股票认购协议.doc

SMARTHEAT INC.

SUBSCRIPTION AGREEMENT

SMARTHEAT INC.公司
股票认购协议

This Subscription Agreement pertains to the offering by SmartHeat Inc. (the “Company”) of up to Two Million Two Hundred Eighty Five Thousand Seven Hundred Fourteen (2,285,714) units (the “Units”), with each Unit consisting of one (1) share of the Company’s common stock (the “Shares”) and warrants to purchase fifteen percent (15%) of one (1) share of the Company’s common stock at an exercise price of Six Dollars ($6.00) per share (the “Warrants”), at a purchase price of Three Dollars Fifty Cents ($3.50) per Unit for an aggregate offering of a minimum of Five Million Dollars ($5,000,000) and up to a maximum of Eight Million Dollars ($8,000,000) (the “Offering”) described in the Private Placement Offering Memorandum for the Units dated May 23, 2008, as the same hereto may be amended (the "Offering Memorandum"). The minimum subscription that the Company will accept from any investor is Ten Thousand (10,000) Units for a purchase price of Thirty Five Thousand Dollars ($35,000). The Company is making this offering solely to accredited investors (as defined under Rule 501(a) of Regulation D promulgated under the Securities Act of 1933, as amended (the “Securities Act”)).
本协议旨在对SmartHeat Inc.公司（以下简称“公司”）发行共计2,285,714单位有价证券（以下简称“发行单位”）的相关事宜进行约定。按照约定，每一发行单位包括一股公司普通股股票（以下简称“发行股票”）及一份权证（该权证的持有人所持有的每一份权证可以6美元的行权价格购买公司15%股的公司普通股股票，以下简称“发行权证”）；此次发行总的融资金额将按照2008年5月23 日所签订的《私募发行协议》及其修订协议（以下简称“《发行协议》”）确定，为500万美元至800万美元之间；此次发行每一投资人应至少认购10000发行单位，相应的最低投资金额为35000美元。
The undersigned, intending to be legally bound, hereby offers to purchase from the Company the number of Units for the aggregate purchase price set forth on the signature page hereto.
The Company will be deemed to have accepted this offer upon execution by it of the Receipt and Acceptance attached to this Subscription Agreement. This subscription is submitted to the Company subject to its acceptance and in accordance with, and subject to, the terms and conditions described in, this Subscription Agreement.
1. Definitions. In addition to the terms defined elsewhere in this Subscription Agreement, for all purposes of this Subscription Agreement, the following terms shall have the meanings indicated in this Section 1:
一、定义
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 144.
“Commission” means the Securities and Exchange Commission.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“GAAP” means U.S. generally accepted accounting principles.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities Act” means the Securities Act of 1933, as amended.
“Transaction Documents” means this Subscription Agreement, the Warrants, the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
2. Verification of Investor Suitability under Regulation D. The undersigned understands that in order to subscribe for the Units in this Offering, the undersigned must be an “accredited investor” as defined in Section 501 of Regulation D under the Securities Act and the undersigned hereby represents and warrants that it is an “accredited investor” as such item is defined in Rule 501(a) promulgated under the Securities Act. Furthermore, the Company understands that, as a condition to the Company’s acceptance of this subscription, the undersigned must complete a Purchaser Questionnaire in the form attached hereto.
二、合格投资者身份声明
