CN DRAGON CORPORATION AND CNDC GROUP LTD Share Exchange Agreement
Exhibit 10.1
CN
DRAGON CORPORATION
AND
CNDC
GROUP LTD
THIS SHARE EXCHANGE AGREEMENT
(the “Agreement”) is entered into on the 14th day
of March 2010, and is made
BETWEEN:
|
(1)
|
CN
Dragon Corporation (fka, Wavelit, Inc.), a
corporation incorporated under the laws of the State of Nevada, with an
address at ▇/▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, Hong
Kong (“DRGN”)
|
AND
|
(2)
|
CNDC
Group Ltd, a corporation incorporated under the laws of the British
Virgin Islands, with an address at OMC ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (“CNDC
Group”)
|
PREMISES
|
A.
|
This
Agreement provides for the acquisition of CNDC Corporation, a corporation
incorporated under the laws of the British Virgin Islands
(“CNDC”).
|
|
B.
|
CNDC
is a wholly owned subsidiary of CNDC Group and is engaged in the business
of providing consulting and advisory services to tourism and hospitality
developers in the People’s Republic of China
(PRC).
|
|
C.
|
On
the ‘Closing Date’ of this Agreement (hereinafter defined), DRGN will
acquire one (1) issued and fully paid ordinary share representing 100%
equity interest in CNDC, in exchange for the issuance of 42,000,000 common
stock of DRGN to CNDC Group. Accordingly, CNDC will become a wholly-owned
subsidiary of DRGN on the Closing Date of this Agreement.
|
|
D.
|
The
board of directors of DRGN and CNDC Group have determined, subject to the
terms and conditions in this Agreement, that the transaction contemplated
hereby is desirable and in the best interests of their stockholders,
respectively. This Agreement is being entered into for the purpose of
setting forth the terms and conditions of the proposed
acquisition.
|
|
E.
|
The
parties desire that the exchange qualify as a tax free exchange meeting
the requirements of Article 368(a)(1)(B) of the Internal Revenue Code of
1986, as amended.
|
|
F.
|
Further
information and particulars of DRGN, CNDC Group and CNDC are set out in
the Schedule.
|
|
|
AGREEMENT
|
NOW, THEREFORE, on the stated
premises and for and in consideration of the mutual covenants and agreements
hereinafter set forth and the mutual benefits to the parties to be derived here
from, it is hereby agreed as follows:
ARTICLE
I
REPRESENTATIONS,
COVENANTS AND WARRANTIES OF CN DRAGON CORPORATION
As an
inducement to, and to obtain the reliance of CNDC Group, DRGN represents and
warrants as follows:
Section
1.1 Organization
DRGN is a
corporation duly organized, validly existing, and in good standing under the
laws of Nevada and has the corporate power and is duly authorized, qualified,
franchised and licensed under all applicable laws, regulations, ordinances and
orders of public authorities to own all of its properties and assets and to
carry on its business in all material respects as it is now being conducted,
including qualification to do business as a foreign corporation in the
jurisdiction in which the character and location of the assets owned by it or
the nature of the business transacted by it requires qualification.
The
execution and delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not violate any provision of DRGN’s articles of incorporation or bylaws.
DRGN has full power, authority and legal right and has taken all action required
by law, its articles of incorporation, and its bylaws or otherwise to authorize
the execution and delivery of this Agreement.
Section
1.2 Capitalization
The authorized capitalization of DRGN
consists of 250,000,000 shares of Common Stock, $0.001 par value per share, and
375,000,000 shares of Preferred Stock, $0.001 par value per share. As of the
date hereof, DRGN has 1,804,696 shares of Common Stock issued and
outstanding.
All
issued and outstanding shares are legally issued, fully paid and non-assessable
and are not issued in violation of the preemptive or other rights of any person.
DRGN has no other securities, warrants or options authorized or
issued.
|
Section
1.3
|
Subsidiaries
|
DRGN has
the following wholly-owned subsidiaries: Precision Aviation, Inc.; Galaxy
Networks, Inc. (USA); Galaxy Networks, Inc. (Canada); and China Teletech Limited
(fka, Stream Horizons Ltd).
Section
1.4 Tax
Matters: Books and Records.
The books
and records, financial and others, of DRGN are in all material respects complete
and correct and have been maintained in accordance with good business accounting
practices. DRGN has no liabilities with respect to the payment of any country,
federal, state, county, or local taxes (including any deficiencies, interest or
penalties). DRGN will remain responsible for all debts incurred by DRGN prior to
the date of closing.
Section 1.5
Litigation and
Proceedings
There are
no actions, suits, proceedings or investigations pending or threatened by or
against or affecting DRGN or its properties, at law or in equity, before any
court or other governmental agency or instrumentality, domestic or foreign or
before any arbitrator of any kind that would have a material adverse affect on
the business, operations, financial condition or income of DRGN. DRGN is not in
default with respect to any judgment, order, writ, injunction, decree, award,
rule or regulation of any court, arbitrator or governmental agency or
instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.
