Document:

Unassociated Document

    

     

    

     

    NOTES
PURCHASE AGREEMENT

    

    by and
between

    

    FUSHI
COPPERWELD, INC.

    

    and

    

    CITADEL
EQUITY FUND LTD.

    

    

     

    

     

    

     

    

     

    Dated:  August
13, 2009

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    This
Notes Purchase Agreement (this “Agreement”)
is dated as of August 13, 2009, by and between Fushi Copperweld, Inc. (formerly
known as Fushi International, Inc.), a Nevada corporation (the “Company”),
and Citadel Equity Fund Ltd. (“Citadel”).

     

    WHEREAS,
the Company originally issued and sold to Citadel 200 of the
Company’s  3.0% Guaranteed Senior Secured Convertible Notes due 2012
(the “Notes”)
of US$100,000 principal amount each, convertible into shares of common stock of
the Company, issued pursuant to the provisions of an indenture (the “Indenture”),
dated as of January 25, 2007, among the Company, Fushi Holdings, Inc., as
guarantor, and The Bank of New York, as trustee (the “Trustee”);

     

    WHEREAS,
Citadel is currently the sole beneficial holder of the remaining 50 Notes with
an aggregate principal amount of US$5,000,000, which constitute all of the
outstanding Notes as of the date hereof;

     

    WHEREAS,
all capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Indenture;

     

    NOW,
THEREFORE, in consideration of the mutual covenants and promises contained
herein and for other good and valuable consideration the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows:

     

    1.           Purchase
of Notes.

     

    Subject
to the terms and conditions of this Agreement, the Company will repurchase all
of the outstanding 50 Notes at a purchase price determined as
follows:

     

    
      	
              (a)

            	
              Notes
      repurchased by the Company on or prior to October 9, 2009 (the “First
      Closing Date”) shall be repurchased at 200% of their face value,
      provided that no less than 20 Notes shall be repurchased by the Company on
      or prior to October 9, 2009, with the minimum amount payable to Citadel
      being US$4,000,000 payable in Shares (as hereinafter defined) on the First
      Closing Date  (the aggregate purchase price payable by the
      Company on the First Closing Date, as determined in accordance with the
      foregoing, is hereinafter referred to as the “First
      Closing Purchase Amount”); it being acknowledged and agreed that
      the Company shall have the right to repurchase up to the remainder of the
      Notes on the First Closing Date, without any penalty;
  and

            

    

     

    
      	
              (b)

            	
              Any
      Notes remaining outstanding after the First Closing Date (including,
      without limitation, any Notes remaining outstanding as a result of the
      Company’s failure to repurchase at least 20 Notes on the First Closing
      Date) shall be repurchased by the Company on or prior to November 9, 2009
      (the “Second
      Closing Date” and together with the First Closing Date, each a
      “Closing
      Date”), at 202% of their face value (the aggregate purchase price
      payable by the Company on the Second Closing Date, as determined in
      accordance with the foregoing, is hereinafter referred to as the “Second
      Closing Purchase Amount”).

            

    

     

    The sum of the First Closing Purchase
Amount and the Second Closing Purchase Amount is hereinafter referred to as the
“Purchase
Amount”.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    2.           Payment of the Purchase
Amount

     

    
      	
              (a)

            	
              The
      Purchase Amount shall be payable by a combination of cash and 440,529
      newly issued shares (the “Shares”)
      of common stock of the Company, par value US$0.0006 per share (the “Common
      Stock”).

            

    

     

    
      	
              (b)

            	
              The
      value of the Shares to be issued and delivered as part of the Purchase
      Amount is hereby agreed to be US$9.08 per share, for an aggregate value of
      US$4,000,000.  The balance of the Purchase Amount shall be
      payable in cash.

            

    

     

    
      	
              2A.

            	
              Registration of
      Shares

            

    

     

    
      	
              (a)

            	
              The
      Company shall cause the Shares to be registered for resale on the
      Company’s Registration Statement on Form S-3 (Reg. No. 333-160449)(as
      amended or supplemented from time to time, the “Registration
      Statement”) for an offering to be made on a delayed or continuous
      basis pursuant to Rule 415 of the Act from time to time by Citadel (and/or
      its transferees), and cause such Registration Statement to be declared
      effective under the U.S. Securities Act of 1933, as amended (the “Securities
      Act”), within thirty (30) calendar days after the First Closing
      Date (the “Effective
      Date”).  All costs and expenses of any registration and
      qualification of the Shares pursuant to this Section 2A shall be borne and
      paid by the Company.

