Exhibit 4.1
SECURITIES PURCHASE
AGREEMENT
This SECURITIES PURCHASE
AGREEMENT (the “Agreement”), dated as of June 19,
2012, by and between CLEAN WIND ENERGY TOWER, INC. , a
Nevada corporation, with headquarters located at 1997 Annapolis
Exchange Parkway, Annapolis, MD 21401 (the “Company”),
and ASHER ENTERPRISES, INC. , a Delaware corporation, with
its address at 1 Linden Place, Suite 207, Great Neck, NY 11021 (the
“Buyer”).
WHEREAS :
A.
The Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities
registration afforded by the rules and regulations as promulgated
by the United States Securities and Exchange Commission (the
“SEC”) under the Securities Act of 1933, as amended
(the “1933 Act”);
B.
Buyer desires to purchase and the Company desires to issue and
sell, upon the terms and conditions set forth in this Agreement an
8% convertible note of the Company, in the form attached hereto as
Exhibit A, in the aggregate principal amount of $32,500.00
(together with any note(s) issued in replacement thereof or as a
dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the “Note”), convertible into
shares of common stock, $0.0001 par value per share, of the Company
(the “Common Stock”), upon the terms and subject to the
limitations and conditions set forth in such Note.
C.
The Buyer wishes to purchase, upon the terms and conditions stated
in this Agreement, such principal amount of Note as is set forth
immediately below its name on the signature pages hereto;
and
NOW THEREFORE
, the Company and the Buyer
severally (and not jointly) hereby agree as follows:
1.
Purchase and Sale of Note.
a.
Purchase of Note. On the Closing Date (as defined below),
the Company shall issue and sell to the Buyer and the Buyer agrees
to purchase from the Company such principal amount of Note as is
set forth immediately below the Buyer’s name on the signature
pages hereto.
b.
Form of Payment. On the Closing Date (as defined below), (i)
the Buyer shall pay the purchase price for the Note to be issued
and sold to it at the Closing (as defined below) (the
“Purchase Price”) by wire transfer of immediately
available funds to the Company, in accordance with the
Company’s written wiring instructions, against delivery of
the Note in the principal amount equal to the Purchase Price as is
set forth immediately below the Buyer’s name on the signature
pages hereto, and (ii) the Company shall deliver such duly executed
Note on behalf of the Company, to the Buyer, against delivery of
such Purchase Price.
c.
Closing Date. Subject to the satisfaction (or written waiver)
of the conditions thereto set forth in Section 6 and Section 7
below, the date and time of the issuance and sale of the Note
pursuant to this Agreement (the “Closing Date”) shall
be 12:00 noon, Eastern Standard Time on or about June 21, 2012, or
such other mutually agreed upon time. The closing of the
transactions contemplated by this Agreement (the
“Closing”) shall occur on the Closing Date at such
location as may be agreed to by the parties.
2.
Buyer’s Representations and Warranties. The Buyer
represents and warrants to the Company that:
a.
Investment Purpose. As of the date hereof, the Buyer is
purchasing the Note and the shares of Common Stock issuable upon
conversion of or otherwise pursuant to the Note (including, without
limitation, such additional shares of Common Stock, if any, as are
issuable (i) on account of interest on the Note, (ii) as a result
of the events described in Sections 1.3 and 1.4(g) of the Note or
(iii) in payment of the Standard Liquidated Damages Amount (as
defined in Section 2(f) below) pursuant to this Agreement, such
shares of Common Stock being collectively referred to herein as the
“Conversion Shares” and, collectively with the Note,
the “Securities”) for its own account and not with a
present view towards the public sale or distribution thereof,
except pursuant to sales registered or exempted from registration
under the 1933 Act; provided, however, that by making the
representations herein, the Buyer does not agree to hold any of the
Securities for any minimum or other specific term and reserves the
right to dispose of the Securities at any time in accordance with
or pursuant to a registration statement or an exemption under the
1933 Act.
b.
Accredited Investor Status. The Buyer is an “accredited
investor” as that term is defined in Rule 501(a) of
Regulation D (an “Accredited Investor”).
c.
