PLAN OF EXCHANGE
|
|
BY
WHICH
|
(a
Pennsylvania corporation)
SHALL
ACQUIRE
CHINA
FOLK TOURISM CO., LTD.
(a
corporation organized under the laws of the British virgin islands)
This
Plan of Exchange (the “Agreement” or “Plan of Exchange”)
is made and dated as of this 12th day of January, 2010, and is intended
to supersede all previous oral or written agreements, if any, between the
parties, with respect to its subject matter. Notwithstanding the foregoing, it
is subject to, and shall be interpreted together with the Escrow Agreement,
dated January 12, 2010 ("Escrow Agreement"). This Agreement anticipates that
extensive due diligence shall have been performed by both parties. All due
diligence shall have been completed by the Parties no later than January 12,
2010.
I.
RECITALS
1.
The Parties (collectively referred to as the "Parties") to this
Agreement:
(1.1) Bluesky Systems Corp.
("BSKS"), a Pennsylvania corporation.
(1.2) China Folk Tourism Co.,
Ltd. a corporation organized under the laws of the British Virgin
Islands (“CFT”).
2.
The Capital of the Parties:
(2.1) The Capital of BSKS consists
of 50,000,000 authorized shares of Common Stock, par value $.001, of which
25,548,933 shares are issued and outstanding. BSKS contemplates a “reverse stock
split” at a ratio of twenty five to one (25 to 1), yielding an aggregate of
1,021,958 total shares then issued and outstanding.
(2.2) The Capital of CFT consists
of 50,000 Ordinary Shares, which for the purposes of this Agreement, is referred
to as “common stock” or “capital stock”.
3. Transaction Descriptive
Summary: BSKS desires to acquire CFT and the shareholders of CFT (the
“CFT Shareholders”) desire that CFT be acquired by BSKS. BSKS would
acquire 100% of the capital stock of CFT equal to 50,000 shares in exchange for
an issuance by BSKS of 35,000,000 new post-split shares of Common Stock of BSKS
to CFT. In addition, CFT and/or the CFT Shareholders would acquire 200,000
post-split shares of BSKS Common Stock from ▇▇▇▇▇ ▇▇▇▇▇▇▇, the President of BSKS
(“▇▇. ▇▇▇▇▇▇▇”), or his assignees, in exchange for a cash payment by CFT and/or
the CFT Shareholders of an amount equal to $210,000 to ▇▇. ▇▇▇▇▇▇▇, less any
expenses incurred and a secured promissory note in the amount of $260,000. The
above purchase and issuance will give CFT a total of 35,200,000 shares of the
Common Stock, or a 'controlling interest' in BSKS representing approximately
97.7% of the then issued and outstanding shares of Common Stock. The transaction
will not immediately close but shall be conditioned upon: (1) Elimination of all
liabilities in BSKS as of the closing date and an acknowledgement from BSKS and
▇▇. ▇▇▇▇▇▇▇ that they will be fully responsible for any unknown or undisclosed
liabilities that may have arisen while ▇▇. ▇▇▇▇▇▇▇ was in control of
BSKS. (2) Before closing, BSKS shall provide a comfort
letter prepared by a third party law firm confirming that to the best of their
knowledge after reasonable due diligence, BSKS has no pending or threatened
litigation. (3) There shall be a deposit of 5,000,000 shares of BSKS
Common Stock deposited into the escrow account of Greentree Financial Group,
Inc. ("Escrow Agent") and cash deposit of $210,000 along with a secured
promissory note in the amount of $260,000 and a loan guaranty
package. (4) There shall be an issuance of 35,000,000 new post-split
shares of Common Stock issued in the name of the CFT shareholders and held in
escrow until closing, which should take no longer than 71 days. (5) ▇▇. ▇▇▇▇▇▇▇
shall tender his resignation from the board of directors and as officer of BSKS
and appoint his successor(s) as designated by CFT and/or the CFT
Shareholders. (6) CFT shall be fully reorganized as set forth in
Schedule A attached hereto and all of the necessary irrevocable PRC contractual
arrangements shall have been executed in accordance with PRC law and all PRC
regulatory approvals required for this transaction shall have been
acquired. (7) BSKS shall have completed up to a 25:1 reverse stock
split. The parties intend that the transactions qualify and meet the Internal
Revenue Code requirements for a tax free reorganization, in which there is no
corporate gain or loss recognized by the parties, with reference to Internal
Revenue Code (IRC) sections 354 and 368.
