EXHIBIT 2.1
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement (the "Agreement")(previously defined as Business
Combination Agreement in the consulting agreement between PageOne Business
Productions, LLC and TradeQwest, Inc. dated May 11, 2001), dated July ____,
2001, is by and between Pangaea Communications, Inc., a Delaware corporation
("Pangaea"), having its principal offices at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and TradeQwest Inc, a Delaware corporation having its
principal offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("TradeQwest"),
and the holders of common stock of TradeQwest listed on Exhibit A to this
Agreement (the "TradeQwest Shareholders").
RECITALS:
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A. Pangaea desires to acquire at least 100% of the issued and outstanding
common stock of TradeQwest and the TradeQwest Shareholders desire to
exchange all of their shares of TradeQwest common stock for shares of
Pangaea common stock as hereinafter provided. The TradeQwest Shareholders,
as of the date hereof, hold 100% of the outstanding common stock, no par
value, (the "TradeQwest Common Stock") of TradeQwest.
B. It is the intention of the parties hereto that: (i) Pangaea shall
acquire the TradeQwest Common Stock in exchange solely for shares of
Pangaea's common stock, par value $.001 ("Pangaea Common Stock"), as set
forth below (the "Exchange"); and (ii) the Exchange shall qualify as a
transaction in securities exempt from registration or qualification under
the Securities Act of 1933, as amended, and under the applicable securities
laws of each state or jurisdiction where the TradeQwest Shareholders
reside.
C. The board of directors of Pangaea deems it to be in the best interest of
Pangaea and its shareholders for Pangaea to acquire the TradeQwest Common
Stock held by the TradeQwest Shareholders.
D. Each of the TradeQwest Shareholders deems it to be in his best interest
to exchange his TradeQwest Common Stock for Pangaea Common Stock as
hereinafter provided.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties
hereto agree as follows:
SECTION 1. EXCHANGE OF SHARES
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1.1 Exchange of Shares. Pangaea and each TradeQwest Shareholder hereby
agree that such TradeQwest Shareholder shall, on the Closing Date (as
hereinafter defined), exchange all of his TradeQwest Common Stock for the
number of shares of Pangaea Common Stock set forth opposite his name on
Exhibit A hereto. The Pangaea Common Stock to be issued in the Exchange
(collectively, the "Pangaea Shares") will be restricted against resale
pursuant to the provisions of Federal and state securities laws. The
TradeQwest Common Stock to be exchanged will represent 100% of the
currently issued and outstanding shares of TradeQwest Common Stock. The
total number of Pangaea Shares issued to the TradeQwest Shareholders in the
Exchange will constitute approximately 78.7% of the outstanding Pangaea
Common Stock immediately after the Exchange.
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1.2 Delivery of Shares. On the Closing Date, each TradeQwest Shareholder
will deliver to Pangaea the certificates representing his TradeQwest Common
Stock, duly endorsed (or with executed stock powers) so as to make Pangaea
the sole owner thereof. On the Closing Date, Pangaea will deliver
certificates to each TradeQwest Shareholder representing the Pangaea Shares
to which he is entitled under this Agreement.
1.3 Restricted Securities. The Pangaea Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and
may not be resold unless the resale thereof is registered under the
Securities Act or an exemption from such registration is available. Each
certificate representing the Pangaea Shares will have a legend thereon in
substantially the form set forth in Section 2.7 hereof.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF TRADEQWEST AND THE TRADEQWEST
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SHAREHOLDERS
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TradeQwest represents and warrants to Pangaea as set forth in Sections 2.1,
2.2, 2.8 and 2.10 - 2.24 hereof. Each TradeQwest Shareholder severally and
not jointly represents and warrants (as to himself only) to Pangaea as set
forth in Sections 2.3 - 2.9 hereof.
2.1 Organization and Good Standing. TradeQwest is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. TradeQwest has the corporate power and authority to
carry on its business as presently conducted. TradeQwest is qualified to do
business in all jurisdictions where the failure to be so qualified would
have a material adverse effect on its business.
2.2 Corporate Authority. TradeQwest has the corporate power to enter into
this Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by the TradeQwest
Shareholders and by the directors of TradeQwest.
2.3 Ownership of Shares. Each TradeQwest Shareholder represents with
respect to himself only, that he is the owner of record of the issued and
outstanding TradeQwest Common Stock set forth with respect to him on
Exhibit A. Such TradeQwest Shareholder represents and warrants that he owns
such shares free and clear of all rights, claims, liens and encumbrances,
and the shares have not been sold, pledged, assigned or otherwise
transferred except pursuant to this Agreement.
2.4 Independent Investigation. Each TradeQwest Shareholder acknowledges
that in making his decision to exchange his TradeQwest Common Stock for
Pangaea Common Stock, will rely, in part, upon independent investigations
made by him or his representatives, if any.
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2.5 Risks. Each TradeQwest Shareholder acknowledges and understands that
his acquisition of Pangaea Shares involves a high degree of risk and is
suitable only for persons of adequate financial means who have no need for
liquidity in this investment in that (i) the Shareholder may not be able to
liquidate the investment in the event of an emergency; (ii) transferability
is extremely limited; and (iii) in the event of a disposition, the
Shareholder could sustain a complete loss of his entire investment. The
Shareholder is sufficiently experienced in financial and business matters
to be capable of evaluating the merits and risks of an investment in
Pangaea; has evaluated such merits and risks, including risks particular to
the Shareholder's situation; and the Shareholder has determined that this
investment is suitable for the Shareholder. The Shareholder has adequate
financial resources and can bear a complete loss of the Shareholder's
investment.
2.6 Investment Intent. Except as set forth on Schedule 2.6, each TradeQwest
Shareholder hereby represents that the Pangaea Shares he is acquiring are
being acquired for the Shareholder's own account with no intention of
distributing such securities to others. The Shareholder has no contract,
undertaking, agreement or arrangement with any person to sell, transfer or
otherwise distribute to any person or to have any person sell, transfer or
otherwise distribute the Pangaea Shares for the Shareholder. The
Shareholder is presently not engaged, nor does the Shareholder plan to
engage within the presently foreseeable future, in any discussion with any
person regarding such a sale, transfer or other distribution of the Pangaea
Shares or any interest therein.
2.7 Compliance with Federal and State Securities Laws. Each TradeQwest
Shareholder understands that the Pangaea Shares have not been registered
under the Securities Act. Such TradeQwest Shareholder understands that the
Pangaea Shares must be held indefinitely unless the sale or other transfer
thereof is subsequently registered under the Securities Act or an exemption
from such registration is available. Moreover, such TradeQwest Shareholder
understands that his right to transfer the Pangaea Shares will be subject
to certain restrictions, which include restrictions against transfer under
the Securities Act and applicable state securities laws. In addition to
such restrictions, such TradeQwest Shareholder realizes that he may not be
able to sell or dispose of the Pangaea Shares as there may be no public or
other market for them. Such TradeQwest Shareholder understands that
certificates evidencing the Shares shall bear a legend substantially as
follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY
APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR PLEDGED UNLESS REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE
STATE LAW OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
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2.8 Approvals. No approval, authorization, consent, order or other action
of, or filing with, any person, firm or corporation or any court,
administrative agency or other governmental authority is required in
connection with the execution and delivery of this Agreement by TradeQwest
or by such TradeQwest Shareholder for the consummation of the transactions
described herein.