            

    

     

    
      	
              (b)

            	
              The
      Company shall use its best efforts to cause the Registration Statement to
      remain effective under the Securities Act, including, without limitation,
      by promptly filing post-effective amendments and supplements, to permit
      Citadel (and/or its transferees from time to time) to dispose of the
      Shares in such registration for a period (the “Effectiveness
      Period”) commencing as of the Effective Date and ending on the
      earliest to occur of (i) the date on which all such Shares which have not
      been previously sold to the public pursuant to the Registration Statement
      can be sold to the public under Rule 144 under the Securities Act, and
      (ii) the date on which all such Shares have been sold to the public
      pursuant to the Registration Statement in accordance with the intended
      method of distribution thereof.

            

    

     

    
      	
              (c)

            	
              If:
      (i) a Registration Statement is not filed and declared effective by the
      Commission on or prior to the Effective Date or if, by the business day
      immediately following the Effective Date, the Company shall not have filed
      a “final” prospectus for the Registration Statement with the Commission
      under Rule 424(b) in accordance with the terms hereof (whether or not such
      a prospectus is technically required by such Rule), or (ii) after its
      Effective Date, without regard for the reason thereunder or efforts
      therefor, such Registration Statement ceases for any reason to be
      effective and available to Citadel as to the Shares at any time prior to
      the expiration of the Effectiveness Period for more than an aggregate of
      10 trading days (which need not be consecutive) (any such failure or
      breach being referred to as an “Event”,
      and for purposes of clause (i) the date on which such Event occurs, or for
      purposes of clause (ii) the date which such 10 trading day-period is
      exceeded, being referred to as the “Event
      Date”), then in addition to any other rights Citadel may have
      hereunder or under applicable law, on each such Event Date and on each
      monthly anniversary of each such Event Date (if the applicable Event shall
      not have been cured by such date) until the applicable Event is cured, the
      Company shall pay to Citadel an amount in cash, as partial liquidated
      damages and not as a penalty, equal to 1.0% of
      US$4,000,000.  The parties agree that the
      maximum aggregate liquidated damages payable to Citadel under this
      Agreement shall be ten percent (10%) of
      US$4,000,000.  The partial liquidated damages pursuant to
      the terms hereof shall apply on a daily pro-rata basis for any portion of
      a month prior to the cure of the applicable Event and in such case shall
      be due and payable no later than the third business day after the date the
      Event is cured, (except in the case of the first Event Date), and shall
      cease to accrue (unless earlier cured) upon the expiration of the
      Effectiveness Period.  If the Company fails to pay any
      liquidated damages pursuant to this section in full within seven business
      days after the date payable, the Company will pay interest thereon at a
      rate of 15% per annum (or such lesser maximum amount that is permitted to
      be paid by applicable law) to Citadel, accruing daily from the date such
      liquidated damages are due until the amounts, plus interest thereon, are
      paid in full.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              (d)

            	
              The
      Company shall, notwithstanding any termination of this Agreement,
      indemnify and hold harmless Citadel, the officers, directors, managers,
      partners, members, stockholders, agents, brokers, investment advisors and
      employees of each of them, each person who controls Citadel (within the
      meaning of Section 15 of the Securities Act or Section 20 of the Exchange
      Act) and the officers, directors, agents and employees of each such
      controlling person (the “Indemnified Party”), to the fullest extent
      permitted by applicable law, from and against any and all losses, claims,
      damages, liabilities, costs (including, without limitation, costs of
      preparation and attorneys’ fees) and expenses (collectively, “Losses”), as
      incurred, arising out of or relating to any violation of securities laws
      or untrue or alleged untrue statement of a material fact contained in the
      Registration Statement, any prospectus or any form of prospectus or in any
      amendment or supplement thereto or in any preliminary prospectus, or
      arising out of or relating to any omission or alleged omission of a
      material fact required to be stated therein or necessary to make the
      statements therein (in the case of any prospectus or form of prospectus or
      supplement thereto, in the light of the circumstances under which they
      were made) not misleading, except to the extent, but only to the extent,
      that such untrue statements or omissions are based solely upon information
      regarding or provided by Citadel or such other Indemnified Party furnished
      in writing to the Company for use therein.  The Company shall
      notify Citadel promptly of the institution, threat or assertion of any
      proceeding of which the Company is aware in connection with the
      Registration Statement, any prospectus or any form of prospectus or in any
      amendment or supplement thereto or in any preliminary
      prospectus.

