Attached files
| file | filename |
|---|---|
| 8-K - China New Energy Group CO | v196995_8k.htm |
| EX-4.1 - China New Energy Group CO | v196995_ex4-1.htm |
| EX-10.5 - China New Energy Group CO | v196995_ex10-5.htm |
| EX-10.6 - China New Energy Group CO | v196995_ex10-6.htm |
| EX-10.4 - China New Energy Group CO | v196995_ex10-4.htm |
| EX-10.3 - China New Energy Group CO | v196995_ex10-3.htm |
| EX-10.7 - China New Energy Group CO | v196995_ex10-7.htm |
| EX-10.1 - China New Energy Group CO | v196995_ex10-1.htm |
| EX-10.8 - China New Energy Group CO | v196995_ex10-8.htm |
| EX-10.9 - China New Energy Group CO | v196995_ex10-9.htm |
| EX-10.2 - China New Energy Group CO | v196995_ex10-2.htm |
| EX-10.11 - China New Energy Group CO | v196995_ex10-11.htm |
| EX-10.14 - China New Energy Group CO | v196995_ex10-14.htm |
| EX-10.12 - China New Energy Group CO | v196995_ex10-12.htm |
| EX-10.13 - China New Energy Group CO | v196995_ex10-13.htm |
| EX-10.10 - China New Energy Group CO | v196995_ex10-10.htm |
CHINA
NEW ENERGY GROUP COMPANY
CERTIFICATE
OF DESIGNATIONS OF PREFERENCES,
RIGHTS
AND LIMITATIONS
OF
SERIES
D CONVERTIBLE PREFERRED STOCK
The
undersigned, Yang Kan Chong, does hereby certify
that:
1. He
is the Chief Executive Officer and Chairman of the Board of Directors of CHINA NEW ENERGY GROUP
COMPANY, a Delaware corporation (the “Company”).
2. The
Company is authorized to issue 10,000,000 shares of Preferred Stock, par value
$0.001 per share (“Preferred Stock”), of
which (i) 5,500,000 shares are designated as Series A Convertible Preferred
Stock, par value $0.001 per share (“Series A Preferred
Stock”) and 2,098,917 shares of such Series A
Preferred Stock are issued and outstanding, (ii) 2,000,000 shares are
designated as Series B Convertible Preferred Stock, par value $0.001 per share
(“Series B Preferred
Stock”) and 1,116,388 shares of such Series B
Preferred Stock are issued and outstanding, and (ii) 25 shares are
designated as Series C Convertible Preferred Stock, par value $0.001 per share
(“Series C Preferred
Stock”) and all shares of such Series C Preferred Stock
are issued and outstanding.
3. The
following resolutions were duly adopted by the Board of Directors of the Company
(the “Board of
Directors”):
WHEREAS,
the Certificate of Incorporation of the Company provides for a class of its
authorized stock known as Preferred Stock, comprised of 10,000,000 shares,
$0.001 par value per share, issuable from time to time in one or more
series;
WHEREAS,
the Board of Directors is authorized to fix the dividend rights, dividend rate,
voting rights, conversion rights, rights and terms of redemption and liquidation
preferences of any wholly unissued series of Preferred Stock and the number of
shares constituting any series and the designation thereof, of any of them;
and
WHEREAS,
it is the desire of the Board of Directors, pursuant to its authority as
aforesaid, to fix the rights, preferences, restrictions and other matters
relating to a series of the preferred stock, which shall consist of four
(4)shares of the Preferred Stock, which the Company has the authority to issue,
as follows:
NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for
the issuance of a series of Preferred Stock for cash or exchange of other
securities, rights or property and does hereby fix and determine the rights,
preferences, restrictions and other matters relating to such series of Preferred
Stock as follows:
1
TERMS OF PREFERRED
STOCK
Section
1. Definitions. Capitalized terms used and
not otherwise defined herein shall have the meanings ascribed to such terms in
the Series C and Series D Convertible Preferred Stock Securities Purchase
Agreement by and between the Company, China Hand Fund, I, LLC, a Delaware
limited liability company (as amended, modified or supplemented from time to
time in accordance with its terms, a copy of which is on file at the principal
offices of the Company, the “Purchase Agreement”)
For the purposes hereof, the following terms shall have the following
meanings:
“Acquisition End Date”
shall have the meaning set forth in Section 6(b).
