[EXHIBIT 2.1]
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") is made and
entered into effective April 24, 2008 by and among CHINA
RENEWABLE ENERGY HOLDINGS, INC., a Florida corporation ("CREH"),
China Clean & Renewable Energy Limited, a Hong Kong corporation
("CCRE"), and the shareholders of CCRE listed on the signature
page and Schedule A hereto, constituting all of the shareholders
of CCRE (collectively, the "Shareholders").
RECITALS:
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A. The Shareholders own all of the issued and outstanding
common stock of CCRE, consisting of One Million (1,000,000)
shares of common stock (the "CCRE Shares").
B. CREH desires to acquire the CCRE Shares from the
Shareholders in exchange for an aggregate of Twenty-Three Million
(23,000,000) shares of restricted common stock, $.001 par value
per share, of CREH (the "CREH Shares") to be issued to the
Shareholders.
C. The Shareholders desire to exchange their CCRE Shares for
the CREH Shares upon the terms and conditions set forth herein.
D. It is the intention of the parties hereto that: (i) CREH
shall acquire the CCRE Shares solely for the CREH Shares (the
"Exchange"); (ii) the Exchange shall qualify as a transaction
exempt from registration or qualification under the Securities
Act of 1933, as amended (the "Securities Act"), and (iii) the
Exchange shall qualify as a "tax-free" transaction within the
meaning of Section 368 of the Internal Revenue Code of 1986.
NOW, THEREFORE, in consideration of the mutual covenants,
agreements, representations and warranties contained in this
Agreement, the parties hereto agree as follows:
Section 1. Exchange of Shares
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1.1 Exchange of Shares. On the Closing (as hereinafter
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defined), the Shareholders shall tender the CCRE Shares to CREH
and CREH shall issue the CREH Shares to the Shareholders in
exchange therefore and in an amount equal to 23 CREH Shares for
each CCRE Shares owned by each Shareholder as set forth on
Schedule A attached hereto. The Shareholders shall each execute
an Investment Letter at or prior to the receipt of the CREH
Shares substantially in the form of Exhibit A hereto.
1.2 Delivery of CCRE Shares. On the Closing Date, the
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Shareholders will deliver to CREH the certificates representing
the CCRE Shares, duly endorsed for transfer (or with executed
stock powers) so as to convey good and marketable title to the
CCRE Shares to CREH, and, promptly thereafter, CREH will cause
its transfer agent to deliver certificates evidencing the CREH
Shares to the Shareholders in accordance with Schedule A hereto.
Section 2. Representations and Warranties of the Shareholders
--------------------------------------------------------------
Each of the Shareholders represents and warrants to CREH as
follows:
2.1 Information on Shareholders. Each of the Shareholders is an
---------------------------
"accredited investor," as such term is defined in Regulation D
promulgated under the Securities Act, or is otherwise experienced
in investments and business matters, has made investments of a
speculative nature and has such knowledge and experience in
financial, tax and other business matters as to enable him to
evaluate the merits and risks of, and to make an informed
investment decision with respect to, this Agreement. Each of the
Shareholders understands that his acquisition of the CREH Shares
is a speculative investment, and each of the Shareholders
represents that he is able to bear the risk of such investment
for an indefinite period, and can afford a complete loss thereof.
2.2 Investment Intent. The Shareholders understand that the
-----------------
CREH Shares have not been registered under the Securities Act,
and may not be sold, assigned, pledged, transferred or otherwise
disposed of unless the CREH Shares are registered under the
Securities Act or an exemption from registration is available.
Shareholders represent and warrant that each is acquiring the
CREH Shares for his/its own account, for investment, and not with
a view to the sale or distribution of the CREH Shares except in
compliance with the Securities Act. Each certificate
representing the CREH Shares will have the following or
substantially similar legend thereon:
"The shares represented by this certificate have
not been registered under the Securities Act of
1933, as amended (the "Securities Act") or any
state securities laws. The shares have been
acquired for investment and may not be sold or
transferred in the absence of an effective
Registration Statement for the shares under the
Securities Act unless, in the opinion of counsel
satisfactory to the Company, registration is not
required under the Securities Act or any
applicable state securities laws."
2.3 Ownership of CCRE Shares and Authorization of Agreement.
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Shareholders are the sole record and beneficial owners of the
CCRE Shares, all of which shares are owned free and clear of all
rights, claims, liens and encumbrances, and have not been sold,
pledged, assigned or otherwise transferred except pursuant to
this Agreement. There are no outstanding subscriptions, rights,
options, warrants or other agreements obligating Shareholders to
sell or transfer to any third person any of the CCRE Shares owned
by Shareholders, or any interest therein. Shareholders have the
power to enter into this Agreement and to carry out his, her or
its obligations hereunder. This Agreement has been duly executed
by the Shareholders and constitutes the valid and binding
obligation of the Shareholders, enforceable against the
Shareholders in accordance with its terms.
Section 3. Representations and Warranties of CCRE and the Shareholders
-----------------------------------------------------------------------
CCRE and the Shareholders, to the best of their knowledge,
hereby represent and warrant to CREH as follows, with any
exceptions thereto being denoted on the applicable schedule to
this Agreement:
3.1 Organization and Good Standing. CCRE is a corporation, duly
------------------------------
organized, validly existing and in good standing under the laws
of Hong Kong, and is entitled to own or lease its properties and
to carry on its business as and in the places where such
properties are now owned, leased or operated and such business is
now conducted. CCRE is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property
or business requires such qualification.
3.2 Authorization; Enforceability; No Breach. CCRE has all
----------------------------------------
necessary corporate power and authority to execute this Agreement
and perform its obligations hereunder. This Agreement
constitutes the valid and binding obligation of CCRE enforceable
against CCRE in accordance with its terms, except as may be
limited by bankruptcy, moratorium, insolvency or other similar
laws generally affecting the enforcement of creditors' rights.
