Item 1.01.
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Entry
into a Material Definitive
Agreement.
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Malex, Inc - Recent Material Event
On
October 22, 2009, China Wind Systems, Inc., a Delaware corporation (the
“Company”), sold 2,400,000 shares of Series A Convertible Preferred Stock, par
value $0.001 per share (the “series A preferred stock”) to Barron Partners LP,
Eos Holdings, LLC, Ancora Greater China Fund, LP, Matthew Hayden, and Torben
Sommer (the “Investors”) for $2,400,000.
In
connection with the stock sale, Barron Partners, who purchased 1,500,000 shares
of series A preferred stock in the financing, entered into a voting agreement
with Jianhua Wu, the Company’s chief executive officer, pursuant to which Mr. Wu
has the right to vote the series A preferred stock purchased in the financing
and the underlying common stock as to all matters for which stockholder approval
is obtained as long as Barron or its affiliates own the stock. Upon
the sale of the series A preferred stock or the underlying common stock to a
person other than an affiliate of Barron, the voting agreement terminates as to
the transferred shares, and Mr. Wu has no voting rights with respect to the
transferred shares.
The
series A preferred stock is the same series of preferred stock that was issued
in the Company’s November 2007 private placement. As a result of the
one-for-three reverse split of the common stock, each share of series A
preferred stock is presently convertible into one-third share of common stock,
subject to adjustment. The certificate of designation for the series
A preferred stock provides that no holder can convert the series A preferred
stock to the extent that such conversion would result in the holder and its
affiliates beneficially owning in excess of 4.9% of the number of shares of the
Company’s common stock then outstanding. Such 4.9% limitation may not
be waived or amended. As of the date of this current report, Barron
Partners owns more than 5% of the Company’s outstanding common
stock.
The
issuance of the series A preferred stock was exempt from registration under
Section 4(2) of the Securities Act. Each of the investors is an “accredited
investor,” as defined in Rule 501 of Securities and Exchange Commission under
the Securities Act, and acquired the Company’s common stock for investment
purposes for its own respective accounts and not as nominees or agents, and not
with a view to the resale or distribution thereof, with the understanding that
the Preferred Stock may not be sold or otherwise disposed of without
registration under the Securities Act or an applicable exemption
therefrom. The certificates for the series A preferred stock bear a
restricted stock legend.
(d)
Exhibits.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned hereunto
duly authorized.
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