Item
24.
Indemnification
of Directors and Officers.
Section
145 of the Delaware General Corporation Law (the “DGCL”) provides, in general,
that a corporation incorporated under the laws of the State of Delaware, as
we
are, may indemnify any person who was or is a party or is threatened to be
made
a party to any threatened, pending or completed action, suit or proceeding
(other than a derivative action by or in the right of the corporation) by reason
of the fact that such person is or was a director, officer, employee or agent
of
the corporation, or is or was serving at the request of the corporation as
a
director, officer, employee or agent of another enterprise, against expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such action,
suit or proceeding if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best interests of
the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe such person’s conduct was unlawful. In the case of a
derivative action, a Delaware corporation may indemnify any such person against
expenses (including attorneys’ fees) actually and reasonably incurred by such
person in connection with the defense or settlement of such action or suit
if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, except that
no
indemnification will be made in respect of any claim, issue or matter as to
which such person will have been adjudged to be liable to the corporation unless
and only to the extent that the Court of Chancery of the State of Delaware
or
any other court in which such action was brought determines such person is
fairly and reasonably entitled to indemnity for such expenses.
Our
Certificate of Incorporation and By-laws provide that we will indemnify our
directors, officers, employees and agents to the extent and in the manner
permitted by the provisions of the DGCL, as amended from time to time, subject
to any permissible expansion or limitation of such indemnification, as may
be
set forth in any stockholders’ or directors’ resolution or by contract. In
addition, our director and officer indemnification agreements with each of
our
directors and officers provide, among other things, for the indemnification
to
the fullest extent permitted or required by Delaware law, provided that no
indemnitee will be entitled to indemnification in connection with any claim
initiated by the indemnitee against us or our directors or officers unless
we
join or consent to the initiation of the claim, or the purchase and sale of
securities by the indemnitee in violation of Section 16(b) of the Exchange
Act.
Any
repeal or modification of these provisions approved by our stockholders will
be
prospective only and will not adversely affect any limitation on the liability
of any of our directors or officers existing as of the time of such repeal
or
modification.
We
are
also permitted to apply for insurance on behalf of any director, officer,
employee or other agent for liability arising out of his actions, whether or
not
the DGCL would permit indemnification.
Item
26.
Recent
Sales of Unregistered Securities.
On
October 24, 2006, we accepted subscriptions for a total of 1,050,000 shares
of
common stock, at a purchase price of $1.00 per share, in exchange for gross
proceeds of $1,050,000. The securities were offered and sold to investors in
reliance upon exemptions from registration pursuant to Section 4(2) under the
Securities Act of 1933, as amended, and Rule 506 promulgated thereunder. Each
of
the persons and/or entities receiving our securities qualified as an accredited
investor (as defined by Rule 501 under the Securities Act of 1933, as
amended).
On
October 24, 2004, pursuant to a Share Exchange Agreement with the shareholders
of China Clean Energy Resources, Ltd., we issued 15,995,000 shares of common
stock to the shareholders of China Clean Energy Resources, Ltd. in exchange
for
100% of the common shares of China Clean Energy Resources, Ltd. The securities
were offered and sold to investors in reliance upon exemptions from registration
pursuant to Section 4(2) under the Securities Act of 1933, as amended, and
Rule
506 promulgated thereunder. Each of the persons and/or entities receiving our
securities qualified as an accredited investor (as defined by Rule 501 under
the
Securities Act of 1933, as amended).
On
October 24, 2006, we issued Yongfu Zhu 408,333 shares of common stock, valued
at
$0.10 per share, as compensation for consulting services. The securities were
issued to Yongfu Zhu in reliance upon exemptions from registration pursuant
to
Section 4(2) under the Securities Act of 1933, as amended, and Rule 506
promulgated thereunder. Yongfu Zhu qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended)..
