Date: August 7,
2009
China Wind
Systems, Inc.
No. 9 Yanyu
Middle Road
Qianzhou
Village, Huishan District, Wuxi City
Jiangsu
Province, People’s Republic of China
Re: Securities
Purchase Agreement
China Wind Systems, Inc., a Delaware
corporation (the “Company”), is issuing to Barron
Partners, LP, (the “Purchaser”) its 12% promissory note
due February 7, 2011 (the “Note”) in the aggregate
principal amount of $80,000.
1. The Company agrees to sell
to the Purchaser, and the Purchaser agrees to purchase from the
Company, the Note for an aggregate purchase price (the
“Purchase Price”) of $80,000. The Note will
be in the form of Exhibit A to this Agreement. The
Company will issue the Note to the Purchaser, and the Purchaser
shall wire the Purchase Price to the Company in immediately
available funds, contemporaneously with the execution of this
Agreement, to the account set forth in Exhibit B to this
Agreement.
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”)) are entities duly incorporated or
otherwise organized, validly existing and in good standing under
the laws of the jurisdiction of its 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, the Note
and any other instrument or document delivered or to be delivered
pursuant to this Agreement (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 Note) 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 Notes. 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) 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 or any
Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents; (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, except as set forth
in the Disclosure Materials, as hereinafter defined, 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
on any of the Notes; 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 Notes, 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 ”).
(d) Filings,
Consents and Approvals . Assuming the accuracy of the
representations of the Purchasers set forth in Section 4 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 Note by
the Company to the Purchasers thereunder) 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, and (iii) the
filings contemplated by the Transaction Documents.
(e) Issuance of the
Note . The Note has been duly authorized and when issued and
paid for in accordance with this Agreement, will constitute the
valid, binding and enforceable obligation of the Company, except
for such restrictions on transfer or ownership imposed by
applicable federal or state securities laws or set forth in this
Agreement and shall be entitled to the rights set forth in the
Note, as the case may be. When the Ren Shares (as defined below)
are transferred in accordance with the terms of the Note, such
shares will be validly issued and outstanding, fully paid and
non-assessable, and the holders shall be entitled to all rights
accorded to a holder of the Company’s common stock, par value
$0.001 per share (“Common Stock”).
(f) SEC Reports;
Financial Statements . The Company has filed all reports
required to be filed by it under the Securities Act and 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 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, 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.
(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 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 an
