EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
by and among
New Pacific, Inc.
a Nevada corporation
and
Liquisite Development, Inc., a Nevada corporation
effective as of January 25, 2002
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, is made and entered into
this 25th day of January 2002, by and between New Pacific, Inc., a Nevada
corporation ("New Pacific") and Liquisite Development, Inc., a Nevada
corporation (""), and certain shareholders of Liquisite listed on the attached
Schedule I ("Liquisite Shareholders"), and specifically incorporated herein by
reference (Liquisite and Liquisite Shareholders shall be hereinafter jointly
referred to as "Liquisite Parties").
PREMISES
A. This Agreement provides for the reorganization of Liquisite with and
into New Pacific, with Liquisite becoming a wholly-owned subsidiary of New
Pacific, and in connection therewith, the exchange of the outstanding common
stock of Liquisite into shares of common voting stock of New Pacific, all for
the purpose of effecting a tax- free reorganization pursuant to sections 351,
354 and 368(a)(1)(B) of the Internal Revenue Code of 1986, as amended ("IRC").
On the terms and conditions set forth herein, the parties hereby adopt the Plan
of Reorganization embodied in this Agreement.
B. The boards of directors of Liquisite and New Pacific have
determined, subject to the terms and conditions set forth in this Agreement,
that the exchange contemplated hereby, as a result of which Liquisite would
become a wholly owned subsidiary of New Pacific is desirable and in the best
interests of their stockholders. This Agreement is being entered into for the
purpose of setting forth the terms and conditions of the proposed exchange.
AGREEMENT
NOW, THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS AND WARRANTIES OF
LIQUISITE AND LIQUISITE SHAREHOLDERS
Liquisite and each of Liquisite Shareholders, individually and neither
jointly nor severally, represents and warrants to New Pacific, except as
disclosed in this Agreement or in the case of any representation qualified by
its terms to a particular Schedule, as hereinafter defined, of Liquisite
attached hereto, that the statements made in this Article I will be correct and
complete at the Effective Date, as hereinafter defined, provided, however, if
there is no Effective Date, then no party shall be liable for any inaccuracy.
SECTION 1.1 SHAREHOLDERS. Each of the Liquisite Shareholders is the
owner of all of the issued and outstanding shares of the capital stock of
Liquisite attributed to such Shareholder on Schedule I; each Liquisite
Shareholder has full legal title to all Liquisite Shares described in Schedule I
as being owned by such Liquisite Shareholder free from any and all claims, liens
or other encumbrances. Liquisite Shareholders have the unqualified right to
sell, transfer, and dispose of their respective Liquisite Shares subject to the
applicable securities laws and the laws of bankruptcy, insolvency and general
creditors' rights. Each Liquisite Shareholder represents and warrants that, in
regards to such Liquisite Shareholder's shares of Liquisite, such Liquisite
Shareholder has full right and authority to execute this Agreement and to
transfer his shares of Liquisite to New Pacific.
SECTION 1.2 ORGANIZATION. Liquisite is a corporation duly organized,
validly existing, and in good standing under the laws of Nevada and has the
corporate power and is duly authorized, qualified, franchised and licensed under
all applicable laws, regulations, ordinances and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a
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foreign corporation in the jurisdiction in which the character and location of
the assets owned by it or the nature of the business transacted by it requires
qualification. Included in the Liquisite Schedules (as hereinafter defined) are
complete and correct copies of the articles of incorporation, bylaws and
amendments thereto of Liquisite as in effect on the date hereof. The execution
and delivery of this Agreement does not and the consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof will not
violate any provision of Liquisite's articles of incorporation or bylaws.
Liquisite has full power, authority and legal right and has taken all action
required by law, its articles of incorporation, its bylaws or otherwise to
authorize the execution and delivery of this Agreement.
SECTION 1.3 CAPITALIZATION. The authorized capitalization of Liquisite
consists of 100 million common stock shares, $0.001 par value per share (the
"Liquisite Common Shares"). As of the date of this Agreement, 5,525,935 of the
authorized common shares are issued and outstanding. All issued and outstanding
shares are legally issued, fully paid and nonassessable and are not issued in
violation of the preemptive or other rights of any person. Except as may be
disclosed in Liquisite Schedules, Liquisite has no other securities, warrants or
options authorized or issued.
SECTION 1.4 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Except as
otherwise set forth in the Liquisite Schedules, Liquisite does not have any
other subsidiaries and does not own, beneficially or of record, any shares of
any other corporation. For purposes herein, all references to Liquisite shall
include Liquisite and all of its subsidiaries.
SECTION 1.5 FINANCIAL INFORMATION.
(a) Attached hereto as Schedule 1.5 are audited (from
inception in 1999 until December 31, 2000) and unaudited financial
statements (for the nine months ended September 30, 2001) (the
"Liquisite Financial Statements").
(b) Liquisite has no liabilities with respect to the payment
of any federal, state, county, local or other taxes (including any
deficiencies, interest or penalties), except for taxes accrued but not
yet due and payable;
(c) Liquisite has filed all state, federal and local income
tax returns, including extensions of such tax returns, if any, required
to be filed by it from inception to the date hereof, if any;
(d) The books and records, financial and others, of Liquisite
are in all material respects complete and correct and have been
maintained in accordance with good business accounting practices; and
(e) except as and to the extent disclosed herein and the
Liquisite Schedules, Liquisite has no material contingent liabilities,
direct or indirect, matured or unmatured.
SECTION 1.6 INFORMATION. The information concerning Liquisite set forth
in this Agreement and in the Liquisite Schedules to the best of Liquisite's
knowledge, is complete and accurate in all material respects and does not
contain any untrue statement of a material fact or omit to state a material fact
required to make the statements made, in light of the circumstances under which
they were made, not misleading.
SECTION 1.7 OPTIONS AND WARRANTS. Except as may otherwise be disclosed
herein on Schedule 1.7, there are no existing options, warrants, calls or
commitments of any character to which Liquisite is a party and by which it is
bound.
SECTION 1.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth
in this Agreement, the Liquisite Schedules, or as otherwise disclosed to New
Pacific, since September 30, 2001:
(a) there has not been: (i) any material adverse change in the
business, operations, properties, assets or condition of Liquisite; or
(ii) any damage, destruction or loss to Liquisite (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets or condition of Liquisite;
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(b) Liquisite has not: (i) amended its articles of
incorporation or bylaws; (ii) declared or made, or agreed to declare or
make, any payment of dividends or distributions of any assets of any
kind whatsoever to stockholders or purchased or redeemed or agreed to
purchase or redeem any of its capital stock; (iii) waived any rights of
value which in the aggregate are extraordinary or material considering
the business of Liquisite; (iv) made any material change in its method
of management, operation or accounting other than in its ordinary
course of business; (v) entered into any other material transaction;
(vi) made any accrual or arrangement for or payment of bonuses or
special compensation of any kind or any severance or termination pay to
any present or former officer or employee; (vii) increased the rate of
compensation; or (viii) made any increase in any profit sharing, bonus,
deferred compensation, insurance, pension, retirement or other employee
benefit plan, payment or arrangement made to, for, or with its
officers, directors or employees.
(c) Liquisite has not: (i) granted or agreed to grant any
options, warrants or other rights for its stocks, bonds or other
corporate securities calling for the issuance thereof; (ii) borrowed or
agreed to borrow any funds or incurred or become subject to, any
material obligation or liability (absolute or contin gent) except
liabilities incurred in the ordinary course of business; (iii) paid any
material obligation or liability (absolute or contingent) other than
current liabilities reflected in or shown on the most recent Liquisite
balance sheet and current liabilities incurred since that date in the
ordinary course of business; (iv) sold or transferred, or agreed to
sell or transfer, any of its assets, properties or rights (except
assets, properties or rights not used or useful in its business which,
in the aggregate have a value of less than $10,000); (v) made or
permitted any amendment or termination of any contract, agreement or
license to which it is a party if such amendment or termination is
material, considering the business of Liquisite; or (vi) issued,
delivered or agreed to issue or deliver any stock, bonds or other
corporate securities, including debentures (whether authorized and
unissued or held as treasury stock); and
(d) to the best knowledge of Liquisite, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business,
operations, properties, assets or condition of Liquisite.