The execution, delivery and performance of this Agreement by CCRE
and the consummation of the transactions contemplated hereby will
not:
2
(a) violate any provision of the Charter or By-Laws of CCRE;
(b) violate, conflict with or result in the breach of any of
the terms of, result in a material modification of, otherwise give
any other contracting party the right to terminate, or constitute
(or with notice or lapse of time or both constitute) a default
under, any contract or other agreement to which CCRE is a party
or by or to which it or any of its assets or properties may be
bound or subject;
(c) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against,
or binding upon, CCRE, or upon the properties or business of
CCRE; or
(d) violate any statute, law or regulation of any jurisdiction
applicable to the transactions contemplated herein which could have a
Material Adverse Effect (as hereinafter defined) on the business or
operations of CCRE.
3.3 Compliance with Laws. CCRE has complied with all federal,
--------------------
state, county and local laws, ordinances, regulations,
inspections, orders, judgments, injunctions, awards or decrees
applicable to it or its business which, if not complied with,
would materially and adversely affect the business or financial
condition of CCRE.
3.4 Consents and Approvals. No filing with, and no permit,
----------------------
authorization, consent, or approval of, any public body or
authority or any third party is necessary for the consummation by
CCRE of the transactions contemplated by this Agreement.
3.5 Litigation. There is no action, suit or proceeding pending
----------
or threatened, or any investigation, at law or in equity, before
any arbitrator, court or other governmental authority, pending or
threatened, nor any judgment, decree, injunction, award or order
outstanding, against or in any manner involving CCRE or any of
CCRE's properties or rights, which (a) could reasonably be
expected to have a material adverse effect on CCRE taken as a
whole, or (b) could reasonably be expected to materially and
adversely affect consummation of any of the transactions
contemplated by this Agreement (collectively, a "Material Adverse
Effect").
3.6 Brokers or Finders. No broker's or finder's fee will be
------------------
payable by CCRE in connection with the transaction contemplated
by this Agreement, nor will any such fee be incurred as a result
of any actions by CCRE.
3.7 Real Estate. CCRE neither owns real property nor is a party
-----------
to any leasehold agreement, except as set forth on Schedule 3.7
hereof.
3.8 Assets. CCRE owns all rights, title and interest in and to
------
its assets, free and clear of all liens, pledges, mortgages,
security interests, conditional sales contracts or any other
encumbrances.
3.9 Financial Statements. The audited balance sheet of CCRE
--------------------
at December 31, 2007 and related statement of operations, cash flow
and shareholders' equity, (collectively the "CCRE Financial
Statements") fairly present in all material respects the
financial position of CCRE as of the respective dates thereof,
and the other related statements included therein fairly present
in all material respects the results of operations, changes in
shareholders' equity and cash flows of CCRE for the respective
periods or as of the respective dates set forth therein, all in
conformity with generally accepted accounting principles
consistently applied during the periods involved, except as
otherwise noted therein.
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3.10 Absence of Changes; No Undisclosed Liabilities. Except as
----------------------------------------------
set forth on Schedule 3.10, since December 31, 2007, CCRE has not
incurred any liability material to CCRE, except in the ordinary
course of its business, consistent with past practices; suffered
a change, or any event involving a prospective change, in the
business, assets, financial condition, or results of operations
of CCRE which has had, or is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect,
(other than as a result of changes or proposed changes in federal
or state regulations of general applicability or interpretations
thereof, changes in generally accepted accounting principles, and
changes that could, under the circumstances, reasonably have been
anticipated in light of disclosures made in writing by CCRE to
CREH pursuant hereto); or subsequent to the date hereof,
conducted its business and operations other than in the ordinary
course of business and consistent with past practices. CCRE has
no liability (and CCRE is not aware of any basis for any present
or future action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand against any of them giving
rising to any liability which individually or is in the aggregate
are reasonably likely to have a Material Adverse Effect on CCRE)
except for (a) liabilities set forth on the face of the most
recent balance sheet included in the CCRE Financial Statements,
and (b) liabilities which have arisen after the date of such
balance sheet in the ordinary course of business (none of which
results from, arises out of, relates to, is in the nature of, or
was caused by any breach of contract, tort, infringement, or
violation of law).
3.11 Capitalization. The authorized capital stock of CCRE
--------------
consists of One Million (1,000,000) shares of common stock of
which One Million (1,000,000) shares are presently issued and
outstanding. CCRE has not granted, issued or agreed to grant,
issue or make available any warrants, options, subscription
rights or any other commitments of any character relating to the
unissued shares of capital stock of CCRE. All of the CCRE Shares
are duly authorized and validly issued, fully paid and non-
assessable.
3.12 Contracts. A copy of each of the material contracts,
---------
instruments, mortgages, notes, security agreements, leases,
agreements, or understandings, whether written or oral, to which
CCRE is a party that relates to or affects the assets or
operations of CCRE or to which CCRE's assets or operations may be
bound or subject (collectively, the "Contracts"), has been
provided to CREH. Each Contract is a valid and binding
obligation of CCRE and in full force and effect, except for where
the failure to be in full force and effect would not,
individually or in the aggregate, have a Material Adverse Effect.
For purposes of this Agreement a material contract shall be any
contract or agreement involving consideration in excess of
$10,000. There are no existing defaults by CCRE thereunder or,
to the knowledge of CCRE, by any other party thereto, which
defaults, individually or in the aggregate, would have a Material
Adverse Effect.
3.13 Taxes. All required tax returns or federal, state, county,
-----
municipal, local, foreign and other taxes and assessments have
been properly prepared and filed by CCRE for all years for which
such returns are due unless an extension for filing any such
return has been properly prepared and filed. Any and all
federal, state, county, municipal, local, foreign and other
taxes, assessments, including any and all interest, penalties and
additions imposed with respect to such amounts have been paid or
provided for. CCRE has not been audited by any local, state or
federal tax authority.
3.14 Intellectual Property. (a) Except to the extent that any
---------------------
inaccuracy of any of the following (or the circumstances giving
rise to such inaccuracy), in the aggregate, would not reasonably
be expected to have a Material Adverse Effect on CCRE: (i) CCRE
owns, or is licenses or otherwise has the legally enforceable
right to use (in each case, clear of any liens or encumbrances of
any kind), all Intellectual Property (as hereinafter defined)
used in or necessary for the conduct of its business as currently
conducted; (ii) no claims are pending or, to the knowledge of
CCRE, threatened that CCRE is infringing on or otherwise
violating the rights of any person with regard to any
Intellectual Property used by, owned by, and/or licensed to CCRE;
(iii) as of the date of this Agreement, to the knowledge of CCRE,
4
no person is infringing on or otherwise violating any right of
CCRE with respect to any Intellectual Property owned by and/or
licensed to CCRE; and (iv) as of the date of this Agreement, CCRE
has not received any notice of any claim challenging the
ownership or validity of any Intellectual Property owned by CCRE
or challenging CCRE's license or legally enforceable right to use
any Intellectual Property licensed by it.
