified Party, as incurred, within ten (10)
Trading Days of written notice thereof to the Indemnifying Party; provided, that
the Indemnified Party shall promptly reimburse the Indemnifying Party for that
portion of such fees and expenses applicable to such actions for which such
Indemnified Party is not entitled to indemnification hereunder, determined based
upon the relative faults of the parties.

 

(d) Contribution. If a
claim for indemnification under Section 5(a) or 5(b) is unavailable to an
Indemnified Party (by reason of public policy or otherwise), then each
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such Losses, in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party and Indemnified Party in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such Indemnifying
Party and Indemnified Party shall be determined by reference to, among other
things, whether any action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission of a material fact,
has been taken or made by, or relates to information supplied by, such
Indemnifying Party or Indemnified Party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
action, statement or omission. The amount paid or payable by a party as a result
of any Losses shall be deemed to include, subject to the limitations set forth
in Section 5(c), any reasonable attorneys' or other reasonable fees or
expenses incurred by such party in connection with any Proceeding to the extent
such party would have been indemnified for such fees or expenses if the
indemnification provided for in this Section was available to such party in
accordance with its terms.

 

8

 

(e) The
parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation or by
any other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Holder from the sale of the
Registrable Securities subject to the Proceeding exceeds the amount of any
damages that such Holder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission, except in
the case of fraud by such Holder. The indemnity and contribution agreements
contained in this Section are in addition to any liability that the
Indemnifying Parties may have to the Indemnified Parties.

 

6. Miscellaneous.

 

(a) Remedies. In the
event of a breach by the Company or by a Holder, of any of their obligations
under this Agreement, each Holder or the Company, as the case may be, in
addition to being entitled to exercise all rights granted by law and under this
Agreement, including recovery of damages, will be entitled to specific
performance of its rights under this Agreement. The Company and each Holder
agree that monetary damages would not provide adequate compensation for any
losses incurred by reason of a breach by it of any of the provisions of this
Agreement and hereby further agrees that, in the event of any action for
specific performance in respect of such breach, it shall waive the defense that
a remedy at law would be adequate.

 

(b) No
Piggyback on Registrations. Except
as set forth on Schedule 6(b)(i), neither the Company nor any of its security
holders (other than the Holders in such capacity pursuant hereto) may include
securities of the Company in a Registration Statement filed pursuant to Section
2 hereof other than the Registrable Securities. Except as set forth on Schedule
6(b)(ii) or as set forth in the SEC Reports, no Person has any right to cause
the Company to effect a registration under the Securities Act of any securities
of the Company. Other than a Registration Statement on Form S-8, the
Company shall not and will not file any other registration statement until after
the Effective Date.

 

(c) Compliance. Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with sales
of Registrable Securities pursuant to the Registration Statement.

 

(d) Discontinued
Disposition. Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of any event of the kind
described in Section 3(c), such Holder will forthwith discontinue
disposition of such Registrable Securities under the Registration Statement
until such Holder's receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement or until it is advised in writing (the
“Advice”) by the
Company that the use of the applicable Prospectus may be resumed, and, in either
case, has received copies of any additional or supplemental filings that are
incorporated or deemed to be incorporated by reference in such Prospectus or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph.

 

9

 

(e) Piggyback
Registrations. If at
any time during the Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering for its own account or the account of others under the
Securities Act of any of its equity securities, other than on Form S-4 or Form
S-8 (each as promulgated under the Securities Act) or their then equivalents
relating to equity securities to be issued solely in connection with any
acquisition of any entity or business or equity securities issuable in
connection with stock option or other employee benefit plans, then the Company
shall send to each Holder a written notice of such determination and, if within
fifteen (15) days after the date of such notice, any such Holder shall so
request in writing, the Company shall include in such registration statement all
or any part of such Registrable Securities such Holder requests to be
registered, subject to customary underwriter cutbacks applicable to all holders
of “piggyback” registration rights; provided,
however, that
(i) if, at any time after giving written notice of its intention to register any
securities and prior to the effective date of the registration statement filed
in connection with such registration, the Company determines for any reason not
to proceed with such registration, the Company may, at its election, given
written notice of such determination to the Holders and, thereupon, will be
relieved of its obligation to register any Registrable Securities in connection
with such registration, and (ii) in case of a determination by the Company to
delay registration of its securities, the Company will be permitted to delay the
registration of Registrable Securities for the same period as the delay in
registering such other securities. Notwithstanding the foregoing, nothing in
this paragraph (e) shall permit the Company to file a registration statement in
contravention of the restrictions in Section 6(b)

 

(f) Amendments
and Waivers. The
provisions of this Agreement, including the provisions of this sentence, may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and each Holder of the then outstanding Registrable
Securities.

 

(g) Notices. Any and
all notices or other communications or deliveries required or permitted to be
provided hereunder shall be in writing and shall be deemed given and effective
on the earliest of (i) the date of transmission, if such notice or communication
is delivered via facsimile at the facsimile number provided for below prior to
5:00 p.m. (New York City time) on a Trading Day, (ii) the Trading Day after the
date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number provided for below later than 5:00 p.m. (New York City
time) on any date, (iii) the Trading Day following the date of mailing, if sent
by nationally recognized overnight courier service, or (iv) upon actual receipt
by the party to whom such notice is required to be given. The address for such
notices and communications shall be delivered and addressed as set forth in the
Purchase Agreement

 

10

 

(h) Successors
and Assigns. This
Agreement shall inure to the benefit of and be binding upon the successors and
permitted assigns of each of the parties and shall inure to the benefit of each
Holder. Each Holder may assign their respective rights hereunder in the manner
and to the Persons as permitted under the Purchase Agreement.

 

(i) Execution
and Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and, all of which taken together
shall constitute one and the same Agreement. In the event that any signature is
delivered by facsimile transmission, such signature shall create a valid binding
obligation of the party executing (or on whose behalf such signature is
executed) the same with the same force and effect as if such facsimile signature
were the original thereof.

