Form 8-K Exhibit 10.1
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SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT (this "Agreement") is made and entered into
this 22nd Day of August 2007, by and among, those individual purchasers set
forth on Schedule A (together, the "Purchasers") and the Seller, Xxxxxx Xx, one
of the major shareholders of China Recycling Energy Corporation.
RECITALS:
WHEREAS, the Seller Xxxxxx Xx is a major shareholder China Recycling Energy
Corporation, a Nevada Corporation (the "XXXX"), and
WHEREAS, the Purchasers are, collectively, the owners of 1,870,230 shares
(the "Yingfeng Shares") of ownership interest of Xi'an Yingfeng Science and
Technology Co, Ltd., a Chinese Corporation (the "Yingfeng"), listed adjacent to
each of the Purchasers' names on Schedule A; and
WHEREAS, the Seller has determined that it is in his best interest to
exchange, subject to the terms and conditions set forth herein, 623,410 shares
of common stocks of XXXX ("XXXX shares") he owns with the Purchasers for all the
Yingfeng Shares owned by Purchasers; and
WHEREAS, the Purchasers have determined that it is in their best interests
that they exchange, subject to the terms and conditions set forth herein, all
the Yingfeng Shares owned by them with the Seller for 623,410 XXXX shares owned
by the Seller; and
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the agreements set
forth herein, the Seller and the Purchasers agree as follows:
ARTICLE I
SHARE EXCHANGE
Section 1.01. The Share Excahange. Subject to the terms and conditions of
this Agreement, the Seller agrees to assign, transfer and deliver to the
Purchasers, at the Closing, 623,410 XXXX shares owned by him. As exchange,
Purchasers agree to assign, transfer and deliver to the Seller, at the Closing,
all the Yingfeng shares owned by them. Under the terms of this Agreement, each
individual Purchaser receives ONE XXXX Share owned by the Seller for THREE
Yingfeng Shares owned by Purchasers prior to the transaction, at the Closing,
with the restriction that all Purchasers shall not trade or resell the XXXX
shares they acquired within a period of one year following the closing date of
this transaction, complying with the restrictions on re-sale of the securities
of Rules 903 (a) and (b)(3) of Regulation S.
Section 1.02. Execution and Closing. The Share Exchange shall take place at
such other time and place as the Seller and the Purchasers mutually agree upon,
orally or in writing (which time and place is designated as the "Closing"). The
Seller shall deliver to the Purchasers either (i) a certificate or certificates
representing the XXXX Shares or (ii) instruments of assignment or transfer that
shall, in the reasonable opinion of the Purchasers be necessary to transfer the
XXXX Shares to each of the Purchasers. The Purchasers shall also deliver to the
Seller either (i) a certificate or certificates representing the Yingfeng Shares
or (ii) instruments of assignment or transfer that shall, in the reasonable
opinion of the Seller be necessary to transfer the Yingfeng Shares to the
Seller.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.01. Representations and Warranties of the Purchasers. Each of the
Purchasers, on a joint and several basis, represents and warrants to the Seller
as follows:
(a) The Purchasers have all power and authority to execute, deliver
and perform this Agreement.
(b) This Agreement is the valid and binding obligation of each of
the Purchasers, enforceable against each of the Purchasers in accordance with
its terms.
(c) The XXXX Shares will be acquired for investment for the account
of each of the Purchasers, and not as a nominee or agent, and not with a view to
the distribution or public offering thereof. In connection therewith, each of
the Purchasers confirms that he or she is neither a U.S Person, as such term is
defined in Rule 902(k) of Regulation S, nor located within the United States,
and that the transaction will be between non-U.S. Persons, and take place
outside of the United States.
(d) None of the Purchasers have been contacted concerning the
acquired XXXX Shares or the matters set forth in this Agreement by means of any
advertisement or other general solicitation.
(e) Each of the Purchasers understands that (i) the acquired XXXX
Shares have not been registered under either the Securities Act of 1933, as
amended (the "Securities Act") or the securities laws of any state by reason of
specific exemptions therefrom and that such securities may be resold in the
United States without registration under the Securities Act only in certain
limited circumstances.
(f) The Purchasers have access to information relating to the XXXX
as the Purchasers deem necessary to make an informed investment decision in
connection with the acquired CHDW Shares, and except as provided in Section 2.02
below, the Seller is making no representations and warranties concerning the
acquired XXXX Shares or the business of the XXXX.
(g) Each of the Purchasers understands that Regulation S promulgated
under the Securities Act, is available only for offers and sales of securities
outside the United States, and will comply with Regulation S, attached hereto as
Exhibit A, specifically complying with the restrictions on re-sale of the
securities of Rules 903 (a) and (b)(3) of Regulation S.
