-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TLl3kY1vH2xq1ZSXe9NqUguQgDWSe8Yh7Encji3RYWTw2X3KZP+WHNoBANvG2k/d fGGC/buL5HP3wt7dOvAcyg== /in/edgar/work/20000823/0000944209-00-001422/0000944209-00-001422.txt : 20000922 0000944209-00-001422.hdr.sgml : 20000922 ACCESSION NUMBER: 0000944209-00-001422 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 20000823 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: TXON INTERNATIONAL DEVELOPMENT CORP CENTRAL INDEX KEY: 0001081834 STANDARD INDUSTRIAL CLASSIFICATION: [1531 ] IRS NUMBER: 870629754 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-59499 FILM NUMBER: 708618 BUSINESS ADDRESS: STREET 1: 3672 EAST COVE POINT DR CITY: SALT LAKE CITY STATE: UT ZIP: 84109 BUSINESS PHONE: 8015748000 MAIL ADDRESS: STREET 1: LOEB & LOEB STREET 2: 10100 SANTA MONICA BLVD STE 2200 CITY: LOS ANGELES STATE: CA ZIP: 90067 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ATLAS TRUST CO CENTRAL INDEX KEY: 0001122514 STANDARD INDUSTRIAL CLASSIFICATION: [ ] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: LOEB & LOEB LLP C/O DAVID FICKSMAN STREET 2: 10100 SANTA MONICA BLVD SUITE 2200 CITY: LOS ANGELES STATE: CA ZIP: 90067-4164 BUSINESS PHONE: 3102822128 SC 13D 1 0001.txt SCHEDULE 13D (THE ATLAS TRUST COMPANY) SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D UNDER THE SECURITIES EXCHANGE ACT OF 1934 (AMENDMENT NO___________)* Txon International Development Corporation ______________________________ (Name of Issuer) Common Stock, $0.001 Par Value Per Share ______________________________ (Title of Class of Securities) 90210R305 ______________________________ (CUSIP Number) David L. Ficksman, Esq. Loeb & Loeb LLP 10100 Santa Monica Boulevard, Suite 2200, Los Angeles, CA 90067 (310) 282-2350 ______________________________________________________________________________ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 14, 2000 ______________________________________________________________________________ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box [_]. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. * The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") or otherwise subject to the liabilities of that section of the Exchange Act but shall be subject to all other provisions of the Exchange Act. Page 1 of 6 CUSIP No. _______________ 1 NAME OF REPORTING PERSON Atlas Trust Company I.R.S. IDENTIFICATION NOS OF ABOVE PERSON Not Applicable 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [_] (b) [_] 3 SEC USE ONLY 4 SOURCE OF FUNDS OO 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] 6 CITIZENSHIP OR PLACE OF ORGANIZATION NUMBER OF 7 SOLE VOTING POWER SHARES 1,961,175 BENEFICIALLY OWNED BY 8 SHARED VOTING POWER EACH 0 REPORTING PERSON 9 SOLE DISPOSITIVE POWER 1,961,175 10 SHARED DISPOSITIVE POWER 0 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1,961,175 shares* 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [_] 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 75.16% - ------------------ * Represents the 1,961,175 shares of the Common Stock of the Issuer registered in the name of Main Edge International Limited. The Atlas Trust Company owns 100% of Main Edge International Limited. Page 2 of 6 14 TYPE OF REPORTING PERSON OO ITEM 1. SECURITY AND ISSUER This statement on Schedule 13D relates to the common stock, $0.001 par value per share (the "Common Stock"), of Txon International Development Corporation, a Nevada Corporation (the "Issuer"). The principal executive offices of the Company is located at 13C Chinaweal Center 414-424 Jaffee Road, Wanchai, Hong Kong. ITEM 2. IDENTITY AND BACKGROUND (a)-(c) This statement on Schedule 13D is filed by Atlas Trust Company ("Atlas" or the "Reporting Person"). The address of Atlas Trust Company is Suite A, Second Floor, Natwest House, Line Wall Road, PO Box 925, Gibraltar. The principal business of Atlas Trust Company is to serve as a fiduciary for certain trusts. The shares which are the subject of this Schedule 13D are registered in the name of Main Edge International Limited. Atlas Trust Company owns 100% of Main Edge International Limited. Set forth on Appendix A hereto is a schedule setting forth the names and titles of the executive officers of Main Edge, the name, present principal occupation or employment of the Directors of Atlas and the name, principal business and address of any corporation or other organization in which such employment is conducted. (d) and (e) During the past five years, the Reporting Person has not (i) been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which such person was or is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activity subject to federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION In connection with the closing under the Share Exchange Agreement dated as of August 10, 2000, by and among the Issuer, Main Edge International Limited ("Main Edge"), Virtual Edge Limited ("Virtual Edge") and certain shareholders of the Issuer named therein (the "Share Exchange Agreement"), Main Edge acquired 1,961,175 shares of the Issuer in exchange for the Main Edge's shares of Virtual Edge Limited, a wholly owned subsidiary of the Main Edge ("Virtual Edge"), which shares represented all of the issued and outstanding shares of Virtual Edge. ITEM 4. PURPOSE OF TRANSACTION. The Reporting Person entered into the above mentioned transaction to acquire the shares of Common Stock for investment purposes. The Common Stock was acquired pursuant to the Share Exchange Agreement as described in Item 3 hereof. The Reporting Person intends to review on a continuing basis its investment in the Issuer and may, depending upon the evaluation of his financial planning, upon the Issuer's business and prospects and upon future developments in general business, economic and market conditions, determine to increase, decrease or continue to hold or dispose of the position in the Issuer. Except as set forth in the previous paragraphs, the Reporting Person has no plans or proposals that relate to or would result in: (a) the acquisition by any person of additional securities of the Issuer, or the disposition of securities of the Issuer; (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation or any of its subsidiaries; (d) any change in the present Board of Directors or management of the Issuer; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any other material change in the Issuer, involving the Issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the Issuer's business or corporate structure; (g) changes in the Issuer's charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Issuer by any person; (h) causing a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Exchange Act; or (j) any action similar to any of those enumerated in (a)-(i) above. Page 3 of 6 ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) The table below sets forth the aggregate number of shares and percentage of the Company's outstanding shares beneficially owned by each Reporting Person.
Number of Share Percentage of Total ---------------- ------------------- Atlas Trust Company 1,961,175* 75.16
(b) The Reporting Person, holds the sole power to vote and to dispose or direct the disposition of any of the shares of Common Stock. (c) The Reporting Person has not effected any transaction in the Common Stock during the past 60 days, except as disclosed herein. (d) Not applicable. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER Other than as described in Item 4 above, to the Reporting Person's knowledge, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the Issuer, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7. MATERIAL TO BE FILED AS EXHIBITS EXHIBIT NO. DESCRIPTION - ----------- ----------- 1.1 Share Exchange Agreement, dated as of August 10, 2000 - --------------------- * Represents the 1,961,175 shares of the Common Stock of the Issuer registered in the name of Main Edge. Atlas Trust Company owns 100% of Main Edge. Page 4 of 6 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information named in this statement is true, complete and correct. Date: August 21, 2000 ATLAS TRUST COMPANY By: /s/ Leslie Livens -------------------------------- Name: Leslie Livens Title: Director Page 5 of 6 APPENDIX A Officers & Directors of Atlas Trust Company* Name Title - ---- ----- Arthur Olivero** Director Lesile John Philip Livens** Director - ----------------------- * The address for each of the directors is Atlas Trust Company LTD, Suite A 2nd Floor, Natwest House Line Wall Road, PO Box 925, Gibraltar ** The country of citizenship is the United Kingdom - Great Britain Page 6 of 6 EX-1.1 2 0002.txt SHARE EXCHANGE AGREEMENT, DATED AUGUST 10, 2000 EXHIBIT 1.1 SHARE EXCHANGE AGREEMENT THIS