2.9 No General Solicitation. Such TradeQwest Shareholder is not acquiring
the Pangaea Shares because of or following any advertisement, article,
notice or other communication published in any newspaper, magazine or
similar media or broadcast over television or radio, or presented at any
seminar or meeting, or any solicitation or subscription by a person other
than a representative of Pangaea.
2.10 Financial Statements, Books and Records. Attached as Exhibit 2.10 are
the audited financial statements of TradeQwest as of and for the period
from inception to March 31, 2001 (the "TradeQwest Financial Statements").
The books of account and other financial records of TradeQwest are complete
and correct in all material respects and are maintained in accordance with
good business and accounting practices. The TradeQwest Shareholders
acknowledge that a minimum of two (2) years of audited financial
information (or such shorter period that TradeQwest was in existence) will
be required to be filed with the Securities and Exchange Commission within
75 days of the Closing Date.
2.11 No Material Adverse Changes. Since March 31, 2001 there has not been:
(i) any material adverse change in the financial position of TradeQwest;
(ii) any damage, destruction or loss materially and adversely affecting the
assets, properties, operations or condition (financial or otherwise) of
TradeQwest, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any dividend or
distribution with respect to any redemption or repurchase of TradeQwest
capital stock
(iv) any sale of an asset (other than in the ordinary course of business)
or any mortgage or pledge by TradeQwest of any properties or assets;
(v) any adoption by TradeQwest of any pension, profit sharing, retirement,
stock bonus, stock option or similar plan or arrangement;
(vi) any indebtedness of TradeQwest incurred for borrowed money;
(vii) any loan or advance by TradeQwest to any shareholder, officer,
director, consultant, agent or other representative of TradeQwest;
(viii) any material increase in the annual level of compensation of any
executive employee of TradeQwest;
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(ix) any entry into or modification by TradeQwest of any contract,
agreement or transaction except in the ordinary course of business; or
(x) any issuance by TradeQwest of any equity security.
2.12 Taxes. TradeQwest has filed all material tax forms and reports (or
extensions thereof) due or required to be filed and has paid or made
adequate provisions for all taxes or assessments which have become due as
of the date hereof, and there are no deficiency notices outstanding. No
extensions of time for the assessment of deficiencies for any year is in
effect. No deficiency notice is proposed or, to the knowledge of the
TradeQwest Shareholders after reasonable inquiry, threatened against
TradeQwest. The tax returns of TradeQwest have never been audited.
2.13 Compliance with Laws. TradeQwest has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to it or its business
which, if not complied with, would materially and adversely affect the
business of TradeQwest.
2.14 No Breach. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of Incorporation or the Bylaws
of TradeQwest;
(ii) violate, conflict with or result in the material breach of any of the
terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time, or both constitute) a default under any material contract or
other agreement to which TradeQwest is a party or by or to which it or any
of its assets or properties is bound or subject;
(iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against TradeQwest; or
(iv) violate any statute, rule or regulation applicable to and that would
have a material adverse effect on TradeQwest, its properties or assets.
2.15 Actions and Proceedings. TradeQwest is not a party to any material
pending litigation or, to the knowledge of the TradeQwest Shareholders,
after reasonable inquiry, any governmental investigation or proceeding not
reflected in the TradeQwest Financial Statements and, to their best
knowledge, no material litigation, claims, assessments or non-governmental
proceedings are threatened against TradeQwest.
2.16 Agreements. Schedule 2.16 sets forth a list of any material contract
or arrangement to which TradeQwest is a party or by or to which it or its
assets, properties or business are bound or subject, whether written or
oral.
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2.17 Brokers or Finders. No broker's or finder's fee will be payable by
TradeQwest in connection with the transactions contemplated by this
Agreement, nor will any such fee be incurred as a result of any actions by
TradeQwest or any of its Shareholders.
2.18 Real Estate. TradeQwest owns no real property nor is a party to any
leasehold agreement. All uses of the real property leased by TradeQwest or
its subsidiaries conform in all material respects to all applicable
building and zoning ordinances, laws and regulations.
2.19 OSHA and Environmental Compliance. To the knowledge of the TradeQwest
Shareholders, TradeQwest has duly complied with, and its offices, real
property, business, assets, leaseholds and equipment are in compliance in
all material respects with, the provisions of the Federal Occupational
Safety and Health Act, the Environmental Protection Act, and all other
environmental laws. There have been no outstanding citations, notices or
orders of non-compliance issued to TradeQwest or relating to its business,
assets, property, leaseholders or equipment under such environmental laws,
rules or regulations.
TradeQwest has been issued all required federal, state and local licenses,
certificates or permits relating to all applicable environmental laws. To
the best of the TradeQwest Shareholders' knowledge, after reasonable
inquiry, no hazardous substances are present on any premises leased by
TradeQwest excepting such quantities as are handled in accordance with all
applicable manufacturer's instructions and governmental regulations and in
the proper storage containers and as are necessary for the operation of the
commercial business of TradeQwest.
2.20 Assets. TradeQwest holds good and valid title to the assets shown on
its balance sheet dated March 31, 2001 (the "Balance Sheet"), free and
clear of all liens, pledges, mortgages, security interests, conditional
sales contracts or any other encumbrances (each, a "Lien") (other than
Permitted Liens, as defined below). All of TradeQwest's material assets are
in good operating condition and repair and are usable in the ordinary
course of business of TradeQwest and conform in all material respects to
all applicable laws, ordinances and government orders, rules and
regulations relating to their construction and operation. To the best
knowledge of TradeQwest, TradeQwest has clear title to all of its business
names, trading names, registered trademarks, service marks and
applications. "Permitted Liens" means any Lien that: (a) secures
indebtedness reflected on the Balance Sheet; (b) are Liens filed of record;
(c) are Liens for taxes accrued but not yet payable; (d) are Liens arising
as a matter of law in the ordinary course of business with respect to
obligations incurred after the date of the Balance Sheet; provided that the
obligations secured by such Liens are not delinquent or are being contested
in good faith; or (e) involve only such imperfections of title and
encumbrances, if any, which do not materially detract from the value or
materially interfere with the use, as currently used, of the properties
subject thereto or affected thereby or otherwise materially impair the
business operations being conducted thereon.
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2.21 Liabilities. TradeQwest does not have any material indebtedness,
liability, claim, loss, damage, deficiency, obligation or responsibility,
secured or unsecured, accrued or absolute, contingent or otherwise (all of
the foregoing are collectively defined as "Liabilities"), which were not
fully, fairly and adequately reflected on the Financial Statements, as of
the date thereof. As of the Closing Date, TradeQwest will not have any
Liabilities, other than Liabilities fully and adequately reflected on the
Financial Statements, Liabilities incurred after March 31, 2001, and
Liabilities that in the aggregate are not material to TradeQwest's business
or financial condition. To the best knowledge of the TradeQwest
Shareholders, there is no circumstance, condition, event or arrangement
which would hereafter give rise to any material Liabilities of TradeQwest
not in the ordinary course of business.
