SHARE EXCHANGE AGREEMENT
THIS AGREEMENT is made as of the 20th day of February, 2007
AMONG:
PARAGON FINANCIAL CORPORATION, a corporation formed pursuant to the
laws of the State of Delaware and having an office for business at
0000 Xxxxxxxx Xxxxxxx Xxxxx, Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
("Paragon")
AND:
C W PARTICIPACOES, LTDA., a limited liability company formed pursuant
to the laws of Brazil and having an office for business located at
Alameda Rio Negor, 585-7th andar-Edificio Padauiri
06454-000-Alphaville-barnueri-SP-Brazil ("CW").
UNIONE CONSULTING LTDA., a limited liability company formed pursuant
to the laws of Brazil and having an office for business located at
Xxxxxxx Xxx Xxxxx, 000-0xx andar-Edificio Padauiri
06454-000-Alphaville-Barnueri-SP-Brasil. ("Unione")
UNIONE CONSULTING CHILE S.A.
AND:
NEWMARKET TECHNOLOGY, INC., a company formed pursuant to the laws of
Nevada and having an office for business located at 00000 Xxxxxxxx
Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 and the 99.9998% owner of C W
Participacoes Ltda. ("NewMarket")
WHEREAS:
A. NewMarket owns 4,510,490 quotas or 99.9998% of the total quotas
(4,510,500) of CW. CW owns 933,900 quotas or 99.99% of the total quotas
(934,000) of Unione. Unione owns 99,999 shares or 99.999% of the total shares
(100,000) of Unione Consulting Chile S.A. For the purposes of this agreement,
C.W. Participacoes, Unione Brazil and Unione Chile shall be considered as
"Unione".
B. Paragon is a reporting company whose common stock is quoted on the Pink
Sheets; and
C. The respective Boards of Directors of Paragon and Unione deem it
advisable and in the best interests of Paragon and Unione that Unione become a
wholly-owned subsidiary of Paragon (the "Acquisition") pursuant to this
Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSETH THAT in consideration of the premises
and the mutual covenants, agreements, representations and warranties contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS AND INTERPRETATION
Definitions
1.1 In this Agreement the following terms will have the following meanings:
(a) "Acquisition" means the Acquisition, at the Closing, of Unione by
Paragon pursuant to this Agreement;
(b) "Acquisition Shares" means the 100 Paragon Series H Preferred Shares
to be issued to NewMarket at Closing pursuant to the terms of the
Acquisition;
(c) "Agreement" means this share purchase agreement among Paragon, Unione,
and NewMarket;
(d) "Paragon Accounts Payable and Liabilities" means all accounts payable
and liabilities of Paragon, on a consolidated basis, due and owing or
otherwise constituting a binding obligation of Paragon and its
subsidiaries (other than a Paragon Material Contract) as of December
31, 2006 as set forth is Schedule "A" hereto;
(e) "Paragon Accounts Receivable" means all accounts receivable and other
debts owing to Paragon, on a consolidated basis, as of December 31,
2006 as set forth in Schedule "B" hereto;
(f) "Paragon Assets" means the undertaking and all the property and assets
of the Paragon Business of every kind and description wheresoever
situated including, without limitation, Paragon Equipment, Paragon
Inventory, Paragon Material Contracts, Paragon Accounts Receivable,
Paragon Cash, Paragon Intangible Assets and Paragon Goodwill, and all
credit cards, charge cards and banking cards issued to Paragon;
(g) "Paragon Bank Accounts" means all of the bank accounts, lock boxes and
safety deposit boxes of Paragon and its subsidiaries or relating to
the Paragon Business as set forth in Schedule "C" hereto;
(h) "Paragon Business" means all aspects of any business conducted by
Paragon and its subsidiaries;
(i) "Paragon Cash" means all cash on hand or on deposit to the credit of
Paragon and its subsidiaries on the Closing Date;
(j) "Paragon Preferred Shares" means the shares of a new series of
preferred stock of Paragon, $0.0001 par value per share, designated
the "Series H", which will have the rights, powers and preferences set
forth in accordance with the terms of the Certificate of Designation,
in the form attached hereto as Exhibit "A".
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(k) "Paragon Debt to Related Parties" means the debts owed by Paragon to
any affiliate, director or officer of Paragon as described in Schedule
"D" hereto;
(l) "Paragon Equipment" means all machinery, equipment, furniture, and
furnishings used in the Paragon Business, including, without
limitation, the items more particularly described in Schedule "E"
hereto;
(m) "Paragon Financial Statements" means, collectively, the audited
consolidated financial statements of Paragon for the fiscal year ended
December 31, 2005, together with the auditors' going concern report
thereon, and the unaudited consolidated financial statements of
Paragon for the three month period ended December 31, 2006, true
copies of which are attached as Schedule "F" hereto;
(n) "Paragon Goodwill" means the goodwill of the Paragon Business
including the right to all corporate, operating and trade names
associated with the Paragon Business, or any variations of such names
as part of or in connection with the Paragon Business, all books and
records and other information relating to the Paragon Business, all
necessary licenses and authorizations and any other rights used in
connection with the Paragon Business;
(o) "Paragon Insurance Policies" means the public liability insurance and
insurance against loss or damage to the Paragon Assets and the Paragon
Business as described in Schedule "G" hereto;
(p) "Paragon Intangible Assets" means all of the intangible assets of
Paragon and its subsidiaries, including, without limitation, Paragon
Goodwill, all trademarks, logos, copyrights, designs, and other
intellectual and industrial property of Paragon and its subsidiaries;
(q) "Paragon Inventory" means all inventory and supplies of the Paragon
Business as of December 31, 2006, as set forth in Schedule "H" hereto;
and
(r) "Paragon Material Contracts" means the burden and benefit of and the
right, title and interest of Paragon and its subsidiaries in, to and
under all trade and non-trade contracts, engagements or commitments,
whether written or oral, to which Paragon or its subsidiaries are
entitled whereunder Paragon or its subsidiaries are obligated to pay
or entitled to receive the sum of $10,000 or more including, without
limitation, any pension plans, profit sharing plans, bonus plans, loan
agreements, security agreements, indemnities and guarantees, any
agreements with employees, lessees, licensees, managers, accountants,
suppliers, agents, distributors, officers, directors, attorneys or
others which cannot be terminated without liability on not more than
one month's notice, and those contracts listed in Schedule "I" hereto.
