REORGANIZATION PLAN AND AGREEMENT
This Reorganization Plan and Agreement ("Agreement") is made and entered
into this 15th day of Novermber, 2000, between and among: (i) Waterbury
Resources Inc., a Cayman Islands company, which is referred to herein as the
"Company," (ii) G/O International, Inc., a Colorado corporation, which is
referred to herein as "G/O Colorado," (iii) Beijing Orient LegendMaker
Software Development Co., Ltd., a Company formed under the laws of the
People's Republic of China, which is referred to herein as "OLM," and (iv)
those persons or entities identified in Schedule A attached hereto, who are
the beneficial owners of 20,000,000 shares of the capital stock of OLM which
constitutes 100% of the issued and outstanding capital stock of OLM, which are
referred to herein as the "OLM Shareholders."
WHEREAS, the OLM Shareholders, as set forth in Schedule A hereto, own
and have the right to sell, transfer and convey 20,000,000 shares of the
capital stock of OLM which constitutes one hundred percent (100%) of the
issued and outstanding capital stock of OLM; and
WHEREAS, the Company wishes to acquire the issued and outstanding
capital stock of OLM from the OLM Shareholders; and
WHEREAS, the OLM Shareholders have agreed to deliver 20,000,000 shares
of OLM which constitutes one hundred percent (100%) of the issued and
outstanding shares of capital stock of OLM to the Company in exchange for
those Ordinary Shares of the Company, $0.0001 par value per share, set forth
in Schedule A hereto; and
WHEREAS, in connection with such exchange of shares among the OLM
Shareholders and the Company, G/O Colorado, the Company's parent, has agreed,
subject to the fulfillment of certain conditions, to distribute the
outstanding shares of the Company's $0.0001 par value per share Ordinary
Shares currently held by it to its existing shareholders; and
WHEREAS, the parties hereto wish to formalize the above mentioned
agreements and thereafter accomplish such exchange on the terms and conditions
set forth herein.
NOW THEREFORE, for and in consideration of the premises, and the
agreements, covenants, representations and warranties hereinafter set forth,
and other good and valuable considerations, the receipt and adequacy all of
which are forever acknowledged and confessed, the parties hereto agree as
follows:
1. REPRESENTATIONS AND WARRANTIES BY OLM AND THE OLM SHAREHOLDERS.
OLM and the OLM Shareholders hereby jointly and severally make the following
express representations and warranties to the Company and to G/O Colorado:
X. XXX is a corporation duly organized, validly existing and in
good standing under the laws of the People's Republic of China.
X. XXX is the holder of the issued and outstanding capital
stock of each of those subsidiaries corporations set forth in Schedule B
hereto (the "Subsidiaries"). Except as disclosed in Schedule B hereto, OLM has
no subsidiaries and does not own any interest in any other entity. Further,
none of the OLM Shareholders has conducted the business of OLM or any business
similar to the business of OLM or related to the business of OLM under any
other name or identity. Each of the Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of the
People's Republic of China.
X. XXX, the Subsidiaries and the OLM Shareholders have taken
all necessary steps to assure that OLM and the Subsidiaries have the corporate
power and are duly authorized, qualified and licensed under all applicable
laws, regulations, ordinances and orders of public authorities to own their
properties and conduct their businesses in the places and in the manner now
conducted.
X. XXX has registered capital of 20,000,000.00 RMB Yuan and
presently has outstanding a total of 20,000,000 shares of its capital stock.
OLM has no other shares of capital stock issued and outstanding and has no
outstanding committments to the issue any additional shares or rights to the
issuance of capital shares of OLM.
E. The execution, delivery and performance of this Agreement by
OLM and the OLM Shareholders and the transactions contemplated hereby:
(i) are within the corporate powers of OLM, are not in
contravention of the terms of the Enterprise Legal Entity
Business License, the New Technology Enterpprise Approval
certificate or any Articles and or Memorandum of Association
or any amendments thereto of OLM or any of its Subsidiaries,
and have been duly authorized by the Board of Directors of
OLM, and to the best knowledge of the officers of OLM and
the OLM Shareholders are not in contravention of any
applicable laws;
(ii) will neither conflict with nor result in any breach or
contravention of, or the creation of any lien under, any
indenture, agreement, lease, instrument or understanding to
which OLM or any of its Subsidiaries or any OLM Shareholder
is a party or by which any of the Assets of OLM or any of
its Subsidiaries is or are bound; and
(iii) are and will constitute the valid and legally binding
obligations of OLM and of each and every OLM Shareholder,
enforceable in accordance with the terms of this Agreement.
X. XXX and the OLM Shareholders have delivered to the Company
copies of those financial statements set forth on Exhibit 1 hereto respecting
the operation of OLM and its Subsidiaries, prepared by KPMG in accordance with
International Accounting Standards ("Existing Financial Statements").
The Existing Financial Statements have been prepared by KPMG from
the books and records of OLM and its Subsidiaries and, to the best knowledge
of the management of OLM and the OLM Shareholders, accurately reflect the
status and results of operations of OLM and its Subsidiaries as of the June
30, 2000 (the "Balance Sheet Date"), and to the best knowledge of OLM and the
OLM Shareholders there have occurred no material adverse changes in the
financial condition or business of OLM and/or its Subsidiaries as reflected in
such Existing Financial Statements, other than changes in the ordinary course
of business, which have not had any material adverse effect on the business or
financial condition of OLM and/or its Subsidiaries, and or any of their
respective Assets.
X. XXX and the OLM Shareholders have delivered to the Company
an accurate list and summary description (Schedule C) as of the date of this
Agreement of all material assets of OLM and its Subsidiaries (the "Assets").
X. XXX and the OLM Shareholders have delivered to the Company
an accurate list and summary description (Schedule D) as of the date of this
Agreement of all licenses, permits, franchises, certificates of need,
certificate of need applications, trademarks, trade names, patents, patent
applications and copyrights, owned or held by OLM and/or its Subsidiaries
relating to the ownership, development or operations of OLM and/or its
Subsidiaries, all of which are now valid, in good standing, not subject to
renewal prior to Closing. OLM and/or the OLM Shareholders are not aware of any
licenses, permits, franchises, certificates of need, certificate of need
applications, trademarks, trade names, patents, patent applications and
copyrights which are not possessed or held by OLM or its Subsidiaries which,
taken together with the business of OLM and/or its Subsidiaries or any
proposed business of OLM and/or its Subsidiaries such failure to possess or
hold the same would materially adversely effect the ability of OLM and/or its
Subsidiaries to conduct their existing business or any proposed business.
X. XXX and the OLM Shareholders have delivered to the Company
an accurate list (Schedule E) as of the date of this Agreement of all material
agreements which relate to or may affect the Assets or the operation of the
OLM and/or its Subsidiaries, to which OLM and/or any of its subsidiaries is a
party or by which OLM and/or any of its Subsidiaries, or any of its Assets is
bound (the "Contracts") and have made copies of such Contracts available to
the Company and G/O Colorado for inspection. None of such Contracts unduly
burdens or restricts OLM and/or its Subsidiaries in conducting its current
ordinary course of businesses nor restricts or would tend to restrict any
proposed further courses of business. OLM and its Subsidiaries have complied
with all material commitments and obligations under all such agreements, such
agreements constitute the entire agreements by and between the parties as
respectively indicated on Schedule E. Neither OLM nor any of its Subsidiaries
are a party to nor are their Assets bound by:
(i) except as expressly set forth in Schedule E, any contracts
or commitments affecting ownership of, title to, use of, or
any interest in the Assets;
(ii) except as expressly set forth in Schedule E, any patent
licensing agreements or any other agreements or commitments
with respect to patents, patent applications, trademarks,
trade names, technical assistance, copyrights or other like
terms;
(iii) except as expressly set forth in Schedule E, any incentive
compensation, pension, retirement, profit sharing or other
like employee pension or welfare plans of any nature
whatsoever, other than sick leave and vacation policies for
any of the employees of OLM and/or its Subsidiaries;
(iv) except as expressly set forth in Schedule E, any collective
bargaining agreements or other contracts or commitments to
or with any labor unions or other employee representatives
or groups of employees affecting or which could affect the
Assets;
(v) except as expressly set forth in Schedule E, any employment
contracts or any other contracts, agreements or commitments
to or with individual employees or agents affecting or which
could affect its business or the Assets extending for a
period of more than ninety (90) days from the Closing Date,
or which cannot be terminated without cause upon not more
than ninety (90) days notice without payment of penalty or
equivalent thereof;
(vi) except as expressly set forth in Schedule E, any other
contracts or commitments providing for payments based in any
matter on the revenues, purchases or profits of OLM or any
of its Subsidiaries.
X. XXX and the OLM Shareholders warrant and represent that:
(i) The Contracts constitute the entire agreements by and
between the respective parties thereto; and
(ii) In all material respects, all obligations required to be
performed under the terms of the Contracts have been
performed, and each of the Contracts is now and will be,
upon and after the Closing Date, in full force and effective
without default on the part of the parties thereto.
