SHARE EXCHANGE AGREEMENT
Exhibit
2.1
EXECUTION
COPY
Share
Exchange Agreement (this "Agreement") is made this 28th day of March, 2008, by
and between China World Trade Corporation, a Nevada corporation ("CWTD");
Xxxxxxx Xxx Xxxx Xxxxx, the Chairman and President of CWTD ("Xxxxx"); Uonlive
Limited, a corporation organized and existing under the laws of the Hong Kong
SAR of the People's Republic of China ("Uonlive"); Tsun Sin Man Xxxxxx,
Chairman of Uonlive ("Tsun"); Hui Chi Kit, Chief Financial Officer of Uonlive
("Hui"); Parure Capital Limited, a corporation organized and existing under
the laws of the British Virgin Islands and parent of Uonlive ("Parure Capital");
Tsun and Hui being the holders of all of the outstanding capital stock of Parure
Capital and hereinafter referred to as the "Shareholders"; and
Parure Capital and Uonlive being hereinafter referred to as the "Uonlive
Subsidiaries”; all of whom execute and deliver this Agreement, based on the
following:
Recitals
WHEREAS,
CWTD wishes to acquire one hundred percent (100%) of all of the issued and
outstanding share capital of Parure Capital from the Shareholders in an exchange
for One Hundred Fifty Million (150,000,000) shares of common stock of CWTD and
500,000 shares of Series A Convertible Preferred Stock of CWTD having the terms
and conditions set forth in Exhibit A hereto (the “Series A Convertible
Preferred Stock”) in a transaction intended to qualify as a tax-free exchange
pursuant to sections 351 and 368(a)(1)(B) of the Internal Revenue Code of 1986,
as amended.
WHEREAS,
in furtherance thereof, the respective Boards of Directors of CWTD and the
Uonlive Subsidiaries, have approved the exchange, upon the terms and subject to
the conditions set forth in this Agreement, pursuant to which one hundred
percent (100%) of the share capital of Parure Capital (the "Parure Capital Share
Capital”) issued and outstanding prior to the exchange, will be exchanged by
the Shareholders in the aggregate for 150,000,000 shares of common
stock, $.001 par value, of CWTD and 500,000 shares of Series A Convertible
Preferred Stock of CWTD (the "CWTD Common Stock and Series A Convertible
Preferred Stock" or the “Stock”).
WHEREAS,
neither party is seeking tax counsel or legal or accounting opinions on whether
the transaction qualifies for tax free treatment.
Agreement
Based on
the stated premises, which are incorporated herein by reference, and for and in
consideration of the mutual covenants and agreements hereinafter set forth, the
mutual benefits to the parties to be derived herefrom, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, it is hereby agreed as follows:
ARTICLE
I
EXCHANGE
OF SHARE CAPITAL FOR STOCK
1.01
Exchange of Share Capital
for Stock. On the terms and subject to the conditions set forth in this
Agreement, on the Closing Date (as defined in Section 1.05 hereof), the
Shareholders shall assign, transfer, and deliver to CWTD, free and clear of all
liens, pledges, encumbrances, charges, restrictions, or claims of any kind,
nature, or description, the Parure Capital Share Capital, and CWTD agrees to
acquire such share capital on such date by issuing and delivering in exchange
therefore to the Shareholders, or its designees, the Stock on a pro-rata basis.
All shares of Stock to be issued and delivered pursuant to this Agreement shall
be appropriately adjusted to take into account any stock split, stock dividend,
reverse stock split, recapitalization, or similar change in the CWTD Common
Stock which may occur between the date of the execution of this Agreement and
the Closing Date.
1.02
Delivery of Parure Capital Share Capital by the Shareholders. The transfer of
the Parure Capital Share Capital by the Shareholders shall be effected by the
delivery to CWTD at the Closing (as set forth in Section 1.05 hereof) of an
endorsement of the share capital in the name of CWTD followed by an entry into
the share ledger of Parure Capital and registration of the same in the name of
CWTD with the appropriate government ministry of China.
1.03
Operation as Wholly-Owned Subsidiary. After giving effect to the transaction
contemplated hereby, CWTD will own one hundred percent (100%) of all of the
share capital of Parure Capital. Parure Capital will be a
wholly-owned subsidiary of CWTD operating under the name “Parure Capital”, a
corporation organized and existing under the laws of the British Virgin Islands.
Uonlive will become a wholly-owned indirect subsidiary of CWTD operating under
the name “xxx.XXxXxxx.xxx”,” a corporation organized and existing under the laws
of the Hong Kong SAR of the People’s Republic of China.
1.04
Further Assurances. At the Closing and from time to time thereafter, the
Shareholders shall execute such additional instruments and take such other
action as CWTD may reasonably request, without undue cost to the Shareholders in
order to more effectively sell, transfer, and assign clear title and ownership
in the Parure Capital Share Capital to CWTD.
1.05
Closing and Parties. The Closing contemplated hereby shall be held at a mutually
agreed upon time and place on or before March 31, 2008, or on another date to be
agreed to in writing by the parties (the "Closing Date”). The Agreement may be
closed at any time following approval by a majority of Board of Directors of
CWTD and by a majority of the Board of Directors of the Uonlive Subsidiaries and
the approval of the Shareholders. The Closing may be accomplished by wire,
express mail, overnight courier, conference telephone call or as otherwise
agreed to by the respective parties or their duly authorized
representatives.
- 1
-
1.06
Closing Events.
|
(a)
|
CWTD
Deliveries. Subject to fulfillment or waiver of the conditions set forth
in Article V, CWTD shall deliver to the Shareholders at Closing all the
following:
|
|
(i)
|
|
(ii)
|
Incumbency
and specimen signature certificates dated the Closing Date with respect to
the officers of CWTD executing this Agreement and any other document
delivered pursuant hereto on behalf of
CWTD;
|
|
(iii)
|
Copies
of the resolutions/consents of CWTD’s board of directors and shareholder
minutes or consents authorizing the execution and performance of this
Agreement and the contemplated transactions, certified by the secretary or
an assistant secretary of CWTD as of the Closing
Date;
|
|
(iv)
|
The
certificate contemplated by Section 4.01, duly executed by the chief
executive officer of CWTD;
|
|
(v)
|
The
certificate contemplated by Section 4.02, dated the Closing Date, signed
by the chief executive officer of
CWTD;
|
|
(vi)
|
Certificates
for 150,000,000 shares of CWTD Common Stock issued pro rata in the name of
the Shareholders or their respective designee(s) and
certificates for 500,000 shares of Series A Convertible Preferred Stock
issued pro rata in the name of the Shareholders or their respective
designee(s);
|
|
(vii)
|
Copies
of the resolutions/consents of CWTD’s board of directors and/or
shareholder minutes or consents authorizing the appointment of new
directors nominated by the Shareholders to CWTD’s Board of
Directors with effect on the Closing
Date;
|
|
(viii)
|
Letters
of resignation from CWTD’s current Board of Directors and officers with
effect on the Closing Date; and
|
|
(ix)
|
In
addition to the above deliveries, CWTD shall take all steps and actions as
the Shareholders may reasonably request or as may otherwise be reasonably
necessary to consummate the transactions contemplated
hereby.
|
|
(b)
|
Parure
Capital Deliveries. Subject to fulfillment or waiver of the conditions set
forth in Article IV, the Uonlive Subsidiaries and/or the Shareholders
shall deliver to CWTD at Closing all the
following:
|
|
(i)
|
Incumbency
and specimen signature certificates dated the Closing Date with respect to
the officers executing this Agreement and any other document delivered
pursuant;
|
|
(ii)
|
Copies
of resolutions/consents of the board of directors of Parure Capital
authorizing the execution and performance of this Agreement and the
contemplated transactions, certified by the secretary or an assistant
secretary of Parure Capital as of the Closing
Date;
|
|
(iii)
|
The
certificate contemplated by Section 5.01, executed by the Shareholders;
and
|
|
(iv)
|
The
certificate contemplated by Section 5.02, dated the Closing Date, signed
by the chief executive officer of
Uonlive.
|
|
(v)
|
In
addition to the above deliveries, Parure Capital and/or the Shareholders
shall take all steps and actions as CWTD may reasonably request or as may
otherwise be reasonably necessary to consummate the transactions
contemplated hereby.
|
1.07
Director and Officer Resignations.
At
Closing, the current Board of Directors of CWTD shall appoint such director
nominees as may be designated by the Shareholders to fill vacancies on the Board
of Directors of CWTD, and, thereafter, the current directors of CWTD shall
resign. In addition, at Closing all officers of CWTD shall tender their
resignations to the Board of Directors, and new officers of CWTD shall be
appointed by the newly appointed Board of Directors of CWTD. All such
director and officer resignations and appointments shall be in compliance with
the Securities Exchange Act of 1934, as amended, and pursuant to a previously
filed Information Statement on Schedule 14F-1 prepared and filed by
CWTD.
ARTICLE
II
REPRESENTATIONS,
COVENANTS AND WARRANTIES OF CWTD, ETC.
As an
inducement to, and to obtain the reliance of the Shareholders and the Uonlive
Subsidiaries, CWTD and Xxxxx, jointly and severally, represent, promise and
warrant as follows:
2.01 Organization.
CWTD is,
and will be at Closing, a corporation duly organized, validly existing, and in
good standing under the laws of the State of Nevada and has the corporate power
and is and will be duly authorized, qualified, franchised, and licensed under
all applicable laws, regulations, ordinances, and orders of public authorities
to own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, and there are no other
jurisdictions in which it is not so qualified in which the character and
location of the assets owned by it or the nature of the material business
transacted by it requires qualification, except where failure to do so would not
have a material adverse effect on its business, operations, properties, assets
or condition. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of CWTD’s
Articles of Incorporation or Bylaws, or other agreement to which it is a party
or by which it is bound.