 

(j) Governing
Law. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without regard to the conflicts of laws principles
thereof. The parties hereto hereby irrevocably agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this Agreement, shall be
brought solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the parties hereby covenant and
irrevocably submit to the in personam jurisdiction of the federal and state
courts located in the City, County and State of New York and agree that any
process in any such action may be served upon any of them personally, or by
certified mail or registered mail upon them or their agent, return receipt
requested, with the same full force and effect as if personally served upon them
in New York City. The parties hereto waive any claim that any such jurisdiction
is not a convenient forum for any such suit or proceeding and any defense or
lack of in personam jurisdiction with respect thereto. In the event of any such
action or proceeding, the party prevailing therein shall be entitled to payment
from the other party hereto of its reasonable counsel fees and disbursements in
an amount judicially determined.

 

(k) Cumulative
Remedies. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.

 

(l) Severability. If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated, and the parties hereto shall use their commercially reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

(m) Headings. The
headings in this Agreement are for convenience of reference only and shall not
limit or otherwise affect the meaning hereof.

 

(n) Independent
Nature of Purchasers' Obligations and Rights. The
obligations of each Purchaser hereunder is several and not joint with the
obligations of any other Purchaser hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at any closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

 

11

 

(o) Obligation
of Holders to Furnish Information. The
Company’s obligation to cause any Registration Statement to be filed and/or
become effective in connection with distribution of any Registrable Securities
pursuant to this Agreement is contingent upon each Holder, with reasonable
promptness, furnishing to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities, as is required pursuant to Regulation S-K or S-B, as the case
may be, promulgated under the Securities Act, to effect the registration of the
Registrable Securities. Each Holder agrees, by acquisition of the Registration
Securities, that it shall not be entitled to sell any of such Registrable
Securities pursuant to the Registration Statement or to receive a Prospectus
relating thereto, unless such Holder has furnished the Company with all
information required to be disclosed in order to make any information regarding
such Holder previously furnished to the Company by such Holder, and any other
information regarding such Holder and the distribution of such Holder’s
Registrable Securities as the Company may from time to time reasonably request,
not misleading in a material respect. Any sale of any Registrable Securities by
any Holder shall constitute a representation and warranty by such Holder that
the information relating to such Holder and its plan of distribution is as set
forth in the prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale contain
any untrue statement of a material fact relating to or provided by such Holder
or relating to its plan of distribution and that such Prospectus does not as of
the time of such sale omit to state any material fact relating to or provided by
such Holder or relating to its plan of distribution necessary to make the
statements in such Prospectus, in light of the circumstances under which they
were made, not misleading.

 

 

[Remainder
of page intentionally left blank]

12

IN
WITNESS WHEREOF, the
parties have executed this Registration Rights Agreement as of the date first
written above.

 

 

CHINA
WORLD TRADE CORPORATION

 

By:
/s/ John H.W. Hui

John H.W.
Hui

Chief
Executive Officer and Vice Chairman

 

13

 

 

(PURCHASERS
SIGNATURE PAGE TO REGISTRATION RIGHTS AGREEMENT)

 

[              ]

 

By:

Name:

Title:

 

[              ]

 

By:

Name:

Title:

 

[              ]

 

By:

Name:

Title:

 

 

14

 

ANNEX
A

 

Plan of
Distribution

 

The
Selling Stockholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of Common Stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The Selling Stockholders may use any one or more of the
following methods when selling shares:

 

	 	
      ·
	
      ordinary
      brokerage transactions and transactions in which the broker/dealer
      solicits purchasers;

 

	 	
      ·
	
      block
      trades in which the broker/dealer will attempt to sell the shares as agent
      but may position and resell a portion of the block as principal to
      facilitate the transaction;

 

	 	
      ·
	
      purchases
      by a broker/dealer as principal and resale by the broker/dealer for its
      account;

 

	 	
      ·
	
      an
      exchange distribution in accordance with the Rules of the applicable
      exchange;

 

	 	
      ·
	
      privately
      negotiated transactions;

 

	 	
      ·
	
      settlement
      of short sales;

 

	 	
      ·
	
      broker/dealers
      may agree with the Selling Stockholders to sell a specified number of such
      shares at a stipulated price per share;

 

	 	
      ·
	
      a
      combination of any such methods of sale;
and

 

	 	
      ·
	
      any
      other method permitted pursuant to applicable
law.

 

The
Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

 

Broker/dealers
engaged by the Selling Stockholders may arrange for other brokers/dealers to
participate in sales. Broker/dealers may receive commissions from the Selling
Stockholders (or, if any broker/dealer acts as agent for the purchaser of
shares, from the purchaser) in amounts to be negotiated. The Selling
Stockholders do not expect these commissions to exceed what is customary in the
types of transactions involved.

 

The
Selling Stockholders may from time to time pledge or grant a security interest
in some or all of the shares of common stock owned by them and, if they default
in the performance of their secured obligations, the pledgees or secured parties
may offer and sell the shares of common stock from time to time under this
prospectus, or under an amendment to this prospectus under Rule 424(b)(3)
or other applicable provision of the Securities Act of 1933 amending the list of
Selling Stockholders to include the pledgee, transferee or other successors in
interest as Selling Stockholders under this prospectus.

 

The
Selling Stockholders and any broker/dealers or agents that are involved in
selling the shares are deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event, any commissions
received by such broker/dealers or agents and any profit on the resale of the
shares purchased by them may be deemed to be underwriting commissions under the
Securities Act. The Selling Stockholders have informed the Company that it does
not have any agreement or understanding, directly or indirectly, with any person
to distribute the Common Stock.

 

The
Company is required to pay all fees and expenses incident to the registration of
the shares. The Company has agreed to indemnify the Selling Stockholders against
certain losses, claims, damages and liabilities, including liabilities under the
Securities Act.