SHARE EXCHANGE AGREEMENT, dated as of August 10, 2000, is by and among Txon International Development Corporation, a Nevada corporation (the "Company"), Richard Ford, Jeanie Hildebrand and Gary Lewis (collectively, the "Shareholders"), Virtual Edge Limited, a British Virgin Islands corporation ("Virtual Edge"), and Main Edge International Limited, a British Virgin Islands corporation (the "Seller") with reference to the following: W I T N E S S E T H: A. The Seller owns 100% of the shares of common stock of Virtual Edge, which shares constitute all of the issued and outstanding shares of capital stock of Virtual Edge (the "Virtual Edge Shares"). B. The Company desires to acquire from the Seller, and the Seller desires to sell to the Company, all of the Virtual Edge Shares in exchange for the issuance by the Company of an aggregate of One Million Nine Hundred Sixty One Thousand, One Hundred and Seventy Five (1,961,175) shares (the "Company Shares") of the Company's common stock, par value $.001 per share (the "Company Common Stock"), on the terms and conditions set forth below. C. Immediately prior to the Closing Date (as hereinafter deferred), the Company will have an aggregate of 648,100 shares of Company Common Stock issued and outstanding consisting of (a) 500,000 shares covered by an effective S-8 registration statement, (b) 123,000 shares issued in reliance on the exemption from registration provided by Section 3(b) of the Securities Act of 1933, as amended, (c) 25,000 shares held by prior affiliates of the Company and others, and taking into account (d) the cancellation of 4,375,000 shares owned by present or former officers and drectors of the Company and others which will be cancelled immediately prior to Closing (the "Share Cancellation"). D. The Company has filed an effective registration statement regarding options to acquire 500,000 additional common shares as to which options have not been granted or exercised (the "Unissued Options"). NOW, THEREFORE, in consideration of the premises and of the mutual representations, warranties and agreements set forth herein, the parties hereto agree as follows: ARTICLE I EXCHANGE OF SHARES 1.1 Exchange of Shares. Subject to the terms and conditions of this ------------------ Agreement, on the Closing Date: (a) the Company shall issue and deliver to the Seller 1,961,175 authorized but unissued shares of Company Common Stock which shall equal 75.16% of the issued and outstanding shares of Company Common Stock on a fully diluted basis after taking into account such issuance, and the Share Cancellation (but prior to the issuance of the Financial Consultant Shares referred to in Section 5.1(m); and (b) the Seller agrees to deliver to the Company all shares of Common Stock, par value $1.00 per share, of Virtual Edge (the "Virtual Edge Common Stock") along with an appropriately executed stock power endorsed in favor of the Company. 1.2 Time and Place of Closing. The closing of the transactions ------------------------- contemplated hereby (the "Closing") shall take place at the offices of Loeb & Loeb LLP at 1000 Wilshire Boulevard, Suite 1800, Los Angeles, California on August 10, 2000 (the "Closing Date") at 10:00 A.M., Los Angeles time, or at such other place as the Company, Virtual Edge and the Seller may agree. ARTICLE II REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SHAREHOLDERS The Company and the Shareholders jointly and severally represent and warrant to the Seller, subject to the exceptions specifically disclosed in the schedules supplied by the Company to Virtual Edge and the Seller, as follows: 2.1 Due Organization and Qualification; Subsidiaries; Due Authorization. ------------------------------------------------------------------- (a) The Company is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of formation, with full corporate power and authority to own, lease and operate its respective business and properties and to carry on its respective business in the places and in the manner as presently conducted or proposed to be conducted. The Company is in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business conducted, by it requires such qualification except for any such failure, which when taken together with all other failures, is not likely to have a Material Adverse Effect on the business of the Company taken as a whole. ("Material Adverse Effect" shall mean, with respect to the Company on the one hand and Virtual Edge on the other hand, the result of one or more events, changes or effects which, individually or in the aggregate, would have a material adverse effect or impact on the business, assets, results of operations, intellectual property rights, prospects or financial condition of such party, taken as a whole, or is reasonably likely to delay or prevent the consummation of the transactions contemplated hereby). (b) The Company does not own, directly or indirectly, any capital stock, equity or interest in any corporation, firm, partnership, joint venture or other entity. (c) The Company has all requisite corporate power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby and thereby. The Company has taken all corporate action necessary for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and this Agreement constitutes the valid and binding obligation of the Company, enforceable against the Company in accordance with its respective terms, except as may be affected by bankruptcy, insolvency, moratoria or other similar laws affecting the enforcement of creditors' rights 2 generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought. 2.2 No Conflicts or Defaults. The execution and delivery of this Agreement ------------------------ by the Company and the consummation of the transactions contemplated hereby do not and shall not (a) contravene the Articles of Incorporation or Bylaws of the Company or (b) with or without the giving of notice or the passage of time (i) violate, conflict with, or result in a breach of, or a default or loss of rights under, any material covenant, agreement, mortgage, indenture, lease, instrument, permit or license to which the Company is a party or by which the Company is bound, or any judgment, order or decree, or any law, rule or regulation to which the Company is subject, (ii) result in the creation of, or give any party the right to create, any lien, charge, encumbrance or any other right or adverse interest ("Liens") upon any of the assets of the Company, (iii) terminate or give any party the right to terminate, amend, abandon or refuse to perform, any material agreement, arrangement or commitment to which the Company is a party or by which the Company's assets are bound, or (iv) accelerate or modify, or give any party the right to accelerate or modify, the time within which, or the terms under which, the Company is to perform any duties or obligations or receive any rights or benefits under any material agreement, arrangement or commitment to which it is a party. 2.3 Capitalization. The authorized capital stock of the Company -------------- immediately prior to giving effect to the transactions contemplated hereby consists of 50,000,000 shares of Company Common Stock of which 5,548,000 shares of $.001 par value Common Stock will be issued and outstanding as of the Closing Date (as more fully described in Recitals C and D), and 10,000,000 shares of Preferred Stock, none of which are outstanding. All of the outstanding shares of Common Stock are, and the Company Shares when issued in accordance with the terms hereof, will be, duly authorized, validly issued, fully paid and nonassessable, and have not been or, with respect to the Company Shares, will not be issued in violation of any preemptive right of stockholders. Except for the Unissued Options, the Company Shares are not subject to any preemptive or subscription right, any voting trust agreement or other contract, agreement, arrangement, option, warrant, call, commitment or other right of any character obligating or entitling the Company to issue, sell, redeem or repurchase any of its securities, and there is no outstanding security of any kind convertible into or exchangeable for Common Stock. The Company has not granted registration rights to any person. 2.4 Financial Statements. Schedule 2.4 contains copies of the unaudited -------------------- ------------ balance sheets of the Company at March 31, 2000 and December 31, 1999 and the related statements of operations and statement of cash flows for the periods then ended (all such statements being the "Company Financial Statements"). The Financial Statements, together with the notes thereto, have been prepared in accordance with U.S. generally accepted accounting principles applied on a basis consistent throughout all periods presented, subject to audit adjustments, which are not expected to be material. Such statements present fairly the financial position of the Company as of the dates and for the periods indicated. The books of account and other financial records of the Company have been maintained in accordance with good business practices. 