Attached files
| file | filename |
|---|---|
| 8-K - SHARING ECONOMY INTERNATIONAL INC. | v163629_8k.htm |
| EX-99.2 - SHARING ECONOMY INTERNATIONAL INC. | v163629_ex99-2.htm |
| EX-99.3 - SHARING ECONOMY INTERNATIONAL INC. | v163629_ex99-3.htm |
Date:
October 22, 2009
China
Wind Systems, Inc.
No. 9
Yanyu Middle Road
Qianzhou
Village, Huishan District, Wuxi City
Jiangsu
Province, People’s Republic of China
Re: Subscription
Agreement
Gentlemen:
The undersigned (the “Purchaser”)
hereby subscribes for the number of Shares (the “Shares”) of the Company’s
Series A Convertible Preferred Stock, par value $0.001 per share (the “Preferred
Shares”), of China Wind Systems, Inc., a Delaware corporation (the “Company”),
as are set forth on the signature page of this Agreement, at a purchase price of
$1.00 per share. The total purchase price for the Shares is set forth on the
signature page of this Agreement.
1. The
Company is offering 2,400,000 Shares at a purchase price of $1.00 per share on a
best efforts basis, with no minimum number of Shares being sold. As a
result, the Purchaser understands that it is possible that the Company will not
receive any proceeds from the sale of Shares other than the purchase price of
the Shares being purchased by the Purchaser. Purchaser has wired or
will wire the purchase price to Sichenzia Ross Friedman Ference LLP (the “Escrow
Agent”), as escrow agent, to be disbursed from escrow as provided in this
Agreement. Promptly upon execution of this Agreement and the escrow
agreement (the “Escrow Agreement”) among the Company, the Purchasers and the
Escrow Agent:
(a) Upon
receipt of the subscription documents for the 2,400,000 Shares, the Company
shall instruct the Escrow Agent to disburse $2,000,000 to the Company and retain
$400,000 in escrow, subject to disbursement in accordance with instructions from
the Company. The Company agrees that the $400,000 held in
escrow shall be used solely for legal, audit and investor relations
fees and expenses, fees and expenses of non-Chinese directors, fees and expenses
for internal accounting services, compensation and expenses of officers not
based in China, transfer agent charges, stock exchange fees, Edgar fees, and any
and all other obligations which are payable in the United States.
(b) The
Company will instruct its transfer agent to issue the Preferred Shares to the
Purchaser.
2. The
Company hereby represents, warrants, covenants and agrees to the Purchaser
that:
(a) Organization and
Qualification. The Company and each of its subsidiaries (each a
“Subsidiary” and collectively, the “Subsidiaries”) is an entity incorporated or
otherwise organized and validly existing under the laws of its jurisdiction of
incorporation or organization (as applicable), with the requisite power and
authority to own and use its properties and assets and to carry on its business.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.
(b) Authorization;
Enforcement. The Company has the requisite corporate power and authority
to execute and deliver each of this Agreement and the Escrow Agreement, to issue
the Preferred Shares and to execute and deliver any other instrument or document
delivered or to be delivered pursuant to this Agreement and the Escrow
Agreements (collectively, the “Transaction Documents” and each, a “Transaction
Document”) and to enter into and to consummate the transactions contemplated by
each of the Transaction Documents (including the issuance and sale of the
Preferred Shares) and otherwise to carry out its obligations thereunder. The
execution and delivery of each of the Transaction Documents by the Company and
the consummation by it of the transactions contemplated thereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company or its stockholders in connection therewith.
The Company has provided to the Purchaser a copy of the action in writing by the
Company’s board of directors approving this sale of the Preferred
Shares. Each Transaction Document, including this Agreement, has been
(or upon delivery will have been) duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms, except where enforceability may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors’ rights or by
the effect of general equitable principles.
(c) Due
Authorization. The Preferred Shares, when issued upon payment
of the Purchase Price, and the shares of common stock, par value $0.001 per
share (“Common Stock”), issuable upon conversion of the Preferred Shares, when
issued upon such conversion, will be duly and validly authorized and issued,
fully paid and non-assessable.