(s) "Closing" means the completion, on the Closing Date, of the
transactions contemplated hereby in accordance with Article 9 hereof;
(t) "Closing Date" means the day on which all conditions precedent to the
completion of the transaction as contemplated hereby have been
satisfied or waived, but in any event no later than February 20th,
2007 ;
(u) "Unione Accounts Payable and Liabilities" means all accounts payable
and liabilities of Unione, due and owing or otherwise constituting a
binding obligation of Unione (other than a Unione Material Contract)
as of December 31, 2006 as set forth in Schedule "J" hereto;
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(v) "Unione Accounts Receivable" means all accounts receivable and other
debts owing to Unione, as of December 31, 2006 as set forth in
Schedule "K" hereto;
(w) "Unione Assets" means the undertaking and all the property and assets
of the Unione Business of every kind and description wheresoever
situated including, without limitation, Unione Equipment, Unione
Inventory, Unione Material Contracts, Unione Accounts Receivable,
Unione Cash, Unione Intangible Assets and Unione Goodwill, and all
credit cards, charge cards and banking cards issued to Unione;
(x) "Unione Bank Accounts" means all of the bank accounts, lock boxes and
safety deposit boxes of Unione or relating to the Unione Business as
set forth in Schedule "L" hereto;
(y) "Unione Business" means all aspects of the business conducted by
Unione;
(z) "Unione Cash" means all cash on hand or on deposit to the credit of
Unione on the Closing Date;
(aa) "Unione Debt to Related Parties" means the debts owed by Unione and
its subsidiaries to NewMarket or to any family member thereof, or to
any affiliate, director or officer of Unione or NewMarket as described
in Schedule "M";
(bb) "Unione Equipment" means all machinery, equipment, furniture, and
furnishings used in the Unione Business, including, without
limitation, the items more particularly described in Schedule "N"
hereto;
(cc) "Unione Financial Statements" means collectively, the audited
financial statements of Unione for the two fiscal years ended December
31, 2005, together with the unqualified auditors' report thereon, and
the unaudited consolidated financial statements of Unione for the
three month period ended December 31, 2006, true copies of which are
attached as Schedule "O" hereto;
(dd) "Unione Goodwill" means the goodwill of the Unione Business together
with the exclusive right of Paragon to represent itself as carrying on
the Unione Business in succession of Unione subject to the terms
hereof, and the right to use any words indicating that the Unione
Business is so carried on including the right to use the name "Unione"
or "Unione International" or any variation thereof as part of the name
of or in connection with the Unione Business or any part thereof
carried on or to be carried on by Unione, the right to all corporate,
operating and trade names associated with the Unione Business, or any
variations of such names as part of or in connection with the Unione
Business, all telephone listings and telephone advertising contracts,
all lists of customers, books and records and other information
relating to the Unione Business, all necessary licenses and
authorizations and any other rights used in connection with the Unione
Business;
(ee) "Unione Insurance Policies" means the public liability insurance and
insurance against loss or damage to Unione Assets and the Unione
Business as described in Schedule "P" hereto;
(ff) "Unione Intangible Assets" means all of the intangible assets of
Unione, including, without limitation, Unione Goodwill, all
trademarks, logos, copyrights, designs, and other intellectual and
industrial property of Unione and its subsidiaries;
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(gg) "Unione Inventory" means all inventory and supplies of the Unione
Business as of December 31, 2006 as set forth in Schedule "Q" hereto;
(hh) "Unione Material Contracts" means the burden and benefit of and the
right, title and interest of Unione in, to and under all trade and
non-trade contracts, engagements or commitments, whether written or
oral, to which Unione is entitled in connection with the Unione
Business whereunder Unione is obligated to pay or entitled to receive
the sum of $10,000 or more including, without limitation, any pension
plans, profit sharing plans, bonus plans, loan agreements, security
agreements, indemnities and guarantees, any agreements with employees,
lessees, licensees, managers, accountants, suppliers, agents,
distributors, officers, directors, attorneys or others which cannot be
terminated without liability on not more than one month's notice, and
those contracts listed in Schedule "R" hereto;
(ii) "Unione Related Party Debts" means the debts owed by NewMarket or by
any family member thereof, or by any affiliate, director or officer of
Unione or NewMarket, to Unione as described in Schedule "S";
(jj) "Unione Shares" means all of the issued and outstanding equity of
Unione;
(kk) "Place of Closing" means the offices of Sichenzia Xxxx Xxxxxxxx
Xxxxxxx LLP, or such other place as Paragon and Unione may mutually
agree upon;
Any other terms defined within the text of this Agreement will have the meanings
so ascribed to them.
Captions and Section Numbers
1.2 The headings and section references in this Agreement are for convenience of
reference only and do not form a part of this Agreement and are not intended to
interpret, define or limit the scope, extent or intent of this Agreement or any
provision thereof.
Section References and Schedules
1.3 Any reference to a particular "Article", "section", "paragraph", "clause" or
other subdivision is to the particular Article, section, clause or other
subdivision of this Agreement and any reference to a Schedule by letter will
mean the appropriate Schedule attached to this Agreement and by such reference
the appropriate Schedule is incorporated into and made part of this Agreement.
The Schedules to this Agreement are as follows:
Information concerning Paragon
Schedule "A" Paragon Accounts Payable and Liabilities
Schedule "B" Paragon Accounts Receivable
Schedule "C" Paragon Bank Accounts
Schedule "D" Paragon Debts to Related Parties
Schedule "E" Paragon Equipment
Schedule "F" Paragon Financial Statements
Schedule "G" Paragon Insurance Policies
Schedule "H" Paragon Inventory
Schedule "I" Paragon Material Contracts
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Information concerning Unione
Schedule "J" Unione Accounts Payable and Liabilities
Schedule "K" Unione Accounts Receivable
Schedule "L" Unione Bank Accounts
Schedule "M" Unione Debts to Related Parties
Schedule "N" Unione Equipment
Schedule "O" Unione Financial Statements
Schedule "P" Unione Insurance Policies
Schedule "Q" Unione Inventory
Schedule "R" Unione Material Contracts
Schedule "S" Unione Related Party Debts
Severability of Clauses
1.4 If any part of this Agreement is declared or held to be invalid for any
reason, such invalidity will not affect the validity of the remainder which will
continue in full force and effect and be construed as if this Agreement had been
executed without the invalid portion, and it is hereby declared the intention of
the parties that this Agreement would have been executed without reference to
any portion which may, for any reason, be hereafter declared or held to be
invalid.
ARTICLE 2
THE ACQUISITION
Sale of Shares
2.1 NewMarket hereby agree to sell to Paragon the Unione Shares in exchange for
the Acquisition Shares on the Closing Date and to transfer to Paragon on the
Closing Date a 100% undivided interest in and to the Unione Shares free from all
liens, mortgages, charges, pledges, encumbrances or other burdens with all
rights now or thereafter attached thereto.
Adherence with Applicable Securities Laws
2.2 NewMarket agrees that it is acquiring the Acquisition Shares for investment
purposes and will not offer, sell or otherwise transfer, pledge or hypothecate
any of the Acquisition Shares issued to them (other than pursuant to an
effective Registration Statement under the Securities Act of 1933, as amended)
directly or indirectly unless:
(a) the sale is to Paragon;
(b) the sale is made pursuant to the exemption from registration under the
Securities Act of 1933, as amended, provided by Rule 144 thereunder;
or
(c) the Acquisition Shares are sold in a transaction that does not require
registration under the Securities Act of 1933, as amended, or any
applicable United States state laws and regulations governing the
offer and sale of securities, and the vendor has furnished to Paragon
an opinion of counsel to that effect or such other written opinion as
may be reasonably required by Paragon.
