Exhibit 10.1
SHARE EXCHANGE AGREEMENT
AND
PLAN OF REORGANIZATION
DATE: March 7, 2006
BETWEEN: Pacel Corp. a Nevada corporation
0000 Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxx, XX 00000 ("Pacel")
AND: Xxxxxxxxxx Xxxxxxxx, owner of all of the issued and
outstanding shares of common stock of United Personnel
Services, Inc., a Maine corporation ("Xxxxxxxx")
RECITALS
X. Xxxxxxxx owns 100% of the issued and outstanding shares ("Xxxxxxxx
Shares") of United Personnel Services, Inc., a Maine corporation ("United"),
which operates a professional services organization in the State of Maine. In
addition, Xxxxxxxx owns 100% of the issued and outstanding shares of World Wide
Personnel Services of Maine, Inc., a Maine corporation (" World Wide").
X. Xxxxx desires to acquire the Xxxxxxxx Shares, as well as all of the
issued and outstanding shares of World Wide, in exchange for the issuance of
Pacel's Series "C" Convertible Preferred Stock. ("Series "C" Stock").
C. The acquisition by Pacel of World Wide will be the subject of a
subsequent Shares Exchange Agreement and Plan of Reorganization to be executed
by the parties following the closing of this Agreement. ("World Wide
Agreement").
X. Xxxxx and Xxxxxxxx intend by the execution of this Agreement to
adopt and qualify a plan of reorganization within the meaning of Section 368 (b)
of the Internal Revenue Code of 1986, as amended, pursuant to the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
set forth herein, the parties hereto do hereby agree as follows:
AGREEMENT
1. EFFECTIVE DATE The effective date of this Agreement shall
be January 1, 2006. ("Effective Date").
2. EXCHANGE OF SHARES. At the Closing, as defined in Section
9 of this Agreement, Xxxxxxxx shall assign, transfer and deliver to Pacel the
Xxxxxxxx Shares. In exchange for the Xxxxxxxx Shares. Pacel shall issue to
Xxxxxxxx 500,000 shares of the Series "C" Stock, upon the execution and closing
of the World Wide Agreement. The Series "C" Stock shall have the rights and
limitations as set forth in the Certificate of Designation, attached hereto as
Exhibit "A" and incorporated by reference. The assignment, transfer, and
delivery by Xxxxxxxx of the Xxxxxxxx Shares to Pacel shall be effected on the
Closing Date by Xxxxxxxx'x execution and delivery of documents and instruments
necessary to assign, transfer, and deliver the Xxxxxxxx Shares, free and clear
of any and all liens, encumbrances, security interests, claims and other
restrictions or charges of any kind whatsoever.
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3. EMPLOYMENT AGREEMENT
(a) The parties acknowledge that the willingness of Pacel to
enter into this Agreement is contingent upon the ability of Pacel, as more
particularly described in Section 10 herein, to retain the services of
Xxxxxxxxxx Xxxxxxxx and her husband, Xxxxxxx Xxxxxxxx, United and World Wide,
respectively.
(b) Within thirty (30) days of the Effective Date, Pacel and
Xxxxxxx Xxxxxxxx and Xxxxxxxxxx Xxxxxxxx, respectively, shall negotiate and
agree upon compensation and other terms and conditions of their respective
employment agreements between Pacel and/or its subsidiaries and affiliates and
the Petersons ("Employment Agreements") based on the summary "Outline of
Employment Agreement Between Pacel and Xxxxxxxx attached hereto as Exhibit "B"
and incorporated by this reference. Such terms and conditions agreed upon
between the parties shall be memorialized in separate Employment Agreements
within the time frame set forth in this section and shall be executed by the
parties thereto concurrent with the Closing of this Agreement.