4. SEC compliance. BSKS shall cause the filing
with the Commission of a Current Report on Form 8-K, within four business days
of the date hereof, reporting the execution of this Agreement, and, after the
closing, the filing and mailing to its shareholders of an Information Statement
on Schedule 14F-1 pursuant to Rule 14f-1 promulgated under the Securities
Exchange Act of 1934, as amended, which is required to be filed and mailed ten
days before a change in the majority of the Board of Directors of BSKS other
than at a shareholders’ meeting. The Parties contemplate that any change in the
majority of the Board of Directors will occur after the closing. The
parties shall also file a Preliminary and Definitive Information Statement on
Schedule 14C for any name change, amendment to the corporate Articles or if
deemed necessary to effectuate this business combination.
5. Pennsylvania
compliance. Articles of Exchange are required to be filed by
Pennsylvania law as the last act to make the plan of exchange final and
effective under Pennsylvania law.
6. Audited Financial
Statements. Certain filings under the Securities Exchange Act of 1934,
such as a Current Report on Form 8-K, require audited financial statements of
CFT to be filed with the SEC within 71 days of the initial Form 8-K filing with
respect to this transaction or within 4 days if BSKS is deemed to be a
“shell”. Assuming BSKS is not a “shell”, in connection
with BSKS’s filing of an amendment to the Current Report on Form 8-K/A within 71
days after the closing, as it relates to this transaction, audited financial
statements of CFT will be filed with the SEC in accordance with Form 8-K. CFT
has agreed to provide audited financial statements prepared in conformity with
U.S. GAAP to BSKS within 71 days after the closing.
II. PLAN OF EXCHANGE
1.
Conditions Precedent to Closing.
The
obligation of the parties to consummate the transactions contemplated herein are
subject to the fulfillment or waiver prior to the closing of the following
conditions precedent:
(1.1) Shareholder Approval. CFT
and BSKS shall have secured all requisite shareholder approval for this
transaction, if required, in accordance with the laws of its place of
incorporation and its constituent documents.
(1.2) Board of Directors. The
Boards of Directors of CFT and BSKS shall have approved the transaction and this
agreement, in accordance with the laws of their place of incorporation and
constituent documents.
(1.3) Due Diligence Investigation.
Each party shall have furnished to the other party all corporate and financial
information which is customary and reasonable, to conduct its respective due
diligence, normal for this kind of transaction. If either party determines that
there is a reason not to complete the Plan of Exchange as a result of their due
diligence examination, then they must give written notice to the other party
prior to the expiration of the due diligence examination period. The due
diligence period, for purposes of this paragraph, shall have expired on January 12,
2010. The Closing Date shall be three days after the
satisfaction or waiver of all of the conditions
precedent to closing set forth in this Plan of Exchange, unless extended to a
later date by mutual agreement of the parties.
(1.4) The rights of dissenting
shareholders, if any, of each party shall have been satisfied and the
Board of Directors of each party shall have determined to proceed with the Plan of
exchange.
