Name of Subscriber:
________________________
Zhaoheng Hydropower Company
SUBSCRIPTION
AGREEMENT
Zhaoheng
Hydropower Company
F/19, Unit A,
JingFengCheng Building
Ladies and
Gentlemen:
1. Subscription
.
(a) The undersigned, intending to be
legally bound, hereby irrevocably subscribes for and agrees to
purchase from Zhaoheng Hydropower Company, a Nevada corporation
(the “ Company ”), for the number of shares of
Common Stock (the “ Shares ”) of the Company
indicated on the signature page hereof, for a purchase price equal
to $[__] per share. This subscription is made in
accordance with and subject to the terms and conditions described
in this Subscription Agreement (this “ Agreement
”) and in the Private Placement Memorandum (the “
Memorandum ”), dated August ____, 2008, and any
attachments thereto.
The Shares that are the subject of this
Agreement are part of the offering (the “ Offering
”) by the Company of up to $5,689,853 of shares of Common
Stock, as described in the Memorandum.
The closing of the issuance of Shares pursuant
to the Offering will occur as soon as practicable after
subscriptions for up to $5,689,853 Shares (the “Purchase
Price”) are received and accepted by the Company but not
later than [__], 2008, unless extended at the Company’s sole
election. Pending the receipt of subscriptions for the
Purchase Price, the subscription proceeds will be held in one or
more special bank accounts.
THE SECURITIES BEING OFFERED HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ SECURITIES ACT ”), OR UNDER THE
SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY APPLICABLE STATE OR OTHER
REGULATORY AUTHORITY PASSED UPON THE ACCURACY OR ADEQUACY OF THE
MEMORANDUM OR ENDORSED THE MERITS OF THE OFFERING. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
THE SECURITIES ARE OFFERED PURSUANT TO
EXEMPTIONS PROVIDED BY THE SECURITIES ACT, CERTAIN STATE SECURITIES
LAWS AND CERTAIN RULES AND REGULATIONS PROMULGATED PURSUANT
THERETO. THE SECURITIES MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT (I) OUTSIDE OF THE UNITED STATES IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S (RULE 901 THROUGH
905, AND PRELIMINARY NOTES) PROMULGATED UNDER THE SECURITIES ACT,
(II) WITHIN THE UNITED STATES PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND IN COMPLIANCE WITH ALL
APPLICABLE STATE AND OTHER SECURITIES LAWS, OR (III) WITHIN THE
UNITED STATES PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT AND IN COMPLIANCE WITH ALL APPLICABLE STATE
SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE
SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
SECURITIES ACT.
The undersigned understands that the Shares are
being offered and issued pursuant to exemptions from the
registration requirements of the Securities Act. As
such, the Shares are only being offered and sold to investors who
qualify as “accredited investors” (as described in
Exhibit A ) and/or persons who are not “U.S.
Persons” (as described in Exhibit B ) and the Company
is relying on the representations made by the undersigned in this
Agreement that the undersigned qualifies as such. The
Shares will be “restricted securities” for purposes of
the United States securities laws and cannot be transferred except
as permitted under these laws.
(b) The
undersigned is delivering (1) two executed copies of the signature
page of and Exhibit A to this Agreement and/or two executed
copies of the signature page of and Exhibit B to this
Agreement, as applicable, (2) two executed copies of the signature
page to any other agreement or other document required by the
Company in connection herewith and (3) the subscription payment in
the full amount of the purchase price for the Shares subscribed
for, in the form of:
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a check payable
to “Zhaoheng Hydropower Company” delivered to the
address of the Company listed in Section 8(b)(i) of
this Agreement; or
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a wire transfer
to “Zhaoheng Hydropower Company” in accordance with the
following instructions:
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Wire Transfer Instructions to Zhaoheng
Hydropower Company
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Bank:
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___________
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Account
Name:
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____________
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Zhaoheng
Hydropower Company
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______________
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Account
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ABA
No.:
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Account
No.:
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Attention:
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Phone
No.:
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If this subscription is accepted by the Company
in whole or in part, then, as soon as practicable, the Company will
deliver to the undersigned the Shares subscribed for by the
undersigned, as well as a fully executed copy of this
Agreement.
In the event of an oversubscription for Shares,
or for any other reason determined by the Company in its
discretion, the Company may determine to accept a subscription for
only a portion of the Shares for which the undersigned has
subscribed pursuant to this Agreement. In such a case
(i) the Company will deliver the portion of the Shares that the
Company has determined to sell to the undersigned and retain the
purchase price therefor and (ii) the balance of the purchase price
delivered to the Company by the undersigned will be repaid to the
undersigned without interest.
(c) The
undersigned may not withdraw this subscription or any amount paid
pursuant thereto except as otherwise provided below.
