COMMON STOCK PURCHASE AGREEMENT
THIS
COMMON STOCK PURCHASE AGREEMENT (this "Agreement"), dated as
of June 30, 2009 by and between China Broadband, Inc. a Nevada corporation (the
“Company”) and
the investor identified on the signature page hereto (the "Investor").
RECITALS
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Section 4(2) of the
Securities Act (as defined below), the Company desires to issue and sell to the
Investor, and the Investor desires to purchase from the Company certain
securities of the Company, as more fully described in this
Agreement;
WHEREAS, the Company is
offering up to 6,000,000 shares of its common stock, par value $0.001 per share
(the “Common
Stock” and, the shares being offered herein, the “Shares”) to the
Investor and other investors under identical terms, at a purchase price of $0.15
per share (the “Price
Per Share”) for a minimum offering amount of $25,000 and an aggregate
maximum offering amount of $900,000;
WHEREAS, the Company is in the
process of obtaining partial waivers from certain note and warrant holders of
their anti dilution rights that would otherwise trigger a reduction in their
note conversion price to the Price Per Share;
NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement,
and for other good and valuable consideration the receipt and adequacy of which
are hereby acknowledged, the Company and the Investors agree as
follows:
1. Agreement to
Purchase.
1.1 Closing. The
Investor hereby agrees to purchase, and the Company hereby agrees to sell,
166,667 shares of the Company’s common stock, par value $.001 per share (the
“Shares”)
pursuant to the conditions set forth herein. The aggregate purchase
price of the Shares being sold to the Investor hereunder is $25,000.00 (the
“Purchase
Price”), at the Price Per Share. The Investor shall
deliver to the Company the Purchase Price according to instructions provided by
the Company (the “Closing”). The
Closing shall take place at the offices of the Company on or before July 1, 2009
or at such other location or time as the parties may agree.
1.2 Closing
Deliveries. (a) At the Closing, the Company shall
deliver or cause to be delivered to the Investor a [Missing Graphic
Reference]facsimile copy of a certificate evidencing a number of Shares equal to
such Investor’s Purchase Price divided by the Price Per Share, registered in the
name of such Investor (provided that originals of the same are delivered to the
address provided by the Investor). The Company shall also deliver a
statement as to how many other Shares have been sold, if any, in this
offering.
(b) At
the Closing, the Investor shall deliver or cause to be delivered to the Company
its Purchase Price, in United States dollars and in immediately available funds,
by wire transfer to the account or accounts designated in writing by the Company
for such purpose.
2. Representations,
Warranties and Covenants of the Investor. The
Investor represents and warrants to the Company, and covenants for
the benefit of the Company, as follows:
(a) The
Investor is an "accredited investor" as defined under Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended (the "Securities
Act");
(b) The
Investor is acquiring the Shares for its own account and not with a view to any
distribution of the Shares in violation of the Securities Act;
(c) The
Investor acknowledges that it has significant prior investment experience,
including investment in non-listed and non-registered securities, and that the
Investor recognizes the highly speculative nature of this
investment. In particular, and without limitation, the Investor
represents that it understands that the Company’s securities have suffered
significant illiquidity and decline in stock price and that other restricted
shareholders are eligible to sell securities pursuant to Rule 144 of the
Securities Act. The Investor represents that it has been furnished
with, and has reviewed, all of the Company’s securities filings and all
documents and other information regarding the Company that the Investor had
requested or desired to know and all other documents which could be reasonably
provided have been made available for the Investor’s inspection and
review;
(d) The
Investor acknowledges that the Shares have not been passed upon or reviewed by
the Securities and Exchange Commission. The Investor agrees that it
will not sell, transfer or otherwise dispose of any of the Shares until they are
registered under the Securities Act, or unless an exemption from such
registration is available and that a legend substantially in the form as
provided in Section 4 below will be placed on the certificate(s) representing
the shares to such effect;
(e) This
Agreement constitutes a valid and binding agreement and obligation of the
Investor enforceable against the Investor in accordance with its terms, subject
to limitations on enforcement by general principles of equity and bankruptcy or
other laws affecting the enforcement of creditors' rights
generally;
(f) Investor
is not acquiring the Shares as part of a group, as such term is defined in
Section 13 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and
is not acting in concert with any person acting in such
manner. Investor makes its own voting and dispositive decisions and
has not agreed to grant any proxy or enter into any form of voting trust,
agreement or similar arrangement with respect to the Shares; and
(g) This
Agreement has been duly authorized, validly executed and delivered on behalf of
the Investor, and the Investor has full power and authority to execute and
deliver this Agreement and the other agreements and documents contemplated
hereby and to perform his obligations hereunder and thereunder.
(h) Investor
understands and acknowledges existing holders of Notes (the “Notes”) and Warrants (the
“Warrants”) issued in
January of 2008 to certain investors and the placement agent (the “Note Holders”) have certain
full ratchet and other anti dilutions protections attached to their Notes and
Warrants, and that the Company shall have obtained partial waivers from the Note
Holders which provide, in relevant part, that the Conversion Price (as defined
in the Notes) of such Notes shall be reduced to (i) $0.20 if such
Note Holder invests new monies in the Company pursuant to an offering of
convertible notes with similar terms to their existing Notes (except at a lower
conversion price) or (ii) $0.25 per share if such note Holder does not invest
new monies, and further provide that such Note Holders waive any other anti
dilution rights that would otherwise cause an adjustment to the exercise price
of the Warrants or any other anti dilution rights that would cause an adjustment
or adjustments to the nature of the Warrants or Notes as a result of this
offering.