“Affiliate” means,
with respect to any Person, any other Person directly or indirectly controlling,
directly or indirectly controlled by, or under direct or indirect common control
with, such Person or a member of such Person's immediate family; or if such
Person is a partnership, any general partner of such Person or a Person
controlling any such general partner. For purposes of this
definition, "control" (including "controlled by" and "under common control
with") shall mean the power, directly or indirectly, to direct or cause the
direction of the management and policies of such Person whether through the
ownership of voting securities, by contract or otherwise.
“Board of Directors”
means the Board of the Directors of the Company.
“Certificate” means
this Certificate of Designations of Preferences, Rights and Limitations of
Series D Convertible Preferred Stock of China New Energy Group Company, as
amended from time to time.
“Commission” means the
Securities and Exchange Commission of the United States of America.
“Common Stock” means
the Company’s common stock, par value $0.001 per share, and stock of any other
class into which such shares may hereafter have been reclassified or
changed.
“Company” means China
New Energy Group Company, a Delaware corporation.
“Conversion Ratio”
shall mean the number of shares of Common Stock issuable upon conversion of one
share of Series D Preferred Stock as follows:
A = (B *
(.72/.28) - C – D)/4
Where:
A
= total number of common shares into which Series D will be convertible on and
after the Acquisition End Date.
B=
219,605,986
C
= number of shares of Common Stock into which Series C Convertible Preferred
Stock may be converted on the Issuance Date plus any shares Common Stock into
which shares of Series C Convertible Preferred Stock which may be converted upon
conversion of any convertible promissory notes convertible into such stock
outstanding on the Issuance Date.
2
D
= number of shares of Common stock, plus the number of shares of Common stock
into which any convertible preferred stock, debt or other convertible securities
are convertible, issued to new investors between October 1, 2010 and April 30,
2011, which result in gross proceeds to the Company which do not exceed
$54,500,000.
“Conversion Shares”
means, collectively, the shares of Common Stock issuable upon conversion of the
shares of Series D Preferred Stock in accordance with the terms of the Purchase
Agreement and this Certificate.
September 14, 2010 “Dadi” means Beijing
Century Dadi Gas Engineering Co., Ltd.
“Exchange Act” means
the Securities Exchange Act of 1934, as amended.
“Holder” shall have
the meaning set forth in Section 2 hereof.
“Issuance Date” means
the first date on which the Series D Convertible Preferred Stock is
issued.
“Person” means a
corporation, an association, a partnership, a limited liability company, a
business association, an individual, a trust, a government or political
subdivision thereof or a governmental agency.
“Purchaser” means any
purchaser who purchased shares of Series D Preferred Stock pursuant to the
Purchase Agreement.
“Registration Rights
Agreement(s)” means the Registration Rights Agreement(s), to which the
Company and the Purchasers are parties, as amended, modified or supplemented
from time to time in accordance with its terms.
“Securities Act” means
the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
“Series D Preferred
Stock” shall have the meaning set forth in Section 2 hereof.
“Subsidiary” shall
mean a corporation, limited liability company, partnership, joint venture or
other business entity of which the Company owns beneficially or of record more
than a majority of the equity interests.
“Trading Day” means a
day on which the Common Stock is traded on a Trading Market.
“Trading Market” means
the following markets or exchanges on which the Common Stock is listed or quoted
for trading on the date in question: the New York Stock Exchange, the New York
Stock Exchange Amex, the NASDAQ Global Select Market, the NASDAQ Global Market,
the NASDAQ Capital Market or the OTC Bulletin Board.
