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AGREEMENT AND PLAN OF BUSINESS COMBINATION
THIS AGREEMENT, entered into this 17th day of April, 1998, by and between
the PAN Environmental Corporation, a Delaware corporation (hereinafter "PAN"),
as Acquiror, and the Xxxxxxxxx Holdings, Ltd., an Antigua, West Indies
corporation (hereinafter "Xxxxxxxxx"), as Acquiree:
WHEREAS, PAN desires to acquire all of the issued and outstanding common
stock of Xxxxxxxxx incident to a tax-free exchange of capital stock of PAN for
all outstanding capital stock of Xxxxxxxxx upon the terms and conditions
contained herein,
FURTHER WHEREAS, the shareholders of Xxxxxxxxx desire to exchange
their 100% ownership of Xxxxxxxxx for common stock of PAN to be newly issued by
PAN upon the terms and conditions contained in this Agreement,
FURTHER WHEREAS, the shareholders of Xxxxxxxxx desire to raise U.S.
$1,000,000 in bridge financing via a private placement of 333,333 shares at
$3.00 per share, and immediately thereafter U.S. $22,500,000 in PAN via a
private placement of 5,000,000 shares at $4.50 per share which is one of their
purposes for entering into this Agreement in addition to becoming a public
company,
NOW THEREFORE, for valuable consideration and upon the mutual
representations, warranties, covenants and agreements and other promises set
forth in writing herein, the parties hereto agree as follows:
1. Plan of Business Combination - It is the agreement and intention of
all parties hereto that all of the issued and outstanding capital stock of
Xxxxxxxxx owned by any and all shareholders of Xxxxxxxxx shall be acquired by
PAN hereby in exchange solely for common stock of PAN. It is particularly the
intention of all parties hereto that this transaction qualify as a tax-free
reorganization under Section 368(a)(1)(B) of the Internal Revenue Code of 1954,
as amended, and related sections thereunder.
2. Audits and Financial Statements - Both PAN and Xxxxxxxxx recognize
the importance of obtaining certified audits of Xxxxxxxxx Holdings, Ltd.,
incident to this Agreement and Plan of Business Combination. These certified
audits will be prepared on a consolidated basis for the combined companies (PAN
and Xxxxxxxxx) after consummation of this business combination. The officers
and directors of PAN and Xxxxxxxxx shall take all necessary efforts in a
diligent manner to prepare financial and accounting materials and statements as
necessary to prepare for a consolidated financial statement of the combined
operations so as to position the combined companies to conduct a certified
audit to satisfy registration requirements of the SEC and relevant state
security commissions for a future public or private offering.
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
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3. Xxxxxxxxx Acquisition of Gaming Systems - Xxxxxxxxx has acquired the
gaming system from United, Inc. dba United Race and Sports Book for 10,000
common shares of Xxxxxxxxx. The gaming system so acquired consists of computer
hardware, computer software, expertise and proprietary systems to operate race
and sports book operations, and telephone communications.
4. Xxxxxxxxx License-Back of Gaming System Back to United - Xxxxxxxxx
has licensed back to United the gaming system acquired in paragraph 3 above for
2.4% of the betting volume of United, which should allow United to run a
profitable race and sports book operation given the fact that the 1995 State of
Nevada Gaming Control Board Report entitled Fiscal Year Sports Book Breakdown
for the July 1 through June 30 fiscal years, 1985 through 1997, showed an
average net gaming revenue of 3.39% as an average for all Nevada race and
sports books. (A copy of the Gaming system License Agreement is attached hereto
as Exhibit A.)
5. Exchange of Shares - All parties hereto agree that all Xxxxxxxxx
common stock presently outstanding shall be exchanged by the shareholders
thereof with PAN for common shares of PAN to be divided among the present
shareholders of Xxxxxxxxx pro rata in proportion to their shareholdings in
Xxxxxxxxx. This exchange shall be made on the basis of 12,800,000 PAN common
shares (3,200,000 shares to be issued immediately into Escrow and 9,600,000 to
be reserved for issuance based on performance in paragraph 6 below, upon PAN
Directors' Resolution) for all outstanding capital stock of Xxxxxxxxx,
including all common shares pursuant to the terms and conditions of the Escrow
Agreement in paragraph 6 below.