SECTION 1.9 TITLE AND RELATED MATTERS. Except as provided herein or in
the Liquisite Schedules, Liquisite has good and marketable title to and is the
sole and exclusive owner of all of its properties, inventory, interests in
properties and assets, real and personal including technical information,
copyrights, trademarks, service marks and tradenames (collectively, the
"Assets") which are reflected in the Liquisite Schedules or acquired after that
date (except properties, interests in properties and assets sold or otherwise
disposed of since such date in the ordinary course of business), free and clear
of all liens, pledges, charges or encumbrances except: (a) statutory liens or
claims not yet delinquent; (b) such imperfections of title and easements as do
not and will not, materially detract from or interfere with the present or
proposed use of the properties subject thereto or affected thereby or otherwise
materially impair present business operations on such properties; and (c) as
described in the Liquisite Schedules. Except as set forth in the Liquisite
Schedules, Liquisite owns free and clear of any liens, claims, encumbrances,
royalty interests or other restrictions or limitations of any nature whatsoever,
any and all products it is currently manufacturing, including the underlying
technology and data, and all procedures, techniques, marketing plans, business
plans, methods of management or other information utilized in connection with
Liquisite's business. Except as set forth in the Liquisite Schedules, no third
party has any right to, and Liquisite has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, proprietary techniques,
trademarks, service marks, trade names or copyrights which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, would
have a materially adverse affect on the business, operations, financial
conditions or income of Liquisite or any material portion of its properties,
assets or rights.
SECTION 1.10 LITIGATION AND PROCEEDINGS. To the best of Liquisite's
knowledge and belief, there are no actions, suits, proceedings or investigations
pending or threatened by or against Liquisite or affecting Liquisite or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign or before any arbitrator of any kind
that would have a material adverse affect on the business, operations, financial
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condition or income of Liquisite. Liquisite does not have any knowledge of any
default on its part with respect to any judgment, order, writ, injunction,
decree, award, rule or regulation of any court, arbitrator or governmental
agency or instrumentality or of any circumstances which, after reasonable
investigation, would result in the discovery of such a default.
SECTION 1.11 CONTRACTS.
(a) Except as included or described in the Liquisite
Schedules, there are no material contracts, agreements, franchises,
license agreements or other commitments to which Liquisite is a party
or by which it or any of its assets, products, technology or properties
are bound;
(b) Except as included or described in the Liquisite Schedules
or reflected in the most recent Liquisite balance sheet, Liquisite is
not a party to any oral or written: (i) contract for the employment of
any officer or employee which is not terminable on thirty (30) days or
less notice; (ii) profit sharing, bonus, deferred compensation, stock
option, severance pay, pension benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guaranty of any obligation,
other than one on which Liquisite is a primary obligor, for collection
and other guaranties of obligations, which, in the aggregate do not
exceed more than one year or providing for payments in excess of
$10,000 in the aggregate; (v) consulting or other similar contracts
with an unexpired term of more than one year or providing for payments
in excess of $10,000 in the aggregate; (vi) collective bargaining
agreements; (vii) agreement with any present or former officer or
director of Liquisite; or (viii) contract, agreement or other
commitment involving payments by it of more than $10,000 in the
aggregate; and
(c) To Liquisite's knowledge, all contracts, agreements,
franchises, license agreements and other commitments to which Liquisite
is a party or by which its properties are bound and which are material
to the operations of Liquisite taken as a whole, are valid and
enforceable by Liquisite in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights
of creditors generally.
SECTION 1.12 MATERIAL CONTRACT DEFAULTS. Except as set forth in the
Liquisite Schedules, to the best of Liquisite's knowledge and belief, Liquisite
is not in default in any material respect under the terms of any outstanding
contract, agreement, lease or other commitment which is material to the
business, operations, properties, assets or condition of Liquisite, and there is
no event of default in any material respect under any such contract, agreement,
lease or other commitment in respect of which Liquisite has not taken adequate
steps to prevent such a default from occurring.
SECTION 1.13 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which Liquisite is
a party or to which any of its properties or operations are subject.
SECTION 1.14 GOVERNMENTAL AUTHORIZATIONS. To the best of Liquisite's
knowledge and except as provided herein or in the Liquisite Schedules, Liquisite
has all licenses, franchises, permits or other governmental authorizations
legally required to enable Liquisite to conduct its business in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities and corporation laws, as hereinafter provided, no
authorization, approval, consent or order of, or registration, declaration or
filing with, any court or other governmental body is required in connection with
the execution and delivery by Liquisite of this Agreement and the consummation
by Liquisite of the transactions contemplated hereby.
SECTION 1.15 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of
Liquisite's knowledge, except as disclosed in the Liquisite Schedules, Liquisite
has complied with all applicable statutes and regulations of any federal, state
or other governmental entity or agency thereof, except to the extent that
noncompliance would not materially
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and adversely affect the business, operations, properties, assets or condition
of Liquisite or would not result in Liquisite's incurring any material
liability.
SECTION 1.16 INSURANCE. Except as disclosed on Schedule 1.16, Liquisite
has no insurable properties and no insurance policies will be in effect at the
Closing Date, as hereinafter defined.
SECTION 1.17 APPROVAL OF AGREEMENT. The board of directors of Liquisite
has authorized the execution and delivery of this Agreement by Liquisite and has
approved the transactions contemplated hereby. The majority of Liquisite's
shareholders approved the transactions contemplated hereby by the written
consent action.
SECTION 1.18 MATERIAL TRANSACTIONS OR AFFILIATIONS. Except as disclosed
herein and in the Liquisite Schedules, there exists no material contract,
agreement or arrangement between Liquisite and any predecessor and any person
who was at the time of such contract, agreement or arrangement an officer,
director or person owning of record, or known by Liquisite to own beneficially,
ten percent (10%) or more of the issued and outstanding Liquisite Common Shares
and which is to be performed in whole or in part after the date hereof. In all
of such transactions, the amount paid or received, whether in cash, in services
or in kind, has been during the full term thereof, and is required to be during
the unexpired portion of the term thereof, no less favorable to Liquisite than
terms available from otherwise unrelated parties in arms length transactions.
There are no commitments by Liquisite, whether written or oral, to lend any
funds to, borrow any money from or enter into any other material transactions
with, any such affiliated person.
SECTION 1.19 LABOR RELATIONS. Liquisite has never had a work stoppage
resulting from labor problems. To the best knowledge of Liquisite, no union or
other collective bargaining organization is organizing or attempting to organize
any employee of Liquisite.
SECTION 1.20 PREVIOUS SALES AND ISSUANCE OF SECURITIES. Since
inception, Liquisite has issued Liquisite Common Shares in reliance upon
applicable exemptions from the registration requirements under the laws of the
jurisdiction of Nevada and other applicable state and federal securities laws,
to the shareholders listed on Schedule I. The shares of Liquisite Common Stock
issued to the Liquisite Shareholders are legally issued, fully paid and
nonassessable and are not issued in violation of the preemptive or other rights
of any person.
SECTION 1.21 REORGANIZATION RELATED REPRESENTATIONS.
(a) following the Effective Date, Liquisite will continue its
historic business or use a significant portion of its historic business
assets in its business;
(b) Liquisite is not an investment company as defined in
section 368(a)(2)(F)(iii) and (iv) of IRC;
(c) Liquisite is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368(a)(3)(A) of
the IRC.
SECTION 1.22 LIQUISITE SCHEDULES. Upon execution hereof, Liquisite will
deliver to New Pacific the following schedules, which are collectively referred
to as the "Liquisite Schedules" and which consist of separate schedules dated as
of the date of this Agreement and instruments and data as of such date,
complete, true and correct in all material respects:
(a) copies of the articles of incorporation, bylaws and all
minutes of shareholders' and directors' meetings of Liquisite;
(b) the financial information of Liquisite referenced
hereinabove in Section 1.4;
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(c) a list indicating the name and address of the stockholders
of Liquisite, together with the number of shares owned by them;
(d) the Liquisite Business Plan which includes, among other
matters, information concerning all of Liquisite's material licenses,
permits and other governmental authorizations, requests or applications
therefor, pursuant to which Liquisite carries on or proposes to carry
on its business (except those which in the aggregate, are immaterial to
the present or proposed business of Liquisite), as well as a
description of any material adverse change in the business operations,
property, inventory, assets or condition of Liquisite since the most
recent Liquisite balance sheet required to be provided pursuant to
Section 1.7; and
Liquisite shall cause the Liquisite Schedules and the instruments and
data delivered to New Pacific hereunder to be updated after the date hereof up
to and including the Closing Date, as hereinafter defined.
