exv10w1



 





Exhibit 10.1




SHARE EXCHANGE AGREEMENT




          SHARE EXCHANGE AGREEMENT, dated as of May 11, 2007 (the “Agreement”), by and among
CORNERWORLD, INC. Delaware corporation (“CornerWorld”) and each of the shareholders of CornerWorld
set forth on the signature page hereof (collectively, the “Shareholders”) and CORNERWORLD
CORPORATION, a Nevada corporation, (the “Company”) (all collectively, the “Parties”).




WITNESSETH




          WHEREAS, the Company is a public company listed on the OTC Bulletin Board having the following
securities issued and outstanding: (i) Sixty Two Million Seven Hundred Thousand (62,700,000) shares
of restricted stock; and (ii) Eleven Million Four Hundred Thousand (11,400,000) free trading shares
(collectively, the “Shares”);




          WHEREAS, the Shareholders desire to acquire a controlling interest of the Company, and the
Company has agreed to sell a controlling interest of their share holdings to the Shareholders upon
the terms and conditions hereinafter set forth; and




          WHEREAS, following the Recapitalization of the Company and payment of the Purchase Price, as
described in Article 2 herein, the Parties will proceed to a Closing, whereby the Shareholders
shall exchange all of the issued and outstanding shares of CornerWorld (the “Acquisition Shares”)
for an aggregate of 62,700,000 shares of common stock of the Company.




          WHEREAS, certain terms used in this Agreement are defined in Article 1; and




          WHEREAS, it is intended that the Acquisition shall qualify for United States federal income
tax purposes as a reorganization within the meaning of Section 368 of the Internal Revenue Code of
1986, as amended.




          NOW THEREFORE in consideration of the promises and the mutual covenants, agreements,
representations and warranties contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:




ARTICLE 1.

DEFINITIONS AND INTERPRETATION



1.1 Definitions. As used in this Agreement, the following terms when capitalized in this
Agreement shall have the following meanings:





	 	(a)	 	“Affiliates” shall mean, with respect to any Person, any and all other Persons
that control, are controlled by, or are under common control with, such Person. For
purposes of the foregoing, “control” of a Person shall mean direct or indirect
ownership of 50% or more of the securities or other interests of such Person having by
their terms ordinary voting power to elect or appoint a majority of the board of
directors or others performing similar functions with respect to such Person.
	 
	 	(b)	 	“Acquisition” means the Acquisition, at the Closing, of the Company by




 









 






	 	 	 	CornerWorld pursuant to this Agreement;






	 	(c)	 	“Acquisition Shares” means the 6,160,854 shares of common stock of CornerWorld to
be issued to the Company at Closing pursuant to the terms of the Acquisition;
	 
	 	(d)	 	“Business Day” shall mean any day other than Saturday, Sunday and any day on
which banking institutions in the United States are authorized by law or other
governmental action to close;
	 
	 	(e)	 	“Closing” shall mean that term as defined in Section 2.5 of this Agreement.
	 
	 	(f)	 	“Claim Notice” means written notification pursuant to Section 9.3 of a Third
Party Claim as to which indemnity under Section 9.1 is sought by an Indemnified Party.
	 
	 	(g)	 	“Code” means the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
	 
	 	(h)	 	“Contract” shall mean an agreement, written or oral, between the Company and any
other Person which obligates either the Company or such other Person to do or not to
do a particular thing.
	 
	 	(i)	 	“Election Notice” means a written notice provided by the Sellers or CornerWorld,
as the case may be, in respect of a Tax Claim to the effect that it elects to contest,
and to control the defense or prosecution of, such Tax Claim as provided in this
Agreement.
	 
	 	(j)	 	“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.
	 
	 	(k)	 	“ERISA Affiliate” shall mean any entity that would be deemed to be a “single
employer” with the Company under Section 414(b), (c), (m) or (o) of the Code or
Section 4001 of ERISA.
	 
	 	(l)	 	“Environmental Liabilities” means any cost, damages, expense, liability,
obligation, or other responsibility arising from or under (a) any Environmental Law
and consisting of or relating to (i) any environmental matters or conditions
(including on-site or off-site contamination and environmental regulation of chemical
substances or products); (ii) fines, penalties, judgments, awards, settlements, legal
or administrative proceedings, out-of-pocket damages and necessary and required
response, investigative, remedial, or inspection costs and expenses arising under
Environmental Law; (iii) financial responsibility under Environmental Law for clean-up
costs or corrective action, including any necessary and required investigation,
clean-up, removal, containment, or other remediation or response actions required by
Environmental Law and for any natural resource damages; or (iv) any other compliance,
corrective, investigative, or remedial measures required under Environmental Law; or
(b) any common law causes of action, including, but not limited to, negligence,
trespass or nuisance, based on violation by the Company of Environmental Laws,
releases by the Company of Hazardous Materials or actions or omissions by the Company
that expose others to
Hazardous Materials. The terms “removal,” “remedial,” “response action”, and 




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	 	 	 	“release”
shall have the meanings provided for such terms under, and shall include the types of
activities covered by, the United States Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 et seq., as amended
(“CERCLA”).






	 	(m)	 	“Environmental Laws” shall mean all federal, state and local Laws relating to
public health, or to pollution or protection of the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) including, without limitation, the Clean Air Act, as amended, CERCLA, the
Resource Conservation and Recovery Act of 1976, as amended (“RCRA”), the Toxic
Substances Control Act, the Federal Water Pollution Control Act, as amended, the Safe
Drinking Water Act, as amended, the Hazardous Materials Transportation Act, as
amended, the Oil Pollution Act of 1990, any state Laws implementing the foregoing
federal Laws, and all other Laws relating to or regulating (i) emissions, discharges,
releases, or cleanup of pollutants, contaminants, chemicals, polychlorinated biphenyls
(PCB’s), oil and gas exploration and production wastes, brine, solid wastes, or toxic
or Hazardous Materials or wastes (collectively, the “Polluting Substances”), (ii) the
generation, processing, distribution, use, treatment, handling, storage, disposal, or
transportation of Polluting Substances, or (iii) environmental conservation or
protection. References in this Agreement to Environmental Laws existing or in effect
as of a particular date shall include written administrative interpretations and
policies then existing or in effect.
	 
	 	(n)	 	“Environmental Permit” means any federal, state, local, provincial, or foreign
permits, licenses, approvals, consent or authorizations required by any Governmental
or Regulatory Authority under or in connection with any Environmental Law and includes
any and all orders, consent orders or binding agreements issued or entered into by a
Governmental or Regulatory Authority under any applicable Environmental Law.
	 
	 	(o)	 	“Governmental or Regulatory Authority” shall mean any federal, state, regional,
municipal or local court, legislative, executive, Native American or regulatory
authority or agency, board, commission, department or subdivision thereof.
	 
	 	(p)	 	“Hazardous Activity” means the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, release, storage,
transfer, transportation, treatment, or use (including any withdrawal or other use of
groundwater) of Hazardous Materials in, on, under, about, or from the Company’s
facilities or any part thereof into the environment.
	 
	 	(q)	 	“Hazardous Materials” means (i) any petroleum or petroleum products, radioactive
materials, asbestos in any form that is, or that is likely to become, friable, urea
formaldehyde foam insulation and transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls (PCBs), or (ii) any
chemicals, materials, substances or wastes which are now or hereafter become defined
as or included in the definition of “hazardous substances,” “hazardous wastes,”
“hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,”
“toxic substances,” “toxic pollutants” or words of similar import, under any
applicable Environmental Law.




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	 	(r)	 	“Indemnified Party” means any Person entitled to indemnification under any
provision of Article 9.
	 
	 	(s)	 	“Indemnifying Party” means any Person obligated to provide indemnification under
any provision of Article 9.
	 
	 	(t)	 	“Law” shall mean any federal, state, county, or local laws, statutes,
regulations, rules, codes, ordinances, orders, decrees, judgments or injunctions
enacted, adopted, issued or promulgated by any Governmental or Regulatory Authority,
from time to time.
	 
	 	(u)	 	“Lien” shall mean any mortgage, deed of trust, pledge, lien, claim, security
interest, covenant, restriction, easement, preemptive right, or any other encumbrance
or charge of any kind.
	 
	 	(v)	 	“Material Contract” shall have the meaning set forth in Section 4.14.
	 
	 	(w)	 	“Material Adverse Effect” shall mean any material adverse effect on the business
or financial condition of the Company;
	 
	 	(x)	 	“Order” shall mean any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether preliminary or final).
	 
	 	(y)	 	“Place of Closing” means the offices of Sichenzia Ross Friedman Ference LLP, or
such other place as CornerWorld and the Sellers may mutually agree upon;
	 
	 	(z)	 	“Permitted Lien” shall mean: (a) liens created under any Lease, except any lien
arising as a result of any failure to timely make any payment or failure to perform
any other obligation or other default under such Lease; (b) liens for Taxes that are
not yet due and payable or that are being contested in good faith by appropriate
proceedings; (c) mechanics, materialmen’s, landlords’, carriers’, warehousemen’s, and
other liens imposed by law incurred in the ordinary course of business; (d) zoning
restrictions, land use regulations, declarations, reservations, provisions, covenants,
conditions, waivers, restrictions on the use of property and third party easements,
rights of way, leases or similar matters that are recorded in the county records where
the effected property is located and do not prohibit the use of the property as
currently used; (e) the absence of executed rights of way or easements, or a defect in
any executed right of way or easement, where such rights have been or can be otherwise
obtained through a proceeding under prescription or other operation of law; (f)
deposits or pledges to secure obligations under worker’s compensation, social security
or similar laws, or under unemployment insurance; (g) deposits or pledges to secure
bids, tenders, contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds, performance bonds and other
obligations of like nature arising in the ordinary course of the Company’s business
and made, created or arising prior to the Closing Date; (h) leases or subleases
granted by or to others; and (i) precautionary Uniform Commercial Code financing
statements regarding operating leases which leases are either disclosed pursuant to
Article 3 hereof or no longer in effect.




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	 	(aa)	 	“Person” shall mean an individual, partnership, joint venture, trust,
corporation, limited liability company or other legal entity or Governmental or
Regulatory Authority.
	 
	 	(bb)	 	“Post-Closing Period” means any taxable period or portion thereof beginning after
the Closing Date. If a taxable period begins on or before the Closing Date and ends
after the Closing Date, then the portion of the taxable period that begins on the day
following the Closing Date shall constitute a Post-Closing Period.
	 
	 	(cc)	 	“Pre-Closing Period” means any taxable period or portion thereof that is not a
Post-Closing Period.
	 
	 	(dd)	 	“Purchase Price” means the Purchase Price as defined in Section 2.3 herein.
	 
	 	(ee)	 	“Company Material Adverse Effect” shall mean any material adverse effect on the
business or financial condition of the Company;
	 
	 	(ff)	 	“Recapitalization” means that term as set forth in Section 2.2 of this
Agreement;
	 
	 	(gg)	 	“Remedial Action” shall mean any removal, remediation, response, clean up or
other corrective action to respond to, remove or otherwise address any Environmental
Liability.
	 
	 	(hh)	 	“Shares” means 62,700,000 shares of common stock of the Company to be issued
to CornerWorld at Closing pursuant to the terms of the Acquisition.
	 
	 	(ii)	 	“Taxes” shall mean any and all taxes, charges, fees, levies or other
assessments, including, without limitation, all net income, gross income, gross
receipts, excise, stamp, real or personal property, ad valorem, withholding,
estimated, social security, unemployment, occupation, use, sales, service, service
use, license, net worth, payroll, franchise, severance, transfer, recording or other
taxes, assessments or charges imposed by any Governmental or Regulatory Authority,
whether computed on a separate, consolidated, unitary, combined or other basis, and in
each case such term shall include any interest, penalties, or additions to tax
attributable thereto.
	 
	 	(jj)	 	“Tax Return” shall mean any return, report or similar statement required to be
filed with respect to any Tax (including any attached schedules), including, without
limitation, any information return, claim for refund, amended return or declaration of
estimated Tax and including any return of an affiliated, combined or unitary group.




Any other terms defined within the text of this Agreement will have the meanings so ascribed to
them.



1.2 Captions and Section Numbers. The headings and section references in this Agreement
are for convenience of reference only and do not form a part of this Agreement and are not
intended to interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.



1.3 Section References and Schedules. Any reference to a particular “Article”, “Section”,
“paragraph”, “clause” or other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by number will mean the


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 appropriate Schedule attached to this Agreement and by such reference the appropriate Schedule is
incorporated into and made part of this Agreement.



1.4 Severability of Clauses. If any part of this Agreement is declared or held to be
invalid for any reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been executed without
the invalid portion, and it is hereby declared the intention of the parties that this Agreement
would have been executed without reference to any portion which may, for any reason, be hereafter
declared or held to be invalid.




ARTICLE 2.

THE ACQUISITION



2.1 The Acquisition. Subject to the terms and conditions set forth in this Agreement and
in reliance on the representations, warranties, covenants and conditions herein contained, the
Company hereby agree to sell, assign and deliver to CornerWorld the Shares, in exchange for the
Acquisition Shares on the Closing Date.



2.2 Recapitalization. Simultaneously with the execution of this Agreement, the Company
shall cause its shareholders owning an aggregate of (i) 7,296,000 of the then outstanding
11,400,000 free trading shares, and (ii) all of the outstanding 62,700,000 restricted Shares of
the Company, to deposit such shares, along with duly executed stock powers, in escrow with
Continental Stock Transfer & Trust Company (the “Escrow Agent”) pending the payment of the
Purchase Price, as defined in Section 2.3 of this Agreement, and execution of this Agreement.