6. Escrow Agreement - An Escrow will be set up to receive the PAN common
shares which provides that the Escrow Agent shall release to Stockholders one
share for each $24.9375 of betting volume placed with United resulting in
$0.6225 of license fees payable to Xxxxxxxxx under paragraph 3 of the License
Agreement. Such betting volume will be jointly verified by PAN, Xxxxxxxxx and
United. The release of Shares will be done on a quarterly basis as defined in
paragraph 7 below and when an aggregate betting volume of eighty three million
dollars ($83,000,000) resulting in one million nine hundred ninety two thousand
dollars ($1,992,000) payable to Xxxxxxxxx of first year license fees has been
met, the Escrow Agent will release the entire 3,200,000 shares or remainder
thereof. The first year is defined as the first full fiscal year beginning with
the first full calendar quarter following the effective date of the License
Agreement. In the event that the minimum betting volume and license fees are
not met by the end of the first full fiscal year, then the same formula will be
applied for one subsequent fiscal year to earn out any amount in excess of that
earned and paid in the first full fiscal year. Any shares not so earned shall
be returned to PAN. (A copy of the Escrow Agreement is attached as Exhibit B.)
7. Merger and Acquisition Consultant Agreement - Business Combination
Agreement - PAN and Xxxxxxxxx has agreed to issue 800,000 restricted Rule 144
common shares to TCKTS, L.L.C. and have agreed to pay $50,000.00 in fees for
consulting services rendered incident to the negotiation and execution of this
Agreement. TCKTS, L.L.C. is owned fifty percent (50%) by Xxxxx Xxxxxxxx and
fifty percent (50%) by Xxxxxxxx X. Xxxxxxxx. (A copy of the Merger and
Acquisition Consultant Agreement is attached as Exhibit C.)
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
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8. The $22,500,000 Financing -- Because raising $22,500,000 to expand
Xxxxxxxxx'x operations is one of the reasons for Xxxxxxxxx entering into this
agreement, PAN agrees, subject to the closing of this Agreement, to xxxxx
Xxxxxxxxx the guaranteed right to raise $22,500,000 in capital by offering
5,000,000 shares of PAN for sale at a guaranteed price for ninety (90) days at
$4.50 per share in a private placement. The shares to be issued in this
offering shall be restricted Rule 144 shares.
This guaranteed right to offer 5,000,000 PAN shares at $4.50 per
share shall expire three (3) months from the date of this Agreement, and the
$4.50 price per share will be guaranteed for the three (3) months.
9. Financial Consultant Agreement -- $22,500,000 Financing -- PAN has
agreed as of April 17, 1998 to retain Cheong Tat Corporation as its consultant
to secure additional financing for PAN's operations, including equity and/or
debt financing. In consideration of such consulting services, Xxxxxxxxx has
agreed to pay Cheong Tat Corporation ten percent (10%) finder's fee or pro
rata portion thereof on a $1,000,000 private placement payable half in stock
and half in cash, and five percent (5%) finder's fee or pro rata portion
thereof on a $22,500,000 private placement payable half in stock and half in
cash. (A copy of the Financial Consulting Agreement is attached as Exhibit D.)
10. Investment Representation -- Incident to their voting upon or
otherwise consenting to this business combination agreement, the shareholders
of Xxxxxxxxx will be required to represent that they are acquiring these
restricted securities of PAN for investment and not with a present intention or
view to resell or redistribute any of them, absent future SEC and relevant
state registration or an appropriate exemption therefrom. The shareholders of
Xxxxxxxxx also hereby acknowledge that the certificates for PAN common shares
to be issued to the shareholders of Xxxxxxxxx incident to this business
combination will be legended with appropriate language evidencing such
restrictions on further transfer, sale or disposition thereof.