(iii) with respect to any leases respecting real estate:
(a) OLM and/or its Subsidiaries and/or the OLM
Shareholders, to the best of their knowledge, have not
received any notice of violation of any applicable
ordinance or other law, order, regulation or
requirement, or notice of condemnation, lien,
assessment or the like, relating to any part of the
real property at which any business conducted by OLM
and/or its Subsidiaries are located or from which they
are operated;
(b) To the best knowledge of OLM and the OLM Shareholders,
each operation of OLM and/or its Subsidiaries,
wherever located, is in compliance with all applicable
zoning ordinances and the consummation of transactions
contemplated herein will not result in a violation of
any applicable zoning ordinance or termination of any
applicable zoning variance now existing;
(c) All fixtures and improvements within or upon real
estate utilized by OLM and/or its Subsidiaries is in
operating condition and in a reasonable state of
maintenance and repair, except for deterioration
caused by normal wear and tear in the ordinary course
of business;
K. All the inventory and supplies constituting any part of the
Assets are of a quality usable and salable in the ordinary course of the
business of OLM and/or its Subsidiaries. Inventory and supplies are carried
at the lower of cost or market, on a first-in, first-out basis and are
properly stated in the Existing Financial Statements.
X. XXX and the OLM Shareholders have delivered to the Company
an accurate list and a substantially complete description (Schedule F) of all
the equipment (including all software) associated with, or constituting any
part of the Assets as of the Balance Sheet Date, designating which of the
equipment is owned or leased by OLM and/or its Subsidiaries. The equipment
included in Schedule F is adequate in all material respects to fully equip and
operate OLM and or its Subsidiaries as now being operated and is in operating
condition and in a reasonable state of maintenance and repair, except for
deterioration caused by normal wear and tear in the ordinary course of
business;
Since the Balance Sheet Date, OLM and /or its Subsidiaries have
not acquired or sold or otherwise disposed of any equipment associated with,
or constituting any part of, the Assets.
X. XXX and/or its Subsidiaries will have good and marketable
title to all properties, assets and leasehold estates, real and personal,
constituting or associated with the Assets or any part thereof, subject to no
mortgage, lien, pledge, security interest, conditional sales agreement,
encumbrance or charge, except as set forth on Schedule G and liens for current
taxes and assessments, if any, with respect to which no default exists.
X. XXX and the OLM Shareholders have delivered to the Company
an accurate Schedule (Schedule H) as of the Closing Date of this Agreement
reflecting the insurance policies covering the ownership and operations of the
Assets by OLM and/or its Subsidiaries, which Schedule H reflects the policies'
numbers, terms, identity of insurers, amounts and coverage. All of such
policies are now and will be in full force and effect on and after the Closing
hereunder on an occurrence basis with no premium arrearages. True and correct
copies of all such policies and any endorsements thereto have been delivered
to the Company and to G/O Colorado.
X. XXX and/or its Subsidiaries currently employs those
management personnel set forth in Schedule I hereto at the salary levels set
forth therein. OLM and the OLM Shareholders have provided to the Company all
materials containing policies and procedures governing employees of OLM and/or
its Subsidiaries. Except as set forth in Schedule I, neither OLM nor any of
its Subsidiaries have had any pension, profit sharing, deferred compensation
or other employee pension or welfare benefit plan or arrangement relating to
the operations of OLM and/or its Subsidiaries. There is not pending and, to
the knowledge of OLM or the OLM Shareholders, there is not threatened, any
employee strike or work stoppage affecting OLM and or its Subsidiaries.
Further, no management personnel has threatened to leave the employ or has
left the employ of OLM and/or its Subsidiaries for the preceding twelve months
except as set forth in Schedule I hereto. Schedule I hereto sets forth all
employment contracts entered into between OLM and any employees of OLM and
between any of its Subsidiaries and any employees of its Subsidiaries, copies
of which have been provided to the Company and G/O Colorado.
X. XXX and the OLM Shareholders have delivered to the Company
an accurate list and summary description (Schedule J) as of the Balance Sheet
Date of all litigation, complaints or proceedings to which OLM and/or its
Subsidiaries or any OLM Shareholder is a party as the same relates to or in
any way is connected with the operation of OLM and/or its Subsidiaries.
Neither OLM nor any of its Subsidiaries is in default under any law or
regulation, or under any order of any court or federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality wherever located which would have a material adverse effect on
the Assets or the operation of OLM and/or its Subsidiaries and, except to the
extent set forth on Schedule J there are no claims, actions, suits,
proceedings or investigations pending or to the best knowledge of OLM and/or
the OLM Shareholders threatened against or affecting OLM and/or its
Subsidiaries and/or the Assets or the OLM Shareholders, at law or in equity,
or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality wherever
located.
Q. Since the Balance Sheet Date, except as disclosed in
Schedule K, there has not been:
(i) any material adverse change in the financial condition,
assets, liabilities (contingent or otherwise), income or
business of OLM and/or its Subsidiaries;
(ii) any damage, destruction or loss (whether or not covered by
insurance) materially adversely affecting the properties or
business of OLM and/or its Subsidiaries;
(iii) any increase in the compensation payable or to become
payable by OLM and/or its Subsidiaries to any OLM and/or any
of its Subsidiaries employee, officers, or agents, or any
bonus payment or arrangement made to or with any thereof;
(iv) any labor dispute, proposed law or regulation or any event
or condition of any character materially adversely affecting
the business or future prospects of OLM and/or its
Subsidiaries; or
(v) any transaction by OLM and/or its Subsidiaries outside the
ordinary course of their respective businesses.
R. The OLM Shareholders are acquiring the Shares of the Company
solely for their own account, for investment, and not with a view to any
subsequent "distribution" thereof within the meaning of the Securities Act of
1933, as amended (said Act and rules and regulations promulgated thereunder
being hereinafter referred to as the "Act"). The OLM Shareholders understand
that the Company's Shares have not been registered under the Act by reason of
the specific exemptions therefrom, which exemptions depend in part upon their
subjective investment intent as expressed herein. In furtherance of the
foregoing, each shall be required to execute and deliver to the Company an
Investment Letter, in the form attached hereto as Exhibit 2, as a condition
precedent to the issuance of the Company's securities issuable to them
hereunder.
S. The OLM Shareholders. hereby acknowledges that they are:
(i) Neither citizens nor residents of the United States of
America;
(ii) "Accredited Investors" as such term is defined in Regulation
D promulgated under the Act, or they have such knowledge and
experience in financial and business matters that they are
capable of evaluating the merits and risks of the proposed
transaction and their acquisition of the Company's Shares;
and
(iii) able to bear the economic risks associated with the
acquisition of the Company's Shares and are able to protect
their own interests in an investment of this nature, and
T. Each OLM Shareholder possesses good title to his respective
shares of OLM capital stock, free and clear of all liens, charges,
encumbrances and restrictions, except restrictions as to resale imposed by
state and federal securities laws. No consent, approval or authorization of
any government, administrative agency or court, domestic or foreign having
jurisdiction over the OLM Shareholders is legally required for the sale or the
transfer of the OLM shares to the Company in the manner contemplated by this
Agreement.
U. The shares of OLM capital stock, to be tendered by each OLM
Shareholder to the Company pursuant to this Agreement were, when issued and
remain, duly and validly issued and authorized by OLM and remain issued on a
fully paid basis with no further right of assessment by OLM.
OLM and each of the OLM Shareholders further represents and
warrants that all of the representations and warranties set forth above are
true as of the date of this Agreement, shall be true at the Closing Date and
shall survive for a period of two years from the Closing Date. Further, the
Exhibits and Schedules hereto and all other documents and information
furnished to the Company and to G/O Colorado and the Company's and G/O
Colorado's representatives by OLM and the OLM Shareholders pursuant hereto do
not and will not include any untrue statement of a material fact or omit to
state any material fact necessary to make the statements made and to be made
not misleading.
2. REPRESENTATIONS AND WARRANTIES BY THE COMPANY AND BY G/O COLORADO.
The Company and G/O Colorado hereby make the following express representations
and warranties to OLM and the OLM Shareholders:
A. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the Cayman Islands, British
West Indies and G/O Colorado is a corporation duly organized, validly existing
and in good standing under the laws of the State of Colorado and each has the
corporate power to own its properties and carry on its business as now being
conducted. Copies of the Company's Memorandum & Articles of Association and
G/O Colorado's Articles of Incorporation and By-Laws have heretofore been
furnished to OLM and the OLM Shareholders by the Company and by G/O Colorado,
and all such copies are true, correct and complete copies of the original
Memorandum & Articles of Association and Articles of Incorporation and By-Laws
including all amendments thereto.