(b) For purposes of this Agreement, "Intellectual
Property" means trademarks (registered or unregistered), service
marks, brand names, certification marks, trade dress, assumed
names, trade names, and other indications of origin, the goodwill
associated with the foregoing and registrations in any
jurisdiction of, and applications in any jurisdiction to
register, the foregoing, including any extension, modification or
renewal of any such registration or application; inventions,
discoveries and ideas, whether patented, patentable, or not in
any jurisdiction; trade secrets and confidential information and
rights in any jurisdiction to limit the use or disclosure thereof
by any person; writings and other works of authorship, whether
copyrighted, copyrightable, or not in any jurisdiction;
registration or applications for registration of copyrights in
any jurisdiction, and any renewals or extensions thereof; any
similar intellectual property or proprietary rights and computer
programs and software (including source code, object code, and
data); licenses, immunities, covenants not to ▇▇▇, and the like
relating to the foregoing; and any claims or causes of action
arising out of or related to any infringement or misappropriation
of any of the foregoing.
3.15 Labor and Employment Matters. (a) CCRE is and has been in
----------------------------
compliance in all respects with all applicable laws respecting
employment and employment practices, terms, and conditions of
employment and wages and hours, including, such laws respecting
employment discrimination, equal opportunity, affirmative action,
worker's compensation, occupational safety, and health
requirements and unemployment insurance and related matters, and
are not engaged in and have not engaged in any unfair labor
practice; (b) no investigation or review by or before any
governmental entity concerning any violations of any such
applicable laws is pending nor, to the knowledge of CCRE is any
such investigation threatened or has any such investigation
occurred during the last three years, and no governmental entity
has provided any notice to CCRE or otherwise asserted an
intention to conduct any such investigation; (c) there is no
labor strike, dispute, slowdown, or stoppage actually pending or
threatened against CCRE; (d) no union representation question or
union organizational activity exists respecting the employees of
CCRE; (e) no collective bargaining agreement exists which is
binding on CCRE; (f) CCRE has experienced no work stoppage or
other labor difficulty; and (g) in the event of termination of
the employment of any of the current officers, directors,
employees, or agents of CCRE, CCRE shall, pursuant to any
agreement or by reason of anything done prior to the closing by
CCRE not be liable to any of said officers, directors, employees,
or agents for so-called "severance pay" or any other similar
payments or benefits, including, without limitation, post-
employment healthcare (other than pursuant to COBRA) or insurance
benefits, except to the extent that any matter in Items (a), (b),
(f) and (g) could reasonably be expected individually or in the
aggregate to have a Material Adverse Effect on CCRE.
3.16 Employee Benefit Plans. CCRE is not a party to any
----------------------
written or formal employee benefit plan (including, without limitation,
any "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA")) policy or agreement that is maintained (all of the
foregoing, the "Benefit Plans"), or is or was contributed to by
CCRE or pursuant to which CCRE or any trade or business, whether
or not incorporated (an "ERISA Affiliate"), which together with
CCRE would be deemed a "single employer" within the meaning of
Section 4001 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), is still potentially liable for
payments, benefits, or claims.
3.17 Absence of Certain Business Practices. Neither CCRE nor
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any director, officer, employer, or agent of CCRE, nor any person
acting on their behalf, directly or indirectly has to CCRE's
5
knowledge given or agree to give any gift or similar benefit to
any customer, supplier, governmental employee or other person
which (a) might subject CCRE to any damage or penalty in any
civil, criminal, or governmental litigation or proceeding, (b) if
not given in the past, might have had a Material Adverse Effect
on CCRE, or (c) if not continued in the future, might have a
Material Adverse Effect on CCRE or which might subject CCRE to
suit or penalty in any private or governmental litigation or
proceeding.
3.18 Internal Accounting Controls. CCRE maintains a system
----------------------------
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
3.19 Hong Kong Counsel. CCRE has retained counsel in Hong Kong
-----------------
who has reviewed the terms and conditions of, and transactions
contemplated by, this Agreement and has informed CCRE that (1) no
filing with, and no permit, authorization, consent, or approval
of, any public body or authority or any third party in connection
with the laws of Hong Kong is necessary for the consummation by
CCRE of the transactions contemplated by this Agreement, and (2)
the execution, delivery and performance of this Agreement by CCRE
and the consummation of the transactions contemplated hereby will
not violate any statute, law or regulation of Hong Kong
applicable to the transactions contemplated herein which could
have a Material Adverse Effect (as hereinafter defined) on the
business or operations of CCRE.
3.20 Full Disclosure. No representation or warranty by CCRE in
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this Agreement or in any document or schedule to be delivered by
it pursuant hereto, and no written statement, certificate or
instrument furnished or to be furnished to CREH pursuant hereto
or in connection with the negotiation, execution or performance
of this Agreement contains, or will contain, any untrue statement
of a material fact or omits, or will omit, to state any fact
necessary to make any statement herein or therein not materially
misleading or necessary to a complete and correct presentation of
all material aspects of the businesses of CCRE.
Section 4. Representations and Warrants of CREH.
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CREH hereby represents and warrants to CCRE and the
Shareholders as follows, with any exceptions thereto being
denoted on the applicable schedule to this Agreement:
4.1 Organization and Good Standing. CREH is a corporation duly
------------------------------
organized, validly existing and in good standing under the laws
of Florida, and is entitled to own or lease its properties and to
carry on its business as and in the places where such properties
are now owned, leased or operated and such business is now
conducted. CREH is qualified to do business as a foreign
corporation in each jurisdiction, if any, in which its property
or business requires such qualification.
4.2 Authorization; Enforceability; No Breach. CREH has all
----------------------------------------
necessary corporate power and authority to execute this Agreement
and perform its obligations hereunder. This Agreement
constitutes the valid and binding obligation of CREH enforceable
against CREH in accordance with its terms, except as may be
limited by bankruptcy, moratorium, insolvency or other similar
laws generally affecting the enforcement of creditors' rights.