SECTION 1.23 TAXES. Liquisite has complied with applicable tax filing
requirements, if any.
SECTION 1.24 ADDITIONAL INFORMATION AVAILABLE. Liquisite will make
available to New Pacific the opportunity to ask questions and receive answers
concerning acquisition of Liquisite shares in this transaction, and to obtain
any additional information related thereto which Liquisite possesses or can
acquire without unreasonable effort or expense.
SECTION 1.25 LIMITATION ON LIABILITY. Notwithstanding anything to the
contrary contained in this Agreement, Liquisite shall not have any liability for
any misrepresentation or breach of any representation or warranty contained in
this Article I, if New Pacific has actual knowledge of such misrepresentation or
breach.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
OF NEW PACIFIC
As an inducement to, and to obtain the reliance of Liquisite, New
Pacific represents and warrants as follows:
SECTION 2.1 ORGANIZATION. New Pacific is a corporation duly organized,
validly existing and in good standing under the laws of the state of Nevada and
has the corporate power and is duly authorized, qualified, franchised and
licensed under all applicable laws, regulations, ordinances and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the New Pacific Schedules (as hereinafter
defined) are complete and correct copies of the articles of incorporation,
amended articles of incorporation (collectively, hereinafter referred to as the
"articles of incorporation"), bylaws of New Pacific as in effect on the date
hereof and a certificate of Good Standing. The execution and delivery of this
Agreement does not and the consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof will not, violate any provision of
New Pacific's articles of incorporation or bylaws. New Pacific has taken all
action required by law, its articles of incorporation, its bylaws or otherwise
to authorize the execution and delivery of this Agreement. New Pacific has full
power, authority and legal right and has taken all action required by law, its
articles of incorporation, bylaws or otherwise to consummate the transactions
herein contemplate.
SECTION 2.2 CAPITALIZATION. The authorized capitalization of New
Pacific consists of 20 million shares of Common Stock, par value $0.001 per
share, of which 1,500,000 shares are issued and outstanding, and 5 million
shares of Preferred Stock, $0.001 par value, of which no shares are issued nor
outstanding. All issued and outstanding shares are legally issued, fully paid
and nonassessable and are not issued in violation of the preemptive or other
rights of any person. Except as may be disclosed in New Pacific Schedules, New
Pacific has no other securities, warrants or options authorized or issued.
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SECTION 2.3 SUBSIDIARIES. At the Closing, other than as disclosed
herein, New Pacific shall own no securities or have any interest in any
corporation, partnership, or other form of business organization, including its
current subsidiaries.
SECTION 2.4 FINANCIAL STATEMENTS.
(a) Attached hereto as Schedule 2.4 are audited financial
statements for the years ended December 31, 2000 and December 31, 1999,
together with the related footnotes and report thereon of the auditors
rendering such reports and unaudited financial statements for the nine
months ending September 30, 2001 (the "New Pacific Financial
Statements"). The New Pacific Financial Statements are correct and
complete in all respects and fairly present, in accordance with
generally accepted accounting principles ("GAAP"), consistently
applied, the consolidated financial position of New Pacific as of such
dates and the results of operations and changes in financial position
for such periods all in accordance with GAAP. The New Pacific Financial
Statements comply with the requirements of Regulation S-X of the
Securities and Exchange Commission and the provisions of the Securities
Act of 1933 (the "1933 Act") and will be suitable for inclusion in any
subsequent filing with any state or federal regulatory agency under the
Securities Exchange Act of 1934 (the "1934 Act"). As of the date of
this Agreement, New Pacific does not have any source of revenues. AN
INVESTMENT IN NEW PACIFIC SHARES INVOLVES A HIGH DEGREE OF RISK.
LIQUISITE SHAREHOLDERS SHOULD REVIEW AND CAREFULLY CONSIDER THE
DISCLOSURE MATERIALS ATTACHED HERETO AS EXHIBIT "A", INCLUDING THE RISK
FACTORS CONTAINED THEREIN, PRIOR TO EXECUTING THIS AGREEMENT;
(b) The books and records, financial and others, of New
Pacific are in all material respects complete and correct and have been
maintained in accordance with good business accounting practices;
(c) New Pacific has no liabilities with respect to the payment
of any federal, state, county, local or other taxes, current or accrued
(including any deficiencies, interest or penalties);
(d) New Pacific has filed all state, federal and local income
tax returns, including extensions of such tax returns, if any, required
to be filed by it from inception to the date hereof, if any;
(e) except as and to the extent disclosed herein and the New
Pacific Schedules, New Pacific has no material contingent liabilities,
direct or indirect, matured or unmatured.
SECTION 2.5 INFORMATION. The information concerning New Pacific as set
forth in this Agreement and in the New Pacific Schedules, to the best of New
Pacific's knowledge, is complete and accurate in all material respects and does
not contain any untrue statement of a material fact or omit to state a material
fact required to make the statements made, in light of the circumstances under
which they were made, not misleading.
SECTION 2.6 OPTIONS AND WARRANTS. Except as may otherwise be disclosed
herein on Schedule 2.6, there are no existing options, warrants, calls or
commitments of any character to which New Pacific is a party and by which it is
bound.
SECTION 2.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as described
herein or in the New Pacific Schedules, since September 30, 2001:
(a) there has not been: (i) any material adverse change in the
business, operations, properties, assets or condition of New Pacific;
or (ii) any damage, destruction or loss to New Pacific (whether or not
covered by insurance) materially and adversely affecting the business,
operations, properties, assets or condition of New Pacific;
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(b) New Pacific has not: (i) amended its articles of
incorporation or bylaws; (ii) declared or made, or agreed to declare or
make, any payment of dividends or distributions of any assets of any
kind whatsoever to stockholders or purchased or redeemed or agreed to
purchase or redeem any of its capital stock; (iii) waived any rights of
value which in the aggregate are extraordinary or material considering
the business of New Pacific; (iv) made any material change in its
method of management, operation or accounting other than in its
ordinary course of business; (v) entered into any other material
transaction; (vi) made any accrual or arrangement for or payment of
bonuses or special compensation of any kind or any severance or
termination pay to any present or former officer or employee; (vii)
increased the rate of compensation; or (viii) made any increase in any
profit sharing, bonus, deferred compensation, insurance, pension,
retirement or other employee benefit plan, payment or arrangement made
to, for, or with its officers, directors or employees.
(c) Except as disclosed to Liquisite or as included in the New
Pacific Schedules, New Pacific has not: (i) granted or agreed to grant
any options, warrants or other rights for its stocks, bonds or other
corporate securities calling for the issuance thereof; (ii) borrowed or
agreed to borrow any funds or incurred or become subject to, any
material obligation or liability (absolute or contingent) except
liabilities incurred in the ordinary course of business; (iii) paid any
material obligation or liability (absolute or contingent) other than
current liabilities reflected in or shown on the most recent New
Pacific balance sheet and current liabilities incurred since that date
in the ordinary course of business; (iv) sold or transferred, or agreed
to sell or transfer, any of its assets, properties or rights (except
assets, properties or rights not used or useful in its business which,
in the aggregate have a value of less than $10,000); (v) made or
permitted any amendment or termination of any contract, agreement or
license to which it is a party if such amendment or termination is
material, considering the business of New Pacific; or (vi) issued,
delivered or agreed to issue or deliver any stock, bonds or other
corporate securities, including debentures (whether authorized and
unissued or held as treasury stock); and
(d) to the best knowledge of New Pacific, it has not become
subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business,
operations, properties, assets or condition of New Pacific.
SECTION 2.8 TITLE AND RELATED MATTERS. As of the Closing Date, New
Pacific will own no real, personal or intangible property, other than as
disclosed herein.