 

15

 

Schedule
6(b)(ii)

	
      Name

       
	Shares

       

	 	 
	 	 

 

 

16Unassociated Document

 

EXHIBIT 10.6

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS 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 LOAN SECURED BY SUCH SECURITIES

 

CHINA
WORLD TRADE CORPORATION

 

SERIES
A WARRANT TO PURCHASE 166,667 SHARES OF COMMON STOCK

 

(SUBJECT
TO ADJUSTMENT)

 

(Void
after August 26, 2009) 

 

THIS
SERIES A COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
Bridges & PIPES, LLC (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
“Initial
Exercise Date”) or
prior to the close of business on August 26, 2009 (the “Termination
Date”) but
not thereafter, to subscribe for and purchase from China World Trade
Corporation, a Nevada corporation (the “Company”), up to
166,667 shares (the “Warrant
Shares”) of
Common Stock, $.001 par value per share, of the Company (the “Common
Stock”). The
purchase price of one share of Common Stock (the “Exercise
Price”) under
this Warrant shall be $2.50, subject to adjustment hereunder. The Exercise Price
and the number of Warrant Shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement dated as of August 26, 2004, between
the Company and the purchasers set forth on Schedule 1
thereto (the
“Purchase
Agreement”).

 

1

 

1.  Title
to Warrant. Prior
to the Termination Date and subject to compliance with applicable laws and
Section 7 of this
Warrant, this Warrant and all rights hereunder are transferable, in whole or in
part, at the office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly endorsed. The transferee shall sign an investment
letter in form and substance reasonably satisfactory to the
Company.

 

2.  Authorization
of Shares. 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, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

3.  Exercise
of Warrant.

 

(a)  Exercise
of the purchase rights represented by this Warrant may be made at any time or
times on or after the Initial Exercise Date and on or before the Termination
Date by the surrender of this Warrant and the Notice of Exercise Form annexed
hereto duly executed, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered
Holder at the address of such Holder appearing on the books of the Company), and
upon payment of the Exercise Price of the Warrant Shares thereby purchased by
wire transfer or cashier’s check drawn on a United States bank or
internationally recognized bank, the Holder shall be entitled to receive a
certificate for the number of Warrant Shares so purchased. Certificates for
Warrant Shares purchased hereunder shall be delivered to the Holder within seven
(7) Trading Days after the date on which this Warrant shall have been exercised
as aforesaid. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the 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 properly exercised by payment to the Company of the Exercise
Price and all taxes required to be paid by the Holder, if any, pursuant to
Section 5 have
been paid. If such conditions by the Holder have been met, and the Company fails
to deliver to the Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 3(a) by the
close of business on the 7th Trading Day after the date of such conditions being
met by the Holder, then the Holder will have the right to rescind such exercise.
In addition to any other rights available to the Holder, if the Company fails to
deliver to the Holder a certificate or certificates representing the Warrant
Shares pursuant to a proper exercise, and all conditions being met by the
Holder, by the close of business on the 10th Trading Day after the date of
exercise, and if after such 10th Trading Day the Holder is required by its
broker to purchase (in an open market transaction or otherwise) 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 (1) pay in immediately available funds to the Holder the
amount by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the Warrant Shares so purchased exceeds (y) the amount
obtained by multiplying (A) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue times
(B) the price at which the sell order giving rise to such purchase obligation
was executed, and (2) 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 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 $100 to cover a Buy-In with respect to an
attempted exercise of Warrant Shares with an aggregate sale price giving rise to
such purchase obligation of $80, under clause (1) of the immediately preceding
sentence the Company shall be required to pay the Holder $20. The Holder shall
provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Company. 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 Warrant Shares as required pursuant to the terms
hereof.

 

2

 

(b)  If this
Warrant shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Shares, deliver
to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant. 

 

(c)  The
Company shall not effect any exercise of this Warrant, and the Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 3(a) or
otherwise, to the extent that after giving effect to such issuance after
exercise, the Holder (together with the Holder’s Affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in excess of 4.9% of
the number of shares of the Common Stock issued and outstanding immediately
after giving effect to such issuance. 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 the determination of such
sentence is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (A) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by the Holder or any of its Affiliates and
(B) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other
Warrants) 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 3(c),
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act. For purposes of this Section 3(c), in
determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y)
a more recent public announcement by the Company or (z) any other notice by the
Company or the Company’s transfer agent setting forth the number of shares of
Common Stock outstanding. Upon the written or oral request of the Holder, the
Company shall within four 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 Company 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
provisions of this Section 3(c) may be
waived by the Holder upon, at the election of the Holder, not less than 61 days’
prior notice to the Company, and the provisions of this Section 3(c) shall
continue to apply until such 61st day (or
such later date, as determined by the Holder, as may be specified in such notice
of waiver). The Holder is solely responsible for all calculations required in
this Section 3(c). The
Company shall have no liability for any issuances of Warrant Shares that exceed
the 5% amount and the Company is entitled to rely on all calculations by the
Holder and/or its agents. The Holder’s exercise notice shall be deemed a
representation of the Holder that the number of Warrant Shares to be acquired
pursuant to such exercise notice shall be in compliance with the provisions of
this Section 3(c).

 

(d)  If, but
only if, at any time after one year from the date of issuance of this Warrant
there is no effective Registration Statement registering the resale of the
Warrant Shares by the Holder, this Warrant may also be exercised 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
Closing Price on the Trading Day preceding the date of such
election;

 

(B)
= the
Exercise Price of the Warrants, as adjusted; and 

 

	 	
      (X)
      =
	
      the
      number of Warrant Shares issuable upon exercise of the Warrants in
      accordance with the terms of this Warrant.

 

3

 

4.  No
Fractional Shares or Scrip. No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.

 

5.  Charges,
Taxes and Expenses.
Issuance of certificates for Warrant Shares shall be made without charge to the
Holder for any issue or transfer tax or other incidental expense in respect of
the issuance of such certificate, all of which taxes and expenses shall be paid
by the Company, and such certificates shall be issued in the name of the Holder
or in such name or names as may be directed by the Holder; provided,
however, that in
the event certificates for Warrant Shares are to be issued in a name other than
the name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

 

6.  Closing
of Books. The
Company will not close its stockholder books or records in any manner which
prevents the timely exercise of this Warrant, pursuant to the terms
hereof.

 

7.  Transfer,
Division and Combination.

 

(a)  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 1 and
Section 7(e) hereof
and to the provisions of Section 4.1 of the
Purchase Agreement, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees 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. A Warrant, if properly assigned, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.

 

(b)  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 7(a), as to
any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such
notice.

 

(c)  The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.

 

(d)  The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.