3
Rank of Series or
Classes. For purposes of this Certificate, any stock of any
series or class of the Company shall be deemed to rank:
(a)
senior to the shares of Series D Preferred Stock, as to dividends or upon
liquidation, dissolution or winding up, as the case may be, if the holders of
such class or classes shall be entitled to the receipt of dividends or of
amounts distributable upon dissolution, liquidation or winding up of the
Company, as the case may be, in preference or priority to the
Holders;
(b) on a
parity with shares of Series D Preferred Stock, as to dividends or upon
liquidation, dissolution or winding up, as the case may be, whether or not the
dividend rates, dividend payment dates or redemption or liquidation prices per
share or sinking fund provisions, if any, be different from those of Series D
Preferred Stock, if the holders of such stock shall be entitled to the receipt
of dividends or of amounts distributable upon dissolution, liquidation or
winding up of the Company, as the case may be, in proportion to their respective
dividend rates or liquidation prices, without preference or priority, one over
the other, as between the holders of such stock and the Holders;
(c)
junior to shares of Series D Preferred Stock as to dividends or upon
liquidation, dissolution or winding up, as the case may be, if such class shall
be Common Stock or if the Holders shall be entitled to receipt of dividends or
of amounts distributable upon dissolution, liquidation or winding up of the
Company, as the case may be, in preference or priority to the holders of shares
of such class or classes.
Section
2. Designation
and Amount. The series of Preferred Stock, par value $0.001
per share shall be designated as the Company’s Series D Convertible Preferred
Stock (the “Series D
Preferred Stock”) and the number of shares so designated shall be two (2)
(which shall not be subject to increase without the consent of all of the
holders of at least 50% of the then outstanding shares of Series D Preferred
Stock (each a “Holder” and
collectively, the “Holders”). The
Company may issue fractional shares of the Series D Preferred Stock. In the
event of the conversion of shares of Series D Preferred Stock into Common Stock,
pursuant to Section 6 hereof, or in the event that the Company shall otherwise
acquire and cancel any shares of Series D Preferred Stock, the shares of Series
D Preferred Stock so converted or otherwise acquired and canceled shall have the
status of authorized but unissued shares of Preferred Stock, without designation
as to series until such stock is once more designated as part of a particular
series by the Board of Directors. In addition, if the Company shall
not issue the maximum number of shares of Series D Preferred Stock, the Company
may, from time to time, by resolution of the Board of Directors and the approval
of the holders of a majority of the outstanding shares of Series D Preferred
Stock (the “Majority
Holders”), reduce the number of shares of Series D Preferred Stock
authorized, provided, that no such reduction shall reduce the number of
authorized shares to a number which is less than the number of shares of Series
D Preferred Stock then issued or reserved for issuance. The number of
shares by which the Series D Preferred Stock is reduced shall have the status of
authorized but unissued shares of Preferred Stock, without designation as to
series, until such stock is once more designated as part of a particular series
by the Company’s Board of Directors. The Board of Directors shall
cause to be filed with the Secretary of State of the State of Delaware such
certificate as shall be necessary to reflect any reduction in the number of
shares constituting the Series D Preferred Stock.
Section
3. Dividends. The
Series D Preferred Stock shall not be entitled to receive
dividends.
4
Section
4. Voting
Rights. Except as otherwise provided by law, the holders of the Series D
Preferred Stock shall have no voting rights and powers.
Section
5. Liquidation.
The shares of Series D Preferred Stock shall have no liquidation preference. No
holder of shares of the Series D Preferred Stock shall be entitled to receive
any distributions upon liquidation, dissolution or winding-up of the
Company.
Section
6. Conversion.
(a) Automatic Conversion Upon
Qualifying Financing. All of the outstanding shares of Series D Preferred
Stock shall be automatically converted into the Conversion Shares, and the
shares held by each Holder shall convert into a number of Conversion Shares
determined by dividing the number of shares held by the total Series D
Convertible Preferred Stock outstanding times the Conversion Ratio, immediately
after the conversion of all Series C Convertible preferred Stock and upon the
latest to occur of: (i) May 31, 2011 or (ii) the date upon which the Company’s
completes the acquisition of at least 70% of the equity interests in Beijing
Century Dadi Gas Engineering Co., Ltd. (“Dadi”) and/or its
Affiliates (the “Acquisition End
Date”).