2.22 Access to Records. The corporate financial records, minute books and
other documents and records of TradeQwest have been made available to
Pangaea prior to the Closing. TradeQwest has provided Pangaea with the
opportunity to ask questions of and receive answers from TradeQwest
concerning the terms and conditions of this Agreement and to obtain any
additional information that TradeQwest possesses or can acquire without
unreasonable effort or expense necessary to verify the accuracy of the
information provided.
2.23 Capitalization. The authorized capital of TradeQwest consists of 1,500
shares of TradeQwest Common Stock, no par value, of which 1,500 shares are
issued and outstanding. TradeQwest has no dividend obligations. TradeQwest
has not granted, issued or agreed to grant, issue or make any warrants,
options, subscription rights or any other commitments of any character
relating to the issued or unissued shares of capital stock of TradeQwest,
except as set forth on Schedule 2.23 attached hereto and made a part
hereof.
2.24 Full Disclosure. No representation or warranty by TradeQwest or the
TradeQwest Shareholders in this Agreement or in any document or schedule to
be delivered by them pursuant hereto, and no written statement, certificate
or instrument furnished or to be furnished by TradeQwest pursuant hereto or
in connection with the negotiation, execution or performance of this
Agreement contains or will contain any untrue statement of a material fact
or omits or will omit to state any fact necessary to make any statement
herein or therein not materially misleading.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF PANGAEA
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Pangaea hereby represents and warrants to TradeQwest and the TradeQwest
Shareholders as follows:
3.1 Organization and Good Standing. Pangaea is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware. It has the corporate power and authority to own its own
property and to carry on its business as now being conducted and is duly
qualified to do business in any jurisdiction where so required except where
the failure to so qualify would have no material adverse effect on its
business.
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3.2 Corporate Authority. Pangaea has the corporate power to enter into this
Agreement and to perform its obligations hereunder. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby has been, or will be prior to the Closing Date, duly
authorized by the Board of Directors of Pangaea and, if required, by the
shareholders of Pangaea.
3.3 The Pangaea Shares. At the Closing, the Pangaea Shares to be issued and
delivered to the TradeQwest Shareholders hereunder will, when so issued and
delivered, constitute valid and legally issued shares of Pangaea Common
Stock, fully paid and nonassessable.
3.4 Financial Statements; Books and Records. Attached as Exhibit 3.4 are
the audited financial statements of Pangaea as of and for the fiscal year
ended December 31, 2000 and unaudited financial statements as of and for
the quarter ended March 31, 2001 (collectively the "Pangaea Financial
Statements"), all of which are on file with the U.S. Securities and
Exchange Commission (the "SEC"). The Pangaea Financial Statements fairly
represent the financial position of Pangaea as at such dates and the
results of its operations for the periods then ended. The Pangaea Financial
Statements were prepared in accordance with generally accepted accounting
principles applied on a consistent basis, except as otherwise stated
therein. The books of account and other financial records of Pangaea are
complete and correct in all material respects and are maintained in
accordance with good business and accounting practices.
3.5 No Material Adverse Changes.
Since March 31, 2001, there has not been:
(i) any material adverse changes in the financial position of Pangaea;
(ii) any damage, destruction or loss materially affecting the assets,
properties, prospective business, operations or condition (financial or
otherwise) of Pangaea, whether or not covered by insurance;
(iii) any declaration, setting aside or payment of any dividend or
distribution with respect to, or any redemption or repurchase of, Pangaea
capital stock;
(iv) any sale of an asset (other than in the ordinary course of business)
or any mortgage or pledge by Pangaea of any properties or assets;
(v) any adoption or modification by Pangaea of any pension, profit sharing,
retirement, stock bonus, stock option or similar plan or arrangement;
(vi) any incurred or assumed indebtedness or liability of Pangaea, whether
or not currently due and payable, except in the ordinary course of
business;
(vii) any loan or advance by Pangaea to any shareholder, officer, director,
employee, consultant, agent or other representative, or any other loan or
advance by Pangaea otherwise than in the ordinary course of business;
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(viii) any material increase in the annual level of compensation of any
executive employee of Pangaea;
(ix) any entry into or modification by Pangaea of any contract, agreement
or transaction except in the ordinary course of business; or
(x) any issuance by Pangaea of any equity securities or rights to acquire
equity securities, other than as set forth in Schedule 3.5.
3.6 Taxes. Pangaea has filed all tax, governmental and/or related forms and
reports (or extensions thereof) due or required to be filed by it, and has
paid all taxes due for all periods prior to the date hereof, except that
its accountants are in the process of filing its federal corporate tax
returns for the year ended 2000. Any liabilities for taxes, in the
aggregate, will not exceed $1,000 for such year ended 2000. There are no
deficiency notices outstanding with respect to any taxes or assessments nor
are there any extensions of time for the assessment of deficiencies for any
year in effect. No deficiency notice is proposed or to the knowledge of
Pangaea, after reasonable inquiry, threatened against Pangaea. No tax
return of Pangaea has ever been audited.
3.7 Compliance with Laws. Pangaea has complied with all federal, state,
county and local laws, ordinances, regulations, inspections, orders,
judgments, injunctions, awards or decrees applicable to it or its business,
which, if not complied with, would materially and adversely affect the
business of Pangaea.
3.8 Actions and Proceedings. Pangaea is not a party to any material pending
litigation or governmental investigation or proceeding or other claim,
assessment or non- governmental proceeding, nor to its knowledge is any
such litigation or governmental investigation or proceeding or other claim,
assessment or non-governmental proceeding threatened against Pangaea.
3.9 Periodic Reports. Pangaea is a Section 12(g) reporting company and
therefore must file periodic reports to be filed pursuant to the Securities
Exchange Act of 1934, as amended (the "1934 Act"). Except as set forth on
Schedule 3.9 hereto, each report or filing (the "1934 Act Filings")
required to be made by Pangaea pursuant to the 1934 Act was timely made.
Each such 1934 Act Filing complied as to form with the requirements under
the 1934 Act and the regulations promulgated thereunder. Each such 1934 Act
Filing did not misstate any material fact or omit to state a material fact
required to be stated in order to make the information contained in such
filing not misleading.
3.10 Capitalization. Attached as Schedule 3.10 is a true and correct copy
of the shareholder list of Pangaea as of the date hereof, to be provided
prior to the Closing Date. As of the date hereof and as of the Closing,
there are 300 shareholders of record of Pangaea that are the owners of
3,037,600 shares (following 2-for-1 split) of Pangaea Common Stock, none of
which owns in excess of 5% of the issued and outstanding shares, except as
may be set forth on Schedule 3.10. Pangaea has 100,000,000 shares of
Pangaea Common Stock authorized, of which 3,037,600 are issued, and
8,000,000 shares of preferred stock, par value $0.001 per share,
authorized, none of which have been issued. There are no outstanding
warrants, stock options, stock rights or other commitments of any character
relating to the issued or unissued shares of Pangaea capital stock.