4. DUE DILIGENCE REVIEW Pacel and Xxxxxxxx shall permit their
respective employees, agents, accountants, legal counsel and other
representatives to have access to each others books, records, employees,
counsel, accountants, and other representatives at all reasonable times for the
purpose of conducting their respective due diligence investigation. Each party
will make available to the other for examination and reproduction all documents
and data of every kind and character relating to this Agreement and the
transactions contemplated hereby, in possession or control of, or subject to
reasonable access by either party. All such due diligence investigation shall be
completed and each party shall notify the other in writing of the satisfaction
or removal of this due diligence review condition within thirty (30) days of the
Effective Date. Upon mutual agreement of the parties, additional time may be
allowed to complete such due diligence investigation. Should a party ("Reviewing
Party") become aware of any information during its due diligence investigation
which, in the opinion of the Reviewing Party, could have material adverse impact
on this Agreement and/or the transactions contemplated hereby, the Reviewing
Party shall immediately notify the other party ("Receiving Party") in writing of
such information and the concerns which such information has caused. The
Receiving Party shall have a reasonable time to respond to those concerns. In
the event that the concerns cannot be resolved to the satisfaction of the
Reviewing Party, the Reviewing Party shall have the right to terminate this
Agreement without further liability hereunder. Each party shall bear the costs
and expenses of its own due diligence investigation hereunder, including the
fees and expenses of professional advisors.
5. CONDUCT OF BUSINESS; INTERIM OPERATIONS Pending the
Closing of this Agreement and the transactions contemplated thereby, Xxxxxxxx
shall use her best efforts to conduct the business of United in a reasonable and
prudent manner in accordance with its past practices, to preserve its existing
business organizations and relationships with its employees, customers, clients
and others with whom it has a business relationship, to preserve and protect its
properties, and to conduct its business in compliance with applicable laws and
regulations. Without the prior written consent of Pacel, United shall not:
(a) merge into or with or consolidate with, any other
corporation;
(b) amend its articles of incorporation or bylaws;
(c) issue any capital stock or other securities, or grant or
enter into any agreement to grant, any options, convertible rights, warrants,
calls, or agreements relating to its securities;
(d) enter into, or terminate, any material agreement;
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(e) engage in any one or more activities or transactions
outside the ordinary course of business;
(f) enter into any transaction or make any commitment which
could result in any of the warranties and representations of Xxxxxxxx contained
in this Agreement not being true and correct after the occurrence of such
transaction or event.
6. WARRANTIES AND REPRESENTATIONS OF XXXXXXXX Xxxxxxxx
warrants and represents to Pacel, as of the date hereof, as follows:
(a) United is a corporation duly organized under the laws of
the State of Maine, validly existing and in good standing, authorized to
exercise all its corporate powers, rights and privilege and has the corporate
power and authority to own and operate its properties and to carry on its
business as now conducted.
(b) Xxxxxxxx has all requisite legal and corporate power to
execute and deliver this Agreement, consummate the transactions contemplated
hereby and perform its obligations hereunder.
(c) All corporate action on the part of United necessary for
the authorization, execution, delivery and performance of all obligations under
this Agreement will be taken and this Agreement constitutes a legal, valid and
binding obligation enforceable according to its terms.
(d) Xxxxxxxx has, and will have at Closing, legal and
beneficial ownership of Xxxxxxxx Shares, free and clear of any and all liens and
encumbrances or other restrictions or limitations and has, and will have at
Closing, all required legal and corporate power to transfer and convey Xxxxxxxx
Shares to Pacel.
(e) There are no claims, actions, suits, investigations or
proceedings against Xxxxxxxx or United pending or, to the knowledge of Xxxxxxxx,
threatened in any court or before or by any governmental authority, or before
any arbitrator, that might have an adverse effect on United or Xxxxxxxx Shares,
and to the knowledge of Xxxxxxxx, there is no basis for any such claim, action,
suit, investigation or proceeding that is likely to result in a judgment, decree
or order having an adverse effect on United or Xxxxxxxx Shares. Xxxxxxxx and
United are not in default under, and no condition exists that would (i)
constitute a default under, or breach or violation of, any legal requirement,
permit or contract applicable to Xxxxxxxx or United, or (ii) accelerate or
permit the acceleration of the performance required under, or give any party the
right, to terminate any contract.