B. The Company has the corporate authority to issue a total of
100,000,000 Ordinary Shares of a nominal or par value of US$0.0001 per share,
of which 1,414,000 shares are presently issued and outstanding and 10,000,000
Preferred Shares of a nominal or par value of US$0.0001 per share, none of
which are outstanding, and 390,000,000 unclassified shares of a nominal or par
value of US$0.0001, none of which are issued or outstanding. A total of
714,000 of the total of 1,414,000 of the Company's Ordinary Shares (58.8%) are
owned by G/O Colorado. Prior to the Closing as provided herein, the Company
will forward split its Ordinary Shares on the basis calculated by subtracting
from 14,000,000 the number of equity shares issued in connection with the
financing of OLM, under the terms of the Financing Letter of Intent and
dividing such sum by the number of issued and outstanding shares of the
Company immediately prior to the Reorganization contemplated hereby.
C. The Company has no subsidiaries. G/O Colorado has those
subsidiaries set forth in Schedule L hereto.
D. Attached hereto as Schedule M is a list of all documents
filed by G/O Colorado with the United States Securities & Exchange Commission
for the past twelve months as of the date of this Agreement (the "Disclosure
Information"). The Company has provided to each of the OLM Shareholders copies
of each item set forth on Schedule M.
E. The audited Financial Statements of G/O Colorado contained
in the G/O Colorado Form 10KSB included in the Disclosure Information
described in Schedule M hereto (the "Company's Financial Statements"), except
as further described in Schedule M hereto, constitute substantially true and
correct statements of the financial condition of the Company and the Company's
assets, liabilities and income as of such date. Since the date of the Balance
Sheet contained in the Financial Statements, except as described in Schedule M
the Company has not:
(i) issued any additional shares of its capital stock to any
person;
(ii) paid or declared any dividends or distributions of capital,
surplus, or profits with respect to any of its issued and
outstanding shares of capital stock;
(iii) paid or agreed to pay any consideration in redemption of any
of its issued and outstanding shares of capital stock; or
(iv) entered into any other transaction or agreement that would,
or might, materially impair the shareholder's equity of the
Company as reflected in such Balance Sheet.
F. The execution and delivery of this Agreement, and issuance
of the Company's Shares required to be issued hereunder, will have been duly
authorized by all necessary corporate action and neither the execution nor
delivery of this Agreement nor issuance of the Company's Shares, nor the
performance, observance or compliance with the terms and provisions of this
Agreement will violate any provision of law, any order of any court or other
governmental agency, the Memorandum & Articles of Association of the Company
or the Articles of Incorporation or By-Laws of G/O Colorado or any indenture,
agreement or other instrument to which the Company or G/O Colorado is a party,
or by which either is bound or by which their property is bound.
G. Neither the Company nor G/O Colorado is involved in any
pending or threatened litigation that would, or might, materially affect its
financial condition and which has not been:
(i) provided for in the G/O Colorado Financial Statements, and
(ii) disclosed to OLM, and/or the OLM Shareholders in writing.
H. There are no unpaid assessments or proposed assessments of
income taxes pending against the Company or G/O Colorado. All liabilities for
Federal and State income or franchise taxes, as shown on the tax returns
filed, or to be filed, by the Company and G/O Colorado, have been paid or the
liability therefore has been provided for in the Balance Sheet contained in
the Disclosure Information set forth in Schedule M hereto and all Federal and
State income or franchise taxes for periods subsequent to the periods covered
by said returns likewise have been paid or adequately accrued.
I. The Company's 66,000,000 Ordinary Shares, $0.0001 par value
per share, which will be delivered by the Company to the OLM Shareholders
pursuant to the terms of this Agreement, as set forth in Schedule A hereto
will, on delivery in accordance with the terms hereof, be duly authorized,
validly issued and fully paid and non assessable.
The Company further represents and warrants that all of the
representations and warranties set forth above are true as of the date of this
Agreement, shall be true Closing Date and shall survive for a period of two
years from the Closing Date.
3. COVENANTS OF OLM AND THE OLM SHAREHOLDERS PRIOR TO CLOSING. Between
the date of this Agreement and the Closing Date:
X. XXX and the OLM Shareholders shall afford to the officers
and authorized representatives of the Company and/or G/O Colorado reasonable
access to the properties, books and records of OLM and its Subsidiaries, and
will furnish the Company and G/O Colorado with such additional financial and
operating data and other information as to the business and properties of OLM
and its Subsidiaries as the Company and/or G/O Colorado may from time to time
reasonably request without regard to where such information may be located.
OLM and OLM Shareholders shall cooperate with the Company and G/O Colorado,
the Company's and G/O Colorado's representatives and counsel in the
preparation of any document or other material which may be required in
connection with any document or material required by any governmental agency
as a predicate to or result of the transaction herein contemplated. The
Company and G/O Colorado shall cause all information obtained in connection
with the negotiation and performance of this Agreement to be treated as
confidential (except such information as the Company and/or G/O Colorado may
be required to disclose to disclose to any governmental agency) and will not
use, and will not knowingly permit others to use, any such information in a
manner detrimental to OLM and/or its Subsidiaries and/or the OLM Shareholders.
B. With respect to the ownership, operations and development of
OLM and/or its Subsidiaries, OLM and the OLM Shareholders agree to:
(i) carry on the business of OLM and its Subsidiaries in
substantially the same manner as heretofore and not make any
material change in personnel, operations, finance,
accounting policies, or real or personal property;
(ii) maintain the Assets and all parts thereof in as good working
order and condition as at present, ordinary wear and tear
excepted;
(iii) perform all of the obligations of OLM and its Subsidiaries
under agreements relating to or affecting the assets,
properties and rights of OLM and/or its Subsidiaries;
(iv) keep in full force and effect present insurance policies or
other comparable insurance coverage;
(v) maintain and preserve the business organization of OLM and
its Subsidiaries intact, retain the present management
personnel of OLM and its Subsidiaries and maintain the
relationship of OLM and its Subsidiaries with suppliers,
customers and others having business relations with OLM and
its Subsidiaries;
C. With respect to the ownership, operation and development of
OLM and its Subsidiaries, OLM and the OLM Shareholders will not, without the
prior written consent of the Company:
(i) increase compensation payable or to become payable or make a
bonus payment to or otherwise enter into one or more
agreements with or otherwise create any officer, employee or
agent;
(ii) create, assume or permit to exist any new mortgage, pledge
or other lien or encumbrance upon any of the Assets;
(iv) sell, assign, lease or otherwise transfer or dispose of any
of the Assets; or
(v) merge or consolidate or agree to merge or consolidate with
or into any other entity
4. COVENANTS OF THE COMPANY AND G/O COLORADO. Between the date of this
Agreement and the Closing Date:
A. With respect to corporate action to be taken by G/O
Colorado, the respective Boards of Directors of the Company and G/O Colorado
shall take all action necessary to:
(i) Forward split the Company's Ordinary Shares on the ratio
determined by dividing the current number of shares
outstanding (1,414,000) by the denominator calculated by
subtracting from the number 14,000,000 that number of the
Ordinary Shares of OLM issued to investors in the Bridge
Financing as set forth in paragraph 6D herein below (the
"Stock Split");
(ii) Distribute to the shareholders of G/O Colorado shares of the
Company's currently issued and outstanding $0.0001 par value
per share Ordinary Shares held by G/O Colorado. In
connection therewith G/O Colorado, through its directors
shall immediately distribute the Company's Ordinary Shares
held by it to Xxxxxxx X. Xxxxxxxxxx, Esq., legal counsel to
G/O Colorado, to be held by him for further distribution to
those G/O Colorado Shareholders, or their assigns,
determined as of a dividend date selected by G/O Colorado,
upon registration by the Company of its Ordinary Shares,
$0.0001 par value per share, under Section 12(g) of the
Securities Exchange Act of 1934, as amended; or,
alternatively, pursuant to a registration of the Ordinary
Shares pursuant to the Securities Act of 1933, as amended,
all pursuant to a mutually satisfactory escrow agreement to
be executed among the G/O Colorado and the Escrow Agent (the
"Distribution").
B. With respect to the ownership, operations and development
the Company, the Company and G/O Colorado agree to:
(i) carry on the business of the Company in substantially the
same manner as heretofore and not make any material change
in personnel, operations, finance, accounting policies, or
real or personal property;
(ii) maintain any assets of the Company and all parts thereof in
as good working order and condition as at present, ordinary
wear and tear excepted;
(iii) perform all of the obligations of the Company under
agreements relating to or affecting the assets, properties
and rights of the Company;
(iv) keep in full force and effect present insurance policies or
other comparable insurance coverage;
(v) maintain and preserve the business organization of the
Company intact, retain the present employees of the Company
and maintain the relationship of the Company with suppliers,
customers and others having business relations with the
Company;
C. With respect to the ownership, operation and development of
the Company, the Company and G/O Colorado will not, without the prior written
consent of the OLM Shareholders:
(i) increase compensation payable or to become payable or make a
bonus payment to or otherwise enter into one or more
agreements with or otherwise create any officer, employee or
agent;
(ii) create, assume or permit to exist any new mortgage, pledge
or other lien or encumbrance upon any of the Company's
assets;
(iii) sell, assign, lease or otherwise transfer or dispose of any
of the Company's assets; or
(iv) merge or consolidate or agree to merge or consolidate with
or into any other entity.