(b) Mechanics of
Conversion
i. Delivery of Certificate Upon
Conversion. Except as otherwise set forth herein, not later than ten (10)
Trading Days after the Acquisition End Date (the “Share Delivery
Date”), the Company shall deliver to the Holder a certificate or
certificates which, after the effective date of the Registration Statement
covering the sale of the Conversion Shares of such Holder (the “Effective Date”),
shall be free of restrictive legends and trading restrictions (other than those
required by the Purchase Agreements) representing the number of Conversion
Shares being acquired upon the conversion of shares of Series D Preferred
Stock. After the Effective Date, the Company shall, upon request of
the Holder, deliver any certificate or certificates required to be delivered by
the Company under this Section electronically through the Depository Trust
Company or another established clearing Company performing similar functions if
the Company’s transfer agent has the ability to deliver shares of Common Stock
in such manner.
ii. Obligation Absolute; Partial
Liquidated Damages. The Company’s obligations to issue and deliver the
Conversion Shares upon conversion of Series D Preferred Stock in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect
to any provision hereof, the recovery of any judgment against any Person or any
action to enforce the same, or any setoff, counterclaim, recoupment, limitation
or termination, or any breach or alleged breach by the Holder or any other
Person of any obligation to the Company or any violation or alleged violation of
law by the Holder or any other person, and irrespective of any other
circumstance which might otherwise limit such obligation of the Company to the
Holder in connection with the issuance of such Conversion Shares. In
the event a Holder shall elect to convert any or all of its Series D Preferred
Stock, the Company may not refuse conversion based on any claim that such Holder
or any one associated or affiliated with the Holder has been engaged in any
violation of law, agreement or for any other reason unless an
injunction from a court, on notice, restraining and or enjoining conversion of
all or part of this Series D Preferred Stock shall have been sought and obtained
and the Company posts a surety bond for the benefit of the Holder in the amount
of 150% of the Liquidation Value of Series D Preferred Stock which is subject to
the injunction, which bond shall remain in effect until the completion of
arbitration/litigation of the dispute and the proceeds of which shall be payable
to such Holder to the extent it obtains judgment. In the absence of
an injunction precluding the same, the Company shall issue Conversion Shares or,
if applicable, cash, upon a properly noticed conversion. Nothing
herein shall limit a Holder’s right to pursue actual damages for the Company’s
failure to deliver certificates representing the Conversion Shares upon
conversion within the period specified herein and such Holder shall have the
right to pursue all remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or
injunctive relief.
5
iii. Compensation for “Buy-In on
Failure to Timely Deliver Certificates Upon Conversion. If the
Company fails to deliver to the Holder such certificate or certificates by a
Share Delivery Date, and if after such Share Delivery Date the Holder purchases
(in an open market transaction or otherwise) Common Stock to deliver in
satisfaction of a sale by such Holder of the Conversion Shares which the Holder
was entitled to receive upon the conversion relating to such Share Delivery Date
(a “Buy-In”),
then the Company shall pay in cash to the Holder the amount by which (x) the
Holder’s total purchase price (including brokerage commissions, if any) for the
Common Stock so purchased exceeds (y) the product of (1) the aggregate number of
shares of Common Stock that such Holder was entitled to receive from the
conversion at issue multiplied by (2) the price at which the sell order giving
rise to such purchase obligation was executed. For example, if the Holder
purchases Common Stock having a total purchase price of $11,000 to cover a
Buy-In with respect to an attempted conversion of shares of Series D Preferred
Stock with respect to which the aggregate sale price giving rise to such
purchase obligation is $10,000, the Company shall be required to pay the Holder
$1,000 hereunder. 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 shares of Common
Stock upon conversion of the shares of Series D Preferred Stock as required
pursuant to the terms hereof.
(c) Reservation of Shares
Issuable Upon Conversion. The Company covenants that it will at all times
reserve and keep available out of its authorized and unissued shares of Common
Stock solely for the purpose of issuance upon conversion of the Series D
Preferred Stock, each as herein provided, free from preemptive rights or any
other actual or contingent purchase rights of persons other than the Holders,
not less than such number of shares of the Common Stock as shall (subject to any
additional requirements of the Company as to reservation of such shares set
forth in the Purchase Agreements) be issuable upon the conversion of all
outstanding shares of Series D Preferred Stock. The Company covenants
that all shares of Common Stock that shall be so issuable shall, upon issue, be
duly and validly authorized, issued and fully paid,
nonassessable. The Company shall immediately, in accordance with the
laws of the State of Delaware, increase the authorized amount of its Common
Stock if, at any time, the authorized amount of its Common Stock, remaining
unissued shall not be sufficient to permit the conversion of all shares of
Series D Preferred Stock.