            

    

     

    
      	
              (e)

            	
              Citadel
      shall indemnify and hold harmless the Company, its directors, officers,
      agents and employees, each person who controls the Company (within the
      meaning of Section 15 of the Securities Act and Section 20 of the Exchange
      Act), and the directors, officers, agents and employees of such
      controlling persons, to the fullest extent permitted by applicable law,
      from and against all Losses, as incurred, arising solely out of or based
      solely upon any untrue statement of a material fact contained in the
      Registration Statement, any prospectus, or any form of prospectus, or in
      any amendment or supplement thereto, or arising solely out of or based
      solely upon any omission of a material fact required to be stated therein
      or necessary to make the statements therein (in the case of any Prospectus
      or form of prospectus or supplement thereto, in the light of the
      circumstances under which they were made) not misleading, to the extent,
      but only to the extent, that such untrue statement or omission is
      contained in any information so furnished in writing by Citadel or other
      Indemnifying Party to the Company specifically for inclusion in the
      Registration Statement or such prospectus or any form of prospectus or in
      any amendment or supplement thereto or in any preliminary
      prospectus.

            

    

    

    
      	
              (f)

            	
              Citadel
      agrees for a period of sixty days from the earlier of (i) the Effective
      Date of the Registration Statement, or (ii) October 20, 2009 (the “Lock-up
      Period”), that it will not, without the prior written consent of
      the Company (which consent may be withheld in its sole discretion),
      directly or indirectly, sell, offer, contract or grant any option to sell
      (including without limitation any short sale), pledge, hypothecate,
      transfer, grant a security interest in, establish an open “put equivalent
      position” within the meaning of Rule 16a-1(h) under the Securities
      Exchange Act of 1934, as amended or otherwise dispose of, or enter into
      any transaction which is designed to, or might reasonably be expected to,
      result in the disposition (whether by actual disposition or effective
      economic disposition due to cash settlement or otherwise, directly or
      indirectly) (a “Disposition”) of the Shares that are owned either of
      record or beneficially (as defined in Rule 13d-3 under the Securities
      Exchange Act of 1934, as amended) by Citadel, to any person other than an
      affiliate of Citadel in a transaction not involving a public resale of the
      Shares; provided, however that in connection with any such Disposition to
      an affiliate, such affiliate agrees in writing to be bound by the
      provisions of this Section 2A(f), or publicly announce an intention to do
      any of the foregoing, during the Lock-up
Period.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.           Repurchase,
Delivery and Cancellation.

     

    
      	
              (a)

            	
              On
      each Closing Date, upon the delivery of the applicable Purchase Amount as
      set forth below, Citadel shall surrender to the Company the Notes to be
      repurchased on such Closing Date, which Notes shall in turn be surrendered
      by the Company to the Trustee for cancellation in accordance with Section
      2.08 of the Indenture prior to 10:00 a.m. (New York City time) on the
      relevant Closing Date:

            

    

     

    (i) on
the First Closing Date, the Company shall (x) issue a stock certificate
evidencing the 440,529 Shares in the name of Citadel, and (y) in the event that
more than 20 Notes are to be repurchased on the First Closing Date, pay the
balance of the First Closing Purchase Amount in cash; and

     

    (ii) on
the Second Closing Date, the Company shall pay the Second Closing Purchase
Amount in cash.

     

    
      	
              (b)

            	
              All
      cash payments by the Company hereunder shall be made by immediately
      available Federal funds bank wire transfer to such bank account or
      accounts as Citadel shall have designated. The repurchase contemplated in
      this Agreement shall be consummated by the delivery by the Company of the
      applicable Purchase Amount to be received by Citadel on each Closing Date
      on which such Purchase Amount is
due.

            

    

     

    
      	
              (c)

            	
              In
      the event the Second Closing Purchase Amount is not paid in full by the
      Second Closing Date, the portion of the Second Closing Purchase Amount
      remaining outstanding for payment as of the Second Closing Date shall be
      increased by five percent (5%) (the outstanding Second Closing Purchase
      Amount as so increased, the “Default
      Amount”), and such Default Amount shall be paid in full no later
      than 15 business days from the Second Closing
  Date.

            

    

     

    
      	
              (d)

            	
              If
      the Company fails to pay the Default Amount within the 15 business day
      period specified in clause (c) above, Citadel shall have the right to
      exercise any right or remedy it may have under this Agreement, at law,
      equity or otherwise in relation to such breach by the Company, including,
      without limitation, the right to sell any or all Notes failed to be
      repurchased by the Company hereunder (and/or the shares deliverable upon
      conversion of such Notes) on such terms as Citadel may see
      fit.  If the price received by Citadel from any such sale is
      less than the Default Amount it would have been entitled to receive
      under clause (c), the Company shall upon demand by Citadel pay the
      difference to Citadel in cash.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    4.           Discharge of
Indenture

     

    Upon full
payment of the Purchase Amount (or, if applicable, the Default Amount) to
Citadel, and surrender of the Notes to the Trustee for cancellation, the Company
shall, in accordance with Section 11.01 of the Indenture, deliver an Officer’s
Certificate and Opinion of Counsel to the Trustee, and the Trustee shall execute
proper instruments acknowledging satisfaction of and discharge of the
Indenture.