The
balance of the 11,400,000 outstanding shares, being an aggregate of 4,104,000 free trading shares, shall remain outstanding, with (i) 3,000,000 shares being deposited in the name of Dynasty
Capital LLC at an account at Bishop Rosen & Co., Inc. or such other brokerage firm as may be
designated by CornerWorld, as further provided for in Section 2.3 herein, and (ii) 1,104,000 of
such shares being held in escrow by the Escrow Agent, or at such other place as may be mutually
agreed upon, pending (i) payment of the Purchase Price and (ii) the Closing of this Agreement or
termination of this transaction.



Upon payment of the Purchase Price and the Closing of this Agreement, the Escrow Agent shall
release the Shares to the Shareholders. The holders of such 1,004,000 free trading shares of the
Company agree to restrict the resale of such shares for a period of six (6) months following the
payment of the Purchase Price. Such persons further agree to only sell such shares in limited
amounts for the one (1) year period following the initial six (6) month restricted sale period
such that their sales are not to exceed twenty five percent (25%) of such shares in every three
(3) month period, although the Company may waive any such restrictions.



In order to assure compliance with these agreed upon contractual restrictions, an appropriate
restrictive legend reflecting such agreement shall be placed upon the certificates representing
such shares. Notwithstanding the foregoing, the Company may, in its sole discretion, at any time
following payment of the Purchase Price, agree to waive the foregoing restrictions on resale of
the 700,000 shares.



2.3 Purchase Price. The purchase price for the purchase of the Acquisition Shares shall
be the Shares, which shall be issued in accordance with Exhibit A attached hereto,
following


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 satisfaction of the Purchase Price (as defined below) to be paid to the shareholders of the
Company and the completion of the Recapitalization, is to occur as follows:





	 	(a)	 	3,000,000 of the outstanding free trading Shares of the Company shall be deposited in
the name of Dynasty Capital LLC (“Dynasty”) or a Dynasty designee at an account at Bishop,
Rosen & Co., Inc. or such other brokerage firm as may be designated by the Parties, with
such account to be managed by a mutually agreed upon, un-affiliated third party. Such
3,000,000 shall thereafter be sold for a price of not less than $1.05 per share (unless
such $1.05 minimum sale price is waived by CornerWorld in its sole and absolute
discretion) and the proceeds of up to $975,000 (the “Purchase Price”) shall be delivered
to the holders of such shares as the funds are received.
	 
	 	(b)	 	Should the proceeds from the sale of the shares total at least $500,000 but still be
less than the Purchase Price within sixty (60) days of the execution of this Agreement
(the “Purchase Price Closing Period”), then and in such event Dynasty or a Dynasty
designee and the Company agree to extend the period during which they shall continue to
make sales of the shares towards satisfying the payment of the Purchase Price for an
additional ninety (90) days period. Notwithstanding the foregoing, CornerWorld shall have
the option, at any time during the Purchase Price Payment Period (including the time
during with such period may be extended), to deliver the balance of the Purchase Price to
the Company in cash and to receive the remaining unsold Shares, together with duly
executed stock powers, for disposition. If, however, the proceeds of the sale of the
3,000,000 Shares exceed the Purchase Price, Dynasty and the Company agree, on behalf of
themselves and the Company’s shareholders, to contribute such excess funds to the Company.
	 
	 	(c)	 	In the event that the Company does not receive proceeds from the sale of the shares
totaling the Purchase Price within the Purchase Price Payment Period (as such period may
be extended as provided above), then the Company and its shareholders shall have the right
to cause the Escrow Agent to return all of the shares deposited by them in escrow, retain
all funds received from the sale of shares and to have the transaction unwound with each
party taking away what they contributed to the proposed transaction, at their original
basis of contribution to effect no gain or loss to either party.




2.4 Adherence with Applicable Securities Laws. The Company agrees that it is acquiring
the Acquisition Shares for investment purposes and will not offer, sell or otherwise transfer,
pledge or hypothecate any of the Acquisition Shares issued to it (other than pursuant to an
effective Registration Statement under the Securities Act of 1933, as amended (the “Securities
Act”) directly or indirectly unless:





	 	(a)	 	the sale is to CornerWorld;
	 
	 	(b)	 	the sale is made pursuant to the exemption from registration under the Securities
Act, provided by Rule 144 thereunder; or
	 
	 	(c)	 	the Acquisition Shares are sold in a transaction that does not require registration
under the Securities Act or any applicable United States state laws and regulations
governing the offer and sale of securities, and the vendor has furnished to the Company an
opinion of counsel to that effect or such other written opinion as may be reasonably
required by




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	 	 	 	the Company.




The Shareholders acknowledge that the certificates representing the Acquisition Shares shall bear
the following legend:





NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT UNDER
THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IN RESPECT OF SUCH
SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE TO SAID SHARES.


2.5 Closing. The parties hereto shall use their best efforts to close the transactions contemplated
by this Agreement (the “Closing”) within sixty (60) days of the execution of this Agreement, unless
extended for an additional ninety (90) day period pursuant to Section 2.3 of this Agreement. In the
event the Closing does not occur pursuant to the above, either party may cancel this Agreement;
provided that the delay in Closing shall not be due to the actions or inactions of the party
seeking such cancellation.




ARTICLE 3.

REPESENTATIONS AND WARRANTIES OF CORNERWORLD AND THE SHAREHOLDERS




          CornerWorld and the Shareholders represent and warrant to the Company that:



3.1 Organization, Standing and Power. CornerWorld is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware, with full corporate power
and corporate authority to (i) own, lease and operate its properties, (ii) carry on the business
as currently conducted by it. There are no states or jurisdictions in which the character and
location of any of the properties owned or leased by CornerWorld, or the conduct of CornerWorld’s
business makes it necessary for CornerWorld to qualify to do business as a foreign corporation,
except for those jurisdictions in which the failure to so qualify would not have a Material
Adverse Effect on the business or operations of CornerWorld.



3.2 Authorization of Agreement. Each Shareholder has all requisite power, authority and
legal capacity to execute and deliver this Agreement, and each other agreement, document, or
instrument or certificate contemplated by this Agreement or to be executed by such Shareholder in
connection with the consummation of the transactions contemplated by this Agreement (together with
this Agreement, the “Shareholder Documents”), and to consummate the transactions contemplated
hereby and thereby. This Agreement has been, and each of the Shareholders Documents will be at or
prior to the Closing, duly and validly executed and delivered by each Shareholder and (assuming
the due authorization, execution and delivery by the other parties hereto and thereto) this
Agreement constitutes, and each of the Shareholder Documents when so executed and delivered will
constitute, legal, valid and binding obligations of each Shareholder, enforceable against each
Shareholder in accordance with their respective terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies
generally, and subject, as to enforceability, to


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 general principles of equity, including principles of commercial reasonableness, good faith and
fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).



3.3 Capitalization. The authorized capital stock of CornerWorld consists of 100,000,000
shares of common stock, $.00001 par value, and 25,000,000 shares of preferred stock, $.00001 par
value, 6,160,854 shares of which are issued and outstanding (the “Acquisition Shares”). All of the
Acquisition Shares are duly authorized, validly issued, fully paid and nonassessable.



3.4 Corporate Records.





	 	(a)	 	The Shareholders have delivered to the Company true, correct and complete copies
of the certificate of incorporation (certified by the Secretary of State or other
appropriate official of the applicable jurisdiction of organization) and by-laws
(certified by the secretary, assistant secretary or other appropriate officer) or
comparable organizational documents of CornerWorld.
	 
	 	(b)	 	The minute books of CornerWorld previously made available to the Company contain
complete and accurate records of all meetings and accurately reflect all other
corporate action of the Shareholders and board of directors (including committees
thereof) of CornerWorld. The stock certificate books and stock transfer ledgers of
CornerWorld previously made available to the Company are true, correct and complete.
All stock transfer taxes levied or payable with respect to all transfers of shares of
CornerWorld prior to the date hereof have been paid and appropriate transfer tax
stamps affixed.




3.5 Conflicts; Consents of Third Parties.





	 	(a)	 	None of the execution and delivery by any Shareholder of this Agreement and the
Shareholder Documents, the consummation of the transactions contemplated hereby or
thereby, or compliance by any Shareholder with any of the provisions hereof or thereof
will (i) conflict with, or result in the breach of, any provision of the articles of
incorporation or by-laws or comparable organizational documents of CornerWorld; (ii)
conflict with, violate, result in the breach or termination of, or constitute a
default under any note, bond, mortgage, indenture, license, agreement or other
instrument or obligation to which CornerWorld is a party or by which any of them or
any of their respective properties or assets is bound; (iii) violate any statute,
rule, regulation, order or decree of any governmental body or authority by which
CornerWorld is bound; or (iv) result in the creation of any Lien upon the properties
or assets of CornerWorld or any Subsidiary except, in case of clauses (ii), (iii) and
(iv), for such violations, breaches or defaults as would not, individually or in the
aggregate, have a Material Adverse Effect.
	 
	 	(b)	 	No consent, waiver, approval, Order, permit or authorization of, or declaration
or filing with, or notification to, any Person or Governmental or Regulatory Authority
is required on the part of any Shareholder or CornerWorld in connection with the
execution and delivery of this Agreement or the Shareholder Documents, or the
compliance by each Shareholder or CornerWorld as the case may be, with any of the
provisions hereof or thereof.





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3.6 Ownership and Transfer of Acquisition Shares. Each Shareholder is the record and
beneficial owner of the Acquisition Shares indicated as being owned by such Shareholder on
Exhibit A, free and clear of any and all Liens. Each Shareholder has the power and
authority to sell, transfer, assign and deliver such Acquisition Shares as provided in this
Agreement, and such delivery will convey to the Company good and marketable title to such
Acquisition Shares, free and clear of any and all Liens.



3.7 . No Undisclosed Liabilities. Except as set forth on Schedule 3.7, CornerWorld has no
indebtedness, obligations or liabilities of any kind (whether accrued, absolute, contingent or
otherwise, and whether due or to become due).



3.8 Taxes. CornerWorld and the Company will file all applicable Tax Returns prior to the
Closing.



3.9 Investors. Each of the Shareholders represents and warrants to the Company that he or
she is an “accredited investor” as such term is defined under the Securities Act of 1933, as
amended.




ARTICLE 4.




REPRESENTATIONS AND WARRANTIES OF THE COMPANY




          The Company hereby represents and warrants to CornerWorld and the Shareholders, that:



4.1 Organization and Good Standing.




               The Company is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada, with full corporate power and corporate authority to (i) own, lease
and operate its properties, (ii) carry on the business as currently conducted by it. There are no
states or jurisdictions in which the character and location of any of the properties owned or
leased by the Company, or the conduct of the Company’s business makes it necessary for the Company
to qualify to do business as a foreign corporation, except for those jurisdictions in which the
failure to so qualify would not have a Material Adverse Effect on the business or operations of
the Company.


4.2 Authorization of Agreement.




               The Company has full corporate power and authority to execute and deliver this Agreement and
each other agreement, document, instrument or certificate contemplated by this Agreement or to be
executed by the Company in connection with the consummation of the transactions contemplated hereby
and thereby (the “ Company Documents”), and to consummate the transactions contemplated hereby and
thereby. The execution, delivery and performance by the Company of this Agreement and each Company
Document have been duly authorized by all necessary corporate action on behalf of the Company.
This Agreement has been, and each Company Document will be at or prior to the Closing, duly
executed and delivered by the Company and (assuming the due authorization, execution and delivery
by the other parties hereto and thereto) this Agreement constitutes, and each Company Document when
so executed and delivered will constitute, legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and
remedies



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generally, and subject, as to enforceability, to general principles of equity, including
principles of commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity).


4.3 Capitalization.




               The Company is a public company listed on the OTC Bulletin Board, and the authorized capital
stock of the Company consists of: (i) Sixty Two Million Seven Hundred Thousand (62,700,000) shares
of restricted stock; and (ii) Eleven Million Four Hundred
Thousand (11,400,000) free trading shares. All of the shares of the Company are duly authorized, validly issued, fully paid and
nonassessable. Schedule 4.3 sets forth a true and complete list of the holders of all
outstanding shares of the Company as of the date of this Agreement, and the holders of all
outstanding options and warrants issued by the Company, which shares, options and warrants are
held by them in the amounts set forth on Schedule 4.3. Except as contemplated by this
Agreement and except as set forth on Schedule 4.3, there are no options, warrants or other
rights, agreements, arrangements or commitments of any character relating to the issued or
unissued capital stock of the Company or obligating the Company to issue or sell any shares of
capital stock of or other equity interests in the Company. There is no personal liability, and
there are no preemptive rights with regard to the capital stock of the Company, and no
right-of-first refusal or similar catch-up rights with regard to such capital stock. Except as set
forth on Schedule 4.3 and except for the transactions contemplated by this Agreement,
there are no outstanding contractual obligations or other commitments or arrangements of the
Company to (A) repurchase, redeem or otherwise acquire any shares of the Shares (or any interest
therein) or (B) to provide funds to or make any investment (in the form of a loan, capital
contribution or otherwise) in any other entity, or (C) issue or distribute to any person any
capital stock of the Company, or (D) issue or distribute to holders of any of the capital stock of
the Company any evidences of indebtedness or assets of the Company. All of the outstanding
securities of the Company have been issued and sold by the Company in full compliance in all
material respects with applicable federal and state securities laws.


4.4 Subsidiaries. Except as set forth on Schedule 4.4, Purchaser has no
subsidiaries.



4.5 Corporate Records.





	 	(a)	 	The Company has delivered to the Shareholders true, correct and complete copies
of the articles of incorporation (each certified by the Secretary of State or other
appropriate official of the applicable jurisdiction of organization) and by-laws (each
certified by the secretary, assistant secretary or other appropriate officer) or
comparable organizational documents of the Company.
	 