NewMarket acknowledges that the certificates representing the Acquisition
Shares shall bear the following legend:
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NO SALE, OFFER TO SELL, OR TRANSFER OF THE SHARES REPRESENTED BY
THIS CERTIFICATE SHALL BE MADE UNLESS A REGISTRATION STATEMENT
UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, IN RESPECT
OF SUCH SHARES IS THEN IN EFFECT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF SAID ACT IS THEN IN FACT APPLICABLE
TO SAID SHARES.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF PARAGON
Representations and Warranties
3.1 Paragon hereby represents and warrants in all material respects to Unione
and NewMarket, with the intent that Unione and NewMarket will rely thereon in
entering into this Agreement and in approving and completing the transactions
contemplated hereby, that:
Paragon - Corporate Status and Capacity
(a) Incorporation. Paragon is a corporation duly incorporated and validly
subsisting under the laws of the State of Delaware and in good
standing with the office of the Secretary of State for the State of
Delaware;
(b) Carrying on Business. Paragon conducts the business described in its
filings with the Securities and Exchange Commission and does not
conduct any other business. The nature of the Paragon Business does
not require Paragon to register or otherwise be qualified to carry on
business in any jurisdiction;
(c) Corporate Capacity. Paragon has the corporate power, capacity and
authority to own the Paragon Assets and to enter into and complete
this Agreement;
(d) Reporting Status; Listing. Paragon is required to file current reports
with the Securities and Exchange Commission pursuant to section 13 of
the Securities Exchange Act of 1934, the common stock of Paragon,
$0.0001 par value per share, is registered under section 12(g) of the
Securities Exchange Act of 1934 and is quoted on the Pink Sheets, and,
except as set forth in Schedule 3.1(d) attached hereto all reports
required to be filed by Paragon with the Securities and Exchange
Commission or NASD have been filed;
Paragon - Capitalization
(e) Authorized Capital. The authorized capital of Paragon consists of
400,000,000 shares of common stock of Paragon, $0.0001 par value per
share and 5,000,000 shares of preferred stock, of which 125,466,330
shares of common stock and -0-shares of preferred stock are presently
issued and outstanding;
(f) No Option, Warrant or Other Right. Except as set forth in Schedule
3.1(f) attached hereto, no person, firm or corporation has any
agreement, option, warrant, preemptive right or any other right
capable of becoming an agreement, option, warrant or right for the
acquisition of shares of common stock of Paragon or for the purchase,
subscription or issuance of any of the unissued shares in the capital
of Paragon;
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Paragon - Records and Financial Statements
(g) Charter Documents. The charter documents of Paragon and its
subsidiaries have not been altered since the incorporation of each,
respectively, except as filed in the record books of Paragon or its
subsidiaries, as the case may be;
(h) Corporate Minute Books. The corporate minute books of Paragon and its
subsidiaries are complete and each of the minutes contained therein
accurately reflect the actions that were taken at a duly called and
held meeting or by consent without a meeting. All actions by Paragon
and its subsidiaries which required director or shareholder approval
are reflected on the corporate minute books of Paragon and its
subsidiaries. Paragon and its subsidiaries are not in violation or
breach of, or in default with respect to, any term of their respective
Certificates of Incorporation (or other charter documents) or by-laws.
(i) Paragon Financial Statements. The Paragon Financial Statements present
fairly, in all material respects, the assets and liabilities (whether
accrued, absolute, contingent or otherwise) of Paragon, on a
consolidated basis, as of the respective dates thereof, and the sales
and earnings of the Paragon Business during the periods covered
thereby, in all material respects and have been prepared in
substantial accordance with generally accepted accounting principles
consistently applied;
(j) Paragon Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of Paragon or its subsidiaries
which are not disclosed in Schedule "A" hereto or reflected in the
Paragon Financial Statements except those incurred in the ordinary
course of business since the date of the said schedule and the Paragon
Financial Statements, and neither Paragon nor its subsidiaries have
guaranteed or agreed to guarantee any debt, liability or other
obligation of any person, firm or corporation. Without limiting the
generality of the foregoing, all accounts payable and liabilities of
Paragon as of December 31, 2006, are described in Schedule "A" hereto;
(k) Paragon Accounts Receivable. All the Paragon Accounts Receivable
result from bona fide business transactions and services actually
rendered without, to the knowledge and belief of Paragon, any claim by
the obligor for set-off or counterclaim. Without limiting the
generality of the foregoing, all accounts receivable of Paragon as of
December 31, 2006, are described in Schedule "B" hereto;
(l) Paragon Bank Accounts. All of the Paragon Bank Accounts, their
location, numbers and the authorized signatories thereto are as set
forth in Schedule "C" hereto;
(m) No Debt to Related Parties. Except as disclosed in Schedule "D"
hereto, neither Paragon nor any of its subsidiaries is, and on Closing
will not be, indebted to any affiliate, director or officer of Paragon
except accounts payable on account of bona fide business transactions
of Paragon incurred in normal course of the Paragon Business,
including employment agreements, none of which are more than 30 days
in arrears;
(n) No Related Party Debt to Paragon. No director or officer or affiliate
of Paragon is now indebted to or under any financial obligation to
Paragon or any subsidiary on any account whatsoever, except for
advances on account of travel and other expenses not exceeding $1,000
in total;
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(o) No Dividends. No dividends or other distributions on any shares in the
capital of Paragon have been made, declared or authorized since the
date of Paragon Financial Statements;
(p) No Payments. No payments of any kind have been made or authorized
since the date of the Paragon Financial Statements to or on behalf of
officers, directors, shareholders or employees of Paragon or its
subsidiaries or under any management agreements with Paragon or its
subsidiaries, except payments made in the ordinary course of business
and at the regular rates of salary or other remuneration payable to
them;
(q) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting Paragon;
(r) No Adverse Events. Since the date of the Paragon Financial Statements
(i) there has not been any material adverse change in the
consolidated financial position or condition of Paragon, its
subsidiaries, its liabilities or the Paragon Assets or any
damage, loss or other change in circumstances materially
affecting Paragon, the Paragon Business or the Paragon Assets or
Paragon' right to carry on the Paragon Business, other than
changes in the ordinary course of business,
(ii) there has not been any damage, destruction, loss or other event
(whether or not covered by insurance) materially and adversely
affecting Paragon, its subsidiaries, the Paragon Business or the
Paragon Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by Paragon to any of Paragon'
officers, employees or agents or any bonus, payment or
arrangement made to or with any of them,
(iv) the Paragon Business has been and continues to be carried on in
the ordinary course,
(v) Paragon has not waived or surrendered any right of material
value,
(vi) neither Paragon nor its subsidiaries have discharged or satisfied
or paid any lien or encumbrance or obligation or liability other
than current liabilities in the ordinary course of business, and
(vii) no capital expenditures in excess of $10,000 individually or
$30,000 in total have been authorized or made.