3. Amount and Method of Payment. The purchase price for the Units is Three Dollars Fifty Cents ($3.50) per Unit and shall be paid by tender of a check made payable to SmartHeat Inc. or wire transfer of immediately available funds to the special segregated account set forth on the last page hereof (the “Segregated Account”) in the amount of Three Dollars Fifty Cents ($3.50) per Unit multiplied by the number of Units purchased by the undersigned as set forth on the signature page hereof (the “Purchase Price”). All proceeds of this Offering will be deposited in the Segregated Account and will not be released to the Company until gross proceeds of at least Five Million Dollars ($5,000,000) have been deposited into the Segregated Account. If this amount is not received before July 31, 2008, as such date may be extended as provided in the Offering Memorandum, then the Purchase Price shall be returned to the undersigned in full without interest unless the Company determines, in its sole discretion, to extend the offering period. Affiliates of placement agents and the Company may purchase Units for their own account. Such purchases will be included in determining whether the minimum amount of this Offering has been sold.
三、认购金额及支付方式
此次发行每一认购单位的发行价格为3.5美元，支付方式为支票或者电汇。
4. Acceptance of Subscription.
四、认购的接受
(a) The undersigned understands and agrees that the Company, in its sole discretion, reserves the right to accept or reject this or any other subscription for Units in whole or in part at any time prior to the Closing (as defined below).
（一）投资人知悉并同意，在此次发行完成前，公司有权自行决定接受或拒绝投资人的认购；
(b) In the event that this subscription is rejected in whole or in part, the Company shall promptly return all or the applicable portion of the Purchase Price without interest to the undersigned, as the case may be, and this Subscription Agreement shall thereafter have no force or effect except with respect to the portion, if any, of this subscription that is accepted by the Company.
（二）在拒绝投资人认购的情况下，公司应当立即将已经收到认购款返还给投资人。
5. Registration Rights.
五、股票注册权
Concurrently with the execution of this Subscription Agreement, the Company and the undersigned have entered into a Registration Rights Agreement regarding the Shares and the Warrant Shares.
在签订本协议的同时，公司应当与投资人一并签署一份《股票注册权协议》。
6. Restrictions on Resale or Transfer.
六、二次出售或转让的限制
(a) The Units, Shares, Warrants and Warrant Shares have not been registered under the Securities Act or any state securities laws, and may not be sold or transferred unless (i) such sale or transfer is subsequently registered thereunder; (ii) the undersigned shall have delivered to the Company an opinion of counsel (which opinion and counsel shall be reasonably acceptable to the Company) to the effect that the securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration; or (iii) the securities are sold pursuant to Rule 144 promulgated under the Securities Act (or a successor rule).
（一）此次发行的发行单位、发行股票、发行权证及行权股票在为按照《1933年证券法》或者其他州一级别的证券法律注册之前，不得再次出售或者转让，除非：（1）已经办理了上述注册，（2）投资人能够向公司提供一份《法律意见书》，证明有关再次出售或转让依法得到豁免，（3）有关再次出售或转让是按照《1933年证券法》的144规则所进行的。
(b) The certificate(s) representing the Shares and the Warrant Shares and the Warrants shall each bear restrictive legends in substantially the following form (and a stop-transfer order may be placed against transfer of the certificates for such securities):
“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws, and accordingly may not be offered for sale, sold or otherwise transferred in the absence of an effective registration statement for the securities under the Securities Act or in a transaction not subject to the registration requirements of the Securities Act, in each case in accordance with applicable state securities laws and in the case of a transaction exempt from registration, the Company has received an opinion of counsel, in form, substance and scope reasonably acceptable to the Company, that registration is not required under the Securities Act and under all applicable state securities laws or unless sold pursuant to Rule 144 under the Securities Act.”