The execution, delivery and performance of this Agreement by CREH
and the consummation of the transactions contemplated hereby will
not:
6
(a) violate any provision of the Charter or By-Laws of CREH;
(b) violate, conflict with or result in the breach of any of
the terms of, result in a material modification of, otherwise give
any other contracting party the right to terminate, or constitute
(or with notice or lapse of time or both constitute) a default
under, any contract or other agreement to which CREH is a party
or by or to which it or any of its assets or properties may be
bound or subject;
(c) violate any order, judgment, injunction, award or decree
of any court, arbitrator or governmental or regulatory body against,
or binding upon, CREH, or upon the properties or business of
CREH; or
(d) violate any statute, law or regulation of any jurisdiction
applicable to the transactions contemplated herein which could
have a Material Adverse Effect on the business or operations of
CREH.
4.3 The CREH Shares. The CREH Shares to be issued to the
---------------
Shareholders have been, or on or prior to the Closing will have
been, duly authorized by all necessary corporate and shareholder
actions and, when so issued in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable
and will not be issued in violation of the pre-emptive or similar
rights of any person.
4.4 Compliance with Laws. CREH has complied with all federal,
--------------------
state, county and local laws, ordinances, regulations,
inspections, orders, judgments, injunctions, awards or decrees
applicable to it or its business which, if not complied with,
would materially and adversely affect the business or financial
condition of CREH.
4.5 Consents and Approvals. No filing with, and no permit,
----------------------
authorization, consent or approval of any public body or
authority or any third party is necessary for the consummation by
CREH of the transactions contemplated by this Agreement.
4.6 Litigation. Other than as set forth on Schedule 4.6 and
----------
in its publicly filed documents with the Securities and Exchange
Commission ("SEC"), there is no action, suit or proceeding
pending or threatened, or any investigation, at law or in equity,
before any arbitrator, court or other governmental authority,
pending or threatened, nor any judgment, decree, injunction,
award or order outstanding, against or in any manner involving
CREH or any of CREH's properties or rights which (a) could
reasonably be expected to have a material adverse effect on CREH
taken as a whole, or (b) could reasonably be expected to
materially and adversely affect consummation of any of the
transactions contemplated by this Agreement.
4.7 Brokers or Finders. No broker's or finder's fee will be
------------------
payable by CREH in connection with the transaction contemplated
by this Agreement, nor will any such fee be incurred as a result
of any actions by CREH.
4.8 Real Estate. CREH neither owns real property nor is a party
-----------
to any leasehold agreement.
4.9 Assets. CREH owns all rights, title and interest in and to
------
its assets, free and clear of all liens, pledges, mortgages,
security interests, conditional sales contracts or any other
encumbrances.
4.10 Financial Statements. The audited balance sheets of CREH at
--------------------
December 31, 2007 and related statements of operations, cash flow
and shareholders' equity (collectively the "CREH Financial
Statements") fairly present in all material respects the
financial position of CREH as of the respective dates thereof,
and the other related statements included therein fairly present
in all material respects the results of operations, changes in
shareholders' equity and cash flows of CREH for the respective
7
periods or as of the respective dates set forth therein, all in
conformity with generally accepted accounting principles
consistently applied during the periods involved, except as
otherwise noted therein.
4.11 Absence of Changes; No Undisclosed Liabilities. Except
----------------------------------------------
as disclosed in its Form 10-K for the year end December 31, 2007
filed March 25, 2008, since December 31, 2007, CREH has not
incurred any liability material to CREH on a consolidated basis,
except in the ordinary course of its business, consistent with
past practices; suffered a change, or any event involving a
prospective change, in the business, assets, financial condition,
or results of operations of CREH which has had, or is reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect, (other than as a result of changes or proposed
changes in federal or state regulations of general applicability
or interpretations thereof, changes in generally accepted
accounting principles, and changes that could, under the
circumstances, reasonably have been anticipated in light of
disclosures made in writing by CREH to CCRE pursuant hereto); or
subsequent to the date hereof, conducted its business and
operations other than in the ordinary course of business and
consistent with past practices. CREH has no liability (and CREH
is not aware of any basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or
demand against any of them giving rising to any liability which
individually or is in the aggregate are reasonably likely to have
a Material Adverse Effect on CREH) except for (a) liabilities set
forth on the face of the most recent balance sheet included in
the CREH Financial Statements, and (b) liabilities which have
arisen after the date of such balance sheet in the ordinary
course of business (none of which results from, arises out of,
relates to, is in the nature of, or was caused by any breach of
contract, tort, infringement, or violation of law).
4.12 Capitalization. The authorized capital stock of CREH
--------------
consists of 100,000,000 shares of common stock of which
24,580,000 shares are presently issued and outstanding, and
10,000,000 shares of preferred stock, no shares of which have
been issued or designated. CREH has not granted, issued or
agreed to grant, issue or make available any warrants, options,
subscription rights or any other commitments of any character
relating to the unissued shares of capital stock of CREH except
as set forth in Schedule 4.12 hereto or as disclosed in its
public filings with the SEC. All of the CREH Shares are duly
authorized and validly issued, fully paid and non-assessable.
4.13 Contracts. A copy of each of the material contracts,
---------
instruments, mortgages, notes, security agreements, leases,
agreements, or understandings, whether written or oral, to which
CREH is a party that relates to or affects the assets or
operations of CREH or to which CREH's assets or operations may be
bound or subject (collectively, the "Contracts"), has been
provided to CCRE. Each of the Contracts is a valid and binding
obligation of CREH and in full force and effect, except for where
the failure to be in full force and effect would not,
individually or in the aggregate, have a Material Adverse Effect.
For purposes of this Agreement a material contract shall be any
contract or agreement involving consideration in excess of
$10,000. There are no existing defaults by CREH thereunder or,
to the knowledge of CREH, by any other party thereto, which
defaults, individually or in the aggregate, would have a Material
Adverse Effect.
4.14 Taxes. All required tax returns or federal, state, county,
-----
municipal, local, foreign and other taxes and assessments have
been properly prepared and filed by CREH for all years for which
such returns are due unless an extension for filing any such
return has been properly prepared and filed. Any and all
federal, state, county, municipal, local, foreign and other
taxes, assessments, including any and all interest, penalties and
additions imposed with respect to such amounts have been paid or
provided for. CREH has never been audited by any local, state or
federal tax authority.