Section 1.6
Material Contract
Defaults
DRGN is
not in default in any material respect under the terms of any outstanding
contract, agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of DRGN, and there is no
event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which DRGN has not taken adequate steps
to prevent such a default from occurring.
Section
1.7 Information
The
information concerning DRGN as set forth in this Agreement and in the Schedule
is complete and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state a material fact required to
be made.
Section
1.8 Title
and Related Matters
DRGN has
good and marketable title to and is the sole and exclusive owner of all of its
properties, inventory, interest in properties and assets, real and personal
(collectively, the “Assets”) free and clear of all liens, pledges, charges or
encumbrances. DRGN owns free and clear of any liens, claims, encumbrances,
royalty interests or other restrictions or limitations of any nature whatsoever
and all procedures, techniques, marketing plans, business plans, methods of
management or other information utilized in connection with DRGN’s business. No
third party has any right to, and DRGN has not received any notice of
infringement of or conflict with asserted rights of other with respect to any
product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly on in the
aggregate, if the subject of an unfavorable decision ruling or finding, would
have a materially adverse affect on the business, operations, financial
conditions or income of DRGN or any material portion of its properties, assets
or rights.
Section
1.9 Contracts
On the
Closing Date, there are no material contracts, agreements franchises, license
agreements, or other commitments to which DRGN is a party or by which it or any
of its properties are bound.
DRGN is
not a party to any contract, agreement, commitment or instrument or subject to
any charter or other corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely affects, or in the
future may (as far as DRGN can now foresee) materially and adversely affect, the
business, operations, properties, assets or conditions of DRGN.
DRGN is
not a party to any material oral or written: (i) contract for the employment of
any officer or employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income Security Act,
as amended; (iii) agreement, contract or indenture relating to the borrowing of
money; (iv) guaranty of any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties, of obligations,
which, in the aggregate exceeds $1,000; (v) consulting or other contract with an
unexpired term of more than one year or providing for payments in excess of
$10,000 in the aggregate; (vi) collective bargaining agreement; (vii) contract,
agreement or other commitment involving payments by it for more than $10,000 in
the aggregate.
Section
1.10 Compliance
with Laws and Regulations
To the
best of DRGN’s knowledge and belief, DRGN has complied with all applicable
statutes and regulations of any federal, state or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
DRGN or would not result in DRGN incurring material liability.
Section
1.11 Insurance
All
of the insurable properties of DRGN are insured for DRGN’s benefit under valid
and enforceable policy or policies containing substantially equivalent coverage
and will be outstanding and in full force at the Closing Date.
Section
1.12 Approval
of Agreement
The
directors of DRGN have authorized the execution and delivery of the Agreement
and have approved the transactions contemplated hereby.
Section
1.13 Material
Transactions or Affiliations
Chong Him ▇▇▇ is director of DRGN. ▇▇
▇▇▇ is also sole director and shareholder of CNDC Group. CNDC Group is director
and sole shareholder of CNDC. Accordingly, ▇▇ ▇▇▇ is a
related party in the transaction contemplated by this Agreement.
Other
than described above in the first paragraph of this Section 1.13, there are no
material contracts or agreements of arrangement between DRGN and any person, who
was at the time of such contract, agreement or arrangement, an officer, director
or person owning of record, or known to beneficially own ten percent (10%) or
more of the issued and outstanding Common Stock of DRGN and which is to be
performed in whole or in part after the date hereof. DRGN has no commitment,
whether written or oral, to lend any funds to, borrow any money from or enter
into material transactions with any such affiliated person.
Section 1.14 No Conflict with Other
Instruments
The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust or other material contract, agreement or instrument to
which DRGN is a party or to which any of its properties or operations are
subject.
Section 1.15 Governmental
Authorizations
DRGN
has all licenses, franchises, permits or other governmental authorizations
legally required to enable it to conduct its business in all material respects
as conducted on the date hereof. Except for compliance with federal and state
securities and corporation laws, as hereinafter provided, no authorization,
approval, consent or order of, or registration, declaration or filing with, any
court or other governmental body is required in connection with the execution
and delivery by DRGN of this Agreement and the consummation of the transactions
contemplated hereby.
Section
1.16 SEC
Reporting and Compliance.
DRGN is
currently subject to SEC reporting requirements. To the best knowledge of DRGN,
DRGN has otherwise complied with the Securities Act, Exchange Act and all other
applicable federal and state securities laws.
Section
1.17 No
General Solicitation or Advertising
In
issuing DRGN’s Common Stock under this Agreement, neither DRGN nor anyone acting
on its behalf has offered to sell the DRGN Common Stock by any form of general
solicitation or advertising.
Section
1.18 Questionable
Payments and Off-Balance Sheet Arrangements
Neither
DRGN nor any director, officer or, to the best knowledge of DRGN, agent,
employee or other person associated with or acting on behalf of DRGN, has used
any corporate funds for unlawful contributions, gifts, entertainment or other
unlawful expenses relating to political activity; made any direct or indirect
unlawful payments to government officials or employees from corporate funds;
established or maintained any unlawful or unrecorded fund of corporate monies or
other assets; made any false or fictitious entries on the books of record of any
such corporations; made any off-balance sheet arrangements; or made any bribe,
rebate, payoff, influence payment, kickback or other unlawful
payment.