7. Delivery of the Stock Certificate and Warrants. The Company will execute and deliver certificate(s) representing the Shares and Warrants to the subscriber as soon as practicable after the occurrence of each of the following items: (i) acceptance of the subscription by the Company; (ii) receipt of the Purchase Price into the Segregated Account; (iii) a closing of the Offering; and (iv) release to the Company of the net proceeds of the Offering from the Segregated Account.
七、股票及权证凭证的交付
公司应当在下述条件满足的情况下向投资人签发并交付股票及权证凭证：
（一） 收到投资人所交纳的认购款；
（二） 认购款足额支付至专用帐户；
（三） 此次发行顺利完成；
（四） 公司从专用帐户取得全部发行融资金额。
八、股票及权证凭证的交付
8. Representations and Warranties. The undersigned hereby acknowledges, represents and warrants to, and agrees with, the Company as follows:
(a) The undersigned understands that the offering and sale of the Units by the Company to the undersigned is intended to be exempt from registration under the Securities Act by virtue of Section 4(2) of the Securities Act and the provisions of Rule 506 of Regulation D promulgated thereunder and, in accordance therewith and in furtherance thereof, the undersigned represents and warrants to and agrees with the Company as follows:
(i) The undersigned has carefully reviewed the Offering Memorandum, this Subscription Agreement and the Confidential Purchaser Questionnaire attached hereto, the Form of Stock Purchase Warrant, the Registration Rights Agreement, and understands the information contained in each such document including, but not limited to, the audited financial statements as of December 31, 2006 and 2007 and for the years then ended for Taiyu (as opposed to the Company), and the pro-forma combined balance sheet of the Company and Taiyu as of December 31, 2007, the pro-forma combined statements of operations of the Company and Taiyu for the year ended December 31, 2007, and the unaudited financial statements as of March 31, 2008 and for the three months then ended included in the Offering Memorandum.
(ii) All documents, records and books pertaining to the Company and/or this investment that the undersigned has requested have been made available for inspection by him and/or his attorney, accountant and other advisor(s);
(iii) The undersigned and/or his advisor(s) have had a reasonable opportunity to ask questions of and receive information and answers from a person or persons acting on behalf of the Company concerning the offering of the Units and all such questions have been answered and all such information has been provided to the full satisfaction of the undersigned;
(iv) Neither the undersigned nor the undersigned’s investment advisors, if any, have been furnished any offering literature other than the Offering Memorandum and the exhibits attached thereto and the undersigned and the undersigned’s advisors, if any, have relied only on the information contained in the Offering Memorandum and the exhibits attached thereto and the information, as described in subparagraphs (ii) and (iii) above, furnished or made available to them by the Company;
(v) No oral or written representations have been made and no oral or written information has been furnished to the undersigned or his advisor(s) in connection herewith that were in any way inconsistent with the information set forth in the Offering Memorandum and the exhibits attached thereto;
(vi) The undersigned is not subscribing for the Units as a result of or subsequent to any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or presented at any seminar or meeting;
(vii) The undersigned acknowledges that he has conducted his own independent evaluation of the Company and has analyzed the risks associated with an investment in the Units and has based his decision to invest in the Units on the results of this evaluation and analysis;
(viii) The undersigned’s overall commitment to investments that are not readily marketable is not disproportionate to the undersigned’s net worth and the undersigned’s investment in the Company will not cause such overall commitment to become disproportionate to the undersigned’s net worth;
(ix) If the undersigned is a natural person, the undersigned has reached the age of majority in the jurisdiction in which the undersigned resides, has adequate net worth and means of providing for the undersigned’s current financial needs and personal contingencies, is able to bear the substantial economic risks of an investment in the Units for an indefinite period of time, has no need for liquidity in such investment and, at the present time, could afford a complete loss of such investment;
(x) The address set forth below is the undersigned’s true and correct residence (or, if not an individual, domiciliary) address;
(xi) The undersigned (A) has such knowledge of, and experience in, business and financial matters so as to enable him to utilize the information made available to him in connection with the offering of the Units in order to evaluate the merits and risks of an investment in the Units and to make an informed investment decision with respect thereto, (B) the undersigned has carefully evaluated the risks of investing and (C) has the capacity, either alone, or with a professional advisor, to protect his own interests in connection with a purchase of the Units;
(xii) The undersigned is not relying on the Company with respect to the economic considerations of the undersigned relating to this investment. In regard to such considerations, the investor has relied on the advice of, or has consulted with, only his own advisor(s). The undersigned recognizes that the information furnished by the Company does not constitute investment, accounting, legal or tax advice. The undersigned is relying on professional advisors for such advice;
(xiii) The undersigned is acquiring the Units solely for his own account as principal, for investment purposes only and not with a view to the resale or distribution thereof, in whole or in part, and no other person has a direct or indirect beneficial interest in such Units;
(xiv) The undersigned understands that the certificate(s) evidencing ownership of the Shares and the Warrant Shares and the Warrants will each bear a restrictive legend and have not been registered under the Securities Act or any state securities laws, and may not be sold or transferred unless (i) such sale or transfer is subsequently registered thereunder; (ii) the undersigned shall have delivered to the Company an opinion of counsel (which opinion and counsel shall be reasonably acceptable to the Company) to the effect that the securities to be sold or transferred may be so