     

    5.           Representations
and Warranties.

     

    
      	
              (a)

            	
              Citadel.  Citadel
      represents and warrants, as of the date hereof and as of each Closing
      Date, to the Company as follows:

            

    

     

    
      	
               
      

            	
              (i)

            	
              Citadel
      is duly organized, validly existing and in good standing under the laws of
      the jurisdiction of its organization and has all power and authority
      required to use its properties and conduct its
  business.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              Citadel
      has all requisite power and authority to execute, deliver and perform its
      obligations under this Agreement.  The execution, delivery and
      performance of this Agreement have been duly authorized by all necessary
      action on the part of Citadel.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              This
      Agreement has been duly executed and delivered by Citadel and constitutes
      a valid and binding obligation of Citadel, enforceable against Citadel in
      accordance with its terms, except as such enforceability may be limited by
      bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
      or other similar laws relating to or affecting creditors’ rights generally
      and by general principles of
equity.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              No
      regulatory approval is required to be obtained by Citadel in connection
      with the execution, delivery and performance of this Agreement. The
      execution, delivery and performance of this Agreement will not (i) violate
      any provision of the constitutional documents of Citadel, (ii) result in
      the violation of any law applicable to Citadel, (iii) violate or
      constitute a default under or give rise to any third parry rights under
      any agreement or instrument applicable to Citadel or any of its assets, or
      (iv) result in the imposition of any security interest upon any assets of
      Citadel, except for such violations, defaults, third party rights and
      security interest under clauses (ii), (iii) and (iv) that, individually
      and in the aggregate, neither have had nor are reasonably likely to have a
      material adverse effect on the ability of Citadel to perform its
      obligations under this Agreement.

            

    

     

    
      	
               
      

            	
              (v)

            	
              Citadel
      has the sole beneficial interest in all of 50 Notes as of the date hereof,
      and immediately prior to each Closing Date, will have the sole beneficial
      interest in all the Notes to be sold by it on such Closing Date in
      accordance with this Agreement, in each case, free and clear of any lien,
      security interest, claim or
encumbrance.

            

    

     

    
      	
               
      

            	
              (vi)

            	
              Citadel
      is not a “U.S. Person” (as defined in Rule 902 of Regulation S under the
      Securities Act) and, except for the Registration Statement to be filed
      pursuant to Section 2A hereof, it understands that no action has been or
      will be taken in any jurisdiction that would permit a resale of the Shares
      in any country or jurisdiction where action for that purpose is
      required.  Citadel is not acquiring the Shares for the account
      or benefit of any U.S. persons.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (vii)

            	
              Citadel
      understands and agrees that the Shares being issued by the Company
      pursuant to this Agreement have not been registered under the Securities
      Act or the securities laws of any state of the U.S. and that the issuance
      of the Shares is being effected in reliance upon an exemption from
      registration afforded by Regulation S for offers and sales of securities
      outside the U.S. Citadel is not acquiring the Shares with a view to any
      distribution thereof that would violate the Securities Act or the
      securities laws of any state of the United States or any other applicable
      jurisdiction.

            

    

     

    
      	
               
      

            	
              (viii)

            	
              Citadel
      acknowledges that, at the time of issuance and delivery hereunder, the
      Shares will be “restricted securities” as defined in Rule 144 under the
      Securities Act and subject to resale restrictions during the period set
      forth in Rule 144.  Citadel acknowledges that resales of the
      Shares must be made in accordance with Regulation S, pursuant to an
      effective registration statement, or otherwise pursuant to an exemption
      from registration and agrees not to engage in hedging transaction with
      regard to the Shares, unless in compliance with the Securities
      Act.

            

    

     

    
      	
               
      

            	
              (ix)

            	
              The
      Shares to be acquired by Citadel will be acquired for investment for
      Citadel’s own account, and not as a nominee or agent. Citadel does not
      presently have any contract, undertaking, agreement or arrangement with
      any person, directly or indirectly, to sell, transfer, distribute or grant
      participations to such person or to any third person, with respect to any
      of the Shares.

            

    

     

    
      	
               
      

            	
              (x)

            	
              Citadel
      has sufficient knowledge and experience in finance, securities,
      investments and other business matters to be able to protect its interests
      in connection with the transfer contemplated
  hereunder.

            

    

     

    
      	
               
      

            	
              (xi)

            	
              Citadel
      acknowledges that the Shares when delivered will bear a restrictive
      legend, similar to the following:

            

    

     

     

    “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE SECURITIES
ACT,  (2) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR (3) PURSUANT TO AN
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE (EXCEPT IN THE CASE OF A
TRANSFER PURSUANT TO RULE 144 OF THE SECURITIES ACT) THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH SECURITIES MAY BE
OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED IN THE MANNER
CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES
LAWS.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED BY
THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT.”