Section
1.19 Indebtedness
DRGN’s
Financial Statements sets forth as of the dates and periods indicated on such
form and financial statements, all outstanding secured and unsecured
Indebtedness of DRGN, as applicable, or for which DRGN, as applicable, has
commitments. For the purposes of this Agreement, “Indebtedness” shall mean (i)
any liabilities for borrowed money or amounts owed in excess of $5,000 (other
than trade accounts payable incurred in the ordinary course of business), (ii)
all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
DRGN’s balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (ii) the present value of any lease payments in
excess of $5,000 due under leases required to be capitalized in accordance with
GAAP. DRGN is not in default with respect to any Indebtedness.
Section
1.20 Absence
of Certain Developments
DRGN has
not: (i) issued any stock, bonds or other corporate securities or any rights,
options or warrants with respect thereto; (ii) borrowed any amount or incurred
or become subject to any liabilities (absolute or contingent) except current
liabilities incurred in the ordinary course of business which are comparable in
nature and amount to the current liabilities incurred in the ordinary course of
business during the comparable portion of its prior fiscal year, as adjusted to
reflect the current nature and volume of DRGN’s business; (iii) made capital
expenditures or commitments thereof that aggregate in excess of $10,000; (iv)
entered into any other transaction other than in the ordinary course of
business, or entered into any other material transaction, whether or not in the
ordinary course of business.
Section
1.21 Financial
Statements
The
balance sheets, and statements of income, changes in financial position and
stockholders’ equity contained in the DRGN financial statements filed with the
SEC, (i) have been prepared in accordance with GAAP applied on a basis
consistent with prior periods (and, in the case of unaudited financial
information, on a basis consistent with year-end audits), (ii) are in accordance
with the books and records of DRGN, and (iii) present fairly in all material
respects the financial condition of DRGN at the dates therein specified and the
results of its operations and changes in financial position for the periods
therein specified.
ARTICLE
II
REPRESENTATIONS,
COVENANTS AND WARRANTIES OF CNDC GROUP LTD
As an
inducement to, and to obtain the reliance of DRGN, CNDC Group represents and
warrants as follows:
Section
2.1 Organization
CNDC
is a corporation duly organized, validly existing and in good standing under the
laws of the British Virgin Islands and has the corporate power and is duly
authorized, qualified, franchised and licensed under all applicable laws,
regulations, ordinances and orders of public authorities to own all of its
properties and assets and to carry on its business in all material respects as
it is now being conducted, including qualification to do business as a foreign
entity in the country or states in which the character and location of the
assets owned by it or the nature of the business transacted by it requires
qualification.
The
execution and delivery of this Agreement does not and the consummation of the
transactions contemplated by this Agreement in accordance with the terms hereof
will not, violate any provision of CNDC’s certificate of incorporation or
bylaws. CNDC has full power, authority and legal right and has taken all action
required by law, its articles of incorporation, bylaws or otherwise to authorize
the execution and delivery of this Agreement.
Section
2.2 Capitalization
The
authorized capitalization of CNDC consists of 50,000 ordinary shares, $1.00 par
value per share and no preferred shares. As of the date hereof, there is one (1)
ordinary share issued and outstanding.
All
issued and outstanding shares are legally issued, fully paid and non-assessable
and are not issued in violation of the preemptive or other rights of any person.
CNDC has no other securities, warrants or options authorized or
issued.
Section
2.3 Subsidiaries
CNDC has
two wholly-owned subsidiaries, CN Dragon Holdings Ltd, a corporation
incorporated under the laws of Hong Kong and Zhengzhou CN Dragon Limited, a
Wholly Foreign Owned Enterprise incorporated under the laws of the
PRC.
Section
2.4 Tax
Matters: Books and Records.
The books
and records, financial and others, of CNDC are in all material respects complete
and correct and have been maintained in accordance with good business accounting
practices. CNDC has no liabilities with respect to the payment of any country,
federal, state, county, or local taxes (including any deficiencies, interest or
penalties). CNDC shall remain responsible for all debts incurred by CNDC prior
to the Closing Date.
Section 2.5
Information
The
information concerning CNDC as set forth in this Agreement and in the Schedule
is complete and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state a material fact required to
be made.
Section
2.6 Title and Related
Matters
CNDC has
good and marketable title to and is the sole and exclusive owner of all of its
properties, inventory, interests in properties and assets, real and personal
(collectively, the “Assets”) free and clear of all liens, pledges, charges or
encumbrances. CNDC owns free and clear of any liens, claims, encumbrances,
royalty interests or other restrictions or limitations of any nature whatsoever
and all procedures, techniques, marketing plans, business plans, methods of
management or other information utilized in connection with CNDC’s business. No
third party has any right to, and CNDC has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a materially adverse affect on the business, operations, financial
conditions or income of CNDC or any material portion of its properties, assets
or rights.