(f) No suit, action or other proceeding is pending or, or to
the knowledge of Xxxxxxxx, threatened before any governmental authority seeking
to restrain Xxxxxxxx or prohibit its entry into this Agreement or prohibit the
Closing, or seeking damages against Xxxxxxxx or United as a result of the
consummation of this Agreement.
(g) Neither the execution and delivery of this Agreement nor
the carrying out of any of the transactions contemplated hereby will:
i. violate or conflict with any of the terms
and conditions or provisions of the articles
of incorporation or bylaws of United;
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ii. violate any legal requirement applicable to
Xxxxxxxx or United
iii. violate, conflict with, result in a breach
of, constitute a default under, or
accelerate or permit the acceleration of the
performance required by, or give any other
party the right to terminate, any contract
or permit applicable to Xxxxxxxx or United;
iv. result in the creation of any lien, charge
or other encumbrance on any property of
Xxxxxxxx or United other than as provided
for herein; or
v. require Xxxxxxxx or United to obtain or make
any waiver, consent, action, approval or
authorization of, or registration,
declaration, notice or filing with, any
private non-governmental third party or any
governmental authority.
7. WARRANTIES AND REPRESENTATIONS OF PACEL Pacel warrants and
represents to Xxxxxxxx as follows:
(a) Pacel is a corporation duly organized under the laws of
the State of Nevada, validly existing and in good standing, is authorized to
exercise all its corporate powers, rights and privileges and has the corporate
power and authority to own and operate its properties and to carry on its
businesses as now conducted.
(b) Pacel has all requisite legal and corporate power to
execute and deliver this Agreement, consummate the transactions contemplated
hereby and perform its obligations hereunder.
(c) All corporate action on Pacel's part necessary for the
authorization, execution, delivery and performance of all obligations under this
Agreement and for the issuance and delivery of the Pacel Shares will be taken,
and this Agreement constitutes a legal, valid and binding obligation of Pacel
enforceable according to its terms.
(d) Neither the execution and delivery of this Agreement nor
the carrying out of any of the transactions contemplated hereby will:
i. violate or conflict with any of the terms
and conditions or provisions of the articles
of incorporation or bylaws of Pacel;
ii. violate any legal requirement applicable to
Pacel;
iii. violate, conflict with, result in a breach
of, constitute a default under, or
accelerate or permit the acceleration of the
performance required by, or give any other
party the right to terminate, any contract
or permit applicable to Pacel;
iv. result in the creation of any lien, charge
or other encumbrance on any property of
Pacel; or
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v. require Pacel to obtain or make any waiver,
consent, action, approval or authorization
of, or registration, declaration, notice or
filing with, any private non-governmental
third party or any governmental authority.
(e) The Pacel Shares, when issued and delivered in accordance
with the terms of this Agreement and for the consideration expressed herein,
shall be duly and validly issued, fully paid and non-assessable.
(f) No suit, action or other proceeding is pending or, to
Pacel's best knowledge, threatened before any governmental authority seeking to
restrain Pacel or prohibit entry into this Agreement or prohibit the Closing, or
seeking damages against Pacel or its properties as a result of the consummation
of this Agreement.
(g) The current authorized capital stock of Pacel consists of
Ten Billion (10,000,000,000) shares of common stock, $0.001 par value per share,
of which 4,445,584 shares are issued and outstanding and One Million (1,000,000)
shares of 1997 Series "A" Preferred Stock, of which 1,000,000 are issued and
outstanding. There are no other securities, options, warrants, or other rights
to purchase any securities of Pacel outstanding. All outstanding securities of
Pacel are duly and validly issued, are fully paid and non-assessable and were
issued in compliance with all applicable federal and state securities laws.
8. COVENANTS.
8.1 APPROVAL OF DIRECTORS Prior to the effective date
of this Agreement, Pacel and United , to the extent required, shall each hold a
special meeting of their respective Boards of Directors to approve the Agreement
and the transactions contemplated thereby.