(1.5) All of the terms, covenants and
conditions of the Plan of exchange to be
complied with or performed by each party before Closing shall have been complied
with, performed or waived in writing;
(1.6) The representations and
warranties of the parties, contained in the Plan of exchange, as
herein contemplated, except as amended, altered or waived by the parties in
writing, shall be true and correct in all material respects at the Closing Date
with the same force and effect as if such representations and warranties are
made at and as of such time; and each party shall provide the other with a
certificate, certified either individually or by an officer, dated as
of the Closing Date, to the effect, that all conditions precedent have been met,
and that all representations and warranties of such party are true and correct
as of that date. The form and substance of each party's certification shall be
in form reasonably satisfactory to the other.
(1.7) Certificate from ▇▇▇▇▇
▇▇▇▇▇▇▇. It shall be a condition precedent to the obligation
of CFT and the CFT Shareholders to consummate the transactions contemplated
herein that a certificate from ▇▇. ▇▇▇▇▇▇▇ in substantially the following form
be delivered to them on the date of Closing:
|
(i)
|
BSKS
is a corporation duly organized and validly existing under the laws of the
State of Pennsylvania and has all requisite corporate power to own,
operate and lease its properties and assets and to carry on its business.
The authorized capitalization and the number of issued and outstanding
capital shares of BSKS are accurately and completely set forth in the Plan
of Exchange.
|
|
(ii)
|
The
issued and outstanding shares of BSKS (including 35,000,000 new post-split
investment shares of Common Stock of BSKS to be issued to the CFT
Shareholders pursuant to Regulation S) have been duly authorized and
validly issued and are fully paid and
non-assessable.
|
|
(iii)
|
BSKS
and ▇▇. ▇▇▇▇▇▇▇ have the full right, power and authority to sell, transfer
and deliver the 200,000 post-split shares of Common Stock of BSKS to the
CFT Shareholders for the total purchase price of $470,000, and have the
full right, power and authority to sell, transfer and deliver the
35,000,000 new post-split investment shares of Common Stock of BSKS to the
CFT Shareholders, and, upon delivery of the certificates representing such
shares as contemplated in the Plan of Exchange, will transfer to the CFT
Shareholders good, valid and marketable title thereto, free and clear of
all liens.
|
|
(iv)
|
BSKS
has issued the 35,000,000 new post-split investment shares of Common Stock
of BSKS into escrow in compliance with the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, as well as
the rules and regulations promulgated pursuant
thereto.
|
|
(v)
|
BSKS shall increase the authorized shares of
Common Stock from 50,000,000 to 200,000,000, par value
$.001.
|
|
(vi)
|
All
liabilities of BSKS have been eliminated. This includes, but is not
limited to, any accounts payable, accrued expenses, long-term mortgage, as
well as any liabilities shown on its latest fiscal report as of December
31, 2009 filed on Form 10K with the Securities and Exchange Commission
prior to the Closing and as of the date of complete
closing.
|
|
(vii)
|
BSKS
and ▇▇. ▇▇▇▇▇▇▇ pledge that any expenses concerning any known or unknown
lawsuit, legal dispute or any expense resulting from the actions of BSKS
or their shareholders prior to Closing, shall be the full responsibility
of ▇▇. ▇▇▇▇▇▇▇.
|
|
(viii)
|
A
comfort letter prepared by a third party law firm confirming that to the
best of their knowledge after reasonable due diligence, BSKS has no
pending or threatened litigation is attached
hereto.
|
(1.8) Absence of
Liabilities. BSKS shall have no material liabilities as such
term is defined by U.S. generally accepted accounting principles. ▇▇. ▇▇▇▇▇▇▇
will retain the right to future use of the name Bluesky Systems Corp. only if
the new management changes BSKS's name. All expenses to prepare and file
documents connected to the Plan of Exchange will be paid by GT. The attorney
comfort letter, not to exceed $3,000, will be paid by GT. The quarterly
accounting review fees after the Closing will also be paid by CFT.
(1.9) Delivery of Audited Financial
Statements. CFT shall have delivered to BSKS audited
financial statements and an audit report thereon for the years ended December
31, 2008 and September 30, 2009, and any required audits shall be prepared by a
PCAOB member audit firm in accordance with U.S. GAAP at CFT’s
expense.