2.02 Approval
of Agreement; Enforceability.
CWTD has
full power, authority, and legal right and has taken, or will take, all action
required by law, its Articles of Incorporation, Bylaws, and otherwise to execute
and deliver this Agreement and to consummate the transactions herein
contemplated. The board of directors of CWTD has authorized and
approved the execution, delivery, and performance of this Agreement. This
Agreement, when delivered in accordance with the terms hereof, will constitute
the valid and binding obligation of CWTD and Xxxxx enforceable in accordance
with its terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally, the
enforcement of creditors’ rights and remedies. The CWTD
shareholders will not have dissenter’s rights with respect to any of the
transactions contemplated herein.
- 2
-
2.03 Capitalization.
The
authorized capitalization of CWTD consists of 200,000,000 shares of common
stock, $0.001 par value, of which 49,565,923 shares were issued and outstanding
as of March 31, 2008. There are 10,000,000 authorized shares of preferred stock,
$.001 par value, and 500,000 shares of Series A Convertible Preferred Stock are
issued and outstanding as of March 31, 2008. There are, and at the Closing,
there will be no outstanding subscriptions, options, warrants, convertible
securities, calls, rights, commitments or agreements calling for or requiring
issuance or transfer, sale or other disposition of any shares of capital stock
of the Company or calling for or requiring the issuance of any securities or
rights convertible into or exchangeable (including on a contingent basis) for
shares of capital stock. All of the outstanding shares of CWTD (and
the shares that will be converted from the Series A Convertible Preferred Stock)
are, and upon conversion, will be duly authorized, validly issued, fully paid
and non-assessable and not issued in violation of the preemptive or other right
of any person. There are no dividends due, to be paid or in arrears
with respect to any of the capital stock of Company.
2.04 Financial
Statements.
(i) CWTD
has previously delivered to Parure Capital an audited balance sheet of CWTD as
of December 31, 2007, and the related statements of operations, stockholders'
equity (deficit), and cash flows for the fiscal year ended December 31, 2007,
including the notes thereto (collectively the “Financial Statements”) and the
accompanying auditor’s report to the effect that such audited financial
statements contain all adjustments (all of which are normal recurring
adjustments) necessary to present fairly the results of operations and financial
position for the periods and as of the dates indicated.
(ii) The
Financial Statements of CWTD delivered pursuant to Section 2.04(i) have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved as explained in the notes
to such financial statements. The Financial Statements present fairly, in all
material respects, as of the closing date, the financial position of CWTD. CWTD
will not have, as of the Closing Date, any liabilities, obligations or claims
against it (absolute or contingent), and all assets reflected on such financial
statements present fairly the assets of CWTD in accordance with generally
accepted accounting principles.
(iii) CWTD
has filed or will file as the Closing Date its tax returns required to be filed
and will pay all taxes due thereon. All such returns and reports are
accurate and correct in all material respects. CWTD has no
liabilities with respect to the payment of any federal, state, county, local, or
other taxes (including any deficiencies, interest, or penalties) accrued for or
applicable to the period ended on the Closing Date and all such dates and years
and periods prior thereto and for which CWTD may at said date have been liable
in its own right or as transferee of the assets of, or as successor to, any
other corporation or entity, except for taxes accrued but not yet due and
payable, and to the best knowledge of CWTD, no deficiency assessment or proposed
adjustment of any such tax return is pending, proposed or
contemplated. None of such income tax returns has been examined or is
currently being examined by the Internal Revenue Service and no deficiency
assessment or proposed adjustment of any such return is pending, proposed or
contemplated. CWTD has not made any election pursuant to the
provisions of any applicable tax laws (other than elections that relate solely
to methods of accounting, depreciation, or amortization) that would have a
material adverse affect on CWTD, its financial condition, its business as
presently conducted or proposed to be conducted, or any of its respective
properties or material assets. There are no outstanding agreements or
waivers extending the statutory period of limitation applicable to any tax
return of CWTD. CWTD has also withheld or collected from each payment made to
each of its employees the amount of all taxes (including, but not limited to,
United States income taxes and other foreign taxes) required to be withheld or
collected therefrom, and has paid the same to the proper tx
authorities.
2.05 Information.
The
information concerning CWTD set forth in this Agreement is complete and accurate
in all respects and does not contain any untrue statement of a fact or omit to
state a fact required to make the statements made, in light of the circumstances
under which they were made, not misleading. CWTD shall cause the
information delivered by it pursuant hereto to the Shareholders to be updated
after the date hereof up to and including the Closing Date.
2.06 Absence
of Certain Changes or Events.
Except as
set forth in this Agreement, since the date of the most recent CWTD balance
sheet described in Section 2.04 and included in the information referred to in
Section 2.05:
(a) There
has not been: (i) any adverse change in the business, operations, properties,
level of inventory, assets, or condition of CWTD; or (ii) any damage,
destruction, or loss to CWTD (whether or not covered by insurance) adversely
affecting the business, operations, properties, assets, or conditions of
CWTD;
(b) CWTD
has not: (i) amended its Articles of Incorporation or Bylaws; (ii) declared or
made, or agreed to declare or make, any payment of dividends or distributions of
any assets of any kind whatsoever to stockholders or purchased or redeemed, or
agreed to purchase or redeem, any of its capital stock; (iii) waived any rights
of value which in the aggregate are extraordinary or material considering the
business of CWTD; (iv) made any material change in its method of management,
operation, or accounting; (v) entered into any other material transactions; (vi)
made any accrual or arrangement for or payment of bonuses or special
compensation of any kind or any severance or termination pay to any present or
former officer or employee; (vii) increased the rate of compensation payable or
to become payable by it to any of its officers or directors or any of its
employees whose monthly compensation exceeds $1,000; or (viii) made any increase
in any profit-sharing, bonus, deferred compensation, insurance, pension,
retirement, or other employee benefit plan, payment, or arrangement made to,
for, or with its officers, directors, or employees;
(c) CWTD
has not: (i) granted or agreed to grant any options, warrants, or other rights
for its stocks, bonds, or other corporate securities calling for the issuance
thereof; (ii) borrowed or agreed to borrow any funds or incurred, or become
subject to, any material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid any material
obligation or liability (absolute or contingent) other than current liabilities
reflected in or shown on the most recent CWTD balance sheet and current
liabilities incurred since that date in the ordinary course of business; (iv)
sold or transferred, or agreed to sell or transfer, any of its material assets,
properties, or rights (except assets, properties, or rights not used or useful
in its business which, in the aggregate have a value of less than $5,000 or
canceled, or agreed to cancel, any debts or claims (except debts and claims
which in the aggregate are of a value of less than $5,000); (v) made or
permitted any amendment or termination of any contract, agreement, or license to
which it is a party if such amendment or termination is material, considering
the business of CWTD; or (vi) issued, delivered, or agreed to issue or deliver
any stock, bonds, or other corporate securities including debentures (whether
authorized and unissued or held as treasury stock); and
(d) CWTD
has not become subject to any law, order, investigation, inquiry, grievance or
regulation which materially and adversely affects, or in the future would be
reasonably expected to adversely affect, the business, operations, properties,
assets, or condition of CWTD.
- 3
-
2.07 Litigation
and Proceedings.
There are
no material actions, suits, claims, or administrative or other proceedings
pending, asserted or unasserted, threatened by or against CWTD and Xxxxx or
adversely affecting CWTD, Xxxxx or its/his properties, at law or in equity,
before any court or other governmental agency or instrumentality, domestic or
foreign, or before any arbitrator of any kind. CWTD and Xxxxx are not
in default of any judgment, order, writ, injunction, decree, award, rule, or
regulation of any court, arbitrator, or governmental agency or
instrumentality.
2.08 Compliance
With Laws; Government Authorization.
(a) CWTD
and its officers and directors have complied with all federal, state, county and
local laws, ordinances, regulations, inspections, orders, judgments,
injunctions, awards or decrees applicable to it or its business, including
federal and state securities laws. CWTD and its officers, directors
and beneficial owners are not under investigation by any federal, state, county
or local authorities, including the Commission. CWTD and its officers, directors
and beneficial owners have not received notification from any federal, state,
county, or local authorities, including the Commission, that it or
any of its officers or directors will be the subject of a legal action or that
the Commission’s Division of Enforcement will be recommending to the Commission
that a Federal District Court or Commission administrative action or any other
action be filed or taken against CWTD and its officers, directors and beneficial
owners.
(b) CWTD
has all licenses, franchises, permits, and other governmental authorizations
that are legally required to enable it to conduct its business in all material
respects as conducted on the date of this Agreement. No notice,
authorization, approval, consent, or order of, or registration, declaration, or
filing with, any court or other governmental body is required in connection with
the execution and delivery by CWTD of this Agreement and the consummation by
CWTD of the transactions contemplated hereby, other than filings that
may be required or permitted under states securities laws, the Securities Act of
1933, as amended and/or the Securities Exchange Act of 1934, as amended
resulting from the issuance of the CWTD Common Stock.