(d) No Conflicts. The
execution, delivery and performance of the Transaction Documents and the
consummation by the Company of the transactions contemplated thereby do not and
will not (i) conflict with or violate any provision of the Company’s certificate
of incorporation or bylaws; (ii) conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound or affected; (iii) to the Company’s knowledge, conflict with, or result in
or constitute any violation of, any award, decision, judgment, decree,
injunction, writ, order, subpoena, ruling, verdict or arbitration award (each an
“Order”)
entered, issued, made or rendered by any federal, state, local or foreign
government or any other Governmental Entity (as defined below), or any Law (as
defined below), applicable to the Company or any of its Subsidiaries, or to any
of their respective properties or assets, or to any shares; (iv) result in the
creation or imposition of (or the obligation to create or impose) any Lien on
any of the properties or assets of the Company or any of the Subsidiaries; or
(v) conflict with, or result in or constitute any violation of, or result in the
termination, suspension or revocation of, any Authorization (as defined below)
applicable to the Company or any of the Subsidiaries, or to any of their
respective properties or assets, or to any of the Preferred Shares, or result in
any other impairment of the rights of the holder of any such Authorization;
except in the case of each of clauses (ii), (iii), (iv) and (v), such as would
not, individually or in the aggregate, have or reasonably be expected to result
in a (i) a material adverse effect on the legality, validity or enforceability
of any Transaction Document, (ii) a material adverse effect on the results of
operations, assets, business or financial condition of the Company and the
Subsidiaries, taken as a whole, or (iii) adversely impair the Company’s ability
to perform in any material respect on a timely basis its obligations under any
Transaction Document (any of (i), (ii) or (iii), a “Material Adverse
Effect”).
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(e) Filings, Consents and
Approvals. Assuming the accuracy of the representations of the Purchaser
set forth in Section 3 hereof, no registration (including any registration under
the Securities Act) or filing with, or any notification to, or any approval,
permission, consent, ratification, waiver, authorization, order, finding of
suitability, permit, license, franchise, exemption, certification or similar
instrument or document (each, an “Authorization”) of or
from, any U.S. or PRC court, arbitral tribunal, arbitrator, administrative or
regulatory agency or commission or other governmental or regulatory authority,
agency or governing body, domestic or foreign, including without limitation any
Trading Market (each, a “Governmental
Entity”), or any other person, or under any statute, law, ordinance,
rule, regulation or agency requirement of any Governmental Entity, (each, a
“Law”), on the
part of the Company is required in connection with the execution or delivery by
the Company of the Transaction Documents or the performance by the Company of
its obligations under each of the Transaction Documents (including, the offer
and sale of the Preferred Shares by the Company to the Purchaser hereunder)
except (i) as would not have a Material Adverse Effect on the Company or
its performance of its obligations under the Transaction Documents,
(ii) Form D and blue sky filings, if required, and (iii) the
filings contemplated by the Transaction Documents.
(f) SEC Reports; Financial
Statements. The Company has filed all reports required to be filed by it
under the Securities Act of 1933 (the “Securities Act”) and
the Securities Exchange Act of 1934 (the “Exchange Act”),
including pursuant to Section 13(a) or 15(d) thereof, since January 1, 2009
(the foregoing materials, including the exhibits thereto (together with any
materials filed by the Company under the Exchange Act, whether or not required),
being collectively referred to herein as the “SEC Reports”) on a
timely basis or has timely filed a valid extension of such time of filing and
has filed any such SEC Reports prior to the expiration of any such extension
other than reports that failure to file of which would not affect the ability of
the holder of the Company’s restricted Common Stock to sell such shares pursuant
to Rule 144 of the Securities and Exchange Commission (the “Commission”) under
the Securities Act after satisfying all applicable holding periods. As of their
respective dates, the SEC Reports complied in all material respects with the
requirements of the Securities Act or the Exchange Act, as the case may be, and
the rules and regulations of the Commission promulgated thereunder, and none of
the SEC Reports, when filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with applicable
accounting requirements and the rules and regulations of the Commission with
respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (“GAAP”), except as may
be otherwise specified in such financial statements and except that unaudited
financial statements may not contain all footnotes required by GAAP, and fairly
present in all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in the case of
unaudited statements, to normal, year-end audit adjustments.
(g) Material Changes.