(d) Fractional Shares. No
fractional shares shall be issued upon the conversion of any share or shares of
the Series D Preferred Stock, and the number of shares of Common Stock to be
issued shall be rounded up to the nearest whole share. The number of
shares issuable upon conversion shall be determined on the basis of the total
number of shares of Series D Preferred Stock the holder is at the time
converting into Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.
6
(e) No Charge for Conversion;
Transfer Taxes. The issuance of certificates for shares of
Common Stock upon the conversion of shares of Series D Preferred Stock shall be
made without charge to the converting Holders for such certificates. The
issuance of certificates for shares of the Common Stock on conversion of the
Series D Preferred Stock shall be made without charge to the Holders thereof for
any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such certificate, provided that the Company shall not be
required to pay any tax that may be payable in respect of any transfer involved
in the issuance and delivery of any such certificate upon conversion in a name
other than that of the Holder of such shares of Series D Preferred Stock so
converted and the Company shall not be required to issue or deliver such
certificates unless or until the person or persons requesting the issuance
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been
paid.
(f) Absolute
Obligation. Except as expressly provided herein, no provision
of this Certificate shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the liquidated damages (if any) on, the
shares of Series D Preferred Stock at the time, place, and rate, and in the coin
or currency, herein prescribed.
Section
7. Reserved.
Section
8. Miscellaneous.
(a) Transfer
Restriction. The Series D Preferred Stock is not
transferable except as between Affiliates and as between China Hand Fund I, LLC,
a limited liability company organized and existing under the laws of the State
of Delaware and Vicis Master Fund (“Vicis”), which shall
not be deemed Affiliate to China Hand based solely on this Section
8(a). Vicis may also transfer shares of Series D Preferred Stock to
its affiliates.
(b) Notices. Any
and all notices or other communications or deliveries to be provided by the
Holders hereunder shall be in writing and delivered personally, by facsimile,
sent by a nationally recognized overnight courier service, addressed to the
Company, at its principal address as reflected in its most recent filing with
the Commission. Any and all notices or other communications or
deliveries to be provided by the Company hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight
courier service addressed to each Holder at the facsimile telephone number or
address of such Holder appearing on the books of the Company, or if no such
facsimile telephone number or address appears, at the principal place of
business of the Holder. Any notice or other communication or
deliveries hereunder shall be deemed given when received, and any notice by
telecopier shall be effective if confirmation of receipt is given by the party
to whom the notice is transmitted.
(c) Lost or Mutilated Preferred
Stock Certificate. If a Holder’s Series D Preferred Stock
certificate shall be mutilated, lost, stolen or destroyed, the Company shall
execute and deliver, in exchange and substitution for and upon cancellation of a
mutilated certificate, or in lieu of or in substitution for a lost, stolen or
destroyed certificate, a new certificate for the shares of Series D Preferred
Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence
of such loss, theft or destruction of such certificate, and of the ownership
thereof, and indemnity, if requested, all reasonably satisfactory to the
Company.
7
(d) Next Trading
Day. Whenever any payment or other obligation hereunder shall
be due on a day other than a Trading Day, such payment shall be made on the next
succeeding Trading Day.
(e) Headings. The
headings contained herein are for convenience only, do not constitute a part of
this Certificate and shall not be deemed to limit or affect any of the
provisions hereof.
(f) Amendment. This
Certificate constitutes an agreement between the Company and the Holders. For as
long as any shares of Series D Preferred Stock shall remain outstanding, there
terms hereof may be amended, modified, repealed or waived only by the
affirmative vote or written consent of holders of a majority of the then
outstanding shares of Series D Preferred Stock, voting together as a class and
series.
8
RESOLVED, FURTHER, that the
Chairman, the president or any vice-president, and the secretary or any
assistant secretary, of the Company be and they hereby are authorized and
directed to prepare and file a Certificate of Designation of Preferences, Rights
and Limitations in accordance with the foregoing resolution and the provisions
of Delaware law.
IN
WITNESS WHEREOF, the undersigned has executed this Certificate as of September
13, 2010.
|
/s/ Yang Kan Chong
|
|
|
Name:
Yang Kan Chong
|
|
|
Title: Chairman
and Chief
Executive Officer |
9