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NOTE
PURCHASE AGREEMENT
THIS NOTE
PURCHASE AGREEMENT (this “Agreement”), dated as of
October 30, 2009 (“Effective
Date”), is entered into by and between GC China Turbine Corp., a Nevada
corporation (the “Company”) and Clarus Capital
Ltd. (the “Purchaser”).
RECITAL
WHEREAS, the Purchaser is
willing to acquire from the Company, and the Company is willing to issue to the
Purchaser, on the terms and subject to the conditions set forth herein, a
Convertible Promissory Note in the aggregate principal amount of $1,000,000 (the
“Note”) on the terms and
conditions as set forth in the Note in the form attached hereto as Exhibit
A.
NOW, THEREFORE, in
consideration of the foregoing, and the representations, warranties, covenants
and conditions set forth below, the parties hereto, intending to be legally
bound, hereby agree as follows:
AGREEMENT
1. Issuance and Receipt of the
Note. Upon the Delivery Confirmation Date (as such term is
defined in the Note), the Company and Purchaser shall execute the Note and the
Purchaser shall transmit via wire transfer the amount of USD $1,000,000 to the
Company.
2. Representations and Warranties of the
Company. The Company represents and warrants to the Purchaser
as follows:
(a)
Organization and Good Standing:
Certificate of Incorporation and Bylaws. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
state of its organization and has all requisite corporate power and authority to
carry on its business as now conducted and proposed to be
conducted. To the extent the Company owns, lease or operates
properties or business outside the state of its organization, the Company is
duly qualified to conduct business as a foreign corporation and is in good
standing as a foreign corporation in all such jurisdictions where such
properties owned, leased or operated by it are located or where such business is
conducted, except where the failure to so qualify or be in good standing is not
reasonably likely to have a material adverse effect on the Company’s business,
financial condition, results of operations, assets, liabilities or prospects (a
“Material Adverse
Effect”).
(b)
Corporate
Power. The Company has all requisite legal and corporate power
to enter into, execute, deliver and perform its obligations under this Agreement
and the Note. This Agreement is and, the Note upon its issuance will
be, valid and binding obligations of the Company, enforceable in accordance with
their terms.
(c)
Authorization.
(i) Corporate
Action. All corporate and legal action on the part of the Company,
its officers, directors and stockholders necessary for the execution and
delivery of this Agreement and the Note, and the performance of the Company’s
obligations hereunder and thereunder, has been taken.
(ii) No
Preemptive Rights. No person has any right of first refusal or any
preemptive or similar rights in connection with the issuance of the Note, or the
issuance of common stock of the Company upon conversion of the Note (the “Conversion
Stock”).
(d)
Offering. In
reliance, in part, on the representations and warranties of the Purchaser in
Section 3 hereof, the offer and issuance of the Note in conformity with the
terms of this Agreement and the issuance of the Conversion Stock will not result
in a violation of the requirements of Section 5 of the Securities Act of 1933,
as amended, (the “Securities
Act”) or the qualification or registration requirements of any applicable
state securities laws.
(e)
Compliance with
Laws. The Company is not (i) subject to the terms or
provisions of any material judgment, decree, order, writ or injunction or (ii)
in violation of any terms or provisions of any laws, rules, or regulations,
except where such violations do not and are not likely to have a Material
Adverse Effect.
(f)
Use of
Proceeds. The Company expects to use the net proceeds received
under this Agreement for general working capital purposes. The Company has not
reserved or allocated specific amounts for these purposes. Accordingly, the
Company’s management will have broad discretion as to the application of such
funds.
(g)
Public
Filings. The Company has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934, as
amended, during the past twelve months (the “Company SEC
Reports”).
3. Representations and Warranties by the
Purchaser. The Purchaser represents and warrants to, and covenants with,
the Company as follows:
(a)
Investment. The
Purchaser is acquiring the Note and, upon conversion thereof, the Conversion
Stock for the Purchaser’s own account, and not directly or indirectly for the
account of any other person. The Purchaser is acquiring the Note and,
upon conversion thereof, the Conversion Stock for investment and not with a view
to distribution or resale thereof except in compliance with Securities Act and
any applicable state law regulating securities.
(b)
Registration of Note and
Conversion Stock. The Purchaser must bear the economic risk of
investment for an indefinite period of time because the Note and Conversion
Stock have not been registered under the Securities Act and therefore cannot and
will not be sold unless they are subsequently registered under the Securities
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 Securities Act, including, without limitation, any
exemption for limited sales in routine brokers’ transactions pursuant to Rule
144 under the Securities Act, will become available. Transfer of the Note and
Conversion Stock have not been registered or qualified under any applicable
state law regulating securities and therefore the Note and Conversion Stock
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.