11. Delivery of Shares -- Incident to the closing of this business
combination, the shareholders of Xxxxxxxxx shall deliver to PAN appropriate
certificates representing all of their shares of Xxxxxxxxx, which certificates
shall be properly endorsed, so as to make PAN the sole holder and owner of all
Xxxxxxxxx shares, free and clear of all liens and encumbrances.
12. Closing Date -- The Closing Date of this business combination shall
be on May 22, 1998 after final approval by the Board of Directors of the
parties hereto.
13. Representations of PAN -- PAN hereby represents and warrants that
effective the date of this Agreement, and as of the Closing Date hereof, the
following statements are true and correct:
(a) As of the Closing Date of this business combination, all PAN
common shares outstanding will constitute validly and legally issued shares in
their entirety, as well as the common shares of PAN to be exchanged with the
shareholders of Xxxxxxxxx in this business
AGREEMENT AND PLAN OF
BUSINESS COMBINATION -- PAN/Xxxxxxxxx
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combination, and that all of such shares shall be fully paid and nonassessable;
and that the common shares of PAN to the issued hereto will be in all respects
equivalent to the common stock of PAN issued and outstanding as of the date
hereof;
(b) The officers of PAN who have executed this Agreement are duly
authorized to execute it on behalf of PAN, and they have taken all action
required by law and the Bylaws of PAN to properly and legally execute and
validate this Agreement;
(c) Any financial statements submitted by any party to this
Agreement, and any such statements to be submitted in the future incident
hereto, shall be complete and accurate for the dates and periods indicated
thereon and fairly present the financial condition of PAN and its operations
for the periods covered; and that there are no material liabilities, either
fixed or contingent, not reflected in such financial statements;
(d) All PAN common stock to be outstanding at the Closing Date
hereof shall not be in any greater amount than has already been disclosed to
the shareholders of Xxxxxxxxx incident to entering into this Agreement;
(e) There have not been any material changes in the financial
position of PAN since the time that financial position statements have been
submitted in connection with this Agreement, unless they have already been
disclosed to the shareholders of Xxxxxxxxx incident to negotiating or entering
into this Agreement;
(f) That from the date of this Agreement until the closing of this
business combination, there will not be any negative material change in the
position of PAN;
(g) Than PAN is not involved in any pending or threatened litigation
or governmental proceeding or investigation unless reflected in its financial
statements or disclosed in writing to the shareholders of Xxxxxxxxx; and to the
best knowledge of PAN and its officers, no material litigation, claims,
assessments or governmental investigation or proceeding is threatened against
PAN or any of its properties, or any of its directors or officers incident to
their roles with PAN;
(h) As of the Closing Date of this business combination, PAN will be
in good standing and qualified to conduct business in each state where such
qualification is required;
(i) PAN has paid any and all taxes or assessments due to any
governmental agency incident to its past operations to the date hereof except
as noted in PAN's financial statements;
(j) PAN has complied with all state and federal laws and regulations
regarding its incorporation and formation, past issuances of capital stock and
sale thereof, capitalization, business and operations; and no contingent
liabilities against PAN have been threatened, or claims
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
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made against PAN, and no basis for the same exists, with respect to such
incorporation, formation, business operations, capitalizations, or sales and
issuance of securities;
(k) PAN has not breached any material agreement or contract to which
it is a party; and the execution of this Agreement will not violate or breach
any material agreement, contract or commitment to which PAN or its shareholders
are parties;
(l) PAN has no outstanding debt other than what has been disclosed
to the shareholders of Xxxxxxxxx incident to the negotiations and preparation
of this Agreement;
(m) As of the date hereof, and at the Closing Date, PAN to the best
of its ability and knowledge, has disclosed all events, conditions, and facts
materially affecting the business and prospects of Xxxxxxxxx; and PAN has not
now, and will not as of the Closing Date have, withheld knowledge of any such
events, conditions, and facts which it knows, or has reasonable grounds to