2.09 Securities
and Exchange Commission Compliance of CWTD. CWTD has a class of
securities registered pursuant to Section 12 of the Securities Exchange Act of
1934, as amended (“Exchange Act”) and has complied in all respects with Rule
14(a) and 14(c) of the Exchange Act, and with Sections 13 and 15(d) of the
Exchange Act, and CWTD, its management and beneficial owners have complied in
all respects with Sections 13(d) and 16(a) of the Exchange Act.
|
Without limiting the
generality of the foregoing, CWTD has made all filings with the SEC
that it has been required to make under the Securities Act and the
Exchange Act (such filings, inclusive of all reports and Txon
International Development Corporation’s registration statement on Form
10-SB filed with the SEC on May 18, 1999 (the “Form 10-SB”), are
hereinafter referred to as the “Public Reports”). Each of the Public
Reports has complied with the Securities Act and the Exchange Act, and the
Sarbanes/Oxley Act of 2002 (the “Sarbanes/Oxley Act”) and/or regulations
promulgated thereunder, as the case may be, in all material respects. None
of the Public Reports, as of their respective dates, contained any untrue
statement of a material fact or omitted to state a material fact necessary
to make the statements made therein not misleading. The Form 10-SB, at the
time it became effective, did not contain any untrue statement of material
fact or omit to state a material fact necessary to make the statements
made therein not misleading. The financial statements, including the notes
thereto, included in the Public Reports have been prepared in accordance
with U.S. GAAP applied on a consistent basis throughout the periods
covered thereby and present fairly the financial condition of CWTD as of
such dates and the results of operations of CWTD for such periods;
provided, however, that the financial statements for all interim periods
are subject to normal year-end adjustments and lack certain footnotes and
other presentation items otherwise required by GAAP. There is no event,
fact or circumstance that would cause any certification signed by any
officer of CWTD in connection with any Public Report pursuant to the
Sarbanes/Oxley Act to be untrue, inaccurate or incorrect in any respect.
The Common Stock of CWTD covered by the Form 10-SB is validly, properly
and effectively registered under the Exchange Act in accordance with all
applicable federal securities laws and trades on the OTC Bulletin Board.
There is no revocation order, suspension order, injunction or other
proceeding or law affecting the effectiveness of CWTD’s Exchange Act
registration or the trading of its Common Stock. The consummation of the
transactions contemplated by this Agreement do not conflict with and will
not result in any violation of any NASD or OTC Bulletin Board trading
requirement or standard applicable to CWTD or its Common
Stock.
|
Since the
date of the filing of its quarterly report on Form 10-QSB for the quarter ended
September 30, 2007, except as specifically disclosed in the Public Reports: (A)
there has been no event, occurrence or development that has resulted in or could
result in a Material Adverse Effect (for purposes of this Section 2.09, a
“Material Adverse Effect” means any event, occurrence, fact, condition, change
or effect that is materially adverse to the business, assets, condition
(financial or otherwise), operating results or prospects of CWTD); (B) CWTD has
not incurred any liabilities, contingent or otherwise, other than professional
fees, which are accurately disclosed in the Public Reports; (C) CWTD has not
declared or made any dividend or distribution of cash or property to its
shareholders, purchased, redeemed or made any agreements to purchase or redeem
any shares of its capital stock, or issued any equity securities; or (D) CWTD
has not made any loan, advance or capital contribution to or investment in any
person or entity.
2.10 Contract
Defaults.
CWTD is
not in default under the terms of any outstanding contract, agreement, lease, or
other commitment, and there is no event of default or other event which, with
notice or lapse of time or both, would constitute a default in any respect under
any such contract, agreement, lease, or other commitment.
2.11 No
Conflict With Other Instruments.
The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust, or other material contract, agreement, or instrument to
which CWTD or Xxxxx is a party or to which any of its or his properties or
operations are subject.
Furthermore,
the execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will violate any constitution, statute,
regulation, rule, injunction, judgment, order, decree, ruling, charge or other
restriction of any government, governmental agency, court, administrative panel
or other tribunal to which CWTD or Xxxxx is subject; (ii) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify or cancel, or
require any notice under any agreement, contract, lease, license, instrument or
other arrangement to which CWTD is a party or by which it is bound, or to which
any of its assets is subject; or (iii) result in or require the creation or
imposition of any encumbrance of any nature upon or with respect to any of
CWTD’s assets, including without limitation the Stock.
- 4
-
2.12 Subsidiary.
As of the
Closing, CWTD will not beneficially own of record any equity interest in any
other corporation (other than an equity interest in Parure Capital and Uonline).
CWTD does not have a predecessor as that term is defined under generally
accepted accounting principles or Regulation S-X promulgated by the Securities
and Exchange Commission.
2.13 CWTD
Documents.
CWTD has
delivered to the Shareholders copies of the following documents, which are
collectively referred to as the "CWTD Documents" and which consist of the
following dated as of the date of execution of this Agreement, all certified by
a duly authorized officer of CWTD as complete, true, and accurate:
(a) A
copy of the Articles of Incorporation and Bylaws of CWTD in effect as of the
date of this Agreement;
(b) A
copy of resolutions adopted by the board of directors of CWTD approving this
Agreement and the transactions herein contemplated;
(c) A
document setting forth a description of any material adverse change in the
business, operations, property, inventory, assets, or condition of CWTD since
the most recent CWTD balance sheet required to be provided pursuant to Section
2.04 hereof, updated to the Closing Date;
2.14 Quotation
on the OTC Bulletin Board. CWTD’s Common Stock is quoted in good
standing on the OTC Bulletin Board under the symbol “CWTD” and CWTD will retain
such quotation and standing on the OTC Bulletin Board until the Closing of the
transactions contemplated herein, without a penalty such as receipt of an “E” or
otherwise being penalized by NASD or the OTCBB.
2.15 Delivery
of Shareholder List. Upon execution of this Agreement, CWTD shall
deliver a certified shareholder list from its transfer agent setting forth the
name of each CWTD shareholder, the number of shares held by each, dated as of a
date within fifteen days of Closing and whether such shares held are restricted
securities. In connection therewith, CWTD represents that none of its
shareholders are nominees for any other person.
|
2.16
|
Liabilities,
Indebtedness, etc.
|
As of the
Closing Date, CWTD shall not have any liabilities or indebtedness of whatever
kind as such terms are defined by Generally Accepted Accounting
Principles.
|
2.17
|
Books and Financial
Records.
|
2.18 No
Broker Fees
No
brokers, finders or financial advisory fees or commissions will be payable by
CWTD with respect to the transactions contemplated by this
Agreement.
|
2.18
|
Survival.
|
Each of
the representations and warranties set forth in this Article II shall be deemed
represented and made by CWTD and Xxxxx at the Closing as if made at such time
and shall survive the Closing for a period terminating on the first anniversary
of the date of this Agreement.
ARTICLE
III
REPRESENTATIONS,
COVENANTS, WARRANTIES OF THE SHAREHOLDERS AND THE UONLIVE
SUBSIDIARIES
As an
inducement to, and to obtain the reliance of CWTD, the Shareholders
and the Uonlive Subsidiaries, jointly and severally, represent and warrant as
follows:
3.01 Organization.
Parure
Capital is, and will be on the Closing Date, a corporation duly organized and
validly existing under the laws of the British Virgin Islands, and has the
corporate power and is and will be duly authorized, qualified, franchised, and
licensed under all applicable laws, regulations, ordinances, and orders of
public authorities to own all of its properties and assets and to carry on its
business in all material respects as it is now being conducted, and there are no
other jurisdictions in which it is not so qualified in which the character and
location of the assets owned by it or the nature of the material business
transacted by it requires qualification, except where failure to do so would not
have a material adverse effect on its business, operations, properties, assets
or condition of Parure Capital. The execution and delivery of this
Agreement does not, and the consummation of the transactions contemplated by
this Agreement in accordance with the terms hereof will not, violate any
provision of Parure Capital’s constituent documents, or other material agreement
to which it is a party or by which it is bound, nor will they violate any laws,
rules or policies of the government of the Hong Kong SAR of the People’s
Republic of China.
3.02 Approval
of Agreement; Enforceability.
Parure
Capital has full power, authority, and legal right and has taken, or will take,
all action required by law, its constituent documents, or otherwise to execute
and deliver this Agreement and to consummate the transactions herein
contemplated. The board of directors of Parure Capital has authorized and
approved the execution, delivery, and performance of this Agreement and the
transactions contemplated hereby, subject to the approval of the Shareholders,
which has been obtained, and compliance with any laws, rules or policies of the
government of the Hong Kong SAR of the People’s Republic of
China. This Agreement, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Shareholders and
the Uonlive Subsidiaries enforceable in accordance with its terms, except as
such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of creditors’ rights and
remedies.
3.03 Capitalization.
The
issued and outstanding share capital of Parure Capital consists of 50,000
shares, no par value, as of March 31, 2008. Such share capital is
validly issued, fully paid, and nonassessable.
- 5
-
3.04 Financial
Statements.
(a) Uonlive
has previously delivered to CWTD a copy of an audited balance sheet of Uonlive
as of December 31,2007, and the related audited statements of operations, cash
flows, and share capital for the years ended December 31, 2007, including the
notes thereto to the effect that such financial statements contain all
adjustments (all of which are normal recurring adjustments) necessary to present
fairly the results of operations and financial position for the periods and as
of the dates indicated.
Parure
Capital has previously delivered to CWTD a copy of an audited balance sheet of
Parure Capital as of December 31, 2007 and the related audited statements of
operations, cash flows, and share capital for the period from November 21, 2007
(Inception) through December 31, 2007, including the notes thereto to the effect
that such financial statements contain all adjustments (all of which are normal
recurring adjustments) necessary to present fairly the results of operations and
financial position for the periods and as of the dates indicated.
(b) The
audited financial statements delivered pursuant to Section 3.04(a) have been
prepared in accordance with generally accepted accounting principles
consistently applied in the United States, throughout the periods involved. The
financial statements of Uonlive and Parure Capital, respectively, present
fairly, as of their respective dates, the financial position of Uonlive and
Parure Capital, respectively. Uonlive and Parure Capital,
respectively, did not have, as of the date of any such balance sheets, except as
and to the extent reflected or reserved against therein, any liabilities or
obligations (absolute or contingent) which should be reflected in any financial
statements or the notes thereto prepared in accordance with generally accepted
accounting principles in the United States, and all assets reflected therein
present fairly the assets of Uonlive and Parure Capital, respectively, in
accordance with generally accepted accounting principles in the United States.
