Attached files
THIS NOTE
AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, OR AN OPINION
OF COUNSEL SATISFACTORY TO THE BORROWER THAT REGISTRATION IS NOT REQUIRED UNDER
SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT.
GC
China Turbine Corp.
CONVERTIBLE
PROMISSORY NOTE
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October
30, 2009
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$1,000,000
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GC China
Turbine Corp., a Nevada corporation (the “Company”), for value received,
promises to pay to the order of Clarus Capital Ltd (the “Holder”), the sum of One
Million Dollars ($1,000,000), or the aggregate unpaid principal balance of all
amounts outstanding hereunder, whichever is less (the "Principal").
This Note
(a) supersedes and cancels that certain promissory note in the principal amount
of Six Hundred Thousand Dollars ($600,000) dated June 8, 2009 between the
Company and New Margin Management LLC (the “New Margin Note”) in its
entirety, previously assigned to Holder pursuant to that certain Assignment
Agreement dated October 30, 2009, and (b) partially cancels that certain
convertible promissory note in the principal amount of Four Hundred Fifteen
Thousand Dollars ($415,000) dated June 8, 2009 between the Company and Coach
Capital LLC (the “Coach Capital
Note”), previously assigned to Holder pursuant to that certain Assignment
Agreement dated October 30, 2009. This Note is issued by the Company
in connection with that certain Share Exchange Agreement among the Company,
Wuhan Guoce Nordic New Energy Co., Ltd. (“GC Nordic”), Luckcharm
Holdings Limited, Golden Wind Holdings Limited and a certain shareholder of the
Company dated September 30, 2009. The Company and Holder agree as
follows:
1. Cancellation of New Margin Note and
Coach Capital Note. In connection with the issuance of this Note, Holder
has surrendered to the Company for cancellation the original of the New Margin
Note and the Coach Capital Note, the receipt of which the Company hereby
acknowledges, and the cancellation of which Holder herby
acknowledges.
2. Issuance of Principal and
Conversion.
2.1 The
Principal (the “Debt”)
shall be due and payable by the Company on or before [actual maturity date to be
inserted] (“Maturity
Date”). The Holder shall convert the Debt, in whole but not in
part, into shares of the Company at a price of Two Dollars ($2.00) per share
(“Conversion Price”) at
anytime on or before the Maturity Date. On the six (6) month anniversary of the
date that the Company provides confirmation to Holder of the delivery of twenty
(20) wind turbine systems by the Company’s indirect wholly-owned subsidiary,
Wuhan Guoce Nordic New Energy Co., Ltd. to its customers (the “Delivery Confirmation Date”), the Debt
shall automatically convert into shares of common stock of the Company at the
Conversion Price (“Automatic
Conversion”). For purposes of this Section, the Delivery
Confirmation Date shall be the date that the Company provides to Holder pursuant
to Section 6.5 hereof a copy of delivery acceptance documentation for twenty
(20) wind turbine systems.
2.2 The
Company hereby waives demand and presentment for payment, notice of nonpayment,
protest and notice of protest of this Note.
2.3 In
the event of conversion, whether by Automatic Conversion or otherwise, the
Holder will surrender the original of this Note for conversion at the principal
office of the Company at the time of such conversion. Holder agrees
to execute all necessary documents in connection with the conversion of this
Note, including a definitive stock purchase agreement. If upon such
conversion of this Note a fraction of a share would result, then the Company
will round up to the nearest whole share.
3. Issuance of Consideration on
Conversion. As soon as practicable after receipt of the
original Note and related documents for conversion pursuant to Section 2, but in
not event later than five (5) business days therefrom, the Company at its
expense will cause to be issued in the name of, and delivered to, the Holder, a
certificate or certificates for the number of shares of common stock to which
the Holder will be entitled on such conversion (bearing such legends as may be
required by applicable state and federal securities laws in the opinion of legal
counsel for the Company), together with any other securities and property, if
any, to which the Holder is entitled on such conversion under the terms of this
Note.
4. Adjustment
Provisions. The number and character of shares of common stock
issuable upon conversion of this Note and the Conversion Price therefor, are
subject to adjustment upon occurrence of the following events:
4.1 Adjustment for Stock Splits, Stock
Dividends, Recapitalizations, etc. The Conversion Price of
this Note and the number of shares of common stock issuable upon conversion of
this Note shall each be proportionally adjusted to reflect any stock dividend,
stock split, reverse stock split, reclassification, recapitalization or other
similar event affecting the number of outstanding shares of common
stock.
4.2 Adjustment for Reorganization,
Consolidation, Merger. In the event (a) of any
reorganization of the Company, (b) the Company consolidates with or merges
into another entity, (c) the Company sells all or substantially all of its
assets to another entity and then distributes the proceeds to its shareholders,
or (d) the Company issues or otherwise sells securities representing more
than 50% of the voting power of the Company in a single transaction or series of
related transactions immediately after giving effect to such transaction or
series of related transaction (each of such events shall be referred to herein
as a “Liquidation
Event”), then, and in each such case, the Holder, upon the conversion of
this Note at any time after the consummation of any Liquidation Event shall be
entitled to receive, in lieu of the common stock or other securities and
property receivable upon the conversion of this Note prior to such consummation,
the stock or other securities or property to which the Holder would have been
entitled upon the consummation of such Liquidation Event if the Holder had
converted this Note immediately prior thereto, all subject to further adjustment
as provided in this Note, and the successor or purchasing entity in a
Liquidation Event (if other than the Company) shall duly execute and deliver to
the Holder a supplement hereto acknowledging such entity’s obligations under
this Note.