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4.15 Intellectual Property. Except as may be disclosed in its
---------------------
public filings with the SEC and to the extent that any inaccuracy
of any of the following (or the circumstances giving rise to such
inaccuracy), in the aggregate, would not reasonably be expected
to have a Material Adverse Effect on CREH: (i) CREH owns, or is
licensed or otherwise has the legally enforceable right to use
(in each case, clear of any liens or encumbrances of any kind),
all Intellectual Property (as hereinafter defined) used in or
necessary for the conduct of its business as currently conducted;
(ii) no claims are pending or, to the knowledge of CREH,
threatened that CREH is infringing on or otherwise violating the
rights of any person with regard to any Intellectual Property
used by, owned by, and/or licensed to CREH or any of its
subsidiaries; (iii) as of the date of this Agreement, to the
knowledge of CREH, no person is infringing on or otherwise
violating any right of CREH with respect to any Intellectual
Property owned by and/or licensed to CREH; and (iv) as of the
date of this Agreement, neither CREH nor any of its subsidiaries
have received any notice of any claim challenging the ownership
or validity of any Intellectual Property owned by CREH or
challenging CREH's license or legally enforceable right to use
any Intellectual Property licensed by it.
4.16 Labor and Employment Matters. (a) CREH is and has been
----------------------------
in compliance in all respects with all applicable laws respecting
employment and employment practices, terms, and conditions of
employment and wages and hours, including, such laws respecting
employment discrimination, equal opportunity, affirmative action,
worker's compensation, occupational safety, and health
requirements and unemployment insurance and related matters, and
are not engaged in and have not engaged in any unfair labor
practice; (b) no investigation or review by or before any
governmental entity concerning any violations of any such
applicable laws is pending nor, to the knowledge of CREH is any
such investigation threatened or has any such investigation
occurred during the last three years, and no governmental entity
has provided any notice to CREH or otherwise asserted an
intention to conduct any such investigation; (c) there is no
labor strike, dispute, slowdown, or stoppage actually pending or
threatened against CREH; (d) no union representation question or
union organizational activity exists respecting the employees of
CREH; (e) no collective bargaining agreement exists which is
binding on CREH; (f) CREH has experienced no work stoppage or
other labor difficulty; and (g) in the event of termination of
the employment of any of the current officers, directors,
employees, or agents of CREH, CREH shall not, pursuant to any
agreement or by reason of anything done prior to the closing by
CREH be liable to any of said officers, directors, employees, or
agents for so-called "severance pay" or any other similar
payments or benefits, including, without limitation, post-
employment healthcare (other than pursuant to COBRA) or insurance
benefits, except to the extent that any matter in Items (a), (b),
(f) and (g) could reasonably be expected individually or in the
aggregate to have a Material Adverse Effect on CREH.
4.17 Employee Benefit Plans. Except as may be disclosed in its
----------------------
public filings with the SEC, CREH is not a party to any written
or formal employee benefit plan (including, without limitation,
any "employee benefit plan" as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended
("ERISA")) policy or agreement that is maintained (all of the
foregoing, the "Benefit Plans"), or is or was contributed to by
CREH or pursuant to which CREH or any trade or business, whether
or not incorporated (an "ERISA Affiliate"), which together with
CREH would be deemed a "single employer" within the meaning of
Section 4001 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), is still potentially liable for
payments, benefits, or claims.
4.18 State Anti-Takeover Statutes. The CREH Board of Directors
----------------------------
has approved this Agreement and the transactions contemplated
hereby, and thereby such approval constitutes approval of the
Agreement and other transactions contemplated hereby and thereby
by the CREH Board of Directors as required under Florida law. To
the knowledge of CREH, no state anti-takeover statute is
applicable to the Exchange.
9
4.19 Absence of Certain Business Practices. Neither CREH nor
-------------------------------------
any director, officer, employer, or agent of the foregoing, nor any
person acting on its behalf, directly or indirectly has to CREH's
knowledge given or agree to give any gift or similar benefit to
any customer, supplier, governmental employee or other person
which (a) might subject CREH to any damage or penalty in any
civil, criminal, or governmental litigation or proceeding, (b) if
not given in the past, might have had a Material Adverse Effect
on CREH, or (c) if not continued in the future, might have a
Material Adverse Effect on CREH or which might subject CREH to
suit or penalty in any private or governmental litigation or
proceeding.
4.20 Internal Accounting Controls. CREH maintains a system of
----------------------------
internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations, (ii)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability, (iii)
access to assets is permitted only in accordance with
management's general or specific authorization and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken
with respect to any differences.
4.21 SEC Reports. Except as may be disclosed in its public
-----------
filings with the SEC, CREH has filed all reports required to be
filed by it under the Exchange Act, including pursuant to Section
13(a) or 15(d) thereof (the foregoing materials, including the
exhibits thereto, being collectively referred to herein as the
"SEC Reports"). The SEC Reports comply in all material respects
with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder, and none of the
SEC Reports, when filed, contained any untrue statement of a
material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company
included in the SEC Reports comply in all material respects with
applicable accounting requirements and the rules and regulations
of the SEC with respect thereto as in effect at the time of
filing.
4.22 Full Disclosure. No representation or warranty by CREH
---------------
in this Agreement or in any document or schedule to be delivered by
them pursuant hereto, and no written statement, certificate or
instrument furnished or to be furnished to CCRE pursuant hereto
or in connection with the negotiation, execution or performance
of this Agreement contains, or will contain, any untrue statement
of a material fact or omits, or will omit, to state any fact
necessary to make any statement herein or therein not materially
misleading or necessary to a complete and correct presentation of
all material aspects of the businesses of CREH.
Section 5. Covenants and Additional Agreement
----------------------------------------------
5.1. Examinations and Investigations. Prior to the Closing,
-------------------------------
the parties acknowledge that they have been entitled, through their
employees and representatives, to make such investigation and
verification of the assets, properties, business and operations,
books, records and financial condition of the other, including
communications with suppliers, vendors and customers, as they
each may reasonably require. No investigation by a party hereto
shall, however, diminish or waive in any way any of the
representations, warranties, covenants or agreements of the other
party under this Agreement. Consummation of this Agreement shall
be subject to the fulfillment of due diligence procedures to the
reasonable satisfaction of each of the parties hereto and their
respective counsel.