The statements of revenue and expenses and cash flows present fairly the
financial position and results of operations of Uonlive and Parure Capital,
respectively, as of their respective dates and for the respective periods
covered thereby.
3.05 Outstanding
Warrants and Options.
Parure
Capital has no issued warrants or options, calls, or commitments of any nature
relating to the Parure Capital Share Capital, except as previously disclosed in
writing to CWTD.
3.06 Information.
The
information concerning the Uonlive Subsidiaries set forth in this Agreement is
complete and accurate in all material respects and does not contain any untrue
statement of a material fact or omit to state a material fact required to make
the statements made, in light of the circumstances under which they were made,
not misleading. The Uonlive Subsidiaries shall cause the information
required to be delivered by them pursuant to this Agreement to CWTD to be
updated after the date hereof up to and including the Closing Date.
3.07 Absence
of Certain Changes or Events.
Except as
set forth in this Agreement, since the date of the most recent Uonlive balance
sheet described in Section 3.04 and included in the information referred to in
Section 3.06:
(a) There
has not been: (i) any material adverse change in the business, operations,
properties, level of inventory, assets, or condition of Uonlive; or (ii) any
damage, destruction, or loss to Uonlive materially and adversely affecting the
business, operations, properties, assets, or conditions of Uonlive;
(b) Uonlive
has not: (i) amended its constituent documents; (ii) declared or made, or agreed
to declare or make, any payment of dividends or distributions of any assets of
any kind whatsoever to holders of share capital or purchased or redeemed, or
agreed to purchase or redeem, any of its share capital; (iii) waived any rights
of value which in the aggregate are extraordinary and material considering the
business of Uonlive; (iv) made any material change in its method of accounting;
(v) entered into any other material transactions other than those contemplated
by this Agreement; (vi) made any material accrual or material arrangement for or
payment of bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; or (vii) made any
material increase in any profit-sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee benefit plan, payment, or
arrangement made to, for, or with their officers, directors, or
employees;
(c) Uonlive
has not (i) granted or agreed to grant any options, warrants, or other rights
for its share capital, bonds, or other corporate securities calling for the
issuance thereof, except as previously disclosed in writing to CWTD; (ii)
borrowed or agreed to borrow any funds or incurred, or become subject to, any
material obligation or liability (absolute or contingent) except liabilities
incurred in the ordinary course of business; (iii) paid any material obligation
or liability (absolute or contingent) other than current liabilities reflected
in or shown on the most recent Uonlive balance sheet and current liabilities
incurred since that date in the ordinary course of business; (iv) sold or
transferred, or agreed to sell or transfer, any of its material assets,
properties, or rights, or agreed to cancel any material debts or claims; (v)
made or permitted any amendment or termination of any contract, agreement, or
license to which it is a party if such amendment or termination is material,
considering the business of Uonlive; or (vi) issued, delivered, or agreed to
issue or deliver any share capital, bonds, or other corporate securities
including debentures (whether authorized and unissued or held as treasury
stock); and
(d) To
the best knowledge of Uonlive, it has not become subject to any law or
regulation which materially and adversely affects, or in the future would be
reasonably expected to adversely affect, the business, operations, properties,
assets, or condition of Uonlive.
3.08 Litigation
and Proceedings.
There are
no material actions, suits, or proceedings pending or, to the knowledge of
Uonlive, threatened by or against Uonlive or adversely affecting Uonlive, at law
or in equity, before any court or other governmental agency or instrumentality,
domestic or foreign, or before any arbitrator of any kind. Uonlive
does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, award, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality.
3.09 Material
Contract Defaults.
Uonlive
is not in default in any material respect under the terms of any outstanding
contract, agreement, lease, or other commitment which is material to the
business, operations, properties, assets, or condition of Uonlive, and there is
no event of default or other event which, with notice or lapse of time or both,
would constitute a default in any material respect under any such contract,
agreement, lease, or other commitment in respect of which Uonlive has not taken
adequate steps to prevent such a default from occurring.
- 6
-
3.10 No
Conflict With Other Instruments.
The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust or other material contract, agreement, or instrument to
which Uonlive is a party or to which any of its properties or operations are
subject.
3.11 Governmental
Authorizations.
Uonlive
has all licenses, franchises, permits, and other governmental authorizations
that are legally required to enable it to conduct its business in all material
respects as conducted on the date of this Agreement. No
authorization, approval, consent, or order of, or registration, declaration, or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Uonlive of this Agreement and the consummation by
Uonlive of the transactions contemplated hereby.
3.12 Compliance
With Laws and Regulations.
Uonlive
has complied with all applicable statutes and regulations of any governmental
entity or agency thereof having jurisdiction over Uonlive, except to the extent
that noncompliance would not materially and adversely affect the business,
operations, properties, assets, or condition of Uonlive or except to the extent
that noncompliance would not result in the occurrence of any material liability
for Uonlive. The consummation of this transaction will comply with
all applicable laws, rules and policies of the government of the People’s
Republic of China.
3.14 Subsidiaries.
Uonlive
does not own beneficially or of record equity securities in any subsidiary that
has not been previously disclosed to CWTD.
3.15 Uonlive
Documents.
Uonlive
has delivered to CWTD the following documents, which are collectively referred
to as the "Uonlive Documents" and which consist of the following dated as of the
date of execution of this Agreement, all certified by the Chief Executive
Officer of Uonlive as complete, true, and accurate:
(a) A
copy of all of Uonlive’s constituent documents and all amendments thereto in
effect as of the date of this Agreement;
(b) Copies
of resolutions adopted by the board of directors of Uonlive approving this
Agreement and the transactions herein contemplated;
(c) A
document setting forth a description of any material adverse change in the
business, operations, property, inventory, assets, or condition of Uonlive since
the most recent Uonlive balance sheet required to be provided pursuant to
Section 3.04 hereof, updated to the Closing Date;
ARTICLE
IV
CONDITIONS
PRECEDENT TO OBLIGATIONS OF THE SHAREHOLDERS AND THE UONLIVE
SUBSIDIARIES
The
obligations of the Shareholders and the Uonlive Subsidiaries under this
Agreement are subject to the satisfaction or waiver, at or before the Closing
Date, of the following conditions:
4.01 Accuracy
of Representations.
The
representations and warranties made by CWTD and Xxxxx in this Agreement were
true when made and shall be true at the Closing Date with the same force and
effect as if such representations and warranties were made at and as of the
Closing Date, and CWTD and Xxxxx shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by CWTD prior to or at the Closing. The Shareholders shall be
furnished with a certificate, signed by a duly authorized officer of CWTD and
dated the Closing Date, to the foregoing effect.
4.02 Officer's
Certificate.
The
Shareholders shall have been furnished with a certificate dated the Closing Date
and signed by the duly authorized Chief Executive Officer of CWTD to the effect
that to such officer's best knowledge no litigation, proceeding, investigation,
or inquiry is pending or, to the best knowledge of CWTD threatened, which might
result in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement. Furthermore, based on a certificate
of good standing, and CWTD’s own documents and information, the certificate
shall represent, to the best knowledge of the officer, that:
(a) This
Agreement has been duly approved by CWTD’s board of directors and has been duly
executed and delivered in the name and on behalf of CWTD by its duly authorized
officer pursuant to, and in compliance with, authority granted by the board of
directors of CWTD pursuant to a majority consent;
(b) There
have been no adverse changes in CWTD up to and including the date of the
certificate;
(c) All
conditions required by this Agreement have been met, satisfied, or performed by
CWTD;
(d) All
authorizations, consents, approvals, registrations, reports, schedules and/or
filings with any governmental body including the Securities and Exchange
Commission, agency, or court have been obtained or will be obtained by CWTD and
all of the documents obtained by CWTD are in full force and effect or, if not
required to have been obtained, will be in full force and effect by such time as
may be required; and
(e) There
is no claim action, suit, proceeding, inquiry, or investigation at law or in
equity by any public board or body pending or threatened against CWTD, wherein
an unfavorable decision, ruling, or finding could have an adverse effect on the
financial condition of CWTD, the operation of CWTD, or the transactions
contemplated herein, or any agreement or instrument by which CWTD is bound or in
any way contests the existence of CWTD.
- 7
-
4.03
No Litigation.
As of the
Closing, there shall not be pending any litigation to which CWTD, the
Shareholders, or the Uonlive Subsidiaries is a party and which is reasonably
likely to have a material adverse effect on the business of CWTD or the
contemplated transactions.
4.04 Results
of Due Diligence Investigation.
The
Shareholders shall be satisfied with the results of their due diligence
investigation of CWTD, in his sole discretion.
4.05 CWTD
Shall Have No Liabilities as of Closing.
As of the
Closing, CWTD shall have no indebtedness or liabilities of any kind whatsoever
as such term is defined by U.S. generally accepted accounting
principles.
4.06.
CWTD’s Outstanding Capital Stock at Closing.
As of the
Closing, the total outstanding Common Stock of CWTD shall consist of 199,565,923
shares of Common Stock, after giving effect to the 150,000,000 share issuance
contemplated hereby, and there shall be no options, warrants, employee
compensation or other rights to issue common stock or preferred stock issued or
outstanding.
4.07
CWTD Shall Have Filed and Mailed a Schedule 14F-1.