2.5 Further Financial Matters. The Company does not have any liabilities ------------------------- or obligations, whether secured or unsecured, accrued, determined, absolute or contingent, asserted or unasserted or otherwise, which are required to be reflected or reserved in a balance sheet or 3 the notes thereto under generally accepted accounting principles, but which are not reflected in the Company Financial Statements. 2.6 Taxes. The Company has filed all United States federal, state, ----- county, local and foreign national, provincial and local returns and reports which were required to be filed on or prior to the date hereof in respect of all income, withholding, franchise, payroll, excise, property, sales, use, value- added or other taxes or levies, imposts, duties, license and registration fees, charges, assessments or withholdings of any nature whatsoever (together, "Taxes"), and has paid all Taxes (and any related penalties, fines and interest) which have become due pursuant to such returns or reports or pursuant to any assessment which has become payable, or, to the extent its liability for any Taxes (and any related penalties, fines and interest) has not been fully discharged, the same have been properly reflected as a liability on the books and records of the Company and adequate reserves therefore have been established. All such returns and reports filed on or prior to the date hereof have been properly prepared and are true, correct (and to the extent such returns reflect judgments made by the Company, as the case may be, such judgments were reasonable under the circumstances) and complete in all material respects. No tax return or tax return liability of the Company has been audited or, presently under audit. The Company has not given or been requested to give waivers of any statute of limitations relating to the payment of any Taxes (or any related penalties, fines and interest). There are no claims pending or, to the knowledge of the Company, threatened, against the Company for past due Taxes. All payments for withholding taxes, unemployment insurance and other amounts required to be paid for periods prior to the date hereof to any governmental authority in respect of employment obligations of the Company, including, without limitation, amounts payable pursuant to the Federal Insurance Contributions Act, have been paid or shall be paid prior to the Closing and have been duly provided for on the books and records of the Company and in the Company Financial Statements. 2.7 Indebtedness; Contracts; No Defaults. ------------------------------------ (a) Schedule 2.7 sets forth a true, complete and correct list of all ------------ material instruments, agreements, indentures, mortgages, guarantees, notes, commitments, accommodations, letters of credit or other arrangements or understandings, whether written or oral, to which the Company is a party (collectively, the "Company Agreements"). (b) Except as disclosed in Schedule 2.7, neither the Company, nor, to ------------ the Company's knowledge, any other person or entity is in breach in any material respect of, or in default in any material respect under, any contract, agreement, arrangement, commitment or plan to which the Company is a party, and no event or action has occurred, is pending or is threatened, which, after the giving of notice, passage of time or otherwise, would constitute or result in such a material breach or material default by the Company or any other person or entity. The Company has not received any notice of default under any contract, agreement, arrangement, commitment or plan to which it is a party, which default has not been cured to the satisfaction of, or duly waived by, the party claiming such default on or before the date hereof. 2.8 Personal Property. The Company has good and marketable title to all ----------------- of its tangible personal property and assets, including, without limitation, all of the assets reflected in the Company Financial Statements that have not been disposed of in the ordinary course of 4 business since March 31, 2000 free and clear of all Liens or mortgages, except for any Lien for current taxes not yet due and payable and such restrictions, if any, on the disposition of securities as may be imposed by federal or applicable state securities laws. Schedule 2.8 sets forth a true and complete list of all ------------ personal property owned by, or lease or subleased by or to, the Company. 2.9 Real Property. Schedule 2.9 sets forth a true and complete list of ------------- ------------ all real property owned by, or leased or subleased by or to, the Company. 2.10 Compliance with Law. The Company is not conducting its business or ------------------- affairs in violation of any applicable federal, state or local law, ordinance, rule, regulation, court or administrative order, decree or process, or any requirement of insurance carriers. The Company has not received any notice of violation or claimed violation of any such law, ordinance, rule, regulation, order, decree, process or requirement. 2.11 No Material Assets or Operations. The Company has no material assets -------------------------------- or liabilities and is not conducting any business operations. 2.12 No Adverse Changes. There have not been (a) any material adverse ------------------ change in the business, prospects, the financial or other condition, or the respective assets or liabilities of the Company as reflected in the Company Financial Statements, (b) any material loss sustained by the Company, including, but not limited to any loss on account of theft, fire, flood, explosion, accident or other calamity, whether or not insured, which has materially and adversely interfered, or may have a Material Adverse Effect on the Company's business, taken as a whole, or (c) any event, condition or state of facts, including, without limitation, the enactment, adoption or promulgation of any law, rule or regulation, the occurrence of which materially and adversely does or would affect the results of operations or the business or financial condition of the Company. 2.13 Litigation. There is no claim, dispute, action, suit, proceeding or ---------- investigation pending or threatened, against or affecting the business of the Company, or challenging the validity or propriety of the transactions contemplated by this Agreement, at law or in equity or admiralty or before any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, nor has any such claim, dispute, action, suit, proceeding or investigation been pending or threatened, during the 12-month period preceding the date hereof; (b) there is no outstanding judgment, order, writ, ruling, injunction, stipulation or decree of any court, arbitrator or federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, against or materially affecting the business of the Company; and (c) the Company has not received any written or verbal inquiry from any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality concerning the possible violation of any law, rule or regulation or any matter disclosed in respect of its business. 2.14 Insurance. The Company does not currently maintain any form of --------- insurance. 2.15 Certificate of Incorporation and Bylaws; Minute Books. The copies of ----------------------------------------------------- the Articles of Incorporation and Bylaws (or similar governing documents) of the Company, and all amendments to each are true, correct and complete. The minute books of the Company contains 5 true and complete records of all meetings and consents in lieu of meetings of their respective Board of Directors (and any committees thereof), or similar governing bodies, since the time of their respective organization. The stock books of the Company are true, correct and complete. 