know, may materially affect the business, worth or prospects of Xxxxxxxxx;
(n) All outstanding shares of capital stock of PAN has been duly
authorized, validly issued and are fully paid and nonassessable with no
personal liability attaching to the ownership thereof;
(o) PAN has not mortgaged, pledged any of its assets, whether
tangible or intangible;
(p) PAN has not sold, assigned or transferred any material tangible
or intangible assets or rights unless already disclosed to the shareholders of
Xxxxxxxxx incident hereto; nor has it knowingly waived any rights of material
value;
(q) PAN does not have any outstanding warrants, options or other
rights to acquire equity shares of interests in capital stock of PAN;
(r) All corporation minute books and financial records in existence
will be made available to Xxxxxxxxx for review prior to the closing of this
Agreement;
(s) The records of all issuances and transfers of record of the
common stock of PAN have been maintained by the transfer agent of PAN in good
and current order and accurately reflect the record ownership of all issued and
outstanding common stock of PAN;
(t) That any financial statements submitted by PAN, or to be
submitted by PAN, incident to this business combination have been prepared or
will be prepared, in accordance with generally accepted accounting principles
applied on a consistent basis;
(u) PAN has only one class of capital stock outstanding and all
outstanding common shares have been duly authorized; validly issued and are
fully paid and nonassessable with no personal liability attaching to the
ownership thereof;
AGREEMENT AND PLAN OF
BUSINESS COMBINATION -- PAN/Xxxxxxxxx
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(v) Capitalization - PAN has authorized capital stock of 40,000,000
common shares of $0.001 par value per share of which there are 3,218,163 shares
currently outstanding and 10,000,000 preferred shares of $3.00 par value per
share of which there are no shares currently outstanding.
14. Representations of Xxxxxxxxx and shareholders of Xxxxxxxxx - As of the
date of this Agreement, and as of the Closing Date of this business combination,
Xxxxxxxxx hereby represents and warrants the following:
(a) As of the Closing Date of this business combination, all
Xxxxxxxxx common stock will constitute validly and legally issued shares in
their entirety, and that all such shares shall be fully paid and nonassessable;
(b) The officers of Xxxxxxxxx executing this Agreement are duly
authorized to execute it on behalf of Xxxxxxxxx, and they have taken all action
required by law and the Bylaws of Xxxxxxxxx to properly and legally execute and
validate this Agreement;
(c) Any financial statements of Xxxxxxxxx submitted incident to this
Agreement or in preparation for its closing, shall be complete and accurate for
the dates and periods indicated thereon and fairly present the financial
condition of Xxxxxxxxx and its operations for the periods covered; and that
there are no material liabilities, either fixed or contingent, not reflected in
such financial statements;
(d) All Xxxxxxxxx common stock to be outstanding at the Closing Date
hereof shall not be in any greater amount than has already been disclosed to
PAN;
(e) There are no material liabilities, either fixed or contingent,
not disclosed in such financial statements.
(f) There have not been any material changes in the financial
position of Xxxxxxxxx since the time of executing this Agreement, unless they
have already been disclosed to PAN prior to the Closing Date of this business
combination;
(g) That from the date of this Agreement until the closing of this
business combination, there will not be any negative material change in the
position of Xxxxxxxxx;
(h) That Xxxxxxxxx is not involved in any pending or threatened
litigation or governmental proceeding or investigation unless reflected in its
financial statements or otherwise disclosed in writing to PAN; and to the best
knowledge of Xxxxxxxxx and its officers, no material litigation, claims,
assessments or governmental investigation or proceedings are threatened against
Xxxxxxxxx or any of its properties, or any of its directors or officers incident
to their roles with Xxxxxxxxx;
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
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(i) Xxxxxxxxx has not breached any material agreement or contract to
which it is a party;
(j) All corporate minutes books and financial records in existence
regarding Xxxxxxxxx and its business will be made available to PAN for review
prior to the closing of this Agreement;
(k) The execution of this Agreement will not violate or breach any
material agreement, contract or commitment to which Xxxxxxxxx or its
shareholders or officers are party;