CWTD
shall have filed with the Commission and mailed to its shareholders of record an
Information Statement on Schedule 14F-1, and ten days shall have passed since
the date on which it was mailed to shareholders of record.
4.08
Consummation of Transfer of the Subsidiaries.
Prior to
the Closing, CWTD shall have transferred the stock of its subsidiaries to Top
Speed Technologies Limited with the result that CWTD shall not have any assets
or liabilities as such terms are defined by U.S. GAAP.
4.09 No
Material Adverse Change.
There
shall not be any change in, or effect on, either of Uonlive’s or CWTD’s assets,
financial condition, operating results, customer and employee relations, or
business prospects or the financial statements previously supplied by Uonlive or
CWTD which is, or may reasonably be expected to be, materially adverse to the
business, operations (as now conducted), assets, prospects or condition
(financial or otherwise), of Uonlive or CWTD or to the contemplated
transactions.
4.10.
CWTD’s Over-The-Counter Bulletin Board Quotation.
As of the
Closing, the common stock of CWTD shall be quoted on
FINRA’s Over-The-Counter Bulletin Board, and shall be in good
standing without an “E” or any other penalty being imposed by NASD or
the OTCBB.
4.11 Good
Standing.
The
Shareholders shall have received a certificate of good standing from the
appropriate authority, dated as of the date within five days prior to the
Closing Date, certifying that CWTD is in good standing as a corporation in the
State of Nevada.
4.12 Other
Items.
The
Shareholders shall have received from CWTD such other documents, legal opinions,
certificates, or instruments relating to the transactions contemplated hereby as
the Shareholders may reasonably request.
ARTICLE
V
CONDITIONS
PRECEDENT TO OBLIGATIONS OF CWTD
The
obligations of CWTD under this Agreement are subject to the satisfaction, at or
before the Closing Date, of the following conditions:
5.01 Accuracy
of Representations.
The
representations and warranties made by the Shareholders and the Uonlive
Subsidiaries in this Agreement were true when made and shall be true at the
Closing Date with the same force and affect as if such representations and
warranties were made at and as of the Closing Date (except for changes therein
permitted by this Agreement), and the Shareholders and/or the Uonlive
Subsidiaries shall have performed or complied with all covenants and conditions
required by this Agreement to be performed or complied with by them prior to or
at the Closing. CWTD shall be furnished with a certificate, signed by
the Shareholders and dated the Closing Date, to the foregoing
effect.
- 8
-
5.02 Officer's
Certificate.
CWTD
shall have been furnished with a certificate dated the Closing Date and signed
by the duly authorized Chief Executive Officer of Uonlive to the effect that no
litigation, proceeding, investigation, or inquiry is pending or, to the best
knowledge of Uonlive, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this
Agreement. Furthermore, based on Uonlive’s own documents, the
certificate shall represent, to the best knowledge of the officer,
that:
(a) This
agreement has been duly approved by Uonlive’s board of directors and
stockholders and has been duly executed and delivered in the name and on behalf
of Uonlive by its duly authorized officer pursuant to, and in compliance with,
authority granted by the board of directors of Uonlive;
(b) Except
as provided or permitted herein, there have been no material adverse changes in
Uonlive up to and including the date of the certificate;
(c) All
material conditions required by this Agreement have been met, satisfied, or
performed by Uonlive and/or the Shareholders;
(d) All
authorizations, consents, approvals, registrations, and/or filings with any
governmental body, agency, or court required in connection with the execution
and delivery of the documents by Uonlive and/or the Shareholders have been
obtained and are in full force and effect or, if not required to have been
obtained will be in full force and effect by such time as may be required;
and
(e) There
is no material action, suit, proceeding, inquiry, or investigation at law or in
equity by any public board or body pending or threatened against Uonlive,
wherein an unfavorable decision, ruling, or finding would have a material
adverse affect on the financial condition of Uonlive, the operation of Uonlive,
for the transactions contemplated herein, or any material agreement or
instrument by which Uonlive is bound or would in any way contest the existence
of Uonlive.
5.03 No
Litigation.
As of the
Closing, there shall not be pending any litigation to which CWTD, any of the
Shareholders or the Uonlive Subsidiaries is a party and which is reasonably
likely to have a material adverse effect on the business of Uonlive or the
contemplated transactions.
5.04 Results
of Due Diligence Investigation.
CWTD
shall be satisfied with the results of its due diligence investigation of
Uonlive, in its sole discretion.
5.05 No
Material Adverse Change.
There
shall not be any change in, or effect on, Uonlive’s or CWTD’s assets, financial
condition, operating results, customer and employee relations, or business
prospects or the financial statements previously supplied by Uonlive or CWTD
which is, or may reasonably be expected to be, materially adverse to the
business, operations (as now conducted), assets, prospects or condition
(financial or otherwise), of the Shareholders or the Uonlive Subsidiaries or to
the contemplated transactions.
5.06 Consummation
of Transfer of the Subsidiaries.
Prior to
the Closing, CWTD shall have transferred the stock of its subsidiaries to Top
Speed Technologies Limited with the result that CWTD shall not have any assets
or liabilities as such terms are defined by U.S. GAAP.
5.07 Other
Items.
CWTD
shall have received from the Shareholders and/or the Uonlive Subsidiaries such
other documents, legal opinions, certificates, or instruments relating to the
transactions contemplated hereby as CWTD may reasonably request.
ARTICLE
VI
SPECIAL
COVENANTS
6.01 Activities
of CWTD and Uonlive
(a) From
and after the date of this Agreement until the Closing Date and except as set
forth in the respective documents to be delivered by CWTD and the Shareholders
pursuant hereto or as permitted or contemplated by this Agreement, CWTD and
Uonlive will each:
(i) Carry
on its business in substantially the same manner as it has
heretofore;
(ii)
Maintain in full force and effect insurance, if any, comparable in amount and in
scope of coverage to that now maintained by it;
(iii)
Perform in all material respects all of its obligations under material
contracts, leases, and instruments relating to or affecting its assets,
properties, and business;
(iv) Use
its best efforts to maintain and preserve its business organization intact, to
retain its key employees, and to maintain its relationships with its material
suppliers and customers;
(v) Duly
and timely file for all taxable periods ending on or prior to the Closing Date
all tax returns required to be filed by or on behalf of such entity or for which
such entity may be held responsible and shall pay, or cause to pay, all taxes
required to be shown as due and payable on such returns, as well as all
installments of tax due and payable during the period commencing on the date of
this Agreement and ending on the Closing Date; and
(vi) Fully
comply with and perform in all material respects all obligations and duties
imposed on it by all laws and all rules, regulations, and orders imposed by
governmental authorities.
- 9
-
(b) From
and after the date of this Agreement and except as provided herein until the
Closing Date, CWTD and Uonlive will each not:
(i) Make
any change in its Articles of Incorporation, Bylaws or constituent
documents;
(ii) Enter
into or amend any material contract, agreement, or other instrument of any of
the types described in such party's documents, except that a party may enter
into or amend any contract, agreement, or other instrument in the ordinary
course of business;
(iii)
Enter into any agreement for the sale of CWTD securities or a merger or sale of
substantially all of the assets of CWTD without the prior written approval of
Uonlive
(iv)
issue any additional shares of capital stock or equity securities or grant any
option, warrant or right to acquire any capital stock or equity securities or
issue any security convertible into or exchangeable for its capital stock or
alter in any material term of any of its outstanding securities or make any
change in its outstanding shares of capital stock or its capitalization, whether
by reason of a reclassification, recapitalization, stock split or combination,
exchange or readjustment of shares, stock dividend or otherwise;
(v) make
any material change in the conduct of its businesses and/or operations or enter
into any transaction other than in the ordinary course of business consistent
with past practices ;
(vi)
incur, assume or guarantee any indebtedness for borrowed money, issue any notes,
bonds, debentures or other corporate securities or grant any option, warrant or
right to purchase any thereof, except pursuant to transactions in the ordinary
course of business consistent with past practices;
(vii)issue
any securities convertible or exchangeable for debt or equity securities of CWTD
or Uonlive, as the case may be;
(viii)
make any sale, assignment, transfer, abandonment or other conveyance of any of
its assets or any part thereof, except pursuant to transactions in the ordinary
course of business consistent with past practice;
(ix) subject
any of its assets, or any part thereof, to any lien or suffer such to be imposed
other than such liens as may arise in the ordinary course of business consistent
with past practices by operation of law which will not have an Material Adverse
Effect on CWTD;
(x) acquire
any assets, raw materials or properties, or enter into any other transaction,
other than in the ordinary course of business consistent with past
practices;
|
(xi)
enter into any new (or amend any existing) employee benefit plan, program
or arrangement or any new (or amend any existing) employment, severance or
consulting agreement, grant any general increase in the compensation of
officers or employees (including any such increase pursuant to any bonus,
pension, profit-sharing or other plan or commitment) or grant any increase
in the compensation payable or to become payable to any employee, except
in accordance with pre-existing contractual provisions or consistent with
past practices;
|
(xii) make or
commit to make any material capital expenditures;
(xiii) pay, loan
or advance any amount to, or sell, transfer or lease any properties or assets
to, or enter into any agreement or arrangement with, any of its
affiliates;
(xiv) guarantee
any indebtedness for borrowed money or any other obligation of any other
person;
(xv) fail to
keep in full force and effect insurance comparable in amount and scope to
coverage maintained by it (or on behalf of it) on the date hereof;
(xvi) take any
other action that would cause any of the representations and warranties made by
it in this Agreement not to remain true and correct in all material
aspect;
(xvii) make any
material loan, advance or capital contribution to or investment in any
person;
(xviii) make any
material change in any method of accounting or accounting principle, method,
estimate or practice;
(xix) settle,
release or forgive any claim or litigation or waive any right;
(xx) commit
itself to do any of the foregoing.
