SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement"), dated as of December 20, 2001
among Xxxx and Xxxx Xxxxx, Xxxx Xxxxx, ("Sellers"), World Envirotech, Inc.
("WEI"), and Xin Net Corp. ("Buyer").
W I T N E S S E T H:
A. WHEREAS, WEI is a corporation duly organized under the laws of the
State of Colorado.
B. WHEREAS, Buyer wishes to purchase 3,882,700 of the outstanding common
shares of WEI free and clear of liens
C. WHEREAS, prior to the transaction Buyer is not an affiliate of WEI.
NOW, THEREFORE, it is agreed among the parties as follows:
ARTICLE I
The Consideration
1.1 Subject to the conditions set forth herein, Sellers shall sell and
Buyer shall purchase 3,882,700 shares of common stock of WEI. The transactions
contemplated by this Agreement shall be completed simultaneously herewith. The
purchase price for the shares to be paid by Buyer to Sellers is $200,000 in cash
(the "Consideration") which shall be paid as follows: cash at closing of $66,666
to Xxxx and Xxxx Xxxxx, $133,334 to Xxxx Xxxxx, and upon the proposed
acquisition of ProtectServe Pacific Ltd. of Hong Kong, Buyer shall issue 100,000
shares of restricted common stock (post-reverse split) to Sellers to be divided
as follows: Xxxx and Xxxx Xxxxx 33,333 shares and 66,667 shares to Xxxx Xxxxx.
ARTICLE II
Closing and Conveyance of Shares
2.1 The Purchase Shares shall be delivered and conveyed by Sellers to Buyer
simultaneously herewith, with duly executed stock powers, upon receipt of the
Consideration by Sellers.
2.2 Closing hereunder with delivery of the consideration and shares
shall occur on or before December 21, 2001 @ 5pm MST. Closing may occur through
use of Federal Express and wire transfer.
ARTICLE III
Representations, Warranties and Covenants of Sellers as to XXX
Xxxxxxx and WEI each hereby, jointly and severally, represent, warrant
and covenant to Buyer as follows:
3.1 WEI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Colorado, and has the corporate power
and authority to carry on its business as it is now being conducted. The
Articles of Incorporation and Amendments and Bylaws of WEI, copies of which have
been delivered to Buyer, are complete and accurate, and the minute books of WEI,
copies of which have also been delivered to Buyer, contain a record, which is
complete and accurate in all material respects, of all meetings, and all
corporate actions of the shareholders and Board of Directors of WEI.
3.2 The authorized capital stock of WEI consists of 50,000,000 shares of
common stock. There are 5,402,700 shares of Common Stock issued and outstanding.
All such shares of capital stock of WEI are validly issued, fully paid and
nonassessable. WEI has no outstanding options, warrants, or other rights to
purchase, or subscribe to, or other securities convertible into or exchangeable
for any shares of capital stock of WEI, or contracts or arrangements of any kind
relating to the issuance, sale or transfer of any capital stock or other equity
securities of WEI. All of the outstanding shares of capital stock of WEI have
been offered, issued, sold and delivered in compliance with applicable federal
and state securities laws and none of such securities were, at the time of
issuance, subject to preemptive rights.
3.3 WEI does not own nor has it owned in the last five years any
outstanding shares of capital stock or other equity interests of any
partnership, joint venture, trust, corporation, limited liability company or
other entity and there are no obligations of WEI to repurchase, redeem or
otherwise acquire any capital stock or equity interest of another entity.
3.4 This Agreement has been duly authorized, validly executed and delivered
on behalf of the Sellers and WEI and is a valid and binding agreement and
obligation of the Sellers and WEI enforceable against each Sellers, jointly and
severally, and against WEI in accordance with its terms, subject to limitations
on enforcement by general principles of equity and by bankruptcy or other laws
affecting the enforcement of creditors' rights generally, and the Sellers and
WEI each have complete and unrestricted power to enter into and, upon the
appropriate approvals as required by law, to consummate the transactions
contemplated by this Agreement.
