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SEC Filing: Clean Wind Energy Tower Enters Securities Agreement With Asher Enterprises
Posted October 9, 2011
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On October 3, 2011, Clean Wind Energy Tower, Inc. entered into a Securities Purchase Agreement with Asher Enterprises, Inc., for the sale of an 8% convertible note in the principal amount of $32,500. The financing closed on October 6, 2011.
The Note bears interest at the rate of 8% per annum. All interest and principal must be repaid on July 5, 2012. The Note is convertible into common stock, at Asher's option, at a 69% discount to the average of the three lowest closing bid prices of the common stock during the 10 trading day period prior to conversion. In the event the Company prepays the Note in full, the Company is required to pay off all principal, interest and any other amounts owing multiplied by (i) 140% if prepaid during the period commencing on the closing date through 120 days thereafter, (ii) 145% if prepaid 121 days following the closing through 150 days following the closing and (iii) 150% if prepaid 151 days following the closing through 180 days following the closing. After the expiration of 180 days following the date of the Note, the Company has no right of prepayment.
Asher has agreed to restrict its ability to convert the Note and receive shares of common stock such that the number of shares of common stock held by them in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding shares of common stock. The total net proceeds the Company received from this Offering was $32,500.
The Company claims an exemption from the registration requirements of the Securities Act of 1933, as amended for the private placement of these securities pursuant to Section 4(2) of the Act and/or Regulation D promulgated there under since, among other things, the transaction did not involve a public offering, Asher is an accredited investor, Asher had access to information about the Company and their investment, Asher took the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.
In addition, on September 27, 2011, the Company and Asher amended the convertible note dated July 27, 2011 in the amount of $45,000 issued to Asher to increase the discount on the conversion price to 69%.
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Clean Wind Energy Tower, Inc.
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