6.02 Access
to Properties and Records.
Until the
Closing Date, Uonlive and CWTD will afford to the other party's officers and
authorized representatives and attorneys full access to the properties, books,
and records of the other party in order that each party may have full
opportunity to make such reasonable investigation as it shall desire to make of
the affairs of Uonlive or CWTD and will furnish the other party with such
additional financial and other information as to the business and properties of
Uonlive or CWTD as each party shall from time to time reasonably
request. Additional provisions governing such business review are set
forth in paragraph 5 of the Letter of Intent.
6.03 Indemnification
by Uonlive and the Shareholders.
(a) Uonlive
will indemnify and hold harmless CWTD and its directors and officers, and each
person, if any, who controls CWTD within the meaning of the Securities Act from
and against any and all losses, claims, damages, expenses, liabilities, or other
actions to which any of them may become subject under applicable law (including
the Securities Act and the Securities Exchange Act) and will reimburse them for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not resulting in
liability, insofar as such losses, claims, damages, expenses, liabilities, or
actions arise out of or are based upon: (i) any untrue statement or alleged
untrue statement of a material fact contained in any of the representations,
covenants and warranties set forth herein; or (ii) the breach of any covenant or
agreement set forth herein. The indemnity set forth herein shall
survive the consummation of the transactions herein for a period of one
year.
(b) The
Shareholders will indemnify and hold harmless CWTD, its directors and officers,
and each person, if any, who controls CWTD within the meaning of the Securities
Act from and against any and all losses, claims, damages, expenses, liabilities,
or other actions to which any of them may become subject under applicable law
(including the Securities Act and the Securities Exchange Act) and will
reimburse them for any legal or other expenses reasonably incurred by them in
connection with investigating or defending any claims or actions, whether or not
resulting in liability, insofar as such losses, claims, damages, expenses,
liabilities, or actions arise out of or are based upon: (i) any untrue statement
or alleged untrue statement of a material fact contained in any of the
representations, covenants and warranties set forth herein; or (ii) the breach
of any covenant or agreement set forth herein. The indemnity set
forth herein shall survive the consummation of the transactions herein for a
period of one year.
|
6.04
|
Indemnification
by CWTD and Xxxxx.
|
(a) CWTD
will indemnify and hold harmless Parure Capital, Uonlive, the Shareholders, and
Parure Capital’s and Uonlive’s directors and officers, and each person, if any,
who controls Uonlive and Parure Capital within the meaning of the Securities Act
from and against any and all losses, claims, damages, expenses, liabilities, or
actions to which any of them may become subject under applicable law (including
the Securities Act and the Securities Exchange Act) and will reimburse them for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any claims or actions, whether or not resulting in
liability, insofar as such losses, claims, damages, expenses, liabilities, or
actions arise out of or are based upon: (i) any untrue statement or
alleged untrue statement of a material fact contained in any of the
representations, covenants and warranties set forth herein; or (ii) the breach
of any covenant or agreement set forth herein. The indemnity set
forth herein shall survive the consummation of the transactions herein for a
period of one year.
- 10
-
(b) Xxxxx
will indemnify and hold harmless Parure Capital, Uonlive, the
Shareholders, and Parure Capital’s and Uonlive’s directors
and officers, and each person, if any, who controls Parure Capital and Uonlive
within the meaning of the Securities Act from and against any and all losses,
claims, damages, expenses, liabilities, or other actions to which any of them
may become subject under applicable law (including the Securities Act and the
Securities Exchange Act) and will reimburse them for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
claims or actions, whether or not resulting in liability, insofar as such
losses, claims, damages, expenses, liabilities, or actions arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of a material
fact contained in any of the representations, covenants and warranties set forth
herein; or (ii) the breach of any covenant or agreement set forth
herein. The indemnity set forth herein shall survive the consummation
of the transactions herein for a period of one year.
6.05 The
Issuance of CWTD Common Stock.
CWTD and
the Shareholders understand and agree that the consummation of this Agreement,
including the issuance of the Stock to the Shareholders as contemplated hereby,
constitutes the offer and sale of securities under the Securities Act and
applicable state statutes. CWTD and the Shareholders agree that such
transactions shall be consummated in reliance on an exemption from registration
pursuant to the Securities Act of 1933, as amended (the “Act”), provided by
Regulation S. Such exemption is based on the following
representations, warranties and covenants made by the Shareholders.
(a) Regulation
S Representations, Warranties and Covenants.
The
Shareholders represent and warrant to, and covenant with, CWTD as
follows:
|
(1)
|
The
Shareholders are not a U.S. person and are not acquiring the shares of
Stock of CWTD for the account or for the benefit of any U.S. person and
are not a U.S. person who purchased the shares of common stock in a
transaction that did not require registration under the
Act.
|
|
(2)
|
The
Shareholders agree to resell such Common Stock only in accordance with the
provisions of Regulation S, pursuant to registration under the Act, or
pursuant to an available exemption from
registration.
|
|
(3)
|
The
Shareholders agree not to engage in hedging transactions with regard to
such Stock unless in compliance with the
Act.
|
|
(4)
|
The
Shareholders consent to the certificate for the shares
of Common Stock of CWTD to contain a legend to the effect that
transfer is prohibited except in accordance with the provisions of
Regulation S, pursuant to registration under the Act, or pursuant to an
available exemption from registration, and that hedging transactions
involving the shares of Common Stock of CWTD may not be conducted unless
in compliance with the Act.
|
|
(5)
|
The
Shareholders acknowledge that CWTD has agreed to refuse to register any
transfer of the shares of Common Stock of CWTD not made in accordance with
the provisions of Regulation S, pursuant to registration under the Act, or
pursuant to an available exemption from
registration.
|
|
(6)
|
The
Shareholders covenant and represent and warrant in favor of CWTD that all
of the representations and warranties set forth herein shall be true and
correct at the time of Closing as if made on that
date.
|
(b) In
connection with the transaction contemplated by this Agreement, CWTD shall file,
with its counsel, such notices, applications, reports, or other instruments as
may be deemed necessary or appropriate in an effort to document reliance on such
exemptions, and the appropriate regulatory authority in the countries where the
Shareholders resides unless an exemption requiring no filing is available in
such jurisdictions, all to the extent and in the manner as may be deemed by such
Parties to be appropriate.
6.06 Securities
Filings.
CWTD
shall be responsible for the preparation and filing of all Securities Act and
Exchange Act filings that may result from the transactions contemplated in this
Agreement at its own costs and expense, although counsel for the Shareholders
may assist with the preparation and filing.
6.07 Sales
of Securities under Rule 144, If Applicable.
(a) CWTD
will use its best efforts to at all times satisfy the current public information
requirements of Rule 144 promulgated under the Act.
(b) If
any certificate representing any such restricted stock is presented to CWTD’s
transfer agent for registration or transfer in connection with any sales
theretofore made under Rule 144, provided such certificate is duly endorsed for
transfer by the appropriate person(s) or accompanied by a separate stock power
duly executed by the appropriate person(s) in each case with reasonable
assurances that such endorsements are genuine and effective, and is accompanied
by an opinion of counsel satisfactory to CWTD and its counsel that such transfer
has complied with the requirements of Rule 144, as the case may be, CWTD will
promptly instruct its transfer agent to allow such transfer and to issue one or
more new certificates representing such shares to the transferee and, if
appropriate under the provisions of Rule 144, as the case may be, free of any
stop transfer order or restrictive legend.
- 11
-
(c) Other
Representations, Warranties and Covenants.
|
(1)
|
The
Shareholders have been furnished with and has carefully read the periodic
reports on Forms 10-KSB, 10-QSB and 8-K filed by CWTD with the Securities
and Exchange Commission during the preceding three years. With
respect to individual or partnership tax and other economic considerations
involved in this investment, the Shareholders confirm that they are not
relying on CWTD (or any agent or representative of CWTD). The
Shareholders have carefully considered and have, to the extent such
persons believe such discussion necessary, discussed with their own legal,
tax, accounting and financial advisers the suitability of an investment in
the Stock for such particular tax and financial
situation.
|
|
(2)
|
The
Shareholders acknowledge that CWTD, at Closing, is a “shell company” with
no operations and no significant assets and that, as a result, the
consideration for the Parure Capital Share Capital far exceeds
the value of the Stock under any recognized criteria of
value. The Shareholders further acknowledge that they are aware
of the quoted prices for CWTD’s common stock on the OTC Bulletin Board but
understand there is no active trading market for such shares, quotations
on the OTCBB represent inter-dealer prices without retail xxxx-up,
xxxx-down, or commission, and may not represent actual transactions, and
there is no liquid trading market for CWTD’s Common Stock. As a
result, there can be no assurance that the Shareholders will be able to
sell the Stock.
|
|
(3)
|
The
Shareholders have had an opportunity to inspect relevant documents
relating to the organization and business of CWTD. The
Shareholders acknowledge that all documents, records and books pertaining
to this investment which such Shareholders have requested has been made
available for inspection by such Shareholders and their respective
attorney, accountant or other
adviser(s).
|
|
(4)
|
The
Shareholders and/or his respective advisor(s) has/have had a reasonable
opportunity to ask questions of, and receive answers and request
additional relevant information from, the officers of CWTD concerning the
transactions contemplated by this
Agreement.
|
|
(5)
|
The
Shareholders confirm that they are not acquiring the Stock as a result of
or subsequent to any advertisement, article, notice or other communication
published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any
seminar.
|
|
(6)
|
The
Shareholders, by reason of such person’s business or financial experience,
have the capacity to protect their own interests in connection with the
transactions contemplated by this
Agreement.
