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TERRITORY OF THE BRITISH VIRGIN
ISLANDS
BUSINESS COMPANIES ACT (CAP 285)
PLAN OF MERGER
OF
CHARDAN SOUTH CHINA ACQUISITION
CORP.
(a Delaware, United States of America
Corporation)
into
CHINA ENERGY TECHNOLOGY
LIMITED
(a British Virgin Islands Business
Company)
1. Recitals
A. Chardan South China Acquisition Corporation
(" Merged Company ") is the
sole shareholder of China Energy Technology Limited ("
Surviving Company ").
B. The Boards of Directors and stockholders of Merged Company and
Surviving Company have determined that Merged Company shall be
merged with and into the Surviving Company under the laws of the
British Virgin Islands in a transaction qualifying under United
States federal income tax law as a reorganization within the
meaning of Section 368(a)(1) of the Internal Revenue Code of 1986,
as amended (the "Code)(the "Merger"). The Merger is being
undertaken to facilitate the business purposes of the Merged
Company and its stockholders.
C. Surviving Company was formed solely to effect
the Merger and has not conducted and will not conduct any business
activities or operations of any kind prior to the Merger (except in
connection with the Merger). Additionally, prior to the Merger,
Surviving Company will not hold any assets other than a nominal
amount of assets to facilitate its organization or preserve its
legal existence.
D. Immediately following the consummation of the
Merger, the Merged Company stockholders will own all of the issued
and outstanding shares of Surviving Company. The Merged Company
stockholders will own all of the Surviving Company shares solely by
reason of their ownership of Merged Company stock held immediately
prior to the Merger. Additionally, at the time of the Merger, the
fair market value of the Surviving Company shares and any other
consideration received by each Merged Company stockholder will be
equal to the fair market value of the Merged Company stock
surrendered in the Merger.
E. For United States federal income tax purposes,
the parties to this agreement hereby adopt this agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g)
and 1.368-3(a) of the United States Treasury
Regulations.
2. Plan of Merger
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(a)
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Names of constituent companies and surviving
company.
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The names of the constituent companies are
Chardan South China Acquisition Corporation, a Delaware, United
States of America corporation incorporated on the 10th day of March
2005, (the " Merged Company ") and China Energy Technology Limited, a British Virgin
Islands Business Company incorporated on the __ day of
_____________, 2007 (the " Surviving Company
") and the name of the Surviving Company
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