Since the date of the latest audited financial statements included within the
SEC Reports, except as disclosed in the SEC Reports, (i) there has been no
event, occurrence or development that has had or that could reasonably be
expected to result in a Material Adverse Effect, (ii) the Company has not
altered its method of accounting, (iii) the Company has not declared or
made any dividend or distribution of cash or other property to its stockholders
or purchased, redeemed or made any agreements to purchase or redeem any shares
of its capital stock and (iv) the Company has not issued any equity
securities to any officer, director or affiliate, as defined in Rule 144(a)(1)
of the Commission under the Securities Act (“Affiliate”), except
pursuant to existing Company equity incentive plans, stock option plans, stock
option agreements, restricted stock agreements, stock ownership plans or
dividend reinvestment plans or as otherwise disclosed in the SEC Reports. The
Company does not have pending before the Commission any request for confidential
treatment of information.
- 3
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(h) Litigation. There are
no actions, suits, inquiries, notices of violation, proceedings or
investigations pending or, to the knowledge of the Company, threatened against
or affecting the Company, any Subsidiary or any of their respective properties
before or by any court, arbitrator, governmental or administrative agency or
regulatory authority (federal, state, county, local or foreign) (collectively,
an “Action”)
which (i) adversely affects or challenges the legality, validity or
enforceability of any of the Transaction Documents or (ii) would have or
reasonably be expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor, to the Company’s knowledge, any director or
officer thereof, is or has been the subject of any Action involving a claim of
violation of or liability under federal or state securities laws or a claim of
breach of fiduciary duty. There has not been, and to the knowledge of the
Company, there is not pending or contemplated, any investigation by the
Commission involving the Company or any current director or officer of the
Company or any person who served in such capacity since January 1, 2009. The
Commission has not issued any stop order or other order suspending the
effectiveness of any registration statement filed by the Company under the
Exchange Act or the Securities Act.
(i) Taxes. Each of the
Company and the Subsidiaries has filed all necessary material federal, state and
foreign income and franchise tax returns and has paid or accrued all material
taxes shown as due thereon, and neither the Company nor any of its Subsidiaries
has knowledge of a tax deficiency which has been or might be asserted or
threatened against it which could reasonably be expected to result in a Material
Adverse Effect.
(j) Compliance. Neither
the Company nor any Subsidiary (i) is in default under or in violation of (and
no event has occurred that has not been waived that, with notice or lapse of
time or both, could result in a default by the Company or any Subsidiary under),
nor has the Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any agreement, credit facility,
debt or other instrument (evidencing a Company or Subsidiary debt or otherwise)
or other understanding to which the Company or any Subsidiary is a party or by
which any property or asset of the Company or any Subsidiary is bound or
affected (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or (iii)
to the Company’s knowledge, is or has been in violation of any statute, rule or
regulation of any governmental authority, including without limitation all
foreign, federal, state and local laws relating to taxes, environmental
protection, kickbacks and false claims in healthcare programs, occupational
health and safety, product quality and safety and employment, labor matters,
except in each case as would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. Except as
disclosed in the SEC Reports, the Company is in compliance with the applicable
requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations
thereunder promulgated by the Commission, except where such noncompliance would
not have or reasonably be expected to result in a Material Adverse
Effect.
(k) Regulatory Permits.
The Company and the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign regulatory
authorities necessary to conduct their respective businesses as described in the
SEC Reports, except where the failure to possess such permits would not have or
reasonably be expected to result in a Material Adverse Effect (“Material Permits”),
and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material
Permit.
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(l) Certain Fees. No
brokerage or finder’s fees or commissions are or will be payable by the Company
to any broker, financial advisor or consultant, finder, placement agent,
investment banker, bank or other Person with respect to the transactions
contemplated by this Agreement. The Purchaser shall have no obligation with
respect to any fees or with respect to any claims made by or on behalf of other
Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by this Agreement other than such
fees as may result from actions on the part of the Purchaser.
(m) Disclosure. All
disclosure provided to the Purchasers regarding the Company, its business and
the transactions contemplated hereby, taken together, are complete, true and
correct in all material respects and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
3. The
Purchaser hereby represents, warrants, covenants and agrees as
follows:
(a) The
Purchaser understands that the offer and sale of the Preferred Shares is being
made only by means of this Agreement. The Purchaser understands that
the Company has not authorized the use of, and the Purchaser confirms that it is
not relying upon, any other information, written or oral, other than material
contained in this Agreement and in material that has been publicly filed with
the Commission. The Purchaser is aware that
the purchase of the Preferred Shares involves a high degree of risk and that the
Purchaser may sustain, and has the financial ability to sustain, the loss of its
entire investment, understands that no assurance can be given that the Company
will be profitable in the future, that the Company may need additional financing
and that the failure of the Company to raise additional funds when required may
have a material adverse effect upon its business. Furthermore,
in purchasing the Preferred Shares, the Purchaser acknowledges that it is not
relying upon any projections, forecasts, estimates or any statements of any kind
relating to future revenue, earnings, operations or cash
flow.