|
|
(7)
|
Except
as set forth in this Agreement, the Shareholders represent that no
representations or warranties have been made to them by CWTD, any officer
director, agent, employee, or affiliate of CWTD, and such Shareholders
have not relied on any oral representation by CWTD or by any of its
officers, directors or agents in connection with their decision to acquire
the Stock.
|
|
(8)
|
The
Shareholders represent that neither they nor any of their affiliates is
subject to any of the events described in Section 262(b) of Regulation A
promulgated under the Act.
|
|
(9)
|
The
Shareholders have adequate means for providing for their current financial
needs and contingencies, are able to bear the substantial economic risks
of an investment in the CWTD Stock for an indefinite
period of time, have no need for liquidity in such investment and, at the
present time, could afford a complete loss of such
investment.
|
|
(10)
|
The
Shareholders have such knowledge and experience in financial, tax and
business matters so as to enable them to use the information made
available to them in connection with the transaction to evaluate the
merits and risks of an investment in the CWTD Stock and to make an
informed investment decision with respect
thereto.
|
|
(11)
|
The
Shareholders understand that the CWTD Stock constitutes “restricted
securities” that have not been registered under the Securities Act or any
applicable state securities law and they are acquiring the same as
principal for their own account for investment purposes and not for
distribution. The Shareholders acknowledge that the Common Stock has not
been registered under the Act or under any the securities act of any state
or country. The Shareholders understand further that in absence
of an effective registration statement, the shares of Stock can only be
sold pursuant to some exemption from
registration.
|
|
(12)
|
The
Shareholders recognize that investment in the CWTD Stock involves
substantial risks. The Shareholders acknowledge that they have
reviewed the risk factors identified in the periodic reports filed by CWTD
with the Securities and Exchange Commission. The Shareholders
further confirm that they are aware that no federal or state agencies have
passed upon this transaction or made any finding or determination as to
the fairness of this investment.
|
|
(13)
|
The
Shareholders acknowledge that each stock certificate representing the
Stock shall contain a legend substantially in the following
form:
|
THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
“SECURITIES ACT”) PURSUANT TO AN EXEMPTION FROM REGISTRATION AFFORDED BY
REGULATION S AND HAVE NOT BEEN REGISTERED UNDER APPLICABLE STATE
SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR
PURSUANT TO AVAILABLE EXEMPTIONS FROM SUCH REGISTRATION, PROVIDED THAT THE
PURCHASER DELIVERS TO THE COMPANY AN OPINION OF COUNSEL (WHICH OPINION AND
COUNSEL ARE REASONABLY SATISFACTORY TO THE COMPANY) CONFIRMING THE AVAILABILITY
OF SUCH EXEMPTION. THE HOLDER AGREES TO REFRAIN FROM HEDGING
TRANSACTIONS PURSUANT TO THE REQUIREMENTS OF REGULATION S.
4.06 Securities
Filings.
The
Shareholders, as the controlling shareholder of CWTD following Closing, shall
cause CWTD to timely prepare and file all Securities Act and Exchange Act
filings that may result from or be required in connection with the transactions
contemplated in this Agreement.
ARTICLE
VII
MISCELLANEOUS
7.01 Brokers.
No
broker’s or finder’s fee will be paid in connection with the transaction
contemplated by this Agreement.
7.02 No
Representation Regarding Tax Treatment.
No
representation or warranty is being made by any party to any other party
regarding the treatment of this transaction for federal or state income
taxation. Each party has relied exclusively on its own legal,
accounting, and other tax adviser regarding the treatment of this transaction
for federal and state income taxes and on no representation, warranty, or
assurance from any other party or such other party's legal, accounting, or other
adviser.
- 12
-
7.03 Governing
Law.
This
Agreement shall be governed by, enforced and construed under and in accordance
with the laws of the State of Nevada without giving effect to principles of
conflicts of law thereunder. All controversies, disputes or claims
arising out of or relating to this Agreement shall be resolved by binding
arbitration. The arbitration shall be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration
Association. Each arbitrator shall possess such experience in, and
knowledge of, the subject area of the controversy or claim so as to qualify as
an “expert” with respect to such subject matter. The prevailing party
shall be entitled to receive its reasonable attorney’s fees and all costs
relating to the arbitration. Any award rendered by arbitration shall
be final and binding on the Parties, and judgment thereon may be entered in any
court of competent jurisdiction.
7.04 Notices.
Any
notices or other communications required or permitted hereunder shall be
sufficiently given if personally delivered, if sent by facsimile or telecopy
transmission or other electronic communication confirmed by registered or
certified mail, postage prepaid, or if sent
by
prepaid overnight courier addressed as follows:
If to
China World Trade Corporation, to:
3rd Floor,
Goldlion Digital Network Center
138 Tiyu
Road East, Tianhe
Guangzhou,
People’s Republic of China
If to
Parure Capital or Uonlive, to:
5/F.
Guangdong Finance Building
00
Xxxxxxxxx Xxxx Xxxx
Xxxx Xxxx
SAR of the People’s Republic of China
or such
other addresses as shall be furnished in writing by any party in the manner for
giving notices, hereunder, and any such notice or communication shall be deemed
to have been given as of the date so delivered or sent by facsimile or telecopy
transmission or other electronic communication, or one day after the date so
sent by overnight courier.
7.05 Attorney's
Fees.
In the
event that any party institutes any action or suit to enforce this Agreement or
to secure relief from any default hereunder or breach hereof, the breaching
party or parties shall reimburse the non-breaching party or parties for all
costs, including reasonable attorneys' fees, incurred in connection therewith
and in enforcing or collecting any judgment rendered therein.
7.06 Document;
Knowledge.
Whenever,
in any section of this Agreement, reference is made to information set forth in
the documents provided by CWTD or the Shareholders, such reference is to
information specifically set forth in such documents and clearly marked to
identify the section of this Agreement to which the information
relates. Whenever any representation is made to the "knowledge" of
any party, it shall be deemed to be a representation that no officer or director
of such party, after reasonable investigation, has any knowledge of such
matters.
7.07 Entire
Agreement.
This
Agreement represents the entire agreement between the Parties relating to the
subject matter hereof. All previous agreements between the Parties,
whether written or oral, have been merged into this Agreement. This
Agreement alone fully and completely expresses the agreement of the Parties
relating to the subject matter hereof. There are no other courses of
dealing, understandings, agreements, representations, or warranties, written or
oral, except as set forth herein.
7.08 Survival,
Termination.
The
representations, warranties, and covenants of the respective Parties shall
survive the Closing Date and the consummation of the transactions herein
contemplated for a period of one year from the Closing Date, unless otherwise
provided herein.
7.09 Counterparts.
This
Agreement may be executed in multiple counterparts, each of which shall be
deemed an original and all of which taken together shall be but a single
instrument. In addition, facsimile or electronic signatures shall have the same
legally binding effect as original signatures.
7.10 Amendment
or Waiver.
Every
right and remedy provided herein shall be cumulative with every other right and
remedy, whether conferred herein, at law, or in equity, and such remedies may be
enforced concurrently, and no waiver by any party of the performance of any
obligation by the other shall be construed as a waiver of the same or any other
default then, theretofore, or thereafter occurring or existing. At
any time prior to the Closing Date, this Agreement may be amended by a writing
signed by all Parties hereto, with respect to any of the terms contained herein,
and any term or condition of this Agreement may be waived or the time for
performance thereof may be extended by a writing signed by the party or parties
for whose benefit the provision is intended.
[INTENTIONALLY
LEFT BLANK]
- 13
-
EXECUTION
PAGE
IN
WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as
of the date first above written.
|
CHINA
WORLD TRADE CORPORATION
|
UONLIVE
LIMITED
|
||
|
By
/s/ X.X. Xxxx
|
By
/s/ Tsun Sin Man Xxxxxx
|
||
|
X.X.
Xxxx
|
Tsun
Sin Man Xxxxxx
|
||
|
Chief
Executive Officer
|
Chairman
|
||
|
XXXXXXX
X.X. XXXXX
|
TSUN
SIN MAN XXXXXX
|
||
|
/s/
Xxxxxxx X.X. Xxxxx
|
/s/
Tsun Sin Man Xxxxxx
|
||
|
(In
His Individual Capacity)
|
(In
His Individual Capacity)
|
||
|
PARURE
CAPITAL LIMITED
|
HUI
CHI KIT
|
||
|
By
/s/ Tsun Sin Man Xxxxxx
|
/s/
Xxx Xxx Kit
|
||
|
Tsun
Sin Man Xxxxxx
|
(In
His Individual Capacity)
|
||
|
Director
|
|||
- 14
-
Exhibit A to the Share
Exchange Agreement
CERTIFICATE
OF DESIGNATION OF
SERIES
A CONVERTIBLE PREFERRED STOCK OF
CHINA
WORLD TRADE CORPORATION
SETTING
FORTH THE PREFERENCES, RIGHTS,
QUALIFICATIONS
AND LIMITATIONS OF SUCH SERIES OF PREFERRED STOCK
WE,
Xxxxxxx Xxx Xxxx Xxxxx and Chi Xxxx Xxxx, being the President and Chief
Executive Officer, respectively, of China World Trade Corporation, a corporation
organized and existing under the laws of Nevada (the “Company”), DO HEREBY
CERTIFY that:
Pursuant
to the authority conferred upon the Board of Directors of the Company by the
Articles of Incorporation of the Company, the Board of Directors of the Company
on March 23, 2008 adopted the following resolution creating a series of
preferred stock designated as Series A Voting Convertible Preferred Stock, and
such resolution has not been modified and is in full force and effect on the
date hereof:
RESOLVED that, pursuant to the
authority vested in the Board of Directors of the Company in accordance with the
provisions of the Articles of Incorporation, a series of the class of authorized
preferred stock, par value $0.001 per share, of the Company is hereby created
and that the designation and number of shares thereof and the voting powers,
preferences and relative, participating, optional and other special rights of
the shares of such series, and the qualifications, limitations and restrictions
thereof are as follows:
|
1.