 

(e)  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 registered pursuant to an effective
registration
statement under the Securities Act and
under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that such transfer may be made
without
registration under
the
Securities Act and under applicable state securities or blue sky laws, (ii) that
the holder or transferee execute and deliver to the Company an investment letter
in form and substance acceptable to the Company and (iii) that the transferee be
an “accredited investor” as defined in Rule 501(a) promulgated under the
Securities Act.

 

4

 

8.  No
Rights as Shareholder Until Exercise. This
Warrant does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the surrender of
this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares
so purchased shall be and be deemed to be issued to such Holder as the record
owner of such shares as of the close of business on the later of the date of
such surrender or payment.

 

9.  Loss,
Theft, Destruction or Mutilation of Warrant. The
Company covenants that upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
or any stock certificate relating to the Warrant Shares, and in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to it
(which, in the case of the Warrant, shall not include the posting of any bond),
and upon surrender and cancellation of such Warrant or stock certificate, if
mutilated, the Company will make and deliver a new Warrant or stock certificate
of like tenor and dated as of such cancellation, in lieu of such Warrant or
stock certificate.

 

10.  Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday
in the State of New York, then such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal holiday in
the State of New York.

 

11.  Adjustments
to Exercise Price and Number of Warrant Shares.

 

For
purposes of this Section
11,
references to Common Stock shall include shares of Common Stock, par value
$.0001 of the Company (and any other classes of common stock issued by the
Company). 

 

(a)  Stock
Splits, Etc. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each
such adjustment of the kind and number of Warrant Shares or other securities of
the Company which are purchasable hereunder pursuant to this Section 11(a), the
Holder shall thereafter be entitled to purchase the number of Warrant Shares or
other securities resulting from such adjustment at an Exercise Price per Warrant
Share or other security obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares purchasable
pursuant hereto immediately prior to such adjustment and dividing by the number
of Warrant Shares or other securities of the Company resulting from such
adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.

 

5

 

(b)  Anti-Dilution
Provisions. From
the Initial Exercise Date until one year following the Closing Date, the
Exercise Price and the number of Warrant Shares issuable hereunder and for which
this Warrant is then exercisable pursuant to Section 1 hereof
shall be subject to adjustment from time to time as provided in this
Section 11(b). In the
event that any adjustment of the Exercise Price as required herein results in a
fraction of a cent, such Exercise Price shall be rounded up or down to the
nearest cent.

 

(i)  Effect
on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under Section
11(b) hereof,
the following will be applicable:

 

(A)  If at any
time from Closing Date until the first anniversary thereof, the Company shall
grant any warrants to any person or entity with an exercise price which shall be
less than the Exercise Price, without the consent of each Holder, the Exercise
Price (of the Warrants which have not been exercised) shall be adjusted to equal
to such lower exercise price

 

(B)  Exceptions
to Adjustment of Exercise Price.
Notwithstanding anything to the contrary herein, this Section 11(b) shall
not apply to the following (1) the granting of warrants to employees, officers,
directors or consultants of the Company pursuant to any stock option plan or
other written compensatory agreement, or (2) the issuance of warrants in
connection with acquisitions, joint ventures, arrangements related to the
Company’s operations and strategic relationships, or other strategic
investments, the primary purpose of which is not to raise capital.

 

(ii)  Minimum
Adjustment of Exercise Price. No
adjustment of the Exercise Price shall be made in an amount of less than 1% of
the Exercise Price in effect at the time such adjustment is otherwise required
to be made, but any such lesser adjustment shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which,
together with any adjustments so carried forward, shall amount to not less than
1% of such Exercise Price.

 

12.  Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets. In case
the Company shall reorganize its capital, reclassify its capital stock (other
than as set forth in Section 11), consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to any class of common stock of the
Company), or sell, transfer or otherwise dispose of all or substantially all its
property, assets or business to another corporation and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
(“Other
Property”), are
to be received by or distributed to the holders of Common Stock of the Company,
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For
purposes of this Section 12,
“common
stock of the successor or acquiring corporation” shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.

 

6

 

13.  Voluntary
Adjustment by the Company. The
Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.

 

14.  Notice
of Adjustment.
Whenever the number of Warrant Shares or number or kind of securities or other
property purchasable upon the exercise of this Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall give notice thereof to the
Holder, which notice shall state the number of Warrant Shares (and other
securities or property) purchasable upon the exercise of this Warrant and the
Exercise Price of such Warrant Shares (and other securities or property) after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was
made.

 

15.  Notice
of Corporate Action. If at
any time:

 

(a)  the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right,
or

 

(b)  there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation or,

 

(c)  there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

 

then, in
any one or more of such cases, the Company shall give to Holder (i) at least 10
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10 days’
prior written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their Warrant Shares
for securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently given
if addressed to Holder at the last address of Holder appearing on the books of
the Company and delivered in accordance with Section 17(d).

 

7

 

16.  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 principal Trading Market upon which the Common Stock may be
listed. 

 

(a)  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
(a) not increase the par value of any Warrant Shares above the amount payable
therefore upon such exercise immediately prior to such increase in par value,
(b) take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.

 

(b)  Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

 

17.  Miscellaneous.

 

(a)  Jurisdiction. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without regard to the conflicts of laws principles
thereof. The parties hereto hereby irrevocably agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this Agreement, shall be
brought solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the parties hereby covenant and
irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in
personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of its reasonable counsel fees and disbursements in an amount
judicially determined.

 

8

 

(b)  Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered for resale under the Securities Act, will have
legends imprinted upon any stock certificates evidencing such Warrant Shares and
the Company will notify its transfer agent of restrictions upon resale imposed
by the applicable state and federal securities laws.

 

(c)  Nonwaiver
and Expenses. No
course of dealing or any delay or failure to exercise any right hereunder on the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding all rights hereunder
terminate on the Termination Date. If the Company willfully and knowingly fails
to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate proceedings, incurred
by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.

 

(d)  Notices. Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Purchase Agreement; provided, upon
any permitted assignment of this Warrant, the assignee shall promptly provide
the Company with its contact information.

 

(e)  Limitation
of Liability. No
provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant or purchase Warrant Shares, and no enumeration herein of the rights
or privileges of 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.