Reliance on Exemptions. The Buyer understands that the
Securities are being offered and sold to it in reliance upon
specific exemptions from the registration requirements of United
States federal and state securities laws and that the Company is
relying upon the truth and accuracy of, and the Buyer’s
compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Buyer set forth herein in
order to determine the availability of such exemptions and the
eligibility of the Buyer to acquire the Securities.
d.
Information. The Buyer and its advisors, if any, have been, and
for so long as the Note remain outstanding will continue to be,
furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or
its advisors. The Buyer and its advisors, if any, have been, and
for so long as the Note remain outstanding will continue to be,
afforded the opportunity to ask questions of the Company.
Notwithstanding the foregoing, the Company has not disclosed to the
Buyer any material nonpublic information and will not disclose such
information unless such information is disclosed to the public
prior to or promptly following such disclosure to the Buyer.
Neither such inquiries nor any other due diligence investigation
conducted by Buyer or any of its advisors or representatives shall
modify, amend or affect Buyer’s right to rely on the
Company’s representations and warranties contained in Section
3 below. The Buyer understands that its investment in the
Securities involves a significant degree of risk. The Buyer is not
aware of any facts that may constitute a breach of any of the
Company's representations and warranties made herein.
e.
Governmental Review. The Buyer understands that no United
States federal or state agency or any other government or
governmental agency has passed upon or made any recommendation or
endorsement of the Securities.
f.
Transfer or Re-sale. The Buyer understands that (i) the sale
or re-sale of the Securities has not been and is not being
registered under the 1933 Act or any applicable state securities
laws, and the Securities may not be transferred unless (a) the
Securities are sold pursuant to an effective registration statement
under the 1933 Act, (b) the Buyer shall have delivered to the
Company, at the cost of the Buyer, an opinion of counsel that shall
be in form, substance and scope customary for opinions of counsel
in comparable transactions to the effect that the Securities to be
sold or transferred may be sold or transferred pursuant to an
exemption from such registration, which opinion shall be accepted
by the Company, (c) the Securities are sold or transferred to an
“affiliate” (as defined in Rule 144 promulgated under
the 1933 Act (or a successor rule) (“Rule 144”)) of the
Buyer who agrees to sell or otherwise transfer the Securities only
in accordance with this Section 2(f) and who is an Accredited
Investor, (d) the Securities are sold pursuant to Rule 144, or (e)
the Securities are sold pursuant to Regulation S under the 1933 Act
(or a successor rule) (“Regulation S”), and the Buyer
shall have delivered to the Company, at the cost of the Buyer, an
opinion of counsel that shall be in form, substance and scope
customary for opinions of counsel in corporate transactions, which
opinion shall be accepted by the Company; (ii) any sale of such
Securities made in reliance on Rule 144 may be made only in
accordance with the terms of said Rule and further, if said Rule is
not applicable, any re-sale of such Securities under circumstances
in which the seller (or the person through whom the sale is made)
may be deemed to be an underwriter (as that term is defined in the
1933 Act) may require compliance with some other exemption under
the 1933 Act or the rules and regulations of the SEC thereunder;
and (iii) neither the Company nor any other person is under any
obligation to register such Securities under the 1933 Act or any
state securities laws or to comply with the terms and conditions of
any exemption thereunder (in each case). Notwithstanding the
foregoing or anything else contained herein to the contrary, the
Securities may be pledged as collateral in connection with a
bona fide margin account or other lending
arrangement.
g.
Legends. The Buyer understands that the Note and, until such
time as the Conversion Shares have been registered under the 1933
Act may be sold pursuant to Rule 144 or Regulation S without any
restriction as to the number of securities as of a particular date
that can then be immediately sold, the Conversion Shares may bear a
restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the
certificates for such Securities):
“NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
(WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID
ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR
FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”
The legend set forth above shall be
removed and the Company shall issue a certificate without such
legend to the holder of any Security upon which it is stamped, if,
unless otherwise required by applicable state securities laws, (a)
such Security is registered for sale under an effective
registration statement filed under the 1933 Act or otherwise may be
sold pursuant to Rule 144 or Regulation S without any restriction
as to the number of securities as of a particular date that can
then be immediately sold, or (b) such holder provides the Company
with an opinion of counsel, in form, substance and scope customary
for opinions of counsel in comparable transactions, to the effect
that a public sale or transfer of such Security may be made without
registration under the 1933 Act, which opinion shall be accepted by
the Company so that the sale or transfer is effected. The Buyer
agrees to sell all Securities, including those represented by a
certificate(s) from which the legend has been removed, in
compliance with applicable prospectus delivery requirements, if
any. In the event that the Company does not accept the opinion of
counsel provided by the Buyer with respect to the transfer of
Securities pursuant to an exemption from registration, such as Rule
144 or Regulation S, at the Deadline, it will be considered an
Event of Default pursuant to Section 3.2 of the Note.