8.2 THIRD PARTY CONSENTS Pacel and Xxxxxxxx each
agree to use their respective best efforts to obtain, as soon as reasonably
practicable, all permits, authorizations, consents, waivers and approvals from
third parties or governmental authorities necessary to consummate this Agreement
and the transactions contemplated hereby.
9. CLOSING Subject to the satisfaction of the conditions set
forth in Section 10 and Section 11 of this Agreement, the closing of the
transactions contemplated hereby ("Closing") shall be held at the office of
Pacel in North Carolina. The date upon which the Closing occurs is hereinafter
referred to as the "Closing Date". If by the close of business on March 7, 2006,
Closing has not occurred, then either party hereto may terminate this Agreement
by written notice to such effect to the other party without liability to any
other party to this Agreement unless the reason for the Closing having not
occurred is (i) such party's willful breach of this Agreement, or (ii) , if all
of the conditions to such party's obligations set forth in Section 10 and
Section 11 of this Agreement have been satisfied or waived in writing by the
date scheduled for the Closing, the failure of such party to perform its
obligations under this Agreement on such date. However, any termination pursuant
to this Section 9 shall not relieve any party hereto who was responsible for
Closing having not occurred of liability for such party's willful breach of this
Agreement or the failure of such party to perform its obligations under this
Section 9 on such date.
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10. CONDITIONS TO OBLIGATIONS OF PACEL The obligations of
Pacel to carry out the transactions contemplated by this Agreement are subject,
at the option of the Pacel, to the satisfaction, or waiver by Pacel, of the
following conditions:
(a) All warranties and representations of Xxxxxxxx contained
in this Agreement shall be true and correct in all material respects as of the
Closing and Xxxxxxxx shall have performed and satisfied in all material respects
all agreements and covenants required by this Agreement to be performed or
satisfied by it at or prior to the Closing.
(b) As of the Closing Date, no suit, action, or other
proceeding, shall be pending or threatened before any court or governmental
agency seeking to restrain Pacel or prohibit the Closing or seeking damages
against Pacel or Xxxxxxxx or United as a result of the consummation of this
Agreement.
(c) Since the date of this Agreement and up to and including
the Closing there have not been:
i. any changes in the business, operations,
prospects or financial condition of United
that had or might have a material adverse
effect on United; or
ii. any damage, destruction or loss to United
that had or might have an adverse effect on
United or Xxxxxxxx Shares.
(d) Xxxxxxxx shall have furnished Pacel with a copy of all
necessary corporate action on its behalf approving Xxxxxxxx'x execution,
delivery and performance of this Agreement.
(e) Pacel shall have completed its due diligence investigation
and the results thereof have not revealed that any of the warranties and
representations of Xxxxxxxx set forth herein are untrue or incorrect in any
respect or otherwise unsatisfactory to Pacel or that exceptions, if any, have
been resolved to the satisfaction of Pacel.
(f) Pacel shall have received written evidence, in form and
substance satisfactory to it, of the consent to the transactions contemplated by
this Agreement of all governmental and private third parties where the absence
of any such consent would result in a violation of law or breach or default
under any agreement to which Xxxxxxxx is a party.
(g) Pacel shall have entered into Employment Agreements with
Xxxxxxx Xxxxxxxx and Xxxxxxxxxx Xxxxxxxx, respectively, as that term is defined
in Section 3 of this Agreement.
11. CONDITIONS TO OBLIGATIONS OF XXXXXXXX The obligations of
Xxxxxxxx to carry out the transactions contemplated by this Agreement are
subject, at the option of the Xxxxxxxx, to the satisfaction or waiver by
Xxxxxxxx, of the following conditions:
(a) Pacel shall have furnished Xxxxxxxx with copies of all
necessary corporate action on its behalf approving the execution, delivery and
performance of this Agreement.
(b) All warranties and representations of Pacel contained in
this Agreement shall be true and correct in all material respects as of the
Closing and Pacel shall have performed and satisfied in all material respects
all agreements and covenants required by this Agreement to be performed or
satisfied by it at or prior to the Closing.