Paragon - Income Tax Matters
(s) Tax Returns. All tax returns and reports of Paragon and its subsidiaries
required by law to be filed have been filed and are true, complete and
correct, and any taxes payable in accordance with any return filed by
Paragon and its subsidiaries or in accordance with any notice of assessment
or reassessment issued by any taxing authority have been so paid;
9
(t) Current Taxes. Adequate provisions have been made for taxes payable for the
current period for which tax returns are not yet required to be filed and
there are no agreements, waivers, or other arrangements providing for an
extension of time with respect to the filing of any tax return by, or
payment of, any tax, governmental charge or deficiency by Paragon or its
subsidiaries. Paragon is not aware of any contingent tax liabilities or any
grounds which would prompt a reassessment including aggressive treatment of
income and expenses in filing earlier tax returns;
Paragon - Applicable Laws and Legal Matters
(u) Licenses. Paragon and its subsidiaries hold all licenses and permits as may
be requisite for carrying on the Paragon Business in the manner in which it
has heretofore been carried on, which licenses and permits have been
maintained and continue to be in good standing except where the failure to
obtain or maintain such licenses or permits would not have a material
adverse effect on the Paragon Business;
(v) Applicable Laws. Neither Paragon nor its subsidiaries have been charged
with or received notice of breach of any laws, ordinances, statutes,
regulations, by-laws, orders or decrees to which they are subject or which
apply to them the violation of which would have a material adverse effect
on the Paragon Business, and neither Paragon nor its subsidiaries are in
breach of any laws, ordinances, statutes, regulations, bylaws, orders or
decrees the contravention of which would result in a material adverse
impact on the Paragon Business;
(w) Pending or Threatened Litigation. Other than what has been previously
disclosed in routine periodic filings with the Securities and Exchange
Commission, there is no material litigation or administrative or
governmental proceeding pending or threatened against or relating to
Paragon, its subsidiaries, the Paragon Business, or any of the Paragon
Assets nor does Paragon have any knowledge of any deliberate act or
omission of Paragon or its subsidiaries that would form any material basis
for any such action or proceeding;
(x) No Bankruptcy. Neither Paragon nor its subsidiaries have made any voluntary
assignment or proposal under applicable laws relating to insolvency and
bankruptcy and no bankruptcy petition has been filed or presented against
Paragon or its subsidiaries and no order has been made or a resolution
passed for the winding-up, dissolution or liquidation of Paragon or its
subsidiaries;
(y) Labor Matters. Neither Paragon nor its subsidiaries are party to any
collective agreement relating to the Paragon Business with any labor union
or other association of employees and no part of the Paragon Business has
been certified as a unit appropriate for collective bargaining or, to the
knowledge of Paragon, has made any attempt in that regard;
(z) Finder's Fees. Neither Paragon nor its subsidiaries are party to any
agreement which provides for the payment of finder's fees, brokerage fees,
commissions or other fees or amounts which are or may become payable to any
third party in connection with the execution and delivery of this Agreement
and the transactions contemplated herein;
Execution and Performance of Agreement
(aa) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby, have
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been duly and validly authorized by all necessary corporate action on the
part of Paragon;
(bb) No Violation or Breach. The execution and performance of this Agreement
will not:
(i) violate the charter documents of Paragon or result in any breach of,
or default under, any loan agreement, mortgage, deed of trust, or any
other agreement to which Paragon or its subsidiaries are party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, the Paragon Material Contracts, or any
right or rights enjoyed by Paragon or its subsidiaries,
(iii) result in any alteration of Paragon' or its subsidiaries' obligations
under any agreement to which Paragon or its subsidiaries are party
including, without limitation, the Paragon Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party upon or
against the Paragon Assets,
(v) result in the imposition of any tax liability to Paragon or its
subsidiaries relating to the Paragon Assets, or
(vi) violate any court order or decree to which either Paragon or its
subsidiaries are subject;
The Paragon Assets - Ownership and Condition
(cc) Business Assets. The Paragon Assets comprise all of the property and
assets of the Paragon Business, and no other person, firm or
corporation owns any assets used by Paragon or its subsidiaries in
operating the Paragon Business, whether under a lease, rental
agreement or other arrangement, other than as disclosed in Schedules
"E" or "H" hereto;
(dd) Title. Paragon or its subsidiaries are the legal and beneficial owner
of the Paragon Assets, free and clear of all mortgages, liens,
charges, pledges, security interests, encumbrances or other claims
whatsoever, save and except as disclosed in Schedules "E" or "H"
hereto;
(ee) No Option. No person, firm or corporation has any agreement or option
or a right capable of becoming an agreement for the purchase of any of
the Paragon Assets;
(ff) Paragon Insurance Policies. Paragon and its subsidiaries maintain the
public liability insurance and insurance against loss or damage to the
Paragon Assets and the Paragon Business as described in Schedule "G"
hereto;
(gg) Paragon Material Contracts. The Paragon Material Contracts listed in
Schedule "I" constitute all of the material contracts of Paragon and
its subsidiaries;
(hh) No Default. There has not been any default in any material obligation
of Paragon or any other party to be performed under any of the Paragon
Material Contracts, each of which is in good standing and in full
force and effect and unamended (except as disclosed in Schedule "I"
hereto), and Paragon is not aware of any default in the obligations of
any other party to any of the Paragon Material Contracts;
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(ii) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of Paragon or its
subsidiaries. Neither Paragon nor its subsidiaries are obliged to pay
benefits or share profits with any employee after termination of
employment except as required by law;
Paragon Assets - Paragon Equipment
(jj) Paragon Equipment. The Paragon Equipment has been maintained in a
manner consistent with that of a reasonably prudent owner and such
equipment is in good working condition;
Paragon Assets - Paragon Goodwill and Other Assets
(kk) Paragon Goodwill. Paragon and its subsidiaries do not carry on the
Paragon Business under any other business or trade names. Paragon does
not have any knowledge of any infringement by Paragon or its
subsidiaries of any patent, trademarks, copyright or trade secret;
The Paragon Business
(ll) Maintenance of Business. Since the date of the Paragon Financial
Statements, Paragon and its subsidiaries have not entered into any
material agreement or commitment except in the ordinary course and
except as disclosed herein;
(mm) Subsidiaries. Paragon does not own any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest in any
other corporation, partnership, joint venture or firm; and
Paragon - Acquisition Shares
(nn) Acquisition Shares. The Acquisition Shares when delivered to NewMarket
pursuant to the Acquisition shall be validly issued and outstanding as
fully paid and non-assessable shares and the Acquisition Shares shall
be transferable upon the books of Paragon, in all cases subject to the
provisions and restrictions of all applicable securities laws.
Non-Merger and Survival
3.2 The representations and warranties of Paragon contained herein will be true
at and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by Unione or NewMarket, the representations
and warranties of Paragon shall survive the Closing.
Indemnity
3.3 Paragon agrees to indemnify and save harmless Unione and NewMarket from and
against any and all claims, demands, actions, suits, proceedings, assessments,
judgments, damages, costs, losses and expenses, including any payment made in
good faith in settlement of any claim (subject to the right of Paragon to defend
any such claim), resulting from the breach by it of any representation or
12
warranty made under this Agreement or from any misrepresentation in or omission
from any certificate or other instrument furnished or to be furnished by Paragon
to Unione or NewMarket hereunder.
ARTICLE 4
COVENANTS OF PARAGON
Covenants
4.1 Paragon covenants and agrees with Unione and NewMarket that it will:
(a) Conduct of Business. Until the Closing, conduct the Paragon Business
diligently and in the ordinary course consistent with the manner in
which the Paragon Business generally has been operated up to the date
of execution of this Agreement;
(b) Preservation of Business. Until the Closing, use its best efforts to
preserve the Paragon Business and the Paragon Assets and, without
limitation, preserve for Unione Paragon's and its subsidiaries'
relationships with any third party having business relations with
them;
(c) Access. Until the Closing, give Unione, NewMarket, and their
representatives full access to all of the properties, books,
contracts, commitments and records of Paragon, and furnish to Unione,
NewMarket and their representatives all such information as they may
reasonably request; and
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents
required to permit the Acquisition and to preserve and maintain the
Paragon Assets notwithstanding the change in control of Unione arising
from the Acquisition.
Authorization
4.2 Paragon hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting Paragon and its subsidiaries to release any and
all information in their possession respecting Paragon and its subsidiaries to
NewMarket. Paragon shall promptly execute and deliver to NewMarket any and all
consents to the release of information and specific authorizations which
NewMarket reasonably requires to gain access to any and all such information.