3.5 Neither the making of nor the compliance with the terms and provisions
of this Agreement and consummation of the transactions contemplated herein by
WEI will conflict with or result in a breach or violation of the Articles of
Incorporation or Bylaws of WEI, or of any material provisions of any material
agreement or instrument to which WEI is a party or by which it or any of its
material properties or assets are bound, or of any material provision of any
law, statute, rule, regulation, or any existing applicable decree, judgment or
order by any court, federal or state regulatory body, administrative agency, or
other governmental body having jurisdiction over WEI, or any of its material
properties or assets, or will result in the creation or imposition of any
material lien, charge or encumbrance upon any material property or assets of WEI
pursuant to the terms of any agreement or instrument to which WEI is a party or
by which WEI may be bound or to which any of WEI property is subject and no
event has occurred with which lapse of time or action by a third party could
result in a material breach or violation of or default by WEI.
3.6 Except as disclosed herein, and based upon the representations and
warranties of the Buyer set forth herein, no authorization, consent, approval,
exemption or other action by or notice to any government entity or filing with
or consent of any governmental body is required for the sale of the Purchase
Shares to Buyer pursuant to this Agreement.
3.7 There is no claim, legal action, arbitration, governmental
investigation or other legal or administrative proceeding, nor any order, decree
or judgment in progress, pending or in effect, or to the best knowledge of the
Sellers threatened against or relating to WEI or affecting any of its assets,
properties, business or capital stock. There is no continuing order, injunction
or decree of any court, arbitrator or governmental authority to which WEI is a
party or by which WEI or its assets, properties, business or capital stock are
bound.
3.8 WEI has accurately prepared and filed all Federal, state and other tax
returns required by law, domestic and foreign, to be filed by it, has paid or
made provisions for the payment of all taxes shown to be due and all additional
assessments, and adequate provisions have been and are reflected in the
financial statements of WEI for all current taxes and other charges to which WEI
is subject and which are not currently due and payable. None of the Federal
income tax returns of WEI have been audited by the Internal Revenue Service or
other foreign governmental tax agency. WEI has no knowledge of any additional
assessments, adjustments or contingent tax liability (whether federal or state)
pending or threatened against WEI for any period, nor of any basis for any such
assessment, adjustment or contingency.
3.9 Sellers are the legal, beneficial and registered owners of the Purchase
Shares, free and clear of any liens, charges, encumbrances, voting trusts,
shareholder agreements or rights of any kind granted to any person or entity, or
any interest in or the right to purchase or otherwise acquire any of the
Purchase Shares from the Sellers at any time upon the happening of any stated
event and may transfer such shares without the consent of any third party. Upon
closing of the transactions contemplated hereby, the Buyer will acquire all
right, title and interest in the Purchase Shares, free and clear of all liens,
charges or encumbrances and will have all of Sellers's entire right, title and
interest in and to the Purchase Shares. All Purchase Shares owned by Sellers is
set forth hereto on Schedule 3.9.
3.10 Other Shareholders who join this Agreement by Addendum shall
warrant and represent that the shares sold by such shareholders are free and
clear of any liens and encumbrances and may be transferred without consent of
any third party.
3.11 WEI has delivered to Buyer audited financial statements dated
February 28, 2001 and unaudited financial statements for the period ended August
31, 2001. All such statements, herein sometimes called "WEI Financial
Statements" are complete and correct in all material respects and, together with
the notes to these financial statements, present fairly the financial position
and results of operations of WEI for the periods indicated. All financial
statements of WEI have been prepared in accordance with generally accepted
accounting principles.
3.12 As of the date hereof, WEI and the Sellers hereby, jointly and
severally, represent and warrant that all outstanding indebtedness of WEI is as
shown on the financial statement, and all such indebtedness, if any, will be
paid by Sellers at closing hereunder.