(l) The records of all issuances and transfers of records of the
capital stock of Xxxxxxxxx have been maintained by Xxxxxxxxx as its own
transfer agent in good and current order and accurately reflect the record
ownership of all issued common stock of Xxxxxxxxx;
(m) Xxxxxxxxx has not sold, assigned or transferred any tangible or
intangible assets unless disclosed to PAN prior hereto; nor has it knowingly
waived any rights of material value;
(n) Xxxxxxxxx is not subject to any bankruptcy proceeding or
insolvency action;
(o) As of the Closing Date of this business combination, Xxxxxxxxx
will be in good standing and qualified to conduct business in each jurisdiction
where such qualification is required;
(p) Unless otherwise disclosed in the financial statements submitted
by Xxxxxxxxx incident to this Agreement, Xxxxxxxxx has paid any and all taxes
or assessments due to any governmental agency incident to its past operations
to the date hereof and also has filed whatever income tax and other returns,
federal, state or other jurisdiction, which are required to the date hereof;
(q) Xxxxxxxxx has complied with all state, federal and other
jurisdiction's laws and regulations regarding its incorporation and formation,
past issuances of capital stock and sale thereof, capitalization, business and
operations; and no contingent liabilities against Xxxxxxxxx have been
threatened, or claims made against Xxxxxxxxx, with respect to such
incorporation, formation, business operations, capitalizations, or sales and
issuance of securities unless already disclosed by Xxxxxxxxx in the financial
statements;
(r) Xxxxxxxxx has no outstanding debt other than what has been
disclosed to PAN incident to the negotiation and preparation of this Agreement;
(s) As of the date hereof, and at the Closing Date, Xxxxxxxxx to the
best of its ability and knowledge, has disclosed all events, conditions, and
facts materially affecting the business and prospects of PAN; and Xxxxxxxxx has
not now, and will not as of the Closing Date have, withheld knowledge of any
such events, conditions, and facts which its knows, or has
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN / Xxxxxxxxx
Page 7 of 15
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reasonable grounds to know, may materially affect the business, worth or
prospects of PAN;
(t) All outstanding common shares of Xxxxxxxxx have been duly
authorized, validly issued and are fully paid and nonassessable with no
personal liability attaching to the ownership thereof;
(u) Xxxxxxxxx has not mortgaged, pledged any of its assets, whether
tangible or intangible, other than already disclosed to Xxxxxxxxx;
(v) Xxxxxxxxx has not sold, assigned or transferred any material
tangible or intangible assets or rights unless already disclosed to PAN
incident hereto;
(w) Any outstanding warrants, options or other rights to acquire
equity shares or interests in capital stock of Xxxxxxxxx have been disclosed in
full to PAN incident to entering into this Agreement;
(x) Capitalization. Xxxxxxxxx has authorized capital stock of 10,000
common shares of no par value of which 10,000 shares are currently issued and
outstanding.
(z) Conduct of Business. Since the date of this Agreement, unless
already disclosed in writing to PAN, there has not been and, between the date
of this Agreement and the Closing Date, there will not be:
i) Any material increase in the encumbrances against any
assets of Xxxxxxxxx or transfer of any such assets unless
in the ordinary course of business;
ii) Any change in the accounting methods or practices
followed by Xxxxxxxxx;
iii) Any termination, changes or violations of any leases,
contracts, licenses, commitments or other arrangement or
agreements of Xxxxxxxxx having a material adverse effect
on the business or assets of Xxxxxxxxx;
iv) Any material new borrowing or increased borrowing not in
the ordinary course of business, nor any material new
contracts or commitments for the purchase or sale of
services, merchandise or supplies except in the ordinary
course of business;
v) Any material increase in the compensation of any
director, officer or key employee of Xxxxxxxxx, or any
new material employment agreements;
vi) Any stock or cash dividend or distribution of common
stock for services, unless approved in writing by PAN;
vii) Any violation of any permit, license, law or regulation
materially adversely affecting any assets or business of
Xxxxxxxxx;
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
Page 8 of 15
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viii) Any loan or other material transaction with any officer
or director or shareholder of Xxxxxxxxx unless consented
to by PAN; and
ix) Any authorization, issuance, sale or other disposition of
any common shares, or rights thereto, of Xxxxxxxxx except
with the written consent of PAN.
