July 2, 2010
|
July
2, 2010
|
c/o
Xxxxxx Xxxxxx, Counsel to CleanTech Innovations, Inc.
The
Xxxxxx Law Firm, PLLC
00 Xxxx
Xxxxxx, 00xx
Xxxxx
Xxx Xxxx,
XX 00000
|
Re:
|
Lock-Up
Agreement
|
This letter agreement (“Letter
Agreement”) is being entered into by the undersigned and CleanTech Innovations,
Inc., a Nevada corporation (the “Company”), with the intent to be legally bound.
The undersigned understands that the Company intends to commence an offering and
sale (the “Offering”) of the Company’s common stock, par value $.00001 per share
(the “Common Stock”), and/or securities convertible thereto.
In
recognition of the benefit that the Offering will confer upon the undersigned as
a stockholder of the Company, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned agrees
that, during the Lock-Up Period (as defined below), the undersigned will not,
except in the event of a Change of Control of the Company and with the prior
written consent of the Company’s Board of Directors, directly or indirectly, (i)
offer, pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company’s
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned
(collectively, the “Lock-Up Securities”) or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Lock-Up Securities,
whether any such swap or transaction is to be settled by delivery of Common
Stock or other securities, in cash or otherwise. The foregoing sentence shall
not apply to transfers of shares of Common Stock or any security convertible
into Common Stock (i) to any other member of the Company’s management or (ii) as
a bona fide gift by will or intestacy or to a family member or trust for the
benefit of a family member; provided, that in case of any transfer of
distribution pursuant to this sentence (a) each member of the Company’s
management, donee or distributee shall sign and deliver a lock-up agreement
substantially in the form of this letter and (b), in the case of subclause (i)
of this sentence, no filing under Section 16(a) of the Securities Exchange Act
of 1934, as amended, reporting a reduction in beneficial ownership of shares of
Common Stock shall be required or shall be made voluntarily during the Lock-Up
Period. For the purposes of this Letter Agreement, “Change of Control” means (i)
the approval by the shareholders of the Company of a plan of complete
liquidation or dissolution of the Company; (ii) the consummation of a sale of
all or substantially all of the assets of the Company; (iii) the consummation of
any transaction as a result of which any individual or entity becomes the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing more than fifty percent
(50%) of the total voting power of all voting securities of the Company then
issued and outstanding; or (iv) the consummation of a merger, consolidation,
reorganization or business combination, other than a merger, consolidation,
reorganization or business combination that would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the
combined voting securities of the Company or the surviving entity immediately
after such merger, consolidation, reorganization of business
combination.
Page
2 of 4
In
furtherance thereof, the Company will (i) place a stop order on all Shares (as
defined below) and (ii) notify its transfer agent in writing of the stop order
and the restrictions on such Shares under this Letter Agreement and direct the
transfer agent not to process any attempts by the undersigned to resell or
transfer any Shares in violation of this Agreement. The undersigned shall
deliver the share certificate[s] representing the Shares so they may be held in
custody during the Lock-Up Period by the Company’s counsel, The Xxxxxx Law Firm,
or such other custodian designated by the Company.
No
provision in this letter shall be deemed to restrict or prohibit the exercise or
exchange by the undersigned of any option or warrant to acquire shares of Common
Stock, or securities exchangeable or exercisable for or convertible into Common
Stock, provided that the undersigned does not transfer the Common Stock acquired
on such exercise or exchange during the Lock-Up Period, unless otherwise
permitted pursuant to the terms of this Letter Agreement.
The
undersigned hereby represents and warrants that he/she/it does not beneficially
own (as determined in accordance with Section 13(d) of the Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder) any shares of
Common Stock, or any economic interest therein or derivative therefrom, other
than those shares of Common Stock specified on the signature page to this
Agreement as of the date of this Agreement (the “Shares”).
The
undersigned hereby represents and warrants that the undersigned has full power
and authority to enter into this Lock-Up Agreement. All authority herein
conferred or agreed to be conferred shall survive the death or incapacity of the
undersigned and any obligations of the undersigned shall be binding upon the
heirs, personal representatives, successors and assigns of the undersigned. The
undersigned has consulted an attorney and hereby waives his/her/its right to all
defenses of inadequate representation of counsel.
This
Letter Agreement shall commence as of the date hereof and automatically
terminate upon the earliest to occur of (i) two years and six months following
the date the Company’s securities are listed on a registered national securities
exchange or (ii) if the closing of an Offering does not occur within one year
from the date hereof, then two years from the date hereof (the “Lock-Up
Period”).
This Agreement may be executed in
facsimile and in any number of counterparts, each of which when so executed and
delivered shall be deemed an original, but all of which shall together
constitute one and the same agreement.
If any
provision of this Letter Agreement is held to be invalid or unenforceable for
any reason, such provision will be conformed to prevailing law rather than
voided, if possible, in order to achieve the intent of the parties and, in any
event, the remaining provisions of this Letter Agreement shall remain in full
force and effect and shall be binding upon the parties hereto.
Page 3
of 4
This
Letter Agreement may not be amended or modified in any manner except by a
written agreement executed by each of the parties hereto.
The
Company shall have the right to specifically enforce all of the obligations of
the undersigned under this Letter Agreement (without posting a bond or other
security), in addition to recovering damages by reason of any breach of any
provision of this Letter Agreement and to exercise all other rights granted by
law. Furthermore, the undersigned recognizes that if it fails to perform,
observe, or discharge any of its obligations under this Letter Agreement, any
remedy at law may prove to be inadequate relief to the Company. Therefore, the
undersigned agrees that the Company shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
The terms
and provisions of this Agreement shall be construed in accordance with the laws
of the State of New York, without giving effect to the principles of conflicts
of laws, and the federal laws of the United States of America applicable
therein. The parties agree to the exclusive laying of venue in a State or
Federal court located in New York State.
[Signature
Page Follows]
Page 4
of 4
|
Very
truly yours,
|
|
|
XXXX
XXXX
|
|
|
Holder
of 755,635 shares of Common Stock
|
|
|
/s/ Ping
Xxxx
|
|
|
Xxxx
Xxxx
|
AGREED
AND ACCEPTED
|
By:
|
/s/
Bei Lu
|
|
Name:
|
Bei
Lu
|
|
Title:
|
Chairman
& Chief Executive
Officer
|