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3.11 Access to Records. Pangaea has provided TradeQwest and the TradeQwest
Shareholders with each of the 1934 Act Filings, and with the records,
minute books, and other documents listed on Schedule 3.11 hereto. Pangaea
has provided TradeQwest with the opportunity to ask questions of and
receive answers from Pangaea concerning the terms and conditions of this
Agreement and to obtain any additional information that Pangaea possesses
or can acquire without unreasonable effort or expense necessary to verify
the accuracy of the information provided.
3.12 No Breach. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not:
(i) violate any provision of the Certificate of Incorporation or By-Laws of
Pangaea;
(ii) violate, conflict with or result in the breach of any of the material
terms of, result in a material modification of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time or both constitute) a default under, any contract or other
agreement to which Pangaea is a party or by or to which it or any of its
assets or properties may be bound or subject;
(iii) violate any order, judgment, injunction, award or decree of any
court, arbitrator or governmental or regulatory body against, or binding
upon, Pangaea or upon the securities, properties or business to Pangaea; or
(iv) violate any statute, rule or regulation applicable to and that would
have a material adverse effect on Pangaea, its business, operations,
properties or assets.
3.13 Brokers or Finders. No broker's or finder's fee will be payable by
Pangaea in connection with the transactions contemplated by this Agreement,
nor will any such fee be incurred as a result of any actions of Pangaea.
3.14 Approvals. No approval, authorization, consent, order or other action
of, or filing with, any person, firm or corporation or any court,
administrative agency or other governmental authority is required in
connection with the execution and delivery of this Agreement by Pangaea or
for the consummation of the transactions described herein.
3.15 Agreements. There are no material contracts or arrangements to which
Pangaea is a party or by or to which it or its assets, properties or
business are bound or subject, whether written or oral.
3.16 Full Disclosure. No representation or warranty by Pangaea in this
Agreement or in any document or schedule to be delivered by them pursuant
hereto, and no written statement, certificate or instrument furnished or to
be furnished by Pangaea pursuant hereto or in connection with the
negotiation, execution or performance of this Agreement contains or will
contain any untrue statement of a material fact or omits or will omit to
state any fact necessary to make any statement herein or therein not
materially misleading or necessary to complete and correct presentation of
all material aspects of the business of Pangaea.
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3.17 Assets. Pangaea holds good and valid title to the assets shown in the
Pangaea Financial Statements, free and clear of all Liens (other than
Pangaea Permitted Liens, as defined below). All of the material assets of
Pangaea are in good operating condition and repair and are usable in the
ordinary course of business of Pangaea and conform to all applicable laws,
ordinances and government orders, rules and regulations relating to their
construction and operation. To the best knowledge of Pangaea, Pangaea has
clear title to all of its business names, trading names, registered
trademarks, service marks and applications. "Pangaea Permitted Liens" means
any Lien that: (a) secures indebtedness reflected on the March 31, 2001
balance sheet of Pangaea that is included in the Pangaea Financial
Statements; (b) are Liens filed of record; (c) are Liens for taxes accrued
but not yet payable; (d) are Liens arising as a matter of law in the
ordinary course of business with respect to obligations incurred after the
date of such balance sheet; provided that the obligations secured by such
Liens are not delinquent or are being contested in good faith; or (e)
involve only such imperfections of title and encumbrances, if any, which do
not materially detract from the value or materially interfere with the use,
as currently used, of the properties subject thereto or affected thereby or
otherwise materially impair the business operations being conducted
thereon.
3.18 Liabilities. Pangaea does not have any material Liabilities which were
not fully, fairly and adequately reflected on the Pangaea Financial
Statements, as of the date thereof. As of the Closing Date, Pangaea will
not have any Liabilities, other than Liabilities fully and adequately
reflected on the Pangaea Financial Statements, Liabilities incurred after
March 31, 2001 in the ordinary course of business, and Liabilities that in
the aggregate are not material to Pangaea's business or financial
condition. To the best knowledge of Pangaea, there is no circumstance,
condition, event or arrangement which may hereafter give rise to any
material Liabilities not in the ordinary course of business.
3.19 No Claims Outstanding. Pangaea represents that it is not subject to
any claims, litigation, or other charges against its assets, has no real
estate or real estate holdings, has no employees, and has one officer and
two directors, serving without pay. Therefore there can be no OSHA or other
personnel claims outstanding or potentially assertable against the company.
Furthermore, there have been no material changes in the company's position,
and the company has conducted no other business, since January 1, 2001,
other than as disclosed in its public filings, indicating a description of
activities since inception of the corporation.
3.20 Securities Issuances. Pangaea represents that all its issued and
outstanding shares are fully paid and non-assessable, not subject to
preemptive rights, and were duly and validly issued in compliance with all
laws, including the Securities Act, and are fully described in the
financial statements.
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SECTION 4. CONDITIONS PRECEDENT
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4.1 Conditions Precedent to the Obligations of TradeQwest and the
TradeQwest Shareholders. All obligations of TradeQwest and the TradeQwest
Shareholders under this Agreement are subject to the fulfillment, prior to
or as of the Closing Date, of each of the following conditions (any one or
more of which may be waived by TradeQwest and the TradeQwest Shareholders):
(a) The representations and warranties of Pangaea contained in this
Agreement or in any certificate or document delivered pursuant to the
provisions hereof shall be true in all material respects at and as of the
Closing Date as though such representations and warranties were made at and
as of such time.
(b) Pangaea shall have performed and complied in all material respects with
all covenants, agreements, and conditions set forth in this Agreement to be
performed or complied with by it prior to or at the Closing.
(c) Prior to the Closing, the Board of Directors and, if required,
shareholders of Pangaea shall have approved, in accordance with Delaware
law, the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby, and authorized all
necessary and proper action to enable Pangaea to comply with the terms of
this Agreement.
(d) Pangaea shall have executed and delivered each instrument and document
to be delivered by it pursuant to this Agreement, including without
limitation the items set forth in Section 8.2(c) hereof.
(e) All instruments and documents to be delivered to TradeQwest and the
TradeQwest Shareholders pursuant to the provisions hereof shall be
reasonably satisfactory to legal counsel for TradeQwest.
(f) There shall be no order, decree, or ruling by any court or governmental
agency or threat thereof, or any other fact or circumstance that would
prohibit or render illegal the transactions provided for in this Agreement.
(g) No litigation or proceeding shall be pending that will have the
probable effect of enjoining or preventing the consummation of any of the
transactions provided for in this Agreement. No litigation or proceeding
shall be pending which could reasonably be expected to have a material
adverse effect on the financial condition or results of operations of
Pangaea.
(h) Pangaea shall have obtained and shall have delivered to TradeQwest
copies of (i) all governmental approvals required to be obtained by Pangaea
in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and (ii) all consents
necessary to be obtained by Pangaea in order to consummate the Exchange
pursuant to this Agreement.
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4.2 Conditions Precedent to the Obligations of Pangaea and Pangaea
Shareholders. All obligations of Pangaea under this Agreement are subject
to the fulfillment, prior to or as of the Closing Date, of each of the
following conditions (any one or more of which may be waived by Pangaea):
(a) The representations and warranties by TradeQwest and the TradeQwest
Shareholders contained in this Agreement or in any certificate or document
delivered pursuant to the provisions hereof shall be true in all material
respects at and as of the Closing Date as though such representations and
warranties were made at and as of such time.