SECTION 2.9 LITIGATION AND PROCEEDINGS. There are no actions, suits or
proceedings pending or, to the best of New Pacific's knowledge and belief,
threatened by or against or affecting New Pacific, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign,
or before any arbitrator of any kind that would have a material adverse effect
on the business, operations, financial condition, income or business prospects
of New Pacific. New Pacific does not have any knowledge of any default on its
part with respect to any judgment, order, writ, injunction, decree, award, rule
or regulation of any court, arbitrator or governmental agency or
instrumentality.
SECTION 2.10 CONTRACTS. On the Closing Date and other than as disclosed
herein in Schedule 2.9 or otherwise:
(a) There are no material contracts, agreements, franchises,
license agreements, or other commitments to which New Pacific is a
party or by which it or any of its properties are bound;
(b) New Pacific is not a party to any contract, agreement,
commitment or instrument or subject to any charter or other corporate
restriction or any judgment, order, writ, injunction, decree or award
which materially and adversely affects, or in the future may (as far as
New Pacific can now foresee) materially and adversely affect, the
business, operations, properties, assets or conditions of New Pacific;
and
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(c) New Pacific is not a party to any material oral or
written: (i) contract for the employment of any officer or employee;
(ii) profit sharing, bonus, deferred compensation, stock option,
severance pay, pension, benefit or retirement plan, agreement or
arrangement covered by Title IV of the Employee Retirement Income
Security Act, as amended; (iii) agreement, contract or indenture
relating to the borrowing of money; (iv) guaranty of any obligation for
the borrowing of money or otherwise, excluding endorsements made for
collection and other guaranties of obligations, which, in the aggregate
exceeds $1,000; (v) consulting or other similar contract with an
unexpired term of more than one year or providing for payments in
excess of $10,000 in the aggregate; (vi) collective bargaining
agreement; (vii) agreement with any present or former officer or
director of New Pacific; or (viii) contract, agreement, or other
commitment involving payments by it of more than $10,000 in the
aggregate.
SECTION 2.11 NO CONFLICT WITH OTHER INSTRUMENTS. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, or
constitute an event of default under, any material indenture, mortgage, deed of
trust or other material contract, agreement or instrument to which New Pacific
is a party or to which any of its properties or operations are subject.
SECTION 2.12 MATERIAL CONTRACT DEFAULTS. To the best of New Pacific's
knowledge and belief, New Pacific is not in default in any material respect
under the terms of any outstanding contract, agreement, lease or other
commitment which is material to the business, operations, properties, assets or
condition of New Pacific, and there is no event of default in any material
respect under any such contract, agreement, lease or other commitment in respect
of which New Pacific has not taken adequate steps to prevent such a default from
occurring.
SECTION 2.13 GOVERNMENTAL AUTHORIZATIONS. To the best of New Pacific's
knowledge, New Pacific has all licenses, franchises, permits and other
governmental authorizations that are legally required to enable it to conduct
its business operations in all material respects as conducted on the date
hereof. Except for compliance with federal and state securities or corporation
laws, no authorization, approval, consent or order of, or registration,
declaration or filing with, any court or other governmental body is required in
connection with the execution and delivery by New Pacific of the transactions
contemplated hereby.
SECTION 2.14 COMPLIANCE WITH LAWS AND REGULATIONS. To the best of New
Pacific's knowledge and belief, New Pacific has complied with all applicable
statutes and regulations of any federal, state or other governmental entity or
agency thereof, except to the extent that noncompliance would not materially and
adversely affect the business, operations, properties, assets or condition of
New Pacific or would not result in New Pacific's incurring any material
liability.
SECTION 2.15 INSURANCE. New Pacific has no insurable properties and no
insurance policies will be in effect at the Closing Date, as hereinafter
defined.
SECTION 2.16 APPROVAL OF AGREEMENT. The board of directors of New
Pacific has authorized the execution and delivery of this Agreement by New
Pacific and has approved the transactions contemplated hereby. The approval of
this Agreement by New Pacific's shareholders is not required.
SECTION 2.17 MATERIAL TRANSACTIONS OR AFFILIATIONS. Except as stated
herein or in the New Pacific Schedules, as of the Closing Date there will exist
no material contract, agreement or arrangement between New Pacific and any
person who was at the time of such contract, agreement or arrangement an
officer, director or person owning of record, or known by New Pacific to own
beneficially, ten percent (10%) or more of the issued and outstanding common
stock of New Pacific and which is to be performed in whole or in part after the
date hereof. New Pacific has no commitment, whether written or oral, to lend any
funds to, borrow any money from or enter into any other material transactions
with, any such affiliated person.
SECTION 2.18 LABOR RELATIONS. New Pacific has never had a work stoppage
resulting from labor problems. New Pacific has no employees other than its
officers and directors.
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SECTION 2.19 TAXES. (a) Except as provided in Schedule 2.19, New
Pacific has timely filed (within the applicable extension periods) with the
appropriate governmental agencies all governmental tax returns, information
returns, tax reports and declarations which are monetary liabilities. All
governmental tax returns, information returns, tax reports and declarations
filed by New Pacific for years for which the statute of limitations has not run
(the "Tax Returns") are correct in all material respects. New Pacific has timely
paid (or has collected and paid over in the case of sales, use or similar taxes)
all taxes, additions to tax, penalties, interest, assessments, deposits, and
other governmental charges imposed by law upon it or any of its properties,
tangible or intangible assets, income, receipts, payrolls, transactions,
capital, net worth and franchises, or upon the sale, use or delivery of any item
sold by the Company, other than as may be disclosed in the Schedule of Taxes.
Except as set forth in the Schedule of Taxes, no tax returns have been examined
by the Internal Revenue Service or any other governmental authority. Except as
may be disclosed in the Schedule of Taxes or in any document delivered to New
Pacific therewith, New Pacific (i) is not currently being audited with respect
to any tax, assessment or other governmental charge; (ii) has not received
formal or informal notice from any governmental agency that an audit or
investigation with respect to any tax, assessment or other governmental charge
is to be initiated; (iii) is not formally or informally discussing material
pending ruling requests or other material tax or assessment issues with the
Internal Revenue Service or any other governmental taxing authority in
connection with any matter concerning any member of New Pacific's group; or (iv)
has not been formally or informally notified of any potential tax or assessment
issue which the Internal Revenue Service or any other governmental taxing
authority intends to raise in connection with any matter concerning any member
of New Pacific's group. Except (i) as may be disclosed in the Schedule of Taxes,
or (ii) in connection with any pending audit or investigation, New Pacific has
not granted or proposed any waiver of any statute of limitations with respect
to, or any extension of a period for the assessment or collection of, or any
offer in compromise of any governmental tax. The accruals and reserves for taxes
reflected in the financial statements are adequate to cover substantially all
taxes (including additions to tax, interest, penalties, and other charges or
assessments, if any) which become due and payable or accruable by reason of the
business conducted by New Pacific through the Closing Date herein. New Pacific
is not now or has it ever been a corporation which meets the tests of Section
542(b)(2) of the Internal Revenue Code. New Pacific has not participated in, or
is required to participate in, for any period prior to the date of this
Agreement the filing of any consolidated tax return other than (i) as set forth
in the Schedule of Taxes, or (ii) as a member of an affiliated group of which
New Pacific is the common parent.
SECTION 2.20 REPORTING ACT DOCUMENTS. Except as set forth in New
Pacific's Schedules, New Pacific has, in all reporting act documents, complied
in all material respects with the reporting requirements of the Exchange Act and
the rules and regulations of the Securities and Exchange Commission promulgated
thereunder. The information contained in each reporting act document of New
Pacific, to the best of New Pacific's knowledge, is true and correct in all
material respects as of the date thereof, and no reporting act document contains
any untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading as of the date thereof. To the best knowledge of current management
of New Pacific, there is no negative matters, such as pending investigation or
formal inquiry, which are outstanding concerning Exchange Act reports filed by
New Pacific prior to the Closing.
SECTION 2.21 NEW PACIFIC SCHEDULES. Upon execution hereof, New Pacific
shall deliver to Liquisite the following schedules, which are collectively
referred to as the "New Pacific Schedules" which are dated the date of this
Agreement, all complete, true and accurate in all material respects:
(a) complete and correct copies of the articles of
incorporation and bylaws of New Pacific as in effect as of the date of
this Agreement;
(b) copies of all financial statements of New Pacific
identified in Section 2.4(a);
(c) the description of any material adverse change in the
business, operations, property, assets, or condition of New Pacific
since September 30, 2001 required to be provided pursuant to Section
2.6; and
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(d) any other information, together with any required copies
of documents, required to be disclosed in the New Pacific Schedules
under this Agreement.