2.
Conditions Concurrent to Closing.
(2.1) Delivery of Registered Capital of
CFT. At Closing, BSKS
shall have a 100% beneficial ownership interest in China Folk Tourism Co. Ltd.
and CFT shall be fully reorganized as set forth in Schedule A attached hereto
and all of the necessary irrevocable PRC contractual arrangements shall have
been executed in accordance with PRC law and all PRC regulatory approvals
required for this transaction shall have been acquired.
(2.2) Acquisition Share Issuance and
Purchase of Common Stock. At Closing, BSKS shall deliver 200,000
post-split shares of Common Stock of BSKS to the CFT Shareholders in exchange
for total payments of $470,0001, and shall issue 35,000,000 new post-split
investment shares of Common Stock to the CFT Shareholders in exchange for 100%
of the capital stock of CFT, and, as a result, the then outstanding common
shares shall be as follows:
|
BSKS
Issued (post-split)
|
1,021,958
|
|
Acquisition
Share Issuance
|
35,000,000
|
|
Resulting
Total
|
36,021,958
|
|
Total
common shares owned by CFT
|
35,200,000
|
(2.3) Appointment of
CFT Nominees. At
Closing, nominees of CFT shall be appointed to the Board of Directors and as
Officers of BSKS to fill the vacancies created by the resignation of ▇▇.
▇▇▇▇▇▇▇. The appointments will occur within 10 days of the closing after proper
notice has been given pursuant to Rule 14F-1 under the Securities Exchange Act
of 1934, as amended.
(2.4) Reverse
Split. BSKS shall have completed up to a 25:1 reverse stock
split.
3.
Plan of Exchange
(3.1) Exchange and Reorganization:
BSKS and CFT shall be hereby reorganized, such that BSKS shall acquire
100% the capital stock of CFT equal to 50,000 ordinary shares, and CFT shall
become a wholly-owned subsidiary of BSKS.
(3.2) Delivery of Common Stock:
Immediately before the Closing, BSKS shall deposit 5,000,000 shares of Common
Stock of BSKS into the account of Escrow Agent for transfer.
(3.3) Issuance of Common Stock:
At the Closing, BSKS shall issue 35,000,000 new post-split investment shares of
Common Stock of BSKS to or for the CFT Shareholders.
(3.4) Closing/Effective Date:
The Plan of exchange
shall become effective immediately upon approval and adoption by the
parties hereto, in the manner provided by the law of the places of incorporation
and constituent corporate documents, and upon compliance with governmental
filing requirements, such as, without limitation, filings under the Securities
Exchange Act of 1934, and the filing of Articles of Exchange, if applicable
under State Law. Closing shall occur when all conditions of closing have been
met or are waived by the parties. The parties anticipate the filing of a
Schedule 14F-1 Information Statement at least ten days prior to any change in
majority of the Board of Directors of BSKS. The Parties expect to make such
filing after the Closing.
(3.5) Surviving Corporations:
Both corporations shall survive the exchange and reorganization herein
contemplated and shall continue to be governed by the laws of its respective
jurisdiction of incorporation.
(3.6) Rights of Dissenting
Shareholders: Each Party is the entity responsible for the rights of its
own dissenting shareholders, if any.
(3.7) Service of Process and Address:
Each corporation shall continue to be amenable to service of process in
its own jurisdiction, exactly as before this acquisition. The address
of BSKS is ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The address of CFT is Portcullis TrustNet (BVI) Limited,
Portcullis TrustNet ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇. The address of BSKS will be changed, according to the
instruction of CFT, before filing of the Form 8-K.
(3.8) Surviving Articles of
Incorporation: the Articles of Incorporation of each Corporation shall
remain in full force and effect, unchanged.
(3.9) Surviving By-Laws: the
By-Laws of each Corporation shall remain in full force and effect,
unchanged.
