SHARE EXCHANGE AGREEMENT
THIS AGREEMENT is made this 27TH day of May 2002 by and among New
Cinema Partners, a Nevada corporation, hereinafter called "NCPP", Witnet Co.
Ltd. a Korean corporation, hereinafter called " Witnet ", and the registered
shareholders of Witnet, hereinafter called the "SELLING SHAREHOLDERS".
RECITALS:
WHEREAS NCPP desires to acquire 100% of the issued and outstanding
shares of the common stock of Witnet in exchange for 55,000,000 authorized but
unissued shares of the common stock of NCPP, pursuant to a plan of
reorganization within the meaning of IRC (1986), Section 368(a)(1)(B), as
amended; and
WHEREAS the SELLING SHAREHOLDER desire to exchange 100% of the issued
and outstanding shares of the common stock of Witnet , currently owned by the
SELLING SHAREHOLDER, in exchange for said 55,000,000 shares of NCPP,
NOW THEREFORE, in consideration of the mutual promises, covenants and
representations contained herein, and to consummate the foregoing plan of
reorganization, the parties hereby adopt said plan of organization and agree as
follows:
ARTICLE I
EXCHANGE OF SECURITIES
1.01 Issuance of NCPP Shares. Subject to all of the terms and
conditions of this Agreement, NCPP agrees to issue to the SELLING SHAREHOLDER
55,000,000 fully paid and non-assessable unregistered shares of NCPP common
stock in exchange for 100% of the outstanding Witnet common stock, all of which
are currently owned by the SELLING SHAREHOLDER.
1.02 Transfer of Witnet Shares. In exchange for NCPP's stock being
issued to the SELLING SHAREHOLDER as above described, the SELLING SHAREHOLDER
shall on the closing date and concurrent with such issuance of NCPP's common
stock, deliver to NCPP 100% of the outstanding common stock of Witnet .
ARTICLE II
REPRESENTATIONS, AGREEMENTS AND WARRANTIES OF
THE SELLING SHAREHOLDERS AND Witnet
The SELLING SHAREHOLDER and Witnet hereby represent, agree and warrant
that:
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2.01 Organization. Witnet is a corporation duly organized, validly
existing, and in good standing under the laws of Korea and has all necessary
corporate powers to own its properties and to carry on its business as now owned
and operated by it, is duly qualified to do business and is in good standing in
any jurisdiction its business requires qualification.
2.02 Capital. The authorized capital stock of Witnet consists of
________________ common shares. All of the issued and outstanding shares are
validly issued, fully paid and non-assessable. After the execution of the
actions contained in this Agreement, there will be no capital stock remaining,
of any class, other than shares held by NCPP.
2.03 Absence of Undisclosed Liabilaities. As of the date hereof, Witnet
does not have any material debt, liabilaties or obligation of any nature,
whether accrued, absolute, contingent or otherwise, and whether due or to become
due.
2.04 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, NCPP
and/or its attorneys shall have the opportunity to meet with accountants and
attorneys to discuss the financial condition of Witnet. Witnet shall make
available to NCPP and/or its attorneys all books and records of Witnet. If the
transaction contemplated hereby is not completed, all documents received by NCPP
and/or its attorneys shall be returned to Witnet and all information so received
shall be treated as confidential.
2.05 Patents, Trade Names and Rights. Witnet owns or holds or has
adequate license rights in respect of all necessary patents, trademarks, service
marks, trade names, copyrights and other rights necessary to the conduct or
proposed conduct of its business.
2.06 Compliance with Laws. Witnet has complied with, and is not in
violation of, applicable federal, state (Provincial?) or local statutes, laws
and regulations affecting its properties or the operation of its business.
2.07 Litigation. Witnet is not a party to, nor to the best of its
knowledge is there pending or threatened, any suit, action, arbitration or
legal, administrative or other proceeding, or governmental investigation
concerning its business, assets or financial condition. Witnet is not in default
with respect to any order, writ, injunction or decree of any federal, state,
local or foreign court or agency, nor is it engaged in any lawsuits to recover
monies due to it.