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(c) As of the Closing Date, no suit, action, or other
proceeding, shall be pending or threatened before any court or governmental
agency seeking to restrain Xxxxxxxx or United or prohibit the Closing or seeking
damages against Pacel or Xxxxxxxx or United as a result of the consummation of
this Agreement.
12. INDEMNIFICATION Xxxxxxxx agrees to indemnify and hold
harmless Pacel from and against any and all damages, liabilities, obligations,
penalties, fines, judgments, claims, deficiencies, losses, costs, expenses and
assessments arising out of, resulting from or in any way related to (a) a breach
of, or failure to perform or satisfy any of, the warranties and representations,
covenants and agreements made by Xxxxxxxx in this Agreement or in any document
or certificate delivered by Xxxxxxxx at the Closing, or (b) the existence of any
liabilities or obligations of United other than those disclosed in Schedule 13
attached hereto.
13. PUBLIC ANNOUNCEMENTS Neither party shall issue or approve
a news release or other public announcement concerning the transactions
contemplated by this Agreement without the prior written consent of the other as
to the contents of the announcement and its release, which approval shall not be
unreasonably withheld.
14. NOTICES All notice, consents, waivers and other
communications required or permitted by this Agreement shall be in writing and
shall be deemed given to a party when (a) delivered to the appropriate address
by hand or by nationally recognized overnight courier service, with costs
prepaid; (b) sent by facsimile or e-mail with confirmation of transmission by
the transmitting equipment; or (c) sent by certified mail, return receipt
requested, in each case to the following addresses, facsimile numbers or e-mail
addresses and marked to the attention of the person designated below:
To Pacel:
Xxxx Xxxxxxxxx
0000 Xxxxxx Xxx., Xxxxx 000
Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
E-mail: Xxxxxxxxxx@xxxxxxxx.xxx
To: Xxxxxxxx:
Xxxxxxxxxx Xxxxxxxx
0 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
Xxxx@xxxxxxxxxxx.xxx
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15. EXPENSES Each party shall bear the costs and expenses of
its own fees and expenses of professional advisors and other costs relating to
this Agreement.
16. ARBITRATION REQUIRED/MEDIATION FIRST OPTION. Any dispute
or claim that arises out of or that relates to this agreement, or to the
interpretation or breach thereof, or to the existence, scope, or validity of
this agreement or the arbitration agreement, shall be resolved by arbitration in
accordance with the then effective arbitration rules of American Arbitration
Association. Judgment upon the award rendered pursuant to such arbitration may
be entered in any court having jurisdiction thereof. The parties acknowledge
that mediation usually helps parties to settle their dispute. Therefore, any
party may propose mediation whenever appropriate through the organization named
above or any other mediation process or mediator as the parties may agree upon.
17. BINDING EFFECT This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns; but neither this Agreement nor any of the rights, benefits or
obligations hereunder shall be assigned, by operation of law or otherwise, by
either party hereto without the prior written consent of the other party, which
approval shall not be unreasonably withheld.
18. SURVIVAL OF WARRANTIES AND REPRESENTATIONS The warranties
and Representations of the parties as set forth in this Agreement are the
exclusive warranties and representations of the parties. All warranties and
representations, covenants and agreements by the parties to this Agreement shall
expressly survive the Closing.
19. GOVERNING LAW This Agreement and the documents and
instruments delivered pursuant hereto shall be governed by and construed in
accordance with the laws of the State of North Carolina. Each party hereto
irrevocably submits to the jurisdiction of the court of the State of North
Carolina, in any action or proceeding arising out of or relating to this
Agreement. Each party hereto consents to service of process by any means
authorized by applicable law and waives the defense of an inconvenient form to
the maintenance of such action or proceeding in any such court.
20. SEVERABILITY The provisions of this Agreement are
severable. If any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions, to the
extent enforceable, shall nevertheless be binding and enforceable.
21. NON-WAIVER Failure by any party at any time to require
performance of the other party of the provisions of this Agreement shall in no
way affect any party's rights hereunder to enforce the same, nor shall any such
waiver by either party of any breach be held to be a waiver of any succeeding
breach or waiver of this clause.