(b) TradeQwest and the TradeQwest Shareholders shall have performed and
complied in all material respects with all covenants, agreements, and
conditions set forth in this Agreement to be performed or complied with by
them prior to or at the Closing.
(c) TradeQwest and the TradeQwest Shareholders shall have executed and
delivered each instrument and document to be delivered by them pursuant to
this Agreement, including without limitation the items set forth in Section
8.2(a) and (b) hereof.
(d) All instruments and documents to be delivered by TradeQwest and the
TradeQwest Shareholders pursuant to the provisions hereof shall be
reasonably satisfactory to legal counsel for Pangaea.
(e) There shall be no order, decree, or ruling by any court or governmental
agency or threat thereof, or any other fact or circumstance that would
prohibit or render illegal the transactions provided for in this Agreement.
(f) No litigation or proceeding shall be pending that will have the
probable effect of enjoining or preventing the consummation of any of the
transactions provided for in this Agreement.
SECTION 5. COVENANTS
--------------------
5.1 Conduct of Business. On and after the date hereof and until the Closing
Date, except as expressly permitted or required by this Agreement or as
otherwise expressly consented to by TradeQwest in writing, Pangaea will:
(a) carry on its business in, and only in, the ordinary course, in
substantially the same manner as heretofore conducted, and use all
commercially reasonable efforts to preserve intact its present business
organization, and maintain its properties in good operating condition and
repair;
(b) maintain its books of account and records in the usual, regular and
ordinary manner consistent with past policies and practices and not change
such policies and practices;
(c) comply in all material respects with all laws applicable to it and its
business;
13
(d) use all reasonable efforts to maintain its good standing in its
jurisdiction of incorporation and in the jurisdictions in which it is
qualified to do business as a foreign corporation and to maintain all
governmental approvals and consents necessary for, or otherwise material
to, it and its business;
(e) not merge or consolidate with, or agree to merge or consolidate with,
or purchase substantially all of the assets of, or otherwise acquire, any
business, business organization or division thereof, of any other person;
(f) not issue or sell any shares of any class of its capital stock, or any
securities convertible into or exchangeable for any such shares, or issue,
sell, grant or enter into any subscriptions, options, warrants, conversion
or other rights, agreements, commitments, arrangements or understandings of
any kind, contingently or otherwise, to purchase or otherwise acquire any
such shares or any securities convertible into or exchangeable for any such
shares;
(g) not incur any indebtedness for borrowed money, issue or sell any debt
securities or prepay any debt (including, without limitation, any
borrowings from or prepayments to any shareholder or other affiliate);
(h) not mortgage, pledge or otherwise subject to any Lien, any of its
properties or assets, tangible or intangible;
(i) not pay or commit to pay any bonus, other incentive compensation,
change in control or similar compensation to any officer, director,
employee, shareholder or affiliate or grant or commit to grant to any
officer, director, employee, shareholder or affiliate any other increase
in, or additional, compensation in any form;
(j) not amend either its certificate of incorporation or bylaws;
(k) not incur, assume, guarantee or otherwise become directly or indirectly
liable with respect to any Liability or obligation in excess of $1,000 in
each case or $5,000 in the aggregate at any one time outstanding (whether
absolute, accrued, contingent or otherwise and whether direct or indirect,
or as guarantor or otherwise with respect to any liability or obligation of
any other person); and
(l) not liquidate, dissolve or wind-up its affairs.
5.2 No Solicitation. From the date hereof until the earlier of the Closing
or the termination of this Agreement in accordance with the terms hereof,
Pangaea agrees:
(a) that it shall not, and shall direct and use its best efforts to cause
its officers, directors, employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained
by it) not to, initiate, solicit or encourage, directly or indirectly, any
inquiries or the making or implementation of any proposal or offer
(including, without limitation, any proposal or offer to its shareholders)
14
with respect to a merger, acquisition, consolidation or similar transaction
involving, or any purchase of all or any significant portion of the assets
or equity securities of, Pangaea (any such proposal or offer being
hereinafter referred to as an "Acquisition Proposal") or engage in any
negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or
implement an Acquisition Proposal;
(b) that it will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing and will take the necessary
steps to inform the individuals or entities referred to above of the
obligations undertaken in this Section 5.2; and
(c) that it will notify TradeQwest immediately of the identity of the
potential acquiror and the terms of such person's or entity's proposal if
any such inquiries or proposals are received by, any such information is
requested from, or any such negotiations or discussions are sought to be
initiated or continued with, it; provided, however, that nothing contained
in this Section 5.2 shall prohibit the Board of Directors of Pangaea from
(i) furnishing information to or entering into discussions or negotiations
with any person or entity that makes an unsolicited written proposal to
acquire such company pursuant to a merger, consolidation, share exchange,
purchase of a substantial portion of the assets, business combination or
other similar transaction, if, and only to the extent that, (A) the Board
of Directors of such company determines in good faith that such action is
required for the Board of Directors to comply with its fiduciary duties to
shareholders, (B) prior to furnishing such information to, or entering into
discussions or negotiations with, such person or entity, Pangaea provides
written notice to TradeQwest to the effect that it is furnishing
information to, or entering into discussions or negotiations with, such
person or entity, and (C) subject to any confidentiality agreement with
such person or entity (which Pangaea determined in good faith was required
to be executed in order for the Board of Directors to comply with its
fiduciary duties to shareholders), Pangaea keeps TradeQwest informed of the
status of any such discussions or negotiations and (ii) to the extent
applicable, complying with Rule 14e-2 promulgated under the 1934 Act with
regard to an Acquisition Proposal.
5.3 Corporate Examinations and Investigations. From the date hereof until
the earlier of the Closing or the termination of this Agreement in
accordance with the terms hereof, each of the parties hereto will give the
other parties hereto and such other parties' accountants, counsel,
consultants, employees and agents, access at all reasonable times to, and
furnish them with all documents, records, work papers and information with
respect to, all of the assets, properties, books, contracts, commitments,
reports and records of such party, as any of the other parties hereto shall
from time to time reasonably request. No investigations by a party hereto
shall, however, diminish or waive any of the representations, warranties,
covenants or agreements of the party under this Agreement.
15
5.4 Further Assurances. Each of the parties hereto agrees to use and to
cause all persons acting on its behalf to use all reasonable good faith
efforts to take all actions and to do all things necessary, proper or
advisable to consummate the transactions contemplated hereby by the Closing
Date. Each of the parties hereto will, and will cause all persons acting on
its or their behalf to, coordinate and cooperate with the other parties
hereto in exchanging such information and supplying such assistance as may
be reasonably requested by the other parties hereto in connection with the
filings and other actions contemplated hereby. Following the Closing, each
of the parties hereto shall, and shall cause all persons acting on its or
their behalf to, from time to time, execute and deliver such additional
instruments, documents, conveyances or assurances and take such other
actions as shall be necessary, or otherwise reasonably requested by any of
the other parties hereto, to confirm and assure the rights and obligations
provided for in this Agreement and render effective the consummation of the
transactions contemplated hereby.