3.13 Since the dates of the WEI Financial Statements, there have not
been any material adverse changes in the business or condition, financial or
otherwise, of WEI. WEI does not have any liabilities, commitments or
obligations, secured or unsecured except as shown on updated financials (whether
accrued, absolute, contingent or otherwise).
3.14 WEI is not a party to any contract performable in the future.
3.15 The representations and warranties of the Sellers and WEI shall be
true and correct as of the date hereof.
3.16 WEI will deliver to Buyer, all of its corporate books and records at
closing.
3.17 WEI has no employee benefit plan in effect at this time.
3.18 No representation or warranty by WEI or the Sellers in this Agreement,
or any certificate delivered pursuant hereto contains any untrue statement of a
material fact or omits to state any material fact necessary to make such
representation or warranty not misleading.
3.19 Sellers or WEI have delivered, to Buyer true and correct copies of a
Form 10SB filed with by the Securities and Exchange Commission ("SEC") for the
year ended February 28, 2001 and each of its other reports filed with the SEC
for the period ended August 31, 2001. WEI is a registered company under the
Securities Exchange Act of 1934, as amended.
3.20 WEI has duly filed all reports required to be filed by it under the
Securities Exchange Act of 1934, as amended (the "Federal Securities Laws"). No
such reports, or any reports sent to the shareholders of WEI generally contained
any untrue statement of material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements in such
report, in light of the circumstances under which they were made, not
misleading.
3.21 The Sellers has not received any general solicitation or general
advertising regarding the shares of Buyer's common stock comprising the
Consideration.
3.22 WEI has incurred no liabilities except as shown on the financial
statements and has no contract or open account affiliations whatsoever.
ARTICLE IV
Termination of Representation and
Warranties and Certain Agreements
4.1 The respective representations and warranties of the parties hereto
shall survive this Agreement for two years and the covenants shall survive
hereafter.
4.2 Any legal action or proceeding with respect to this Agreement or any
matters arising out of or in connection with this Agreement or the transactions
contemplated hereby or the documents executed and delivered in connection
herewith, and any action for enforcement of any judgment in respect thereof may
be brought in the courts of the State of Colorado or of the United States of
America for the District of Colorado, and, by execution and delivery of this
Agreement, the parties each hereby accepts for itself and in respect of its
property, generally and unconditionally, the jurisdiction of the aforesaid
courts and appellate courts thereof. The parties irrevocably consent to service
of process out of any of the aforementioned courts in any such action or
proceeding. The parties each hereby irrevocably waive any objection that it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or the
transactions contemplated hereby or the documents execute and delivered in
connection herewith brought in the courts referred to above and hereby further
irrevocably waive and agree, to the extent permitted by applicable law, not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of any party hereto to serve process in any other manner
permitted by law.
ARTICLE V
Procedure for Closing
5.1 At the Closing Date, the purchase and sale shall be effective with
common stock certificates of WEI being delivered duly executed for 3,882,700
shares of common stock to Buyer and the delivery of the Consideration to Sellers
from Buyer (from the Escrow with M.A. Xxxxxxx), together with deliver of all
other agreements, schedules, warranties, and representations set forth in this
Agreement.
ARTICLE VI
Conditions Precedent to the
Consummation of the Purchase
The following are conditions precedent to the consummation of the
Agreement on or before the Closing Date:
6.1 SELLERS shall have performed and complied with all of their
respective obligations hereunder which are to be complied with or performed on
or before the Closing Date and SELLERS and WEI and BUYER shall provide one
another at the Closing with a certificate to the effect that such party has
performed each of the acts and undertakings required to be performed by it on or
before the Closing Date pursuant to the terms of this Agreement.