22. REMEDIES The rights and remedies provided by this
Agreement are cumulative and the use of any one right or remedy by any party
hereto shall not preclude or constitute a waiver of its rights to use any or all
other remedies. Such rights and remedies are given in addition to any other
rights and remedies a party may have by law, statute or otherwise.
23. ATTORNEYS' FEES In the event suit or action is brought, or
an arbitration proceeding is initiated, to enforce or interpret any of the
provisions of this agreement, or that arise out of or relate to this agreement,
the prevailing party shall be entitled to reasonable attorney's fees in
connection therewith. The determination of who is the prevailing party and the
amount of reasonable attorney's fees to be paid to the prevailing party shall be
decided by the arbitrator(s) ,with respect to attorney's fees incurred prior to
and during the arbitration proceedings, and by the court or courts, including
any appellate court, in which such matter is tried, heard, or decided, including
a court that hears a request to compel or stay litigation or that hears any
exceptions or objections to,
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or requests to modify, correct, or vacate, an arbitration award submitted to it
for confirmation as a judgment, with respect to attorney's fees incurred in such
court proceedings.
24. ENTIRE AGREEMENT This Agreement, together with all
exhibits attached hereto, constitutes the entire agreement between the parties
with respect to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, by any of
the parties or by any officer or representative of any party. No amendment or
modification of this Agreement shall be binding unless executed in writing by
the party to be bound thereby.
25. COUNTERPARTS This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
26. ADVICE OF COUNSEL This Agreement was prepared by the Law
Office of Xxxxxx X. Xxxxxxxxx on behalf of Pacel and Xxxxxxxx has been advised
to retain her own legal counsel to represent them in connection with this
Agreement and they have elected not to seek the advice of such legal counsel.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
dates indicated below.
PACEL CORP.
By:/s/ XXXX XXXXXXXXX Date: March 7, 2006.
Name: Xxxx Xxxxxxxxx
Title: President
XXXXXXXXXX XXXXXXXX, AS HOLDERS OF 100% OF THE ISSUED AND OUTSTANDING COMMON
STOCK OF UNITED PERSONNEL SERVICES, INC.
/s/ XXXXXXXXXX XXXXXXXX Date: March 7, 2006
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EXHIBIT "A"
CERTIFICATE OF DESIGNATION
SERIES "C" CONVERTIBLE PREFERRED STOCK
The Series "C" Convertible Preferred Stock ("Series "C"
Stock") shall consist of 500,000 shares, par value $0.001 per share. The
preferences, rights and privileges of the Series "C" Stock shall be as follows:
o Dividends shall be declared and set aside for any shares of the
Series " C" Stock in the same manner as the Common Stock;
o The Shares of Series "C" Stock, in the aggregate, shall be
convertible, at the option of the holders, into such number of
shares of Common Stock as shall be equal $500,000, based on the
closing bid price of the Common Stock as quoted on the OTC
Bulletin Board on the date of conversion. No conversion shall
occur for a period of twelve months from the date of issuance of
the Series "C" Stock. Any conversion shall occur without the
payment of any additional consideration;
o The Series "C" Stock shall have no voting rights;
o In the event of any liquidation, dissolution or winding up of the
corporation, the holders of the Series "C" Stock shall be entitled
to be paid out of the assets of the corporation available for
distribution to its shareholders in the same manner as, and
without preference over, the holders of Common Stock.
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EXHIBIT "B"
OUTLINE OF EMPLOYMENT AGREEMENTS BETWEEN PACEL AND XXXXXXXX
Xxxxxxx Xxxxxxxx shall become an employee of Piedmont HR, a subsidiary
of Pacel.
Xxxxxxxxxx Xxxxxxxx shall be appointed President and Chief Executive
Officer of United Personnel Services, Inc.
The terms and conditions of each employment agreement with respect to
the term of each agreement and the compensation to be paid thereunder will be
subject to further negotiation.
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