D. G/O Colorado and the Company shall afford to the officers
and authorized representatives of OLM reasonable access to the properties,
books and records of G/O Colorado and the Company, and will furnish the OLM
Shareholders with such additional financial and operating data and other
information as to the business and properties of G/O Colorado and the Company
as the OLM Shareholders may from time to time reasonably request without
regard to where such information may be located. G/O Colorado and the Company
shall cooperate with the OLM Shareholders and their representatives and
counsel in the preparation of any document or other material which may be
required in connection with any document or material required by any
governmental agency as a predicate to or result of the transaction herein
contemplated. The OLM Shareholders shall cause all information obtained in
connection with the negotiation and performance of this Agreement to be
treated as confidential (except such information as the OLM Shareholders may
be required to disclose to disclose to any governmental agency) and will not
use, and will not knowingly permit others to use, any such information in a
manner detrimental to the Company or G/O Colorado.
5. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE COMPANY AND G/O COLORADO.
The obligations of the Company and G/O Colorado hereunder are, at the option
of the Company and G/O Colorado, subject to the satisfaction, on or prior to
the Closing Date, of the following conditions unless waived in writing by the
Company and G/O Colorado:
A. The representations and warranties of OLM and the OLM
Shareholders contained in this Agreement shall be true when made and on and as
of the Closing Date, as though such representations and warranties had been
made on and as of such Closing Date; and each and all of the terms, covenants
and conditions of this Agreement to be complied with or performed by OLM
and/or the OLM Shareholders on or before the Closing Date pursuant to the
terms hereof shall have been duly complied with and performed.
B. No material adverse change in the results of operations,
financial condition or business of OLM and/or its Subsidiaries shall have
occurred, and OLM and or its Subsidiaries shall not have suffered any material
change, loss or damage to its business or to the Assets, whether or not
covered by insurance, since the Balance Sheet Date or except as noted in
Schedules attached to this Agreement.
6. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF OLM, THE OLM SHAREHOLDERS.
The obligations of the OLM Shareholders and OLM hereunder are subject to the
following conditions
A. The OLM Shareholders and OLM shall not have discovered any
material error or misstatement in any of the representations and warranties
made by the Company and/or G/O Colorado herein and all the terms and
conditions of this Agreement to be performed and complied with by the Company
and G/O Colorado have been performed and complied with.
B. There shall have been no substantial adverse changes in the
financial condition, business or operations of the Company and/or G/O
Colorado, except for changes resulting from those operations in the usual
ordinary course of the business, and no business and assets of the Company
and/or G/O Colorado shall have been materially adversely affected as the
result of any fire, explosion, earthquake, flood, accident, strike, lockout,
combination of the workmen, taking over of any such assets by any governmental
authorities, riot, activities of armed forces, or Acts of God or of the public
enemies.
C. G/O Colorado's board of directors shall have adopted a
resolution approving the contemplated Stock Split and the Distribution as
described in paragraphs 4A(i) and (ii).
X. Xxxxxxxxx shall have received capital contributions equal not
less than USD$2,300,000 (the "Bridge Financing") pursuant to that certain
Letter of Intent dated July 12, 2000, a copy of which is attached hereto as
Exhibit 3 (the "Placement Letter of Intent").
7. CONDITIONS SIMULTANEOUS. The Reorganization and the Bridge Financing
shall close simultaneously through the delivery of all closing documents
required under this Reorganization Agreement and under the Placement Agreement
contemplated by the Placement Letter of Intent.
8. CONDITION SUBSEQUENT. The following conditions shall occur within
ninety-days (90) after the Closing contemplated hereby:
A. the Company shall prepare and file with the SEC a registration
under Section 12(g) of the Securities Act of 1934, as amended; or,
alternatively, pursuant to a registration of the Ordinary Shares pursuant to
the Securities Act of 1933, as amended, thereby registering the Company's
$0.0001 par value per share Ordinary Shares for distribution by the G/O
Shareholders and, in addition, up to 6,000,000 shares held by certain key
employees of OLM who are also shareholders of OLM, as designated by the OLM
Board of Directors.
9. CLOSING DATE. The Closing of this Agreement (the "Closing Date")
shall take place on successful completion of the Bridge Financing.
10. ACTIONS AT CLOSING. Subject to the terms and conditions set forth
herein. At the time of the Closing referred to in Section 9 hereof, the Comany
will cause to be issued and delivered to the OLM Shareholders, identified in
Schedule A hereto, certificates evidencing the ownership of the securities as
designated therein and concurrently therewith the OLM Shareholders, identified
in Schedule A hereto, shall directly or through their agent deliver or cause
to be delivered to the Company the certificates evidencing the ownership of
securities as designated therein, all duly endorsed to the Company, and each
party shall pay any and all taxes required to be paid in connection with the
issuance and the delivery of their own securities. All stock certificates
shall be in the name of the party to which the same are deliverable. In
addition to the above mentioned exchange of certificates, the following
transactions will take place at the Closings:
The Company will deliver to the OLM Shareholders and OLM:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by the Company to authorize the execution,
delivery and performance of this Agreement along with the duly certified
resolutions of the minutes of the board of directors of G/O Colorado approving
the Stock Split and the Distribution.
B. A certificate executed by a principal officer of the Company
and G/O Colorado attesting to the fact that all of the foregoing
representations and warranties of the Company and G/O Colorado are true and
correct as of the Closing Date and that all of the conditions to the
obligations of OLM, and OLM Shareholders which are to be performed by the
Company and G/O Colorado have been performed as of the Closing Date; and
The OLM Shareholders and OLM will deliver to the Company:
A. Duly certified copies of corporate resolutions and other
corporate proceedings taken by OLM to authorize the execution, delivery and
performance of this Agreement; and
B. A certificate by a principal officer of OLM, that each of
the representations and warranties of OLM and the OLM Shareholders are true
and correct as of the Closing Date and that all of the conditions to the
obligations of the Company and G/O Colorado which are to be performed by OLM
and the OLM Shareholders have been performed as of the Closing Date.
11. BOARD OF DIRECTORS. Immediately after the Closing, the Boards of
Directors of G/O Colorado, the Company and OLM shall hold a meeting at which
the Company's Board of Directors will resign and will be replaced by designees
of the OLM Shareholders.
12. FUTURE REGISTRATION. The OLM Shareholders understand that, subject
to the registration rights possessed in the Placement Letter of Intent,
because the Company's Ordinary Shares to be delivered to them hereunder have
not been registered under the Act or any State Act, they must hold the
Company's Shares indefinitely, and cannot dispose of any or all of them unless
such they are subsequently registered under the Act and any applicable State
Act, or exemptions from registration are available. The OLM Shareholders
acknowledge and understand that, except as provided herein, they have no
independent right to require the Company to register the Shares. The OLM
Shareholders further understand that the Company may, as a condition to the
transfer of any of the Shares require that the request for transfer be
accompanied by an opinion of legal counsel, in form and substance satisfactory
to the Company, provided at such OLM Shareholder's expense, to the effect that
the proposed transfer does not result in violation of the Act or any
applicable State Act, unless such transfer is covered by an effective
registration statement under the Act and is in compliance with all applicable
State Acts.
13. TRANSFERABILITY. All Shares that are issued to the OLM Shareholders
pursuant to the terms of this Agreement shall be "restricted securities"
within the meaning of Rule 144 of the Act. The Company shall issue stop
transfer instructions to the transfer agent for its Ordinary Shares and with
respect to the Shares and shall place the following legend, or one
substantially similar thereto, on the certificates representing such Shares:
"The securities represented by this certificate have been acquired
pursuant to a transaction effected in reliance upon an exemption
under the Securities Act of 1933, as amended (the "Act"), and have
not been the subject to a Registration Statement under the Act or
any state securities act. The securities may not be sold or
otherwise transferred in the absence of such registration or
applicable exemption therefrom under the Act or any applicable
state securities act."
14. ACCESS TO INFORMATION. Concurrently herewith, the Company and G/O
Colorado have delivered to the OLM Shareholders and their respective
representatives those materials set forth in Schedule M hereto along with
correct and complete copies of all documents and records requested by them.
In addition, the OLM Shareholders have had the opportunity to ask questions
of, and received answers from, officers and directors of the Company and G/O
Colorado, and persons acting on its behalf concerning such information and the
terms and conditions of the Agreement, and have received sufficient
information relating to the Company and to G/O Colorado to enable them to make
an informed decision with respect to the acquisition of the Ordinary Shares.
15. NO SOLICITATION. At no time were the OLM Shareholders presented
with or solicited by any leaflet, public promotion meeting, circular,
newspaper or magazine article, radio or television advertisement, or any other
form of general advertising in connection with their acquisition of the
Ordinary Shares.