 

(f)  Remedies. 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 the defense in any action
for specific performance that a remedy at law would be adequate.

 

(g)  Successors
and Assigns. Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant and shall be enforceable by any such Holder or
holder of Warrant Shares.

 

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

 

(i)  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.

 

(j)  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.

 

[Remainder
of page intentionally left blank]

 

9

IN
WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly
authorized.

 

Dated:
August 26, 2004

 

CHINA
WORLD TRADE CORPORATION

By:
/s/ John H.W. Hui

Name:
John H.W. Hui

Title:
Chief Executive Officer and

                                                                                    Vice
Chairman

HOLDER

Bridges
& PIPES, LLC

By:
/s/ David Fuchs 

Name:
David Fuchs

Title:
Managing Member

10

 

NOTICE
OF EXERCISE

 

 

To: China
World Trade Corporation

 

 

1.  The
undersigned hereby elects to purchase ________ Series A Warrant Shares of China
World Trade Corporation pursuant to the terms of the attached Series A 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 in lawful money of the United States; or

 

3.  Please
issue a certificate or certificates representing said Series A Warrant Shares in
the name of the undersigned or in such other name as is specified
below:

 

 

The
Series A Warrant Shares shall be delivered to the following:

 

 

4.  Accredited
Investor. The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.

 

[PURCHASER]

By:      

 

Name:           

Title:

 

11

 

ASSIGNMENT
FORM

 

 

(To
assign the foregoing warrant, execute this form and supply required information.

Do not
use this form to exercise the warrant.)

 

FOR
VALUE RECEIVED, the
foregoing Series A Warrant and all rights evidenced thereby are hereby assigned
to

 

                                                                                    
, whose address is:

 

                                                                                                               

 

                                                                                                               

 

 

 

 

Dated:                                 ,
200_

 

 

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 Series A 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 Series A
Warrant.

 

12

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS 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 LOAN SECURED BY SUCH SECURITIES

 

CHINA
WORLD TRADE CORPORATION

 

SERIES
A WARRANT TO PURCHASE 83,334 SHARES OF COMMON STOCK

 

(SUBJECT
TO ADJUSTMENT)

 

(Void
after December 3, 2009)

 

PPW
-       

 

THIS
SERIES A COMMON STOCK PURCHASE WARRANT CERTIFIES that, for value received,
Bridges & PIPES, LLC (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after the date hereof (the
“Initial
Exercise Date”)or
prior to the close of business on December 3, 2009 (the “Termination
Date”) but
not thereafter, to subscribe for and purchase from China World Trade
Corporation, a Nevada corporation (the “Company”), up to
83,334 shares (the “Warrant
Shares”) of
Common Stock, $.001 par value per share, of the Company (the “Common
Stock”). The
purchase price of one share of Common Stock (the “Exercise
Price”) under
this Warrant shall be $2.50, subject to adjustment hereunder. The Exercise Price
and the number of Warrant Shares for which the Warrant is exercisable shall be
subject to adjustment as provided herein. Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Securities Purchase Agreement dated as of August 26, 2004, between
the Company and the purchasers set forth on Schedule 1
thereto (the
“Purchase
Agreement”).

 

13

 

12.  Title
to Warrant. Prior
to the Termination Date and subject to compliance with applicable laws and
Section 7 of this
Warrant, this Warrant and all rights hereunder are transferable, in whole or in
part, at the office or agency of the Company by the Holder in person or by duly
authorized attorney, upon surrender of this Warrant together with the Assignment
Form annexed hereto properly endorsed. The transferee shall sign an investment
letter in form and substance reasonably satisfactory to the
Company.

 

13.  Authorization
of Shares. 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, be duly authorized, validly issued,
fully paid and nonassessable and free from all taxes, liens and charges in
respect of the issue thereof (other than taxes in respect of any transfer
occurring contemporaneously with such issue).

 

14.  Exercise
of Warrant.

 

(a)  Exercise
of the purchase rights represented by this Warrant may be made at any time or
times on or after the Initial Exercise Date and on or before the Termination
Date by the surrender of this Warrant and the Notice of Exercise Form annexed
hereto duly executed, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the registered
Holder at the address of such Holder appearing on the books of the Company), and
upon payment of the Exercise Price of the Warrant Shares thereby purchased by
wire transfer or cashier’s check drawn on a United States bank or
internationally recognized bank, the Holder shall be entitled to receive a
certificate for the number of Warrant Shares so purchased. Certificates for
Warrant Shares purchased hereunder shall be delivered to the Holder within seven
(7) Trading Days after the date on which this Warrant shall have been exercised
as aforesaid. This Warrant shall be deemed to have been exercised and such
certificate or certificates shall be deemed to have been issued, and the 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 properly exercised by payment to the Company of the Exercise
Price and all taxes required to be paid by the Holder, if any, pursuant to
Section 5 have
been paid. If such conditions by the Holder have been met, and the Company fails
to deliver to the Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 3(a) by the
close of business on the 7th Trading Day after the date of such conditions being
met by the Holder, then the Holder will have the right to rescind such exercise.
In addition to any other rights available to the Holder, if the Company fails to
deliver to the Holder a certificate or certificates representing the Warrant
Shares pursuant to a proper exercise, and all conditions being met by the
Holder, by the close of business on the 10th Trading Day after the date of
exercise, and if after such 10th Trading Day the Holder is required by its
broker to purchase (in an open market transaction or otherwise) 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 (1) pay in immediately available funds to the Holder the
amount by which (x) the Holder’s total purchase price (including brokerage
commissions, if any) for the Warrant Shares so purchased exceeds (y) the amount
obtained by multiplying (A) the number of Warrant Shares that the Company was
required to deliver to the Holder in connection with the exercise at issue times
(B) the price at which the sell order giving rise to such purchase obligation
was executed, and (2) 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 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 $100 to cover a Buy-In with respect to an
attempted exercise of Warrant Shares with an aggregate sale price giving rise to
such purchase obligation of $80, under clause (1) of the immediately preceding
sentence the Company shall be required to pay the Holder $20. The Holder shall
provide the Company written notice indicating the amounts payable to the Holder
in respect of the Buy-In, together with applicable confirmations and other
evidence reasonably requested by the Company. 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 Warrant Shares as required pursuant to the terms
hereof.