2.08 Authority. The Board of Directors of Witnet authorized the
execution of this Agreement and the consummation of the transactions
contemplated herein and has full power and authority to execute, deliver and
perform this Agreement. This Agreement is a valid and binding obligation of
Witnet.
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2.09 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by Witnet and the performance of its obligations hereunder in the
time and manner contemplated will not cause, constitute or conflict with or
result in (i) any breach of the provisions of any license, indenture, mortgage,
charter, instrument, certificate of incorporation, bylaw or other agreement or
instrument to which it is a party or by which it may be bound, nor will any
consents or authorizations of any party other than those hereto be required,
(ii) an event that would permit any party to any agreement or instrument to
terminate it or to accelerate the maturity of any indebtedness or other
obligation, or (iii) an event that would result in the creation or imposition of
any lien, charge or encumbrance on any asset.
2.10 Full Disclosure. None of the representations and warranties made
by the SELLING SHAREHOLDER or Witnet herein or in any exhibit, certificate or
memorandum furnished or to be furnished by the SELLING SHAREHOLDER or Witnet, or
on either's behalf, contains or will contain any untrue statement of material
fact, or omits any material fact, the omission of which would be misleading.
2.11 Assets. Witnet has good and marketable title to all of its
property free and clear of any and all liens, claims or encumbrances.
2.12 Indemnification.
The Selling Shareholders and Witnet (each, an "Indemnifying Person")
jointly and severally agree to indemnify, defend and hold harmless NCPP and each
Person, if any, who controls, directly or indirectly, NCPP, each officer,
director, affiliate, partner, employee and agent of NCPP and each such other
Person (individually referred to as an "Indemnified Person"), from and against
any and all loss, claim, damage, liability, cost or expense whatsoever
(including, but not limited to, any and all legal fees and other expenses and
disbursements incurred in connection with investigating, preparing to defend or
defending any action, suit or proceeding, including any inquiry or
investigation, commenced or threatened, or any claim whatsoever or in appearing
or preparing for appearance as a witness in any action, suit or proceeding)
arising out of or based upon (i) the transactions contemplated by this
Agreement, including activities to be undertaken by NCPP in furtherance of such
transactions, (ii) any untrue statement or alleged untrue statement of a
material fact contained in any statement or document of the Company or any
omission or alleged omission to state therein a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading, or (iii) any representation or warranty of the Selling
shareholders and Witnet made in this Agreement or any document delivered by them
in connection herewith being untrue when made or deemed made or any breach of
any obligation of the Selling Shareholders and Witnet under this Agreement. Any
loss, claim, damage, liability, cost or expense found in a final judicial
determination not subject to appeal to be due solely to the gross negligence or
willful misfeasance of an Indemnified Person shall be excluded from the
indemnification and contribution rights of such Indemnified Person set forth in
this Section 2.12. The Selling Shareholders and Witnet further agrees promptly
upon demand by an Indemnified Person at any time or from time to time, to
reimburse such Indemnified Person for, or pay, any loss, claim, damage,
liability, cost or expense as to which the Selling Shareholders and Witnet
agreed to indemnify such Indemnified Person pursuant to this Agreement.
Notwithstanding any of the indemnification or contribution provisions contained
in this Section 2.12 the Indemnifying Person shall not be required to make
reimbursement or payment for any settlement effected without its written
consent, which will not be unreasonably withheld, but if the settlement is made
without its written consent, which will not be unreasonably withheld, or if the
settlement is made with its written consent, or if there be a final judgment
against an Indemnified Person in any such action or proceeding, the Selling
Shareholders and Witnet agrees to indemnify and hold harmless such Indemnified
Person from and against any loss or liability by reason of such settlement or
judgment.