16. EXPENSES. The OLM Shareholders and OLM and the Company and G/O
Colorado shall each pay their respective expenses incident to this Agreement
and the transactions contemplated hereby, including all fees of their counsel
and accountants, whether or not such transactions shall be consummated.
Notwithstanding the foregoing, Waterbury shall defray the cost of the 12(g)
filing or the registration of its ordinary shares as provided in paragraph 8A
herein above.
17. FINDERS. The OLM Shareholders and OLM shall indemnify and hold the
Company and G/O Colorado harmless against and with respect to all claims or
brokerage or other commissions relative to this Agreement or the transactions
contemplated hereby, based on any agreements, arrangements, or understandings
claimed to have been made by the OLM Shareholders and OLM with any third
party. The Company and G/O Colorado shall indemnify and hold the OLM
Shareholders and OLM harmless against and with respect to all claims for
brokerage or other commissions relative to this Agreement or the transactions
contemplated hereby, based in any agreements, arrangements, or understandings
claimed to have been made by the Company and/or G/O Colorado with any third
party. Except as provided in Exhibit 4, each party to this Agreement
represents and warrants to each other party that it has not dealt with and
does not know of any person, firm or corporation asserting a brokerage,
finder's or similar claim in connection with the making or negotiation of this
Agreement or the transactions contemplated hereby.
18. MISCELLANEOUS.
A. Each Exhibit, Certificate and Schedule to this Agreement
shall be considered a part hereof as if set forth herein in full.
Notwithstanding any other provision herein to the contrary, all Exhibits,
Certificates, Schedules or other instruments provided for herein and not
delivered at the time of execution of this Agreement shall be delivered or
completed on or before Closing; and it shall be deemed a condition precedent
to the Closing hereunder that each such Exhibit, Certificate, Schedule or
other instrument shall meet with the approval of the party to whom such
Exhibit, Certificate, Schedule or other instrument is to be delivered
hereunder.
B. The provisions of this Agreement shall be self-operative and
shall not require further agreement by the parties except as may be herein
specifically provided to the contrary; provided, however, at the request of
either party, the other party shall execute such additional instruments and
take such additional acts as the requesting party may deem necessary to
effectuate this Agreement.
C. Except as herein expressly provided to the contrary,
whenever this Agreement requires any consent or approval to be given by either
party or either party must or may exercise discretion, the parties agree that
such consent or approval shall not be unreasonably withheld or delayed and
such discretion shall be reasonably exercised.
D. In the event either party elects to incur legal expenses to
enforce or interpret any provision of this Agreement, the prevailing party
will be entitled to recover such legal expenses, including, without
limitation, attorney's fees, costs and necessary disbursements, in addition to
any other relief to which such party shall be entitled.
E. The parties agree that this Agreement shall be governed by
and construed in accordance with the laws of the Cayman Islands, British West
Indies, and that the courts of the Cayman Islands shall be the exclusive
courts of jurisdiction and venue for any litigation, special proceeding or
other proceeding as between the parties that may be brought, or arise out of,
in connection with or by reason of this Agreement.
F. Subject to provisions herein to the contrary, this Agreement
shall inure to the benefit of and be binding upon the parties hereto and their
respective legal representatives, successors and assigns; provided, however,
that no party may assign this Agreement without the prior written consent of
the other party, which consent shall not be unreasonably withheld. All
provisions contained herein shall be binding upon the respective parties their
legal representatives, successors and assigns unless otherwise explicitly
stated; provided however that the use of a party's name without more shall not
be deemed such an explicit statement.
G. The transactions contemplated hereby shall be effective for
accounting purposes as of the Closing Date, unless otherwise agreed in writing
by the OLM and the Company and G/O Colorado.
H. The OLM, the OLM Shareholders, the Company and G/O Colorado
mutually agree that no party hereto shall release, publish or otherwise make
available to the public in any manner whatsoever any information or
announcement regarding the transactions herein contemplated without the prior
written consent of the OLM Shareholders and the Company and G/O Colorado,
except for information and filings reasonably necessary to be directed to
governmental agencies to fully and lawfully effect the transactions herein
contemplated.
I. The waiver by either party of breach or violation of any
provision of this Agreement shall not operate as, or be construed to be, a
waiver of any subsequent breach of the same or other provision hereof.
J. Any notice, demand or communication required, permitted, or
desired to be given hereunder shall be deemed effectively given when
personally delivered or mailed by prepaid certified mail, return receipt
requested, addressed as follows:
If to OLM or the OLM Shareholders:
Xxx Xxxxxxx, President
Beijing Orient LegendMaker Software Development Company
0xx Xxxxx
Xxxxxxxx Xxxxx
39 Xxxxxx Road
Chaoyang district
Beijing PRC
If to the Company or G/O Colorado:
G/O International, Inc.
11849 Wink
Xxxxxxx, Xxxxx 00000
With Copy to:
Xxxxxxx X. Xxxxxxxxxx, Esq.
Hermes Building Suite 205
455 East 000 Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
or to such other address, and to the attention of such other person or officer
as any party may designate, with copies thereof to the respective counsel
thereof as notified by such party.
K. In the event any provision of this Agreement is held to be
invalid, illegal or unenforceable for any reason and in any respect, such
invalidity, illegality, or un-enforceability shall in no event affect,
prejudice or disturb the validity of the remainder of this Agreement, which
shall be in full force and effect, enforceable in accordance with its terms.
L. Whenever the context of this Agreement requires, the gender
of all words herein shall include the masculine, feminine and neuter, and the
number of all words herein shall include the singular and plural.
M. The divisions of this Agreement into sections and
subsections and the use of captions and headings in connection therewith are
solely for convenience and shall have no legal effect in construing the
provisions of this Agreement.
N. This Agreement supersedes all previous contracts, and
constitutes the entire agreement of whatsoever kind or nature existing between
or among the parties respecting the within subject matter and no party shall
be entitled to benefits other than those specified herein. As between or
among the parties, no oral statements or prior written material not
specifically incorporated herein shall be of any force and effect; the parties
specifically acknowledge that in entering into and executing this Agreement,
the parties rely solely upon the representations and agreements contained in
this Agreement and no others. All prior representations or agreements,
whether written or verbal, not expressly incorporated herein are superseded
and no changes in or additions to this Agreement shall be recognized unless
and until made in writing and signed by all parties hereto. The provisions of
this Agreement shall survive the Closing and remain of full force and effect
for a period of two years; All other agreements described, referenced or
contemplated herein shall not be merged herewith. This Agreement may be
executed in two or more counterparts, each and all of which together shall
constitute but one and the same instrument.
REORGANIZATION PLAN AND AGREEMENT
COUNTERPART SIGNATURE PAGE
Beijing Orient LegendMaker Software Development Co., Ltd.
This Counterpart Signature Page for that certain Reorganization Plan and
Agreement among OLM Consolidated a company formed under the laws of the Cayman
Islands, G/O International, Inc., a corporation formed under the laws of
Colorado, U.S.A., its majority owned subsidiary corporation Waterbury
Resources Inc. and the various shareholders of OLM that are signatories hereto
is executed by OLM Consolidated as of the date first written above.
Beijing Orient LegendMaker Software Development Co., Ltd.
By: /s/
Its President
REORGANIZATION PLAN AND AGREEMENT SIGNATURE PAGE
OLM SHAREHOLDERS
The undersigned, in his, her or its capacity as the beneficial owner of
_________shares of the capital stock of Beijing Orient LegendMaker Software
Development Co., Ltd., a company formed under the laws of the People's
Republic of China (the "Company") hereby joins in and executes the
Reorganization Plan and Agreement between and among the Company, G/O
International, Inc., a Colorado corporation, its majority owned subsidiary
Waterbury Resources Inc., a Cayman Islands company and those holders of the
Company's shares of capital stock that shall execute and deliver this
Counterpart Signature Page to the Reorganization Plan and Agreement, intending
to be bound hereby to the terms and conditions of such Reorganization Plan and
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Counterpart
Signature Page in the City of __________________________Country of
__________________ this _____ day of November, 2000.
/s/
(Signature)
REORGANIZATION PLAN AND AGREEMENT
COUNTERPART SIGNATURE PAGE
G/O International, Inc.
This Counterpart Signature Page for that certain Reorganization Plan and
Agreement among Beijing Orient LegendMaker Software Development Co., Ltd., a
company formed under the laws of the People's Republic of China, G/O
International, Inc., a corporation formed under the laws of Colorado, U.S.A.,
its majority owned subsidiary corporation Waterbury Resources Inc. and the
various shareholders of Beijing Orient LegendMaker Software Development Co.,
Ltd. that are signatories hereto is executed by G/O International, Inc., as of
the date first written above.
G/O International, Inc., a Colorado corporation
By: /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Its President
REORGANIZATION PLAN AND AGREEMENT
COUNTERPART SIGNATURE PAGE
Waterbury Resources, Inc.
