FIRST AMENDMENT TO SHARE EXCHANGE AGREEMENT
FIRST
AMENDMENT TO SHARE EXCHANGE AGREEMENT
FIRST
AMENDMENT TO SHARE EXCHANGE AGREEMENT dated as of April 15, 2008 (this
"Amendment"),
by
and among China Energy Recovery, Inc., a Delaware corporation (“Pubco”),
Poise
Profit International, Ltd., a company incorporated pursuant to the laws of
the
British Virgin Islands ("Priveco"),
and
the undersigned shareholders of Priveco (the "Selling
Shareholders",
and
together with Pubco and Priveco, the "Parties").
RECITALS
WHEREAS,
the Parties entered into a Share Exchange Agreement dated as of January 24,
2008
(the “Agreement”);
WHEREAS,
the Parties desire to clarify the fact that all Pubco share amounts set forth
in
the Agreement reflect the one-for-nine reverse stock split which became
effective on February 5, 2008;
WHEREAS,
Pubco and a wholly-owned subsidiary of Priveco, Shanghai Hai Lu Kun Lun Hi-Tech
Engineering Co., Ltd. ("Shanghai
HAIE"),
will
enter into a Loan Conversion Agreement with RMK Emerging Markets, LLC
("RMK"),
pursuant to which RMK will convert the principal and interest due on a $725,000
loan (the "Loan")
made
by RMK to Shanghai HAIE into shares of Pubco Series A preferred stock at a
price
of $1.08 per share and warrants to purchase shares of Pubco common stock at
an
exercise price of $1.29 (the "Loan
Conversion Agreement");
WHEREAS,
the Parties agree that the principal and interest of the Loan in the aggregate
amount of $1,268,750 which is convertible into Series A preferred stock and
warrants to purchase common stock shall be applied towards the minimum capital
raise of $8,500,000 in the Financing;
WHEREAS,
all capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Agreement.
NOW,
THEREFORE, in consideration of the premises and the mutual covenants herein
contained, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, for themselves, their successors and permitted assigns, agree
as
follows:
AGREEMENT
1.
Incorporation
of Recitals.
The
Recitals set forth above are incorporated herein by this reference and shall
constitute a part of this Amendment.
2. Pubco
Share Amounts On Post-Split Basis.
The
Parties hereby agree that all Pubco share amounts set forth in the Agreement
reflect the one-for-nine reverse stock split of Pubco common stock which became
effective on February 5, 2008.
3. Application
of the Loan Towards the Minimum Raise.
The
Parties hereby agree that pursuant to the terms of the Loan Conversion
Agreement, the aggregate principal and interest due on the Loan is $1,268,750,
which amount shall be applied towards the minimum capital raise of $8,500,000
in
the Financing. The Parties further agree that this paragraph of this Amendment
shall apply to all references to Financing in the Agreement, including, but
not
limited to, the closing conditions set forth Sections 5.1(f) and 5.2(f).
4. Effect
of Amendment.
Except
as expressly amended hereby, the Agreement shall continue in full force and
effect. Any references to the "Agreement" or to the words hereof, hereunder
or
words of similar effect in the Agreement shall mean the Agreement as amended
hereby. In the event of any conflict between the Agreement and this Amendment,
the terms and conditions of this Amendment shall control.
5. Successors
and Assigns.
This
Amendment shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns.
6. Execution.
This
Amendment may be executed in two or more counterparts, all of which when taken
together shall be considered one and the same agreement and shall become
effective when counterparts have been signed by each party and delivered to
the
other party, it being understood that both parties need not sign the same
counterpart. In the event that any signature is delivered by facsimile
transmission, such signature shall create a valid and binding obligation of
the
party executing (or on whose behalf such signature is executed) the same with
the same force and effect as if such facsimile signature page were an original
thereof.
7. Severability.
If any
provision of this Amendment is held to be invalid or unenforceable in any
respect, the validity and enforceability of the remaining terms and provisions
of this Amendment shall not in any way be affected or impaired thereby and
the
parties will attempt to agree upon a valid and enforceable provision that is
a
reasonable substitute therefor, and upon so agreeing, shall incorporate such
substitute provision in this Amendment.
8. Construction.
The
headings herein are for convenience only, do not constitute a part of this
Amendment and shall not be deemed to limit or affect any of the provisions
hereof. The language used in this Amendment will be deemed to be the language
chosen by the parties to express their mutual intent, and no rules of strict
construction will be applied against any party.
9. Governing
Law; Venue; Waiver of Jury Trial.
All
questions concerning the construction, validity, enforcement and interpretation
of this Amendment shall be governed by and construed and enforced in accordance
with the internal laws of the State of Delaware, without regard to the
principles of conflicts of law thereof.
IN
WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date
first above written.
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a
Delaware corporation
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| By: | /s/ Xxxxxxx Xxxxxxxx | |
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Xxxxxxx Xxxxxxxx |
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| President | ||
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POISE PROFIT INTERNATIONAL, LTD.,
a
British Virgin Islands corporation
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| By: | /s/ WU Qinghaun | |
|
WU Qinghuan |
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| Director | ||
| By: | /s/ ZHOU Xxxxxxx | |
|
XXXX Jialing
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| Director | ||
| SELLING SHAREHOLDERS: | ||
| /s/ WU Qinghuan | ||
|
WU Qinghuan
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| /s/ ZHOU Xxxxxxx | ||
|
XXXX Jialing |
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