New Pacific shall cause the New Pacific Schedules and the instruments
to be delivered to Liquisite hereunder to be updated after the date hereof up to
and including the Closing Date.
SECTION 2.22 LISTING OF NEW PACIFIC'S COMMON STOCK. New Pacific's
Common Stock is not listed nor trading on the over-the-counter market of
National Association of Securities' Dealers ("NASD") ("Bulletin Board"). It is
the intention of both Parties to file an application for trading of New
Pacific's stock on the Bulletin Board following the Closing.
SECTION 2.23 ADDITIONAL INFORMATION AVAILABLE. New Pacific will make
available to each Liquisite Shareholder the opportunity to ask questions and
receive answers concerning the acquisition of New Pacific Common Stock in the
transaction, and to obtain any additional information which New Pacific
possesses or can acquire without unreasonable effort or expense.
SECTION 2.24 LIMITATION ON LIABILITY. Notwithstanding anything to the
contrary contained in this Agreement, New Pacific shall not have any liability
for any misrepresentation or breach of any representation or warranty contained
in this Article II, if Liquisite or any of the Liquisite Shareholders has actual
knowledge of such misrepresentation or breach.
ARTICLE III
EXCHANGE PROCEDURE
SECTION 3.1 DELIVERY OF LIQUISITE SECURITIES. On the Closing Date, the
holders of the Liquisite Common Shares shall deliver to New Pacific (i)
certificates or other documents evidencing all of the issued and outstanding
Liquisite Common Shares, duly endorsed in blank or with executed stock power
attached thereto in transferrable form; and (ii) Investment Letters, the form of
which is attached hereto as Exhibit "B".
SECTION 3.2 ISSUANCE OF NEW PACIFIC COMMON SHARES. (a) In exchange for
all of the Liquisite Common Shares tendered pursuant to Section 3.1, New Pacific
shall instruct its Transfer Agent to issue an aggregate of 5,425,935
"restricted" New Pacific Common Shares to the Liquisite shareholders on a pro
rata basis and shall cause such shares to be delivered to Liquisite. Each share
of Liquisite (whether Common or Preferred) shall be exchanged for each one share
of New Pacific (based on the total issuance of 5,425,935 New Pacific Common
Shares).
(b) No fractional New Pacific Common Shares shall be issued
pursuant to this Section 3.2. In lieu of such fractional shares, all
shares to be issued shall be rounded up or down to the nearest whole
share.
(c) The total of 5,425,935 shares to be issued to the
Liquisite shareholders by New Pacific (the "Liquisite Shares") are not
being registered under the Securities Act of 1933, as amended (the
"Act") and are issued in reliance on the exemptions from the
registration requirements provided by Regulation D, and are to be
issued as "restricted securities", as that term is defined in Rule 144
promulgated under the Act, and that the certificates representing the
Liquisite Shares will bear a legend to that effect, substantially in
the form set forth below:
THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF CERTAIN
STATES, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO (I) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND ANY APPLICABLE
STATE LAWS, (II) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT
(OR ANY SIMILAR RULE UNDER THE ACT RELATING TO THE
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DISPOSITION OF SECURITIES), OR (III) AN OPINION OF COUNSEL, IF SUCH
OPINION SHALL BE REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER,
THAT AN EXEMPTION FROM REGISTRATION UNDER THE ACT AND APPLICABLE
STATE LAW IS AVAILABLE.
SECTION 3.3 UNDERTAKINGS.
(a) Upon execution hereof or as soon thereafter as practical,
management of New Pacific and Liquisite shall execute, acknowledge and
deliver (or shall cause to be executed, acknowledged and delivered) any
and all certificates, opinions, financial statements, schedules,
agreements, resolutions, rulings or other instruments required by this
Agreement to be so delivered, together with such other items as may be
reasonably requested by the parties hereto and their respective legal
counsel in order to effectuate or evidence the transactions
contemplated hereby, subject only to the conditions to Closing
referenced hereinbelow.
(b) Liquisite hereby undertakes and provides assurances to New
Pacific that it will file a current report on Form 8-K within 15 days
of the Closing in compliance with the Exchange Act, with the audited
financial statements of Liquisite and the pro forma statements required
by the Exchange Act and by Regulation S-B by amendment of the Form 8-K
within the time parameters established by the Exchange Act, and will
otherwise comply with the reporting requirements of the Exchange Act.
SECTION 3.4 CLOSING. The closing ("Closing") of the transactions
contemplated by this Agreement shall be as of the date in which all of the
shareholders of Liquisite have approved the terms of this Agreement, all
conditions to Closing referenced in this Agreement have been satisfied or waived
by Liquisite and all documentation referenced herein is delivered to the
respective party herein, which shall be the date of January 28, 2002, unless a
different date is mutually agreed to in writing by the parties hereto ("Closing
Date").
SECTION 3.5 TERMINATION.
(a) This Agreement may be terminated by the board of directors
of either New Pacific or Liquisite at any time prior to the Closing
Date if:
(i) there shall be any action or proceeding before
any court or any governmental body which shall seek to
restrain, prohibit or invalidate the transactions contemplated
by this Agreement and which, in the judgment of such board of
directors, made in good faith and based on the advice of its
legal counsel, makes it inadvisable to proceed with the
exchange contemplated by this Agreement; or
(ii) any of the transactions contemplated hereby are
disapproved by any regulatory authority whose approval is
required to consummate such transactions; or
(iii) the conditions described in Article VI below
have not been satisfied in full; or
In the event of termination pursuant to this paragraph (a) of this
Section 3.5, no obligation, right, or liability shall arise hereunder
and each party shall bear all of the expenses incurred by it in
connection with the negotiation, drafting and execution of this
Agreement and the transactions herein contemplated;
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(b) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of New Pacific if
Liquisite shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of Liquisite contained herein shall be
inaccurate in any material respect, which noncompliance or inaccuracy
is not cured after 20 days' written notice thereof is given to
Liquisite. If this Agreement is terminated pursuant to this paragraph
(b) of this Section 3.5, this Agreement shall be of no further force or
effect and no obligation, right or liability shall arise hereunder; and
(c) This Agreement may be terminated at any time prior to the
Closing Date by action of the board of directors of Liquisite if New
Pacific shall fail to comply in any material respect with any of its
covenants or agreements contained in this Agreement or if any of the
representations or warranties of New Pacific contained herein shall be
inaccurate in any material respect, which noncompliance or inaccuracy
is not cured after 20 days written notice thereof is given to New
Pacific. If this Agreement is terminated pursuant to this paragraph (c)
of Section 3.5, this Agreement shall be of no further force or effect
and no obligation, right or liability shall arise hereunder.
(d) This Agreement shall be terminated if the Closing of the
transactions contemplated in this Agreement have not occurred by the
Closing Date as that term is defined in Section 3.4.
SECTION 3.6 DIRECTORS OF NEW PACIFIC. Upon the Closing, the present
members of New Pacific's Board of Directors shall tender their resignations
SERIATIM so that the following persons are appointed directors of New Pacific in
accordance with procedures set forth in the New Pacific bylaws: Xxxxxxxxx Xxxxx.
Each director shall hold office until his successor shall have been duly elected
and shall have qualified or until his or her earlier death, resignation or
removal.
SECTION 3.7 OFFICERS OF NEW PACIFIC. Upon the Closing, the present
officers of New Pacific shall tender their resignations and provide New Pacific
with applicable releases concerning their respective employment agreements, if
any. Simultaneous therewith, the following persons shall be elected as officers
of New Pacific in accordance with procedures set forth in the New Pacific
bylaws:
NAME OFFICE
---- ------
Xxxxxxxxx Xxxxx President, Treasurer, Secretary
SECTION 3.8 EFFECTIVE DATE. The parties hereto hereby agree that the
Effective Date of the transaction proposed herein shall be 5:00 P.M. Pacific
Standard Time on January 28, 2002, unless the parties agree otherwise, in
writing.