This Counterpart Signature Page for that certain Reorganization Plan and
Agreement among Beijing Orient LegendMaker Software Development Co., Ltd., a
company formed under the laws of the People's Republic of China, G/O
International, Inc., a corporation formed under the laws of Colorado, U.S.A.,
its majority owned subsidiary corporation Waterbury Resources Inc. and the
various shareholders of Beijing Orient LegendMaker Software Development Co.,
Ltd. that are signatories hereto is executed by Waterbury Resources Inc. as
of the date first written above.
Waterbury Resources Inc., a Cayman Islands corporation
By: /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Its Director
SCHEDULE A
OLM SHAREHOLDERS
Attached hereto
Name
No. OLM Shares
No. Waterbury Shares
Schedule B-OLM Subsidiaries
1. Shanghai Orient LegendMaker Software Technology Co. Ltd.
2. Chengdu Orient LegendMaker Co. Ltd. (Branch Office)
3. Guangzhou Orient LegendMaker Software Co. Ltd. (Branch Office)
4. Beijing Orient LegendMaker System Integration Co. Ltd.
Schedule C- OLM Assets
Schedule X- XXX Licenses, Permits and Intellectual Property
Schedule E- OLM Contracts
Schedule F-OLM Equipment
Schedule G- OLM Existing Mortgages, Liens and Etc.
Schedule H- OLM Insurance
Schedule I- Employees, Pensions and Sick Leave Policies
Schedule J- OLM Litigation
Schedule K- OLM Material Changes
Schedule L G/O International, Inc.-Subsidiaries
1. Waterbury Resources Inc., a Cayman Islands corporation
2. Daimyo Industries Ltd., a Cayman Islands corporation
3. Antares Trading Inc., a Cayman Islands corporation
4. G/O International, Inc., a Delaware corporation
Schedule M- G/O International, Inc.
Documents filed with the Securities & Exchange Commission
and changes
The Form 10-KSB for the fiscal year ending December 31, 1999
The Form 10-QSB for the Quarter ending March 31, 2000
The Form 10-QSB for the Quarter ending June 30, 2000
Since the date of the Form 10QSB for the Quarter ending June 30, 2000, the
Company issued to G/O Colorado a total of 200,000 of its Ordinary Shares,
$0.0001 par value per share for total consideration of $50,000, thereby
increasing the holdings of G/O Colorado to 714,000 Ordinary Shares or 58.8%
Documents provided by Waterbury Resources
Financial Statements audited by KPMG as of September 30, 2000
Exhibit 1- OLM Financial Statements
Exhibit 2-Investment Letter
Waterbury Resources Inc.
and
G/O International, Inc.
INVESTMENT LETTER
Waterbury Resources Inc.
X.X. Xxx 0000
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx, Xxxxxxx Xxxx Xxxxxx
G/O International, Inc.,
11849 Wink
Xxxxxxx, Xxxxx 00000
Re: Acquisition of Ordinary Shares of Waterbury Resources Inc., a Cayman
Islands corporation (the "Company").
Gentlemen,
Pursuant to that certain Reorganization Plan and Agreement ("Plan")
among the Company, G/O International, Inc., a Colorado corporation, the
Company's parent ("G/O Colorado"), Beijing Orient LegendMaker Software
Development Co., Ltd., a company formed under the laws of the People's
Republic of China ("OLM") and the holders of 20,000,000 shares of the capital
stock of OLM (the "OLM Shareholders") including the undersigned, being the
holder of that number of shares of the capital stock of OLM set forth in
Schedule A of the Plan, the undersigned has agreed to exchange his, her or its
shares of the capital stock of OLM for that number of the Ordinary Shares of
the Company as set forth in Schedule A to the Plan. In connection therewith,
the undersigned hereby acknowledges that he, she or it has approved this
exchange; that he, she or it is aware of all of the terms and conditions of
the Plan; that he, she or it has received and personally reviewed a copy of
any and all material documents regarding the Company and G/O Colorado which
have been delivered for his, her or its review, including those documents set
forth in Schedule M of the Plan and, based upon such review, desires to
acquire at total of that number of the $0.0001 par value per share Ordinary
Shares of the Company (the "Shares") set forth in Schedule A of the Plan, upon
the terms set forth in the Plan. In connection therewith:
1. Representations and Warranties of the Undersigned.
(a) Respecting Offering Materials. The undersigned hereby represent
and warrant that he, she or it :
(1) has been furnished with those materials and documents set
forth in Schedule M to the Plan ("Disclosure Materials").
(2) has been given the opportunity to ask questions of and
receive answers from the officers and directors of the Company and G/O
Colorado with respect to the issuance of the Ordinary Shares pursuant to the
Plan, the Shares, the business of the Company and G/O Colorado and any other
matters which they considered to be material to his her or its investment
decision and all such questions have been answered to his, her or its full
satisfaction;
(3) has not relied on any information or representation other
than those set forth in the Company's and G/O Colorado's Disclosure Materials
and such other written information and representations as have been provided
by the officers and directors of the Company and G/O Colorado pursuant to a
specific question or request for additional information;
(4) has not been presented with or solicited by any leaflet,
public promotional meeting, circular, newspaper or magazine article, radio or
television advertisement, or any other form of general advertising.
(b) Respecting Investor Suitability. The undersigned hereby represents
and warrants that he, she or its:
(1) is an "Accredited Investors" as that term is defined in
Securities and Exchange Commission Regulation D, promulgated under the
Securities Act of 1933, as amended (the "Act");
(2) is capable of bearing the high degree of economic risk
associated with this investment including, but not limited to, the possibility
of complete loss of all his, her or its investment capital;
(3) has sufficient financial and other resources to provide for
anticipated financial needs, without taking into account any income which may
be generated as a result of his, her or its investment in the Shares, and has
no need for liquidity with respect to the investment in the Shares;
(4) has total investments in illiquid investments that are
reasonable in relation to his, her or its net worth and can afford the total
loss of the investment in the Shares;
(5) has had substantial experience in business of investments in
one or more of the following: (i) investment experience with securities, such
as stock and bonds; (ii) ownership of interests in new ventures and start-up
companies; and (iii) experience in business and financial dealings; and
(6) can protect his, her or its own interests in an investment
of this nature and does not have a "Purchaser Representative," as that term is
defined in Regulation D of the Act and does not need such Representative.
(7) understands and agrees that the Shares acquired pursuant to
the Plan have not been and will not be registered under the Act, that the
Shares are being offered and sold in reliance upon the exemption from
registration afforded by Section 4(2) and Rule 506 of Regulation D as
promulgated under the Act and that the Shares have not been registered with
any state securities commission or other governmental authority. Undersigned
hereby acknowledge that pursuant to the requirements of Section 4(2) and Rule
506 or Regulation D, the Shares acquired from the Company may not be
transferred, sold or otherwise exchanged unless registered or in transactions
that are exempt therefrom.
(8) undersigned acknowledge that the Company and G/O Colorado
are relying upon the representations made by him, her or its herein in
transferring the Shares hereunder without registration under the Act pursuant
to an exemption therefrom as provided in Section 4(2) and Rule 506 of
Regulation D promulgated thereunder. Undersigned has consulted with legal
counsel in connection with this transaction.
(9) is purchasing the Shares exclusively for his, her or its own
account and not for the account or benefit or on behalf of another person.
(10) Is not a resident or citizen of the United States of America.
(c) Respecting Investment Liquidity. The undersigned hereby represent
and warrant that he, she or it:
(1) has been advised that the Shares have not been registered
under the Securities Act of 1933 in reliance on the exemption provided by
Section 4(2) and Rule 506 of Regulation D of the Act relating to transactions
not involving a public offering;
(2) understands that the issuance of the Shares has not been
approved or disapproved by the Securities and Exchange Commission or the
securities regulatory authority of any state;
(3) understands that the Shares, are, and will continue to be,
unregistered securities which may not be assigned, sold, transferred, conveyed
or hypothecated to any person unless such are subsequently registered under
applicable Federal and state law, or unless an exemption from such
registration is available to both the undersigned and the proposed transferee
under such laws;
(4) understands that, except as provided in the Placement Letter
of Intent, the Company has no obligation or intention to register the Shares
for sale under the Act;
(5) understand that there is at present a limited public market
for the Shares and that the lack of a liquid market may make it impossible to
liquidate the Shares when desired or at then current asking price, and there
can be no assurances that an active public market will ever develop; and
(6) understands and acknowledges that this investment may be
long term, must be held indefinitely, and is, by nature, highly speculative.
Undersigned further represent and warrant that all of the representations and
warranties set forth above are true as of the date of this Investment Letter.