	 	(b)	 	The minute books of the Company previously made available to the Shareholders
contain complete and accurate records of all meetings and accurately reflect all other
corporate action of the stockholders and board of directors (including committees
thereof) of the Company to the best of the Company’s knowledge. The stock certificate
books and stock transfer ledgers of the Company previously made available to the
Shareholders are true, correct and complete. All stock transfer taxes levied or
payable with respect to all transfers of shares of the Company prior to the date
hereof have been paid and appropriate transfer tax stamps affixed to the best of the
Company’s knowledge.





11









 









4.6 Conflicts; Consents of Third Parties.





	 	(a)	 	None of the execution and delivery by Company of this Agreement and the Company
Documents, the consummation of the transactions contemplated hereby or thereby, or
compliance by Company with any of the provisions hereof or thereof will (i) conflict
with, or result in the breach of, any provision of the articles of incorporation or
by-laws or comparable organizational documents of the Company; (ii) conflict with,
violate, result in the breach or termination of, or constitute a default under any
note, bond, mortgage, indenture, license, agreement or other instrument or obligation
to which the Company is a party or by which any of them or any of their respective
properties or assets is bound; (iii) violate any statute, rule, regulation, order or
decree of any governmental body or authority by which the Company is bound; or (iv)
result in the creation of any Lien upon the properties or assets of the Company
except, in case of clauses (ii), (iii) and (iv), for such violations, breaches or
defaults as would not, individually or in the aggregate, have a Material Adverse
Effect.
	 
	 	(b)	 	No consent, waiver, approval, Order, permit or authorization of, or declaration
or filing with, or notification to, any Person or Governmental or Regulatory Authority
is required on the part of Company in connection with the execution and delivery of
this Agreement or the Company Documents, or the compliance by Company with any of the
provisions hereof or thereof.




4.7 Financial Statements.





	 	(a)	 	Company will deliver to the Shareholders, prior to the Closing Date, copies of
the audited balance sheets of the Company as at April 30, 2007 and the related audited
statements of income and of cash flows of the Company for the years then ended (the
“Financial Statements”), as well as file the Company’s Annual Report on Form 10-KSB
(“Form 10-KSB”), which shall be filed at the Company’s sole expense, however,
CornerWorld’s legal counsel shall prepare the Subsequent Events Section of the Form
10-KSB upon request by the Company. Each of the Financial Statements shall be complete
and correct in all material respects, be prepared in accordance with GAAP (subject to
normal year-end adjustments in the case of the unaudited statements) and in conformity
with the practices consistently applied by the Company without modification of the
accounting principles used in the preparation thereof and presents fairly the
financial position, results of operations and cash flows of the Company as at the
dates and for the periods indicated.
	 
	 	(b)	 	For the purposes hereof, the audited balance sheet of the Company as at April 30,
2007 is referred to as the “Balance Sheet”.




4.8 . No Undisclosed Liabilities. Company has no indebtedness, obligations or liabilities
of any kind (whether accrued, absolute, contingent or otherwise, and whether due or to become due)
that would have been required to be reflected in, reserved against or otherwise described on the
Balance Sheet or in the notes thereto in accordance with GAAP which was not fully reflected in,
reserved against or otherwise described in the Balance Sheet or the notes thereto or was not
incurred in the ordinary course of business consistent with past practice since the Balance Sheet
Date.




12









 







4.9 Absence of Certain Developments. Except as expressly contemplated by this Agreement
or as set forth on Schedule 4.9, since the Balance Sheet Date:





	 	(i)	 	there has not been any material adverse change nor has there occurred any
event which is reasonably likely to result in a material adverse change;
	 
	 	(ii)	 	there has not been any damage, destruction or loss, whether or not covered
by insurance, with respect to the property and assets of the Company having a
replacement cost of more than $25,000 for any single loss or $100,000 for all such
losses;
	 
	 	(iii)	 	there has not been any declaration, setting aside or payment of any
dividend or other distribution in respect of any shares of capital stock of the
Company or any repurchase, redemption or other acquisition by the Company of any
outstanding shares of capital stock or other securities of, or other ownership
interest in, the Company;
	 
	 	(iv)	 	the Company has not awarded or paid any bonuses to employees of the Company
with respect to the fiscal year ended April 30, 2007, except to the extent accrued on
the Balance Sheet or entered into any employment, deferred compensation, severance or
similar agreement (nor amended any such agreement) or agreed to increase the
compensation payable or to become payable by it to any of the Company ‘s directors,
officers, employees, agents or representatives or agreed to increase the coverage or
benefits available under any severance pay, termination pay, vacation pay, company
awards, salary continuation for disability, sick leave, deferred compensation, bonus
or other incentive compensation, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with such directors, officers, employees,
agents or representatives (other than normal increases in the ordinary course of
business consistent with past practice and that in the aggregate have not resulted in
a material increase in the benefits or compensation expense of the Purchaser);
	 
	 	(v)	 	there has not been any change by the Company in accounting or Tax reporting
principles, methods or policies;
	 
	 	(vi)	 	the Company has not entered into any transaction or Contract or conducted
its business other than in the ordinary course consistent with past practice;
	 
	 	(vii)	 	the Company has not made any loans, advances or capital contributions to,
or investments in, any Person or paid any fees or expenses to any Shareholder or any
Affiliate of any Shareholder;
	 
	 	(viii)	 	the Company has not mortgaged, pledged or subjected to any Lien, any of its assets,
or acquired any assets or sold, assigned, transferred, conveyed, leased or otherwise
disposed of any assets of the Company, except for assets acquired or sold, assigned,
transferred, conveyed, leased or otherwise disposed of in the ordinary course of
business consistent with past practice;
	 
	 	(ix)	 	the Company has not discharged or satisfied any Lien, or paid any
obligation or liability (fixed or contingent), except in the ordinary course of
business consistent with past practice and which, in the aggregate, would not be
material to the Company;





13









 





	 	(x)	 	the Company has not canceled or compromised any debt or claim or amended,
canceled, terminated, relinquished, waived or released any Contract or right except
in the ordinary course of business consistent with past practice and which, in the
aggregate, would not be material to the Company;
	 
	 	(xi)	 	the Company has not made or committed to make any capital expenditures or
capital additions;
	 
	 	(xii)	 	the Company has not instituted or settled any material legal proceeding;
and
	 
	 	(xiii)	 	the Company has not agreed to do anything set forth in this Section 4.9.




4.10 Taxes.





	 	(a)	 	Except as set forth on Schedule 4.10, (A) all Tax Returns required to be
filed by or on behalf of the Company will be filed prior to the Closing with the
appropriate taxing authorities in all jurisdictions in which such Tax Returns are
required to be filed (after giving effect to any valid extensions of time in which to
make such filings), and all such Tax Returns were true, complete and correct in all
material respects; (B) all Taxes payable by or on behalf of the Company or in respect
of its income, assets or operations have been fully and timely paid, and (C) the
Company has not executed or filed with the IRS or any other taxing authority any
agreement, waiver or other document or arrangement extending or having the effect of
extending the period for assessment or collection of Taxes (including, but not limited
to, any applicable statute of limitation), and no power of attorney with respect to
any Tax matter is currently in force.
	 
	 	(b)	 	The Company has complied in all material respects with all applicable laws, rules
and regulations relating to the payment and withholding of Taxes and has duly and
timely withheld from employee salaries, wages and other compensation and has paid over
to the appropriate taxing authorities all amounts required to be so withheld and paid
over for all periods under all applicable laws.
	 
	 	(c)	 	The Shareholders have received complete copies of (A) all federal, state, local
and foreign income or franchise Tax Returns of the Company relating to the taxable
periods since 2004 and (B) any audit report issued within the last three years
relating to Taxes due from or with respect to the Company its income, assets or
operations.
	 
	 	(d)	 	All material types of Taxes paid and material types of Tax Returns filed by or on
behalf of the Company have been paid and filed. Except as set forth on Schedule
4.10 and to the best of the Company’s knowledge, no claim has been made by a
taxing authority in a jurisdiction where the Company does not file Tax Returns such
that it is or may be subject to taxation by that jurisdiction.
	 
	 	(e)	 	Except as set forth on Schedule 4.10, all deficiencies asserted or
assessments made as a result of any examinations by the IRS or any other taxing
authority of the Tax Returns of or covering or including the Company have been fully
paid, and there are no other audits or investigations by any taxing authority in
progress, nor have the Shareholders or the Company received any notice from any taxing
authority that it intends to conduct such an audit or investigation. No issue has
been raised by a




14









 






	 	 	 	federal, state, local or foreign taxing authority in any current or prior examination
which, by application of the same or similar principles, could reasonably be expected
to result in a proposed deficiency for any subsequent taxable period.






	 	(f)	 	Except as set forth on Schedule 4.10, the Company has not (A) filed a
consent pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply to any disposition of a subsection (f) asset (as such term is defined
in Section 341(f)(4) of the Code) owned by the Company, (B) agreed to or is required
to make any adjustments pursuant to Section 481(a) of the Code or any similar
provision of state, local or foreign law by reason of a change in accounting method
initiated by the Company or has any knowledge that the Internal Revenue Service has
proposed any such adjustment or change in accounting method, or has any application
pending with any taxing authority requesting permission for any changes in accounting
methods that relate to the business or operations of the Company, (C) executed or
entered into a closing agreement pursuant to Section 7121 of the Code or any
predecessor provision thereof or any similar provision of state, local or foreign law
with respect to the Company, or (D) requested any extension of time within which to
file any Tax Return, which Tax Return has since not been filed.
	 
	 	(g)	 	No property owned by the Company is (i) property required to be treated as being
owned by another Person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (ii) constitutes “tax-exempt use property”
within the meaning of Section 168(h)(1) of the Code or (iii) is “tax-exempt bond
financed property” within the meaning of Section 168(g) of the Code.
	 
	 	(h)	 	The Company is not a foreign person within the meaning of Section 1445 of the
Code.
	 
	 	(i)	 	The Company is not a party to any tax sharing or similar agreement or arrangement
(whether or not written) pursuant to which it will have any obligation to make any
payments after the Closing.
	 
	 	(j)	 	There is no contract, agreement, plan or arrangement covering any person that,
individually or collectively, could give rise to the payment of any amount that would
not be deductible by the Company, its Affiliates or their respective affiliates by
reason of Section 280G of the Code, or would constitute compensation in excess of the
limitation set forth in Section 162(m) of the Code.
	 
	 	(k)	 	The Company is not subject to any private letter ruling of the IRS or comparable
rulings of other taxing authorities.
	 
	 	(l)	 	Except as set forth on Schedule 4.10, there are no liens as a result of
any unpaid Taxes upon any of the assets of the Company.
	 
	 	(m)	 	Except as set forth on Schedule 4.10, the Company has no elections in
effect for federal income tax purposes under Sections 108, 168, 338, 441, 463, 472,
1017, 1033 or 4977 of the code.






15










 





4.11 Real Property.





	 	(a)	 	Schedule 4.11(a) sets forth a complete list of (i) all real property and
interests in real property owned in fee by the Company (individually, an “Owned
Property” and collectively, the “Owned Properties”), and (ii) all real property and
interests in real property leased by the Company (individually, a “Real Property
Lease” and the real properties specified in such leases, together with the Owned
Properties, being referred to herein individually as a “Purchaser Property” and
collectively as the “ Company Properties”) as lessee or lessor. The Company has good
and marketable fee title to all Owned Property, free and clear of all Liens of any
nature whatsoever except (A) Liens set forth on Schedule 4.11(a) and (B)
Permitted Liens. The Company Property constitutes all interests in real property
currently used or currently held for use in connection with the business of the
Company and which are necessary for the continued operation of the business of the
Company as the business is currently conducted. The Company has a valid and
enforceable leasehold interest under each of the Real Property Leases, subject to
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting creditors’ rights and remedies generally and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity), and the Company has not received any written notice
of any default or event that with notice or lapse of time, or both, would constitute a
default by the Purchaser under any of the Real Property Leases. All of the Company
Property, buildings, fixtures and improvements thereon owned or leased by the Company
are in good operating condition and repair (subject to normal wear and tear). The
Company has delivered or otherwise made available to the Shareholders, correct and
complete copies of (i) all deeds, title reports and surveys for the Owned Properties
and (ii) the Real Property Leases, together with all amendments, modifications or
supplements, if any, thereto.
	 
	 	(b)	 	The Company has all material certificates of occupancy and permits of any
Governmental or Regulatory Authority necessary or useful for the current use and
operation of each Company Property, and the Company has fully complied with all
material conditions of the permits applicable to them. No default or violation, or
event that with the lapse of time or giving of notice or both would become a default
or violation, has occurred in the due observance of any permit.
	 
	 	(c)	 	There does not exist any actual or, to the best knowledge of the Company,
threatened or contemplated condemnation or eminent domain proceedings that affect any
Company Property or any part thereof, and Company has not received any notice, oral or
written, of the intention of any Governmental or Regulatory Authority or other Person
to take or use all or any part thereof.
	 
	 	(d)	 	The Company has not received any written notice from any insurance company that
has issued a policy with respect to any Company Property requiring performance of any
structural or other repairs or alterations to such Company Property.
	 
	 	(e)	 	The Company does not own or hold, and is not obligated under or a party to, any
option, right of first refusal or other Contractual right to purchase, acquire, sell,
assign or dispose of any real estate or any portion thereof or interest therein.




16









 











4.12 Tangible Personal Property.





	 	(a)	 	Schedule 4.12(a) sets forth all leases of personal property (“Personal
Property Leases”) involving annual payments in excess of $25,000 relating to personal
property used in the business of the Company or to which the Company is a party or by
which the properties or assets of the Company is bound. The Company has delivered or
otherwise made available to the Shareholders true, correct and complete copies of the
Personal Property Leases, together with all amendments, modifications or supplements
thereto.
	 
	 	(b)	 	The Company has a valid leasehold interest under each of the Personal Property
Leases under which it is a lessee, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and remedies
generally and subject, as to enforceability, to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in equity), and
there is no default under any Personal Property Lease by the Purchaser or, to the best
knowledge of the Company, by any other party thereto, and no event has occurred that
with the lapse of time or the giving of notice or both would constitute a default
thereunder.
	 