Section
2.7 Litigation
and Proceedings
There are
no actions, suits or proceedings pending or threatened by or against or
affecting CNDC, at law or in equity, before any court or other governmental
agency or instrumentality, domestic or foreign or before any arbitrator of any
kind that would have a material adverse effect on the business, operations,
financial condition, income or business prospects of CNDC. CNDC does not have
any knowledge of any default on its part with respect to any judgment, order,
writ, injunction, decree, award, rule or regulation of any court, arbitrator or
governmental agency or instrumentality.
Section
2.8 Contracts.
On the
Closing Date, there
are no material contracts, agreements franchises, license agreements, or other
commitments to which CNDC is a party or by which it or any of its properties are
bound.
CNDC is
not a party to any contract, agreement, commitment or instrument or subject to
any charter or other corporate restriction or any judgment, order, writ,
injunction, decree or award which materially and adversely affects, or in the
future may (as far as CNDC can now foresee) materially and adversely affect, the
business, operations, properties, assets or conditions of CNDC.
CNDC is
not a party to any material oral or written: (i) contract for the employment of
any officer or employee; (ii) profit sharing, bonus, deferred compensation,
stock option, severance pay, pension benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income Security Act,
as amended; (iii) agreement, contract or indenture relating to the borrowing of
money; (iv) guaranty of any obligation for the borrowing of money or otherwise,
excluding endorsements made for collection and other guaranties, of obligations,
which, in the aggregate exceeds $1,000; (v) consulting or other contract with an
unexpired term of more than one year or providing for payments in excess of
$10,000 in the aggregate; (vi) collective bargaining agreement; (vii) contract,
agreement or other commitment involving payments by it for more than $10,000 in
the aggregate.
Section
2.9 No
Conflict with Other Instruments
The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in the breach of any term or
provision of, or constitute an event of default under, any material indenture,
mortgage, deed of trust or other material contract, agreement or instrument to
which CNDC is a party or to which any of its properties or operations are
subject.
Section
2.10 Material
Contract Defaults
To the
best of the knowledge of CNDC Group, CNDC is not in default under the
terms of any outstanding contract, agreement, lease or other commitment which
has, individually or in the aggregate, a material adverse effect on the
businesses, operations, business prospects, financial conditions or operating
results of CNDC, and there is no event of default in any such contract,
agreement, lease or other commitment which default has, individually or in the
aggregate, a material adverse effect on the businesses, operations, business
prospects, financial conditions or operating results of CNDC.
Section
2.11 Governmental
Authorizations
To the
best of the knowledge of CNDC Group, CNDC has all licenses,
franchises, permits and other governmental authorizations that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, or the applicable laws of the British
Virgin Islands, Peoples Republic of China and Hong Kong, as applicable, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by the Parties of the transaction documents
contemplated hereby.
Section
2.12 Compliance
with Laws and Regulations
To the
best knowledge of CNDC Group, the business of CNDC has been and is presently
being conducted in accordance with all applicable federal, state and local
governmental laws, rules, regulations and ordinances, and all applicable laws,
rules, regulations and ordinances of the British Virgin Islands, the Peoples
Republic of China and Hong Kong, as applicable, except for such noncompliance
that, individually or in the aggregate, would not cause a Material Adverse
Effect. CNDC have all franchises, permits, licenses, consents and
other governmental or regulatory authorizations and approvals necessary for the
conduct of its business as now being conducted by it unless the failure to
possess such franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
Section
2.13 Insurance
Each of
CNDC’s insurable properties are insured for CNDC’s benefit under valid and
enforceable policy or policies containing substantially equivalent coverage and
will be outstanding and in full force at the Closing Date.
Section
2.14 Material Transactions or Affiliations
Chong Him ▇▇▇ is director of DRGN. ▇▇
▇▇▇ is also sole director and shareholder of CNDC Group. CNDC Group is director
and sole shareholder of CNDC. Accordingly, ▇▇. ▇▇▇ is a related party
in the transaction contemplated by this Agreement.
Other
than described above in the first paragraph of this Section 2.14, there are no
material contracts or agreements of arrangement between CNDC Group and any
person, who was at the time of such contract, agreement or arrangement, an
officer, director or person owning of record, or known to beneficially own ten
percent (10%) or more of the ordinary shares of CNDC Group and which is to be
performed in whole or in part after the date hereof. CNDC Group has no
commitment, whether written or oral, to lend any funds to, borrow any money from
or enter into material transactions with any such affiliated
person.
Section
2.15 Indebtedness
CNDC’s
Financial Statements sets forth as of the dates and periods indicated on such
form and financial statements, all outstanding secured and unsecured
Indebtedness of CNDC, as applicable, or for which CNDC, as applicable, has
commitments. For the purposes of this Agreement, “Indebtedness” shall mean (a)
any liabilities for borrowed money or amounts owed in excess of $5,000 (other
than trade accounts payable incurred in the ordinary course of business), (b)
all guaranties, endorsements and other contingent obligations in respect of
Indebtedness of others, whether or not the same are or should be reflected in
CNDC’s balance sheet (or the notes thereto), except guaranties by endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of business; and (c) the present value of any lease payments in
excess of $5,000 due under leases required to be capitalized in accordance with
GAAP. CNDC is not in default with respect to any Indebtedness.