 

14

 

(b)  If this
Warrant shall have been exercised in part, the Company shall, at the time of
delivery of the certificate or certificates representing Warrant Shares, deliver
to Holder a new Warrant evidencing the rights of Holder to purchase the
unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
in all other respects be identical with this Warrant. 

 

(c)  The
Company shall not effect any exercise of this Warrant, and the Holder shall not
have the right to exercise any portion of this Warrant, pursuant to Section 3(a) or
otherwise, to the extent that after giving effect to such issuance after
exercise, the Holder (together with the Holder’s Affiliates), as set forth on
the applicable Notice of Exercise, would beneficially own in excess of 4.9% of
the number of shares of the Common Stock issued and outstanding immediately
after giving effect to such issuance. 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 the determination of such
sentence is being made, but shall exclude the number of shares of Common Stock
which would be issuable upon (A) exercise of the remaining, nonexercised portion
of this Warrant beneficially owned by the Holder or any of its Affiliates and
(B) exercise or conversion of the unexercised or nonconverted portion of any
other securities of the Company (including, without limitation, any other
Warrants) 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 3(c),
beneficial ownership shall be calculated in accordance with Section 13(d) of the
Exchange Act. For purposes of this Section 3(c), in
determining the number of outstanding shares of Common Stock, the Holder may
rely on the number of outstanding shares of Common Stock as reflected in (x) the
Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y)
a more recent public announcement by the Company or (z) any other notice by the
Company or the Company’s transfer agent setting forth the number of shares of
Common Stock outstanding. Upon the written or oral request of the Holder, the
Company shall within four 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 Company 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
provisions of this Section 3(c) may be
waived by the Holder upon, at the election of the Holder, not less than 61 days’
prior notice to the Company, and the provisions of this Section 3(c) shall
continue to apply until such 61st day (or
such later date, as determined by the Holder, as may be specified in such notice
of waiver). The Holder is solely responsible for all calculations required in
this Section 3(c). The
Company shall have no liability for any issuances of Warrant Shares that exceed
the 5% amount and the Company is entitled to rely on all calculations by the
Holder and/or its agents. The Holder’s exercise notice shall be deemed a
representation of the Holder that the number of Warrant Shares to be acquired
pursuant to such exercise notice shall be in compliance with the provisions of
this Section 3(c).

 

(d)  If, but
only if, at any time after one year from the date of issuance of this Warrant
there is no effective Registration Statement registering the resale of the
Warrant Shares by the Holder, this Warrant may also be exercised 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
Closing Price on the Trading Day preceding the date of such
election;

 

(B)
= the
Exercise Price of the Warrants, as adjusted; and 

 

	 	
      (X)
      =
	
      the
      number of Warrant Shares issuable upon exercise of the Warrants in
      accordance with the terms of this Warrant.

 

15

 

15.  No
Fractional Shares or Scrip. No
fractional shares or scrip representing fractional shares shall be issued upon
the exercise of this Warrant. As to any fraction of a share which Holder would
otherwise be entitled to purchase upon such exercise, the Company shall pay a
cash adjustment in respect of such final fraction in an amount equal to such
fraction multiplied by the Exercise Price.

 

16.  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.

 

17.  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.

 

18.  Transfer,
Division and Combination.

 

(a)  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 1 and
Section 7(e) hereof
and to the provisions of Section 4.1 of the
Purchase Agreement, this Warrant and all rights hereunder are transferable, in
whole or in part, upon surrender of this Warrant at the principal office of the
Company, together with a written assignment of this Warrant substantially in the
form attached hereto duly executed by the Holder or its agent or attorney and
funds sufficient to pay any transfer taxes payable upon the making of such
transfer. Upon such surrender and, if required, such payment, the Company shall
execute and deliver a new Warrant or Warrants in the name of the assignee or
assignees 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. A Warrant, if properly assigned, may be exercised by a new holder for
the purchase of Warrant Shares without having a new Warrant issued.

 

16

 

(b)  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 7(a), as to
any transfer which may be involved in such division or combination, the Company
shall execute and deliver a new Warrant or Warrants in exchange for the Warrant
or Warrants to be divided or combined in accordance with such
notice.

 

(c)  The
Company shall prepare, issue and deliver at its own expense (other than transfer
taxes) the new Warrant or Warrants under this Section 7.

 

(d)  The
Company agrees to maintain, at its aforesaid office, books for the registration
and the registration of transfer of the Warrants.

 

(e)  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 registered pursuant to an effective
registration
statement under the Securities Act and
under
applicable state securities or blue sky laws, the Company may require, as a
condition of allowing such transfer (i) that the Holder or transferee of this
Warrant, as the case may be, furnish to the Company a written opinion of counsel
(which opinion shall be in form, substance and scope customary for opinions of
counsel in comparable transactions) to the effect that such transfer may be made
without
registration under the
Securities Act and under applicable state securities or blue sky laws, (ii) that
the holder or transferee execute and deliver to the Company an investment letter
in form and substance acceptable to the Company and (iii) that the transferee be
an “accredited investor” as defined in Rule 501(a) promulgated under the
Securities Act.

 

19.  No
Rights as Shareholder Until Exercise. This
Warrant does not entitle the Holder to any voting rights or other rights as a
shareholder of the Company prior to the exercise hereof. Upon the surrender of
this Warrant and the payment of the aggregate Exercise Price, the Warrant Shares
so purchased shall be and be deemed to be issued to such Holder as the record
owner of such shares as of the close of business on the later of the date of
such surrender or payment.

 

20.  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.

 

21.  Saturdays,
Sundays, Holidays, etc. If the
last or appointed day for the taking of any action or the expiration of any
right required or granted herein shall be a Saturday, Sunday or a legal holiday
in the State of New York, then such action may be taken or such right may be
exercised on the next succeeding day not a Saturday, Sunday or legal holiday in
the State of New York.

 

22.  Adjustments
to Exercise Price and Number of Warrant Shares.

 

For
purposes of this Section
11,
references to Common Stock shall include shares of Common Stock, par value
$.0001 of the Company (and any other classes of common stock issued by the
Company). 