Survival
4.3 The covenants set forth in this Article shall survive the Closing for the
benefit of Unione and NewMarket.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF
NEWMARKET
Representations and Warranties
5.1 NewMarket hereby jointly and severally represent and warrant in all material
respects to Paragon, with the intent that it will rely thereon in entering into
this Agreement and in approving and completing the transactions contemplated
hereby, that:
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Unione - Company Status and Capacity
(a) Formation. Unione is a limited liability company duly formed and
validly subsisting under the laws of Brazil and in good standing in
Brazil;
(b) Carrying on Business. Unione carries on the Unione Business primarily
in the countries of Brazil and Chile and does not carry on material
business activities in any other jurisdiction. The nature of the
Unione Business does not require Unione to register or otherwise be
qualified to carry on business in any jurisdiction;
(c) Legal Capacity. Unione has the legal power, capacity and authority to
own Unione Assets, to carry on the Business of Unione and to enter
into and complete this Agreement;
Unione - Capitalization
(d) Authorized Capital. The authorized capital of Unione consists of
$436,757;
(e) Ownership of Unione Shares. The issued and outstanding ownership
interests of Unione will on Closing consist of Paragon, Inc, (being
the Unione Shares), which shares on Closing shall be validly issued
and outstanding as fully paid and non-assessable shares. NewMarket
will be at Closing the registered and beneficial owners of the Unione
Shares. The Unione Shares owned by NewMarket will on Closing be free
and clear of any and all liens, charges, pledges, encumbrances,
restrictions on transfer and adverse claims whatsoever;
(f) Options, Warrants or Other Rights. No person, firm or corporation has
any agreement, option, warrant, preemptive right or any other right
capable of becoming an agreement, option, warrant or right for the
acquisition of Unione Shares held by NewMarket or for the purchase,
subscription or issuance of any of the unissued shares in the capital
of Unione;
(g) No Restrictions. There are no restrictions on the transfer, sale or
other disposition of Unione Shares contained in the charter documents
of Unione or under any agreement;
Unione - Records and Financial Statements
(h) Charter Documents. The charter documents of Unione have not been
altered since its formation date, except as filed in the record books
of Unione;
(i) Minute Books. The minute books of Unione are complete and each of the
minutes contained therein accurately reflect the actions that were
taken at a duly called and held meeting or by consent without a
meeting. All actions by Unione which required director or shareholder
approval are reflected on the corporate minute books of Unione. Unione
is not in violation or breach of, or in default with respect to, any
term of its Certificate of Incorporation (or other charter documents)
or by-laws.
(j) Unione Financial Statements. The Unione Financial Statements present
fairly, in all material respects, the assets and liabilities (whether
accrued, absolute, contingent or otherwise) of Unione as of the date
thereof, and the sales and earnings of the Unione Business during the
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periods covered thereby, in all material respects, and have been
prepared in substantial accordance with generally accepted accounting
principles consistently applied;
(k) Unione Accounts Payable and Liabilities. There are no material
liabilities, contingent or otherwise, of Unione which are not
disclosed in Schedule "J" hereto or reflected in the Unione Financial
Statements except those incurred in the ordinary course of business
since the date of the said schedule and the Unione Financial
Statements, and Unione has not guaranteed or agreed to guarantee any
debt, liability or other obligation of any person, firm or
corporation. Without limiting the generality of the foregoing, all
accounts payable and liabilities of Unione as of December 31, 2005 are
described in Schedule "J" hereto;
(l) Unione Accounts Receivable. All the Unione Accounts Receivable result
from bona fide business transactions and services actually rendered
without, to the knowledge and belief of NewMarket, any claim by the
obligor for set-off or counterclaim. Without limiting the generality
of the foregoing, all accounts receivable of Unione as of December 31,
2005, are described in Schedule "K" hereto;
(m) Unione Bank Accounts. All of the Unione Bank Accounts, their location,
numbers and the authorized signatories thereto are as set forth in
Schedule "L" hereto;
(n) No Debt to Related Parties. Except as disclosed in Schedule "M"
hereto, Unione is not and on Closing will not be, indebted to
NewMarket nor to any family member thereof, nor to any affiliate,
director or officer of Unione or NewMarket except accounts payable on
account of bona fide business transactions of Unione incurred in
normal course of Unione Business, including employment agreements with
NewMarket, none of which are more than 30 days in arrears;
(o) No Related Party Debt to Unione. Except as set forth on Schedule "M"
hereto, neither NewMarket nor any director, officer or affiliate of
Unione is now indebted to or under any financial obligation to Unione
on any account whatsoever, except for advances on account of travel
and other expenses not exceeding $5,000 in total;
(p) No Dividends. No dividends or other distributions on any shares in the
capital of Unione have been made, declared or authorized since the
date of the Unione Financial Statements;
(q) No Payments. No payments of any kind have been made or authorized
since the date of the Unione Financial Statements to or on behalf of
NewMarket or to or on behalf of officers, directors, shareholders or
employees of Unione or under any management agreements with Unione,
except payments made in the ordinary course of business and at the
regular rates of salary or other remuneration payable to them;
(r) No Pension Plans. There are no pension, profit sharing, group
insurance or similar plans or other deferred compensation plans
affecting Unione, except as set forth in the Unione Financial
Statements;
(s) No Adverse Events. Since the date of the Unione Financial Statements:
(i) there has not been any material adverse change in the
consolidated financial position or condition of Unione, its
liabilities or the Unione Assets or any damage, loss or other
change in circumstances materially affecting Unione, the Unione
15
Business or the Unione Assets or Unione's right to carry on the
Unione Business, other than changes in the ordinary course of
business,
(ii) there has not been any damage, destruction, loss or other event
(whether or not covered by insurance) materially and adversely
affecting Unione, the Unione Business or the Unione Assets,
(iii) there has not been any material increase in the compensation
payable or to become payable by Unione to NewMarket or to any of
Unione's officers, employees or agents or any bonus, payment or
arrangement made to or with any of them,
(iv) the Unione Business has been and continues to be carried on in
the ordinary course,
(v) Unione has not waived or surrendered any right of material value,
(vi) Unione has not discharged or satisfied or paid any lien or
encumbrance or obligation or liability other than current
liabilities in the ordinary course of business, and
(vii) no capital expenditures in excess of $10,000 individually or
$30,000 in total have been authorized or made;
Unione - Income Tax Matters
(t) Tax Returns. All tax returns and reports of Unione required by law to
be filed have been filed and are true, complete and correct, and any
taxes payable in accordance with any return filed by Unione or in
accordance with any notice of assessment or reassessment issued by any
taxing authority have been so paid;
(u) Current Taxes. Adequate provisions have been made for taxes payable
for the current period for which tax returns are not yet required to
be filed and there are no agreements, waivers, or other arrangements
providing for an extension of time with respect to the filing of any
tax return by, or payment of, any tax, governmental charge or
deficiency by Unione. Unione is not aware of any contingent tax
liabilities or any grounds which would prompt a reassessment including
aggressive treatment of income and expenses in filing earlier tax
returns;
Unione - Applicable Laws and Legal Matters
(v) Licenses. Unione holds all licenses and permits as may be requisite
for carrying on the Unione Business in the manner in which it has
heretofore been carried on, which licenses and permits have been
maintained and continue to be in good standing except where the
failure to obtain or maintain such licenses or permits would not have
a material adverse effect on the Unione Business;
(w) Applicable Laws. Unione has not been charged with or received notice
of breach of any laws, ordinances, statutes, regulations, by-laws,
orders or decrees to which they are subject or which applies to them
the violation of which would have a material adverse effect on the
Unione Business, and, to the knowledge of NewMarket, Unione is not in
breach of any laws, ordinances, statutes, regulations, by-laws, orders
or decrees the contravention of which would result in a material