(3.10) Further Assurance, Good Faith
and Fair Dealing: the Directors of each Company shall and will execute
and deliver any and all necessary documents, acknowledgments and assurances and
do all things proper to confirm or acknowledge any and all rights, titles and
interests created or confirmed herein; and both companies covenant expressly
hereby to deal fairly and in good faith with each other and each other’s
shareholders. In furtherance of the parties desire, as so expressed, and to
encourage timely, effective and businesslike resolution the parties agree that
any dispute arising between them, capable of resolution by arbitration, shall be
submitted to binding arbitration. As a further incentive to private resolution
of any dispute, the parties agree that each party shall bear its own costs of
dispute resolution and shall not recover such costs from any other
party.
(3.11) General Mutual Representations
and Warranties. The purpose and general import of the Mutual
Representations and Warranties, are that each party has made appropriate full
disclosure to the others, that no material information has been withheld, and
that the information exchanged is accurate, true and correct. These warranties
and representations are made by each party to the other, unless otherwise
provided in this agreement, and they speak and shall be true immediately before
Closing.
|
|
(3.11.1) Organization and
Qualification. Each corporation is duly organized and in good
standing, and is duly qualified to conduct any business it may be
conducting, as required by law or local
ordinance.
|
|
|
(3.11.2) Corporate Authority.
Each corporation has corporate authority, under the laws of its
jurisdiction and its constituent documents, to do each and every element
of performance to which it has agreed, and which is reasonably necessary,
appropriate and lawful, to carry out this Agreement in good
faith.
|
|
|
(3.11.3) Ownership of Assets and
Property. Each corporation has lawful title and ownership of it
property as reported to the other, and as disclosed in its financial
statements.
|
|
|
(3.11.4) Absence of Certain Changes or
Events. Each corporation has not had any material changes of
circumstances or events which have not been fully disclosed to the other
party, and which, if different than previously disclosed in writing, have
been disclosed in writing as currently as is reasonably
practicable. Specifically, and without
limitation:
|
|
|
(3.11.4-a) the business of each
corporation shall be conducted only in the ordinary and usual course and
consistent with its past practice, and neither party shall purchase or
sell (or enter into any agreement to so purchase or sell) any properties
or assets or make any other changes in its operations, respectively, taken
as a whole, or provide for the issuance of, agreement to issue or grant of
options to acquire any shares, whether common, redeemable common or
convertible preferred, in connection
therewith;
|
|
|
(3.11.4-b) Except as set forth in
this Plan of Exchange, neither corporation shall (i) amend its Articles of
Incorporation or By-Laws, (ii) change the number of authorized or
outstanding shares of its capital stock, or (iii) declare, set aside or
pay any dividend or other distribution or payment in cash, stock or
property to the extent that which might contradict or
not comply with any clause or condition set forth in this Plan
of Exchange, or Escrow Agreement;
|
|
|
(3.11.4-c) Neither corporation
shall (i) issue, grant or pledge or agree or propose to issue, grant, sell
or pledge any shares of, or rights of any kind to acquire any shares of,
its capital stock, (ii) incur any indebtedness other than in the ordinary
course of business, (iii) acquire directly or indirectly by redemption or
otherwise any shares of its capital stock of any class or (iv) enter into
or modify any contact, agreement, commitment or arrangement with respect
to any of the foregoing;
|
|
|
(3.11.4-d) Except in the ordinary
course of business, neither party shall (i) increase the compensation
payable or to become payable by it to any of its officers or directors;
(ii) make any payment or provision with respect to any bonus, profit
sharing, stock option, stock purchase, employee stock ownership, pension,
retirement, deferred compensation, employment or other payment plan,
agreement or arrangement for the benefit of its employees (iii) grant any
stock options or stock appreciation rights or permit the exercise of any
stock appreciation right where the exercise of such right is subject to
its discretion (iv) make any change in the compensation to be received by
any of its officers; or adopt, or amend to increase compensation or
benefits payable under, any collective bargaining, bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment, termination or severance or other plan, agreement, trust, fund
or arrangement for the benefit of employees, (v) enter into any agreement
with respect to termination or severance pay, or any employment agreement
or other contract or arrangement with any officer or director or employee,
respectively, with respect to the performance or personal services that is
not terminable without liability by it on thirty days notice or less, (vi)
increase benefits payable under its current severance or termination, pay
agreements or policies or (vii) make any loan or advance to, or enter into
any written contract, lease or commitment with, any of its officers or
directors;
|
|
|
(3.11.4-e) Neither party shall
assume, guarantee, endorse or otherwise become responsible for the
obligations of any other individual, firm or corporation or make any loans
or advances to any individual, firm or corporation, other than obligations
and liabilities expressly assumed by the other that
party;
|
|
|
(3.11.4-f) Neither party shall
make any investment of a capital nature either by purchase of stock or
securities, contributions to capital, property transfers or otherwise, or
by the purchase of any property or assets of any other individual, firm or
corporation.