5.2. Expenses. Each party hereto agrees to pay its own costs
--------
and expenses incurred in negotiating this Agreement and consummating
the transactions described herein.
10
5.3. Further Assurances. The parties shall execute such
------------------
documents and other papers and take such further action as may be
reasonably required or desirable to carry out the provisions
hereof and the transactions contemplated hereby. Each such party
shall use its best efforts to fulfill or obtain in the
fulfillment of the conditions to the Closing, including, without
limitation, the execution and delivery of any documents or other
papers, the execution and delivery of which are necessary or
appropriate to the Closing.
5.4. Confidentiality. In the event the transactions contemplated
---------------
by this Agreement are not consummated, each of the parties hereto
agree to keep confidential any information disclosed to each
other in connection therewith; provided, however, such obligation
shall not apply to information which:
(a) at the time of disclosure was public knowledge;
(b) after the time of disclosure becomes public knowledge
(except due to the action of the receiving party); or
(c) the receiving party had within its possession at the time
of disclosure.
5.7 Stock Certificates and Consideration. At the Closing,
------------------------------------
the Shareholders shall have delivered the certificates
representing the CCRE Shares duly endorsed (or with executed
stock powers) so as to make CREH the sole owner thereof. At such
Closing, CREH shall issue the CREH Shares to the Shareholders, as
provided herein.
5.8 Management of CCRE and CREH. On the Closing date, CREH
---------------------------
shall appoint Tang Chin Wan as Vice President and Chief Technical
Officer and ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ as Vice President and Financial
Controller.
5.9 Cancellation of Shares of CREH. ▇▇. ▇▇▇▇ agrees that,
------------------------------
on the Closing Date, 15,000,000 shares of common stock of CREH
beneficially owned by him will be cancelled and returned to the
treasury of CREH in consideration of the transactions described
herein.
Section 6. The Closing
-----------------------
The closing (the "Closing") shall take place contemporaneous
with the execution of this Agreement, or at such other time and
place as is mutually agreed upon by CREH, CCRE and the
Shareholders, following satisfaction or waiver of all conditions
precedent to Closing. At the Closing, the parties shall provide
each other with such documents as may be necessary or appropriate
and customary in transactions of this sort in order to consummate
the transactions contemplated hereby, including evidence of due
authorization of the Agreement and the transactions contemplated
hereby.
Section 7. Conditions Precedent to Closing
-------------------------------------------
7.1 Conditions Precedent to the Obligation of CREH to Issue
-------------------------------------------------------
the CREH Shares. The obligation of CREH to issue the CREH Shares
---------------
to the Shareholders and to otherwise consummate the transactions
contemplated hereby is subject to the satisfaction, at or before
the Closing, of each of the conditions set forth below. These
conditions are for CREH's sole benefit and may be waived by CREH
at any time in its sole discretion.
(a) Accuracy of CCRE's and the Shareholders' Representations
and Warranties. The representations and warranties of CCRE and the
Shareholders will be true and correct in all material respects as
of the date when made and as of the Closing, as though made at
that time.
11
(b) Performance by CCRE and the Shareholders. CCRE and
the Shareholders shall have performed all agreements and satisfied
all conditions required to be performed or satisfied by them at
or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits the consummation of any of the
transactions contemplated by this Agreement.
(d) No Material Adverse Changes. CCRE shall have suffered
no Material Adverse Effect.
(e) Miscellaneous. CCRE and the Shareholders shall have
delivered to CREH such other documents relating to the transactions
contemplated by this Agreement as CREH may reasonably request.
7.2 Conditions Precedent to the Obligation of the
---------------------------------------------
Shareholders to Exchange CCRE Shares. The obligation of the
------------------------------------
Shareholders to exchange their CCRE Shares for the CREH Shares
and to otherwise consummate the transactions contemplated hereby
is subject to the satisfaction, at or before the Closing, of each
of the conditions set forth below. These conditions are for the
Shareholders' sole benefit and may be waived by CCRE at any time
in its sole discretion.
(a) Accuracy of CREH's Representations and Warranties.
The representations and warranties of CREH will be true and correct
in all material respects as of the date when made and as of the
Closing, as though made at that time.
(b) Performance by CREH. CREH shall have performed all
agreements and satisfied all conditions required to be performed
or satisfied by them at or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive
order, decree, ruling or injunction shall have been enacted,
entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction which prohibits the
consummation of any of the transactions contemplated by this
Agreement.
(d) No Material Adverse Changes. CREH shall have suffered no
Material Adverse Effect.
(e) Management. The directors and officers of CREH shall
have been appointed as set forth in section 5.8.
(f) Miscellaneous. CREH shall have delivered to the
Shareholders such other documents relating to the transactions
contemplated by this Agreement as the Shareholders may reasonably request.
Section 8. Survival of Representations and Warranties of CREH
--------------------------------------------------------------
Notwithstanding any right of CCRE and the Shareholders fully
to investigate the affairs of CREH, CCRE and the Shareholders
shall have the right to rely fully upon the representations,
warranties, covenants and agreements of CREH contained in this
Agreement or in any document delivered by CREH or any of its
representatives, in connection with the transactions contemplated
12
by this Agreement. All such representations, warranties,
covenants and agreements shall survive the execution and delivery
hereof and the Closing hereunder for 12 months following the
Closing.
Section 9. Survival of Representations and Warranties of CCRE
--------------------------------------------------------------
and The Shareholders
--------------------
Notwithstanding any right of CREH fully to investigate the
affairs of CCRE, CREH has the right to rely fully upon the
representations, warranties, covenants and agreements of CCRE and
the Shareholders contained in this Agreement or in any document
delivered to CREH by CCRE or any of its representatives, in
connection with the transactions contemplated by this Agreement.
All such representations, warranties, covenants and agreements
shall survive the execution and delivery hereof and the Closing
hereunder for 12 months following the Closing.