On
October 24, 2006, we issued Olivia Hsin-Yu Chao 408,333 shares of common stock,
valued at $0.10 per share, as compensation for consulting services. The
securities were issued to Olivia Hsin-Yu Chao in reliance upon exemptions from
registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended, and Rule 506 promulgated thereunder. Olivia Hsin-Yu Chao qualified
as
an accredited investor (as defined by Rule 501 under the Securities Act of
1933,
as amended).
On
October 24, 2006, we issued Fred Chang 204,167 shares of common stock, valued
at
$0.10 per share, as compensation for consulting services. The securities were
issued to Fred Chang in reliance upon exemptions from registration pursuant
to
Section 4(2) under the Securities Act of 1933, as amended, and Rule 506
promulgated thereunder. Fred Chang qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
On
October 24, 2006, we issued Liuyi Zhang 204,167 shares of common stock, valued
at $0.10 per share, as compensation for consulting services. The securities
were
issued to Liuyi Zhang in reliance upon exemptions from registration pursuant
to
Section 4(2) under the Securities Act of 1933, as amended, and Rule 506
promulgated thereunder. Liuyi Zhang qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
On
October 24, 2006, we issued Zuyuan Zheng 175,000 shares of common stock, valued
at $0.10 per share, as compensation for consulting services. The securities
were
issued to Zuyuan Zheng in reliance upon exemptions from registration pursuant
to
Section 4(2) under the Securities Act of 1933, as amended, and Rule 506
promulgated thereunder. Zuyuan Zheng qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
On
October 24, 2006, we issued Avenndi, LLC 5,000 shares of common stock, valued
at
$0.10 per share, as compensation for consulting services. The securities were
issued to Avenndi, LLC in reliance upon exemptions from registration pursuant
to
Section 4(2) under the Securities Act of 1933, as amended, and Rule 506
promulgated thereunder. Avenndi, LLC qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
On
October 24, 2006, we issued Westminster Securities Corporation 200,000 shares
of
common stock, valued at $0.10 per share, as compensation for financial advisory
services. The securities were issued to Westminster Securities Corporation
in
reliance upon exemptions from registration pursuant to Section 4(2) under the
Securities Act of 1933, as amended, and Rule 506 promulgated thereunder.
Westminster Securities Corporation qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
On
November 9, 2006, we accepted a subscription for a total of 250,000 shares
of
common stock, at a purchase price of $1.00 per share, in exchange for gross
proceeds of $250,000.
The
securities were offered and sold to investors in reliance upon exemptions from
registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended, and Rule 506 promulgated thereunder. Each of the persons and/or
entities receiving our securities qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended)
.
On
November 15, 2006, we granted Gary Zhao, our Chief Financial Officer, a total
of
100,000 shares of unvested restricted common stock. 8.333 of the restricted
shares will vest on every one-month anniversary of Mr. Zhao employment. The
securities were issued to Mr. Zhao in reliance upon exemptions from registration
pursuant to Section 4(2) under the Securities Act of 1933, as amended, and
Rule
506 promulgated thereunder. Mr. Zhao qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
On
January 25, 2007, we issued 30,000 shares of common stock, valued at $0.10
per
share, to CCG Elite Investor Relations, as compensation for investor relations
services. These shares were issued pursuant to an agreement between us and
CCG
Elite Investor Relations dated November 8, 2006. The securities were issued
to
CCG Elite Investor Relations in reliance upon exemptions from registration
pursuant to Section 4(2) under the Securities Act of 1933, as amended, and
Rule
506 promulgated thereunder. CCG Elite Investor Relations qualified as an
accredited investor (as defined by Rule 501 under the Securities Act of 1933,
as
amended).