	 	(c)	 	The Company has good and marketable title to all of the items of tangible
personal property reflected in the Balance Sheet (except as sold or disposed of
subsequent to the date thereof in the ordinary course of business consistent with past
practice), free and clear of any and all Liens other than the Permitted Liens. All
such items of tangible personal property which, individually or in the aggregate, are
material to the operation of the business of the Purchaser are in good condition and
in a state of good maintenance and repair (ordinary wear and tear excepted) and are
suitable for the purposes used.
	 
	 	(d)	 	All of the items of tangible personal property used by the Company under the
Personal Property Leases are in good condition and repair (ordinary wear and tear
excepted) and are suitable for the purposes used.





4.13 Intangible Property.




               Schedule 4.13 contains a complete and correct list of each patent, trademark, trade
name, service mark and copyright owned or used by Company as well as all registrations thereof and
pending applications therefor, and each license or other agreement relating thereto. Except as set
forth on Schedule 4.13, each of the foregoing is owned by the party shown on such Schedule
as owning the same, free and clear of all mortgages, claims, liens, security interests, charges and
encumbrances and is in good standing and not the subject of any challenge. There have been no
claims made and the Company has not received any notice or otherwise knows or has reason to believe
that any of the foregoing is invalid or conflicts with the asserted rights of others. The Company
possesses all patents, patent licenses, trade names, trademarks, service marks, brand marks, brand
names, copyrights, know-how, formulate and other proprietary and trade rights necessary for the
conduct of its business as now conducted, not subject to any restrictions and without any known
conflict with the rights of others and the Company has not forfeited or otherwise relinquished any
such patent, patent license, trade name, trademark, service mark, brand mark, brand name,
copyright, know-how, formulate or other proprietary right necessary for the conduct of its business
as conducted on the date hereof. The Company is



17









 







not under any obligation to pay any royalties or similar payments in connection with any
license to any Seller or any affiliate thereof.



4.14 Material Contracts.




               Schedule 4.14 sets forth all of the following Contracts to which the Company is a
party or by which it is bound (collectively, the “Material Contracts”): (i) Contracts with any of
the Shareholders or any current officer or director of the Company; (ii) Contracts with any labor
union or association representing any employee of the Company; (iii) Contracts pursuant to which
any party is required to purchase or sell a stated portion of its requirements or output from or to
another party; (iv) Contracts for the sale of any of the assets of the Company other than in the
ordinary course of business or for the grant to any person of any preferential rights to purchase
any of its assets; (v) joint venture agreements; (vi) Material Contracts containing covenants of
the Company not to compete in any line of business or with any person in any geographical area or
covenants of any other person not to compete with the Company in any line of business or in any
geographical area; (vii) Contracts relating to the acquisition by the Company of any operating
business or the capital stock of any other person; (viii) Contracts relating to the borrowing of
money; or (ix) any other Contracts, other than Real Property Leases, which involve the expenditure
of more than $100,000 in the aggregate or $25,000 annually or require performance by any party more
than one year from the date hereof. There have been made available to the Shareholders and their
representatives true and complete copies of all of the Material Contracts. Except as set forth on
Schedule 4.14, all of the Material Contracts and other agreements are in full force and
effect and are the legal, valid and binding obligation of the Company, enforceable against them in
accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors’ rights and remedies generally and subject, as to
enforceability, to general principles of equity (regardless of whether enforcement is sought in a
proceeding at law or in equity). Except as set forth on Schedule 4.14, the Company is not
in default in any material respect under any Material Contracts, nor, to the knowledge of Company,
is any other party to any Material Contract in default thereunder in any material respect.



4.15 Employee Benefits.





	 	(a)	 	Schedule 4.15(a) sets forth a complete and correct list of (i) all
“employee benefit plans”, as defined in Section 3(3) ERISA, and any other pension
plans or employee benefit arrangements, programs or payroll practices (including,
without limitation, severance pay, vacation pay, company awards, salary continuation
for disability, sick leave, retirement, deferred compensation, bonus or other
incentive compensation, stock purchase arrangements or policies, hospitalization,
medical insurance, life insurance and scholarship programs) maintained by the
Purchaser or to which the Purchaser contributes or is obligated to contribute
thereunder with respect to employees of the Company (“Employee Benefit Plans”) and
(ii) all “employee pension plans”, as defined in Section 3(2) of ERISA, maintained by
the Company or any trade or business (whether or not incorporated) which are under
control, or which are treated as a single employer, with Company as an ERISA Affiliate
or to which the Company or any ERISA Affiliate contributed or is obligated to
contribute thereunder (“Pension Plans”). Schedule 4.15(a) clearly identifies,
in separate categories, Employee Benefit Plans or Pension Plans that are (i) subject
to Section 4063 and 4064 of ERISA (“Multiple Employer Plans”), (ii) multiemployer
plans (as defined in Section 4001(a)(3) of ERISA) (“Multiemployer Plans”) or (iii)
“benefit




18









 






	 	 	 	plans”, within the meaning of Section 5000(b)(1) of the Code providing continuing
benefits after the termination of employment (other than as required by Section 4980B
of the Code or Part 6 of Title I of ERISA and at the former employee’s or his
beneficiary’s sole expense).
	 
	 	(b)	 	Each of the Employee Benefit Plans and Pension Plans intended to qualify under
Section 401 of the Code (“Qualified Plans”) so qualify and the trusts maintained
thereto are exempt from federal income taxation under Section 501 of the Code, and,
except as disclosed on Schedule 4.15(b), nothing has occurred with respect to
the operation of any such plan which could cause the loss of such qualification or
exemption or the imposition of any liability, penalty or tax under ERISA or the Code.
	 
	 	(c)	 	All contributions and premiums required by law or by the terms of any Employee
Benefit Plan or Pension Plan which are defined benefit plans or money purchase plans
or any agreement relating thereto have been timely made (without regard to any waivers
granted with respect thereto) to any funds or trusts established thereunder or in
connection therewith, and no accumulated funding deficiencies exist in any of such
plans subject to Section 412 of the Code.
	 
	 	(d)	 	The benefit liabilities, as defined in Section 4001(a)(16) of ERISA, of each of
the Employee Benefit Plans and Pension Plans subject to Title IV of ERISA using the
actuarial assumptions that would be used by the Pension Benefit Guaranty Corporation
(the “PBGC”) in the event it terminated each such plan do not exceed the fair market
value of the assets of each such plan. The liabilities of each Employee Benefit Plan
that has been terminated or otherwise wound up, have been fully discharged in full
compliance with applicable Law.
	 
	 	(e)	 	There has been no “reportable event” as that term is defined in Section 4043 of
ERISA and the regulations thereunder with respect to any of the Employee Benefit Plans
or Pension Plans subject to Title IV of ERISA which would require the giving of
notice, or any event requiring notice to be provided under Section 4041(c)(3)(C) or
4063(a) of ERISA.
	 
	 	(f)	 	There has been no violation of ERISA with respect to the filing of applicable
returns, reports, documents and notices regarding any of the Employee Benefit Plans or
Pension Plans with the Secretary of Labor or the Secretary of the Treasury or the
furnishing of such notices or documents to the participants or beneficiaries of the
Employee Benefit Plans or Pension Plans.
	 
	 	(g)	 	True, correct and complete copies of the following documents, with respect to
each of the Employee Benefit Plans and Pension Plans (as applicable), have been
delivered to the Shareholders (A) any plans and related trust documents, and all
amendments thereto, (B) the most recent Forms 5500 for the past three years and
schedules thereto, (C) the most recent financial statements and actuarial valuations
for the past three years, (D) the most recent Internal Revenue Service determination
letter, (E) the most recent summary plan descriptions (including letters or other
documents updating such descriptions) and (F) written descriptions of all non-written
agreements relating to the Employee Benefit Plans and Pension Plans.





19









 





	 	(h)	 	There are no pending legal proceedings which have been asserted or instituted
against any of the Employee Benefit Plans or Pension Plans, the assets of any such
plans or the Company, or the plan administrator or any fiduciary of the Employee
Benefit Plans or Pension Plans with respect to the operation of such plans (other than
routine, uncontested benefit claims), and there are no facts or circumstances which
could form the basis for any such legal proceeding.
	 
	 	(i)	 	Each of the Employee Benefit Plans and Pension Plans has been maintained, in all
material respects, in accordance with its terms and all provisions of applicable Law.
All amendments and actions required to bring each of the Employee Benefit Plans and
Pension Plans into conformity in all material respects with all of the applicable
provisions of ERISA and other applicable Laws have been made or taken except to the
extent that such amendments or actions are not required by law to be made or taken
until a date after the Closing Date and are disclosed on Schedule 4.15(i).
	 
	 	(j)	 	The Company and any ERISA Affiliate which maintains a “benefits plan” within the
meaning of Section 5000(b)(1) of ERISA, have complied with the notice and continuation
requirements of Section 4980B of the Code or Part 6 of Title I of ERISA and the
applicable regulations thereunder.
	 
	 	(k)	 	Neither the Company, any ERISA Affiliate or any organization to which any is a
successor or parent corporation, has divested any business or entity maintaining or
sponsoring a defined benefit pension plan having unfunded benefit liabilities (within
the meaning of Section 4001(a)(18) of ERISA) or transferred any such plan to any
person other than the Company or any ERISA Affiliate during the five-year period
ending on the Closing Date.
	 
	 	(l)	 	The Company is not a “party in interest” or “disqualified person” with respect to
the Employee Benefit Plans or Pension Plans has engaged in a “prohibited transaction”
within the meaning of Section 4975 of the Code or Section 406 of ERISA.
	 
	 	(m)	 	Neither the Purchaser nor any ERISA Affiliate has terminated any Employee Benefit
Plan or Pension Plan subject to Title IV of ERISA, or incurred any outstanding
liability under Section 4062 of ERISA to the Pension Benefit Guaranty Corporation or
to a trustee appointed under Section 4042 of ERISA.
	 
	 	(n)	 	Neither the execution and delivery of this Agreement nor the consummation of the
transactions contemplated hereby will (i) result in any payment becoming due to any
employee of Company; (ii) increase any benefits otherwise payable under any Employee
Benefit Plan or Pension Plan; or (iii) result in the acceleration of the time of
payment or vesting of any such benefits.
	 
	 	(o)	 	No stock or other security issued by Company forms or has formed a material part
of the assets of any Employee Benefit Plan or Pension Plan.




20









 











4.16 Labor.





	 	(a)	 	The Company is not a party to any labor or collective bargaining agreement and
there are no labor or collective bargaining agreements which pertain to employees of
the Company.
	 
	 	(b)	 	No employees of the Company are represented by any labor organization. No labor
organization or group of employees of the Company has made a pending demand for
recognition, and there are no representation proceedings or petitions seeking a
representation proceeding presently pending or, to the best knowledge of the Company,
threatened to be brought or filed, with the National Labor Relations Board or other
labor relations tribunal. There is no organizing activity involving the Company
pending or, to the best knowledge of the Company, threatened by any labor organization
or group of employees of the Company.
	 
	 	(c)	 	There are no (i) strikes, work stoppages, slowdowns, lockouts or arbitrations or
(ii) material grievances or other labor disputes pending or, to the best knowledge of
any Company, threatened against or involving the Company. There are no unfair labor
practice charges, grievances or complaints pending or, to the best knowledge of
Company, threatened by or on behalf of any employee or group of employees of the
Company.





4.17 Litigation.




               There is no suit, action, proceeding, investigation, claim or order pending or, to the
knowledge of the Company, overtly threatened against the Company (or to the knowledge of the
Company, pending or threatened, against any of the officers, directors or key employees of the
Company with respect to their business activities on behalf of the Company), or to which the
Company is otherwise a party, which, if adversely determined, would have a Material Adverse Effect,
before any court, or before any governmental department, commission, board, agency, or
instrumentality; nor to the knowledge of the Company is there any reasonable basis for any such
action, proceeding, or investigation. The Company is not subject to any judgment, order or decree
of any court or governmental agency except to the extent the same are not reasonably likely to have
a Material Adverse Effect and the Company is not engaged in any legal action to recover monies due
it or for damages sustained by it.


4.18 Compliance with Laws; Permits. The Company is in compliance with all Laws applicable
to the Company or to the conduct of the business or operations of the Company or the use of its
properties (including any leased properties) and assets, except for such non-compliances as would
not, individually or in the aggregate, have a Material Adverse Effect. The Company has all
governmental permits and approvals from state, federal or local authorities which are required for
the Company to operate its business, except for those the absence of which would not, individually
or in the aggregate, have a Material Adverse Effect.



4.19 Environmental Matters. Except as set forth on Schedule 4.19 hereto:





	 	(a)	 	the operations of the Company are in compliance with all applicable Environmental
Laws and all Environmental Permits;
	 
	 	(b)	 	the Company has obtained all permits required under all applicable Environmental




21









 






	 	 	 	Laws necessary to operate its business;
	 
	 	(c)	 	the Company is not the subject of any outstanding written order or Contract with
any Governmental or Regulatory Authority or Person respecting (i) Environmental Laws,
(ii) Remedial Action, (iii) any release or threatened release of a Hazardous Material
or (iv) any Hazardous Activity;
	 
	 	(d)	 	the Company has not received any written communication alleging that the Company
may be in violation of any Environmental Law, or any Environmental Permit, or may have
any liability under any Environmental Law;
	 
	 	(e)	 	the Company has no current contingent liability in connection with any Hazardous
Activity or release of any Hazardous Materials into the indoor or outdoor environment
(whether on-site or off-site);
	 
	 	(f)	 	to the Company’s knowledge, there are no investigations of the business,
operations, or currently or previously owned, operated or leased property of the
Company pending or threatened which could lead to the imposition of any liability
pursuant to Environmental Law;
	 
	 	(g)	 	there is not located at any of the properties of the Company any (i) underground
storage tanks, (ii) asbestos-containing material or (iii) equipment containing
polychlorinated biphenyls; and
	 
	 	(h)	 	the Company has provided to the Shareholders all environmentally related audits,
studies, reports, analyses, and results of investigations that have been performed
with respect to the currently or previously owned, leased or operated properties of
the Company.