adverse impact on the Unione Business;
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(x) Pending or Threatened Litigation. There is no material litigation or
administrative or governmental proceeding pending or threatened
against or relating to Unione, the Unione Business, or any of the
Unione Assets, nor do NewMarket have any knowledge of any deliberate
act or omission of Unione that would form any material basis for any
such action or proceeding;
(y) No Bankruptcy. Unione has not made any voluntary assignment or
proposal under applicable laws relating to insolvency and bankruptcy
and no bankruptcy petition has been filed or presented against Unione
and no order has been made or a resolution passed for the winding-up,
dissolution or liquidation of Unione;
(z) Labor Matters. Unione is not party to any collective agreement
relating to the Unione Business with any labor union or other
association of employees and no part of the Unione Business has been
certified as a unit appropriate for collective bargaining or, to the
knowledge of NewMarket, has made any attempt in that regard;
(aa) Finder's Fees. Unione is not a party to any agreement which provides
for the payment of finder's fees, brokerage fees, commissions or other
fees or amounts which are or may become payable to any third party in
connection with the execution and delivery of this Agreement and the
transactions contemplated herein;
Execution and Performance of Agreement
(bb) Authorization and Enforceability. The execution and delivery of this
Agreement, and the completion of the transactions contemplated hereby,
have been duly and validly authorized by all necessary corporate
action on the part of Unione;
(cc) No Violation or Breach. The execution and performance of this
Agreement will not
(i) violate the charter documents of Unione or result in any breach
of, or default under, any loan agreement, mortgage, deed of
trust, or any other agreement to which Unione is a party,
(ii) give any person any right to terminate or cancel any agreement
including, without limitation, Unione Material Contracts, or any
right or rights enjoyed by Unione,
(iii) result in any alteration of Unione's obligations under any
agreement to which Unione is a party including, without
limitation, the Unione Material Contracts,
(iv) result in the creation or imposition of any lien, encumbrance or
restriction of any nature whatsoever in favor of a third party
upon or against the Unione Assets,
(v) result in the imposition of any tax liability to Unione relating
to Unione Assets or the Unione Shares, or
(vi) violate any court order or decree to which either Unione is
subject;
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Unione Assets - Ownership and Condition
(dd) Business Assets. The Unione Assets, comprise all of the property and
assets of the Unione Business, and neither NewMarket nor any other
person, firm or corporation owns any assets used by Unione in
operating the Unione Business, whether under a lease, rental agreement
or other arrangement, other than as disclosed in Schedules "N" or "Q"
hereto;
(ee) Title. Unione is the legal and beneficial owner of the Unione Assets,
free and clear of all mortgages, liens, charges, pledges, security
interests, encumbrances or other claims whatsoever, save and except as
disclosed in Schedules "N" or "Q" hereto;
(ff) No Option. No person, firm or corporation has any agreement or option
or a right capable of becoming an agreement for the purchase of any of
the Unione Assets;
(gg) Unione Insurance Policies. Unione maintains the public liability
insurance and insurance against loss or damage to the Unione Assets
and the Unione Business as described in Schedule "P" hereto;
(hh) Unione Material Contracts. The Unione Material Contracts listed in
Schedule "R" constitute all of the material contracts of Unione;
(ii) No Default. There has not been any default in any material
obligation of Unione or any other party to be performed under any
of Unione Material Contracts, each of which is in good standing
and in full force and effect and unamended (except as disclosed
in Schedule "R"), and Unione is not aware of any default in the
obligations of any other party to any of the Unione Material
Contracts;
(jj) No Compensation on Termination. There are no agreements, commitments
or understandings relating to severance pay or separation allowances
on termination of employment of any employee of Unione. Unione is not
obliged to pay benefits or share profits with any employee after
termination of employment except as required by law;
Unione Assets - Unione Equipment
(kk) Unione Equipment. The Unione Equipment has been maintained in a manner
consistent with that of a reasonably prudent owner and such equipment
is in good working condition;
Unione Assets - Unione Goodwill and Other Assets
(ll) Unione Goodwill. Unione carries on the Unione Business only under the
name "Unione Technologies, Inc." and variations thereof and under no
other business or trade names. NewMarket do not have any knowledge of
any infringement by Unione of any patent, trademark, copyright or
trade secret;
The Business of Unione
(mm) Maintenance of Business. Since the date of the Unione Financial
Statements, the Unione Business has been carried on in the ordinary
course and Unione has not entered into any material agreement or
commitment except in the ordinary course; and
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(nn) Subsidiaries. Unione does not own any subsidiaries and does not
otherwise own, directly or indirectly, any shares or interest in any
other corporation, partnership, joint venture or firm and Unione does
not own any subsidiary and does not otherwise own, directly or
indirectly, any shares or interest in any other corporation,
partnership, joint venture or firm.
Non-Merger and Survival
5.2 The representations and warranties of Unione contained herein will be true
at and as of Closing in all material respects as though such representations and
warranties were made as of such time. Notwithstanding the completion of the
transactions contemplated hereby, the waiver of any condition contained herein
(unless such waiver expressly releases a party from any such representation or
warranty) or any investigation made by Paragon, the representations and
warranties of Unione shall survive the Closing.
Indemnity
5.3 NewMarket agree to indemnify and save harmless Paragon from and against any
and all claims, demands, actions, suits, proceedings, assessments, judgments,
damages, costs, losses and expenses, including any payment made in good faith in
settlement of any claim (collectively, the "Claims") (subject to the right of
NewMarket to defend any such claim), resulting from the breach by any of them of
any representation or warranty of such party made under this Agreement or from
any misrepresentation in or omission from any certificate or other instrument
furnished or to be furnished by Unione or NewMarket to Paragon hereunder;
provided, however, NewMarket shall not be required to indemnify Paragon for any
such Claims in excess of the value of the Unione Shares.
ARTICLE 6
COVENANTS OF UNIONE AND
NEWMARKET
Covenants
6.1 Unione and NewMarket covenant and agree with Paragon that they will:
(a) Conduct of Business. Until the Closing, conduct the Unione Business
diligently and in the ordinary course consistent with the manner in
which the Unione Business generally has been operated up to the date
of execution of this Agreement;
(b) Preservation of Business. Until the Closing, use their best efforts to
preserve the Unione Business and the Unione Assets and, without
limitation, preserve for Paragon Unione's relationships with their
suppliers, customers and others having business relations with them;
(c) Access. Until the Closing, give Paragon and its representatives full
access to all of the properties, books, contracts, commitments and
records of Unione relating to Unione, the Unione Business and the
Unione Assets, and furnish to Paragon and its representatives all such
information as they may reasonably request;
(d) Procure Consents. Until the Closing, take all reasonable steps
required to obtain, prior to Closing, any and all third party consents
required to permit the Acquisition and to preserve and maintain the
Unione Assets, including the Unione Material Contracts,
notwithstanding the change in control of Unione arising from the
Acquisition;
19
(e) Reporting and Internal Controls. From and after the Closing, NewMarket
shall forthwith take all required actions to implement internal
controls on the business of Unione to ensure that Unione and Paragon
comply with Section 13(b)(2) of the Securities and Exchange Act of
1934;
(f) 1934 Act Reports. From and after the Closing Date, take all such steps
as are necessary to discharge all reporting obligations imposed upon
them by the Securities Exchange Act of 1934;
Authorization
6.2 Unione hereby agrees to authorize and direct any and all federal, state,
municipal, foreign and international governments and regulatory authorities
having jurisdiction respecting Unione to release any and all information in
their possession respecting Unione to Paragon. Unione shall promptly execute and
deliver to Paragon any and all consents to the release of information and
specific authorizations which Paragon reasonably require to gain access to any
and all such information.
