EXHIBIT 10.1
AGREEMENT AND PLAN OF SHARE EXCHANGE
by and between
China Energy Savings Technology, Inc.,
a Nevada corporation,
and
Sky Beyond Investments Limited,
a British Virgin Islands corporation
February 1, 2005
AGREEMENT AND PLAN OF SHARE EXCHANGE
This Agreement and Plan of Share Exchange, dated as of February 1, 2005
(this "Agreement"), is made and entered into by and among China Energy Savings
Technology, Inc., a Nevada corporation ("CESV") and Sky Beyond Investments
Limited, a British Virgin Islands corporation ("Sky Beyond").
WHEREAS, the respective Boards of Directors of CESV and Sky Beyond have
adopted resolutions approving and adopting the proposed share exchange (the
"Exchange") upon the terms and conditions hereinafter set forth in this
Agreement;
WHEREAS, Sky Beyond owns 35 shares or 35% of all of the issued and
outstanding capital stock of Starway Management Limited, a British Virgin
Islands corporation ("Starway");
WHEREAS, the Exchange shall be 35 shares or 35% of all the issued and
outstanding capital stock of Starway (the "Starway Shares") for 7,807,569 shares
of the common stock of CESV;
WHEREAS, it is intended that the terms and conditions of this Agreement
comply in all respects with Section 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended (the "Code") and the regulations corresponding thereto, so that
the Exchange shall qualify as a tax free reorganization under the Code;
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE 1
THE EXCHANGE
1.1 THE EXCHANGE. Upon the terms and subject to the conditions hereof, at
the Closing (as hereinafter defined), Sky Beyond will sell, convey, assign,
transfer and deliver to CESV one or more stock certificates representing 35
shares or 35% of the issued and outstanding capital stock of Starway, and CESV
will issue to Sky Beyond or its designees, in exchange for such Starway Shares,
one or more stock certificates representing 7,807,569 shares of CESV common
stock (the "CESV Shares").
1.2 CLOSING. The closing of the Exchange (the "Closing") shall take place
on or before February 1, 2005, or on such other date as may be mutually agreed
upon by the parties. Such date is referred to herein as the "Closing Date."
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF CESV
CESV hereby represents and warrants to Sky Beyond as follows:
2.1 ORGANIZATION. CESV has been duly incorporated, is validly existing as
a corporation and is in good standing under the laws of its jurisdiction of
incorporation, and has the requisite power to carry on its business as now
conducted.
2.2 CERTAIN CORPORATE MATTERS. CESV is duly qualified to do business and
is in good standing in each jurisdiction in which the ownership of its
properties, the employment of its personnel or the conduct of its business
requires it to be so qualified, except where the failure to be so qualified
would not have a material adverse effect on CESV's financial condition, results
of operations or business. CESV has full corporate power and authority and all
authorizations, licenses and permits necessary to carry on the business in which
it is engaged and to own and use the properties owned and used by it, except
where such failure would not have a material adverse effect on CESV business.
2.3 AUTHORITY RELATIVE TO THIS AGREEMENT. CESV has the requisite power and
authority to enter into this Agreement and to carry out its obligations
hereunder. The execution, delivery and performance of this Agreement by CESV and
the consummation by CESV of the transactions contemplated hereby have been duly
authorized by the Board of Directors of CESV and no other actions on the part of
CESV are necessary to authorize this Agreement or the transactions contemplated
hereby. This Agreement has been duly and validly executed and delivered by CESV
and constitutes a valid and binding agreement of CESV, enforceable against CESV
in accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
2.4 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for requirements of
applicable law, no filing with, and no permit, authorization, consent or
approval of, any third party, public body or authority is necessary for the
consummation by CESV of the transactions contemplated by this Agreement. Neither
the execution and delivery of this Agreement by CESV nor the consummation by
CESV of the transactions contemplated hereby, nor compliance by CESV with any of
the provisions hereof, will (a) conflict with or result in any breach of any
provisions of the organizational documents of CESV, (b) result in a violation or
breach of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, agreement or other instrument or obligation to
which CESV is a party or by which it or its properties or assets may be bound or
(c) violate any order, writ, injunction, decree, statute, rule or regulation
applicable to CESV, or any of its properties or assets, except in the case of
clauses (b) and (c) for violations, breaches or defaults which are not in the
aggregate material to CESV taken as a whole.