2. Representations and Warranties of the Company
a. The Company is a corporation organized under the laws of the Cayman
Islands with full corporate authority to conduct its business as now being
conducted,
b. The issuance of the Shares required to be delivered by the Company
pursuant to this Agreement, will have been duly authorized by all necessary
corporate action by the Company and will not violate any provision of the
corporate statutes or similar organic documents of the Company.
c. Neither the execution nor delivery of this Investment Letter nor the
issuance of Shares, nor the performance, observance or compliance with the
terms and provisions of this Investment Letter by the Company will violate any
provision of law, any order of any court or other governmental agency, or any
indenture, agreement or other instrument to which the Company is a party or by
which the Company is bound. This Investment Letter, upon its execution and
delivery by the Company and assuming the due authorization, execution and
delivery by the other parties hereto, will be the valid, binding, and legally
enforceable obligation of the Company.
d. The Shares, when issued to undersigned will be duly and validly
authorized and issued on a fully paid basis with no further right of
assessment by the Company. In order to further compliance with the
requirements of Regulation D, the Company shall cause the certificates
delivered by the Company's transfer agent for delivery to the Purchaser to
bear the following legend or one substantially similar thereto, to be
contained on the certificate representing the Shares:
"The securities represented by this certificate have been acquired pursuant to
a transaction effected in reliance upon an exemption under the Securities Act
of 1933, as amended (the "Act"), and have not been the subject to a
Registration Statement under the Act or any state securities act. The
securities may not be sold or otherwise transferred in the absence of such
registration or applicable exemption therefrom under the Act or any applicable
state securities act."
e. The Company will take any and all reasonable action necessary to
assist the undersigned in obtaining timely transfer and delivery of the Shares
as contemplated hereby (including the execution and delivery of such
additional documents as may be required to effect transfer of the Shares to
the undersigned thereof as contemplated hereby).
3. Express Covenants of the Undersigned.
(a) Respecting Resales and Transfers. The undersigned expressly
represent, covenant and warrant that he, she or it:
(1) will not transfer or assign this Investment Letter or any of
its rights hereunder, and further agrees that the assignment and
transferability of the Shares shall be made only in accordance with this
Investment Letter and the Plan; and
(2) will not, without the prior written consent of the Company,
assign, sell, transfer, convey or hypothecate any interest in the Shares to
any person, unless the proposed transfer may be lawfully completed without
such consent under the applicable provisions of the Securities and Exchange
Commission Rule 144 and/or Regulation D or pursuant to a registration.
(b) Respecting Indemnification of the Company. The undersigned
represents, warrants and agrees that he, she or it will indemnify and hold the
Company and each of its officers, directors and principal shareholders
harmless from and against all costs and expenses, including attorney's fees,
judgments and amounts paid in settlement, which may be paid or incurred by any
such person in connection with or as a result of any claim, demand, action or
right of action which in anyway arises from or relates to any breach by the
undersigned of any representation, warranty or covenant set forth in this
Investment Letter or any incomplete, evasive or misleading answer to any
question set forth in herein which has been completed by them and submitted
herewith.
4. Restrictive Legend. The Company intends to place the following
restrictive legend, or a legend similar thereto, on each certificate
representing the Ordinary Shares:
"The securities represented by this certificate have been acquired
pursuant to a transaction effected in reliance upon an exemption under the
Securities Act of 1933, as amended (the "Act"), and have not been the subject
to a Registration Statement under the Act or any state securities act. The
securities may not be sold or otherwise transferred in the absence of such
registration or applicable exemption therefrom under the Act or any applicable
state securities act."
5. Notices. All notices or other communications which are, or may be,
required or permitted to be given or made hereunder shall be in writing and
shall be delivered or mailed by registered or certified mail, return receipt
requested, postage prepaid, to the Company at the address first above written
and to the undersigned at the address designated in undersigned's counterpart
signature page to this Investment Letter tendered herewith.
6. Governing Law. The offer and other transactions contemplated under this
Agreement shall be construed in accordance with the governed by the laws of
the Cayman Islands, British West Indies.
7. Entire Agreement. This Agreement constitutes the entire agreement among
the parties hereto with respect to the subject matter hereof and may be
amended only by a writing executed by all parties.
IN WITNESS WHEREOF, the undersigned has executed this Investment Letter
in the City of __________, Country of ___________, on this ___ day of
_____________, 2000.
/s/
(Signature of Subscriber)
SUBSCRIPTION ACCEPTANCE
The subscription for Shares set forth in this Investment Letter is
accepted by the Company on this ___ day of ____________, 2000.
Waterbury Resources Inc.
By /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx
Its Director
Exhibit 3 Placement Letter of Intent
Exhibit 4- Finders
DIVIDEND ESCROW AGREEMENT
THIS DIVIDEND ESCROW AGREEMENT is made and entered into as of the
15th day of November, 2000 between and among Xxxxxxx X. Xxxxxxxxxx,
Esq., as escrow agent, ("Escrow Agent"), G/O International, Inc., a Colorado
corporation (the "Company") and Waterbury Resources Inc. a Cayman Islands
company ("Waterbury").
RECITALS
WHEREAS, the Company is the holder of a total of _________ of the
$0.0001 par value per share Ordinary Shares of Waterbury Resources Inc., a
Cayman Islands corporation;
WHEREAS, the Company, pursuant to that certain Reorganization Plan and
Agreement dated November __, 2000 among Waterbury Resources Inc., a Cayman
Islands corporation ("Waterbury"), (ii) G/O International, Inc., a Colorado
corporation, (iiii) Beijing Orient LegendMaker Software Development Co., Ltd.,
a company formed under the laws of the People's Republic of China ("OLM"), and
(iv) those persons or entities who are the beneficial owners of 20,000,000 of
the capital Shares of OLM, which constitutes 100% of the issued and
outstanding capital stock of OLM (the "OLM Shareholders"), has caused
Waterbury to issue to the OLM Shareholders, in exchange for 20,000,000
Ordinary Shares of OLM tendered by such OLM Shareholders, a total of
66,000,000 of the $0.0001 par value per share Ordinary Shares of Waterbury
and, in addition, has agreed to: (i) immediately distribute the $0.0001 par
value per share Ordinary Shares of Waterbury held by the Company to an escrow
agent to be held by such escrow agent for further distribution to those G/O
Colorado Shareholders or their assigns, determined as of a dividend date
selected by G/O Colorado, upon registration by Waterbury of its $0.0001 par
value per share Ordinary Shares under Section 12(g) of the Securities
Exchange Act of 1934, as amended; or, alternatively, pursuant to a
registration of the Ordinary Shares pursuant to the Securities Act of 1933, as
amended.
WHEREAS, the Company and Waterbury desire that Escrow Agent be appointed
for the purposes of receiving, holding and distributing the Ordinary Shares,
$0.0001 par value per share, of Waterbury distributed by the Company based
upon the terms stated herein and Waterbury and the Company agree to the
appointment of Escrow Agent for such purposes.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants hereinafter expressed, the parties hereto do hereby agree as
follows:
1. Appointment of Escrow Agent. Escrow Agent is hereby appointed by
each of the signatories hereto as agent for the purpose of receiving holding
and distributing all Shares delivered into escrow hereunder.
2. Deposit of Shares. Simultaneous with the execution and delivery of
this Escrow Agreement, the Company shall deliver to Escrow Agent a share
certificate representing the $0.0001 par value per share Ordinary Shares of
Waterbury held by the Company (the "Shares"). The Shares shall be accompanied
by: (1) a duly executed irrevocable Assignment Separate From Certificate with
executed, in blank, by the Company with signatures guaranteed by a commercial
bank or trust company having an office or correspondent in New York City or by
a member of the New York Stock Exchange; and (2) a list compiled, as of the
dividend date established by the Company, setting forth those shareholders of
record of the Company that are entitled to the receipt of the Shares deposited
with Escrow Agent and their respective shareholdings in the Company, as of
such dividend date (Shareholders List").
3. Release of Escrow Shares. Upon receipt by the Escrow Agent of a copy
of correspondence from the United States Securities and Exchange Commission,
notifying Waterbury of the effective registration of its the $0.0001 par value
per share Ordinary Shares under Section 12(g) of the Securities Exchange Act
of 1934, as amended; or, alternatively, pursuant to the Securities Act of
1933, as amended, Escrow Agent, shall release the Shares to the Company's
shareholders, set forth in the Shareholder List. Each of the Company's
shareholders shall receive that number of the Waterbury Ordinary Shares as
determined by multiplying the total number of shares of Waterbury held by the
Company by the fraction determined by dividing the number of shares of each
respective shareholder of the Company as set forth in the Shareholder List by
the total number of shares of the Company issued and outstanding. Escrow
Agent shall maintain books and records of such Shares distributed, which shall
be available for inspection by the Company's shareholders at the offices of
the Escrow Agent upon 48 hours prior written request.
4. Concerning The Escrow Agent. To induce the Escrow Agent to act
hereunder, it is further agreed by the Company, that:
(a) The Escrow Agent shall not be under any duty to give the
Shares (the Shares deposited by the Company hereunder shall hereinafter be
referred to collectively as the "Escrowed Property") held by it hereunder any
greater degree of care than it gives its own similar property.