5.5 Confidentiality. In the event the transactions contemplated by this
Agreement are not consummated, Pangaea, TradeQwest and the TradeQwest
Shareholders agree to keep confidential any information disclosed to each
other in connection therewith for a period of one (1) year from the date
hereof; provided, however, such obligation shall not apply to information
which:
(i) at the time of the disclosure was public knowledge;
(ii) after the time of disclosure becomes public knowledge (except due to
the action of the receiving party);
(iii) the receiving party had within its possession at the time of
disclosure; or
(iv) is ordered disclosed by a Court of proper jurisdiction.
SECTION 6. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
-----------------------------------------------------
The representations and warranties contained in this Agreement shall
survive the execution and delivery hereof and the Closing hereunder for one
year following the Closing.
SECTION 7. INDEMNIFICATION
--------------------------
7.1 For a period of one (1) year from the Closing, TradeQwest agrees to
indemnify and hold harmless Pangaea, its officers, directors and principal
shareholders, and Pangaea agrees to indemnify and hold harmless TradeQwest,
the TradeQwest Shareholders and TradeQwest's officers and directors, at all
times up to one (1) year after the date of this Agreement against and in
respect of any liability, damage, or deficiency, all actions, suits,
proceedings, demands, assessments, judgments, costs and expenses, including
attorneys' fees incident to any of the foregoing (collectively referred to
herein as "Damages"), resulting from (i) any material misrepresentation
16
made herein by any indemnifying party to an indemnified party, (ii) an
indemnifying party's breach of a covenant or warranty or an indemnifying
party's nonfulfillment of any agreement hereunder, or (iii) any material
misrepresentation or omission from any report, certificate, financial
statement or tax return furnished or to be furnished by any party hereto
for any period up to and including 120 days after execution of this
Agreement. This provision shall not be construed to be a waiver of any
lawful indemnification provision contained in a party's certificate of
incorporation or by-laws, as permitted by Federal or state law.
7.2 If the indemnified party receives written notice of the commencement of
any legal action, suit or proceeding with respect to which the indemnifying
party is or may be obligated to provide indemnification pursuant to this
Section, the indemnified party shall, within 30 days of the receipt of such
written notice, give the indemnifying party written notice thereof (a
"Claim Notice"). Failure to give such Claim Notice within such 30 day
period shall not constitute a waiver by the indemnified party or its rights
to indemnity hereunder with respect to such action, suit or proceeding
unless the defense thereof is prejudiced thereby. Upon receipt by the
indemnifying party of a Claim Notice from the indemnified party with
respect to any claim for indemnification which is based upon a claim made
by a third party ("Third Party Claim"), the indemnifying party may assume
the defense of the Third Party Claim with counsel of its own choosing, as
described below. The indemnified party shall cooperate in the defense of
the Third Party Claim and shall furnish such records, information and
testimony and attend all such conferences, discovery proceedings, hearings,
trials and appeals as may be reasonably required in connection therewith.
The indemnified party shall have the right to employ its own counsel in any
such action, but the fees and expenses of such counsel shall be at the
expense of the indemnified party unless the indemnifying party shall not
have with reasonable promptness employed counsel to assume the defense of
the Third Party Claim, in which event such fees and expenses shall be borne
solely by the indemnifying party. The indemnifying party shall not satisfy
or settle any Third Party Claim for which indemnification has been sought
and is available hereunder, without the prior written consent of the
indemnified party, which consent shall not be delayed or which shall not be
required if the indemnified party is granted a release in connection
therewith. If the indemnifying party shall fail with reasonable promptness
to defend such Third Party Claim, the indemnified party may defend, satisfy
or settle the Third Party Claim at the expense of the indemnifying party
and the indemnifying party shall pay to the indemnified party the amount of
such loss within ten days after written demand thereof. The indemnification
provisions hereof shall survive the termination of this Agreement.
7.3 Notwithstanding anything to the contrary herein, the indemnification
provided for in this Section 7 will not apply unless and until the
aggregate Damages for which one or more indemnified persons seeks
indemnification under Section 7 exceeds $250,000, in which event the
indemnification provided for in Section 7 will include all Damages in
excess of such sum. The provisions of this Section 7 shall be the sole
remedy against a party for breach of Sections 2 and 3 hereof.
17
SECTION 8. THE CLOSING
----------------------
8.1 The Closing. Subject to the terms and conditions of this Agreement, the
closing of the Exchange (the "Closing") shall take place (a) at Malibu,
California, at 10:00 a.m., PDT time, on July 31, 2001, or (b) at such other
time, date or place as Pangaea and TradeQwest may agree. The date on which
the Closing occurs is hereinafter referred to as the "Closing Date."
8.2 Items to be Delivered at Closing. At the Closing, in addition to any
other documents to be delivered under other provisions of this Agreement,
the following items shall be delivered, all of such deliveries being deemed
to occur simultaneously:
(a) TradeQwest will deliver, or will cause to be delivered, to Pangaea the
following, the form and substance of which shall be reasonably
acceptable to Pangaea and its legal counsel:
(i) A certificate executed by the President and Secretary of
TradeQwest to the effect that the representations and warranties
made by TradeQwest in this Agreement are true and correct in all
material respects as of the Closing Date, with the same effect as
though made on and as of such date.
(ii) A certificate from the Secretary of State of Delaware dated
within 15 days of the Closing Date to the effect that TradeQwest
is a corporation in good standing under the laws of said State.
(iii)An opinion of its legal counsel, limited as to any portion of
the opinion as to an aspect of this Agreement governed by the
application of Delaware law, to Pangaea to the effect that:
(1) TradeQwest is a corporation validly existing and in good
standing under the laws of the State of Delaware and is duly
qualified to do business in California;
(2) TradeQwest has the corporate power to carry on its business
as presently conducted; and
(3) this Agreement has been duly authorized, executed and
delivered by TradeQwest.
Such opinion shall also cover such additional matters as Pangaea
and its counsel may reasonably request.
(b) Each TradeQwest Shareholder will deliver to Pangaea certificates
representing the TradeQwest Common Stock of such shareholder to be
exchanged for Pangaea Shares, along with a duly executed stock power
transferring such certificates to Pangaea.
(c) Pangaea will deliver, or cause to be delivered, to TradeQwest and/or
the TradeQwest Shareholders the following, the form and substance of
which shall be reasonably acceptable to TradeQwest and its legal
counsel:
18
(i) A certificate executed by the President and Secretary of Pangaea,
to the effect that the representations and warranties of Pangaea
made in this Agreement are true and correct in all material
respects as of the Closing Date, with the same effect as though
made on and as of such date.
(ii) Certified copies of the certificate of incorporation and by-laws
of Pangaea, as in effect on the Closing Date.
(iii)Certified copies of resolutions of the Pangaea Board of
Directors authorizing this Agreement and the transactions
contemplated hereby.
(iv) A certificate from the Secretary of State of Delaware dated
within 15 days of the Closing Date to the effect that Pangaea is
a corporation in good standing under the laws of said State.