2.5 DISCLOSURE. The representations and warranties and statements of fact
made by CESV in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF SKY BEYOND
Sky Beyond hereby represents and warrants to CESV as follows:
3.1 ORGANIZATION. Sky Beyond has been duly incorporated, is validly
existing as a corporation and is in good standing under the laws of its
jurisdiction of incorporation, and has the requisite power to carry on its
business as now conducted.
3.2 OWNERSHIP OF THE STARWAY SHARES. Sky Beyond owns, beneficially and of
record, good and marketable title to the Starway Shares, free and clear of all
security interests, liens, adverse claims, encumbrances, equities, proxies,
options or stockholders' agreements. At the Closing, Sky Beyond will convey to
CESV good and marketable title to the Starway Shares, free and clear of any
security interests, liens, adverse claims, encumbrances, equities, proxies,
options, stockholders' agreements or restrictions.
3.3 CERTAIN CORPORATE MATTERS. Sky Beyond is duly qualified to do business
and is in good standing in each jurisdiction in which the ownership of its
properties, the employment of its personnel or the conduct of its business
requires it to be so qualified, except where the failure to be so qualified
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would not have a material adverse effect on Sky Beyond's financial condition,
results of operations or business. Sky Beyond has full corporate power and
authority and all authorizations, licenses and permits necessary to carry on the
business in which it is engaged and to own and use the properties owned and used
by it, except where such failure would not have a material adverse effect on Sky
Beyond's business.
3.4 AUTHORITY RELATIVE TO THIS AGREEMENT. Sky Beyond has the requisite
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by Sky Beyond and the consummation by Sky Beyond of the transactions
contemplated hereby have been duly authorized by the Board of Directors of Sky
Beyond and no other actions on the part of Sky Beyond are necessary to authorize
this Agreement or the transactions contemplated hereby. This Agreement has been
duly and validly executed and delivered by Sky Beyond and constitutes a valid
and binding agreement of Sky Beyond, enforceable against Sky Beyond in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
3.5 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for requirements of
applicable law, no filing with, and no permit, authorization, consent or
approval of, any third party, public body or authority is necessary for the
consummation by Sky Beyond of the transactions contemplated by this Agreement.
Neither the execution and delivery of this Agreement by Sky Beyond nor the
consummation by Sky Beyond of the transactions contemplated hereby, nor
compliance by Sky Beyond with any of the provisions hereof, will (a) conflict
with or result in any breach of any provisions of the organizational documents
of Sky Beyond, (b) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Sky Beyond is a
party or by which it or its properties or assets may be bound or (c) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to Sky
Beyond, or any of its properties or assets, except in the case of clauses (b)
and (c) for violations, breaches or defaults which are not in the aggregate
material to Sky Beyond taken as a whole.
3.6 RESTRICTED SECURITIES. Sky Beyond acknowledge that the CESV Shares
will not be registered pursuant to the Securities Act of 1933, as amended (the
"Securities Act") or any applicable state securities laws, that the CESV Shares
will be characterized as "restricted securities" under federal securities laws,
and that under such laws and applicable regulations the CESV Shares cannot be
sold or otherwise disposed of without registration under the Securities Act or
an exemption therefrom. In this regard, Sky Beyond is familiar with Rule 144
promulgated under the Securities Act, as currently in effect, and understands
the resale limitations imposed thereby and by the Securities Act.