15. Covenants of Both Parties - PAN and Xxxxxxxxx both hereby agree and
covenant as follows that during the period from the date hereof to the Closing
Date, unless express written consent is obtained from the other party, each
party hereto shall:
(a) Conduct its business and operations solely in the usual, normal
and ordinary course of business;
(b) Issue no stock or stock rights or other equity rights which were
not expressly contemplated by the parties to the information already disclosed
and developed incident to the negotiations and preparation of this Agreement;
(c) make no distribution to shareholders, or any other party of any
assets or properties by way of dividend, purchase of shares, redemption,
liquidation or otherwise;
(d) Pay no salaries, bonuses or other compensation to officers,
principal shareholders, directors or other affiliates, except as finders fees
paid incident to this Agreement or incident to moneys raised, other than the
usual and ordinary course of business or pursuant to employment terms already
established and already disclosed to the other party;
(e) Not sell, dispose of, or transfer any material assets or rights,
tangible or intangible, except under current contract arrangements already
disclosed to the other party or except in the ordinary course of business;
(f) Make no purchase or acquisitions of real property or material
amounts of personal property except in the ordinary course of business or with
the consent of the other party to this Agreement;
(g) Not subject any property or rights to liens, mortgages, pledges
or other encumbrances of any kind or manner except for a full and fair
consideration in the ordinary course of business;
(h) Not borrow any money except for operations in the ordinary
course of business or with the consent of the other parties to this Agreement;
(i) Not make any loans or advances or extend any credit terms except
in the ordinary course of business;
(j) Not amend any bylaws, articles of incorporation, or make any
material
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN / Xxxxxxxxx
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changes in accounting or operational practice and policies;
(k) Maintain and cause to be maintained current and accurate records of
all issuances of common stock of the respective parties;
(l) Each party to this Agreement shall furnish the other parties
reasonable access to properties, premises, books and records, and any financial
and operating data and information regarding the business operations of all the
parties, as each party hereto may from time to time reasonably request of the
other party. Each party shall take diligent and secure efforts to keep all of
such information and data confidential at all times, and shall execute whatever
confidentiality agreements are required by the other party;
(m) Each party shall take its best efforts to retain all present
employees, and do nothing to undermine or diminish the goodwill of suppliers,
prospective customers, current customers, marketing or sales representatives or
any others having business relationships with either party;
(n) Until the termination of this Agreement or the successful closing of
this business combination, neither party shall contemplate or negotiate or
enter into, any other business combination or similar arrangements or merger
with a third party, or offer any of their assets or capital stock to third
party unless with the written consent of the other parties hereto;
(o) Each party hereby warrants and represents that any information or
data supplied to the other party for purposes of being included in information
sent to PAN shareholders shall not contain any statement which at the time and
in the light of the circumstances under which it is made, is false or
misleading with respect to any material fact and shall contain all information
required to make the supplied information not materially misleading or
incomplete. As of the Closing Date, such distributed information will contain
all material statements and information required to be included therein with
respect to each party hereto and will not include any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not materially misleading;
(p) Upon the Closing Date hereof, PAN's existing Directors will first
appoint ___________________, ___________________, and ____________________ as
Directors of PAN and then resign as Directors. Each party hereto shall take
whatever actions are needed to nominate and submit to the shareholders of PAN
at its upcoming shareholders' meeting the following persons to be elected to
the Board of Directors of PAN: ____________________, ___________________, and
__________________________.
(q) Not make any press release or form of public communication concerning
this business combination without the prior approval and consent of the other
party;
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
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(r) Not commit any violation of any permit, license, law or
regulation materially adversely affecting any assets or business of any party
hereto; and
(s) Not enter into any material new borrowing or increased borrowing
without the written consent of the other party hereto; nor enter into any
material new contracts or commitments for the purchase or sale of merchandise or
services except in the ordinary course of business or with the written consent
of the other party.