2.16 Employee Benefit Plans. Except as disclosed on Schedule 2.16, the ---------------------- Company does not maintain, nor has the Company maintained in the past, any employee benefit plans (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or any plans, programs, policies, practices, arrangements or contracts (whether group or individual) providing for payments, benefits or reimbursements to employees of the Company, former employees, their beneficiaries and dependents under which such employees, former employees, their beneficiaries and dependents are covered through an employment relationship with the Company, any entity required to be aggregated in a controlled group or affiliated service group with the Company for purposes of ERISA or the Internal Revenue Code of 1986 (the "Code") (including, without limitation, under Section 414(b), (c), (m) or (o) of the Code or Section 4001 of ERISA, at any relevant time. 2.17 Patents; Trademarks and Intellectual Property Rights. The Company ---------------------------------------------------- does not own or possesses any patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, Internet web site(s) or proprietary rights of any nature. 2.18 Brokers. All negotiations relative to this Agreement and the ------- transactions contemplated hereby have been carried out by the Company directly with the Sellers without the intervention of any individual, corporation, partnership, joint venture, trust, association, organization, or other entity (collectively, a "Person") on behalf of the Company in such a manner as to give rise to any valid claim by any Person against any Seller for a finder's fee, brokerage commission or similar payment. 2.19 Affiliate Transactions. Except as disclosed in Schedule 2.19 neither ---------------------- ------------- the Company nor any officer, director or employee of the Company (or any of the relatives or affiliates of any of the aforementioned Persons) is a party to any agreement, contract, commitment or transaction with the Company or affecting the business of the Company, or has any interest in any property, whether real, personal or mixed, or tangible or intangible, used in or necessary to the Company which will subject the Sellers to any liability or obligation from and after the Closing Date. 2.20 Trading. The Company Common Stock is currently listed for trading on ------- the OTC Bulletin Board, and the Company has received no notice that the Company Common Stock is subject to being delisted there from. 2.21 Compliance. The Company and the Shareholder have complied with all ----------- applicable foreign, federal and state laws, rules and regulations, including, without limitation, the requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Securities Act of 1933, as amended (the "Securities Act") and is current in its filings. 2.22 Filings. None of the filings made by the Company under the Exchange -------- Act or the Securities Act make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading. 6 ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLER The Seller represents and warrants to the Company, subject to the exceptions specifically disclosed in the schedules supplied by the Seller to the Company, as follows: 3.1 Due Organization and Qualification; Subsidiaries; Due Authorization. ------------------------------------------------------------------- (a) Virtual Edge is a corporation duly incorporated, validly existing and in good standing under the laws of its jurisdiction of formation, with full corporate power and authority to own, lease and operate its respective business and properties and to carry on its respective business in the places and in the manner as presently conducted or proposed to be conducted. Virtual Edge is in good standing as a foreign corporation in each jurisdiction in which the properties owned, leased or operated, or the business conducted, by it requires such qualification except for any such failure, which when taken together with all other failures, is not likely to have a Material Adverse Effect on the business of Virtual Edge taken as a whole. (b) Except as disclosed in Schedule 3.1(b), Virtual Edge does not own, --------------- directly or indirectly, any capital stock, equity or interest in any corporation, firm, partnership, joint venture or other entity. (c) Each of Virtual Edge and the Seller has all requisite power and authority to execute and deliver this Agreement, and to consummate the transactions contemplated hereby and thereby. Each of Virtual Edge and the Seller has taken all corporate action necessary for the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, and this Agreement constitutes the valid and binding obligation of each of Virtual Edge and the Seller, enforceable against each of Virtual Edge and the Seller in accordance with its respective terms, except as may be affected by bankruptcy, insolvency, moratoria or other similar laws affecting the enforcement of creditors' rights generally and subject to the qualification that the availability of equitable remedies is subject to the discretion of the court before which any proceeding therefore may be brought. 3.2 No Conflicts or Defaults. The execution and delivery of this ------------------------ Agreement by each of Virtual Edge and the Seller and the consummation of the transactions contemplated hereby do not and shall not (a) contravene the Certificate of Incorporation or Bylaws of Virtual Edge or the governing documents of the Seller, if applicable, or (b) with or without the giving of notice or the passage of time, (i) violate, conflict with, or result in a breach of, or a default or loss of rights under, any material covenant, agreement, mortgage, indenture, lease, instrument, permit or license to which Virtual Edge or the Seller is a party or by which Virtual Edge or the Seller or any of their respective assets are bound, or any judgment, order or decree, or any law, rule or regulation to which Virtual Edge, or the Seller or any of their respective assets are subject, (ii) result in the creation of, or give any party the right to create, any Lien upon any of the assets of Virtual Edge, (iii) terminate or give any party the right to terminate, amend, abandon or refuse to perform, any material agreement, arrangement or commitment to which Virtual Edge is a party or by which Virtual Edge or any of its assets are bound, or (iv) accelerate or modify, or give any party the right to accelerate or modify, the time within which, or the terms under which, Virtual 7 Edge is to perform any duties or obligations or receive any rights or benefits under any material agreement, arrangement or commitment to which it is a party. 3.3 Capitalization. The authorized capital stock of Virtual Edge -------------- immediately prior to giving effect to the transactions contemplated hereby consists of 50,000 shares of Virtual Edge Common Stock, par value $1.00 per share of which as of the date hereof one share of Virtual Edge Common Stock are issued and outstanding. Set forth in Schedule 3.3 is a list of all stockholders ------------ of Virtual Edge, setting forth their names, addresses and number of shares owned. All of the outstanding shares of Virtual Edge Common Stock are, and Virtual Edge Shares when transferred in accordance with the terms hereof, will be, duly authorized, validly issued, fully paid and nonassessable, and have not been or, with respect to Virtual Edge Shares, will not be transferred in violation of any rights of third parties. The Virtual Edge Shares are not subject to any preemptive or subscription right, any voting trust agreement or other contract, agreement, arrangement, option, warrant, call, commitment or other right of any character obligating or entitling Virtual Edge to issue, sell, redeem or repurchase any of its securities, and there is no outstanding security of any kind convertible into or exchangeable for Virtual Edge Common Stock. 3.4 Financial Statements. Schedule 3.4 contains copies of the -------------------- ------------ consolidated balance sheets of Virtual Edge at March 31, 2000, and the related statements of operations, stockholders' equity and cash flows for the period then ended, including the notes thereto, as audited by Moores Rowland, certified public accountants (all such statements being the "Virtual Edge Financial Statements"). The Virtual Edge Financial Statements, together with the notes thereto, have been prepared in accordance with U.S. generally accepted accounting principles applied on a basis consistent throughout all periods presented, subject to audit adjustments, which are not expected to be material. Such statements present fairly the financial position of Virtual Edge as of the dates and for the periods indicated. The books of account and other financial records of Virtual Edge have been maintained in accordance with good business practices. 3.5 Further Financial Matters. Except as set forth in Schedule 3.5, ------------------------- ------------ Virtual Edge does not have any material liabilities or obligations, whether secured or unsecured, accrued, determined, absolute or contingent, asserted or unasserted or otherwise, which are required to be reflected or reserved in a balance sheet or the notes thereto under generally accepted accounting principles, but which are not reflected in the Virtual Edge Financial Statements. 