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ARTICLE IV
SPECIAL COVENANTS
SECTION 4.1 ACCESS TO PROPERTIES AND RECORDS. New Pacific and Liquisite
will each afford to the officers and authorized representatives of the other
full access to the properties, books and records of New Pacific and Liquisite,
as the case may be, in order that each may have full opportunity to make such
reasonable investigation as it shall desire to make of the affairs of the other
and each will furnish the other with such additional financial and operating
data and other information as to the business and properties of New Pacific and
Liquisite, as the case may be, as the other shall from time to time prior to
Closing reasonably request. In addition, New Pacific shall provide to Liquisite
subsequent to Closing all information necessary to allow Liquisite to properly
prepare and file all reports required to be filed pursuant to the Exchange Act,
including all information concerning New Pacific's subsidiaries which existed
prior to Closing.
SECTION 4.2 INFORMATION FOR NEW PACIFIC PUBLIC REPORTS. Liquisite will
furnish New Pacific with all information concerning Liquisite and the Liquisite
Stockholders, including all financial statements, required for inclusion in any
public report to be filed by New Pacific pursuant to the Securities Act, the
Exchange Act, or any other applicable federal or state law. Liquisite covenants
that all information so furnished to New Pacific, including the financial
statements described in Section 1.4, shall be true and correct in all material
respects without omission of any material fact required to make the information
stated not misleading. Similarly, New Pacific will provide all information
concerning its history and operations reasonably requested by Liquisite.
SECTION 4.3 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE NEW
PACIFIC COMMON SHARES TO BE ISSUED IN THE EXCHANGE. The consummation of this
Agreement, including the issuance of the New Pacific Common Shares to the
stockholders of Liquisite as contemplated hereby, constitutes the offer and sale
of securities under the Securities Act, and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes which depend, INTER ALIA,
upon the circumstances under which the Liquisite stockholders acquire such
securities. In connection with reliance upon exemptions from the registration
and prospectus delivery requirements for such transactions, at the Closing,
Liquisite shall cause to be delivered, and the Liquisite stockholders shall
deliver to New Pacific, the Investment Letters and Purchasers' Questionnaires
referenced in Section 3.1. The shareholders of Liquisite shall receive
disclosure materials attached hereto as Exhibit "A".
SECTION 4.4 THIRD PARTY CONSENTS. New Pacific and Liquisite agree to
cooperate with each other in order to obtain any required third party consents
to this Agreement and the transactions herein contemplated.
SECTION 4.5 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the
Closing Date and except as set forth in the New Pacific or Liquisite
Schedules or as permitted or contemplated by this Agreement, Liquisite
and New Pacific, to the extent applicable, will each use its best
efforts to:
(i) carry on its business in substantially the same
manner as it has heretofore;
14
(ii) maintain and keep its properties in states of
good repair and condition as at present, except for
depreciation due to ordinary wear and tear and damage due to
casualty;
(iii) maintain in full force and effect insurance
comparable in amount and in scope of coverage to that now
maintained by it;
(iv) perform in all material respects all of its
obligations under material contracts, leases and instruments
relating to or affecting its assets, properties and business;
(v) maintain and preserve its business organization
intact, to retain its key employees and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material
respects all obligations and duties imposed on it by all
federal and state laws and all rules, regulations and orders
imposed by federal or state governmental authorities.
(b) From and after the date of this Agreement until the
Closing Date, neither New Pacific nor Liquisite will, without the prior
consent of the other party:
(i) except as otherwise specifically set forth
herein, make any change in their respective certificates or
articles of incorporation or bylaws;
(ii) declare or pay any dividend on its outstanding
shares of capital stock, except as may otherwise be required
by law, or effect any stock split or otherwise change its
capitalization, except as provided herein;
(iii) enter into or amend any employment, severance
or similar agreements or arrangements with any directors or
officers;
(iv) grant, confer or award any options, warrants,
conversion rights or other rights not existing on the date
hereof to acquire any shares of its capital stock; or
(v) purchase or redeem any shares of its capital
stock, except as disclosed herein.
SECTION 4.6 INDEMNIFICATION.
(a) Liquisite and its officers and directors hereby agree to
indemnify New Pacific and each of the officers, agents and directors of
New Pacific as of the date of execution of this Agreement against any
loss, liability, claim, damage or expense (including, but not limited
to, any and all expense whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced
or threatened or any claim whatsoever), to which it or they may become
subject incurred as a result of Liquisite's breach of any
representation, warranty or covenant made by Liquisite in this
Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated
hereby and termination of this Agreement for a period of 18 months; and
(b) New Pacific and its officers and directors hereby agrees
to indemnify Liquisite and each of the officers, agents, directors and
current shareholders of Liquisite as of the Closing Date against any
loss, liability, claim, damage or expense (including, but not limited
to, any and all
15
expense whatsoever reasonably incurred in investigating, preparing or
defending against any litigation, commenced or threatened or any claim
whatsoever), to which it or they may become subject incurred as a
result of New Pacific's breach of any representation, warranty or
covenant made by New Pacific in this Agreement and particularly the
representation regarding no liabilities referred to in Section 2.4(b).
The indemnification provided for in this Section shall survive the
Closing and consummation of the transactions contemplated hereby and
termination of this Agreement for a period of 18 months.
SECTION 4.7. PAYMENT FOR LEGAL FEES. Upon receipt of any funds raised
following the Closing, New Pacific and Liquisite agree that the legal fees of
Xxxxx X. Xxxxx, Esq. incurred in connection with this transaction shall be paid
as the first priority. Such fees shall not exceed $10,000.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS
OF NEW PACIFIC
The obligations of New Pacific under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
SECTION 5.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by Liquisite in this Agreement were true when made and shall be
true at the Closing Date with the same force and effect as if such
representations and warranties were made at the Closing Date (except for changes
therein permitted by this Agreement), and Liquisite shall have performed or
complied with all covenants and conditions required by this Agreement to be
performed or complied with by Liquisite prior to or at the Closing. New Pacific
shall be furnished with a certificate, signed by a duly authorized officer of
Liquisite and dated the Closing Date, to the foregoing effect.
SECTION 5.2 LIQUISITE'S APPROVAL OF AGREEMENT. The Board of Directors
and stockholders of Liquisite, if such stockholders' approval is so required
under Nevada law, shall have approved this Agreement and the transactions
contemplated thereby as described in Section 4.1.
SECTION 5.3 OFFICER'S CERTIFICATE. Unless waived by New Pacific, New
Pacific shall have been furnished with a certificate dated the Closing Date and
signed by a duly authorized officer of Liquisite to the effect that no
litigation, proceeding, investigation or inquiry is pending or, to the best
knowledge of Liquisite, threatened, which might result in an action to enjoin or
prevent the consummation of the transactions contemplated by this Agreement or,
to the extent not disclosed in the Liquisite Schedules, by or against Liquisite
which might result in any material adverse change in any of the assets,
properties, business or operations of Liquisite.
SECTION 5.4 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of Liquisite.
SECTION 5.5 OTHER ITEMS. New Pacific shall have received such further
documents, certificates or instruments relating to the transactions contemplated
hereby as New Pacific may reasonably request.
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ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF LIQUISITE
The obligations of Liquisite under this Agreement are subject to the
satisfaction, at or before the Closing Date (unless otherwise indicated herein),
of the following conditions:
SECTION 6.1 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by New Pacific in this Agreement were true when made and shall
be true as of the Closing Date (except for changes therein permitted by this
Agreement) with the same force and effect as if such representations and
warranties were made at and as of the Closing Date, and New Pacific shall have
performed and complied with all covenants and conditions required by this
Agreement to be performed or complied with by New Pacific prior to or at the
Closing. Liquisite shall have been furnished with a certificate, signed by a
duly authorized executive officer of New Pacific and dated the Closing Date, to
the foregoing effect.
SECTION 6.2 OFFICER'S CERTIFICATE. Unless waived by Liquisite,
Liquisite shall be furnished with a certificate dated the Closing Date and
signed by a duly authorized officer of New Pacific to the effect that no
litigation, proceeding, investigation or inquiry is pending or, to the best
knowledge of New Pacific, threatened, which might result in an action to enjoin
or prevent the consummation of the transactions contemplated by this Agreement
or, to the extent not disclosed in the New Pacific Schedules, by or against New
Pacific which might result in any material adverse change in any of the assets,
properties, business or operations of New Pacific.