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (b)

            	
              The
      Company.  The Company represents and warrants, as of the
      date hereof and as of each Closing Date, to Citadel as
      follows:

            

    

     

    
      	
               
      

            	
              (i)

            	
              The
      Company has all requisite corporate power and legal authority to execute,
      deliver and perform his obligations under this Agreement.  The
      execution, delivery and performance of this Agreement have been duly
      authorized by all necessary action on the part of the Company, including
      approval of the Company’s Board of Directors, to the extent
      required.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              This
      Agreement has been duly executed and delivered by the Company and
      constitutes a valid and binding obligation of the Company, enforceable
      against the Company in accordance with its terms, except as such
      enforceability may be limited by bankruptcy, insolvency, fraudulent
      conveyance, reorganization, moratorium or other similar laws relating to
      or affecting creditors’ rights generally and by general principles of
      equity.

            

    

     

    
      	
               
      

            	
              (iii)

            	
              No
      regulatory approval is required to be obtained by the Company in
      connection with the execution, delivery and performance of this Agreement.
      The execution, delivery and performance of this Agreement will not (i)
      violate any provision of the constitutional documents of the Company, (ii)
      result in the violation of any law applicable to the Company, (iii)
      violate or constitute a default under or give rise to any third party
      rights under any agreement or instrument applicable to the Company or any
      of its assets, or (iv) result in the imposition of any security interest
      upon any assets of the Company, except for such violations, defaults,
      third party rights and security interest under clauses (ii), (iii) and
      (iv) that, individually and in the aggregate, neither have had nor are
      reasonably likely to have a material adverse effect on the ability of
      Company to perform his obligations under this
  Agreement.

            

    

     

    
      	
               
      

            	
              (iv)

            	
              The
      Shares have been duly authorized and, when issued in accordance with the
      terms of this Agreement, will be validly issued, fully paid and
      nonassessable, and free and clear of all
liens.

            

    

     

    
      	
               
      

            	
              (v)

            	
              The
      issuance of the Shares shall be pursuant to an exemption from registration
      afforded by Section 4(2) of the Securities Act of 1933, as amended, and/or
      Regulation S, promulgated thereunder. The Company is relying upon the
      representations and warranties of Citadel in issuing the Shares in
      reliance upon an exemption from registration under the securities
      laws.

            

    

     

    6.           Miscellaneous.

     

    
      	
              (a)

            	
              Notices
      given pursuant to any provision of this Agreement shall be addressed as
      follows: (i) if to the Company, to the attention of: Wenbing Chris Wang,
      Chief Financial Officer, 1 Shuang Qiang Road, Jinzhou,
      Dalian  People’s Republic of China 116100, Fax: (86) 10 8447 8847, with a
      copy to Loeb & Loeb
      LLP, 345 Park Avenue, New York, NY 10154, Fax: (212) 407-4990,
      Attention:  Mitchell S. Nussbaum, Esq. and (ii) if to
      Citadel, to: c/o 131 South Dearborn Street, Chicago, Illinois 60609, USA,
      Fax: (1-312) 267 7300, Attention: Mr. Adam C. Cooper, with a copy to 18/F
      Chater House, 8 Connaught Road, Central, Hong Kong, Fax: (852) 3667 5511,
      Attention: Mr. Andrew Fong, and with a copy to Simpson Thacher &
      Bartlett LLP, ICBC Tower 35th Floor, 3 Garden Road, Central, Hong Kong
      SAR, China, Fax: (852) 2869 7694, Attention: Mr. Youngjin Sohn,
      Esq.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              (b)

            	
              This
      Agreement has been and is made solely for the benefit of and shall be
      binding upon each of the parties to this Agreement, and their respective
      heirs, executors, administrators, successors and assigns, all as and to
      the extent provided in this Agreement, and no other person shall acquire
      or have any right under or by virtue of this
  Agreement.

            

    

     

    
      	
              (c)

            	
              THIS AGREEMENT SHALL BE
      GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
      YORK.

            

    

     

    
      	
              (d)

            	
              Each
      of the parties hereto agrees that any suit, action or proceeding against
      such party arising out of or based upon this Agreement or the transactions
      contemplated hereby may be instituted in any State or U.S. federal court
      in The City of New York and County of New York, and waives any objection
      which it may now or hereafter have to the laying of venue of any such
      proceeding, and irrevocably submits to the non-exclusive jurisdiction of
      such courts in any suit, action or
proceeding.

            

    

     

    
      	
              (e)

            	
              The
      parties hereto each hereby waive any right to trial by jury in any action,
      proceeding or counterclaim arising out of or relating to this
      Agreement.