(b) The
Purchaser represents to the Company that the Purchaser is an accredited investor
within the meaning of Rule 501 of the Commission under the Securities Act and it
understands the meaning of the term “accredited investor.” The
Purchaser further represents that it has such knowledge and experience in
financial and business matters as to enable the Purchaser to understand the
nature and extent of the risks involved in purchasing the Preferred
Shares. The Purchaser is fully aware that such investments can and
sometimes do result in the loss of the entire investment. The
Purchaser has engaged its own counsel, accountants and investment advisors to
the extent that it deems necessary.
(c) All
of the information provided by the Purchaser in its Confidential Investor
Questionnaire is true and correct in all material respects.
(d) The
Purchaser is acquiring the Preferred Shares, and any shares of Common Stock
issuable upon conversion of the Preferred Shares, for investment and not with a
view to the sale or distribution thereof, for the Purchaser’s own account and
not on behalf of others; has not granted any other person any interest or
participation in or right or option to purchase all or any portion of the
Preferred Shares; is aware that the securities are restricted securities within
the meaning of Rule 144 of the Commission under the Securities Act, and may not
be sold or otherwise transferred other than pursuant to an effective
registration statement or an exemption from registration; and understands and
agrees that the Preferred Shares and the shares of Common Stock issuable upon
conversion of the Preferred Shares shall bear the Company’s standard investment
legend. The Purchaser understands the meaning of these
restrictions.
(e) The
Purchaser will not transfer the Preferred Shares or underlying shares of Common
Stock except in compliance with all applicable federal and state securities laws
and regulations, and, in such connection, the Company may request an opinion of
counsel reasonably acceptable to the Company as to the availability of any
exemption.
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(f) The
Purchaser represents and warrants that no broker or finder was involved directly
or indirectly in connection with the Purchaser’s purchase of the Preferred
Shares pursuant to this Agreement. The Purchaser shall indemnify the
Company and hold it harmless from and against any manner of loss, liability,
damage or expense, including fees and expenses of counsel, resulting from a
breach of the Purchaser’s warranty contained in this Section 3(f).
(g) The
Purchaser understands that it has no registration rights with respect to the
Preferred Shares or underlying shares of Common Stock.
(h) The
Purchaser represents and warrants that the address set forth on the signature
page is its true and correct address, and understands that the Company will rely
on this representation in determining what filings, if any, need to be made
under state securities or blue sky laws.
4. [Intentionally
omitted.]
5. (a) This
Agreement constitutes the entire agreement between the parties relating to the
subject matter hereof, superseding any and all prior or contemporaneous oral and
prior written agreements, understandings and letters of intent. This
Agreement may not be modified or amended nor may any right be waived except by a
writing which expressly refers to this Agreement, states that it is a
modification, amendment or waiver and is signed by all parties with respect to a
modification or amendment or the party granting the waiver with respect to a
waiver. No course of conduct or dealing and no trade custom or usage
shall modify any provisions of this Agreement.
(b) All
notices provided for in this Agreement shall be in writing signed by the party
giving such notice, and delivered personally or sent by overnight courier, mail
or messenger against receipt thereof or sent by registered or certified mail,
return receipt requested, or by facsimile transmission or similar means of
communication if receipt is confirmed. Notices shall be deemed to
have been received on the date of delivery or attempted personal delivery if
sent by registered or certified mail, by messenger or by an overnight courier
services which provides evidence of delivery or attempted delivery, of if sent
by telecopier, upon the date of receipt provided that receipt is acknowledge by
the recipient. Notices shall be sent to the parties at their
respective addresses set forth on the first page of this Agreement, with respect
to the Company, and on the signature page of this Agreement with respect to the
Purchaser, in each case to the attention of the person who executed this
Agreement on behalf of such party. A copy of any notice to the
Company shall be sent to Sichenzia Ross Friedman Ference LLP, 61 Broadway,
32nd
floor, New York, New York 10006, Attention Asher S. Levitsky P.C., telecopier:
(212) 930-9725, e-mail: alevitsky@srff.com.