(t) Not dilute the shareholdings of either the original PAN
shareholders or the newly issued shares to Xxxxxxxxx shareholders for at least
270 days following the Effective Date of this Agreement and Plan of Business
Combination other than what has been disclosed to both parties incident to the
negotiation and preparation of this Agreement, i.e., and agreement to issue
333,333 shares at $3.00 per share for a $1,000,000 bridge financing and an
agreement to issue 5,000,000 shares at a guaranteed (for 90 days) price of
$4.50 per share pursuant to a $22,500,000 private placement.
16. Closing Conditions - Unless otherwise waived expressly in writing by
the other party, all obligations of PAN and Xxxxxxxxx under this Agreement are
subject to the fulfillment of the following conditions prior to closing:
(a) The representations and warranties by or on behalf of either
party hereto contained in this Agreement or in any document or certificate
delivered to the other party incident to this Agreement or its closing shall be
true and correct in all material respects at and as of the time of closing as
though such representations and warranties were made at and as of such time;
(b) All parties hereto have performed and complied with all
covenants, agreements and conditions required by this Agreement to be performed
or complied with by or prior to the closing of this business combination;
(c) This Agreement must be duly authorized, executed and delivered
by the respective and appropriate officers and/or directors of all parties
hereto;
(d) Any filings or notices to state, federal or other jurisdiction's
regulatory authorities or corporation commissions or secretaries of state
required by this Agreement and its closing must have been completed, including
anything necessary to constitute this business combination as a valid exemption
from registration under state and federal securities laws and regulations;
(e) PAN shall have received the appropriate investment representation
from the Xxxxxxxxx shareholders whereby they represent that the securities being
delivered by PAN in this business combination are being purchased for investment
and not with a view toward further distribution or sale thereof, and that they
understand such securities are "restricted securities" as defined by federal and
state securities laws and accordingly may not be transferred or resold without a
current registration or the availability of an appropriate exemption from such
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
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registration;
(f) The securities to be issued incident to this business
combination shall be issued pursuant to all necessary corporate action being
legally taken prior to their issuance, and shall be fully paid and
nonassessable when issued to the shareholders of Xxxxxxxxx, and certificates
therefor shall be in proper form and carry the required restrictive legend
thereon;
(g) No material claim, action, suit or proceeding, whether private
or public or governmental, shall be pending or threatened against PAN or
Xxxxxxxxx, or the officers or directors of these corporations incident to their
roles with such corporations, which if adversely determined, would prevent or
hinder materially the consummation of the transactions in this Agreement or
result in the payment of substantial damages as a result of such transaction
and action or proceeding;
(h) All actions, proceedings, instruments and documents required to
carry out and effectuate this business combination or incidental hereto, and
any other related legal matters, shall have been approved by respective legal
counsels of the parties hereto;
(i) No material adverse events affecting any party hereto shall have
occurred prior to the closing of this business combination;
(j) There shall have been no material misrepresentation or omission
to state any material fact by either party in connection with the information
provided relative to this business combination and its closing;
(k) Both parties and their legal or accounting representatives, as
the case may be, shall be satisfied that this business combination may be
consummated as a tax-free reorganization;
(l) As of the Closing Date, there shall be no outstanding equity
securities of Xxxxxxxxx other than those being exchanged in this business
combination and also there shall be no outstanding warrants, options or other
conversion rights to acquire any equity securities of Xxxxxxxxx or PAN;
(m) Between the date hereof and the Closing Date, both parties
hereto shall not issue any shares of their common stock, or any warrants or
options or other stock rights; and
(n) All parties hereto shall have completed their respective due
diligence reviews of the business and records of the other parties.
17. Survival of Representations - All representations, warranties and
covenants contained herein by any party hereto shall survive the closing of
this business combination and the consummation of the transactions called for
hereby for two years from the date hereof; provided, however, that all parties
hereto hereby agree that no officer, director or shareholder of PAN or
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
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Xxxxxxxxx shall be personally liable for any damages, liability or expense
resulting from the inaccuracy or incompleteness of any representation or
warranty contained herein.
18. Termination of Agreement - This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing Date:
(a) By written consent of all parties hereto; or
(b) By any party hereto, if there has been a material
misrepresentation or breach of the representations or warranties herein by the
other party, provided, however, that if the breach can and is cured within 10
days following notification thereof, it shall not constitute grounds for
termination; or
(c) By any party hereto if the Closing Date of this business
combination has not taken place by November 1, 1998.