            

    

     

    
      	
              (f)

            	
              No
      failure to exercise, and no course of dealing with respect to, and no
      delay in exercising, any right, power or remedy hereunder shall operate as
      a waiver thereof; nor shall any single or partial exercise of any right,
      power or remedy hereunder preclude any other or further exercise thereof
      or the exercise of any other right, power or
  remedy.

            

    

     

    
      	
              (g)

            	
              This
      Agreement may be signed in various counterparts which together shall
      constitute one and the same
instrument.

            

    

     

    
      	
              (h)

            	
              The
      headings in this Agreement are for convenience of reference only and shall
      not limit or otherwise affect the meaning of any provision of this
      Agreement.

            

    

     

    
      	
              (i)

            	
              If
      any term, provision, covenant or restriction of this Agreement is held by
      a court of competent jurisdiction to be invalid, illegal, void or
      unenforceable, the remainder of the terms, provisions, covenants and
      restrictions set forth herein shall remain in full force and effect and
      shall in no way be affected, impaired or invalidated, in each case, to the
      extent permitted by applicable law, and the parties hereto shall use their
      best efforts to find and employ an alternative means to achieve the same
      or substantially the same result as that contemplated by such term,
      provision, covenant or restriction.  It is hereby stipulated and
      declared to be the intention of the parties that they would have executed
      the remaining terms, provisions, covenants and restrictions without
      including any of such that may be hereafter declared invalid, illegal,
      void or unenforceable, to the extent permitted by applicable
      law.

            

    

     

    
      	
              (j)

            	
              This
      Agreement may be amended, modified or supplemented, and waivers or
      consents to departures from the provisions hereof may be given; provided that
      the same are in writing and signed by all of the signatories
      hereto.

            

    

     

    
      	
              (k)

            	
              Citadel
      hereby agrees as follows:

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
               
      

            	
              (i)

            	
              Citadel
      will, within three (3) business days following the execution of this
      Agreement, deliver a completed and executed Selling Shareholder
      Questionnaire to the Company.  Citadel acknowledges and
      understands that the information contained therein will be used by the
      Company in the amendment to the Registration Statement to include the
      Shares.

            

    

     

    
      	
               
      

            	
              (ii)

            	
              So
      long as the Company is not in violation of its obligations hereunder,
      Citadel shall waive its rights as a holder of the Notes to require a
      Repurchase by the Company under Sections 3.03, 3.04, 3.05 and 3.06 of the
      Indenture, to the extent
applicable;

            

    

     

    
      	
               
      

            	
              (iii)

            	
              While
      Citadel is a holder of any Notes, Citadel shall execute and shall, in its
      capacity as a holder of the Notes, direct the Trustee to execute such
      further documents and agreements as the Company reasonably requests to
      effectuate the terms of this Agreement or consummate the transactions
      contemplated hereby;

            

    

     

    
      	
               
      

            	
              (iv)

            	
              Upon
      the Company’s payment in full of the Purchase Amount (or, if applicable,
      the Default Amount) in accordance with this Agreement, Citadel shall have
      no further interest in the Notes or the Indenture, and shall execute and
      deliver all documents and instruments and notices necessary, and all
      further actions required to release any and all liens by Citadel on the
      equity interests of the Guarantors and to discharge the Company’s
      obligations under the Indenture;

            

    

     

    
      	
               
      

            	
              (v)

            	
              So
      long as the Company is not in violation of its obligations hereunder, with
      respect to the Notes to be sold in accordance with this Agreement, Citadel
      shall not, on or before the applicable Closing Date for such Notes, (x)
      sell, transfer, pledge, convey, or otherwise dispose of its interest in
      such Notes (in whole or in part), (y) exercise any right to convert such
      Notes (or any portion thereof) to common stock of the Company as provided
      in the Indenture, or (z) exercise, or encourage, cause, direct, or
      instruct the Trustee to exercise, any rights or remedies that the holders
      of such Notes have against the Company under the
  Indenture;

            

    

     

    
      	
               
      

            	
              (vi)

            	
              Upon
      the Company’s payment in full of the Purchase Amount (or, if applicable,
      the Default Amount) in accordance with this Agreement, Citadel will
      execute a document to terminate the Amended and Restated Investor Rights
      Agreement made and entered into as of June 4, 2008, by and between
      Citadel, the Company, the Company, and other affiliates of the Company as
      named therein (the “Rights
Agreement”);

            

    

     

    
      	
               
      

            	
              (vii)

            	
              So
      long as the Company is not in violation of its obligations hereunder, and
      subject to payment in full of the Purchase Amount (or, if applicable, the
      Default Amount), Citadel, as the holder of the Notes, from the date hereof
      through the earlier of the Second Closing Date, by executing this
      Agreement,  (A) suspends the obligations of the Company’s
      compliance with the Company’s covenants in Article 4 of the Indenture, (B)
      waives any Defaults or Events of Default that may currently or may then
      exist under the Indenture and (C) waives its rights under Section 3 of
      Rights Agreement; provided, however, that simultaneously with the
      execution of this Agreement, Citadel shall deliver an unconditional waiver
      of its rights under Section 3 of the Rights Agreement, which waiver shall
      be effective until October 9, 2009;
and