(h) Legends. The Purchasers acknowledge that the XXXX Shares they
acquired will bear the following restrictive legend:
THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
HOLDER HEREOF, BY PURCHASING THE SECURITIES,
ACKNOWLEDGES THAT SUCH SECURITIES MAY BE OFFERED, SOLD
OR OTHERWISE TRANSFERRED ONLY: (A) TO THE COMPANY, (B)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT
AND IN COMPLIANCE WITH APPLICABLE LOCAL OR STATE LAWS
AND REGULATIONS, (C) INSIDE THE UNITED STATES PURSUANT
TO (I) RULE 144A UNDER THE SECURITIES ACT TO A PERSON
WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER THAT IS PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF ONE OR MORE QUALIFIED
INSTITUTIONAL BUYERS TO WHOM WRITTEN NOTICE IS GIVEN
THAT THE OFFER, SALE OR TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A OR (II) THE EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER, IF AVAILABLE, AND ANY APPLICABLE STATE
SECURITIES LAWS OR (D) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE UNITED STATES FEDERAL OR STATE SECURITIES
LAWS, AFTER PROVIDING AN OPINION OF COUNSEL OF
RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE
COMPANY TO THAT EFFECT.
(i) Each of the Purchasers acknowledge that it is aware of its
respective obligations under the Securities Exchange Act of 1934 (the "1934
Act"), including, but not limited to those filing obligations that are triggered
as a result of the consummation of the sale of the Sale Shares pursuant to
Sections 13 and 16 of the 1934 Act, together with filings required to be made by
the Company, under the control of the Purchasers, after the consummation of the
sale of the Sale Shares.
Section 2.02. Representations and Warranties of the Seller. The Seller
represents and warrants to the Purchasers as
follows:
(a) The Seller has all power and authority to execute, deliver and
perform this Agreement.
(b) This Agreement is the valid and binding obligation of the
Seller, enforceable against the Sellers in accordance with its terms.
(c) The Seller is the record and beneficial owners of the XXXX
Shares acquired by Purchasers and the XXXX Shares exchanged pursuant to this
agreement have not been assigned, pledged, sold, transferred or otherwise
conveyed.
ARTICLE III
MISCELLANEOUS
Section 3.01. Governing Law; Successors and Assigns. This Agreement shall
be governed and construed in accordance with the law of the State of Nevada and
applicable federal law and shall be binding upon the heirs, personal
representatives, executors, administrators, successors and assigns of the
parties
Section 3.02. Entire Agreement. This Agreement constitutes the entire
agreement of the parties with respect to the subject matter hereof and
supersedes and replaces any prior agreement or understanding between the
Purchasers and the Seller with respect to the transfer of the Sale Shares
between the Seller and the Purchasers.
Section 3.03. Headings. The headings of the Sections of this Agreement are
for convenience and shall not by themselves determine the interpretation of this
Agreement.
Section 3.04. Counterparts. This Agreement may be executed in any number of
counterpart copies, all of which copies shall constitute one and the same
instrument.
Section 3.05. Independent Counsel. The Purchasers and the Seller each
acknowledge that this Agreement has been prepared on behalf of the Seller by
Xxxxxxx & Yam, LLP, counsel to the Seller and that Xxxxxxx & Yam, LLP is not
representing, and is not acting on behalf of, the Purchasers in connection with
this Agreement. The Purchasers have been provided with an opportunity to consult
with their own counsel and their own business, securities and tax advisors with
respect to this Agreement.
Section 3.06. Purchaser Representative. The Purchasers appoints Xx. Xxxxx
Xxxx as their Representative to sign and execute this Share Exchange Agreement
and each Purchaser understands and acknowledges that this appointed Purchaser
Representative
(1) Is not an affiliate, director, officer or other employee of the
issuer, or beneficial owner of 10 percent or more of any class of the
equity securities or 10 percent or more of the equity interest in the
issuer; and
(2) Has such knowledge and experience in financial and business
matters that he is capable of evaluating, alone, or together with
other purchaser representatives of the purchaser, or together with the
purchaser, the merits and risks of the prospective investment;
(3) Is acknowledged by the purchaser in writing, during the course of
the transaction, to be their purchaser representative in connection
with evaluating the merits and risks of the prospective investment;
and
(4) Discloses to the purchaser in writing a reasonable time prior to
the sale of securities to that purchaser any material relationship
between himself or their affiliates and the issuer or its affiliates
that then exists, that is mutually understood to be contemplated, or
that has existed at any time during the previous two years, and any
compensation received or to be received as a result of such
relationship.
THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOLLOWS
IN WITNESS WHEREOF, the parties hereto have signed this Share Exchange
Agreement as of the date first above written.
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Signature Page for Seller
SELLER
By
/s/Xxxxxx Xx
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Xxxxxx Xx
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Signature Page for Purchaser Representative
PURCHASER REPRESENTATIVE
By
/s/Xxxxx Xxxx
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Xxxxx Xxxx
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Signature Page for Purchasers
PURCHASERS
By
X ___________________________
SCHEDULE A