4.20 Insurance. Schedule 4.20 sets forth a complete and accurate list of all
policies of insurance of any kind or nature covering the Company or any of its employees,
properties or assets, including, without limitation, policies of life, disability, fire, theft,
workers compensation, employee fidelity and other casualty and liability insurance. All such
policies are in full force and effect, and, to the Company’s knowledge, the Company is not in
default of any provision thereof, except for such defaults as would not, individually or in the
aggregate, have a Material Adverse Effect.




4.21 Inventories; Receivables; Payables.





	 	(a)	 	The inventories of the Company are in good and marketable condition, and are
saleable in the ordinary course of business. Adequate reserves have been reflected in
the Balance Sheet for obsolete or otherwise unusable inventory, which reserves were
calculated in a manner consistent with past practice and in accordance with GAAP
consistently applied.
	 
	 	(b)	 	All accounts receivable of the Company have arisen from bona fide transactions in
the ordinary course of business consistent with past practice. All accounts
receivable of the Company reflected on the Balance Sheet are good and collectible at
the aggregate recorded amounts thereof, net of any applicable reserve for returns or
doubtful accounts reflected thereon, which reserves are adequate and were calculated




22









 






	 	 	 	in a manner consistent with past practice and in accordance with GAAP consistently
applied. All accounts receivable arising after the Balance Sheet Date are good and
collectible at the aggregate recorded amounts thereof, net of any applicable reserve
for returns or doubtful accounts, which reserves are adequate and were calculated in a
manner consistent with past practice and in accordance with GAAP consistently applied.
	 
	 	(c)	 	All accounts payable of the Company reflected in the Balance Sheet or arising
after the date thereof are the result of bona fide transactions in the ordinary course
of business and have been paid or are not yet due and payable.




4.22 Related Party Transactions. Except as set forth on Schedule 4.22, neither
the Company nor any Affiliates of Company has borrowed any moneys from or has outstanding any
indebtedness or other similar obligations to the Company. Except as set forth in Schedule
4.22, neither the Company, any Affiliate of the Company nor any officer or employee of any of
them (i) owns any direct or indirect interest of any kind in, or controls or is a director,
officer, employee or partner of, or consultant to, or lender to or borrower from or has the right
to participate in the profits of, any Person which is (A) a competitor, supplier, customer,
landlord, tenant, creditor or debtor of the Company, (B) engaged in a business related to the
business of the Company, or (C) a participant in any transaction to which the Company is a party
or (ii) is a party to any Contract with the Company.



4.23 No Misrepresentation. No representation or warranty of Company contained in this
Agreement or in any schedule hereto or in any certificate or other instrument furnished by the
Company to Shareholders pursuant to the terms hereof, contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements contained herein or
therein not misleading.



4.24 Financial Advisors. Except as set forth on Schedule 4.24, no Person has
acted, directly or indirectly, as a broker or finder for the Company in connection with the
transactions contemplated by this Agreement and no Person is entitled to any fee or commission or
like payment in respect thereof.



4.25 Guarantees. Schedule 4.25 hereto is a complete and accurate list and summary
description of all written guarantees currently in effect heretofore issued by the Company to any
bank or other lender in connection with any credit facilities extended by such creditors to the
Company in connection with any other contracts or agreements (collectively, the “Guarantees”),
including the name of such creditor and the amount of the indebtedness, together with any interest
and fees currently owing and expected to be outstanding as of the Closing.



4.26 Patriot Act. The Company certifies that it has not been designated, and is not owned
or controlled, by a “suspected terrorist” as defined in Executive Order 13224. The Company hereby
acknowledges that the Shareholders seek to comply with all applicable Laws concerning money
laundering and related activities. In furtherance of those efforts, the Company hereby
represents, warrants and agrees that: (i) none of the cash or property owned by the Company has
been or shall be derived from, or related to, any activity that is deemed criminal under United
States law; and (ii) no contribution or payment by the Company has, and this Agreement will not,
cause the Company to be in violation of the United States Bank Secrecy


23









 






 Act, the United States International Money Laundering Control Act of 1986 or the United States
International Money Laundering Abatement and Anti-Terrorist Financing Act of 2001.



4.27 Trading Status. The Company’s common stock is traded on the OTC Bulletin Board,
under the trading symbol “OWED.” The Company has at least two market makers. As of the Closing,
Company’s Common Stock will be listed for trading on the OTCBB with at least two market makers.



4.28 Reporting Status. The Company is a reporting issuer under Section 15(d) of the
Securities Exchange Act of 1934 (the “‘34 Act”). The Company is now, and as of the Closing will
be, current in its filings and will have filed all of the filings required to have been made in
the previous twelve months.



4.29 Investment Intention. The Company is acquiring the Acquisition Shares for its own
account, for investment purposes only and not with a view to the distribution (as such term is
used in Section 2(11) of the Securities Act of 1933, as amended (the “Securities Act”) thereof.
The Company understands that the Acquisition Shares have not been registered under the Securities
Act and cannot be sold unless subsequently registered under the Securities Act or an exemption
from such registration is available.



4.30 Shares. The Shares issuable pursuant to the Purchase Price, when issued, will be duly
authorized and validly issued, fully paid and non-assessable, will be delivered hereunder free and
clear of any Liens, except that such Shares will be “restricted securities”, as such term is
defined in the rules and regulations of the SEC promulgated under the Securities Act, and will be
subject to restrictions on transfers pursuant to such rules and regulations.




ARTICLE 5.




COVENANTS




5.1 Access to Information.




               The Shareholders agree that, prior to the Closing Date, the Company shall be entitled, through
its officers, employees and representatives (including, without limitation, its legal advisors and
accountants), to make such investigation of the properties, businesses and operations of
CornerWorld and its Subsidiaries and such examination of the books, records and financial condition
of CornerWorld and its Subsidiaries as it reasonably requests and to make extracts and copies of
such books and records. Any such investigation and examination shall be conducted during regular
business hours and under reasonable circumstances, and the Shareholders shall cooperate, and shall
cause CornerWorld and its Subsidiaries to cooperate, fully therein. No investigation by the
Company prior to or after the date of this Agreement shall diminish or obviate any of the
representations, warranties, covenants or agreements of the Shareholders contained in this
Agreement or the Shareholder Documents. In order that the Company may have full opportunity to
make such physical, business, accounting and legal review, examination or investigation as it may
reasonably request of the affairs of CornerWorld and its Subsidiaries, the Sharheolders shall cause
the officers, employees, consultants, agents, accountants, attorneys and other representatives of
CornerWorld and its Subsidiaries to cooperate fully with such representatives in connection with
such review and examination.



24









 





5.2 Conduct of the Business Pending the Closing.





	 	(a)	 	Except as otherwise expressly contemplated by this Agreement or with the prior
written consent of the Company, CornerWorld shall:






	 	(i)	 	conduct the businesses of CornerWorld only in the ordinary course
consistent with past practice;
	 
	 	(ii)	 	use its best efforts to (A) preserve its present business operations,
organization (including, without limitation, management and the sales force) and
goodwill of CornerWorld and (B) preserve its present relationship with Persons having
business dealings with CornerWorld;
	 
	 	(iii)	 	maintain (A) all of the assets and properties of CornerWorld in their
current condition, ordinary wear and tear excepted and (B) insurance upon all of the
properties and assets of CornerWorld in such amounts and of such kinds comparable to
that in effect on the date of this Agreement;
	 
	 	(iv)	 	(A) maintain the books, accounts and records of CornerWorld in the ordinary
course of business consistent with past practices, (B) continue to collect accounts
receivable and pay accounts payable utilizing normal procedures and without
discounting or accelerating payment of such accounts, and (C) comply with all
contractual and other obligations applicable to the operation of CornerWorld; and
	 
	 	(v)	 	comply in all material respects with applicable laws, including, without
limitation, Environmental Laws; or






	 	(b)	 	Except as otherwise expressly contemplated by this Agreement or with the prior
written consent of CornerWorld, the Company shall not:






	 	(i)	 	declare, set aside, make or pay any dividend or other distribution in
respect of the capital stock of the Company or repurchase, redeem or otherwise
acquire any outstanding shares of the capital stock or other securities of, or other
ownership interests in, the Company;
	 
	 	(ii)	 	transfer, issue, sell or dispose of any shares of capital stock or other
securities of the Company or grant options, warrants, calls or other rights to
purchase or otherwise acquire shares of the capital stock or other securities of the
Company, except as otherwise required pursuant to this Agreement;
	 
	 	(iii)	 	effect any recapitalization, reclassification, stock split or like change
in the capitalization of the Company, except as otherwise required pursuant to this
Agreement;
	 
	 	(iv)	 	amend the certificate of incorporation or by-laws of the Company, except as
otherwise required pursuant to this Agreement;
	 
	 	(v)	 	(A) materially increase the annual level of compensation of any employee of
the Company, (B) increase the annual level of compensation payable or to become
payable by the Company to any of its executive officers, (C) grant any unusual or
extraordinary bonus, benefit or other direct or indirect compensation to any
employee,




25









 






	 	 	 	director or consultant, (D) increase the coverage or benefits available under any (or
create any new) severance pay, termination pay, vacation pay, company awards, salary
continuation for disability, sick leave, deferred compensation, bonus or other incentive
compensation, insurance, pension or other employee benefit plan or arrangement made to,
for, or with any of the directors, officers, employees, agents or representatives of the
Company or otherwise modify or amend or terminate any such plan or arrangement or (E)
enter into any employment, deferred compensation, severance, consulting, non-competition
or similar agreement (or amend any such agreement) to which the Company is a party or
involving a director, officer or employee of the Company in his or her capacity as a
director, officer or employee of the Company;
	 
	 	(vi)	 	subject to any Lien (except for leases that do not materially impair the
use of the property subject thereto in their respective businesses as presently
conducted), any of the properties or assets (whether tangible or intangible) of the
Company;
	 
	 	(vii)	 	acquire any material properties or assets or sell, assign, transfer,
convey, lease or otherwise dispose of any of the material properties or assets
(except for fair consideration in the ordinary course of business consistent with
past practice) of the Company except, with respect to the items listed on
Schedule 5.2(b)(vii) hereto, as previously consented to by CornerWorld;
	 
	 	(viii)	 	cancel or compromise any debt or claim or waive or release any material right of
the Company except in the ordinary course of business;
	 
	 	(ix)	 	enter into any commitment for capital expenditures of the Company in excess
of $25,000 for any individual commitment and $100,000 for all commitments in the
aggregate;
	 
	 	(x)	 	enter into, modify or terminate any labor or collective bargaining
agreement of the Company or, through negotiation or otherwise, make any commitment or
incur any liability to any labor organization with respect to the Company;
	 
	 	(xi)	 	permit the Company to enter into any transaction or to make or enter into
any Contract which by reason of its size or otherwise is not in the ordinary course
of business consistent with past practice;
	 
	 	(xii)	 	permit the Company to enter into or agree to enter into any merger or
consolidation with, any corporation or other entity, and not engage in any new
business or invest in, make a loan, advance or capital contribution to, or otherwise
acquire the securities of any other Person;
	 
	 	(xiii)	 	except for transfers of cash pursuant to normal cash management practices, permit
the Company to make any investments in or loans to, or pay any fees or expenses to,
or enter into or modify any Contract with, any Shareholder or any Affiliate of any
Shareholder; or
	 
	 	(xiv)	 	agree to do anything prohibited by this Section 6.2 or anything which
would make any of the representations and warranties of the Shareholders in this
Agreement or the Shareholder Documents untrue or incorrect in any material respect as of
any time through and including the Effective Time; or





26









 











	 	(xv)	 	issue any other securities, or dilute the interests of any of the
shareholders of the Company at any time prior to the payment, in full, of the
Purchase Price




5.3 Consents. The Shareholders shall use their best efforts, and CornerWorld shall
cooperate with the Shareholders, to obtain at the earliest practicable date all consents and
approvals required to consummate the transactions contemplated by this Agreement, including,
without limitation, the consents and approvals referred to in Section 3.5(b) hereof; provided,
however, that neither the Shareholders nor CornerWorld shall be obligated to pay any consideration
therefor to any third party from whom consent or approval is requested.



5.4 Other Actions. Each of the Shareholders and CornerWorld shall use its best efforts to
(i) take all actions necessary or appropriate to consummate the transactions contemplated by this
Agreement and (ii) cause the fulfillment at the earliest practicable date of all of the conditions
to their respective obligations to consummate the transactions contemplated by this Agreement.



5.5 No Solicitation. The Sharheolders will not, and will not cause or permit CornerWorld
or any of CornerWorld directors, officers, employees, representatives or agents (collectively, the
“Representatives”) to, directly or indirectly, (i) discuss, negotiate, undertake, authorize,
recommend, propose or enter into, either as the proposed surviving, merged, acquiring or acquired
corporation, any transaction involving a merger, consolidation, business combination, purchase or
disposition of any amount of the assets or capital stock or other equity interest in CornerWorld
or any of its Subsidiaries other than the transactions contemplated by this Agreement (an
“Acquisition Transaction”), (ii) facilitate, encourage, solicit or initiate discussions,
negotiations or submissions of proposals or offers in respect of an Acquisition Transaction, (iii)
furnish or cause to be furnished, to any Person, any information concerning the business,
operations, properties or assets of CornerWorld or any of its Subsidiaries in connection with an
Acquisition Transaction, or (iv) otherwise cooperate in any way with, or assist or participate in,
facilitate or encourage, any effort or attempt by any other Person to do or seek any of the
foregoing. The Shareholders will inform the Company in writing immediately following the receipt
by any Shareholder, CornerWorld or any Representative of any proposal or inquiry in respect of any
Acquisition Transaction.