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This Section 2.12 is not in lieu of but is in addition to any rights which any
Indemnified Person, and any obligations which the parties or any other person,
may otherwise have. Any compliance by any party with this Section 2.12 shall not
relieve such party from any liability it may otherwise have.
2.13 Authority to Exchange. As of the date of this Agreement, the
SELLING SHAREHOLDER holds 100% of the shares of Witnet common stock. Such shares
are owned of record by the SELLING SHAREHOLDER and such shares are not subject
to any lien, encumbrance or pledge. The SELLING SHAREHOLDER holds authority to
exchange such shares pursuant to this Agreement. This Agreement is a valid and
binding obligation the Selling Shareholders to exchange their shares of Witnet
as provided for in this Agreement.
2.14 Investment Intent. The SELLING SHAREHOLDER understands and
acknowledges that the shares of NCPP common stock offered for exchange or sale
pursuant to this Agreement are being offered in reliance upon the exemption from
registration requirements of the Securities Act of 1933, as amended (the "Act")
pursuant to Section 4(2) of the Act and the rules and regulations promulgated
thereunder for non-public offerings and make the following representations,
agreements and warranties with the intent that the same may be relied upon in
determining the suitability of the SELLING SHAREHOLDER as a purchaser of NCPP
common stock:
(a) The shares of NCPP common stock are being acquired solely for the
account of the SELLING SHAREHOLDER, for investment purposes only, and not with a
view to, or for sale in connection with, any distribution thereof, and with no
present intention of distributing or reselling any part of the NCPP common stock
acquired.
(b) The SELLING SHAREHOLDER agrees not to dispose of its NCPP common
stock or any portion thereof unless and until counsel for NCPP shall have
determined that the intended disposition is permissible and does not violate the
Act or any applicable Federal or state securities laws, or the rules and
regulations thereunder.
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(c) The SELLING SHAREHOLDER agrees that the certificates evidencing the
NCPP common stock acquired pursuant to this Agreement will have a legend placed
thereon stating that they have not been registered under the Act or any state
securities laws and setting forth or referring to the restrictions on
transferability and sale of the NCPP common stock, and that stop transfer
instructions shall be placed with the transfer agent for said certificate.
(d) The SELLING SHAREHOLDER acknowledges that NCPP has made all records
and documentation pertaining to NCPP common stock available to them and to their
qualified representatives, if any, and has offered such person or persons an
opportunity to ask questions and further discuss the proposed acquisition of
NCPP common stock, and any available information pertaining thereto, with the
officers and directors of NCPP, and that all such questions and information
requested have been answered by NCPP and its officers and directors to the
SELLING SHAREHOLDER's satisfaction.
(e) The SELLING SHAREHOLDER has carefully evaluated its financial
resources and investment position and the risks associated with this transaction
and are able to bear the economic risks of this transaction; and it has
substantial knowledge and experience in financial, business and investment
matters and are qualified as sophisticated investors, and is capable of
evaluating the merits and risks of this transaction; and it desires to acquire
the NCPP common stock on the terms and conditions set forth.
(f) The SELLING SHAREHOLDER is able to bear the economic risk of an
investment in the NCPP common stock.
(g) The SELLING SHAREHOLDER understands that an investment in the NCPP
common stock is not liquid and the SELLING SHAREHOLDER has no need for liquidity
in this investment.
2.15 Regulations - NCPP, Witnet and the SELLING SHAREHOLDER are
aware that NCPP has public shareholders and is a "shell"
corporation without significant assets or liabilities, and
further that public companies are subject to extensive and
complex state, federal and other regulations. Among other
requirements, the SELLING SHAREHOLDER and Witnet are aware that
a Form 8-K must be filed with the United States Securities and
Exchange Commission within fifteen days after closing which
filing requires that audited financial statements be filed
within sixty days after the filing of the 8-K, and they agree
that such responsibility shall be the sole responsibility of
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the officers and directors of NCPP. The SELLING SHAREHOLDER and
Witnet are aware of the legal requirements and obligations of
public companies, understand that regulatory efforts regarding
public shell transactions similar to the transaction
contemplated herein has been and is currently being exerted by
some states, the U.S. Securities and Exchange Commission and
the National Association of Securities Dealers, Inc. (NASD),
and are fully aware of their responsibilities, following
closing, to fully comply will all securities laws and
regulations, and agree to do so.