3.7 ACCREDITED INVESTOR. Sky Beyond is an "Accredited Investor" as that
term is defined in rule 501 of Regulation D promulgated under the Securities
Act. Sky Beyond is able to bear the economic risk of acquiring the CESV Shares
pursuant to the terms of this Agreement, including a complete loss of Sky
Beyond's investment in the CESV Shares. Sky Beyond (together with his, her
and/or its advisors) has such knowledge and experience in business, financial
and tax matters including, in particular, investing in private placements of
securities in entities similar to CESV, so as to enable them to utilize the
information made available to them to: (i) evaluate the merits and risks of an
investment in CESV and to make an informed investment decision with respect
thereto; and (ii) to reasonably be assumed to have the capacity to protect Sky
Beyond's own interests in connection with the transaction contemplated by this
Agreement. Sky Beyond represents that it has a pre-existing personal or business
relationship with CESV or any of its managers, officers or controlling persons.
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The term "pre-existing personal or business relationship" includes any
relationship consisting of personal or business contacts of a nature and
duration which would enable a reasonably prudent purchaser to be aware of the
character, business acumen and general business and financial circumstances of
the person with whom the relationship exists. With the exception of direct
communication to CESV by an officer, director, agent or employee of CESV, Sky
Beyond did not become aware of this offering, through or as the result of any
public or promotional seminar or meeting to which Sky Beyond was invited by, or
any solicitation of a subscription by, a person not previously known to Sky
Beyond in connection with investments in securities generally. Sky Beyond is
acquiring the CESV Shares as principal and not by any other person. Sky Beyond
is acquiring the CESV Shares for investment purposes only for an indefinite
period, and not with a view to the sale or distribution of any part or all
thereof, by public or private sale or other disposition. No person other than
Sky Beyond will have any interest, beneficial or otherwise, in the CESV Shares,
and Sky Beyond is not obligated to transfer the CESV Shares to any other person
nor does Sky Beyond have any agreement or understanding to do so. During the
course of the transaction contemplated by this Agreement, and before acquiring
the CESV Shares, Sky Beyond and/or its advisors had the opportunity, to the
extent they determined to be necessary or relevant in order to verify the
accuracy of the information they received about CESV, to ask questions and
receive answers concerning the terms and conditions of this Agreement, an
investment in the CESV Shares, and the business of CESV and its finances, to
review all documents, books and records of CESV and to the extent Sky Beyond
and/or its advisors availed themselves of this opportunity, received
satisfactory information and answers.
3.6 LEGEND. Sky Beyond acknowledges that the certificate(s) representing
the CESV Shares shall each conspicuously set forth on the face or back thereof a
legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION OR AN OPINION
OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED.
ARTICLE 4
CONDITIONS TO CLOSING
4.1 CONDITIONS TO OBLIGATIONS OF CESV. The obligations of CESV under this
Agreement shall be subject to each of the following conditions:
(a) CLOSING DELIVERIES. At the Closing, Sky Beyond shall have
delivered or caused to be delivered to CESV the following:
(i) resolutions duly adopted by the Board of Directors of Sky
Beyond authorizing and approving the Exchange and the execution, delivery and
performance of this Agreement;
(ii) certificate representing the Starway Shares bearing the name
of the CESV or as otherwise instructed by the counsel of CESV;
(iii) this Agreement duly executed by Sky Beyond;
(iv) such other documents as CESV may reasonably request in
connection with the transactions contemplated hereby.
(b) REPRESENTATIONS AND WARRANTIES TO BE TRUE. The representations
and warranties of Sky Beyond herein contained shall be true in all material
respects at the Closing with the same effect as though made at such time. Sky
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Beyond shall have performed in all material respects all obligations and
complied in all material respects with all covenants and conditions required by
this Agreement to be performed or complied with by them at or prior to the
Closing.
4.2 CONDITIONS TO OBLIGATIONS OF SKY BEYOND. The obligations of Sky Beyond
under this Agreement shall be subject to each of the following conditions:
(a) CLOSING DELIVERIES. On the Closing Date, CESV shall have
delivered to Sky Beyond the following:
(i) resolutions duly adopted by the Board of Directors of CESV
authorizing and approving the Exchange and the execution, delivery and
performance of this Agreement
(ii) one or more certificates representing the CESV Shares to be
delivered pursuant to this Agreement;
(iii) this Agreement duly executed by CESV; and
(iv) such other documents as Sky Beyond may reasonably request in
connection with the transactions contemplated hereby.