3.6 Taxes. Except as indicated in Schedule 3.6, Virtual Edge has filed ----- ------------ all United States federal, state, county, local and foreign national, provincial and local tax returns and reports which were required to be filed on or prior to the date hereof, and has paid all Taxes (and any related penalties, fines and interest) which have become due pursuant to such returns or reports or pursuant to any assessment which has become payable, or, to the extent its liability for any Taxes (and any related penalties, fines and interest) has not been fully discharged, the same have been properly reflected as a liability on the books and records of Virtual Edge and adequate reserves therefore have been established. All such returns and reports filed on or prior to the date hereof have been properly prepared and are true, correct (and to the extent such returns reflect judgments made by Virtual Edge, such judgments were reasonable under the circumstances) and complete in all material respects. Except as indicated in Schedule 3.6, no extension for the filing of any such return or ------------ report is currently in effect. Except as indicated in Schedule 3.6, no tax ------------ 8 return or tax return liability of Virtual Edge has been audited or, presently under audit. All taxes and any penalties, fines and interest which have been asserted to be payable as a result of any audits have been paid. Except as indicated in Schedule 3.6, Virtual Edge has never given or been requested to ------------ give waivers of any statute of limitations relating to the payment of any Taxes (or any related penalties, fines and interest). There are no claims pending or threatened against Virtual Reality for past due Taxes. Except as indicated in Schedule 3.6, all payments for withholding taxes, unemployment insurance and - ------------ other amounts required to be paid for periods prior to the date hereof to any governmental authority in respect of employment obligations of Virtual Edge including, without limitation, amounts payable pursuant to the Federal Insurance Contributions Act, have been paid or shall be paid prior to the Closing and have been duly provided for on the books and records of Virtual Edge and in the Virtual Edge Financial Statements. 3.7 Indebtedness; Contracts; No Defaults. ------------------------------------ (a) Schedule 3.7 sets forth a true, complete and correct list of all ------------ material instruments, agreements, indentures, mortgages, guarantees, notes, commitments, accommodations, letters of credit or other arrangements or understandings, whether written or oral, to which Virtual Edge is a party (collectively, the "Virtual Edge Agreements"). An agreement shall not be considered material for the purposes of this Section 3.7(a) if it provides for expenditures or receipts of less than $100,000 and has been entered into by Virtual Edge in the ordinary course of business. The Virtual Edge Operating Agreements constitute all of the contracts, agreements, understandings and arrangements required for the operation of the business of Virtual Edge or which have a material effect thereon. Copies of all such material written Virtual Edge Operating Agreements have previously been delivered or otherwise made available to the Company and such copies are true, complete and correct as of the date hereof. (b) Except as disclosed in Schedule 3.7, neither Virtual Edge nor, to ------------ Virtual Edge's knowledge, any other person or entity is in breach in any material respect of, or in default in any material respect under, any material contract, agreement, arrangement, commitment or plan to which Virtual Edge is a party, and no event or action has occurred, is pending or is threatened, which, after the giving of notice, passage of time or otherwise, would constitute or result in such a material breach or material default by Virtual Edge or, to the knowledge of Virtual Edge, any other person or entity. Virtual Edge has not received any notice of default under any contract, agreement, arrangement, commitment or plan to which it is a party, which default has not been cured to the satisfaction of, or duly waived by, the party claiming such default on or before the date hereof. 3.8 Personal Property. Except as set forth in Schedule 3.8, Virtual Edge ----------------- ------------ has good and marketable title to all of its tangible personal property and assets, including, without limitation, all of the assets reflected in the Virtual Edge Financial Statements that have not been disposed of in the ordinary course of business since March 31, 2000, free and clear of all Liens or mortgages, except for any Lien for current taxes not yet due and payable and such restrictions, if any, on the disposition of securities as may be imposed by federal or applicable state securities laws. 9 3.9 Real Property. ------------- (a) Schedule 3.9 sets forth a true and complete list of all real ------------ property owned by, or leased or subleased by or to, Virtual Edge. (b) Except as set forth in Schedule 3.9, each lease to which Virtual ------------ Edge is a party is valid, binding and in full force and effect with respect to Virtual Edge and, to the knowledge of Virtual Edge, all other parties thereto; no notice of default or termination under any such lease is outstanding. 3.10 Compliance with Law. Except as set forth in Schedule 3.10, Virtual ------------------- ------------- Edge is not conducting its respective business or affairs in material violation of any applicable law, ordinance, rule, regulation, court or administrative order, decree or process, or any requirement of insurance carriers. Virtual Edge has not received any notice of violation or claimed violation of any such law, ordinance, rule, regulation, order, decree, process or requirement. 3.11 Permits and Licenses. Except as set forth in Schedule 3.11, Virtual -------------------- ------------- Edge has all certificates of occupancy, rights, permits, certificates, licenses, franchises, approvals and other authorizations as are reasonably necessary to conduct its respective business and to own, lease, use, operate and occupy its assets, at the places and in the manner now conducted and operated, except those the absence of which would not materially adversely affect its respective business. Except as set forth in Schedule 3.11, as of the date hereof, Virtual ------------- Edge has not received any written or oral notice or claim pertaining to the failure to obtain any material permit, certificate, license, approval or other authorization required by any federal, state or local agency or other regulatory body, the failure of which to obtain Materially Adversely Effect Virtual Edge's business taken as a whole. 3.12 Ordinary Course. Except as set forth in Schedule 3.12, since March --------------- ------------- 31, 2000 Virtual Edge has conducted its business, maintained its real property and equipment and kept its books of account, records and files, substantially in the same manner as previously conducted, maintained or kept and solely in the ordinary course. 3.13 No Adverse Changes. Except as set forth in Schedule 3.13, since ------------------ ------------- March 31, 2000 there has not been (a) any material adverse change in the business, prospects, the financial or other condition, or the respective assets or liabilities of Virtual Edge as reflected in the Virtual Edge Financial Statements, (b) any material loss sustained by Virtual Edge, including, but not limited to any loss on account of theft, fire, flood, explosion, accident or other calamity, whether or not insured, which has materially and adversely interfered, or may have a Material Adverse Effect on Virtual Edge's business taken as a whole, or (c) any event, condition or state of facts, including, without limitation, the enactment, adoption or promulgation of any law, rule or regulation, the occurrence of which materially and adversely does or would affect the results of operations or the business or financial condition of Virtual Edge. 3.14 Litigation. (a) Except as set forth in Schedule 3.14, there is no ---------- ------------- claim, dispute, action, suit, proceeding or investigation pending or, to the knowledge of Virtual Edge, threatened, against or affecting the business of Virtual Edge, or challenging the validity or propriety of the transactions contemplated by this Agreement, at law or in equity or admiralty or 10 before any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, nor to the knowledge of Virtual Edge, has any such claim, dispute, action, suit, proceeding or investigation been pending or threatened, during the 12-month period preceding the date hereof; (b) there is no outstanding judgment, order, writ, ruling, injunction, stipulation or decree of any court, arbitrator or federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality, against or materially affecting the business of Virtual Edge; and (c) Virtual Edge has not received any written or verbal inquiry from any federal, state, local, foreign or other governmental authority, board, agency, commission or instrumentality concerning the possible violation of any law, rule or regulation or any matter disclosed in respect of its business. 