5.6 Publicity. None of the Shareholders nor the Company shall issue any press release or
public announcement concerning this Agreement or the transactions contemplated hereby without
obtaining the prior written approval of the other party hereto, which approval will not be
unreasonably withheld or delayed, unless, in the sole judgment of the Company, disclosure is
otherwise required by applicable Law or by the applicable rules of any stock exchange on which the
Company lists securities, provided that, to the extent required by applicable law, the party
intending to make such release shall use its best efforts consistent with such applicable law to
consult with the other party with respect to the text thereof.




ARTICLE 6.




CONDITIONS TO CLOSING




6.1 Conditions Precedent to Obligations of the Company.




               The obligation of the Company to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, on or prior to the Closing Date, of each of the following conditions
(any or all of which may be waived by the Company in whole or in part to the extent permitted by
applicable law):



27









 






	 	(a)	 	all representations and warranties of the Shareholders contained herein shall be
true and correct as of the date hereof and as of the Closing Date;
	 
	 	(b)	 	all representations and warranties of the Shareholders contained herein qualified
as to materiality shall be true and correct, and the representations and warranties of
the Shareholders contained herein not qualified as to materiality shall be true and
correct in all material respects, at and as of the Closing Date with the same effect
as though those representations and warranties had been made again at and as of that
time;
	 
	 	(c)	 	the Shareholders shall have performed and complied in all material respects with
all obligations and covenants required by this Agreement to be performed or complied
with by them on or prior to the Closing Date;
	 
	 	(d)	 	there shall not have been or occurred any material adverse change in the business
or operations of CornerWorld;
	 
	 	(e)	 	the Shareholders shall have obtained all consents and waivers referred to in
Section 3.5(b) hereof, in a form reasonably satisfactory to the Company, with respect
to the transactions contemplated by this Agreement and the Shareholder Documents; and
	 
	 	(f)	 	no legal proceedings shall have been instituted or threatened or claim or demand
made against the Shareholders, CornerWorld or any of its Subsidiaries seeking to
restrain or prohibit or to obtain substantial damages with respect to the consummation
of the transactions contemplated hereby, and there shall not be in effect any Order by
a Governmental or Regulatory Authority of competent jurisdiction restraining,
enjoining or otherwise prohibiting the consummation of the transactions contemplated
hereby.





6.2 Conditions Precedent to Obligations of the Shareholders.




               The obligations of the Shareholders to consummate the transactions contemplated by this
Agreement are subject to the fulfillment, prior to or on the Closing Date, of each of the following
conditions (any or all of which may be waived by the Shareholders in whole or in part to the extent
permitted by applicable law):




	 	(a)	 	all representations and warranties of Company contained herein shall be true and
correct as of the date hereof and as of the Closing Date;
	 
	 	(b)	 	all representations and warranties of the Company contained herein qualified as
to materiality shall be true and correct, and all representations and warranties of
the Company contained herein not qualified as to materiality shall be true and correct
in all material respects, at and as of the Closing Date with the same effect as though
those representations and warranties had been made again at and as of that date;
	 
	 	(c)	 	the Company shall have performed and complied in all material respects with all
obligations and covenants required by this Agreement to be performed or complied with
by Company on or prior to the Closing Date;
	 
	 	(d)	 	the Company shall represent and warrant that it has no outstanding debts or
liabilities other than those disclosed in the Company’s filings with the Securities
and Exchange 




28









 






	 	 	 	Commission;


	 	(e)	 	the Company shall represent and warrant that it has filed all federal, state and
local income tax returns and paid any and all outstanding taxes;
	 
	 	(f)	 	the Shareholders shall have been furnished with certificates (dated the Closing
Date and in form and substance reasonably satisfactory to the Sellers) executed by the
Chief Executive Officer and Chief Financial Officer of the Company certifying as to
the fulfillment of the conditions specified in Sections 6.2(a), 6.2(b) and 6.2(c)
hereof;
	 
	 	(g)	 	the Shareholders shall have been furnished by the Company with Certificates of
Good Standing in the Company’s state of incorporation;
	 
	 	(h)	 	pursuant to Section 4.27 of this Agreement, the Company shall furnish the
Shareholders with evidence that the Company is clear for trading on the OTCBB with at
least two (2) market makers and a valid trading symbol;
	 
	 	(i)	 	the Company shall furnish the Shareholders with confirmation that there are no
outstanding SEC or other regulatory comments or investigations concerning the Company;
	 
	 	(j)	 	the Company shall fully and effectively complete the Recapitalization, as further
described in Section 2.2 of this Agreement;
	 
	 	(k)	 	the Company shall increase its authorized shares of common stock from 75,000,000
shares to 260,000,000 shares and create 10,000,000 shares of “blank check” preferred
stock, and file a certificate of amendment with the Nevada Secretary of State to
effect such actions;
	 
	 	(l)	 	the Company shall cause its shareholders to deliver 62,700,000 restricted and
7,296,000 free trading shares, together with duly executed stock powers, to the Escrow
Agent along with a letter of indemnity by Dynasty;
	 
	 	(m)	 	all officers and members of the Board of Directors of the Company, but one, shall
have provided an undated resignation and shall have appointed Scott Beck as Chairman
of the Board and Kelly Larabee Morlan as a Director of the Company;
	 
	 	(n)	 	The name of the corporation shall be changed from Olympic Wedding to “CornerWorld
Corporation”;
	 
	 	(o)	 	there shall not be in effect any Order by a Governmental or Regulatory Authority
of competent jurisdiction restraining, enjoining or otherwise prohibiting the
consummation of the transactions contemplated hereby;
	 
	 	(p)	 	the Shareholders shall have obtained all consents and waivers referred to in
Section 4.6(b) hereof, in a form reasonably satisfactory to the Company, with respect
to the transactions contemplated by this Agreement and the Shareholder Documents;




29









 











6.3 Corporate Actions by the Company Pending the Closing.




               Pending the Closing and the payment of the Purchase Price, the unanimous consent of directors
of the Company shall be required for all material corporate actions of the Company (it being
understood and agreed upon that CornerWorld shall continue to operate on its own and shall not be
subject to any conditions on taking of corporate actions by the Company or its Board). Further, the
remaining Company director shall have veto power over any Director’s Resolutions which contravene
the actions contemplated by this Agreement. Finally, the director resignations from the Company
shall be held in escrow, with the appropriate resignations being effective upon completion or
termination of the transaction.



ARTICLE 7.




TERMINATION



7.1 Delivery of the Purchase Price. In the event the Closing does not occur within sixty
(60) days of the execution of this Agreement, or extended for an additional ninety (90) day period
as provided in Section 2.3 of this Agreement, either party may cancel this Agreement, provided
that the delay in Closing shall not be due to the actions or inactions of the party seeking such
cancellation.




ARTICLE 8.




DOCUMENTS TO BE DELIVERED




8.1 Documents to be Delivered by the Sellers.




          At the Closing, the Shareholders shall deliver, or cause to be delivered, to the Company the
following:





	 	(a)	 	The Acquisition Shares;
	 
	 	(b)	 	copies of all consents and waivers referred to in Section 6.1(e) hereof;
	 
	 	(c)	 	certificates of good standing with respect to CornerWorld issued by the Secretary
of the State of Delaware; and
	 
	 	(d)	 	such other documents as required by Article 6 herein or as the Company shall
reasonably request.





8.2 Documents to be Delivered by the Company.




          At the Closing, the Company shall deliver to the Shareholders the following:





	 	(a)	 	The Shares;
	 
	 	(b)	 	the certificates referred to in Section 6.2(d) hereof;
	 
	 	(c)	 	copies of all consents and waivers referred to in Section 6.1(e) hereof;






30









 






	 	(d)	 	certificates of good standing with respect to the Company issued by the
Secretary of the State of Nevada and for each state in which the Company is qualified
to do business as a foreign corporation;
	 
	 	(e)	 	Undated resignations of all officers and members of the Board of Directors of the
Company, but one;
	 
	 	(f)	 	resolution of the Board of Directors appointing Scott Beck as Chairman of the Board
of Directors of the Company of the Company and Kelly Larabee Morlan as a Director of the
Company; and
	 
	 	(g)	 	evidence that the 62,700,000 restricted and 7,296,000 free trading shares that were
held by the Company’s shareholders have been delivered together with duly executed stock
powers, to the Escrow Agent along with a letter of indemnity by Dynasty;
	 
	 	(h)	 	such other documents as required by Article 6 herein or as the Shareholders shall
reasonably request.





ARTICLE 9.




INDEMNIFICATION




9.1 Indemnification.





	 	(a)	 	Subject to Section 9.2 hereof, the Shareholders hereby agree to jointly and
severally indemnify and hold the Company and its respective directors, officers,
employees, Affiliates, agents, successors and assigns (collectively, the “Company
Indemnified Parties”) harmless from and against:






	 	(i)	 	any and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the failure of any representation or
warranty of the Shareholders set forth in Article 3 hereof, or any representation or
warranty contained in any certificate delivered by or on behalf of the Shareholders
pursuant to this Agreement, to be true and correct in all respects as of the date
made;






	 	(ii)	 	any and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the breach of any covenant or other
agreement on the part of the Shareholders under this Agreement;
	 
	 	(iii)	 	any and all Expenses incident to the foregoing.






	 	(b)	 	Subject to Section 9.2, the Company hereby agrees to indemnify and hold the
Shareholders and their respective Affiliates, agents, successors and assigns
(collectively, the “Shareholder Indemnified Parties”) harmless from and against:






	 	(i)	 	any and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the failure of any representation or
warranty of the Company set forth in Section 4 hereof, or any representation or
warranty contained in any certificate delivered by or on behalf of the Company
pursuant to this Agreement, to be true and correct as of the date made;




31









 












	 	(ii)	 	any and all losses, liabilities, obligations, damages, costs and expenses
based upon, attributable to or resulting from the breach of any covenant or other
agreement on the part of the Company under this Agreement; and
	 
	 	(iii)	 	any and all Expenses incident to the foregoing.





9.2 Limitations on Indemnification for Breaches of Representations and Warranties.




               An Indemnifying Party shall not have any liability under Section 9.1(a)(ii) or Section 9.1(b)
hereof unless the aggregate amount of Losses and Expenses to the indemnified parties finally
determined to arise thereunder based upon, attributable to or resulting from the failure of any
representation or warranty to be true and correct, other than the representations and warranties
set forth in Sections 3.6 and 3.8 hereof, exceeds $5,000 (the “Basket”) and, in such event, the
Indemnifying Party shall be required to pay the entire amount of such Losses and Expenses.



9.3 Indemnification Procedures.





	 	(a)	 	In the event that any legal proceedings shall be instituted or that any claim or
demand (“Claim”) shall be asserted by any Person in respect of which payment may be
sought under Section 9.1 hereof (regardless of the Basket referred to above), the
Indemnified Party shall reasonably and promptly cause written notice of the assertion
of any Claim of which it has knowledge which is covered by this indemnity to be
forwarded to the Indemnifying Party. The Indemnifying Party shall have the right, at
its sole option and expense, to be represented by counsel of its choice, which must be
reasonably satisfactory to the Indemnified Party, and to defend against, negotiate,
settle or otherwise deal with any Claim which relates to any Losses indemnified
against hereunder. If the Indemnifying Party elects to defend against, negotiate,
settle or otherwise deal with any Claim which relates to any Losses indemnified
against hereunder, it shall within five (5) days (or sooner, if the nature of the
Claim so requires) notify the Indemnified Party of its intent to do so. If the
Indemnifying Party elects not to defend against, negotiate, settle or otherwise deal
with any Claim which relates to any Losses indemnified against hereunder, fails to
notify the Indemnified Party of its election as herein provided or contests its
obligation to indemnify the Indemnified Party for such Losses under this Agreement,
the Indemnified Party may defend against, negotiate, settle or otherwise deal with
such Claim. If the Indemnified Party defends any Claim, then the Indemnifying Party
shall reimburse the Indemnified Party for the Expenses of defending such Claim upon
submission of periodic bills. If the Indemnifying Party shall assume the defense of
any Claim, the Indemnified Party may participate, at his or its own expense, in the
defense of such Claim; provided, however, that such Indemnified Party shall be
entitled to participate in any such defense with separate counsel at the expense of
the Indemnifying Party if, (i) so requested by the Indemnifying Party to participate
or (ii) in the reasonable opinion of counsel to the Indemnified Party, a conflict or
potential conflict exists between the Indemnified Party and the Indemnifying Party
that would make such separate representation advisable; and provided, further, that
the Indemnifying Party shall not be required to pay for more than one such counsel for
all indemnified parties in connection with any Claim. The parties hereto agree to
cooperate fully with each other in connection with the defense, negotiation or
settlement of any such Claim.




32









 












	 	(b)	 	After any final judgment or award shall have been rendered by a court,
arbitration board or administrative agency of competent jurisdiction and the
expiration of the time in which to appeal therefrom, or a settlement shall have been
consummated, or the Indemnified Party and the Indemnifying Party shall have arrived at
a mutually binding agreement with respect to a Claim hereunder, the Indemnified Party
shall forward to the Indemnifying Party notice of any sums due and owing by the
Indemnifying Party pursuant to this Agreement with respect to such matter and the
Indemnifying Party shall be required to pay all of the sums so due and owing to the
Indemnified Party by wire transfer of immediately available funds within 10 business
days after the date of such notice.
	 
	 	(c)	 	The failure of the Indemnified Party to give reasonably prompt notice of any
Claim shall not release, waive or otherwise affect the Indemnifying Party’s
obligations with respect thereto except to the extent that the Indemnifying Party can
demonstrate actual loss and prejudice as a result of such failure.