|
|
|
(3.11.5) Absence of Undisclosed
Liabilities. Each corporation has, and has no reason to anticipate
having, any material liabilities which have not been disclosed to the
other, in the financial statements or otherwise in
writing.
|
|
|
(3.11.6) Legal Compliance. Each
corporation shall comply in all material respects with all Federal, state,
local and other governmental (domestic or foreign) laws, statutes,
ordinances, rules, regulations (including all applicable securities laws),
orders, writs, injunctions, decrees, awards or other requirements of any
court or other governmental or other authority applicable to each of them
or their respective assets or to the conduct of their respective
businesses, and use their best efforts to perform all obligations under
all contracts, agreements, licenses, permits and undertaking without
default.
|
|
|
(3.11.7) Legal Proceedings.
Each corporation has no legal proceedings, administrative or regulatory
proceeding, pending or suspected, which have not been fully disclosed in
writing to the other.
|
|
|
(3.11.8) No Breach of Other
Agreements. This Agreement, and the faithful performance
of this agreement, will not cause any breach of any other existing
agreement, or any covenant, consent decree, or undertaking by either, not
disclosed to the other.
|
|
|
(3.11.9) Capital Stock. The
issued and outstanding shares and all shares of capital stock of each
corporation is as detailed herein, that all such shares are in fact issued
and outstanding, duly and validly issued, were issued as and are fully
paid and non-assessable shares, and that, other than as represented in
writing, there are no other securities, options, warrants or rights
outstanding, to acquire further shares of such
corporation.
|
(3.11.10) SEC Reports, Liabilities and
Taxes. BSKS has filed all required registration statements,
prospectuses, reports, schedules, forms, statements and other documents required
to be filed by it with the SEC since the date of its registration under the
Securities Act of 1933, as amended (collectively, including all exhibits
thereto, the "BSKS SEC Reports"). None of the BSKS SEC Reports, as of
their respective dates, contained any untrue statements of material fact or
failed to contain any statements which were necessary to make the statements
made therein, in light of the circumstances, not misleading. All of
the BSKS SEC Reports, as of their respective dates (and as of the date of any
amendment to the respective BSKS SEC Reports), complied as to form in all
material respects with the applicable requirements of the Securities Act and the
Exchange Act and the rules and regulations promulgated thereunder.
(ii)
Except as disclosed in the BSKS SEC Reports filed prior to the date hereof, BSKS
and its Subsidiary have not incurred any liabilities or obligations (whether or
not accrued, contingent or otherwise) that are of a nature that would be
required to be disclosed on a balance sheet of BSKS and its Subsidiaries or the
footnotes thereto prepared in conformity with GAAP, other than (A) liabilities
incurred in the ordinary course of business, or (B) liabilities that would not,
in the aggregate, reasonably be expected to have a material adverse effect on
BSKS.