(b) This Escrow Agreement expressly sets forth all the duties of
the Escrow Agent with respect to any and all matters pertinent hereto. No
implied duties or obligations shall be read into this Agreement against the
Escrow Agent. The Escrow Agent shall not be bound by the provisions of any
agreement among the other parties hereto except this Escrow Agreement.
(c) The Escrow Agent shall not be liable, except for its own gross
negligence or willful misconduct and, except with respect to claims based upon
such gross negligence or willful misconduct that are successfully asserted
against the Escrow Agent, the other parties hereto shall jointly and severally
indemnify and hold harmless the Escrow Agent (and any successor Escrow Agent)
from and against any and all losses, liabilities, claims, actions, damages and
expenses, including reasonable attorneys' fees and disbursements, arising out
of and in connection with this Escrow Agreement. Without limiting the
foregoing, the Escrow Agent shall in no event be liable in connection with its
investment or reinvestment of any cash held by it hereunder in good faith in
accordance with the terms hereof, including without limitation any liability
for any delays (not resulting from its gross negligence or willful misconduct)
in the investment or reinvestment of the Escrowed Property, or any loss of
interest incident to any such delay.
(d) The Escrow Agent shall be entitled to rely upon any order,
judgment, certification, demand, notice, instrument or other writing delivered
to it hereunder without being required to determine the authenticity or the
correctness of any fact stated therein or the propriety or validity of the
service thereof. The Escrow Agent may act in reliance upon any instrument or
signature believed by it to be genuine and may assume that any person
purporting to give receipt or advice or make any statement or execute any
document in connection with the provisions hereof has been duly authorized to
do so.
(e) The Escrow Agent may act pursuant to the advice of counsel
with respect to any matter relating to this Escrow Agreement and shall not be
liable for any action taken or omitted in accordance with such advice.
(f) The Escrow Agent does not have any interest in the Escrow
Property deposited hereunder but is serving as escrow holder only and having
only possession thereof. the Company shall pay or reimburse the Escrow Agent
upon request for any transfer taxes or other taxes relating to the Escrowed
Property incurred in connection herewith and shall indemnify and hold harmless
the Escrow Agent from any amount that it is obligated to pay in the way of
such taxes. Any payments of income from this Escrow Account shall be subject
to withholding regulations then in force with respect to United States taxes.
The parties hereto will provide the Escrow Agent with appropriate W-9 forms
for tax I.D., number certifications, or W-8 forms for non-resident alien
certifications. It is understood that the Escrow Agent shall be responsible
for income reporting only with respect to income earned on investment or funds
that are part of the Escrowed Property and it is not responsible for any other
reporting. This paragraph and paragraph (c) shall survive notwithstanding any
termination of this Escrow Agreement or the resignation of this Escrow Agent.
(g) The Escrow Agent makes no representations as to the validity,
value, genuineness or the collectability of any security or other document or
instrument held by or delivered to it.
(h) The Escrow Agent shall not be called upon to advise any party
as to the wisdom in selling or retaining or taking or refraining from any
action with respect to any securities or other property deposited hereunder.
(i) The Escrow Agent (and any successor Escrow Agent) may at any
time resign as such by delivering the Escrowed Property to any successor
Escrow Agent jointly designated by the other parties hereto in writing, or to
any court of competent jurisdiction, whereupon the Escrow Agent shall be
discharged of and from any an all further obligations arising in connection
with the Escrow Agreement. The resignation of the Escrow Agent will take
effect on the earlier of (a) the appointment of a successor (including a court
of competent jurisdiction) or (b) the day which is 30 days after the date of
delivery of its written notice of resignation to the other parties hereto. If
at the time the Escrow Agent has not received a designation of a successor
Escrow Agent, the Escrow Agents sole responsibility after that time shall be
to safe keep the Escrowed Property until receipt of a designation of successor
Escrow Agent or a joint written disposition instruction by the other parties
hereto or a Final Order of a Court of competent jurisdiction.
(j) The Escrow Agent shall have no responsibility for the contents
of any writing of the arbitrators or any third party contemplated herein as a
means to resolve disputes and may rely without any liability upon the content
thereof.
(k) In the event of any disagreement between the other parties
hereto resulting in adverse claims or demands being made in connection with
the Escrowed Property, or in the event that the Escrow Agent in good faith is
in doubt as to what action it should take hereunder, the Escrow Agent shall be
entitled to retain the Escrowed Property until the Escrow Agent shall have
received (i) a final non-appealable order of a Court of competent jurisdiction
directing delivery of the Escrowed Property or (ii) a written agreement
executed by the other parties hereto directing delivery of the Escrowed
Property, in which event the Escrow Agent shall disburse the Escrowed Property
in accordance with such order or agreement. Any court order shall be
accompanied by a legal opinion by counsel for the presenting party
satisfactory to the Escrow Agent to the effect that said opinion is final and
non-appealable. The Escrow Agent shall act on such court order and legal
opinions without further question.
(l) The Company shall pay the Escrow Agent compensation (as
payment in full for the services to be rendered by the Escrow Agent hereunder)
in accordance with Schedule A attached hereto and incorporated herein at the
time of Closing as provided in this Escrow Agreement and agree to reimburse
the Escrow Agent for all reasonable expenses, disbursements and advances
incurred or made by the Escrow Agent in performance of its duties hereunder
(including reasonable fees, expenses and disbursements for its counsel). It
is agreed that the Escrow Shares shall be held by Escrow Agent as collateral
for such payment of fees or expenses of the Escrow Agent or its counsel which
are not paid as provided for herein and Escrow Agent may, after reasonable
written notice to the Company liquidate such number of Escrow Shares as is
necessary and reasonable to fully reimburse Escrow Agent for any fees or
expenses due hereunder. It is understood that the Escrow Agent's fees may be
adjusted from time to time to conform to its then-current guidelines.
(m) The parties hereunder hereby irrevocably submit to the
jurisdiction of any court located in Arizona in any action or proceeding
arising out of or relating to this Escrow Agreement, and the parties hereby
irrevocably agree that all claims in respect of any such action or proceeding
shall be heard and determined in such a Arizona court. The parties hereby
consent to and grant to any such court jurisdiction over the xxxxxxx of such
parties and over the subject matter of any such dispute and agree that
delivery or mailing of any process or other papers in the manner provided
herein above, or in such other manner as may be permitted by law, shall be
valid and sufficient service thereof.
(n) No printed or other matter in any language (including without
limitation prospectuses, notices, reports and promotional material) which
mention the name of Escrow Agent or the rights, powers, or duties of the
Escrow Agent shall be issued by the other parties hereto or on such parties'
behalf unless the Escrow Agent shall first have given its specific written
consent thereto.
(o) The Escrow Agreement shall be binding upon and inure solely to
the benefit of the parties hereto and the respective successors and assigns,
heirs, administrators and representatives and shall not be enforceable by or
inure to the benefit of any third party except as provided in paragraph 7(i)
with respect to a resignation by the Escrow Agent. No party may assign any of
its rights or obligations under this Escrow Agreement without the written
consent of the other parties. This Escrow Agreement shall be construed in
accordance with and governed by the internal law of Arizona (without reference
to its rule as to conflicts of law). To the best knowledge of the principals
to this transaction, neither the underlying transaction/purpose nor the Escrow
Agreement violate any law or regulation.
(p) This Escrow Agreement may only be modified by a writing signed
by all of the parties hereto, and no waiver hereunder shall be effective
unless in writing signed by the party to be charged.
(q) The Company authorizes the Escrow Agent, for any securities
held hereunder, to use the services of any United States central securities
depository it deems appropriate, including. but not limited to the Depository
Trust Company and the Federal Reserve Book Entry System.
5. Effective Date and Termination. This Agreement shall become
effective on the date of execution by Escrow Agent. All of the provisions of
this Agreement shall be fully performed and the escrow established hereunder
shall terminate upon the distribution of all Escrow Shares as contemplated
hereby.
6. Paragraph Headings and Counterpart Signature. All paragraph headings
herein are inserted for convenience only. This Agreement may be executed in
several counterparts, each of which shall be deemed an original, which
together shall constitute one and the same instrument.
7. Notices. All notices, requests, instructions, or other documents to
be given hereunder shall be in writing and sent by registered mail:
If to the Escrow Agent:
Xxxxxxx X. Xxxxxxxxxx, Esq.
000 Xxxx Xxxxx Xxxxx Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
If to the Company or G/O Colorado:
G/O International, Inc.
11849 Wink
Xxxxxxx, Xxxxx 00000
In Witness whereof, the undersigned have execute this Escrow Agreement
this 15TH day of November 2000.
ESCROW AGENT
By /s/ Xxxxxxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxx, Esq.
G/O International, Inc.
By /s/ Xxxx X. Xxxxx
Xxxx X. Xxxxx
Its President
Waterbury Resources, Inc.
By /s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, Director