 

17

 

(a)  Stock
Splits, Etc. The
number and kind of securities purchasable upon the exercise of this Warrant and
the Exercise Price shall be subject to adjustment from time to time upon the
happening of any of the following. In case the Company shall (i) pay a dividend
in shares of Common Stock or make a distribution in shares of Common Stock to
holders of its outstanding Common Stock, (ii) subdivide its outstanding shares
of Common Stock into a greater number of shares, (iii) combine its outstanding
shares of Common Stock into a smaller number of shares of Common Stock, or (iv)
issue any shares of its capital stock in a reclassification of the Common Stock,
then the number of Warrant Shares purchasable upon exercise of this Warrant
immediately prior thereto shall be adjusted so that the Holder shall be entitled
to receive the kind and number of Warrant Shares or other securities of the
Company which it would have owned or have been entitled to receive had such
Warrant been exercised in advance thereof. Upon each
such adjustment of the kind and number of Warrant Shares or other securities of
the Company which are purchasable hereunder pursuant to this Section 11(a), the
Holder shall thereafter be entitled to purchase the number of Warrant Shares or
other securities resulting from such adjustment at an Exercise Price per Warrant
Share or other security obtained by multiplying the Exercise Price in effect
immediately prior to such adjustment by the number of Warrant Shares purchasable
pursuant hereto immediately prior to such adjustment and dividing by the number
of Warrant Shares or other securities of the Company resulting from such
adjustment. An
adjustment made pursuant to this paragraph shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.

 

(b)  Anti-Dilution
Provisions. From
the Initial Exercise Date until one year following the Closing Date, the
Exercise Price and the number of Warrant Shares issuable hereunder and for which
this Warrant is then exercisable pursuant to Section 1 hereof
shall be subject to adjustment from time to time as provided in this
Section 11(b). In the
event that any adjustment of the Exercise Price as required herein results in a
fraction of a cent, such Exercise Price shall be rounded up or down to the
nearest cent.

 

(i)  Effect
on Exercise Price of Certain Events. For
purposes of determining the adjusted Exercise Price under Section
11(b) hereof,
the following will be applicable:

 

(A)  If at any
time from Closing Date until the first anniversary thereof, the Company shall
grant any warrants to any person or entity with an exercise price which shall be
less than the Exercise Price, without the consent of each Holder, the Exercise
Price (of the Warrants which have not been exercised) shall be adjusted to equal
to such lower exercise price

 

(B)  Exceptions
to Adjustment of Exercise Price.
Notwithstanding anything to the contrary herein, this Section 11(b) shall
not apply to the following (1) the granting of warrants to employees, officers,
directors or consultants of the Company pursuant to any stock option plan or
other written compensatory agreement, or (2) the issuance of warrants in
connection with acquisitions, joint ventures, arrangements related to the
Company’s operations and strategic relationships, or other strategic
investments, the primary purpose of which is not to raise capital.

 

(ii)  Minimum
Adjustment of Exercise Price. No
adjustment of the Exercise Price shall be made in an amount of less than 1% of
the Exercise Price in effect at the time such adjustment is otherwise required
to be made, but any such lesser adjustment shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which,
together with any adjustments so carried forward, shall amount to not less than
1% of such Exercise Price.

 

17.  Reorganization,
Reclassification, Merger, Consolidation or Disposition of
Assets. In case
the Company shall reorganize its capital, reclassify its capital stock (other
than as set forth in Section 11), consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where there
is a change in or distribution with respect to any class of common stock of the
Company), or sell, transfer or otherwise dispose of all or substantially all its
property, assets or business to another corporation and, pursuant to the terms
of such reorganization, reclassification, merger, consolidation or disposition
of assets, shares of common stock of the successor or acquiring corporation, or
any cash, shares of stock or other securities or property of any nature
whatsoever (including warrants or other subscription or purchase rights) in
addition to or in lieu of common stock of the successor or acquiring corporation
(“Other
Property”), are
to be received by or distributed to the holders of Common Stock of the Company,
then the Holder shall have the right thereafter to receive, upon exercise of
this Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such modifications as may
be deemed appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of Warrant Shares
for which this Warrant is exercisable which shall be as nearly equivalent as
practicable to the adjustments provided for in this Section 12. For
purposes of this Section 12,
“common
stock of the successor or acquiring corporation” shall
include stock of such corporation of any class which is not preferred as to
dividends or assets over any other class of stock of such corporation and which
is not subject to redemption and shall also include any evidences of
indebtedness, shares of stock or other securities which are convertible into or
exchangeable for any such stock, either immediately or upon the arrival of a
specified date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The foregoing provisions of
this Section 12 shall
similarly apply to successive reorganizations, reclassifications, mergers,
consolidations or disposition of assets.

 

18

 

18.  Voluntary
Adjustment by the Company. The
Company may at any time during the term of this Warrant reduce the then current
Exercise Price to any amount and for any period of time deemed appropriate by
the Board of Directors of the Company.

 

19.  Notice
of Adjustment.
Whenever the number of Warrant Shares or number or kind of securities or other
property purchasable upon the exercise of this Warrant or the Exercise Price is
adjusted, as herein provided, the Company shall give notice thereof to the
Holder, which notice shall state the number of Warrant Shares (and other
securities or property) purchasable upon the exercise of this Warrant and the
Exercise Price of such Warrant Shares (and other securities or property) after
such adjustment, setting forth a brief statement of the facts requiring such
adjustment and setting forth the computation by which such adjustment was
made.