2. Conditions
. It is understood and agreed that this subscription is
made subject to the following terms and conditions:
(a) The
subscription is subject to all terms and conditions set forth in
this Agreement, including those set forth in Section 1 above, and
the representations and warranties of the Company and the
undersigned contained in Section 3 and Section 4 hereof,
respectively, shall be true and correct in all material respects as
of the acceptance hereof by the Company;
(b) In
addition, the undersigned acknowledges and agrees that this
subscription and the Shares are subject to the terms of any other
agreement or other document required by the Company in connection
herewith, furnished to and agreed to and accepted by the
undersigned, which the undersigned is executing concurrently
herewith.
3. Representations
and Warranties of the Company . The Company
represents and warrants to, and agrees with, the undersigned as
follows, in each case as of the date hereof and in all material
respects as of the date of any acceptance of this subscription by
the Company, except for any changes resulting solely from the
Offering:
(a) The
Company is duly organized, validly existing and in good standing
under the laws of the state of its incorporation with full
corporate power and authority to own, lease, license and use its
properties and assets and to carry out the business in which it is
engaged as described in the Memorandum, and is duly qualified to do
business and is in good standing as a foreign corporation in all
states in which it owns or leases property or in which the conduct
of its business requires it to be so qualified or licensed, except,
in each case, where the absence of any of the foregoing would not
have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(b) The
Company has all requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement
and to issue and sell the Shares. All necessary
corporate proceedings of the Company have been duly taken to
authorize the execution, delivery, and performance of this
Agreement. This Agreement has been duly authorized by
the Company and, when executed and delivered by the Company, will
constitute the legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its
terms.
(c) The
Shares, when issued and paid for in accordance herewith, shall be
binding obligations of the Company enforceable in accordance with
their terms.
4. Representations,
Warranties and Covenants of the Subscriber . The
undersigned hereby represents and warrants to, and agrees with, the
Company as follows, in each case as of the date hereof and in all
material respects as of the date of any acceptance of this
subscription by the Company:
(a) The
undersigned is (i) an “Accredited Investor” as that
term is defined in Rule 501(a) of Regulation D promulgated under
the Securities Act, and as specifically indicated in Exhibit
A to this Agreement, and/or (ii) not a “U.S.
Person” as that term is defined in Rule 902(k) of Regulation
S promulgated under the Securities Act, and as specifically
indicated in Exhibit B to this Agreement.
(b) If
a natural person, the undersigned is (i) a bona fide resident of
the state or non-United States jurisdiction contained in the
address set forth on the signature page of this Agreement as the
undersigned’s home address, (ii) at least 21 years of age and
(iii) legally competent to execute this Agreement, and this
Agreement has been duly executed and delivered by the undersigned
and constitutes the legal, valid and binding obligation of the
undersigned enforceable against the undersigned in accordance with
its terms.
(c) If
an entity, the undersigned has its principal offices or principal
place of business in the state or non-United States jurisdiction
contained in the address set forth on the signature page of this
Agreement, the individual signing on behalf of the undersigned is
duly authorized to execute this Agreement and this Agreement has
been duly executed and delivered by the undersigned and constitutes
the legal, valid and binding obligation of the undersigned
enforceable against the undersigned in accordance with its
terms.
(d) The
undersigned has received, read carefully and is familiar with this
Agreement, the Memorandum and any attachments
thereto. The undersigned understands and acknowledges
that the information included in such documents is not complete
and, among other things, does not include certain information that
would be required in offering documents with respect to an offering
of securities registered under the United States securities laws or
in disclosure documents filed by public companies which are subject
to the periodic reporting requirements of the United States
securities.
(e) The
undersigned, together with the undersigned’s professional
advisor, is familiar with the Company’s business, plans and
financial condition, the terms of the Offering and any other
matters relating to the Offering; the undersigned has received all
materials which have been requested by the undersigned; the
undersigned has had a reasonable opportunity to ask questions of
the Company and its representatives; and the Company has answered
to the satisfaction of the undersigned all inquiries that the
undersigned or the undersigned’s representatives have put to
it. The undersigned has had access to all additional
information that the undersigned has deemed necessary to verify the
accuracy of the information set forth in this Agreement and the
Memorandum and any other materials furnished herewith or therewith,
and has taken all the steps necessary to evaluate the merits and
risks of an investment as proposed under this Agreement and the
Memorandum.
(f) The
undersigned acknowledges that this subscription is and shall be,
subject to the other terms and conditions hereof, irrevocable and
this subscription and the agreements contained herein shall survive
the insolvency, death or disability of the undersigned (as
applicable), except that the undersigned shall have no obligation
hereunder in the event that its subscription is for any reason
rejected or the Offering is cancelled or terminated by the Company,
which the Company reserves the right to do in its sole and absolute
discretion and for any reason.
(g) The
undersigned or the undersigned’s purchaser representative has
such knowledge and experience in finance, securities, taxation,
investments and other business matters so as to be able to protect
the interests of the undersigned in connection with this
transaction.
(h) The
undersigned understands the various risks of an investment in the
Company as proposed herein and can afford to bear such risks,
including, without limitation, the risks of losing the entire
investment.
(i) &nbs