Section 10. Indemnification
----------------------------
10.1 Obligation of CREH to Indemnify. Subject to the limitations
-------------------------------
on the survival of representations and warranties contained in
▇▇▇▇▇▇▇ ▇, ▇▇▇▇ hereby agree to indemnify, defend and hold
harmless the Shareholders and CCRE, to the extent provided for
herein, from and against any losses, liabilities, damages,
deficiencies, costs or expenses (including interest, penalties
and reasonable attorneys' fees and disbursements) (a "Loss")
based upon, arising out of, or otherwise due to any inaccuracy in
or any breach of any representation, warranty, covenant or
agreement of CREH contained in this Agreement or in any document
or other writing delivered pursuant to this Agreement.
10.2 Obligation of the CCRE and the Shareholders to Indemnify.
--------------------------------------------------------
Subject to the limitations on the survival of representations and
warranties contained in Section 9, CCRE and the Shareholders
agree to indemnify, defend and hold harmless CREH to the extent
provided for herein from and against any Loss based upon, arising
out of, or otherwise due to any inaccuracy in or any breach of
any representation, warranty, covenant or agreement made by any
of them and contained in this Agreement or in any document or
other writing delivered pursuant to this Agreement.
Section 11. Miscellaneous
--------------------------
11.1 Waivers. The waiver of a breach of this Agreement or the
-------
failure of any party hereto to exercise any right under this
Agreement shall in no event constitute a waiver as to any future
breach whether similar or dissimilar in nature or as to the
exercise of any further right under this Agreement.
11.2 Amendment. This Agreement may be amended or modified only
---------
by an instrument of equal formality signed by the parties or the
duly authorized representatives of the respective parties.
11.3 Assignment. This Agreement is not assignable except by
-----------
operation of law.
11.4 Notices. Until otherwise specified in writing, the mailing
-------
addresses of both parties of this Agreement shall be as follows:
CCRE: ▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇,
▇▇▇▇ ▇▇ ▇▇▇▇▇▇,
▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
13
The Shareholders: ▇/▇ ▇▇▇▇▇ Clean & Renewable Energy Limited
Room 286, 2nd Floor,
Shui On Centre,
▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
▇▇▇▇: Suite 802, Beautiful Group Tower,
▇▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
Any notice or statement given under this Agreement shall be
deemed to have been given if sent by registered mail addressed to
the other party at the address indicated above or at such other
address as may be furnished in writing to the addressor.
11.5 Governing Law; Venue. This Agreement shall be governed and
--------------------
construed in accordance with the laws of the State of Florida,
without regard to the conflicts of law provisions thereof. Each
party hereby irrevocably submits to the exclusive jurisdiction of
the state and federal courts sitting in the County of Broward,
State of Florida, for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such
court, that such suit, action or proceeding is brought in an
inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives
personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof
to such party at the address for such notices to it under this
agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. If any provision
of this agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this
agreement in that jurisdiction or the validity or enforceability
of any provision of this agreement in any other jurisdiction.
EACH PARTY HERETO IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY.
11.6 Publicity. No publicity release or announcement concerning
---------
this Agreement or the transactions contemplated hereby shall be
issued by either party hereto at any time from the signing hereof
without advance approval in writing of the form and substance
thereof by the other party.
11.7 Entire Agreement. This Agreement (including the Exhibits
----------------
and Schedules hereto) and the collateral agreements executed in
connection with the consummation of the transactions contemplated
herein contain the entire agreement among the parties with
respect to the Exchange and related transactions, and supersede
all prior agreements, written or oral, with respect thereto.
11.8 Headings. The headings in this Agreement are for reference
--------
purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
11.9 Severability of Provisions. The invalidity or
--------------------------
unenforceability of any term, phrase, clause, paragraph,
restriction, covenant, agreement or other provision of this
Agreement shall in no way affect the validity or enforcement of
any other provision or any part thereof.
11.10 Counterparts. This Agreement may be executed in any
------------
number of counterparts, each of which, when so executed, shall
constitute an original copy hereof, but all of which together
shall consider but one and the same document.
14
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date first above written.
CHINA CLEAN & RENEWABLE ENERGY LIMITED
By: /s/▇▇▇▇▇ ▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇, President
CHINA RENEWABLE ENERGY HOLDINGS, INC.
By: /s/▇▇▇▇▇ ▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇, President
SHAREHOLDERS
/s/Tang, Chin Wan
-------------------------------------
Tang, Chin Wan
/s/▇▇▇▇, ▇▇▇ ▇▇▇▇▇
-------------------------------------
▇▇▇▇, ▇▇▇ ▇▇▇▇▇
/s/Cha, ▇▇▇▇▇ ▇▇
-------------------------------------
Cha, ▇▇▇▇▇ ▇▇
/s/▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇ Jun Sik
-------------------------------------
▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇ Jun Sik
/s/▇▇▇, ▇▇▇ ▇.
-------------------------------------
▇▇▇, ▇▇▇ ▇.
/s/Chu, Wing ▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Chu, Wing ▇▇▇ ▇▇▇▇▇▇
15
Roadwings Financial Services, LLC.
By:/s/▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ Charitable
Remainder Trust
By: /s/▇▇▇▇▇ ▇▇▇▇
--------------------------------
▇▇▇▇▇ ▇▇▇▇, Trustee
▇▇▇▇▇ ▇▇▇▇ Family Trust
By:/s/▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇, Trustee
16
SCHEDULE A
EXCHANGE WITH CREH
Shares of Shares of
CCRE CREH
Name of to be to be
Shareholder Exchanged Received
----------- --------- --------
1) Tang, Chin Wan 10,000 230,000
2) ▇▇▇▇, ▇▇▇ ▇▇▇▇▇ 7,000 161,000
3) Cha, ▇▇▇▇▇ ▇▇ 7,200 165,600
4) ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇ Jun Sik 4,800 110,400
5) ▇▇▇, ▇▇▇ ▇. 3,000 69,000
6) Chu, Wing ▇▇▇ ▇▇▇▇▇▇ 3,000 69,000
7) Roadwings Financial Services, LLC.(a) 17,400 400,200
8) ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇ Charitable
Remainder Trust (b) 353,600 8,132,800
9) ▇▇▇▇▇ ▇▇▇▇ Family Trust(c) 594,000 13,662,000
TOTAL 1,000,000 23,000,000
(a) ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇ has voting and dispositive control for the
shares owed by Roadwings Financial Services, LLC.