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(c)
Accredited Investor. The
Purchaser represents and warrants to, and covenants with, the Company that: (i)
the Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D
under the Securities Act and the Purchaser is also knowledgeable, sophisticated
and experienced in making, and is qualified to make decisions with respect to,
investments in securities presenting an investment decision like that involved
in the purchase of the Note, including investments in securities issued by the
Company and investments in comparable companies, and has requested, received,
reviewed and considered all information it deemed relevant in making an informed
decision to purchase the Note; and (ii) the Purchaser has had the opportunity to
review the risks factors identified in the Company SEC Reports.
(d)
Access to
Information. The Purchaser acknowledges that it has had access
to the Company SEC Reports. The Purchaser further acknowledges that
the Company has made available to the Purchaser the opportunity to ask questions
of and receive answers from the Company's officers and directors concerning the
terms and conditions of this Agreement and the business and financial condition
of the Company, and the Purchaser has received such information about the
business and financial condition of the Company and the terms and conditions of
the Agreement as it has requested. The Purchaser understands that the
Note and Conversion Stock are speculative investments, which involve a high
degree of risk of loss of the Purchaser’s entire investment.
(e)
Foreign
Matters. The Purchaser acknowledges that no action has been or
will be taken in any jurisdiction outside the United States by the Company that
would permit an offering of the Note, or possession or distribution of offering
materials in connection with the issuance of the Note, in any jurisdiction
outside the United States where legal action by the Company for that purpose is
required.
(f)
Compliance with
Laws. Purchaser will not use any of the Conversion Stock to
cover any short position in the Common Stock of the Company if doing so would be
in violation of applicable securities laws.
4. Indemnification.
(a)
Company’s Indemnification of
Purchaser. To the extent permitted by law, the Company shall
defend, indemnify and hold harmless the Purchaser from and against any and all
losses, claims, judgments, liabilities, demands, charges, suits, penalties,
costs or expenses, including court costs and attorneys’ fees resulting from any
claim, demand, suit, action or proceeding brought by any third party (“Claims and Liabilities”) with
respect to or arising from (i) the breach of any warranty or any inaccuracy
of any representation made by the Company in this Agreement, or (ii) the
breach of any covenant or agreement made by the Company in this
Agreement.
(b)
Purchaser’s Indemnification of
Company. To the extent permitted by law, the Purchaser shall
defend, indemnify and hold harmless the Company from and against any and all
Claims and Liabilities with respect to or arising from (i) the breach of
any warranty or any inaccuracy of any representation made by the Purchaser in
this Agreement, or (ii) the breach of any covenant or agreement made by the
Purchaser in this Agreement.
5. Miscellaneous.
(a)
Waivers and
Amendments. Any provision of this Agreement may be amended,
waived or modified upon the written consent of all of the parties
hereto.
(b)
Governing
Law. This Agreement and all actions arising out of or in
connection with this Agreement shall be governed by and construed in accordance
with the laws of the State of Nevada, without regard to the conflict of laws
provisions of the State of Nevada or of any other state.
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(c)
Entire
Agreement. This Agreement, together with the Exhibits hereto,
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and thereof.
(d)
Notices. All
notices, requests and other communications hereunder shall be in writing and
shall be deemed to have been duly given at the time of receipt if delivered by
hand or by facsimile transmission or three (3) days after being mailed,
registered or certified mail, return receipt requested, with postage prepaid to
the applicable parties hereto at the address stated on the signature page hereto
or if any party shall have designated a different address or facsimile number by
notice to the other party given as provided above, then to the last address or
facsimile number so designated.
(e)
Validity. If
any provision of this Agreement shall be judicially determined to be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions thereof shall not in any way be affected or impaired
thereby.
(f)
Counterparts. This
Agreement may be executed in any number of counterparts, and a party’s delivery
of a signed counterpart by facsimile transmission shall constitute that party’s
due execution of this Agreement.
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IN WITNESS WHEREOF, the
parties have executed and delivered this Agreement as of the date and year first
written above.
GC China Turbine
Corp.,
a Nevada
corporation
|
By:
_________________________________
|
Name: Qi
Na
Title:
Chief Executive Officer
Address:
No. 86, Nanhu Avenue
East Lake Development Zone,
Wuhan, China
|
Clarus
Capital Ltd.
|
|
By:
_________________________________
|
|
Name:
_______________________________
|
|
Title:
________________________________
|
|
Address:
_____________________________
|
| _____________________________ |
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EXHIBIT
A
FORM OF CONVERTIBLE
PROMISSORY NOTE
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