3.15 Insurance. Virtual Edge maintains insurance against all risks --------- customarily insured against by companies in its industry. All such policies are in full force and effect, and Virtual Edge has not received any notice from any insurance company suspending, revoking, modifying or canceling (or threatening such action) any insurance policy issued to Virtual Edge. 3.16 Certificate of Incorporation and Bylaws; Minute Books. The copies of ----------------------------------------------------- the Certificate of Incorporation and Bylaws (or similar governing documents) of Virtual Edge, and all amendments to each are true, correct and complete. The minute book of Virtual Edge contains true and complete records of all meetings and consents in lieu of meetings of their respective Board of Directors (and any committees thereof), or similar governing bodies, since the time of their respective organization. The stock book of Virtual Edge is true, correct and complete. 3.17 Patents; Trademarks and Intellectual Property Rights. Virtual Edge ---------------------------------------------------- owns or possesses sufficient legal rights to all patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, internet web site(s) proprietary rights and processes necessary for its business as now conducted without any conflict with or infringement of the rights of others. There are no outstanding options, licenses or agreements of any kind relating to the foregoing, and Virtual Edge is not bound by, or a party to, any options, licenses or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses, information, proprietary rights and processes of any other person or entity. 3.18 Brokers. All negotiations relative to this Agreement and the ------- transactions contemplated hereby have been carried out by Virtual Edge directly with the Sellers without the intervention of any Person on behalf of Virtual Edge in such a manner as to give rise to any valid claim by any Person against any Seller for a finder's fee, brokerage commission or similar payment. 3.19 Purchase for Investment. ----------------------- (a) The Seller is acquiring the Company Shares for investment for the Seller's own account and not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and the Seller has no present intention of selling, granting any participation in, or otherwise distributing the same. The Seller further represents that it does not have any 11 contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participation to such person or to any third person, with respect to any of the Company Shares. (b) The Seller understands that the Company Shares are not registered under the Act on the ground that the sale and the issuance of securities hereunder is exempt from registration under the Securities Act pursuant to Section 4(2) thereof, and that the Company's reliance on such exemption is predicated on the Seller's representations set forth herein. The Seller is an "accredited investor" as that term is defined in Rule 501(a) of Regulation D under the Securities Act. 3.20 Investment Experience. The Seller acknowledges that it can bear the --------------------- economic risk of its investment, and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Company Shares. 3.21 Information. The Seller has carefully reviewed such information, as ----------- the Seller deemed necessary to evaluate an investment in the Company Shares. To the full satisfaction of the Seller, it has been furnished all materials that it has requested relating to the Company and the issuance of the Company Shares hereunder, and the Seller has been afforded the opportunity to ask questions of representatives of the Company to obtain any information necessary to verify the accuracy of any representations or information made or given to the Seller. Notwithstanding the foregoing, nothing herein shall derogate from or otherwise modify the representations and warranties of the Company set forth in this Agreement, on which the Seller has relied in making an exchange of the Virtual Edge Shares for the Company Shares. 3.22 Restricted Securities. The Seller understands that the Company --------------------- Shares may not be sold, transferred, or otherwise disposed of without registration under the Securities Act or an exemption there from, and that in the absence of an effective registration statement covering the Company Shares or any available exemption from registration under the Securities Act, the Company Shares must be held indefinitely. The Seller is aware that the Company Shares may not be sold pursuant to Rule 144 promulgated under the Securities Act unless all of the conditions of that Rule are met. Among the conditions for use of Rule 144 may be the availability of current information to the public about the Company. ARTICLE IV INDEMNIFICATION 4.1 Indemnity of the Company and the Shareholders. The Company and each --------------------------------------------- of the Shareholders (jointly and severally) agree to defend, indemnify and hold harmless the Seller from and against, and to reimburse the Seller with respect to, all liabilities, losses, costs and expenses, including, without limitation, reasonable attorneys' fees and disbursements, asserted against or incurred by the Seller by reason of, arising out of, or in connection with any material breach of any representation or warranty contained in this Agreement made by the Company or the Shareholders or in any document or certificate delivered by the Company or the Shareholders pursuant to the provisions of this Agreement or in connection with the transactions contemplated thereby. 12 4.2 Indemnity of the Company. The Seller agrees to defend, indemnify and ------------------------ hold harmless the Company from and against, and to reimburse the Company with respect to, all liabilities, losses, costs and expenses, including, without limitation, reasonable attorneys' fees and disbursements, asserted against or incurred by the Seller by reason of, arising out of, or in connection with any material breach of any representation or warranty contained in this Agreement and made by the Company or in any document or certificate delivered by the Company pursuant to the provisions of this Agreement or in connection with the transactions contemplated thereby. 4.3 Indemnification Procedure. A party (an "Indemnified Party") seeking ------------------------- indemnification shall give prompt notice to the other party (the "Indemnifying Party") of any claim for indemnification arising under this Article 4. The Indemnifying Party shall have the right to assume and to control the defense of any such claim with counsel reasonably acceptable to such Indemnified Party, at the Indemnifying Party's own cost and expense, including the cost and expense of reasonable attorneys' fees and disbursements in connection with such defense, in which event the Indemnifying Party shall not be obligated to pay the fees and disbursements of separate counsel for such in such action. In the event, however, that such Indemnified Party's legal counsel shall determine that defenses may be available to such Indemnified Party that are different from or in addition to those available to the Indemnifying Party, in that there could reasonably be expected to be a conflict of interest if such Indemnifying Party and the Indemnified Party have common counsel in any such proceeding, or if the Indemnified Party has not assumed the defense of the action or proceedings, then such Indemnifying Party may employ separate counsel to represent or defend such Indemnified Party, and the Indemnifying Party shall pay the reasonable fees and disbursements of counsel for such Indemnified Party. No settlement of any such claim or payment in connection with any such settlement shall be made without the prior consent of the Indemnifying Party which consent shall not be unreasonably withheld. ARTICLE V DELIVERIES 5.1 Items to be delivered to Virtual Edge prior to or at Closing by the ------------------------------------------------------------------- Company. - ------- (a) Articles of Incorporation and amendments thereto, Bylaws and certificate of good standing in the