SECTION 6.3 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date,
there shall not have occurred any material adverse change in the financial
condition, business or operations of nor shall any event have occurred which,
with the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business or operations of New
Pacific.
SECTION 6.5 COMPLIANCE WITH REPORTING REQUIREMENTS. As of the Closing
Date, New Pacific shall be current in, and in compliance with all requirements
of, all filings required to be tendered to the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended.
SECTION 6.6 PAYMENT FOR LEGAL FEES. Upon receipt of any funds raised
following the Closing, Liquisite agrees that the legal fees of Xxxxx X. Xxxxx,
Esq. incurred in connection with this transaction shall be paid as the first
priority. Such fees shall not exceed $10,000.
SECTION 6.7 NO LIABILITIES. As of the Closing Date, as defined herein
the New Pacific balance sheet and the notes thereto, shall reflect that New
Pacific has: (i) no receivables; (ii) no accounts payable; (iii) except as
stated herein or in the New Pacific Schedules, no liabilities, whether absolute,
accrued, known or unknown, contingent or otherwise, whether due or to become
due, including, without limitation, liabilities as guarantor under any guaranty
or other governmental charges. In the event New Pacific is bound by or otherwise
liable for any contract, lease or other agreement or any other liability at the
date of Closing, New Pacific's existing "inside" officers and directors shall
execute and deliver a binding Indemnification and Hold Harmless Agreement at
Closing relevant to such obligations.
SECTION 6.8 OTHER ITEMS. Liquisite shall have received such further
documents, certificates, or instruments relating to the transactions
contemplated hereby as Liquisite may reasonably request.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.1 BROKERS AND FINDERS. Except as set forth in Schedule 7.1,
each party hereto hereby represents and warrants that it is under no obligation,
express or implied, to pay certain finders in connection with the bringing of
the parties together in the negotiation, execution, or consummation of this
Agreement. The parties each agree to indemnify the other against any claim by
any third person not listed in Schedule 7.1 for any commission, brokerage or
finder's fee or other payment with respect to this Agreement or the transactions
contemplated hereby based on any alleged agreement or understanding between the
indemnifying party and such third person, whether express or implied from the
actions of the indemnifying party.
SECTION 7.2 LAW. FORUM AND JURISDICTION. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Nevada.
SECTION 7.3 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to New Pacific: New Pacific, Inc.
------------------ 000 Xxxxxxx Xxxxxx Xx., Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
If to Liquisite: Liquisite Development, Inc.
---------------- 0000 XX Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed, or
telegraphed.
SECTION 7.4 ATTORNEYS' FEES. The prevailing party in any proceeding
brought to enforce or interpret any provision of this Agreement shall be
entitled to recover its reasonable attorney's fees, costs and disbursements
incurred in connection with such proceeding, including but not limited to the
costs of experts, accountants and consultants and all other costs and services
reasonably related to the proceeding, including those incurred in any bankruptcy
or appeal, from the non-prevailing party or parties.
SECTION 7.5 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the reorganization contemplated by this Agreement
has been consummated, they and their representatives will hold in strict
confidence all data and information obtained with respect to another party or
any subsidiary thereof from any representative, officer, director or employee,
or from any books or records or from personal inspection, of such other party,
and shall not use such data or information or disclose the same to others,
except: (i) to the extent such data is a matter of public knowledge or is
required by law to be published; and (ii) to the extent that such data or
information must be used or disclosed in order to consum mate the transactions
contemplated by this Agreement.
SECTION 7.6 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
18
SECTION 7.7 THIRD PARTY BENEFICIARIES. This contract is solely between
New Pacific and Liquisite and, except for the Liquisite shareholders or as
otherwise specifically provided herein, no director, officer, stock holder,
employee, agent, independent contractor or any other person or entity shall be
deemed to be a third party beneficiary of this Agreement.
SECTION 7.8 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof. This
Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations or warranties, written or oral,
except as set forth herein. This Agreement may not be amended or modified,
except by a written agreement signed by all parties hereto.
SECTION 7.9 SURVIVAL; TERMINATION. The representations, warranties and
covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for three years.
SECTION 7.10 COUNTERPARTS; FACSIMILE SIGNATURES. This Agreement may be
executed in multiple counterparts, each of which shall be deemed an original and
all of which taken together shall be but a single instrument. This Agreement may
be executed by providing facsimile signatures by the parties hereto, however,
the original signatures shall be delivered within five (5) business days from
the date of execution of this Agreement.
SECTION 7.11 AMENDMENT OR WAIVER. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity, and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
SECTION 7.12 INCORPORATION OF RECITALS. All of the recitals hereof are
incorporated by this reference and are made a part hereof as though set forth at
length herein.
SECTION 7.13 EXPENSES. Each party herein shall bear all of their
respective costs and expenses incurred in connection with the negotiation of
this Agreement and in the consummation of the transactions provided for herein
and the preparation therefor.
SECTION 7.14 HEADINGS; CONTEXT. The headings of the sections and
paragraphs contained in this Agreement are for convenience of reference only and
do not form a part hereof and in no way modify, interpret or construe the
meaning of this Agreement.
SECTION 7.15 BENEFIT. This Agreement shall be binding upon and shall
inure only to the benefit of the parties hereto, and their permitted assigns
hereunder. This Agreement shall not be assigned by any party without the prior
written consent of the other party.
SECTION 7.16 PUBLIC ANNOUNCEMENTS. Except as may be required by law,
neither party shall make any public announcement or filing with respect to the
transactions provided for herein without the prior consent of the other party
hereto.
SECTION 7.17 SEVERABILITY. In the event that any particular provision
or provisions of this Agreement or the other agreements contained herein shall
for any reason hereafter be determined to be unenforceable, or in violation of
any law, governmental order or regulation, such unenforceability or violation
shall not affect the remaining provisions of such agreements, which shall
continue in full force and effect and be binding upon the respective parties
hereto.
19
SECTION 7.18 FAILURE OF CONDITIONS; TERMINATION. In the event any of
the conditions specified in this Agreement shall not be fulfilled on or before
the Closing Date, either of the parties have the right either to proceed or,
upon prompt written notice to the other, to terminate and rescind this Agreement
without liability to any other party. The election to proceed shall not affect
the right of such electing party reasonably to require the other party to
continue to use its efforts to fulfill the unmet conditions.
SECTION 7.19 NO STRICT CONSTRUCTION. The language of this Agreement
shall be construed as a whole, according to its fair meaning and intendment, and
not strictly for or against either party hereto, regardless of who drafted or
was principally responsible for drafting the Agreement or terms or conditions
hereof.
SECTION 7.20 EXECUTION KNOWING AND VOLUNTARY. In executing this
Agreement, the parties severally acknowledge and represent that each: (a) has
fully and carefully read and considered this Agreement; (b) has been or has had
the opportunity to be fully apprized of its attorneys of the legal effect and
meaning of this document and all terms and conditions hereof; and (c) is
executing this Agreement voluntarily, free from any influence, coercion or
duress of any kind.
SECTION 7.21 JOINT PREPARATION. This Agreement is to be deemed to have
been prepared jointly by the parties hereto and any uncertainty or ambiguity
existing herein, if any, shall not be interpreted against any party, but shall
be interpreted according to the application of the rules of interpretation for
arm's length agreements.
SECTION 7.22 ARBITRATION AND VENUE. Any controversy arising out of or
relating to this Agreement or any modification or extension thereof, including
any claim for damages and/or rescission, shall be settled by arbitration in Los
Angeles, Nevada in accordance with the Commercial Arbitration Rules of the
American Arbitration Association before one arbitrator. The arbitrator sitting
in any such controversy shall have no power to alter or modify any express
provisions of this Agreement or to render any award which by its terms effects
any such alteration, or modification. The parties consent to the jurisdiction of
the Superior Court of Nevada, and of the United States District Court for the
Central District of Nevada for all purposes in connection with such arbitration
including the entry of judgment on any award. The parties consent that any
process or notice of motion or other application to either of said courts, and
any paper in connection with arbitration, may be served by certified mail or the
equivalent, return receipt requested, or by personal service or in such manner
as may be permissible under the rules of the applicable court or arbitration
tribunal, provided a reasonable time for appearance is allowed. Each of the
parties shall, subject to the award of the arbitrators, pay an equal share of
the arbitrators' fees except the arbitrators shall have the power to award
recovery of all costs (including the attorneys' fees, administrative fees,
arbitrators' fees and court fees) to the prevailing party, as determined by the
arbitrators. This section shall survive the termination of this Agreement.
