CONVERTIBLE PROMISSORY NOTE TRANSFER AGREEMENT
CONVERTIBLE PROMISSORY NOTE TRANSFER AGREEMENT
This CONVERTIBLE PROMISSORY NOTE TRANSFER AGREEMENT (the “Agreement”) is entered into as of the 28th day of April, 2012, by and among, Great Essential Investment, Ltd., a company registered in the Virgin Islands (“Great Essential”), Carlyle Asia Growth Partners III, L.P., a limited partnership organized under the laws of the Cayman Islands (“CAGP”) and CAGP III Co-Investment, L.P., a limited partnership organized under the laws of the Cayman Islands (“CAGP III,” and together with CAGP, the “Holders”) and China Recycling Energy Corporation, a Nevada corporation (the “Company”). Any capitalized terms in this Agreement not otherwise defined shall have the meaning ascribed to them in the Subscription Agreement and the Note (as hereinafter defined).
ARTICLE I
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
(a) Great Essential has all power and authority to execute, deliver and perform this Agreement. The execution, delivery and performance by Great Essential of this Agreement and the transactions contemplated hereby including, without limitation, the purchase of the Note, have been duly authorized by Great Essential.
(b) This Agreement has been duly executed and delivered by Purchaser and constitutes the legal, valid and binding obligation of Great Essential, enforceable against Great Essential in accordance with its terms.
(c) The Note will be acquired for investment for the account of Great Essential, and not as a nominee or agent, and not with a view to the distribution or public offering thereof. In connection therewith, Great Essential confirms that it is neither a U.S Person, as such term is defined in Rule 902(k) of Regulation S, under the Securities Act of 1933, as amended (the “Securities Act”) nor located within the United States, and that the transaction will be between non-U.S. Persons, and take place outside of the United States.
(d) Great Essential has not been contacted concerning the acquired Note or the matters set forth in this Agreement by means of any advertisement or other general solicitation.
(e) Great Essential understands that a registration statement on Form S-3 has been filed with the Securities and Exchange Commission of the United States (the “SEC”) covering the shares issuable upon the conversion of the Note;, however, it has not been declared effective by the SEC and that the Note has not been registered under either the Securities Act or the securities laws of any state by reason of specific exemptions therefrom and that such securities may be resold in the United States without registration under the Securities Act only in certain limited circumstances.
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(f) Great Essential is a sophisticated and experienced investor, with experience in buying and selling securities and has the ability to evaluate the merits and risks of buying the Note. Great Essential has had access to information relating to the Company, and has had the opportunity to do due diligence concerning the Company, as Great Essential deems necessary to make an informed investment decision in connection with the purchase of the Note. Great Essential has made an independent decision to acquire the Note based on the information available to it. Great Essential has determined that it has adequate information concerning the business and financial condition of the Company and understands the disadvantage to which it may be subject on account of the disparity of information between Great Essential and the Holders. Great Essential understands that, except as provided in Section 2.02 below, the Holders are making no representations and warranties concerning the Note or the business and financial condition of the Company.
Great Essential understands that the Company and/or its affiliates (including the Holders) may now or at any other time have material confidential information that could affect the value of the Note and that this information has not been, and may not be in the future, made available to Great Essential. Great Essential hereby waives any claim against, and covenants not to xxx, the Company, the Holders and their respective controlling persons, officers, directors, members, partners, agents or employees and their respective successors and assigns, from any and all claims, demands, causes of action, damages, losses, expenses or liabilities, of any nature whatsoever, whether accrued or unaccrued, contingent or liquidated, known or unknown, arising from or connected to any action heretofore or hereafter taken or omitted to be taken in connection with this Agreement or any transaction contemplated hereby, including without limitation any failure to disclose to Great Essential any information concerning the Company, including, without limitation, confidential information in connection with any sale of the Note.
(g) Great Essential understands that Regulation S promulgated under the Securities Act, is available only for offers and sales of securities outside the United States, and will comply with Regulation S, specifically complying with the restrictions on re-sale of the securities of Rules 903 (a) and (b)(3) of Regulation S.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE (A) ABSENCE OF (I) A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER THE SECURITIES ACT OR (II) AN OPINION OF COUNSEL TO THE HOLDER THAT SUCH REGISTRATION IS NOT REQUIRED OR (B) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A OF THE SECURITIES ACT. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
(i) Great Essential acknowledges that it is aware of its obligations under the Securities Exchange Act of 1934 (the “1934 Act”), including, but not limited to those filing obligations that are triggered as a result of the consummation of the sale of the Note pursuant to Sections 13 and 16 of the 1934 Act, together with filings required to be made by the Company and the Holders, after the consummation of the sale of the Note or their conversion into shares of the Company’s common stock.
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(j) Great Essential understands that one or more stockholders, including the Holders, may be an “affiliate” of the Company within the meaning of U.S. federal and state securities laws.
(k) The execution, delivery and performance of this Agreement by Great Essential and the consummation of the transactions contemplated thereby, do not and will not (a) violate any requirement of law applicable to Great Essential, or (b) result in a material breach or default under any of the contractual obligations of Great Essential, or under any order, writ, judgment, injunction, decree, determination or award of any governmental authority, in each case applicable to Great Essential or its properties.
(l) No approval, consent, compliance, exemption, authorization, or other action by, or notice to, or filing with, any governmental authority or any other person in respect of any requirement of law, and no lapse of a waiting period under any requirement of law, is necessary or required in connection with the execution, delivery or performance by Great Essential (including, without limitation, the acquisition of the Note) or enforcement against Great Essential of this Agreement or the transactions contemplated hereby.
(m) There are no brokerage commissions, finder’s fees or similar fees or commissions payable in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with Great Essential or any action taken by Great Essential. Holders shall not be liable for any costs or expenses incurred by or on behalf of Great Essential in connection with this Agreement or the transactions contemplated hereby.
(a) The Holder has all power and authority to execute, deliver and perform this Agreement.
(b) This Agreement is the valid and binding obligation of the Holder, enforceable against the Holder in accordance with its terms.
(c) The Holder is the record and beneficial owner of the Note acquired by Great Essential, and the Note conveyed pursuant to this Agreement has not been assigned, pledged, sold, transferred or otherwise previously conveyed.
(d) Except for the representations and warranties contained in this Section 2.02, neither the Holders, the Company nor any other person makes any other express or implied representation or warranty with respect to the Note or the business and financial condition of the Company, and the Holders disclaim any other such representations, warranties, forecasts, projections, statements or information.
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ARTICLE III
Section 3.01. Governing Law; Successors and Assigns. This Agreement shall be governed and construed in accordance with the laws of the State of New York and applicable federal law without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York and shall be binding upon the heirs, personal representatives, executors, administrators, successors and assigns of the parties.
Section 3.07. Effective. This Agreement becomes effective upon the parties’ execution.
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IN WITNESS WHEREOF, the parties hereto have executed this CONVERTIBLE PROMISSORY NOTE TRANSFER AGREEMENT on the date first written above.
For and on behalf of: | |
CARLYLE ASIA GROWTH PARTNERS III, L.P. | |
By: | |
Name: | |
Title: | |
For and on behalf of: | |
CAGP III CO-INVESTMENT, L.P. | |
By: | |
Name: | |
Title: | |
For and on behalf of: | |
GREAT ESSENTIAL INVESTMENT, LTD. | |
By: | |
Name: | |
Title: | |
For and on behalf of: | |
CHINA RECYCLING ENERGY CORPORATION | |
By: | |
Name: | |
Title: |
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