6.2 No action, suit or proceeding shall have been instituted or shall
have been threatened before any court or other governmental body or by any
public authority to restrain, enjoin or prohibit the transactions contemplated
herein, or which might subject any of the parties hereto or their directors or
officers to any material liability, fine, forfeiture or penalty on the grounds
that the transactions contemplated hereby, the parties hereto or their directors
or officers, have violated any applicable law or regulation or have otherwise
acted improperly in connection with the transactions contemplated hereby, and
the parties hereto have been advised by counsel that, in the opinion of such
counsel, such action, suit or proceeding raises substantial questions of law or
fact which could reasonably be decided adversely to any party hereto or its
directors or officers.
6.3 The representations and warranties made by BUYER and SELLERS in
this Agreement shall be true as though such representations and warranties had
been made or given on and as of the Closing Date, except to the extent that such
representations and warranties may be untrue on and as of the Closing Date
because of (1) changes caused by transactions suggested or approved in writing
by BUYER or (2) events or changes (which shall not, in the aggregate, have
materially and adversely affected the business, assets, or financial condition
of WEI during or arising after the date of this Agreement.)
6.4 All outstanding liabilities of WEI shall have been paid and
released prior to closing.
6.5 Buyer and WEI agree that neither shall cause or adopt a reverse
split in excess of one for four shares at any time in the next two years. In the
event of a breach of this covenant, it shall trigger an immediate grant to
Sellers of a total of 325,000 shares on a post-reverse split basis, which must
be delivered to Seller within ten days after the effective date of the reverse
split.
ARTICLE VII
Miscellaneous
7.1 This Agreement embodies the entire agreement between the parties,
and there have been and are no agreements, representations or warranties among
the parties other than those set forth herein or those provided for herein.
7.2 To facilitate the execution of this Agreement, any number of
counterparts hereof may be executed, and each such counterpart shall be deemed
to be an original instrument, but all such counterparts together shall
constitute but one instrument.
7.3 All parties to this Agreement agree that if it becomes necessary or
desirable to execute further instruments or to make such other assurances as are
deemed necessary, the party requested to do so will use its best efforts to
provide such executed instruments or do all things necessary or proper to carry
out the purpose of this Agreement.
7.4 This Agreement may not be amended except by written consent of both
parties.
7.5 Any notices, requests, or other communications required or
permitted hereunder shall be delivered personally or sent by overnight courier
service, prepaid, addressed as follows:
To Sellers: a) Xxxx and Xxxx Xxxxx, 0000 X. Xxxxxxx Xx., Xxxxxxxxx,00000
b) Xxxx Xxxxx, 0000 X. Xxxxxxxxxxx Xx., Xxxxxxxxx Xxxxx, XX 00000
To Buyer: Xin Net Corporation, #830, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, X.X. Xxxxxx
X0X 0X0
or such other addresses as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
received.
7.6 No press release or public statement will be issued relating to the
transactions contemplated by this Agreement without prior approval of Buyer and
Sellers. However, WEI may issue at any time any press release or other public
statement it believes on the advice of its counsel it is obligated to issue to
avoid liability under the law relating to disclosures, but the party issuing
such press release or public statement shall make a reasonable effort to give
the other party prior notice of and opportunity to participate in such release
or statement.
7.7 This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall be considered one and
the same agreement. This Agreement may be executed by facsimile signatures.
7.8 This Agreement shall be governed by and construed in accordance
with and enforced under the laws of the state of Colorado applicable to
agreements made and to be performed entirely in that state.
7.9 In the event of a breach or default of this Agreement or any of the
continuing covenants hereunder which results in a party commencing legal action,
the prevailing party in such legal action shall be entitled to an award of all
legal fees and costs of the action.
IN WITNESS WHEREOF, the parties have executed this Agreement this _____
day of __________________________, 2001.
SELLERS:
/s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx
/s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx
/s/ Xxxx Xxxxx
--------------------------------
Xxxx Xxxxx
World Envirotech, Inc.
By: /s/ Xxxx Xxxxx
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BUYER:
Xin Net Corp.
/s/ Xxxx Xxxx
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