|
Designation and
Rank. The series of Preferred Stock shall be designated
the “Series A Convertible Preferred Stock” (“Series A Preferred”) and
shall consist of 500,000 shares. The Series A Preferred and any other
series of Preferred Stock authorized by the Board of Directors of the
Company are hereinafter referred to as “Preferred Stock.” The
Series A Preferred shall be senior to the common stock and all other
shares of Preferred Stock that may be later
authorized.
|
|
2.
|
Dividend Rate and
Rights. The holders of the Series A Preferred shall be
entitled to receive dividends or other distributions only when, as, and if
declared by the directors of the Corporation, and they shall not be
entitled to receive dividends or other distributions with the holders of
the Common Stock on an as converted
basis.
|
|
3.
|
Conversion into Common
Stock.
|
|
(a)
|
Right to
Convert. Each share of Series A Preferred shall be
convertible, at the option of the holder thereof, at any time six months
after the date of issuance thereof (the “Conversion Date”) into 100 shares
of fully paid and nonassessable shares of Common Stock (the “Conversion
Ratio”).
|
|
(b)
|
Mechanics of
Conversion. Before any holder shall be entitled to
convert, he shall surrender the certificate or certificates representing
the Series A Preferred to be converted, duly endorsed or accompanied by
proper instruments of transfer, at the office of the Corporation or of any
transfer agent, and shall give written notice to the Corporation at such
office that he elects to convert the same. The Corporation shall, as soon
as practicable thereafter, issue a certificate of certificates for the
number of shares of Common Stock to which the holder shall be entitled.
The Corporation shall, as soon as practicable after delivery of stock
certificates, or such agreement and indemnification in the case of a lost,
stolen or destroyed certificate, issue and deliver to such holder of
Series A Preferred a certificate or certificates for the number of shares
of Common Stock to which such holder is entitled as aforesaid and a check
payable as the result of a conversion into fractional shares of Common
Stock. Such conversion shall be deemed to have been made immediately prior
to the close of business on the date of such surrender of the shares of
Series A Preferred to be converted.
|
|
(c)
|
Adjustments to
Conversion Ratio. The number of shares of Common Stock
into which each share of the Series A Preferred is convertible, and the
number of votes to which the holder of a share of the Series A Preferred
is entitled pursuant to Section 4, shall be subject to adjustment from
time to time as follows:
|
(1) Dividends and
Distributions. In case the Company
shall at any time or from time to time declare a non-cash dividend, or make a
distribution, on the outstanding shares of Common Stock in shares of Common
Stock or subdivide or reclassify the outstanding shares of Common Stock into a
larger number of shares or combine or reclassify the outstanding shares of
Common Stock into a smaller number of shares of Common Stock, then, and in each
such case:
|
|
(i)
|
the
number of shares of Common Stock into which each share of Series A
Preferred is convertible shall be adjusted so that the holder of each
share thereof shall be entitled to receive, upon the conversion thereof,
the number of shares of Common Stock which the holder of a share of Series
A Preferred would have been entitled to receive after the happening of any
of the events described above had such share been converted immediately
prior to the happening of such event or the record date therefor,
whichever is earlier;
|
|
(ii)
|
the
number of votes to which a holder of a share of Series A Preferred is
entitled pursuant to Section 5 shall be adjusted so that, after the
happening of any of the events described above, such holder shall be
entitled to a number of votes equal to (I) the number of votes to which
such holder was entitled pursuant to Section 5 immediately prior to such happening
multiplied by (II) a fraction, the numerator of which is the number of
shares of Common Stock into which one share of Series A Preferred was
convertible immediately after
such happening and the denominator of which is the number of shares of
Common Stock into which one share of Series A Preferred was convertible
immediately prior to such happening;
and
|
|
|
(iii)
|
an
adjustment made pursuant to this clause (i) shall become effective (I) in
the case of any such dividend or distribution, (1) immediately after the
close of business on the record date for the determination of holders of
shares of Common Stock entitled to receive such dividend or distribution,
for purposes of subclause (A), and (2) immediately after the close of
business on the date of payment of such dividend or distribution, for
purposes of subclause (B), or (II) in the case of any such subdivision,
reclassification or combination, at the close of business on the day upon
which such corporate action becomes effective, for purposes of both
subclause (A) and subclause (B).
|
- 15
-
|
|
(2)
|
Merger or
Reorganization. In case at any time the Company shall be
a party to any transaction (including, without limitation, a merger,
consolidation, sale of all or substantially all of the Company's assets,
liquidation or recapitalization of the Common Stock and excluding any
transaction to which clause (i) or (ii) of this paragraph (a) applies) in
which the previously outstanding Common Stock shall be changed into or,
pursuant to the operation of law or the terms of the transaction to which
the Company is a party, exchanged for different securities of the Company
or common stock or other securities of another corporation or interests in
a noncorporate entity or other property (including cash) or any
combination of any of the foregoing, then, as a condition of the
consummation of such transaction, lawful and adequate provision shall be
made so that each holder of shares of Series A Preferred Stock shall be
entitled, upon conversion, to an amount per share equal to (A) the
aggregate amount of stock, securities. cash and/or any other property
(payable in kind), as the case may be, into which or for which each share
of Common Stock is changed or exchanged times (B) the number of shares of
Common Stock into which a share of Series A Preferred is convertible
immediately prior to the consummation of such
transaction.
|
|
(d)
|
No
Impairment. The Corporation will not, by amendment of
its Articles of Incorporation, amendment of this Certificate of
Designation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Corporation, but will at all times in good faith assist in the
carrying out of all provisions of this Section 3 and in the taking of all
such action as may be necessary or appropriate in order to protect the
Conversion Rights of the holders of the Series A Preferred against
impairment.
|
|
(e)
|
Certificate as to
Adjustments. Upon the occurrence of each adjustment or
readjustment of the Conversion Ratio of the Series A preferred pursuant to
this Section 3, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish
to each holder of Series A Preferred a certificate setting forth the
adjustment or readjustment and the calculation on which such adjustment or
readjustment is based. The Corporation shall, upon the written
request at any time of any holder of Series A Preferred, furnish or cause
to be furnished to such holder a like certificate setting forth (i) such
adjustments and readjustments, (ii) the Conversion Ratio for the Series A
Preferred at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other property which at the time would be
received upon the conversion of the Series A
Preferred.
|
|
(f)
|
Notices of Record
Date. In the event of any taking by the Corporation of a
record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend
(other than the special cash distribution referred to in Section 2 hereof
or a cash dividend which is the same as the cash dividends paid in the
previous quarter) or other distribution, the Corporation shall mail to
each holder of Series A Preferred at least ten (10) days prior to the date
specified herein, a notice specifying the date on which any such record is
to be taken for the purpose of such dividend or
distribution.
|
|
(g)
|
Common Stock
Reserved. Commencing on the Conversion Date, the
Corporation shall reserve and keep available out of its authorized but
unissued Common Stock such number of shares of Common Stock as shall from
time to time be sufficient to effect conversion of the Series A
Preferred. If, on the Conversion Date, the number of authorized
shares of Common Stock remaining unissued shall not be sufficient to
permit the conversion at such time of all then outstanding shares of the
Series A Preferred, the Company shall use commercially reasonable efforts
to increase the number of authorized shares of the Company’s Common Stock
as necessary to permit the conversion of all then outstanding shares of
Series A Preferred Stock and shall diligently pursue the completion of
such process.
|
|
(h)
|
Waiver of
Adjustment. Notwithstanding anything to the contrary set
forth herein, the operation of, and any adjustment in the number of shares
of Common Stock issuable upon conversion of the Series A Preferred
pursuant to this Section 3, may be waived with respect to any specific
share or shares of Series A Preferred, either prospectively or
retroactively and either generally or in a particular instance, by a
writing executed by the registered holder of such share or shares of
Series A Preferred. Any such waiver shall bind all future holders of such
share or shares of Series A Preferred for which such rights have been
waived.
|
4. Voting
Rights. In addition to any voting rights provided by law each
outstanding share of Series A Preferred shall be entitled to 100 votes per
share. The shares of Series A Preferred and the shares of Common Stock shall
vote together as one class on all matters submitted to a vote of common
stockholders of the Company.
5. Liquidation
Preference. In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary (a
“Liquidation”), the assets of the Corporation available for distribution to its
stockholders shall be distributed pro rata to the holders of the Preferred Stock
and Common Stock ( in case of the Preferred Stock, on an “as converted basis”
into Common Stock) and the Preferred Stock shall not be entitled to any
preference upon liquidation.
6. Reissuance. No
Share or shares of Series A Preferred acquired by the Corporation by reason of
conversion or otherwise shall be reissued as Series A Preferred, and all such
shares thereafter shall be returned to the status of undesignated and unissued
shares of Preferred Stock of the Corporation.
IN WITNESS WHEREOF, China World Trade
Corporation, through its designated officer has caused this Certificate to be
duly executed in its corporate name as of March 24, 2008.
China
World Trade CorporationA Nevada corporation
By: s/s Xxxxxxx Xxx Xxxx
Xxxxx
Name: Xxxxxxx
Xxx Xxxx Xxxxx
Title: President
By /s/ X.X.
Xxxx
Name:
X.X. Xxxx
Title:
Chief Executive Officer
- 16
-