Additionally, NCPP, Witnet and the selling shareholder are
aware that under article 6 of the Foreign Investment Promotion
Act of Korea that notification and a certificate of completion
of notification must be obtained by the Korean Minister of
Commerce, Industry and Energy prior to closing.
2.16 No Assurances or Warranties. The SELLING SHAREHOLDER and Witnet
acknowledge that there can be no assurance regarding the tax consequences of
this transaction, nor can there be any assurance that the Internal Revenue Code
or the regulations promulgated thereunder will not be amended in such manner as
to deprive them of any tax benefit that might otherwise be received. The SELLING
SHAREHOLDER and Witnet are relying upon the advice of their own tax advisors
with respect to the tax aspects of this transaction. No representations or
warranties have been made by NCPP as to the benefits to be derived by the
SELLING SHAREHOLDER or Witnet in completing this transaction, nor has NCPP made
any warranty or agreement, expressed or implied, as to the tax or securities
consequences of the transactions contemplated by this Agreement or the tax or
securities consequences of any action pursuant to or growing out of this
Agreement.
ARTICLE III
REPRESENTATIONS, AGREEMENTS AND WARRANTIES OF NCPP
NCPP represents, agrees and warrants that:
3.01 Organization. NCPP is a corporation duly organized, validly
existing, and in good standing under the laws of Nevada, has all necessary
corporate powers to own properties and to carry on its business as now owned and
operated by it, is duly qualified to do business and is in good standing in each
of the jurisdictions where its business requires qualification.
3.02 Capital. All of the issued and outstanding shares of NCPP are
validly issued, fully paid and non-assessable. All currently outstanding shares
of NCPP Common Stock have been issued in compliance with applicable federal and
state securities laws.
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3.03 Subsidiaries. NCPP has no subsidiaries and does not own any
interest in any other enterprise, whether or not such enterprise is a
corporation.
3.04 Financial Statements. Exhibit 3.04 to this Agreement includes
NCPP's audited financial statements for its most recent fiscal year end. The
financial statements have been prepared in accordance with generally accepted
accounting principles and practices consistently followed throughout the period
indicated and fairly present the financial position of NCPP as of the dates of
the balance sheets included in the financial statements and the results of
operations for the periods indicated.
3.05 Absence of Changes. Since the date of NCPP's most recent financial
statements, there has not been any change in its financial condition or
operations except for changes in the ordinary course of business.
3.06 Absence of Undisclosed Liabilities. As of the date of NCPP's most
recent balance sheet, included in Exhibit 3.04, it did not have any material
debt, liability or obligation of any nature, whether accrued, absolute,
contingent or otherwise, and whether due or to become due, that is not reflected
in such balance sheet.
3.07 Tax Returns. Within the times and in the manner prescribed by law,
NCPP has filed all federal, state or local tax returns required by law, has paid
all taxes, assessments and penalties due and payable and has made adequate
provision on its most recent balance sheet for any unpaid taxes. There are no
present disputes as to taxes of any nature payable by NCPP.
3.08 Investigation of Financial Condition. Without in any manner
reducing or otherwise mitigating the representations contained herein, Witnet
and the SELLING SHAREHOLDER shall have the opportunity to meet with NCPP's
accountants and attorneys to discuss the financial condition of NCPP. NCPP shall
make available to Witnet and the SELLING SHAREHOLDER all books and records of
NCPP.