(iii)
Except as disclosed in the BSKS SEC Reports filed prior to the date hereof, BSKS
and its Subsidiary (i) have prepared in good faith and duly and timely filed
(taking into account any extension of time within which to file) all material
tax returns required to be filed by any of them and all such filed tax returns
are complete and accurate in all material respects; (ii) have paid all taxes
that are shown as due and payable on such filed tax returns or that BSKS or any
of its Subsidiaries are obligated to pay without the filing of a tax return;
(iii) have paid all other assessments received to date in respect of taxes other
than those being contested in good faith for which provision has been made in
accordance with GAAP on the most recent balance sheet included in BSKS’s
financial statements; (iv) have withheld from amounts owing to any employee,
creditor or other person all taxes required by law to be withheld and have paid
over to the proper governmental authority in a timely manner all such withheld
amounts to the extent due and payable; and (v) have not waived any
applicable statute of limitations with respect to United States federal or state
income or franchise taxes and have not otherwise agreed to any extension of time
with respect to a United States federal or state income or franchise tax
assessment or deficiency.
|
|
(3.11.11)
Brokers' or Finder's Fees. Each corporation is not aware of
any claims for brokers' fees, or finders' fees, or other commissions or
fees, by any person not disclosed to the other, which would become,
if valid, an obligation of either
company.
|
(3.12) Miscellaneous
Provisions
|
|
|
|
(3.12.1) Except as required by
law, no party shall provide any information concerning any aspect of the
transactions contemplated by this Agreement to anyone other than their
respective officers, employees and representatives without the prior
written consent of the other parties hereto. The aforesaid obligations
shall terminate on the earlier to occur of (a) the Closing, or (b) the
date by which any party is required under its articles or bylaws or as
required by law, to provide specific disclosure of such transactions to
its shareholders, governmental agencies or other third
parties. In the event that the transaction does not close, each
party will return all confidential information furnished in confidence to
the other. In addition, all parties shall consult with each
other concerning the timing and content of any press release or news
release to be issued by any of
them.
|
|
|
(3.12.2) This Agreement may be
executed simultaneously in two or more counterpart originals. The parties
can and may rely upon facsimile signatures as binding under this
Agreement, however, the parties agree to forward original signatures to
the other parties as soon as practicable after the facsimile signatures
have been delivered.
|
(3.12.3) The Parties to this agreement have no wish to engage in costly or lengthy litigation with each other. Accordingly, any and all disputes which the parties cannot resolve by agreement or mediation, shall be submitted to binding arbitration under the rules and auspices of the American Arbitration Association. As a further incentive to avoid disputes, each party shall bear its own costs, with respect thereto, and with respect to any proceedings in any court brought to enforce or overturn any arbitration award. This provision is expressly intended to discourage litigation and to encourage orderly, timely and economical resolution of any disputes which may occur.
|
|
(3.12.4) If any provision of
this Agreement or the application thereof to any person or situation shall
be held invalid or unenforceable, the remainder of the Agreement and the
application of such provision to other persons or situations shall not be
effected thereby but shall continue valid and enforceable to the fullest
extent permitted by law.
|
|
|
(3.12.5) No waiver by any party
of any occurrence or provision hereof shall be deemed a waiver of any
other occurrence or provision.
|
|
|
(3.12.6) The parties
acknowledge that both they and their counsel have been provided ample
opportunity to review and revise this agreement and that the normal rule
of construction shall not be applied to cause the resolution of any
ambiguities against any party presumptively. The Agreement shall be
governed by and construed in accordance with the laws of the State of
Pennsylvania.
|
4. Termination. The Plan of exchange may be
terminated by written notice, at any time prior to closing, (i) by mutual
consent, (ii) by either party during the due diligence phase, (iii) by either
party, in the event that the transaction represented by the anticipated Plan of exchange has
not been implemented and approved by the proper governmental authorities 71 days
from the date of this Agreement, or (iv) if payments scheduled in the Escrow
Agreement are not received when due. In the event that termination of the Plan of exchange by
either or both, as provided above, the Plan of exchange shall
forthwith become void and there shall be no liability on the part of either
party or their respective officers and directors.