19. Closing Action - Upon the Closing Date hereof, the following actions
shall be taken, and all of such actions shall be deemed to be simultaneous as
of such Closing date:
(a) PAN shall have delivered certificates into Escrow for the
shareholders of Xxxxxxxxx representing the PAN common shares required by the
exchange set forth in this business combination; and
(b) The Xxxxxxxxx shareholders shall have delivered all common
shares of Xxxxxxxxx to PAN legally endorsed for cancellation; and
(c) All corporate, financial and title document books, records and
certificates, as the case may be, of Xxxxxxxxx shall be delivered to the
possession of PAN; and
(d) Any tangible or intangible assets, properties and rights owned
by Xxxxxxxxx shall be placed in the control and possession of PAN along with
the rights, books and records of Xxxxxxxxx; and
(e) Each party should provide the other parties with whatever
certificates or copies of directors' or shareholders' meetings or actions or
resolutions as required to establish evidence of completion of corporate action
required to consummate this business combination; and
(f) Each parties hereto shall furnish the other parties with such
other instruments and documents as are required to be delivered pursuant to the
provisions of this Agreement, or which may be reasonably requested in
furtherance of the intent and purposes of this Agreement.
20. General Matters -
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
Page 13 of 15
14
(a) Notices. Any and all notices provided for in this Agreement shall
be in writing and hand delivered or sent by certified mail, directed as follows:
To PAN: To Xxxxxxxxx:
Attn: Xxxxx Xxxxxxxx, President Attn: Xxxxxxx X. Xxxxx, President
00000 Xxxxxx Xxxxxx North 0000 Xxxxx Xxxxxxx, Xxxxx 00
Xxxxxxxxx, XX 00000-0000 Xxx Xxxxx, XX 00000
(b) Parties in Interest. This Agreement shall inure to the benefit of
and bind the parties hereto, and their respective representatives, heirs,
successors and assigns, as the case may be.
(c) Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original but all of
which together shall constitute one and the same instrument.
(d) Waiver. Any failure on the part of any party hereto to comply
with any of the obligations and conditions of this Agreement may be waived in
writing by any other parties.
(e) Additional Documents. At any time, and from time to time after
the closing of this Agreement, each party hereto will execute and deliver to the
other party such additional documents and instruments, and take such additional
action, as may reasonably be requested by the other party, to confirm or perfect
title to any property or right transferred hereunder or otherwise to carry out
the intents and purposes of this Agreement.
(f) Severability. If any part of this Agreement is deemed to be
unenforceable, the balance of this Agreement shall remain in full force and
effect.
(g) Entire Agreement and Benefit. This Agreement is the entire
agreement of the parties hereto covering everything agreed upon or understood in
this transaction and in the negotiations and preparation of this business
combination. There are no oral promises or agreements or conditions precedent,
representations or understandings between any of the parties hereto of any kind
or nature other than those expressly contained in this Agreement. Nothing herein
expressed or implied is intended or shall be construed to confer upon or give
any persons any rights hereunder or hereto other than the actual parties to this
Agreement.
(h) Tax and Legal Implications. None of the parties to this Agreement
warrant any tax or legal aspects of this transaction to another party; and
nothing herein, or any further information or documents to be furnished in
connection with this business combination shall be construed as business, tax or
legal advice to any person or shareholder. Every party or person involved in
this business combination is urged to consult their own tax or legal advisors as
to the tax and legal implications of this transaction.
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
Page 14 of 15
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the year and day first above written.
PAN ENVIRONMENTAL XXXXXXXXX HOLDINGS, LTD.,
CORPORATION, as Acquiror as Acquiree
By By
------------------------ --------------------------
Its Its
---------------------- -------------------------
And And
----------------------- -------------------------
Its Its
---------------------- -------------------------
SELLING SHAREHOLDERS:
By By
------------------------ --------------------------
By By
------------------------ --------------------------
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Xxxxxxxxx
Page 15 of 15