3.09 Patents, Trade Names and Rights. NCPP does not use any patents,
trade marks, service marks, trade names or copyrights in its business.
3.10 Compliance with Laws. NCPP has complied with, and is not in
violation of, applicable federal, state or local statutes, laws and regulations
affecting its properties, securities or the operation of its business.
3.11 Litigation. NCPP is not a party to, nor to the best of its
knowledge is there pending or threatened, any suit, action, arbitration or
legal, administrative or other proceedings, or governmental investigation
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concerning its business, assets or financial condition. NCPP is not in default
with respect to any order, writ, injunction or decree of any federal, state
local or foreign court or agency, nor is it engaged in, nor does it anticipate
it will be necessary to engage in, any lawsuits to recover money or real or
personal property.
3.12 Authority. The Board of Directors of NCPP has authorized the
execution of this Agreement and the transactions contemplated herein, and it has
full power and authority to execute, deliver and perform this Agreement.
3.13 Ability to Carry Out Obligations. The execution and delivery of
this Agreement by NCPP and the performance of its obligations hereunder will not
cause, constitute, conflict with or result in (i) any breach of the provisions
of any license, indenture, mortgage, charter, instrument, certificate of
incorporation, bylaw or other agreement or instrument to which it is a party or
by which it may be bound, nor will any consents or authorizations of any party
other that those hereto be required, (ii) an event that would permit any party
to any agreement or instrument to terminate it or to accelerate the maturity of
any indebtedness or other obligation, or (iii) an event that would result in a
creation or imposition of any lien, charge or encumbrance on any asset.
3.14 Full Disclosure. None of the representations and warranties made
by NCPP herein, or in any exhibit, certificate or memorandum furnished or to be
furnished by it or on its behalf, contains or will contain any untrue statement
of a material fact, or omits any material fact the omission of which would be
misleading.
3.15 Assets. NCPP has good and marketable title to all of its property
free and clear of any and all liens, claims and encumbrances.
3.16 Indemnification. NCPP agrees to indemnify, defend and hold the
SELLING SHAREHOLDER and Witnet harmless against and in respect to any and all
claims, demands, losses, cost, expenses, obligations, liabilities or damages,
including interest, penalties and reasonable attorneys' fees, incurred or
suffered, which arise out of, result from or relate to any breach of, or failure
by NCPP to perform, any of its representations, warranties or covenants in this
Agreement or in any exhibit or other instrument furnished or to be furnished
under this Agreement.
3.17 Validity of NCPP Shares. The shares of NCPP common stock to be
issued pursuant to this Agreement will be duly authorized, validly issued, fully
paid and non-assessable under Nevada law.
3.18 Trading. The common stock of NCPP trades on the National
Association of Securities Dealers' Bulletin Board.
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ARTICLE IV
ACTIONS PRIOR TO CLOSING
4.01 Investigative Rights. Prior to the Closing Date each party shall
provide to the other parties, including the parties' counsel, accountants and
other authorized representatives, full access during normal business hours (upon
reasonable advance written notice) to such parties' books and records.
4.02 Conduct of Business. Prior to the Closing Date, each party shall
conduct its business in the normal course and shall not see, pledge or assign
any assets, without the prior written approval of the other parties. No party
shall amend its certificate of incorporation or bylaws, declare dividends,
redeem or sell stock or other securities, incur additional liabilities, acquire
or dispose of fixed assets, change employment terms, enter into any material or
long-term contract, guarantee obligations of any third party, settle or
discharge any balance sheet receivable for less than its stated amount, pay more
on any liability than its stated amount or enter into any other transaction
other than in the regular course of business.
ARTICLE V
CLOSING
5.01 Closing. The closing (the "Closing") of this transaction shall be
held at the offices of NCPP, or such other place as shall be mutually agreed
upon, at the time of the special meeting of the shareholders of NCPP which will
be scheduled 30 days from the date of this agreement (the "Closing Date"):
(a) NCPP shall issue 55,000,000 shares of its common stock in a
certificate or certificates representing such shares.