On
January 25, 2007, we issued 50,000 shares of common stock, valued at $0.10
per
share, to Craig Bird, an employees of Segue Ventures LLC, as compensation for
investor relations services. These shares were issued pursuant to an agreement
between us and Segue Ventures LLC dated November 13, 2006. The securities were
issued to Craig Bird in reliance upon exemptions from registration pursuant
to
Section 4(2) under the Securities Act of 1933, as amended, and Rule 506
promulgated thereunder. Craig Bird qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
On
January 9, 2008, we sold (i) 10,000,000 shares of our common stock, (ii)
five-year warrants to purchase 5,000,000 shares of common stock at an exercise
price of $2.00 per share, pursuant to a Securities Purchase Agreement among
us
and the purchasers signatory thereto. We received aggregate gross proceeds
of
approximately $15.0 million from the sale of the common stock and warrants.
The
securities were offered and sold to investors in reliance upon exemptions from
registration pursuant to Section 4(2) under the Securities Act of 1933, as
amended, and Rule 506 promulgated thereunder. Each of the persons and/or
entities receiving our securities qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
Westminster
Securities Corporation acted as placement agent with respect to the January
9,
2008 offering and received a cash fee equal to $1,200,000 and warrants to
purchase 1,200,000 shares of our common stock at an exercise price of $2.00
per
share. The securities were issued to Westminster Securities Corporation in
reliance upon exemptions from registration pursuant to Section 4(2) under the
Securities Act of 1933, as amended, and Rule 506 promulgated thereunder.
Westminster Securities Corporation qualified as an accredited investor (as
defined by Rule 501 under the Securities Act of 1933, as amended).
Item
28.
Undertakings.
The
undersigned registrant hereby undertakes that it will:
1.
File,
during any period in which it offers or sells securities, a post-effective
amendment to this registration statement to:
i.
Include any prospectus required by Section 10(a)(3) of the Securities Act;
ii.
Reflect in the prospectus any facts or events which, individually or together,
represent a fundamental change in the information in the registration statement.
Notwithstanding the forgoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the “Calculation of Registration
Fee” table in the effective registration statement.
iii.
Include any additional or changed material information on the plan of
distribution.
2.
For
determining liability under the Securities Act, treat each post-effective
amendment as a new registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona fide offering.
3.
File a
post-effective amendment to remove from registration any of the securities
that
remain unsold at the end of the offering.
4.
For
determining liability of the undersigned small business issuer under the
Securities Act to any purchaser in the initial distribution of the securities,
the undersigned small business issuer undertakes that in a primary offering
of
securities of the undersigned small business issuer pursuant to this
registration statement, regardless of the underwriting method used to sell
the
securities to the purchaser, if the securities are offered or sold to such
purchaser by means of any of the following communications, the undersigned
small
business issuer will be a seller to the purchaser and will be considered to
offer or sell such securities to such purchaser:
i.
Any
preliminary prospectus or prospectus of the undersigned small business issuer
relating to the offering required to be filed pursuant to Rule 424;
ii.
Any
free writing prospectus relating to the offering prepared by or on behalf of
the
undersigned small business issuer or used or referred to by the undersigned
small business issuer;
iii.
The
portion of any other free writing prospectus relating to the offering containing
material information about the undersigned small business issuer or its
securities provided by or on behalf of the undersigned small business issuer;
and
iv.
Any
other communication that is an offer in the offering made by the undersigned
small business issuer to the purchaser.
5.
Insofar as indemnification for liabilities arising under the Securities Act
of
1933 (the “Act”) may be permitted to directors, officers and controlling persons
of the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable.
In
the
event that a claim for indemnification against such liabilities (other than
the
payment by the small business issuer of expenses incurred or paid by a director,
officer or controlling person of the small business issuer in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
small business issuer will, unless in the opinion of its counsel the matter
has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
6.
Each
prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule
430B
or other than prospectuses filed in reliance on Rule 430A, shall be deemed
to be
part of and included in the registration statement as of the date it is first
used after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into
the
registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such first
use,
supersede or modify any statement that was made in the registration statement
or
prospectus that was part of the registration statement or made in any such
document immediately prior to such date of first use.