            

    

     

    
      	
               
      

            	
              (viii)

            	
              In
      the event the Company does not comply with any of its obligations under
      this Agreement, Citadel’s agreements set forth in clauses (i) through (vi)
      above in this Section (k) shall be null and void ab initio and of no
      force and effect, and any waiver provided by Citadel shall be rescinded,
      provided, however that if the Company is not in compliance due to the
      failure to timely pay the Purchase Amount in full as of the Second Closing
      Date, in the event the Default Amount is paid as provided for in Section
      3(c) this provision shall be null and void and have no force and
      effect.

            

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    IN
WITNESS WHEREOF, the Company and Citadel have executed this Agreement as of the
date set forth above.

     

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	 
      	
                                FUSHI
      COPPERWELD, INC.

                              
	 	 	 
	 	 	 
	 
      	
                                By:

                              	 
      
	 
      	 
      	
                                Name:
      Wenbing Chris Wang

                              
	 
      	 
      	
                                Title:  Chief
      Financial Officer and President

                              
	 
      	 
      	 
      
	 	 
	 	 
	 
      	
                                CITADEL
      EQUITY FUND LTD.

                              
	 	 
	 
      	
                                By:  Citadel
      Advisors LLC, its Portfolio Manager

                              
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
                                By:

                              	 
      
	 
      	 
      	
                                Name:

                              
	 
      	 
      	
                                Title:  Authorized
      SignatoryGalen
Capital Corporation

    8300
Greensboro Drive, Suite 225

    McLean,
VA 22102

    

    STRICTLY
PRIVATE AND CONFIDENTIAL

    

    June 11,
2009

    

    UKARMA
Corporation

    Mr. Bill
Glaser

    Chief
Executive Officer

    499 N.
Canon Drive, Suite 308

    Beverly
Hills, CA 90210

    

    Re: Business Combination between UKARMA
Corporation and Galen Capital
Corporation

    

    Dear
Bill:

    

    The
purpose of this letter of intent ("LOI") is to set forth the terms and
conditions pursuant to which Galen Capital Corporation ("'Galen") will effect a
"going public” transaction with UKARMA Corporation (“UKARMA"). This LOI is
intended to serve as a memorandum of the parties' current discussions and to set
forth the general guidelines pursuant to which they will fulfill their due
diligence obligations and discharge their fiduciary duties by
negotiating,  in good faith, the terms and conditions of a definitive
agreement (“Transaction Agreement”). Both parties acknowledge that all of the
provisions of this LOI are binding. No contract or agreement providing for a
Transaction shall be deemed to exist unless and until a Transaction Agreement
has been negotiated and executed between the parties hereto.

    

    1.           The Transaction.
UKARMA or a wholly owned subsidiary of UKARMA will acquire all of the
outstanding shares of stock of Galen in exchange for the issuance of 95.00% of
the outstanding shares of common stock of UKARMA and $275,000 cash paid at
closing (the “Transaction"); provided however, that $50,000 of the $275,000 cash
fee shall be wire transferred to UKARMA as a deposit within 5 business days
after execution of this LOI.  The deposit shall be refunded to Galen
if UKARMA cannot or will not close the Transaction in accordance with this LOI
despite Galen’s willingness to do so.  UKARMA will, as of the date
above of and at the Closing (defined below), be an SEC reporting company with
its shares publicly-traded. At Closing, UKARMA will have no material assets or
liabilities, contingent or otherwise, will be current on all tax obligations,
and will have had no material changes to its business or financial condition.
Upon the consummation of the Transaction and through the issuance of Common
Stock, Galen’s current stockholders will, collectively, beneficially own and
control 95.00% of the total issued and outstanding common stock of UKARMA, with
UKARMA’s current stockholders retaining an aggregate ownership interest equal to
5% of the common stock outstanding after the close of the
Transaction.  After the Transaction, there will be 35.0-40.0 million
shares outstanding with current UKARMA stockholders holding up to 1.75-2.0
million and with Galen stockholders holding up to 33.25-38.0
million.

    

    2.           Form of Transaction.
Management of Galen and UKARMA will cooperate with each other and their
respective counsels in structuring the transaction which may include a share
exchange or merger. UKARMA will use commercially reasonable efforts to structure
a transaction that satisfies Galen’s objectives.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    3.           Formal Agreement. As
soon as shall be reasonably practicable after acceptance of this LOI, the
parties will enter into a definitive Transaction Agreement. Consistent with and
subject to fiduciary duties imposed on their boards of directors. Galen and
UKARMA shall use commercially reasonable efforts to cause the Transaction
Agreement to be approved and ratified by their respective boards of
directors.