Survival
6.3 The covenants set forth in this Article shall survive the Closing for the
benefit of Paragon.
ARTICLE 7
CONDITIONS PRECEDENT
Conditions Precedent in favor of Paragon
7.1 Paragon's obligations to carry out the transactions contemplated hereby are
subject to the fulfillment of each of the following conditions precedent on or
before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to Paragon hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by Unione or NewMarket at or prior to the
Closing will have been complied with or performed;
(c) title to the Unione Shares held by NewMarket and to the Unione Assets
will be free and clear of all mortgages, liens, charges, pledges,
security interests, encumbrances or other claims whatsoever, save and
except as disclosed herein, and the Unione Shares shall be duly
transferred to Paragon;
(d) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or
condition of Unione, its liabilities or the Unione Assets or any
damage, loss or other change in circumstances materially and
adversely affecting Unione, the Unione Business or the Unione
Assets or Unione's right to carry on the Unione Business, other
than changes in the ordinary course of business, none of which
has been materially adverse, or
20
(ii) any damage, destruction, loss or other event, including changes
to any laws or statutes applicable to Unione or the Unione
Business (whether or not covered by insurance) materially and
adversely affecting Unione, the Unione Business or the Unione
Assets;
(e) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any;
(f) the transactions contemplated hereby shall have been approved by the
Board of Directors and shareholders of Unione;
(g) on or prior to the Closing Date, Unione and/or NewMarket shall have
acquired all of the ordinary shares held by NewMarket that are not
participating in this Agreement so that Paragon shall acquire 100% of
the presently issued and outstanding Unione Shares; and
(h) on or prior to the Closing Date, Unione shall have delivered the
Unione Financial Statements.
Waiver by Paragon
7.2 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of Paragon and any such condition may be waived in whole
or in part by Paragon at or prior to the Closing by delivering to Unione a
written waiver to that effect signed by Paragon. In the event that the
conditions precedent set out in the preceding section are not satisfied on or
before the Closing, Paragon shall be released from all obligations under this
Agreement.
Conditions Precedent in Favor of Unione and NewMarket
7.3 The obligations of Unione and NewMarket to carry out the transactions
contemplated hereby are subject to the fulfillment of each of the following
conditions precedent on or before the Closing:
(a) all documents or copies of documents required to be executed and
delivered to Unione hereunder will have been so executed and
delivered;
(b) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by Paragon at or prior to the Closing will
have been complied with or performed;
(c) Paragon will have delivered the Acquisition Shares to be issued
pursuant to the terms of the Acquisition to Unione at the Closing and
the Acquisition Shares will be registered on the books of Paragon in
the name of the holder of Unione Shares at the time of Closing;
(d) title to the Acquisition Shares will be free and clear of all
mortgages, liens, charges, pledges, security interests, encumbrances
or other claims whatsoever;
(e) subject to Article 8 hereof, there will not have occurred
(i) any material adverse change in the financial position or
condition of Paragon, its subsidiaries, their liabilities or the
Paragon Assets or any damage, loss or other change in
circumstances materially and adversely affecting Paragon, the
Paragon Business or the Paragon Assets or Paragon' right to carry
on the Paragon Business, other than changes in the ordinary
course of business, none of which has been materially adverse, or
21
(ii) any damage, destruction, loss or other event, including changes
to any laws or statutes applicable to Paragon or the Paragon
Business (whether or not covered by insurance) materially and
adversely affecting Paragon, its subsidiaries, the Paragon
Business or the Paragon Assets;
(f) the transactions contemplated hereby shall have been approved by all
other regulatory authorities having jurisdiction over the subject
matter hereof, if any;
(g) the transactions contemplated hereby shall have been approved by the
Board of Directors of Paragon;
(i) each of the directors and officers of Paragon shall have resigned
as directors and/or officers of Paragon;
Xxxxxx Xxxxxx shall have been appointed as the Chairman of the Board of the
Board of Directors of Paragon and Xxxxx Xxxxxx and Xxxx Xxxxx shall have
been appointed to the Board of Directors, provided, however, such
appointment of Xxxxx Xxxxxx & Xxxx Xxxxx shall not become effective until
10 days after the mailing of the Schedule 14f.
Waiver by Unione and NewMarket
7.4 The conditions precedent set out in the preceding section are inserted for
the exclusive benefit of Unione and NewMarket and any such condition may be
waived in whole or in part by Unione or NewMarket at or prior to the Closing by
delivering to Paragon a written waiver to that effect signed by Unione and
NewMarket. In the event that the conditions precedent set out in the preceding
section are not satisfied on or before the Closing, Unione and NewMarket shall
be released from all obligations under this Agreement.
Nature of Conditions Precedent
7.5 The conditions precedent set forth in this Article are conditions of
completion of the transactions contemplated by this Agreement and are not
conditions precedent to the existence of a binding agreement. Each party
acknowledges receipt of the sum of $10.00 and other good and valuable
consideration as separate and distinct consideration for agreeing to the
conditions of precedent in favor of the other party or parties set forth in this
Article.
Termination
7.6 Notwithstanding any provision herein to the contrary, if the Closing does
not occur on or before March 1, 2007 (the "Termination Date"), this Agreement
will be at an end and will have no further force or effect, unless otherwise
agreed upon by the parties in writing.
Confidentiality
7.7 Notwithstanding any provision herein to the contrary, the parties hereto
agree that the existence and terms of this Agreement are confidential and that
if this Agreement is terminated pursuant to the preceding section the parties
agree to return to one another any and all financial, technical and business
documents delivered to the other party or parties in connection with the
negotiation and execution of this Agreement and shall keep the terms of this
Agreement and all information and documents received from Unione and Paragon and
the contents thereof confidential and not utilize nor reveal or release same,
provided, however, that Paragon will be required to issue a news release
22
regarding the execution and consummation of this Agreement and file a Current
Report on Form 8-K with the Securities and Exchange Commission respecting the
proposed Acquisition contemplated hereby together with such other documents as
are required to maintain the currency of Paragon's filings with the Securities
and Exchange Commission.
ARTICLE 8
RISK
Material Change in the Business of Unione
8.1 If any material loss or damage to the Unione Business occurs prior to
Closing and such loss or damage, in Paragon' reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, Paragon shall, within
two (2) days following any such loss or damage, by notice in writing to Unione,
at its option, either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to Paragon' obligations to carry out
the transactions contemplated hereby, be vested in Unione or otherwise
adequately secured to the satisfaction of Paragon on or before the
Closing Date.