h.
Authorization; Enforcement. This Agreement has been duly and
validly authorized. This Agreement has been duly executed and
delivered on behalf of the Buyer, and this Agreement constitutes a
valid and binding agreement of the Buyer enforceable in accordance
with its terms.
i.
Residency. The Buyer is a resident of the jurisdiction set
forth immediately below the Buyer’s name on the signature
pages hereto.
3.
Representations and Warranties of the Company. The Company
represents and warrants to the Buyer that:
a.
Organization and Qualification. The Company and each of its
Subsidiaries (as defined below), if any, is a corporation duly
organized, validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated, with full power and
authority (corporate and other) to own, lease, use and operate its
properties and to carry on its business as and where now owned,
leased, used, operated and conducted. Schedule 3(a) sets forth a
list of all of the Subsidiaries of the Company and the jurisdiction
in which each is incorporated. The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which its
ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the
failure to be so qualified or in good standing would not have a
Material Adverse Effect. “Material Adverse Effect”
means any material adverse effect on the business, operations,
assets, financial condition or prospects of the Company or its
Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements or instruments to be
entered into in connection herewith. “Subsidiaries”
means any corporation or other organization, whether incorporated
or unincorporated, in which the Company owns, directly or
indirectly, any equity or other ownership interest.
b.
Authorization; Enforcement. (i) The Company has all
requisite corporate power and authority to enter into and perform
this Agreement, the Note and to consummate the transactions
contemplated hereby and thereby and to issue the Securities, in
accordance with the terms hereof and thereof, (ii) the execution
and delivery of this Agreement, the Note by the Company and the
consummation by it of the transactions contemplated hereby and
thereby (including without limitation, the issuance of the Note and
the issuance and reservation for issuance of the Conversion Shares
issuable upon conversion or exercise thereof) have been duly
authorized by the Company’s Board of Directors and no further
consent or authorization of the Company, its Board of Directors, or
its shareholders is required, (iii) this Agreement has been duly
executed and delivered by the Company by its authorized
representative, and such authorized representative is the true and
official representative with authority to sign this Agreement and
the other documents executed in connection herewith and bind the
Company accordingly, and (iv) this Agreement constitutes, and upon
execution and delivery by the Company of the Note, each of such
instruments will constitute, a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with
its terms.
c.
Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of: (i) 500,000,000 shares of
Common Stock, $0.0001 par value per share, of which 225,547,250
shares are issued and outstanding; and (ii) 10,000,000 shares of
Preferred Stock, $0.0001 par value per share, of which no shares
are issued and outstanding; no shares are reserved for issuance
pursuant to the Company’s stock option plans, no shares are
reserved for issuance pursuant to securities (other than the Note
and two (2) prior convertible promissory notes in favor of the
Buyer: (a) prior convertible promissory note in favor of the Buyer
dated April 10, 2012 in the amount of $68,500.00 for which
16,223,001 shares of Common Stock are presently reserved and (b)
prior convertible promissory note in favor of the Buyer dated May
3, 2012 in the amount of $42,500.00 for which 9,770,115 shares of
Common Stock are presently reserved and shares reserved pursuant to
the Original Issue Discount Secured Convertible Promissory Note
issued to Hanover Holdings I, LLC) exercisable for, or convertible
into or exchangeable for shares of Common Stock and 18,000,000
shares are reserved for issuance upon conversion of the Note. All
of such outstanding shares of capital stock are, or upon issuance
will be, duly authorized, validly issued, fully paid and
non-assessable. No shares of capital stock of the Company are
su