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IN WITNESS WHEREOF, the corporate parties hereto have caused this
Agreement to be executed by their respective officers, hereunto duly authorized,
and entered into as of the date first above written.
NEW PACIFIC, INC.
By: /s/ XXXXX XXXXXXX
-------------------------------
President
LIQUISITE DEVELOPMENT, INC.
By: /S/ XXXXXXXXX XXXXX
-------------------------------
President
21
LIQUISITE SHAREHOLDER:
Xxxxxxxxx Xxxxx
/S/ XXXXXXXXX XXXXX
----------------------------
22
SCHEDULE I
----------
LIST OF LIQUISITE SHAREHOLDERS
----------
ON FILE WITH LIQUISITE'S CORPORATE RECORDS
------------------------------------------
23
EXHIBIT "A"
DISCLOSURE MATERIALS
FORM 10-SB; FORM 10-SB/A; FORMS 10-QSB AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION.
24
EXHIBIT "B"
FORM OF INVESTMENT LETTER AND POWER OF ATTORNEY
25
INVESTMENT LETTER AND POWER OF ATTORNEY
January , 2002
---
New Pacific, Inc.
000 Xxxxxxx Xxxxxx Xx.
Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Ladies & Gentlemen:
The undersigned herewith deposits certificate(s) for shares of
common stock of Liquisite Development, Inc., ("Liquisite"), as described below
(endorsed, or having executed stock powers attached) in acceptance of and
subject to the terms and conditions of that certain Agreement and Plan of
Reorganization (the "Agreement"), between Liquisite and New Pacific, Inc. ("New
Pacific" or the "Company"), dated January , 2002, receipt of which is hereby
acknowledged, in exchange for shares of Common Stock of New Pacific (the
"Exchange Shares"). If any condition precedent to the Agreement is not satisfied
within the relevant time parameters established in the Agreement (or any
extension thereof), the certificate(s) are to be returned to the undersigned.
The undersigned hereby represents, warrants, covenants and
agrees with you that, in connection with the undersigned's acceptance of the
terms of the Agreement and Exchange Shares and as of the date of this letter:
1. The undersigned has received and has read the Agreement,
and hereby agrees to and accepts the terms and conditions of the Agreement.
2. The undersigned does hereby appoint, Xxxxxxxxx Xxxxx,
Liquisite's President ("Attorney") as its lawful attorney and agent with full
power to execute any amendments to the Agreement which may be agreed to after
the date hereof, which amendments would have been approved by the majority of
the Liquisite's shareholders, on behalf of the undersigned and further grants
unto the Attorney, full power and authority to do and perform each and every act
necessary to be done to complete the same, subject only to removal or
substitution by the undersigned upon written notification to the Attorney of the
foregoing.
3. The undersigned is aware that his, her or its acceptance of
the Exchange Shares is irrevocable, absent an extension of the Expiration Date
of any material change to any of the terms and conditions of the Agreement.
4. The undersigned warrants full authority to deposit all
shares referred to above and that New Pacific will acquire a good and
unencumbered title thereto.
5. The undersigned has full power and authority to enter into
this agreement and that this agreement constitutes a valid and legally binding
obligation of the undersigned.
6. The undersigned represents that the undersigned is_____/ is
not_____an "Accredited Investor" as that term is defined in Section 501(a) of
Regulation D promulgated under the Securities Act of 1933, as amended (the
"Act"), because the undersigned meets one or more of the following requirements:
PLEASE CHECK AS MANY BOXES THAT APPLY ONLY IF YOU ARE ACCREDITED INVESTOR:
26
|_| He or she is a natural person whose individual net worth, or joint net worth
with such investor's spouse, exceeds $1,000,000 and either he or she is able to
bear the economic risk of investment in the proposed investments or the proposed
investments will not exceed 10% of his or her net worth or joint net worth with
such investor's spouse;
|_| He or she is a natural person who had individual income in excess of
$200,000 in each of the two most recent years, or (except in California) joint
income with such investor's spouse in excess of $300,000 in each of those years
and reasonably expects to reach the same income level in the current year, and
either such investor is able to bear the economic risk of investment in the
proposed investments or the proposed investments will not exceed 10% of his or
her net worth or joint net worth with such investor's spouse;
|_| It is an organization described in ss. 501(c)(3) of the Internal Revenue
Code of 1986 as amended, (i.e., tax exempt entities), corporation, Massachusetts
or similar business trust, or partnership, not formed for the specific purpose
of acquiring the proposed investments, with total assets in excess of
$5,000,000;
|_| It is a trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the proposed investments, whose purchases are
directed by a sophisticated person as described under the first alternative
above;
|_| It is a bank as defined in ss. 3(a)(2) of the Securities Act of 1933, or a
savings and loan association or other institution as defined in ss. 3(a)(5)(A)
of the Securities Act of 1933 whether acting in its individual or fiduciary
capacity;
|_| It is a broker registered pursuant toss. 15 of the Securities Exchange Act
of 1934;
|_| It is an insurance company as defined inss. 2(13) of the Securities Act of
1933;
|_| It is an investment company registered under the Investment Company Act of
1940 or a business development company as defined in ss. 2(a)(48) of that Act;
|_| It is a Small Business Investment Company licensed by the U.S. Small
Business Administration underss. 301 (c) or (d) of the Small Business Investment
Act of 1958;
|_| It is a private business development company as defined inss. 202(a)(22) of
the Investment Advisers Act of 1940;
|_| It is an employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, if the investment decision is made by a
plan fiduciary, as defined in ss. 3(21) of such Act, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are Accredited Investors as described above;
|_| He or she is a director or executive officer of the Company;
|_| It is an entity in which all the equity owners are Accredited Investors
since they are all described above.
7. By execution hereof, the undersigned hereby confirms that
the New Pacific common stock to be received in exchange for Liquisite common
stock (the "Securities"), will be acquired for investment for the undersigned's
own account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that the undersigned has no present
intention of selling, granting any participation in, or otherwise distributing
the same. By execution hereof, the undersigned further represents the
undersigned does not have any contract, undertaking, agreement or arrangement
with any third party, with respect to any of the Securities.
8. The undersigned understands that the Securities are being
issued pursuant to available exemption thereto and have not been registered
under the Securities Act of 1933, as amended (the "1933 Act"), or under any
state securities laws. The undersigned understands that no registration
statement has been filed with the United States Securities and Exchange
Commission nor with any other regulatory authority and that, as a result, any
benefit which might normally accrue to a holder such as me by an
27
impartial review of such a registration statement by the Securities and Exchange
Commission or other regulatory authority will not be forthcoming. The
undersigned understands that he/she/it cannot sell the Securities unless such
sale is registered under the 1933 Act and applicable state securities laws or
exemptions from such registration become available. In this connection the
undersigned understands that the Company has advised the Transfer Agent for the
Common Shares that the Securities are "restricted securities" under the 1933 Act
and that they may not be transferred by the undersigned to any person without
the prior consent of the Company, which consent of the Company will require an
opinion of my counsel to the effect that, in the event the Securities are not
registered under the 1933 Act, any transfer as may be proposed by the
undersigned must be entitled to an exemption from the registration provisions of
the 1933 Act. To this end, the undersigned acknowledges that a restrictive
legend will be placed upon the certificate representing the Securities and that
the Transfer Agent has been advised of such facts.
9. The undersigned represents that it is experienced in
evaluation and investing in securities of companies and acknowledges that
he/she/it is able to fend for itself, can bear the economic risk of this
investment and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities.
10. The undersigned represents that all information provided
by the undersigned herein is true and correct as of the date thereof.
IN WITNESS WHEREOF, the undersigned has duly executed this
Investment Letter as of the date indicated hereon.
Dated: , 2002
---------------
Very truly yours,
----------------------------
(signature)
----------------------------
(print name in full)
----------------------------
(address)
28
