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ASSETS TRANSFER AND SHARE
ISSUANCE AGREEMENT
This
ASSETS TRANSFER AND SHARE ISSUANCE AGREEMENT ("Agreement") is
entered into on this 14 th Day of November, 2007 by and
among Hanqiao Zheng ("Zheng"), Shanghai TCH Energy Technology Co.
Ltd ("TCH") and China Recycling Energy Corporation ("CREG"), Zheng,
CREG and TCH are collectively referred to as "Parties".
RECITAL
WHEREAS, Hanqiao Zheng is the
owner of two TRT systems ("Invested Assets"), including all the
equipments, components, devices, computer programs, accessories,
and facilities of the said TRT systems. The total value of the
Invested Assets is $ 9,677,420;
WHEREAS, China Recycling Energy
Corporation ("CREG") is a corporation duly incorporated under the
laws of State of Nevada;
WHEREAS, Shanghai TCH Energy
Technology Co. Ltd ("TCH") is the wholly owned subsidiary company
of CREG, with its place of organization and principal placement of
business in the People’s Republic of China
("PRC");
WHEREAS, Zheng wishes and agrees
to assign and transfer all of the the Invested Assets to CREG as a
capital investment and CREG agrees to accept such capital
investment from Zheng upon the terms and conditions of this
Agreement;
WHEREAS, upon CREG’s
receipt of The Invested Assets from Zheng as capital investment,
CREG wishes to sell and transfer the Invested Assets to TCH and TCH
agrees to accept such sale and transfer upon the terms and
conditions of this Agreement;
NOW THEREFORE, in consideration
of the foregoing and of the mutual covenants set forth below, the
parties hereby agree as follows:
ARTICLE I
ASSIGMENT OF THE INVESTED ASSETS
FROM ZHENG TO CREG
Section 1.1. Assignment of the Invested Assets
from Zheng to CREG.
Zheng
agrees to assign and transfer all of the Invested Assets to CREG as
a capital investment and CREG agrees to accept such capital
investment from Zheng. Upon assignment and transfer of the Invested
Assets from Zheng to CREG, CREG shall assume and agree to pay or
discharge when due all the liabilities and obligations of Zheng
related or attributable to the Invested Assets (hereinafter, the
"Assumed Liabilities").
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Section 1.2. Issuance of
Shares.
In
exchange for Zheng’s assignment and transfer of the Invested
Assets to CREG, CREG shall issue and deliver to Zheng the stock
certificates representing 7,867,821 shares of Common Stock of CREG
(the "Shares"), $ 0.001 par value per share, at the price of $ 1.23
per share.
Section 1.3. First Closing
(from Zheng to CREG).
The
assignment and transfer of the Invested Assets from Zheng to CREG
("First Closing") shall take place at such other time and place as
CREG and Zheng mutually agree upon, orally or in writing. CREG
shall deliver to Zheng either (i) a certificate or certificates
representing the Shares issued or (ii) instruments of assignment or
transfer that shall, in the reasonable opinion of Zheng be
necessary to issue the Shares to Zheng. At the First Closing, Zheng
shall deliver or cause to be delivered to CREG good and sufficient
instruments of transfer transferring to CREG title to all of the
Invested Assets and shall effectively vest in CREG good title to
all of the Invested Assets. Zheng shall deliver or cause to be
delivered to CREG all written leases, contracts, commitments and
rights evidencing the Invested Assets and the liabilities
associated with the Invested Assets, with such assignments thereof
and consents to assignments as are necessary to assure CREG of the
full benefit of the same. Zheng shall take all requisite steps to
put CREG (or its designee) in actual possession and operating
control of the Invested Assets.
ARTICLE II.
SALE OF THE INVESTED ASSETS FROM
CREG TO TCH
Section 2.1. Sale and Transfer of the Invested
Assets from CREG to TCH.
Upon the
First Closing whereas CREG receives the Invested Assets from Zheng
as capital investment, CREG agrees to sell and transfer all of the
Invested Assets to TCH for a total price of $ 9,677,420. Upon sale
and transfer of the Invested Assets from CREG to TCH, TCH shall
assume and agree to pay or discharge when due all the liabilities
and obligations of CREG related or attributable to the Invested
Assets and CREG will cease to assume and pay or discharge when due
all the liabilities and obligations set forth in Section 1.1 of
this Agreement.
Section 2.2. Second Closing
(from CREG to TCH).
The sale
and transfer of the Invested Assets from CREG to TCH ("Second
Closing") shall take place at such other time and place as CREG and
TCH mutually agree upon, orally or in writing and may take place at
the same place and time of First Closing. At the Second Closing,
CREG shall deliver or cause to be delivered to TCH good and
sufficient instruments of transfer transferring to TCH title to all
of the Invested Assets and shall effectively vest in TCH good title
to all of the Invested Assets. CREG shall deliver or cause to be
delivered to TCH all written leases, contracts, commitments and
rights evidencing the Invested Assets and the liabilities
associated with the Invested Assets, with such assignments thereof
and consents to assignments as are necessary to assure TCH of the
full benefit of the same. CREG shall take all requisite steps to
put TCH (or its designee) in actual possession and operating
control of the Invested Assets.
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ARTICLE III
REPRESENTATIONS AND
WARRANTIES
Section 3.1 Representations and Warranties of
Zheng.
Zheng
represents and warrants to CREG, as of the date hereof and as of
the First Closing, with respect to himself and the share issuance,
that the following statements are true and correct:
(a)
Zheng has all power and authority to execute,
deliver and perform this Agreement.
(b)
This Agreement is the valid and binding obligation
of Zheng, enforceable against Zheng in accordance with its
terms.
(c)
The Common Stock will be acquired for investment for
the account of Zheng, and not as a nominee or agent, and not with a
view to the distribution or public offering thereof. In connection
therewith, Zheng confirms that he is neither a U.S Person, as such
term is defined in Rule 902(k) of Regulation S, nor located within
the United States, and that the transaction will be between
non-U.S. Persons, and take place outside of the United
States.
(d)
Zheng has not been contacted concerning the acquired
Shares or the matters set forth in this Agreement by means of any
advertisement or other general solicitation.
(e)
Zheng understands that (i) the acquired Shares have
not been registered under either the Securities Act of 1933, as
amended or the securities laws of any state by reason of specific
exemptions therefrom and that such securities may be resold in the
United States without registration under the Securities Act only in
certain limited circumstances.
(f)
Zheng has access to information relating to CREG as
Zheng deems necessary to make an informed investment decision in
connection with the acquired Shares, and except as provided in
Section 3.2 below, CREG is making no representations and warranties
concerning the acquired Shares or the business of the
Company.
(g)
Zheng understands that Regulation S promulgated
under the Securities Act, is available only for offers and sales of
securities outside the United States, and will comply with
Regulation S, specifically complying with the restrictions on
re-sale of the securities of Rules 903 (a) and (b)(3) of Regulation
S.
(h)
Zheng is also an "accredited investor" as that term
is defined in Rule 501(a) of Regulation D, provided that the sales
of securities under this Agreement is an offshore sale in reliance
upon the exemption from securities registration afforded by the
provisions of Regulation S;
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(i)
Zheng understands that (i) the
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