Material Change in the Paragon Business
8.2 If any material loss or damage to the Paragon Business occurs prior to
Closing and such loss or damage, in Unione's reasonable opinion, cannot be
substantially repaired or replaced within sixty (60) days, Unione shall, within
two (2) days following any such loss or damage, by notice in writing to Paragon,
at its option, either:
(a) terminate this Agreement, in which case no party will be under any
further obligation to any other party; or
(b) elect to complete the Acquisition and the other transactions
contemplated hereby, in which case the proceeds and the rights to
receive the proceeds of all insurance covering such loss or damage
will, as a condition precedent to Unione's obligations to carry out
the transactions contemplated hereby, be vested in Paragon or
otherwise adequately secured to the satisfaction of Unione on or
before the Closing Date.
ARTICLE 9
CLOSING
Closing
9.1 The Acquisition and the other transactions contemplated by this Agreement
will be closed at the Place of Closing on Closing Date in accordance with the
closing procedure set out in this Article.
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Documents to be Delivered by Unione
9.2 On or before the Closing or 45 days after the execution of the share
exchange agreement with the consent of Paragon, Unione and NewMarket will
deliver or cause to be delivered to Paragon:
(a) the original or certified copies of the charter documents of Unione,
including amendments thereof, and all corporate records documents and
instruments of Unione, the corporate seal of Unione and all books and
accounts of Unione;
(b) all reasonable consents or approvals required to be obtained by Unione
for the purposes of completing the Acquisition and preserving and
maintaining the interests of Unione under any and all Unione Material
Contracts and in relation to Unione Assets;
(c) certified copies of such resolutions and minutes of the shareholders
and directors of Unione as are required to be passed to authorize the
execution, delivery and implementation of this Agreement;
(d) an acknowledgement from Unione and NewMarket of the satisfaction of
the conditions precedent set forth in section 7.3 hereof;
(e) the certificates or other evidence of ownership of the Unione Shares,
together with such other documents or instruments required to effect
transfer of ownership of the Unione Shares to Paragon; and
(f) such other documents as Paragon may reasonably require to give effect
to the terms and intention of this Agreement.
Documents to be Delivered by Paragon
9.3 On or before the Closing or 45 days after the execution of the share
exchange agreement with the consent of Paragon, Paragon shall deliver or cause
to be delivered to Unione and NewMarket:
(a) share certificates representing the Acquisition Shares duly registered
in the names of the holders of shares of Unione Common Stock;
(b) certified copies of such resolutions of the directors of Paragon as
are required to be passed to authorize the execution, delivery and
implementation of this Agreement;
(c) a certified copy of a resolution of the directors of Paragon dated as
of the Closing Date appointing the nominees of Unione as officers of
Unione and appointing the nominee of NewMarket to the board of
directors of Paragon;
(d) resignations of all of the officers of Paragon as of the Closing Date;
(e) undated resignation of Xxxx X. Xxxxxx as director of Paragon;
(f) an acknowledgement from Paragon of the satisfaction of the conditions
precedent set forth in section 7.1 hereof;
(g) certificate or incorporation and good standing certificate of Paragon;
and
(h) such other documents as Unione may reasonably require to give effect
to the terms and intention of this Agreement.
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ARTICLE 10
GENERAL PROVISIONS
Arbitration
11.1 The parties hereto shall attempt to resolve any dispute, controversy,
difference or claim arising out of or relating to this Agreement by negotiation
in good faith. If such good negotiation fails to resolve such dispute,
controversy, difference or claim within fifteen (15) days after any party
delivers to any other party a notice of its intent to submit such matter to
arbitration, then any party to such dispute, controversy, difference or claim
may submit such matter to arbitration in the City of New York, New York.
Notice
11.2 Any notice required or permitted to be given by any party will be deemed to
be given when in writing and delivered to the address for notice of the intended
recipient by personal delivery, prepaid single certified or registered mail, or
telecopier. Any notice delivered by mail shall be deemed to have been received
on the fourth business day after and excluding the date of mailing, except in
the event of a disruption in regular postal service in which event such notice
shall be deemed to be delivered on the actual date of receipt. Any notice
delivered personally or by telecopier shall be deemed to have been received on
the actual date of delivery.
Addresses for Service
11.3 The address for service of notice of each of the parties hereto is as
follows:
(a) Paragon:
000 Xxxxxxxxx Xxxx
Xxxxx Xxxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone no. (000) 000-0000
Facsimile no. (000) 000-0000
(b) Unione or NewMarket:
00000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention:
Telephone no. (000) 000-0000
Facsimile no. (000) 000-0000
With a copy to:
Sichenzia Xxxx Xxxxxxxx Xxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxx, Esq.
Phone: (000) 000-0000
Telecopier: (000) 000-0000
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Change of Address
11.4 Any party may, by notice to the other parties change its address for notice
to some other address in North America and will so change its address for notice
whenever the existing address or notice ceases to be adequate for delivery by
hand. A post office box may not be used as an address for service.
Further Assurances
11.5 Each of the parties will execute and deliver such further and other
documents and do and perform such further and other acts as any other party may
reasonably require to carry out and give effect to the terms and intention of
this Agreement.
Time of the Essence
11.6 Time is expressly declared to be the essence of this Agreement.
Entire Agreement
11.7 The provisions contained herein constitute the entire agreement among
Unione, NewMarket and Paragon respecting the subject matter hereof and supersede
all previous communications, representations and agreements, whether verbal or
written, among Unione, NewMarket and Paragon with respect to the subject matter
hereof.
Enurement
11.8 This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective heirs, executors, administrators, successors and
permitted assigns.
Assignment
11.9 This Agreement is not assignable without the prior written consent of the
parties hereto.
Counterparts
11.10 This Agreement may be executed in counterparts, each of which when
executed by any party will be deemed to be an original and all of which
counterparts will together constitute one and the same Agreement. Delivery of
executed copies of this Agreement by telecopier will constitute proper delivery,
provided that originally executed counterparts are delivered to the parties
within a reasonable time thereafter.
Applicable Law
11.11 This Agreement shall be enforced, governed by and construed in accordance
with the laws of the State of New York applicable to agreements made and to be
performed entirely within such state, without regard to the principles of
conflict of laws The parties hereto hereby submit to the exclusive jurisdiction
of the United States federal courts located in New York, New York with respect
to any dispute arising under this Agreement, the agreements entered into in
connection herewith or the transactions contemplated hereby or thereby. All
parties irrevocably waive the defense of an inconvenient forum to the
maintenance of such suit or proceeding. All parties further agree that service
of process upon a party mailed by first class mail shall be deemed in every
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respect effective service of process upon the party in any such suit or
proceeding. Nothing herein shall affect either party's right to serve process in
any other manner permitted by law. All parties agree that a final non-appealable
judgment in any such suit or proceeding shall be conclusive and may be enforced
in other jurisdictions by suit on such judgment or in any other lawful manner.
The party which does not prevail in any dispute arising under this Agreement
shall be responsible for all fees and expenses, including attorneys' fees,
incurred by the prevailing party in connection with such dispute.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF the parties have executed this Agreement effective as of
the day and year first above written.
PARAGON FINANCIAL CORPORATION
By: /s/ Xxxx X. Xxxxxx
--------------------------
Xxxx X. Xxxxxx, Chairman
UNIONE CONSULTING LTDA.
By: /s/ Xxxxxx Xxxxxx
--------------------
Xxxxxx Xxxxxx, CEO
NEWMARKET TECHNOLOGY, INC.
By: /s/ Xxxxxx Xxxxxx, CEO
----------------------
Xxxxxx Xxxxxx, CEO
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