5. Closing. The
parties hereto contemplate that the closing of this Plan of Exchange shall occur
immediately after all of the conditions precedent and concurrent to closing have
been met or waived. The closing deliveries will be made pursuant to
the Escrow Agreement dated January 12,
2010. Immediately upon or within four days of signing the
Plan, CFT will deposit the amount of $210,000 along with a secured promissory
note in the amount of $260,000 and a loan documentation package into the US
account of the Escrow Agent. Immediately upon or within four days of
signing this Plan, ▇▇. ▇▇▇▇▇▇▇ shall deposit into the US account of the Escrow
Agent, certificates representing 5,000,000 shares of Common Stock of BSKS for
transfer. After all conditions of the Plan are met and within 71
days, BSKS shall issue 35,000,000 new post-split investment shares of Common
Stock of BSKS pursuant to an exemption under Regulation S promulgated under the
Securities Act of 1933, as amended, to the CFT shareholders. The parties
acknowledge that the Escrow Agreement has a default provision that governs the
rights of the parties in the event that certain performances are not made on a
timely basis and they expressly accept the terms thereof.
6. Merger
Clause. This Plan of Exchange, together with the Escrow
Agreement, constitute the entire agreement of the parties hereto with respect to
the subject matter hereof, and such documents supersede all prior understandings
or agreements between the parties hereto, whether oral or written, with respect
to the subject matter hereof, all of which are hereby superseded, merged and
rendered null and void.
IN WITNESS WHEREOF, The
parties hereto, intending to be bound, hereby sign this Plan of Exchange below
as of the date first written above.
BLUESKY
SYSTEMS
CORP. ▇▇▇▇▇
▇▇▇▇▇▇▇
By: /S/ ▇▇▇▇▇
▇▇▇▇▇▇▇
By: /S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇,
President ▇▇▇▇▇
▇▇▇▇▇▇▇, Individually
CHINA
FOLK TOURISM CO.,
LTD. CFT
AGENT2
By: /S/ ▇▇▇▇▇▇▇
▇▇▇
By: /S/ ▇▇▇▇▇▇▇
▇▇▇
|
▇▇▇▇▇▇▇
▇▇▇, President
|
▇▇▇▇▇▇▇
▇▇▇
|
|
|
As
agent and attorney in fact for the CFT Shareholders listed on Schedule B
attached hereto.
|
____________________
2 CFT Agent
represents and warrants to Bluesky Systems Corp and ▇▇▇▇▇ ▇▇▇▇▇▇▇, that CFT
Agent has been duly appointed as agent and attorney-in-fact for each of the CFT
Shareholders listed on Schedule B attached hereto, and such appointment is in
full force and effect with respect to each CFT Shareholder and such appointment
has not been revoked nor has any action been taken by any SFT Shareholder to
revoke such appointment.
SCHEDULE
A
SCHEDULE
B
1. SMART
JADE DEVELOPMENT LIMITED 19,000
share
Add:
▇.▇.▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ British Virgin Islands
2. GALAXY
LINK INTERNATIONAL LIMITED 14,000 share
Add: ▇/▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, British Virgin Islands
3. REGAL
ALLIANCE DEVELOPMENT LIMITED 6,500 share
Add: ▇/▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, British Virgin Islands
4. GOLD
SWAN INTERNATIONAL LIMITED 3,500
share
Add: ▇/▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, British Virgin Islands
5. JET
MAIN
LIMITED 3,500
share
Add: ▇/▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, British Virgin Islands
6. DREAM
ELYSIUM INTERNATIONAL LIMITED 3,500 share
Add:
▇.▇.▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