Section
2.16 Absence
of Certain Developments
CNDC has
not: (i) issued any stock, bonds or other corporate securities or any rights,
options or warrants with respect thereto; (ii) borrowed any amount or incurred
or become subject to any liabilities (absolute or contingent) except current
liabilities incurred in the ordinary course of business which are comparable in
nature and amount to the current liabilities incurred in the ordinary course of
business during the comparable portion of its prior fiscal year, as adjusted to
reflect the current nature and volume of CNDC’s business; (iii) made capital
expenditures or commitments thereof that aggregate in excess of $10,000; (iv)
entered into any other transaction other than in the ordinary course of
business, or entered into any other material transaction, whether or not in the
ordinary course of business.
Section
2.18 Financial
Statements
The
balance sheets, and statements of income, changes in financial position and
stockholders’ equity contained in the CNDC’s financial
statements: (i) have been prepared in accordance with GAAP; (ii) are
in accordance with the books and records of the CNDC; and (iii) present fairly
in all material respects the financial condition of the CNDC at the dates
therein specified and the results of its operations and changes in financial
position for the periods therein specified.
ARTICLE
III
EXCHANGE
PROCEDURE AND OTHER CONSIDERATION
Section
3.1 Share
Exchange/Delivery of CNDC Securities
On the
Closing Date, CNDC Group must deliver to DRGN one (1) issued and fully paid
share representing 100% equity interest in CNDC, duly endorsed in blank or with
executed power attached thereto in transferable form.
Section
3.2 Issuance
of DRGN Shares
In
exchange for the CNDC share tendered pursuant to ▇▇▇▇▇▇▇ ▇.▇, ▇▇▇▇ must issue
42,000,000 shares of DRGN’s common stock to CNDC Group. Such shares are
restricted in accordance with Rule 144 of the 1933 Securities Act.
Section
3.3 Events
Prior to Closing
Upon
execution hereof or as soon thereafter as practical, management of DRGN and CNDC
Group must execute, acknowledge and deliver (or must cause to be executed,
acknowledged and delivered) any and all certificates, opinions, financial
statements, schedules, agreements, resolutions rulings or other instruments
required by this Agreement to be so delivered, together with such other items as
may be reasonably requested by the parties hereto and their respective legal
counsel in order to effectuate or evidence the transactions contemplated
hereby.
Section
3.4 Closing
Date
The
closing ("Closing Date") of the transactions contemplated by this Agreement will
be on the date and at the time the exchange documents are executed by all
Parties.
Section
3.5 Termination
(a) This
Agreement may be terminated by any Party, at any time prior to the Closing Date
if: (i) there shall be any action or proceeding before any court or any
governmental body which shall seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement and which, in the judgment of such
board of directors, made in good faith and based on the advice of its legal
counsel, makes it inadvisable to proceed with the exchange contemplated by this
Agreement; or (ii) any of the transactions contemplated hereby are disapproved
by any regulatory authority whose approval is required to consummate such
transactions.
(b)
Except as otherwise agreed by the Parties with respect to the payment of
expenses, in the event of termination pursuant to Paragraph (a) of this Section,
no obligation, right, or liability shall arise hereunder and each party shall
bear all of the expenses incurred by it in connection with the negotiation,
drafting and execution of this Agreement and the transactions herein
contemplated.
(c) This
Agreement may be terminated at any time prior to the Closing Date by any Party
if any Party shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of the Parties contained herein shall be
inaccurate in any material respect, which noncompliance or inaccuracy is not
cured after 20 days written notice thereof is given.
(d)
Should this Agreement is terminated pursuant to Paragraph (b) of this Section,
this Agreement shall be of no further force or effect and no obligation, right
or liability shall arise hereunder.
ARTICLE
IV
SPECIAL
COVENANTS
Section
4.1 Access
to Properties and Records
Prior to
closing, DRGN and CNDC Group will each afford to the officers and authorized
representatives of the other full access to the properties, books and records of
each other, so that each may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of each other, as the other
shall from time to time reasonably request.
|
Section
4.2
|
Availability
of Rule 144
|
DRGN and
CNDC Group Shareholders holding "restricted securities", as that term is defined
in Rule 144 of the 1933 Securities Act will remain as “restricted securities”.
DRGN is under no obligation to register such shares under the Securities Act, or
otherwise. The covenants set forth in this Section 4.2 shall survive the Closing
and the consummation of the transactions herein contemplated.
|
Section
4.3
|
Special
Covenants and Representations Regarding the CN Dragon Corporation Common
Shares to be issued in the Exchange
|
The consummation of this Agreement,
including the issuance of the DRGN common shares to CNDC Group as contemplated
hereby, constitutes the issuance of securities under Section 4(2) of the
Securities Act, and applicable state statutes.
|
Section
4.4
|
Third
Party Consents
|
DRGN and CNDC Group agree to cooperate
with each other in order to obtain any required third party consents to this
Agreement and the transactions herein contemplated.