(v) An opinion of its legal counsel, limited as to any portion of the
opinion as to an aspect of this Agreement governed by the
application of Delaware law, to TradeQwest to the effect that
(1) Pangaea is a corporation validly existing and in good
standing under the laws of the State of Delaware;
(2) Pangaea has the corporate power to carry on its business as
presently conducted;
(3) This Agreement and the other documents and instruments
delivered by Pangaea hereunder have been duly authorized,
executed and delivered by Pangaea and each is a valid and
binding obligation of Pangaea, enforceable in accordance
with its terms;
(4) Pangaea has taken all corporate action necessary for
performance under this Agreement; and
(5) The shares of Pangaea Common Stock issued to the TradeQwest
Shareholders pursuant to this Agreement have been duly
authorized and are validly issued, fully paid and
non-assessable.
Such opinion shall also cover such additional matters as
TradeQwest and its counsel may reasonably request.
(vi) Resignations of all of the officers of Pangaea and of all of its
directors other than ▇▇▇▇▇▇ ▇▇▇▇.
(vii)A written consent of ▇▇▇▇▇▇ ▇▇▇▇, as the sole remaining director
of Pangaea, designating ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇▇
▇▇▇▇ to fill vacancies on the board of directors of Pangaea.
19
(viii) A release of claims in the form attached hereto as Exhibit C,
executed by PageOne Business Productions, LLC, Appletree
Investment Company, and each of the resigning directors and
officers of Pangaea.
(ix) Certificates representing the Pangaea Shares to be issued to the
TradeQwest Shareholders in the Exchange.
(x) Evidence satisfactory to TradeQwest of the filing of all 1934 Act
Filings due by Pangaea for periods prior to the Closing Date.
(xi) List of Shareholders
SECTION 9. TERMINATION
----------------------
9.1 This Agreement may be terminated at any time prior to the Closing:
(a) by the written agreement of TradeQwest and Pangaea;
(b) by TradeQwest or Pangaea, by written notice to the other party by 5:00
p.m., PDT time, on or after July 31, 2001 if the Closing shall not have
occurred by such date (unless the failure of the Closing to occur shall be
due to any breach of this Agreement by the party seeking to terminate),
unless such date shall be extended by the mutual written consent of
TradeQwest and Pangaea;
(c) by Pangaea, if there has been a material breach on the part of
TradeQwest in the representations, warranties or covenants of TradeQwest or
the TradeQwest Shareholders set forth herein, or a failure on the part of
TradeQwest or the TradeQwest Shareholders to perform their respective
obligations hereunder; provided that Pangaea shall have performed and
complied with, in all material respects, all agreements and covenants
required by this Agreement to have been performed and complied with by it
prior to such time, or any other events or circumstances shall have
occurred such that, in any such case, any of the conditions to the Closing
set forth in Section 4.2 could not be satisfied on or prior to the
termination date contemplated by Section 9.1(b) hereof; or
(d) by TradeQwest, if there has been a material breach on the part of
Pangaea in the representations, warranties or covenants of Pangaea set
forth herein or any failure on the part of Pangaea to perform its
obligations hereunder; provided that TradeQwest shall have performed and
complied with, in all material respects, all agreements and covenants
required by this Agreement to have been performed or complied with by it
prior to such time, or any other events or circumstances shall have
occurred such that, in any case, any of the conditions to the Closing set
forth in Section 4.1 could not be satisfied on or prior to the termination
date contemplated by Section 9.1(b) hereof.
9.2 (a) In the event of the termination of this Agreement pursuant to the
provisions of Section 9.1, this Agreement shall become void and have no
effect and all obligations of the parties hereto shall terminate, except
the obligations of the parties pursuant to this Section 9.2 and except for
the provisions of Sections 6, 7 and 10.
20
(b) In the event of termination of this Agreement pursuant to Sections
9.1(c) or 9.1(d), nothing herein shall prejudice the ability of the
non-breaching party from seeking damages from any other party for any breach of
this Agreement, including, without limitation, attorneys' fees and the right to
pursue any remedy at law or in equity.
(c) At any time prior to the Closing, any party hereto, by action taken
by its Board of Directors, may, to the extent legally allowed, (i) extend the
time for the performance of any of the obligations or other acts of the other
parties hereto, (ii) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
SECTION 10. MISCELLANEOUS
-------------------------
10.1 Waivers. The waiver of a breach of this Agreement or the failure of
any party hereto to exercise any right under this Agreement shall in no way
constitute waiver as to any future breach, whether similar or dissimilar in
nature, or as to the exercise of any further right under this Agreement.
10.2 Amendment. Any term or provision of this Agreement may be amended, and
the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only by a writing signed by the party to be bound thereby.
10.3 Assignment. This Agreement is not assignable except by operation of
law.
10.4 Notice. Until otherwise specified in writing, the mailing addresses
and fax numbers of the parties of this Agreement shall be as follows:
To: Pangaea Communications, Inc.
▇▇▇▇▇▇ ▇. ▇▇▇▇, Director
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
To: TradeQwest, Inc.
▇▇▇▇▇▇ ▇▇▇▇, President
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with copy to:
▇▇▇▇▇ ▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇ & Masyr, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
21
Any notice or other communication required or permitted to be given under
this Agreement will be in writing, will be delivered personally or by
facsimile, mail or express delivery, postage prepaid, and will be deemed
given upon actual delivery or, if mailed by registered or certified mail,
on the third business day following deposit in the mails, addressed as
indicated above or at such other address which shall have been furnished in
writing to the addressor.
10.5 Governing Law. This Agreement shall be construed, and the legal
relations between the parties determined, in accordance with the laws of
the State of Delaware, thereby precluding any choice of law rules which may
direct the application of the laws of any other jurisdiction.
10.6 Publicity. No publicity release or announcement concerning this
Agreement or the transactions contemplated hereby shall be issued by either
party hereto at any time from the signing hereof through the Closing Date,
without advance approval in writing of the form and substance by the other
party.
10.7 Entire Agreement. This Agreement (including the Exhibits and Schedules
to be attached hereto) and the collateral agreements executed in connection
with the consummation of the transactions contemplated herein contain the
entire agreement among the parties with respect to the Exchange and
issuance of the Pangaea Shares and related transactions, and supersede all
prior agreements, written or oral, with respect thereto.
10.8 Headings. The headings in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
10.9 Severability of Provisions. The invalidity or unenforceability of any
term, phrase, clause, paragraph, restriction, covenant, agreement or
provision of this Agreement shall in no way affect the validity or
enforcement of any other provision or any part thereof.
10.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall constitute an original
copy hereof, but all of which together shall be considered but one and the
same document.
10.11 Binding Effect. This Agreement shall be binding upon the parties
hereto and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors and assigns.
10.12 Tax Treatment. Pangaea, TradeQwest and the TradeQwest Shareholders
acknowledge that they each have been represented by their own tax advisors
in connection with this transaction; that none of them has made a
representation or warranty to any of the other parties with respect to the
tax treatment accorded this transaction, or the effect individually or
corporately on any party under the applicable tax laws, regulations, or
interpretations; and that no opinion of counsel or private revenue ruling
has been obtained with respect to the effects of this transaction under the
Code.
22
10.13 Press Releases. The parties will mutually agree as to the wording and
timing of any informational releases concerning this transaction prior to
and through the first such release to follow the Closing.