ARTICLE 10.




POST-CLOSING MATTERS



10.1 Forthwith after the Closing, the Company, CornerWorld and the Shareholders agree to use all
their best efforts to:





	 	(a)	 	issue a news release reporting the Closing;
	 
	 	(b)	 	file a Form 8-K with the Securities and Exchange Commission disclosing the terms
of this Agreement with audited financial statements of Company as well as any required
pro forma financial information or other information of Company as required by the
rules and regulations of the Securities and Exchange Commission;
	 
	 	(c)	 	file with the Securities and Exchange Commission a report on Form 14f disclosing
the change in control of Company and, 10 days after such filing, date the resolutions
appointing to the board of directors of the Company Scott Beck and Kelly Larabee
Morlan, and forthwith date and accept the resignations of Brian Pierson as director of
the Company, Patrick Wallace as director, Secretary and Treasurer of the Company.
	 
	 	(d)	 	Immediately upon full-execution of this Agreement, the Company shall adopt a
Stock Option Plan for the purpose of retaining and compensating its officers,
directors, employees and consultants, which shall consist of up to 4,000,000 shares of
common stock that may be issued from time to time pursuant to options or otherwise.





ARTICLE 10(A)




FURTHER AGREEMENTS



(10A.1) The holders 1,004,000 free trading shares of the Company, being delivered as contemplated
by Section 2.2 herein, agree to restrict the resale of such shares for a period of six (6) months
following the payment of the Purchase Price. Such persons further agree to only sell such shares
in limited amounts for the one (1) year period following the initial six (6) month




33









 







restricted sale period such that their sales are not to exceed twenty five percent (25%) of such shares in every three (3) month period, although the Company may waive any such restrictions.



(10A.2) In order to assure compliance with these agreed upon contractual restrictions, an
appropriate restrictive legend reflecting such agreement shall be placed upon the certificates
representing such shares. Notwithstanding the foregoing, CornerWorld may, in its sole discretion,
at any time following payment of the Purchase Price, agree to waive the foregoing restrictions on
resale of the 700,000 shares.



(10A.3) Any options or shares that may be issued under such Stock Option Plan pursuant to Section
10.1(d) herein shall be subject, at minimum, to the same restrictions on resale as the 700,000
shares of the Company that are set forth above.




ARTICLE 11.




GENERAL PROVISIONS



11.1 Notices. All notices and other communications under this Agreement shall be in
writing and shall be deemed given when delivered personally or mailed by certified mail, return
receipt requested, to the parties (and shall also be transmitted by facsimile to the Persons
receiving copies thereof) at the following addresses (or to such other address as a party may have
specified by notice given to the other party pursuant to this provision):




If to the Company to:




Brent Sheppard

1453 Johnston Road, #71510

White Rock, British Columbia, Canada, V4B 5J5

Fax: (604) 536-8972




with a copies to:




J.R. Gaetz

Presidents Corporate Group

302-850 West Hastings Street

Vancouver, BC V6C 1E1 Canada

Tel: (604) 682-2556

Fax: (604) 801-6811




If to CornerWorld or Shareholders to:




Scott Beck

CornerWorld, Inc.

12222 Merit Drive Suite 170

Dallas, Texas 75251




Facsimile:




34









 








with a copy to:




Richard A. Friedman, Esq.

Sichenzia Ross Friedman Ference LLP

61 Broadway, 32nd Floor

New York, New York 10006

Phone: (212) 930-9700

Facsimile: (212) 930-9725



All such notices, requests and other communications will (i) if delivered personally to the address
as provided in this Section, be deemed given upon delivery, (ii) if delivered by mail in the manner
described above to the address as provided in this Section, be deemed given upon receipt, and (iii)
if delivered by courier to the address as provided for in this Section, be deemed given on the
earlier of the second Business Day following the date sent by such courier or upon receipt. Any
party from time to time may change its address or other information for the purpose of notices to
that party by giving notice specifying such change to the other party hereto.



11.2 Payment of Sales, Use or Similar Taxes. All sales, use, transfer, intangible,
recordation, documentary stamp or similar Taxes or charges, of any nature whatsoever, applicable
to, or resulting from, the transactions contemplated by this Agreement shall be borne by the
respective parties.



11.3 Expenses. Except as otherwise provided in this Agreement, the Shareholders and the
Company shall each bear its own expenses incurred in connection with the negotiation and execution
of this Agreement and each other agreement,,document and instrument contemplated by this Agreement
and the consummation of the transactions contemplated hereby and thereby, it being understood that
in no event shall CornerWorld bear any of such costs and expenses.



11.4 Specific Performance. The Company acknowledges and agrees that the breach of this
Agreement would cause irreparable damage to CornerWorld and that CornerWorld will not have an
adequate remedy at law. Therefore, the obligations of the Company under this Agreement,
including, without limitation, the Company’s obligation to sell the Shares to the Shareholders and
its obligations pursuant to the Escrow Agreement, shall be enforceable by a decree of specific
performance issued by any court of competent jurisdiction, and appropriate injunctive relief may
be applied for and granted in connection therewith. Such remedies shall, however, be cumulative
and not exclusive and shall be in addition to any other remedies which any party may have under
this Agreement or otherwise.



11.5 Further Assurances. The Shareholders and the Company each agrees to execute and
deliver such other documents or agreements and to take such other action as may be reasonably
necessary or desirable for the implementation of this Agreement and the consummation of the
transactions contemplated hereby.



11.6 Submission to Jurisdiction; Consent to Service of Process.





	 	(a)	 	The parties hereto hereby irrevocably submit to the non-exclusive jurisdiction of
any federal or state court located within the State of New York over any dispute
arising out of or relating to this Agreement or any of the transactions contemplated
hereby and each party hereby irrevocably agrees that all claims in respect of such
dispute or




35









 






	 	 	 	any suit, action proceeding related thereto may be heard and determined in such
courts. The parties hereby irrevocably waive, to the fullest extent permitted by
applicable law, any objection which they may now or hereafter have to the laying of
venue of any such dispute brought in such court or any defense of inconvenient forum
for the maintenance of such dispute. Each of the parties hereto agrees that a
judgment in any such dispute may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law.





	 	(b)	 	Each of the parties hereto hereby consents to process being served by any party
to this Agreement in any suit, action or proceeding by the mailing of a copy thereof
in accordance with the provisions of Section 11.1.




11.7 Entire Agreement; Amendments and Waivers. This Agreement (including the schedules
and exhibits hereto) represents the entire understanding and agreement between the parties hereto
with respect to the subject matter hereof and can be amended, supplemented or changed, and any
provision hereof can be waived, only by written instrument making specific reference to this
Agreement signed by the party against whom enforcement of any such amendment, supplement,
modification or waiver is sought. No action taken pursuant to this Agreement, including without
limitation, any investigation by or on behalf of any party, shall be deemed to constitute a waiver
by the party taking such action of compliance with any representation, warranty, covenant or
agreement contained herein. The waiver by any party hereto of a breach of any provision of this
Agreement shall not operate or be construed as a further or continuing waiver of such breach or as
a waiver of any other or subsequent breach. No failure on the part of any party to exercise, and
no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of such right, power or remedy by such party preclude any
other or further exercise thereof or the exercise of any other right, power or remedy. All
remedies hereunder are cumulative and are not exclusive of any other remedies provided by law.



11.8 Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.



11.9 Headings. Section headings of this Agreement are for reference purposes only and are
to be given no effect in the construction or interpretation of this Agreement.



11.10 Severability. If any provision of this Agreement is invalid or unenforceable, the
balance of this Agreement shall remain in effect.



11.11 Binding Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties and their respective successors and permitted assigns. Nothing in this
Agreement shall create or be deemed to create any third party beneficiary rights in any person or
entity not a party to this Agreement except as provided below. No assignment of this Agreement or
of any rights or obligations hereunder may be made by either the Sellers or the Purchaser (by
operation of law or otherwise) without the prior written consent of the other parties hereto and
any attempted assignment without the required consents shall be void; provided, however, that the
Purchaser may assign this Agreement and any or all rights or obligations hereunder (including,
without limitation, the Purchaser’s rights to purchase the Shares and the Purchaser’s rights to
seek indemnification hereunder) to any Affiliate of the Purchaser. Upon any such permitted
assignment, the references in this Agreement to the Purchaser shall also apply to any such
assignee unless the context otherwise requires.




36









 







11.12 Counterparts. This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which counterparts will together
constitute one and the same Agreement. Delivery of executed copies of this Agreement by telecopier
will constitute proper delivery, provided that originally executed counterparts are delivered to
the parties within a reasonable time thereafter.




[Remainder of page intentionally left blank.]




37









 







IN WITNESS WHEREOF the parties have executed this Agreement effective as of the day and year first
above written.




	 	 	 	 	 
	CORNERWORLD CORPORATION

 	 	 
	By:  	/s/ Brent Sheppard
 	 	 
	 	Name:  	Brent Sheppard 	 	 
	 	Title:  	President/ CEO, principal executive officer 	 	 
	 
	CORNERWORLD, INC.

 	 	 
	By:  	/s/ Scott Beck
 	 	 
	 	Name:  	Scott Beck 	 	 
	 	Title:  	President 	 	 



SHAREHOLDER SIGNATURE PAGE FOLLOWS:




38









 








SHAREHOLDERS




	 	 	 
	/s/ Scott Beck

	 	/s/ Jarrod Beck
	 

	 	 
	Scott Beck (Separate Property)

	 	Jarrod Beck
	 
	 	 
	/s/ Michelle Beck

	 	/s/ Joshua Emmett
	 

	 	 
	Michelle Beck

	 	Joshua Emmett
	 
	 	 
	/s/ David Gullett

	 	/s/ Billy Green
	 

	 	 
	David Gullett

	 	Billy Green
	 
	 	 
	/s/ Kelly Larabee Morlan

	 	/s/ Crystal Blue Consulting, Inc.
	 

	 	 
	Kelly Larabee Morlan

	 	Crystal Blue Consulting, Inc.
	 
	 	 
	/s/ Plantation Gove Ltd.

	 	/s/ Marvin H. Ribotsky
	 

	 	 
	Plantation Gove Ltd.

	 	Marvin H. Ribotsky
	 
	 	 
	/s/ Selvin Passen M.D.

	 	/s/ Martin B. & Alice Grossman
	 

	 	 
	Selvin Passen M.D.

	 	Martin B. & Alice Grossman
	 
	 	 
	/s/ Andrew W. Greenberg
	 	 
	 
	 	 
	Andrew W. Greenberg
	 	 






39









 






Exhibit A




	 	 	 	 	 	 	 
	Restricted Shares	 	 	 	 	 	Shareholders
	 
	 	 	 	 	 	 
	19,000,000
	 	Brent	 	Sheppard
	32,300,000
	 	Brent	 	Sheppard
	 5,700,000
	 	Brian	 	Pierson
	 5,700,000
	 	Patrick	 	Wallace
	 
	 	 	 	 	 	 
	62,700,000
	 	 	 	 	 	 
	 
	 	 	 	 	 	 





	 	 	 	 	 
	Free
Trading Shares	 	 	 	Shareholders
	 
	 	 	 	 
	307,230

	 	Jordan
	 	Adams
	204,820

	 	D
	 	Barber
	307,230

	 	Jammie
	 	Blackwell
	426,550

	 	Septembre
	 	Blake
	307,230

	 	Hector
	 	Cervantes
	426,550

	 	Barbara
	 	Creasey
	426,550

	 	Wayne E.
	 	Crocker
	204,820

	 	Dorothy May
	 	Crocker
	204,820

	 	Cecelia
	 	Cross
	426,550

	 	Judy
	 	Danielsen
	255,930

	 	Risa
	 	Dionne
	204,820

	 	Curtis
	 	Dodd
	255,930

	 	Don
	 	Dykmans
	426,550

	 	Michael
	 	Hennig
	426,550

	 	Pamela
	 	Kelly
	307,230

	 	Tanya
	 	Krysko
	204,820

	 	Yan
	 	Li
	426,550

	 	Stephen
	 	McLauchlan
	204,820

	 	Pam
	 	McLauchlan
	204,820

	 	Jocelyn
	 	Palmer
	255,930

	 	Salome
	 	Rosner
	204,820

	 	R.G.
	 	Smith
	307,230

	 	Tanis
	 	Watson
	204,820

	 	S.
	 	Steel
	426,550

	 	R.
	 	Ceretzke
	255,930

	 	Dora
	 	Reimer
	307,230

	 	Barry
	 	Sookarookoff
	204,820

	 	D.
	 	Honeybourne
	204,820

	 	A.
	 	Freelend
	255,930

	 	W.
	 	MacLean
	204,820

	 	Ken
	 	Rempel
	426,550

	 	D G
	 	Blanchard
	204,820

	 	Roxane
	 	Carlisle
	255,930

	 	Gail
	 	Kilmer
	307,230

	 	Sonya
	 	Christopher
	255,930

	 	Kathleen Mary
	 	Sutton
	204,820

	 	Chris
	 	Burgher
	426,550

	 	Melissa
	 	Burgher
	204,820

	 	Francesca
	 	Littlejohn
	120,080

	 	Samantha
	 	Silver
	 
	 	 	 	 
	11,400,000
	 	 	 	 
	 
	 	 	 	 
	 
	74,100,000
	 	 	 	 
	 
	 	 	 	 






 









 






SCHEDULE 3.7




No Undisclosed Liabilities



The Company confirms that it has no indebtedness, obligations or liabilities of any kind (whether
accrued, absolute, contingent or otherwise, and whether due or to become due).




 









 








SCHEDULE 4.3




Capitalization.