(b) The SELLING SHAREHOLDER shall deliver the certificates representing
100% of the shares of Witnet common stock (________________ common shares).
(c) NCPP shall deliver a signed consent or minutes of its Board of
Directors, approving this Agreement and authorizing the matters set forth
herein.
(d) Witnet shall deliver a signed consent or minutes of its Board of
Directors approving this Agreement and authorizing the matters set forth herein.
(e) NCPP's existing Board of Directors will elect two new directors, as
named by the SELLING SHAREHOLDER, to act as officers and directors of NCPP
effective the Closing Date.
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ARTICLE VI
MISCELLANEOUS
6.01 Captions and Headings. The article and paragraph headings
throughout this Agreement are for convenience of reference only and shall not be
deemed to define, limit or add to the meaning of any provision of this
Agreement.
6.02 No Oral Change. This Agreement may not be changed or modified
except in writing signed by the party against whom enforcement of any change or
modification is sought.
6.03 Non-Waiver. Except as otherwise expressly provided herein, no
waiver of a covenant, condition or provision of this Agreement shall be deemed
to have been made unless executed in writing and signed by the party against
whom such waiver is charged. The failure of any party to insist in any one or
more cases upon the performance of any covenant, condition or provision of this
Agreement shall not be construed as a waiver or relinquishment for the future of
any such covenant, condition or provision. No waiver by any party of one breach
by the other shall be construed as a waiver with respect to a subsequent breach.
6.04 Time of Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
6.05 Entire Agreement. This Agreement contains the entire agreement
and understanding between the parties and supersedes all prior agreements and
understandings.
6.06 Choice of Law/Arbitration. This Agreement and its application,
shall be governed under the laws of the State of Nevada. Any and all disputes
and controversies of every kind and nature between the parties hereto arising
out of or relating to this Agreement relating to the existence, construction,
validity, interpretation or meaning, performance, non-performance, enforcement,
operation, breach, continuance or termination thereof shall be subject to an
arbitration mutually agreeable to the parties or, in the absence of such mutual
agreement, then subject to arbitration in accordance with the rules of the
American Arbitration Association. It is the intent of the parties hereto and the
purpose of this provision to make the submission to arbitration of any dispute
or controversy arising hereunder an express condition precedent to any legal or
equitable action or proceeding of any nature whatsoever.
6.07 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
6.08 Notices. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to have been given
on the date of service if served personally on the party to whom notice is to be
given, or on the third day after mailing if mailed to the party to whom notice
is to be given, by first class mail, registered or certified, postage prepaid,
and properly addressed as follows:
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NCPP:
New Cinema Partners, Inc.
000 Xxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx Xxxxxx X0X 0X0
Phone: 000-000-0000 Fax: 000-000-0000
Witnet and the SELLING SHAREHOLDER:
Witnet Co., Ltd.
5th Fl. Doukmyung B/D 000-0,
Xxxxx-xxxx, Xxxxxx-xx,,
Xxxxx, Xxxxx 137-040
Phone: 000-000-0000 Fax: 000-000-0000
6.09 Expenses. Each party shall pay their own expenses in relation to
this transaction.
6.10 Survival of Representations and Warranties. The representations,
warranties and covenants set forth in this Agreement or in any instrument,
certificate, opinion or other writing provided for in it, shall survive the
Closing Date.
6.11 Further Documents. The parties agree to execute any and all other
documents and to take such other action or corporate proceedings as may be
necessary or desirable to carry out the terms hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement the date
first above written.
NEW CINEMA PARTNERS, INC.
Per:__________________________
Name:
Title:
I have authority
to bind NCPP.
WITNET CO., LTD.
Per:__________________________
Name:
Title:
I have authority to bind Witnet .
THE SELLING SHAREHOLDERS
Name:________________________
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