10.14 Arbitration.
(a) Any dispute hereunder ("Dispute") shall be settled by arbitration in
California and, except as herein specifically stated, in accordance with
the commercial arbitration rules of the American Arbitration Association
("AAA Rules") then in effect. However, in all events, these arbitration
provisions shall govern over any conflicting rules that may now or
hereafter be contained in the AAA Rules. Any judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
over the subject matter thereof. The arbitrator shall have the authority to
grant any equitable and legal remedies that would be available in any
judicial proceeding instituted to resolve a Dispute.
(b) Any such arbitration will be conducted before a single arbitrator who
will be compensated for his or her services at a rate to be determined by
the parties or by the American Arbitration Association, but based upon a
reasonable hourly or daily consulting rate for the arbitrator if the
parties are not able to agree upon his or her rate of compensation.
(c) The American Arbitration Association will have the authority to select
an arbitrator from a list of arbitrators who are lawyers familiar with
Delaware contract law and experienced in mergers and acquisitions;
provided, however, that such lawyers cannot work for a firm then performing
services for either party, that each party will have the opportunity to
make such reasonable objection to any of the arbitrators listed as such
party may wish and that the American Arbitration Association will select
the arbitrator from the list of arbitrators as to whom neither party makes
any such objection. If the foregoing procedure is not followed, each party
will choose one person from the list of arbitrators provided by the
American Arbitration Association (provided that such person does not have a
conflict of interest), and the two persons so selected will select from the
list provided by the American Arbitration Association the person who will
act as the arbitrator.
(d) Each party to any arbitration proceeding hereunder will pay its pro
rata share of the initial compensation to be paid to the arbitrator in any
such arbitration and of the costs of transcripts and other normal and
regular expenses of the arbitration proceedings; provided, however, that
the prevailing party in any arbitration will be entitled to an award of
attorneys' fees and costs, and all costs of arbitration, including those
provided for above, will be paid by the non-prevailing party, and the
arbitrator will be authorized to make such determinations.
23
(e) For any Dispute submitted to arbitration, the burden of proof will be
as it would be if the claim were litigated in a Delaware judicial
proceeding. Upon the conclusion of any arbitration proceedings hereunder,
the arbitrator will render findings of fact and conclusions of law and a
written opinion setting forth the basis and reasons for any decision
reached and will deliver such documents to each party to this Agreement
along with a signed copy of the award.
(f) The arbitrator chosen in accordance with these provisions will not have
the power to alter, amend or otherwise affect the terms of these
arbitration provisions or the provisions of this Agreement. Except as
specifically otherwise provided in this Agreement, arbitration will be the
sole and exclusive remedy of the parties for any Dispute arising out of
this Agreement.
24
IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.
TRADEQWEST, INC.a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
---------------------------
▇▇▇▇▇▇ ▇▇▇▇
President
PANGAEA COMMUNICATIONS, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇,
Chairman
TradeQwest Shareholders
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇▇▇▇
25
EXHIBIT A
EXCHANGE OF SHARES
Name of TradeQwest Number of TradeQwest Number of Pangaea
Shareholder Shares to be Exchanged Shares to be Issued
------------------ ---------------------- -------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇ 500 3,733,334
▇▇▇▇▇▇ ▇▇▇▇ 500 3,733,334
▇▇▇▇▇▇▇ ▇▇▇▇ 500 3,733,334
----- ----------
Total 1,500 11,200,002
EXHIBIT B
POST MERGER - PRE FINANCING STOCKHOLDERS
STOCKHOLDER NO. OF SHARES % OF TOTAL
----------- ------------- ----------
▇▇▇▇ ▇▇▇▇▇▇▇▇ 3,733,334
▇▇▇▇▇▇ ▇▇▇▇ 3,733,334
▇▇▇▇▇▇▇ ▇▇▇▇ 3,733,334 78.7%
300 Stockholders 2,037,600 14.3%
(including PageOne
and Appletree and
Lexington Ventures) 1,000,000 7.0%
---------- ------
Total 14,237,602 100%
POST MERGER - POST FINANCING STOCKHOLDERS
STOCKHOLDER NO. OF SHARES % OF TOTAL
----------- ------------- ----------
▇▇▇▇ ▇▇▇▇▇▇▇▇ 3,733,334
▇▇▇▇▇▇ ▇▇▇▇ 3,733,334
▇▇▇▇▇▇▇ ▇▇▇▇ 3,733,334 55.34%
300 Stockholders 2,037,600 10.07%
(including PageOne
and Appletree and
Lexington Ventures) 1,000,000 4.94%
Fund Raising
(Private/Public) 6,000,000 29.65%
---------- ------
Total 20,237,602 100%
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Schedule 2.16
TradeQwest has entered into an agreement with Apparel Concepts International for
certain management and other services. A copy of this agreement has been made
available to TradeQwest's independent auditors and to Pangaea.
Schedule 2.23
The following warrants of TradeQwest have been issued but are to be canceled
upon execution of this Share Exchange Agreement:
Warrantholder No. of Warrants
▇▇▇▇▇ ▇▇▇▇▇▇ 19.7386 (nineteen point,seven, three, eight,
six shares)
Schedule 2.6
The TradeQwest shareholders may each offer up to 100,000 Pangaea shares in the
forthcoming SB-2 Registration Statement provided however, that the selling of
these shares will be permitted on an over-allotment basis, unless waived by the
underwriters.
Schedule 3.5
On June 28, 2001, Pangaea sold 1,000,000 shares of restricted common stock to
Lexington Ventures, for $1,000. This offering was pursuant to a private
placement to an accredited investor and is exempt from registration under
section 4(2) of the Securities Act of 1933.
Schedule 3.10
Lexington Ventures is the owner of 1,000,000 shares (7.02%) of the issued and
outstanding common stock of Pangaea Communications, Inc. as of the closing date.
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Schedule 3.9
The following periodic reports have not been timely filed with the Securities
and Exchange Commission:
Report Required Filing Date Actual Filing Date
------ -------------------- ------------------
10-QSB for q/e November 15, 2000 June 4, 2001
9/30/00
10-KSB for y/e April 2, 2001 June 27, 2001
12/31/00
10-QSB for q/e May 15, 2001 June 29, 2001
3/31/01
Schedule 3.10
Effective with the merger of TradeQwest, Inc. and Pangaea Communications, Inc.,
the following warrant is to be issued pursuant to the Consulting Agreement
between PageOne Business Productions, LLC and TradeQwest, Inc. dated May 11,
2001:
A five-year transferable warrant to acquire up to 350,000 registered
shares of Pangaea common stock, in the name of PageOne Business Productions,
LLC, exercisable at $1.00 per share, on an anti-dilutive basis ("PageOne
Warrant") equal to 1.73% of the post merger shares issued (in accordance with
Exhibit B of this Agreement). The shares underlying the PageOne Warrant are
subject to one-time registration rights.shares of common stock,
28
Schedule 3.11
Documents of Pangaea Communications, Inc.
1. Minutes prior to the execution and closing of this Share Exchange
Agreement\
2. (Restated) Articles of Incorporation
3. By-laws
4. Subscription Agreements:
Appletree Investment Company
PageOne Business Productions, LLC
Lexington Ventures
5. Minutes of the Board of Directors and Stockholder Consent:
Approving Share Exchange Agreement
6. Resignation of Officers
29