Section
4.5 Actions
Prior to and Subsequent to Closing.
From and
after the date of this Agreement until the Closing Date, except as permitted or
contemplated by this Agreement, DRGN and CNDC Group will each use its best
efforts to: (i) maintain and keep its properties in states of good repair and
condition as at present, except for depreciation due to ordinary wear and tear
and damage due to casualty; (ii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now maintained by it; and
(iii) perform in all material respects all of its obligations under material
contracts, leases and instruments relating to or affecting its assets,
properties and business.
From and
after the date of this Agreement until the Closing Date, DRGN will not, without
the prior consent of CNDC Group: (i) except as otherwise specifically set forth
herein, make any change in its certificate of incorporation or bylaws; (ii)
declare or pay any dividend on its outstanding common shares, except as may
otherwise be required by law, or effect any stock split or otherwise change its
capitalization, except as provided herein; (iii) enter into or amend any
employment, severance or agreements or arrangements with any directors or
officers; (iv) grant, confer or award any options, warrants, conversion rights
or other rights not existing on the date hereof to acquire any common shares; or
(v) purchase or redeem any common shares.
Section
4.5 Indemnification
DRGN
hereby agrees to indemnify CNDC Group, each of their respective officers, agents
and directors as of the Closing Date against any loss, liability, claim, damage
or expense (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing or defending against any
litigation, commenced or threatened or any claim whatsoever), to which it or
they may become subject to or rising out of or based on any inaccuracy appearing
in or misrepresentation made in this Agreement. The indemnification provided for
in this paragraph shall survive the Closing Date and consummation of the
transactions contemplated hereby and termination of this Agreement;
and
CNDC
Group hereby agrees to indemnify DRGN, each of the officers, agents, directors
and current shareholders of DRGN as of the Closing Date against any loss,
liability, claim, damage or expense (including, but not limited to, any and all
expense whatsoever reasonably incurred in investigating, preparing or defending
against any litigation, commenced or threatened or any claim whatsoever), to
which it or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made in this Agreement. The indemnification
provided for in this paragraph shall survive the Closing Date and consummation
of the transactions contemplated hereby and termination of this
Agreement.
ARTICLE
V
CONDITIONS
PRECEDENT TO OBLIGATIONS OF CN DRAGON CORPORATION
The
obligations of DRGN under this Agreement are subject to the satisfaction, at or
before the Closing Date, of the following conditions:
Section
5.1 Accuracy
of Representations
The
representations and warranties made by CNDC Group in this Agreement were true
when made and shall be true at the Closing Date with the same force and effect
as if such representations and warranties were made at the Closing Date (except
for changes therein permitted by this Agreement), and CNDC Group shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by CNDC Group prior to or at the
Closing. DRGN shall be furnished with a certificate, signed by a duly authorized
officer of CNDC Group and dated the Closing Date, to the foregoing
effect.
Section
5.2 Director
Approval
The Board
of Directors of CNDC Group shall have approved this Agreement and the
transactions contemplated herein.
Section
5.3 Officer's
Certificate
DRGN shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized officer of
CNDC Group to the effect that: (i) the representations and warranties of CNDC
Group set forth in the Agreement and other documents furnished in connection
herewith are in all material respects true and correct as if made on the Closing
Date;
(ii) CNDC
Group has performed all covenants, satisfied all conditions, and complied with
all other terms and provisions of this Agreement to be performed, satisfied or
complied with by it as of the Closing Date; (iii) since such date, CNDC Group
has not entered into any material transaction other than transactions which are
usual and in the ordinary course if its business; and
(iv) no
litigation, proceeding, investigation or inquiry is pending or, to the best
knowledge of CNDC Group, threatened, which might result in an action to enjoin
or prevent the consummation of the transactions contemplated by this Agreement
which might result in any material adverse change in any of the assets,
properties, business or operations of CNDC Group.
Section
5.4 No
Material Adverse Change
Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business or operations of, nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of CNDC.
Section
5.5 Other Items.
|
|
DRGN
shall have received such further documents, certificates or instruments
relating to the
|
|
|
transactions
contemplated hereby as DRGN may reasonably
request.
|
ARTICLE
VI
CONDITIONS
PRECEDENT TO OBLIGATIONS OF CNDC GROUP LTD
The
obligations of CNDC Group under this Agreement are subject to the satisfaction,
at or before the Closing date (unless otherwise indicated herein), of the
following conditions:
Section
6.1 Accuracy
of Representations
The representations and warranties made
by DRGN in this Agreement were true when made and shall be true as of the
Closing Date (except for changes therein permitted by this Agreement) with the
same force and effect as if such representations and warranties were made at,
and as of the Closing Date, and DRGN shall have performed and complied with all
covenants and conditions required by this Agreement to be performed or complied
with by DRGN prior to or at the Closing. CNDC Group shall have been furnished
with a certificate, signed by a duly authorized executive officer of DRGN and
dated the Closing Date, to the foregoing effect.