     

    4.           The Closing;
Reincorporation. The parties contemplate that a Closing will take place
as soon as practical following the execution and delivery of the Transaction
Agreement. Immediately after the Transaction, the parties agree that UKARMA will
change its corporate name to "Galen Capital Corporation”, Galen’s bylaws and
articles of Incorporation will be the surviving governing
documents.

     

    5.           Expenses. It is
understood that each party shall pay its respective legal and accounting fees
and other expenses incurred in connection with this LOI, due diligence
activities under paragraph 3 above and in connection with the Transaction;
provided that Galen shall pay $50,000 of UKARMA’s legal
expenses.  Galen shall wire $25,000 as a retainer directly to
Richardson & Patel LLP, UKARMA’s counsel, within 5 days of this Agreement
and shall pay Richardson & Patel LLP the remaining $25,000 at the closing of
the Transaction Agreement. If either party decides to terminate or not proceed
forward with a final transaction, then the party who terminates will pay to the
other party a break up fee of $50,000.00 US.  UKARMA may pay this
break up fee in shares of its common stock valued at $0.03 per share. The break
up fee is not enforced if a material matter should arise prior to
closing.

     

    6.           Outline Only; No
Contract. The parties do not intend this LOI to be a binding contract or
agreement without giving
effect to the conflicts of laws principles thereof. All disputes, controversies
or claims ("disputes") arising out of or relating to this LOI shall in the first
instance be the subject of a meeting between a representative of each party who
has decision-making authority with respect to the mailer in question. Should the
meeting either not take place or not result in a resolution of the dispute
within 20 business days following notice of the dispute to the other party then
the dispute shall be resolved in a binding arbitration proceeding to be held in
Los Angeles, California in accordance with the international rules of the
American Arbitration Association. The parties agree that a panel of three
arbitrators shall be required. Any award of the arbitrators shall be deemed
confidential information for a minimum period of five years. The arbitrators may
award attorneys' fees and other arbitration related expense, as well as pre- and
post-judgment interest on any award of damages, to the prevailing party,
discretion.

    

    7.           Access to Information and
Confidentiality. In connection with the negotiation and preparation of
the Transaction Agreement, UKARMA will make available to Galen, and their
respective  representatives, all books, records, documents and other
information that may be reasonably be requested. Prior to the Closing, each
party shall keep confidential any non-public information obtained from the other
party hereto. In the event of termination of negotiations, each party will
return or cause to be returned to the other all documents and other material
obtained from the other in connection with the Transaction contemplated hereby
and will use all reasonable efforts to keep confidential any such information,
unless such information is ascertainable from public or published information or
already known by the receiving party.

     

    8.           Exclusivity.  Galen
shall have sixty (60) days from the date of this LOI to negotiate and execute
the Transaction Agreement. During the 60-day period,  will deal
exclusively with Galen in connection with the Transaction discussed herein, and
will not enter into discussions, agreements or undertakings with any other party
with regard to the sale or merger, or other disposition of the stock or assets,
of UKARMA. If the negotiations are terminated by either party, UKARMA will be
free to deal with others.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    9.           Confidentiality;
Non-Disclosure.  Each party to this LOI agrees to maintain the
confidentiality of all of the information received from the other party and use
such information only for the purposes contemplated by this LOI; provided,
however, that the parties shall be permitted to disclose the materials and
information they each receive from the other to their respective advisors,
representatives and agents in connection with performing duties related to the
transaction contemplated in this letter.  In the event of a
termination of this LOI for any reason, each party shall return to the other all
documents (and any copies thereof) and information provided to it by the other
party.  The obligation of confidentiality under this paragraph shall
survive the termination of this LOI.

     

    If the
foregoing meets with the approval of UKARMA please execute this letter in the
spaces provided below and return the same by facsimile transmission to me at
your earliest convenience.

    

    We are
appreciative of the opportunity to work with you and UKARMA and look forward to
a prosperous relationship.

    

    
      
        	
                Very
      truly yours,

              
	 
      
	
                Galen
      Capital Corporation

              
	 
      	 
      
	
                By:

              	
                /s/ William P.
Danielczyk

              
	 
      	
                    
      William P. Danielczyk

              
	 
      	
                     Chairman

              

      

    

    

    ACCEPTED
AND AGREED TO:

    

    UKARMA
Corporation

    

    
      
        	
                By:

              	
                 /s/ Bill Glaser

              
	 
      	 
      
	
                Name:

              	
                Bill Glaser

              
	 
      	 
      
	
                Its:

              	
                CEO

              
	 
      	 
      
	
                Date:

              	
                June 11,
2009

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