Company's state of incorporation; (b) all applicable schedules hereto; (c) all minutes and resolutions of board of director and shareholder meetings in possession of the Company; (d) shareholder list; (e) all financial statements and tax returns in possession of the Company; (f) copies of all SEC filings; 13 (g) resolution from the Company's current directors appointing designees of Virtual Edge to the Company's Board of Directors; (h) letters of resignation from the Company's current officers and directors to be effective upon Closing and after the appointments described in this section; (i) certificates representing 1,961,175 shares of the Company's $.001 par value common stock issued in the denominations as set forth opposite their respective names on Schedule I to this Agreement, duly authorized, validly ---------- issued, fully paid for and non-assessable; (j) copies of board, and if applicable, shareholder resolutions approving this transaction and authorizing the issuances of the shares hereto; (k) a certificate, in form reasonably acceptable to Virtual Edge, signed by an authorized officer of the Company dated the Closing Date, certifying that the representations and warranties made by the Company shall be accurate in all material respects as of the date hereof and as of the Closing Date and the terms and conditions of this Agreement to be performed and complied with by the Company on or prior to the Closing Date shall have been performed and complied with by the Company on or prior to the Closing Date; (l) certification representing the shares covered by the Share Cancellation with appropriate stock powers or instructions; (m) certificates evidencing 50,000 shares of the Company's Common Stock issued to Orient Financial Services Inc. or its designee(s) (the "Financial Consultant Shares"); and (n) any other document reasonably requested by Virtual Edge that it deems necessary for the consummation of this transaction. 5.2 Items to be delivered to the Company prior to or at Closing by Virtual ---------------------------------------------------------------------- Edge. - ---- (a) Charter documents and certificate of good standing in Virtual Edge's jurisdiction of incorporation; (b) all applicable schedules hereto; (c) all minutes and resolutions of board of director and shareholder meetings in possession of the Virtual Edge; (d) shareholder list; (e) resolution from Virtual Edge current directors appointing designees of Virtual Edge to the Company's Board of Directors; (f) certificates representing 100% of Virtual Edge's common stock as set forth opposite their respective names on Schedule I to this Agreement, duly ---------- authorized, validly issued, fully paid for and non-assessable; 14 (g) copies of board, and if applicable, shareholder resolutions approving this transaction and authorizing the issuances of the shares hereto; (h) a certificate, in form reasonably acceptable to the Company, signed by an authorized officer of Virtual Edge dated the Closing Date, certifying that the representations and warranties made by the Virtual Edge shall be accurate in all material respects as of the date hereof and as of the Closing Date and the terms and conditions of this Agreement to be performed and complied with by Virtual Edge on or prior to the Closing Date shall have been performed and complied with by Virtual Edge on or prior to the Closing Date; and (i) any other document reasonably requested by the Company that it deems necessary for the consummation of this transaction. ARTICLE VI CONDITIONS PRECEDENT 6.1 Conditions Precedent to Closing. The obligations of the parties under ------------------------------- this Agreement shall be and are subject to fulfillment, prior to or at the Closing, of each of the following conditions: (a) that each of the representations and warranties of the parties contained herein shall be true and correct at the time of the Closing Date as if such representations and warranties were made at such time; and (b) that the parties shall have performed or complied with all agreements, terms and conditions required by this Agreement to be performed or complied with by them prior to or at the time of the Closing. 6.2 Conditions to Obligations of the Seller. The obligations of the --------------------------------------- Seller shall be subject to fulfillment prior to or at the Closing, of each of the following conditions: (a) the Company shall have paid all of its own costs and expenses associated with this Agreement and the transactions contemplated herein; (b) as of the Closing, the Company shall have no assets and no liabilities whatsoever, contingent or otherwise; (c) the Company shall have received all of the regulatory, shareholder and other third party consents, permits, approvals and authorizations necessary to consummate the transactions contemplated by this Agreement; (d) the Company Common Stock shall be currently listed for trading on the OTC Bulletin Board and the Company shall have received no notice that the Company Common Stock is subject to being delisted therefrom; (e) the Company shall have entered into a registration rights agreement with the Seller in the form attached as Exhibit C; and --------- 15 (f) the Share Cancellation shall have been completed. 6.3 Conditions to Obligations of the Company. The obligations of the ---------------------------------------- Company shall be subject to fulfillment prior to or at the Closing, of each of the following conditions: (a) Virtual Edge and the Seller shall have paid all of their own costs and expenses associated with this Agreement and the transactions contemplated herein; (b) As of the Closing, the liabilities set forth on Schedule 6.3(b) shall have been converted to equity as set forth on such schedule; and (c) Virtual Edge and the Seller shall have received all of the regulatory, shareholder and other third party consents, permits, approvals and authorizations necessary to consummate the transactions contemplated by this Agreement. ARTICLE VII COVENANTS 7.1 Conduct of Business. Between the date hereof and the Closing Date, ------------------- the Company and Virtual Edge shall conduct their businesses in substantially the same manner in which they have heretofore been conducted, and the Company and Virtual Edge shall not without the consent of the other parties to this Agreement dispose of their any of their assets, except in the ordinary course of business. 7.2 Option Shares. The Company will not grant the Unissued Options until ------------- six months from the Closing Date and then at the rate not to exceed 100,000 per month (on a cumulative basis) thereafter. ARTICLE VIII NO PUBLIC DISCLOSURE 8.1 No Public Disclosure. Without the prior written consent of the -------------------- others, none of the Company, Virtual Edge or the Seller will, and will each cause their respective representatives not to, make any release to the press or other public disclosure with respect to either the fact that discussions or negotiations have taken place concerning the transactions contemplated by this Agreement, the existence or contents of this Agreement or any prior correspondence relating to this transactions contemplated by this Agreement, except for such public disclosure as may be necessary, in the written opinion of outside counsel (reasonably satisfactory to the other parties) for the party proposing to make the disclosure not to be in violation of or default under any applicable law, regulation or governmental order. If either party proposes to make any disclosure based upon such an opinion, that party will deliver a copy of such opinion to the other party, together with the text of the proposed disclosure, as far in advance of its disclosure as is practicable, and will in good faith consult with and consider the suggestions of the other party concerning the nature and scope of the information it proposes to disclose. 