Section
6.2 Director
Approval
The Board
of Directors of DRGN shall have approved this Agreement and the transactions
contemplated herein.
Section
6.3 Officer's
Certificate
|
|
CNDC
Group shall be furnished with a certificate dated the Closing Date and
signed
|
|
|
by
a duly authorized officer of DRGN to the effect that: (i) the
representations and warranties of
|
|
|
DRGN
set forth in the Agreement and in all Exhibits, Schedules and other
documents furnished
|
|
|
in
connection herewith are in all material respects true and correct as if
made on the Closing
|
|
|
Date;
and (ii) DRGN has performed all covenants, satisfied all conditions, and
complied with all
|
|
|
other
terms and provisions of the Agreement to be performed, satisfied or
complied with by
|
|
|
DRGN
as of the Closing Date.
|
Section
6.4 No
Material Adverse Change
Prior to the Closing Date, there shall
not have occurred any material adverse change in the financial condition,
business or operations of nor shall any event have occurred which, with the
lapse of time or the giving of notice, may cause or create any material adverse
change in the financial condition, business or operations of DRGN.
Section
6.5 Cancellation
of Outstanding Options, Warrants, Rights, Etc
Prior to the Closing Date, DRGN shall
cancel all outstanding stock options, rights or commitments to issue shares of
DRGN’s common or preferred stock, warrants and convertible notes, and warrants
that there shall be no other common or preferred stock or equity securities or
any options, warrants, rights or other agreements or instruments convertible,
exchangeable or exercisable into common or preferred stock or other equity
securities issued or outstanding.
Section
6.6 Cancellation
of Voting Trusts
Prior to the Closing Date, DRGN shall
cancel all voting trusts, agreements or arrangements among any of the beneficial
holders of DRGN’s common or preferred stock affecting the nomination or election
of directors or the exercise of the voting rights of DRGN’s common or preferred
stock.
ARTICLE
VII
MISCELLANEOUS
Section
7.1 Brokers
and Finders
The Parties each agree to indemnify the
other against any claim by any third person for any commission, brokerage or
finder's fee or other payment with respect to this Agreement or the transactions
contemplated hereby based on any alleged agreement or understanding between the
indemnifying party and such third person, whether express or implied from the
actions of the indemnifying party.
Section
7.2 Law,
Forum and Jurisdiction
This Agreement shall be construed and
interpreted in accordance with the laws of the State of Nevada, United States of
America.
Section
7.3 Notices
Any notices or other communications
required or permitted hereunder shall be sufficiently given if personally
delivered to it or sent by registered mail or certified mail, postage prepaid,
or by prepaid telegram to the address provided above to each Party or such other
addresses as shall be furnished in writing by any party in the manner for giving
notices hereunder, and any such notice or communication shall be deemed to have
been given as of the date so delivered, mailed or telegraphed.
Section
7.4 Attorneys'
Fees
In the event that any party institutes
any action or suit to enforce this Agreement or to secure relief from any
default hereunder or breach hereof, the breaching party or parties shall
reimburse the non-breaching party or parties for all costs, including reasonable
attorneys' fees, incurred in connection therewith and in enforcing or collecting
any judgment rendered therein.
Section
7.5 Confidentiality
Each party hereto agrees with the other
party that, unless and until the transactions contemplated by this Agreement
have been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not use such data or information or disclose the same to others,
except: (i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement.
Section
7.6 Schedule;
Knowledge
Each party is presumed to have full
knowledge of all information delivered pursuant to this Agreement.
Section
7.7 Third
Party Beneficiaries
This contract is solely between DRGN
and CNDC Group and except as specifically provided, no director, officer,
stockholder, employee, agent, independent contractor or any other person or
entity shall be deemed to be a third party beneficiary of this
Agreement.
Section
7.8 Entire
Agreement
This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understanding, agreements, representations or warranties, written or oral,
except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
Section
7.9 Survival;
Termination
The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for 18 months.
Section
7.10 Counterparts
This Agreement may be executed in
multiple counterparts, each of which shall be deemed an original and all of
which taken together shall be but a single instrument.
Section
7.11 Amendment
or Waiver
Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law or in equity, and may be enforced concurrently herewith, and no waiver by
any party of the performance of any obligation by the other shall be construed
as a waiver of the same or any other default then, theretofore, or thereafter
occurring or existing. At any time prior to the Closing Date, this Agreement may
be amended by a written consent by all parties hereto, with respect to any of
the terms contained herein, and any term or condition of this Agreement may be
waived or the time for performance hereof may be extended by a written consent
by the party or parties for whose benefit the provision is
intended.
Section
7.12 Headings;
Context
The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
does not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
Section
7.13 Benefit
This Agreement shall be binding upon
and shall inure only to the benefit of the parties hereto, and their permitted
assigns hereunder. This Agreement shall not be assigned by any party without the
prior written consent of the other party.
Section
7.14 Public
Announcements
Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
Section
7.15 Severability
In the event that any particular
provision or provisions of this Agreement or the other agreements contained
herein shall for any reason hereafter be determined to be unenforceable, or in
violation of any law, governmental order or regulation, such unenforceability or
violation shall not affect the remaining provisions of such agreements, which
shall continue in full force and effect and be binding upon the respective
parties hereto.