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3. Representations,
Warranties and Covenants of the Seller. The Company
represents and warrants to the Investor, and covenants for the benefit of the
Investor, as follows:
(a) Organization and
Qualification. The Company is duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation, with the requisite power and authority to own
and use its properties and assets and to carry on its business as currently
conducted. The Company is not in any material violation of any of the
provisions of its certificate of incorporation, bylaws or other organizational
or charter documents.
(b) Authorization;
Enforcement. The Company has the requisite corporate power and
authority to enter into and to consummate the transactions contemplated herein
and otherwise to carry out its obligations hereunder, subject to consents and
waiver of anti dilution provisions of various existing
shareholders. The execution and delivery of this Agreement by the
Company and the consummation by it of the transactions contemplated thereby have
been duly authorized by all necessary corporate action on the part of the
Company and no further action is required by the Company in connection
therewith. This Agreement has 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 as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally the enforcement of, creditors’
rights and remedies, or (ii) laws relating to the availability of specific
performance, injunctive relief or other equitable principles of general
application.
(c) Issuance of the
Shares. The Shares have been duly authorized and, when issued
and paid for in accordance with this Agreement, will be duly and validly issued,
fully paid and nonassessable, free and clear of all liens.
(d) 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, for the twelve months preceding the date hereof
(or such shorter period as the Company was required by law to file such reports)
(the foregoing materials 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. As of their respective dates, the SEC Reports complied in
all material respects with the requirements of the Securities Act and the
Exchange Act 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, except to the
extent that such SEC Reports may have been subsequently amended or supplemented
to correct such misstatement or omission. 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 GAAP applied on a consistent basis during the periods involved, except as
may be otherwise specified in such financial statements or the notes thereto,
and fairly present in all material respects the financial position of the 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,
immaterial, year-end audit adjustments.
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(e) Certain Registration
Matters. Assuming the accuracy of the Investor’s representations and
warranties, no registration under the Securities Act is required for the offer
and sale of the Shares by the Company to the Investor under this
Agreement.
4. Other
Agreements of the Parties.
(a) The
Company and the Investor agree that the Shares may only be disposed of in
compliance with state and federal securities laws. In connection with
any transfer of the Shares other than pursuant to an effective registration
statement, to the Company, to an affiliate of an Investor or in connection with
a pledge as contemplated in Section 4(b), the Company may require the transferor
thereof to provide to the Company with an opinion of counsel selected by the
transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares under the Securities Act. As
a condition of transfer, any such transferee shall agree in writing to be bound
by the terms of this Agreement.
(b) Certificates
evidencing the Shares will contain substantially the following legend, until
such time as they are not required under Section 4(c):
THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION
OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA
FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
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(c) Certificates
evidencing the Shares shall not contain any legend (including the legend set
forth in Section 4(b)) following a sale or transfer of such Shares pursuant to
Rule 144 (assuming the transferor is not, and does not become, an affiliate of
the Company). The Company may not make any notation on its records or
give instructions to any transfer agent of the Company that enlarge the
restrictions on transfer set forth in this Section. Notwithstanding
the foregoing, the Investor represents that it understands that the Company was
once a blank check shell company and, accordingly, its ability to utilize the
resale exemptions provided pursuant to Rule 144 in the event that the Company
becomes non compliant with its ongoing requirements to file all required SEC
Reports, or to request a legend removal without a sale, is accordingly
limited.
4.2 Delivery
of Share Certificates. As soon as
practicable after the Closing, but in no event more than five (5) business days
after the Closing, the Company agrees to cause manually executed originals of a
certificate evidencing a number of Shares equal to such Investor’s Purchase
price divided by the Per Share Purchase Price, registered in the name of such
Investor to be delivered to such Investor at the address specified by the
Investor to the Company in writing.
5. Binding
Effect; Assignment. This Agreement is
not assignable by the Company or the Investor without the prior written consent
of the other party. This Agreement and the provisions hereof shall be
binding and shall inure to the benefit of the Company and its successors and
permitted assigns with respect to the obligations of the Investor under this
Agreement, and to the benefit of the Investor and its successors and permitted
assigns with respect to the obligations of the Company under this
Agreement.
6. Governing
Law; Jurisdiction. This Agreement
shall be governed by and interpreted in accordance with the laws of the State of
New York without giving effect to conflicts of law principles that would result
in the application of the substantive laws of another jurisdiction.
7. Entire
Agreement. This Agreement constitutes the entire understanding
and agreement of the parties with respect to the subject matter hereof and
supersedes all prior and/or contemporaneous oral or written proposals or
agreements relating thereto all of which are merged herein. This
Agreement may not be amended or any provision hereof waived in whole or in part,
except by a written amendment signed by both of the parties.
8. Survival. The
representations and warranties of the Company and the Investor shall survive the
Closing hereunder.
[REMAINDER
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[Counter
Part Signature Page of China Broadband, Inc., to Common Stock Purchase Agreement
Between Investor and China Broadband, Inc., Dated as of June 30,
2009]
IN
WITNESS WHEREOF, this Agreement was duly executed on the date first written
above.
| CHINA BROADBAND, INC. | |||
|
|
By:
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| Name: Xxxx Xxxxxx | |||
| Title: President | |||
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[Counter
Part Signature Page of Investor, to Common Stock Purchase Agreement Between
Investor
and China Broadband, Inc., Dated as of June 30, 2009]
|
.
Name:
Investment
Amount: $ ________________________
Social Security
No.: __________________________
ADDRESS
FOR NOTICE
c/o: _______________________________________
Street:
_______________________________________
City/State/Zip: _________________________________ Attention:
____________________________________
Tel:
__________________________________________
Fax:
__________________________________________
DELIVERY
INSTRUCTIONS
(if
different from above)
c/o:
Street:
_______________________________________
City/State/Zip:
_________________________________
Attention:
____________________________________
Tel:
__________________________________________
|