(b) ▇▇. ▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇ have voting and
dispositive control for the shares owed by ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Charitable Remainder Trust.
(c) ▇▇▇▇▇ ▇▇▇ ▇. ▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇ and ▇▇▇▇▇▇ ▇▇▇ each
severally have voting and dispositive control over the shares
owed by the ▇▇▇▇▇ ▇▇▇▇ Family Trust.
17
EXHIBIT A
INVESTMENT LETTER
China Renewable Energy Holdings, Inc.
Suite 802, Beautiful Group Tower,
▇▇-▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
In connection with the receipt of the CREH Shares from China
Renewable Energy Holdings, Inc., a Florida corporation
("Company") pursuant to the terms and conditions of the Stock
Exchange Agreement dated April __, 2008, the undersigned hereby
represents, warrants, covenants and agrees as set forth below.
1. Purchase Entirely for Own Account. The Shares will be
---------------------------------
acquired for investment for the Undersigned' own account, not as
a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and the undersigned has no
present intention of selling, granting any participation in, or
otherwise distributing the CREH Shares or any portion thereof.
Further, the undersigned does not have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or
grant participations to such person or to any third person, with
respect to all or any portion of the CREH Shares.
2. No Securities Act Registration. The undersigned
------------------------------
understands that the CREH Shares have not been registered under
the Securities Act of 1933, as amended (the "Securities Act"), by
reason of a specific exemption or specific exemptions from the
registration provisions of the Securities Act which depend upon,
among other things, the bona fide nature of The undersigned'
investment intent as expressed herein.
3. Restricted Securities. The undersigned acknowledges
---------------------
that, unless the undersigned has been advised by the Company that
a current registration statement is in effect covering the resale
of the CREH Shares, because the CREH Shares have not been
registered under the Securities Act, the CREH Shares must be held
by the undersigned indefinitely unless subsequently registered
under the Securities Act or an exemption from such registration
is available. The undersigned is aware of the provision of Rule
144 promulgated under the Securities Act that permits the limited
resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other
things, the satisfaction of having held the CREH Shares for a
certain duration of time, the availability of certain current
public information about the Company, the sale being through a
"broker's transaction" (as provided by Rule 144(f)), and the
volume of shares sold not exceeding specified limitations (unless
the sale is within the requirements of Rule 144(k)).
4. Accredited and Sophisticated Investor. The undersigned:
-------------------------------------
(a) is an accredited investor as defined in Rule 501(a) of
Regulation D of the Securities and Exchange Commission; (b)(i)
either alone or with the undersigned's professional advisor or
advisors, has such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and
risks of acquiring the CREH Shares, (ii) either alone by reason
of the undersigned' business or financial experience or together
18
with the undersigned' professional advisor or advisors, has the
capacity to protect the undersigned' interests in connection with
acquisition of the CREH Shares; and (c) is able to bear the
economic risk of the investment in the CREH Shares, including a
complete loss of the investment.
5. Opportunity to Ask Questions. The undersigned has had
----------------------------
an opportunity to ask questions of and receive answers from the
Company or its representatives concerning the terms of the
undersigned' investment in the CREH Shares, all such questions
have been answered to the full satisfaction of the undersigned,
and the undersigned has had the opportunity to request and obtain
any additional information the undersigned deemed necessary to
verify or supplement the information contained therein. The
undersigned has reviewed and understands the disclosure provided
in the Company's Form 10-SB filed November 16, 2007 with the SEC.
6. Investment Risks. The undersigned recognizes that an
----------------
investment in the CREH Shares involves substantial risks, and is
fully aware of and understands all of the risk factors related to
the acquisition of the CREH Shares. The undersigned has
determined that the acquisition of the CREH Shares is consistent
with the undersigned's investment objectives. The undersigned is
able to bear the economic risks of an investment in the CREH
Shares, and at the present time could afford a complete loss of
such investment.
7. Limitation on Manner of Offering. The CREH Shares were
--------------------------------
not offered to the undersigned by any means of general
solicitation or general advertising.
8. Tax and Other Matters. The undersigned is not relying
---------------------
on CREH with respect to tax and other economic considerations
involved in the acquisition of the CREH Shares. The undersigned
has carefully considered and has, to the extent the undersigned
believes such discussion necessary, discussed with the
undersigned' professional, legal, tax, accounting and financial
advisors the suitability of an investment in the CREH Shares for
the undersigned's particular tax and financial situation and the
undersigned has determined that the CREH Shares are a suitable
investment for him.
9. Restrictive Legends. The undersigned understands that
-------------------
the CREH Shares shall bear one or more of the following
restrictive legends:
(a) "THESE SECURITIES HAVE NOT BEEN
REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT") OR THE SECURITIES
LAWS OF ANY STATE. THEY MAY NOT BE SOLD, OFFERED
FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF A REGISTRATION
STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES
UNDER THE ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY TO THE EFFECT THAT
SUCH REGISTRATION AND QUALIFICATION UNDER THE ACT
AND SUCH LAWS IS NOT REQUIRED"
(b) Any legend required by applicable state law.
19
10. Successors. The representations and warranties
----------
contained herein shall be binding upon the heirs, executors,
administrators, personal representatives and other successors of
the undersigned and shall inure to the benefit of and be
enforceable by the Company.
11. Address. The address, telephone number and facsimile
-------
number set forth at the end of this letter are the undersigned's
true and correct address.
In order to enforce the foregoing covenant, the Company may
impose stop-transfer instructions with respect to the securities
covered thereby until the end of such period.
SHAREHOLDER
-----------
---------------------------------
(Signature)
---------------------------------
(Print Name)
Address:
------------------------
------------------------
------------------------
Telephone:
-----------------------
Social Security Number
-----------
20
Schedule 3.7
Lease Agreement
The principal executive office for CCRE is located in
approximately 200 square feet of office space in Suite Room 286,
2nd Floor, Shui ▇▇ ▇▇▇▇▇▇, ▇-▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇
which is leased from Quantplus Investments, Ltd, an asset
management company 40% owned by ▇▇. ▇▇▇▇▇ ▇▇▇▇ for approximately
$200 a month.
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SCHEDULE 3.10
Liabilities
22