Section
7.16 Failure
of Conditions; Termination
In the event of any of the conditions
specified in this Agreement shall not be fulfilled on or before the Closing
Date, either of the parties have the right either to proceed or, upon prompt
written notice to the other, to terminate and rescind this Agreement. In such
event, the party that has failed to fulfill the conditions specified in this
Agreement will be liable for the other party’s legal fees, as limited in this
Section. The election to proceed shall not affect the right of such
electing party reasonably to require the other party to continue to use its
efforts to fulfill the unmet conditions.
Section
7.17 No
Strict Construction
The language of this Agreement shall be
construed as a whole, according to its fair meaning and intendment, and not
strictly for or against either party hereto, regardless of who drafted or was
principally responsible for drafting the Agreement or terms or conditions
hereof.
Section
7.18 Execution
Knowing and Voluntary
In executing this Agreement, the
parties severally acknowledge and represent that each: (a) has fully and
carefully read and considered this Agreement; (b) has been or has had the
opportunity to be fully apprised by its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; (c) is executing
this Agreement voluntarily, free from any influence, coercion or duress of any
kind.
Section
7.19 Amendment
At any time after the Closing Date,
this Agreement may be amended by a writing signed by both parties, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be executed by their respective
duly authorized officers or representatives and entered into as of the date
first above written.
|
CN
Dragon Corporation
/s/
▇▇▇▇ ▇▇▇▇ Kong
__________________________________________
Signed
for and on behalf of CN Dragon Corporation
By: ▇▇▇▇
▇▇▇▇ Kong
Its: Director
|
||
|
CNDC
Group Ltd
/s/
Chong Him ▇▇▇
___________________________________________
Signed
for and on behalf of CNDC Group Ltd
By:
Chong Him ▇▇▇
Its:
Director
|
||
|
|
SCHEDULE
|
|
|
PART
A
|
|
|
Particulars of
DRGN
|
|
Name
of the Company
|
:
|
CN
Dragon Corporation (fka Wavelit, Inc.)
|
|
Business
Identification
Number
|
:
|
NV20011415667
|
|
Date
of incorporation
|
:
|
8/30/2001
|
|
Place
of incorporation
|
:
|
Nevada,
U.S.
|
|
Address
of registered office
|
:
|
▇/▇
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, Hong Kong
|
|
Authorized
share capital
|
:
|
US$
625,000.00 divided into 2 classes: Common Stock in the amount of
250,000,000 [par share value: US$ 0.001] and Preferred Stock in the amount
of 375,000,000 [par share value: US$ 0.001].
|
|
Issued
and outstanding shares
|
:
|
1,804,696
Common Stock, as of the date of this Agreement
|
|
Director(s)
|
:
|
▇▇▇▇
▇▇▇▇ Kong
Chong
Him ▇▇▇
|
|
|
PART
B
|
|
|
Particulars of CNDC
Group
|
|
Name
of the Company
|
:
|
CNDC
Group Ltd
|
||
|
Company
number
|
:
|
1432774
|
||
|
Date
of incorporation
|
:
|
9/20/2007
|
||
|
Place
of incorporation
|
:
|
British
Virgin Islands
|
||
|
Address
of registered office
|
:
|
OMC
▇▇▇▇▇▇▇▇, PO Box 3152, Road Town,
Tortola,
British Virgin Islands
|
||
|
Authorized
share capital
|
:
|
US$
50,000 divided into 50,000 shares [par share value: US$ 1.00]
|
||
|
Issued
shares
|
:
|
1
share
|
||
|
Director(s)
|
:
|
Chong
Him ▇▇▇
|
||
|
Shareholder(s)
(ordinary
Shares)
|
:
|
Name
|
Number of Share(s)
|
Percentage of shareholding
|
|
Chong
Him ▇▇▇
|
1
|
100%
|
||
PART C
|
|
Particulars of
CNDC
|
|
Name
of the Company
|
:
|
CNDC
Corporation
|
||
|
Company
number
|
:
|
1472024
|
||
|
Date
of incorporation
|
:
|
3/26/2008
|
||
|
Place
of incorporation
|
:
|
British
Virgin Islands
|
||
|
Address
of registered office
|
:
|
OMC
▇▇▇▇▇▇▇▇, PO Box 3152, Road Town,
Tortola,
British Virgin Islands
|
||
|
Authorized
share capital
|
:
|
US$
50,000 divided into 50,000 shares [par share value: US$ 1.00]
|
||
|
Issued
shares
|
:
|
1
share
|
||
|
Director(s)
|
:
|
CNDC
Group Ltd
|
||
|
Shareholder(s)
(ordinary
Shares)
|
:
|
Name
|
Number of Share(s)
|
Percentage of shareholding
|
|
CNDC
Group Ltd
|
1
|
100%
|
||
|
Subsidiaries
|
:
|
CN
Dragon Holdings Ltd
Zhengzhou
CN Dragon Ltd
|