Any party may, by like notice, change the address, person or telecopier number
to which notice shall be sent.
(c) This
Agreement shall be governed and construed in accordance with the laws of the
State of New York applicable to agreements executed and to be performed wholly
within such State, without regard to any principles of conflicts of
law. Each of the parties hereby (i) irrevocably consents and agrees
that any legal or equitable action or proceeding arising under or in connection
with this Agreement may be brought in the federal or state courts located in the
County of New York in the State of New York, (ii) by execution and delivery of
this Agreement, irrevocably submits to and accepts the jurisdiction of said
courts, (iii) waives any defense that such court is not a convenient forum, and
(iv) consent that any service of process may be made (x) in the
manner set forth in Section 6(b) of this Agreement (other than by telecopier or
e-mail), or (y) by any other method of service permitted by law.
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(d) This
Agreement shall be binding upon and inure to the benefit of the parties hereto,
and their respective successors and permitted assigns.
(e) This
Agreement may be executed in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and the same
document.
(f) The
representations, warranties and covenants set forth in this Agreement or in any
other writing delivered in connection therewith shall survive the issuance of
the Preferred Shares.
Please
confirm your agreement with the foregoing by signing this Agreement where
indicated.
|
Very
truly yours,
|
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|
Number
of Shares Subscribed for:
|
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Total
Purchase Price: $
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[Name
of Purchaser]
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By:
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Name:
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Title:
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The
undersigned is an accredited investor pursuant to Item
of Exhibit A.
| Address: |
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| Telecopier Number: |
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| e-mail: |
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| Social Security or Taxpayer ID No.: |
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| Accepted this day of , 2009 | ||
|
CHINA
WIND SYSTEMS, INC.
|
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|
By:
|
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| Jianhua Wu | |
| Chief Executive Officer | |
Sichenzia
Ross Friedman Ference LLP agrees to serve as escrow agent pursuant to the terms
of the Escrow Agreement.
|
SICHENZIA
ROSS FRIEDMAN FERENCE LLP
|
|
|
By:
|
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| Asher S. Levitsky, P.C., of counsel | |
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Exhibit
A
A Purchaser who meets any one of the
following tests is an accredited investor:
(a) The
Purchaser is an individual who has a net worth, or joint net worth with the
Purchaser’s spouse, of at least $1,000,000.
(b) The
Purchaser is an individual who had individual income of more than $200,000 (or
$300,000 jointly with the Purchaser’s spouse) for the past two years, and the
Purchaser has a reasonable expectation of having income of at least $200,000 (or
$300,000 jointly with the Purchaser’s spouse) for the current year.
(c) The
Purchaser is an officer or director of the Company.
(d) The
Purchaser is a bank as defined in section 3(a)(2) of the Securities Act or any
savings and loan association or other institution as defined in section
3(a)(5)(A) of the Securities Act whether acting in its individual or fiduciary
capacity.
(e) The
Purchaser is a broker or dealer registered pursuant to section 15 of the
Exchange Act.
(f) The
Purchaser is an insurance company as defined in section 2(13) of the Securities
Act.
(g) The
Purchaser is an investment company registered under the Investment Company Act
of 1940 or a business development company as defined in section 2(a)(48) of that
Act.
(h) The
Purchaser is a small Business Investment Company licensed by the U.S. Small
Business Administration under section 301(c) or (d) of the Small Business
Investment Act of 1958.
(i) The
Purchaser is an employee benefit plan within the meaning of Title I of the
Employee Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self-directed plan, with investment decisions made solely
by persons that are accredited investors.
(j) The
Purchaser is a private business development company as defined in section
202(a)(22) of the Investment Advisers Act of 1940.
(k) The
Purchaser is an organization described in Section 501(c)(3) of the Internal
Revenue Code, a corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the securities
offered, with total assets in excess of $5,000,000.
(l) The
Purchaser is a trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of the
Commission under the Securities Act.
(m) The
Purchaser is an entity in which all of the equity owners are accredited
investors (i.e., all of the equity owners meet one of the tests for an
accredited investor).
A-1
If an individual investor qualifies as
an accredited investor, such individual may purchase the Preferred
Shares in the name of his or her individual retirement account
(“IRA”).
A-2