4.3 No Change
Necessary. The form of this Note need not be changed because
of any adjustment in the Conversion Price or in the number of shares of common
stock issuable upon its conversion.
5. Representations and Acknowledgments
of the Holder. The Holder hereby represents, warrants,
acknowledges and agrees that:
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5.1 Investment. The
Holder is acquiring this Note and the securities issuable upon conversion of
this Note (together, the “Securities”) for the Holder’s
own account, and not directly or indirectly for the account of any other
person. The Holder is acquiring the Securities for investment and not
with a view to distribution or resale thereof except in compliance with
Securities Act of 1933 (the “Act”) and any applicable state
law regulating securities.
5.2 Access to
Information. The Holder has had the opportunity to ask
questions of, and to receive answers from, appropriate executive officers of the
Company with respect to the terms and conditions of the transactions
contemplated hereby and with respect to the business, affairs, financial
condition and results of operations of the Company. The Holder has
had access to such financial and other information as is necessary in order for
the Holder to make a fully informed decision as to investment in the Company,
and has had the opportunity to obtain any additional information necessary to
verify any of such information to which the Holder has had access.
5.3 Accredited
Investor. The Holder is an “accredited investor” within the
meaning of Regulation D of the rules and regulations promulgated under the Act
and has such business or financial expertise as to be able to protect the
Holder’s own interests in connection with the purchase of the
Securities.
5.4 Speculative
Investment. The Holder’s investment in the Company represented
by the Securities is highly speculative in nature and is subject to a high
degree of risk of loss in whole or in part; the amount of such investment is
within the Holder’s risk capital means and is not so great in relation to the
Holder’s total financial resources as would jeopardize the financial condition
of the Holder in the event such investment were lost in whole or in
part.
5.5 Unregistered
Securities.
(a) The
Holder must bear the economic risk of investment for an indefinite period of
time because the Securities have not been registered under the Act and therefore
cannot and will not be sold unless they are subsequently registered under the
Act or an exemption from such registration is available. The Company
has made no representations, warranties or covenants whatsoever as to whether
any exemption from the Act, including, without limitation, any exemption for
limited sales in routine brokers’ transactions pursuant to Rule 144 under the
Act will become available.
(b) Transfer
of the Securities has not been registered or qualified under any applicable
state law regulating securities and therefore the Securities cannot and will not
be sold unless they are subsequently registered or qualified under any such
state law or an exemption therefrom is available. The Company has
made no representations, warranties or covenants whatsoever as to whether any
exemption from any such state law is or will become available.
6. Miscellaneous.
6.1 Waiver and
Amendment. Any provision of this Note may be amended, waived
or modified only upon the written consent of the Company and the
Holder.
6.2 Restrictions on
Transfer. This Note may only be transferred in compliance with
applicable state and federal laws. All rights and obligations of the
Company and the Holder will be binding upon and benefit the successors, assigns,
heirs, and administrators of the parties.
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6.3 Company
Representation. The Company represents to the Holder that the
Company is a corporation duly organized, validly existing, authorized to
exercise all its corporate powers, rights and privileges, and in good standing
in the State of Nevada and has the corporate power and corporate authority to
own and operate its properties and to carry on its business as now conducted;
all corporate action on the part of the Company, its officers, directors, and
shareholders necessary for the authorization, execution, delivery, and
performance of all obligations under this Note have been taken; this Note
constitutes a legally binding and valid obligation of the Company enforceable in
accordance with its terms, except to the extent that such enforcement may be
subject to applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium, fraudulent conveyance or other laws or court decisions relating to
or affecting the rights of creditors generally, and such enforcement may be
limited by equitable principles of general applicability.
6.4 Governing Law. This
Note will be governed by the laws of the State of Nevada applicable to contracts
between Nevada residents wholly to be performed in Nevada.
6.5 Notices.
Any notices, consents, waivers or other communications required or permitted to
be given under the terms hereof must be in writing and will be deemed to have
been delivered: (i) upon receipt, when delivered personally; (ii)
upon receipt, when sent by facsimile (provided confirmation of transmission is
mechanically or electronically generated and kept on file by the sending party)
or electronic mail; or (iii) one (1) trading day after deposit with a nationally
recognized overnight delivery service, in each case properly addressed to the
party to receive the same. The addresses and facsimile numbers for
such communications shall be:
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If to the Company, to:
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GC
China Turbine Corp.
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No.
86, Nanhu Avenue
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East
Lake Development Zone
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Wuhan,
Hubei Province, China
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Attn:
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Fax:
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If
to Holder, to:
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Clarus
Capital Ltd.
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404
Park Avenue South, 2nd
Floor
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New
York, NY 10016
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Attn:
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Fax:
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or at
such other address and/or facsimile number and/or to the attention of such other
person as the recipient party has specified by written notice given to each
other party three (3) business days prior to the effectiveness of such
change. Written confirmation of receipt (i) given by the recipient of
such notice, consent, waiver or other communication, (ii) mechanically or
electronically generated by the sender's facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (iii) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.
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IN WITNESS WHEREOF, the Company has
caused this Note to be issued as of the date first above written.
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GC
China Turbine Corp.,
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a
Nevada corporation
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By:
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_________________________________ | |
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Qi
Na
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Chief
Executive Officer
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Agreed
and Accepted by the Holder:
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Clarus
Capital Ltd.
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