 

20.  Notice
of Corporate Action. If at
any time:

 

(d)  the
Company shall take a record of the holders of its Common Stock for the purpose
of entitling them to receive a dividend or other distribution, or any right to
subscribe for or purchase any evidences of its indebtedness, any shares of stock
of any class or any other securities or property, or to receive any other right,
or

 

(e)  there
shall be any capital reorganization of the Company, any reclassification or
recapitalization of the capital stock of the Company or any consolidation or
merger of the Company with, or any sale, transfer or other disposition of all or
substantially all the property, assets or business of the Company to, another
corporation or,

 

(f)  there
shall be a voluntary or involuntary dissolution, liquidation or winding up of
the Company;

 

then, in
any one or more of such cases, the Company shall give to Holder (i) at least 10
days’ prior written notice of the date on which a record date shall be selected
for such dividend, distribution or right or for determining rights to vote in
respect of any such reorganization, reclassification, merger, consolidation,
sale, transfer, disposition, liquidation or winding up, and (ii) in the case of
any such reorganization, reclassification, merger, consolidation, sale,
transfer, disposition, dissolution, liquidation or winding up, at least 10 days’
prior written notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause also shall specify (i) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, the date on which the holders of Common Stock shall be entitled to any
such dividend, distribution or right, and the amount and character thereof, and
(ii) the date on which any such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up is to take place and the time, if any such time is to be fixed, as of which
the holders of Common Stock shall be entitled to exchange their Warrant Shares
for securities or other property deliverable upon such disposition, dissolution,
liquidation or winding up. Each such written notice shall be sufficiently given
if addressed to Holder at the last address of Holder appearing on the books of
the Company and delivered in accordance with Section 17(d).

 

21.  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 principal Trading Market upon which the Common Stock may be
listed. 

 

(c)  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
(a) not increase the par value of any Warrant Shares above the amount payable
therefore upon such exercise immediately prior to such increase in par value,
(b) take all such action as may be necessary or appropriate in order that the
Company may validly and legally issue fully paid and nonassessable Warrant
Shares upon the exercise of this Warrant, and (c) use commercially reasonable
efforts to obtain all such authorizations, exemptions or consents from any
public regulatory body having jurisdiction thereof as may be necessary to enable
the Company to perform its obligations under this Warrant.

 

(d)  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.

 

19

 

18.  Miscellaneous.

 

(k)  Jurisdiction. This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York without regard to the conflicts of laws principles
thereof. The parties hereto hereby irrevocably agree that any suit or proceeding
arising directly and/or indirectly pursuant to or under this Agreement, shall be
brought solely in a federal or state court located in the City, County and State
of New York. By its execution hereof, the parties hereby covenant and
irrevocably submit to the in personam
jurisdiction of the federal and state courts located in the City, County and
State of New York and agree that any process in any such action may be served
upon any of them personally, or by certified mail or registered mail upon them
or their agent, return receipt requested, with the same full force and effect as
if personally served upon them in New York City. The parties hereto waive any
claim that any such jurisdiction is not a convenient forum for any such suit or
proceeding and any defense or lack of in
personam
jurisdiction with respect thereto. In the event of any such action or
proceeding, the party prevailing therein shall be entitled to payment from the
other party hereto of its reasonable counsel fees and disbursements in an amount
judicially determined.

 

(l)  Restrictions. The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered for resale under the Securities Act, will have
legends imprinted upon any stock certificates evidencing such Warrant Shares and
the Company will notify its transfer agent of restrictions upon resale imposed
by the applicable state and federal securities laws.

 

(m)  Nonwaiver
and Expenses. No
course of dealing or any delay or failure to exercise any right hereunder on the
part of Holder shall operate as a waiver of such right or otherwise prejudice
Holder’s rights, powers or remedies, notwithstanding all rights hereunder
terminate on the Termination Date. If the Company willfully and knowingly fails
to comply with any provision of this Warrant, which results in any material
damages to the Holder, the Company shall pay to Holder such amounts as shall be
sufficient to cover any costs and expenses including, but not limited to,
reasonable attorneys’ fees, including those of appellate proceedings, incurred
by Holder in collecting any amounts due pursuant hereto or in otherwise
enforcing any of its rights, powers or remedies hereunder.

 

(n)  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; provided, upon
any permitted assignment of this Warrant, the assignee shall promptly provide
the Company with its contact information.

 

(o)  Limitation
of Liability. No
provision hereof, in the absence of any affirmative action by Holder to exercise
this Warrant or purchase Warrant Shares, and no enumeration herein of the rights
or privileges of 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.

 

(p)  Remedies. 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 the defense in any action
for specific performance that a remedy at law would be adequate.

 

(q)  Successors
and Assigns. Subject
to applicable securities laws, this Warrant and the rights and obligations
evidenced hereby shall inure to the benefit of and be binding upon the
successors of the Company and the successors and permitted assigns of Holder.
The provisions of this Warrant are intended to be for the benefit of all Holders
from time to time of this Warrant and shall be enforceable by any such Holder or
holder of Warrant Shares.

 

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

 

(s)  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.

 

(t)  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.

 

[Remainder
of page intentionally left blank]

 

20

IN
WITNESS WHEREOF, the
Company has caused this Warrant to be executed by its officer thereunto duly
authorized.

 

Dated:
December 3, 2004

 

CHINA
WORLD TRADE CORPORATION

By:
/s/ John H.W. Hui

Name:
John H.W. Hui

Title:
Chief Executive Officer and

Vice
Chairman

HOLDER

Bridges
& PIPES, LLC

By:
/s/ David Fuchs

Name:
David Fuchs 

Title:
Managing Member

21

 

NOTICE
OF EXERCISE

 

 

To: China
World Trade Corporation

 

 

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

 

6.  Payment
shall take the form of in lawful money of the United States; or

 

7.  Please
issue a certificate or certificates representing said Series A Warrant Shares in
the name of the undersigned or in such other name as is specified
below:

 

 

The
Series A Warrant Shares shall be delivered to the following:

 

 

8.  Accredited
Investor. The
undersigned is an “accredited investor” as defined in Regulation D promulgated
under the Securities Act of 1933, as amended.

 

[PURCHASER]

By:                                                            

 

Name:

Title:

 

22

 

ASSIGNMENT
FORM

 

 

(To
assign the foregoing warrant, execute this form and supply required information.

Do not
use this form to exercise the warrant.)

 

FOR VALUE
RECEIVED, the
foregoing Series A Warrant and all rights evidenced thereby are hereby assigned
to

 

                                                                                    
, whose address is:

 

                                                                                                               

 

                                                                                                               

 

 

 

 

Dated:                                 ,
200_

 

 

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 Series A 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 Series A
Warrant.

23

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