(b) REPRESENTATIONS AND WARRANTIES TO BE TRUE. The representations
and warranties of CESV herein contained shall be true in all material respects
at the Closing with the same effect as though made at such time. CESV shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and conditions required by this Agreement to be
performed or complied with by them at or prior to the Closing.
ARTICLE 5
GENERAL PROVISIONS
5.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given (i) on the same day if
delivered personally, (ii) upon receipt if sent by overnight courier or (iii)
upon receipt if mailed by registered or certified mail (postage prepaid and
return receipt requested) to the party to whom the same is so delivered, sent or
mailed at addresses set forth on the signature page hereof (or at such other
address for a party as shall be specified by like notice).
5.2 INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
5.3 SEVERABILITY. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify this Agreement to preserve each party's anticipated
benefits under this Agreement.
5.4 MISCELLANEOUS. This Agreement (together with all other documents and
instruments referred to herein): (a) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties with respect to the subject matter hereof; (b) except as
expressly set forth herein, is not intended to confer upon any other person any
rights or remedies hereunder and (c) shall not be assigned by operation of law
or otherwise, except as may be mutually agreed upon by the parties hereto.
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5.5 SEPARATE COUNSEL. Each party hereby expressly acknowledges that it has
been advised to seek its own separate legal counsel for advice with respect to
this Agreement, and that no counsel to any party hereto has acted or is acting
as counsel to any other party hereto in connection with this Agreement.
5.6 GOVERNING LAW; VENUE. This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Nevada,
U.S.A. Any and all actions brought under this Agreement shall be brought in the
state and/or federal courts of the United States sitting in the City of Los
Angeles, California and each party hereby waives any right to object to the
convenience of such venue.
5.7 COUNTERPARTS AND FACSIMILE SIGNATURES. This Agreement may be executed
in two or more counterparts, which together shall constitute a single agreement.
This Agreement and any documents relating to it may be executed and transmitted
to any other party by facsimile, which facsimile shall be deemed to be, and
utilized in all respects as, an original, wet-inked document.
5.8 AMENDMENT. This Agreement may be amended, modified or supplemented
only by an instrument in writing executed by all parties hereto.
5.9 PARTIES IN INTEREST: NO THIRD PARTY BENEFICIARIES. Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective heirs, legal representatives,
successors and assigns of the parties hereto. This Agreement shall not be deemed
to confer upon any person not a party hereto any rights or remedies hereunder.
5.10 WAIVER. No waiver by any party of any default or breach by another
party of any representation, warranty, covenant or condition contained in this
Agreement shall be deemed to be a waiver of any subsequent default or breach by
such party of the same or any other representation, warranty, covenant or
condition. No act, delay, omission or course of dealing on the part of any party
in exercising any right, power or remedy under this Agreement or at law or in
equity shall operate as a waiver thereof or otherwise prejudice any of such
party's rights, powers and remedies. All remedies, whether at law or in equity,
shall be cumulative and the election of any one or more shall not constitute a
waiver of the right to pursue other available remedies.
5.11 EXPENSES. At or prior to the Closing, the parties hereto shall pay all
of their own expenses relating to the transactions contemplated by this
Agreement, including, without limitation, the fees and expenses of their
respective counsel and financial advisers.
[SIGNATURES FOLLOW]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
CHINA ENERGY SAVINGS TECHNOLOGY, INC., SKY BEYOND HOLDINGS INC.,
a Nevada corporation a British Virgin Island corporation
By: /s/ Xxx Xx By: /s/ Xx Xxxx Xing
--------------------------------------- -------------------------------------------
Name: Xxx Xx Name: Xx Xxxx Xing
Title: Chief Executive Officer Title: Sole Director
Address: Xxxxx 0000X, 00/X., Xxxxxxx Xxxxx, Xxxxxxx: 22/F., Xxxxxxxx Commercial Building
18 Harbour Road, 00 Xxxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx,
Xxxx Xxxx Xxxx Xxxx
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