The Company confirms that it is a public company listed on the OTC Bulletin Board, and the
authorized capital stock of the Company consists of: (i) Sixty Two Million Seven Hundred Thousand
(62,700,000) shares of restricted stock; and (ii) Eleven Million Four Hundred Thousand
(11,400,000) free trading shares. All of the shares of the Company are duly authorized, validly
issued, fully paid and nonassessable. The attached list sets forth a true and complete list of the
holders of all outstanding shares of the Company as of the date of this Agreement, and the holders
of all outstanding options and warrants issued by the Company, which shares, options and warrants
are held by them in the amounts set forth on this Schedule 4.3. Except as contemplated by this
Agreement and except as set forth on this Schedule 4.3, there are no options, warrants or other
rights, agreements, arrangements or commitments of any character relating to the issued or
unissued capital stock of the Company or obligating the Company to issue or sell any shares of
capital stock of or other equity interests in the Company. There is no personal liability, and
there are no preemptive rights with regard to the capital stock of the Company, and no
right-of-first refusal or similar catch-up rights with regard to such capital stock. Except as set
forth on this Schedule 4.3 and except for the transactions contemplated by this Agreement, there
are no outstanding contractual obligations or other commitments or arrangements of the Company to
(A) repurchase, redeem or otherwise acquire any shares of the Shares (or any interest therein) or
(B) to provide funds to or make any investment (in the form of a loan, capital contribution or
otherwise) in any other entity, or (C) issue or distribute to any person any capital stock of the
Company, or (D) issue or distribute to holders of any of the capital stock of the Company any
evidences of indebtedness or assets of the Company. All of the outstanding securities of the
Company have been issued and sold by the Company in full compliance in all material respects with
applicable federal and state securities laws.




 









 








SCHEDULE 4.4




Subsidiaries.



The Company confirms that it has no subsidiaries




 









 








SCHEDULE 4.9




Absence of Certain Developments.



The Company confirms, except as expressly contemplated by this Agreement or as set forth on this
Schedule 4.9, since the Balance Sheet Date:





	 	(i)	 	there has not been any material adverse change nor has there occurred any
event which is reasonably likely to result in a material adverse change;
	 
	 	(ii)	 	there has not been any damage, destruction or loss, whether or not covered
by insurance, with respect to the property and assets of the Company having a
replacement cost of more than $25,000 for any single loss or $100,000 for all such
losses;
	 
	 	(iii)	 	there has not been any declaration, setting aside or payment of any
dividend or other distribution in respect of any shares of capital stock of the
Company or any repurchase, redemption or other acquisition by the Company of any
outstanding shares of capital stock or other securities of, or other ownership
interest in, the Company;
	 
	 	(iv)	 	the Company has not awarded or paid any bonuses to employees of the Company
with respect to the fiscal year ended December 31, 2006, except to the extent accrued
on the Balance Sheet or entered into any employment, deferred compensation, severance
or similar agreement (nor amended any such agreement) or agreed to increase the
compensation payable or to become payable by it to any of the Company ‘s directors,
officers, employees, agents or representatives or agreed to increase the coverage or
benefits available under any severance pay, termination pay, vacation pay, company
awards, salary continuation for disability, sick leave, deferred compensation, bonus
or other incentive compensation, insurance, pension or other employee benefit plan,
payment or arrangement made to, for or with such directors, officers, employees,
agents or representatives (other than normal increases in the ordinary course of
business consistent with past practice and that in the aggregate have not resulted in
a material increase in the benefits or compensation expense of the Purchaser);
	 
	 	(v)	 	there has not been any change by the Company in accounting or Tax reporting
principles, methods or policies;
	 
	 	(vi)	 	the Company has not entered into any transaction or Contract or conducted
its business other than in the ordinary course consistent with past practice;
	 
	 	(vii)	 	the Company has not made any loans, advances or capital contributions to,
or investments in, any Person or paid any fees or expenses to any Shareholder or any
Affiliate of any Shareholder;
	 
	 	(viii)	 	the Company has not mortgaged, pledged or subjected to any Lien, any of its assets,
or acquired any assets or sold, assigned, transferred, conveyed, leased or otherwise
disposed of any assets of the Company, except for assets acquired or sold,
assigned, transferred, conveyed, leased or otherwise disposed of in the ordinary course
of business consistent with past practice;




 









 






	 	(ix)	 	the Company has not discharged or satisfied any Lien, or paid any
obligation or liability (fixed or contingent), except in the ordinary course of
business consistent with past practice and which, in the aggregate, would not be
material to the Company;
	 
	 	(x)	 	the Company has not canceled or compromised any debt or claim or amended,
canceled, terminated, relinquished, waived or released any Contract or right except
in the ordinary course of business consistent with past practice and which, in the
aggregate, would not be material to the Company;
	 
	 	(xi)	 	the Company has not made or committed to make any capital expenditures or
capital additions or betterments in excess of $25,000 individually or $100,000 in the
aggregate;
	 
	 	(xii)	 	the Company has not instituted or settled any material legal proceeding;
and
	 
	 	(xiii)	 	the Company has not agreed to do anything set forth in this Section 4.9.






 









 





SCHEDULE 4.10




Taxes



The Company confirms that, except as set forth on this Schedule 4.10, (A) all Tax
Returns required to be filed by or on behalf of the Company will be
filed prior to the
Closing with the appropriate taxing authorities in all jurisdictions in which such Tax
Returns are required to be filed (after giving effect to any valid extensions of time in which
to make such filings), and all such Tax Returns were true, complete and correct in all material
respects; (B) all Taxes payable by or on behalf of the Company or in respect of its income,
assets or operations have been fully and timely paid, and (C) the Company has not executed or
filed with the IRS or any other taxing authority any agreement, waiver or other document or
arrangement extending or having the effect of extending the period for assessment or collection
of Taxes (including, but not limited to, any applicable statute of limitation), and no power of
attorney with respect to any Tax matter is currently in force.





	 	a.	 	The Company has complied in all material respects with all applicable laws, rules
and regulations relating to the payment and withholding of Taxes and has duly and
timely withheld from employee salaries, wages and other compensation and has paid over
to the appropriate taxing authorities all amounts required to be so withheld and paid
over for all periods under all applicable laws.
	 
	 	b.	 	The Shareholders have received complete copies of (A) all federal, state, local
and foreign income or franchise Tax Returns of the Company relating to the taxable
periods since 2004 and (B) any audit report issued within the last three years
relating to Taxes due from or with respect to the Company its income, assets or
operations.
	 
	 	c.	 	All material types of Taxes paid and material types of Tax Returns filed by or on
behalf of the Company have been paid and filed. Except as set forth on Schedule
4.10 and to the best of the Company’s knowledge, no claim has been made by a
taxing authority in a jurisdiction where the Company does not file Tax Returns such
that it is or may be subject to taxation by that jurisdiction.
	 
	 	d.	 	Except as set forth on Schedule 4.10, all deficiencies asserted or
assessments made as a result of any examinations by the IRS or any other taxing
authority of the Tax Returns of or covering or including the Company have been fully
paid, and there are no other audits or investigations by any taxing authority in
progress, nor have the Shareholders or the Company received any notice from any taxing
authority that it intends to conduct such an audit or investigation. No issue has
been raised by a federal, state, local or foreign taxing authority in any current or
prior examination which, by application of the same or similar principles, could
reasonably be expected to result in a proposed deficiency for any subsequent taxable
period.
	 
	 	e.	 	Except as set forth on Schedule 4.10, the Company has not (A) filed a
consent pursuant to Section 341(f) of the Code or agreed to have Section 341(f)(2) of
the Code apply to any disposition of a subsection (f) asset (as such term is defined
in Section 341(f)(4) of the Code) owned by the Company, (B) agreed to or is required
to make any adjustments pursuant to Section 481(a) of the Code or any similar
provision of state, local or foreign law by reason of a change in accounting method
initiated by the Company or has any knowledge that the Internal Revenue Service has
proposed any such adjustment or change in accounting method, or has any application
pending





 









 











	 	 	 	with any taxing authority requesting permission for any changes in accounting methods
that relate to the business or operations of the Company, (C) executed or entered into
a closing agreement pursuant to Section 7121 of the Code or any predecessor provision
thereof or any similar provision of state, local or foreign law with respect to the
Company, or (D) requested any extension of time within which to file any Tax Return,
which Tax Return has since not been filed.
	 
	 	f.	 	No property owned by the Company is (i) property required to be treated as being
owned by another Person pursuant to the provisions of Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect immediately prior to the
enactment of the Tax Reform Act of 1986, (ii) constitutes “tax-exempt use property”
within the meaning of Section 168(h)(1) of the Code or (iii) is “tax-exempt bond
financed property” within the meaning of Section 168(g) of the Code.
	 
	 	g.	 	The Company is not a foreign person within the meaning of Section 1445 of the
Code.
	 
	 	h.	 	The Company is not a party to any tax sharing or similar agreement or arrangement
(whether or not written) pursuant to which it will have any obligation to make any
payments after the Closing.
	 
	 	i.	 	There is no contract, agreement, plan or arrangement covering any person that,
individually or collectively, could give rise to the payment of any amount that would
not be deductible by the Company, its Affiliates or their respective affiliates by
reason of Section 280G of the Code, or would constitute compensation in excess of the
limitation set forth in Section 162(m) of the Code.
	 
	 	j.	 	The Company is not subject to any private letter ruling of the IRS or comparable
rulings of other taxing authorities.
	 
	 	k.	 	Except as set forth on this Schedule 4.10, there are no liens as a result of any
unpaid Taxes upon any of the assets of the Company.
	 
	 	l.	 	Except as set forth on this Schedule 4.10, the Company has no elections in effect
for federal income tax purposes under Sections 108, 168, 338, 441, 463, 472, 1017,
1033 or 4977 of the code.




 









 











SCHEDULE 4.11




Real Property.



The Company does not own any real property nor does it maintain any interests in real property.




 









 








SCHEDULE 4.12




Personal Property.



The Company does not own any tangible personal property, nor does the Company maintain any leases
of personal property of whatever value.




 









 








SCHEDULE 4.13




Intangible Property.



The Company does not maintain any patent, trademark, trade name, service mark or copyright, nor
does the Company maintain any license or other agreement relating thereto.




 









 








SCHEDULE 4.14




Material Contracts.



The Company is not currently bound by any of the following contracts (“Material Contracts”): (i)
Contracts with any of the Shareholders or any current officer or director of the Company; (ii)
Contracts with any labor union or association representing any employee of the Company; (iii)
Contracts pursuant to which any party is required to purchase or sell a stated portion of its
requirements or output from or to another party; (iv) Contracts for the sale of any of the assets
of the Company other than in the ordinary course of business or for the grant to any person of any
preferential rights to purchase any of its assets; (v) joint venture agreements; (vi) Material
Contracts containing covenants of the Company not to compete in any line of business or with any
person in any geographical area or covenants of any other person not to compete with the Company in
any line of business or in any geographical area; (vii) Contracts relating to the acquisition by
the Company of any operating business or the capital stock of any other person; (viii) Contracts
relating to the borrowing of money; or (ix) any other Contracts, other than Real Property Leases,
which involve the expenditure of more than $100,000 in the aggregate or $25,000 annually or require
performance by any party more than one year from the date hereof.




 









 








SCHEDULE 4.15




Employee Benefits.



Section 4.15(a):



The Company does not maintain any “employee benefit plans”, as defined in Section 3(3) ERISA, and
any other pension plans or employee benefit arrangements, programs or payroll practices (including,
without limitation, severance pay, vacation pay, company awards, salary continuation for
disability, sick leave, retirement, deferred compensation, bonus or other incentive compensation,
stock purchase arrangements or policies, hospitalization, medical insurance, life insurance and
scholarship programs) maintained by the Company or to which the Company contributes or is obligated
to contribute thereunder with respect to employees of the Company (“Employee Benefit Plans”) and
(ii) all “employee pension plans”, as defined in Section 3(2) of ERISA, maintained by the Company
or any trade or business (whether or not incorporated) which are under control, or which are
treated as a single employer, with Company as an ERISA Affiliate or to which the Company or any
ERISA Affiliate contributed or is obligated to contribute thereunder (“Pension Plans”)




Section 4.15(b):



The Company does not maintain any Employee Benefit Plans and Pension Plans intended to qualify
under Section 401 of the Code.




 









 








SCHEDULE 4.19




Environmental Matters.



All Company representations as set forth is Section 4.19 of this Share Exchange Agreement are
accurate and complete.




 









 








SCHEDULE 4.20




Insurance.



The Company does not maintain policies of insurance of any kind or nature covering the Company or
any of its employees, properties or assets, including, without limitation, policies of life,
disability, fire, theft, workers compensation, employee fidelity and other casualty and liability
insurance.




 









 








SCHEDULE 4.22




Related Party Transactions.



Neither the Company, any affiliate of the Company nor any officer or employee of any of them (i)
owns any direct or indirect interest of any kind in, or controls or is a director, officer,
employee or partner of, or consultant to, or lender to or borrower from or has the right to
participate in the profits of, any person which is (A) a competitor, supplier, customer, landlord,
tenant, creditor or debtor of the Company, (B) engaged in a business related to the business of the
Company, or (C) a participant in any transaction to which the Company is a party or (ii) is a party
to any Contract with the Company.




 









 








SCHEDULE 4.22




Financial Advisors.



No Person, as defined in this Share Exchange Agreement has acted, directly or indirectly, as a
broker or finder for the Company in connection with the transactions contemplated by this Share
Exchange Agreement and no Person is entitled to any fee or commission or like payment in respect
thereof.




 









 








SCHEDULE 4.25




Financial Advisors.



The Company has not entered into and does not maintain any written guarantees currently in effect
heretofore issued by the Company to any bank or other lender in connection with any credit
facilities extended by such creditors to the Company in connection with any other contracts or
agreements, including the name of such creditor and the amount of the indebtedness, together with
any interest and fees currently owing and expected to be outstanding as of the Closing