16 ARTICLE IX CONFIDENTIAL INFORMATION 9.1 Confidential Information. In connection with the negotiation of this ------------------------ Agreement and the consummation of the transactions contemplated hereby, each party hereto will have access to data and confidential information relating to the other party. Each party hereto shall treat such data and information as confidential, preserve the confidentiality thereof and not duplicate or use such data or information, except in connection with the transactions contemplated hereby, and in the event of the termination of this Agreement for any reason whatsoever, each party hereto shall return to the other all documents, work papers and other material (including all copies thereof) obtained in connection with the transactions contemplated hereby and will use reasonable efforts, including instructing its employees who have had access to such information, to keep confidential and not to use any such data or information; provided, however, that such obligations shall not apply to any data and information (i) which at the time of disclosure, is available publicly, (ii) which, after disclosure, becomes available publicly through no fault of the receiving party, (iii) which the receiving party knew or to which the receiving party had access prior to disclosure by the disclosing party, (iv) which is required by law, regulation or exchange rule, or in connection with legal process, to be disclosed, (v) which is disclosed by a receiving party to its attorneys or accountants, who shall respect the above restrictions, or (vi) which is obtained in connection with any Tax matters and is disclosed in connection with the filing of Tax returns or claims for refund or in conducting an audit or other proceeding. ARTICLE X TERMINATION 10.1 Termination. This Agreement may be terminated at any time before or, ------------ at Closing, by: (a) the mutual agreement of the parties; (b) any party if: (i) any provision of this Agreement applicable to a party shall be materially untrue or fail to be accomplished; (ii) any legal proceeding shall have been instituted or shall be imminently threatening to delay, restrain or prevent the consummation of this Agreement; or (iii) the conditions precedents to Closing are not satisfied. Upon termination of this Agreement for any reason, in accordance with the terms and conditions set forth in this paragraph, each said party shall bear all costs and expenses as each party has incurred and no party shall be liable to the other. 17 ARTICLE XI MISCELLANEOUS 11.1 Survival of Representations, Warranties and Agreements. All ------------------------------------------------------ representations and warranties and statements made by a party to in this Agreement or in any document or certificate delivered pursuant hereto shall survive the Closing Date for so long as the applicable statute of limitations shall remain open. Each of the parties hereto is executing and carrying out the provisions of this agreement in reliance upon the representations, warranties and covenants and agreements contained in this agreement or at the closing of the transactions herein provided for and not upon any investigation which it might have made or any representations, warranty, agreement, promise or information, written or oral, made by the other party or any other person other than as specifically set forth herein. 11.2 Access to Books and Records. During the course of this transaction --------------------------- through Closing, each party agrees to make available for inspection all corporate books, records and assets, and otherwise afford to each other and their respective representatives, reasonable access to all documentation and other information concerning the business, financial and legal conditions of each other for the purpose of conducting a due diligence investigation thereof. Such due diligence investigation shall be for the purpose of satisfying each party as to the business, financial and legal condition of each other for the purpose of determining the desirability of consummating the proposed transaction. The parties further agree to keep confidential and not use for their own benefit, except in accordance with this Agreement any information or documentation obtained in connection with any such investigation. 11.3 Further Assurances. If, at any time after the Closing, the parties ------------------ shall consider or be advised that any further deeds, assignments or assurances in law or that any other things are necessary, desirable or proper to complete the merger in accordance with the terms of this agreement or to vest, perfect or confirm, of record or otherwise, the title to any property or rights of the parties hereto, the parties agree that their proper officers and directors shall execute and deliver all such proper deeds, assignments and assurances in law and do all things necessary, desirable or proper to vest, perfect or confirm title to such property or rights and otherwise to carry out the purpose of this Agreement, and that the proper officers and directors the parties are fully authorized to take any and all such action. 11.4 Notice. All communications, notices, requests, consents or demands ------ given or required under this Agreement shall be in writing and shall be deemed to have been duly given when delivered to, or received by prepaid registered or certified mail or recognized overnight courier addressed to, or upon receipt of a facsimile sent to, the party for whom intended, as follows, or to such other address or facsimile number as may be furnished by such party by notice in the manner provided herein: 18 If to the Company: Txon International Development Corporation 6322 S. 3000 Suite 320 Salt Lake City, Utah 84121 Attn: Richard A. Ford Telecopy: 801______________ with a copy to: James N. Barber, Esq. Bank One Tower 50 West Broaday, Suite 100 Salt Lake City, Utah 84101 Telecopy: 801.364.3406 If to the Seller or Virtual Edge: Virtual Edge Limited 13C Chinaweal Center 414-424 Jaffe Road Wanchai, Hong Kong Attn: John Hui Telecopy: 852.2521.5210 with a copy to: David L. Ficksman, Esq. Loeb & Loeb, LLP. 10100 Santa Monica Boulevard Suite 2200 Los Angeles, California 90067 Telecopy: 310.282.2192 11.5 Entire Agreement. This Agreement, the Disclosure Schedules and any ---------------- instruments and agreements to be executed pursuant to this Agreement, sets forth the entire understanding of the parties hereto with respect to its subject matter, merges and supersedes all prior and contemporaneous understandings with respect to its subject matter and may not be waived or modified, in whole or in part, except by a writing signed by each of the parties hereto. No waiver of any provision of this Agreement in any instance shall be deemed to be a waiver of the same or any other provision in any other instance. Failure of any party to enforce any provision of this Agreement shall not be construed as a waiver of its rights under such provision. 11.6 Successors and Assigns. This Agreement shall be binding upon, ---------------------- enforceable against and inure to the benefit of, the parties hereto and their respective heirs, administrators, executors, personal representatives, successors and assigns, and nothing herein is intended to confer any right, remedy or benefit upon any other person. This Agreement may not be assigned 19 by any party hereto except with the prior written consent of the other parties, which consent shall not be unreasonably withheld. 11.7 Governing Law. This Agreement shall in all respects be governed by ------------- and construed in accordance with the laws of the State of California are applicable to agreements made and fully to be performed in such state, without giving effect to conflicts of law principles. 11.8 Counterparts. This Agreement may be executed in multiple ------------ counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 11.9 Construction. Headings contained in this Agreement are for ------------ convenience only and shall not be used in the interpretation of this Agreement. References herein to Articles, Sections and Exhibits are to the articles, sections and exhibits, respectively, of this Agreement. The Disclosure Schedules are hereby incorporated herein by reference and made a part of this Agreement. As used herein, the singular includes the plural, and the masculine, feminine and neuter gender each includes the others where the context so indicates. 11.10 Severability. If any provision of this Agreement is held to be ------------ invalid or unenforceable by a court of competent jurisdiction, this Agreement shall be interpreted and enforceable as if such provision were severed or limited, but only to the extent necessary to render such provision and this Agreement enforceable. [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 20 IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of the date first set forth above. TXON INTERNATIONAL DEVELOPMENT CORPORATION By: /s/ Richard Ford --------------------------------------- Richard Ford President VIRTUAL EDGE LIMITED /s/ John Hui ------------------------------------------ Name: John Hui Title: President Seller: MAIN EDGE INTERNATIONAL LIMITED /s/ John Hui ------------------------------------------ Name: John Hui Title: Shareholders: /s/ Richard Ford ------------------------------------------ Richard Ford /s/ Gary Lewis ----------------------------------------- Gary Lewis /s/ Jeanie Hildebrand ----------------------------------------- Jeanie Hildebrand 21 -----END PRIVACY-ENHANCED MESSAGE-----