ASSET ACQUISITION AGREEMENT
This Agreement is made this date, by and between TWIN FACES EAST
ENTERTAINMENT CORPORATION ("Company") and PANGAEA EDUCATION SYSTEMS, LLC
("PAN").
WHEREAS, the Company is engaged in the business of development of
intellectual and entertainment properties and desires to acquire the assets
and intellectual properties of PAN and employ its President and;
WHEREAS, PAN desires to transfer (sell) all of its assets, name, patents,
trademarks, copyrights, and other intellectual properties to, and be employed
by, the Company.
NOW THEREFORE IT IS AGREED AS FOLLOWS:
Section 1. Type of Transaction.
Asset Acquisition of PAN with payment in Preferred stock in the
Company. PAN's Assets shall be acquired by Pangaea Education Systems, Inc.
(a to be incorporated Nevada corporation and wholly owned subsidiary of the
Company, hereinafter referred to as "PES").
Section 2. Assets and Intellectual Property.
Defined in the attached "Exhibit A" and includes all of the
intellectual properties, assets whether physical or intellectual, name,
trademarks, patents, copyrights or similar properties that will become the
property of the Company. PAN hereby warrants that each and all of the assets
as defined in "Exhibit A" are free and clear of any encumbrance, liens, or
attachments of any kind.
Section 3. Timing.
The "Effective Date" of this acquisition will be within ten (10)
days of execution of this document.
Section 4. Payment Terms.
Within 30 days of the effective date of this agreement the Company
will issue one million five hundred thousand (1,500,000) shares of Preferred
stock of the Company. The stock will carry conversion rights to common on an
annual basis the first week of January each year after 12-31-03 according to
a formula as defined in "Exhibit C".
Within 30 days of completion of the first quarter end of a positive
EBITDA (Earnings Before Interest Taxes Depreciation and Amortization) as a
wholly owned subsidiary, PAN will receive a five hundred thousand share bonus
of Common stock of the Company. This performance bonus must occur before 01-
01-03 at which time this bonus expires. This stock is subject to SEC Rule
144 restriction including a mandatory two-year restriction from sale that PAN
agrees to support.
Section 5. Return of Assets; Spin-off. In the event PES is unable to
sufficiently utilize the PAN assets to generate a positive EBITDA in excess
of $100,000 within eighteen (18) months from the Effective Date, at the sole
option of PAN, the Company agrees to Spin-off 100% of PES to PAN. In
consideration for the Spin-off and 100% of the PES shares, PAN will return
all preferred shares issued pursuant to Section 4 above to the Company.
The sole intention of this Section 5 is to allow PAN the right, if the
Company and PES are unable to utilize the assets as initially intended, to be
placed in as close to the same position as before entering into this
Agreement.
Section 6. Employment Agreement, Consulting Agreement
See "Exhibit B" attached.
Section 7. Severability. The covenants set forth in this Agreement above
shall be construed as a series of separate covenants, one for each county in
each of the states of the United States to which such restriction applies.
If, in any judicial proceeding, a court of competent jurisdiction shall
refuse to enforce any of the separate covenants deemed included in this
Agreement, or shall find that the term or geographical scope of one or more
of the separate covenants is unreasonably broad, the parties shall use their
best good faith efforts to attempt to agree on a valid provision which shall
be a reasonable substitute for the invalid provision. The reasonableness of
the substitute provision shall be considered in light of the purpose of the
covenants and the reasonable prospectable interests of the Company and PAN.
The substitute provision shall be incorporated into this Agreement. If the
parties are unable to agree on a substitute provision, then the invalid or
unreasonably broad provision shall be deemed deleted or modified to the
minimum extent necessary to permit enforcement.
Section 8. Confidentiality. PAN acknowledges that it will develop and be
exposed to information that is or will be confidential and proprietary to the
Company. The information includes customer lists, marketing plans, pricing
data, product plans, software, and other intangible information. Such
information shall be deemed confidential to the extent not generally known
within the trade. PAN agrees to make use of such information only in
performance of its duties under this Agreement, to maintain such information
in confidence and to disclose the information only to persons with a need to
know.
Section 9. Remedies. PAN acknowledges that monetary damages would be
inadequate to compensate the Company for any breach by PAN of the covenants
set forth in this Agreement. PAN agrees that, in addition to other remedies
which may be available, the Company shall be entitled to obtain injunctive
relief against the threatened breach of this Agreement or the continuation of
any breach, or both, without the necessity of proving actual damages.
Section 10. Waiver. The waiver by the Company of the breach of any
provision of this Agreement by PAN shall not operate or be construed as a
waiver of any subsequent breach by PAN.
Section 11. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada.
Section 12. Arbitration. If at anytime during the term of this Agreement
any dispute, difference, or disagreement shall arise upon or in respect of
this Agreement, and the meaning and construction thereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed
upon by both parties, or if no single arbiter can be agreed upon, an arbiter
or arbiters shall be selected in accordance with the rules of the American
Arbitration Association (AAA) and such dispute, difference, or disagreement
shall be settled by arbitration in accordance with the then prevailing
commercial rules of the AAA, and judgment upon the award rendered by the
arbiter may be entered in any court having jurisdiction thereof.
Section 13. Attorney Fees. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in
any appeal there from, it is agreed that the prevailing party shall be
entitled to reasonable attorneys fees to be fixed by the arbitrator, trial
court, and/or appellate court.
This Agreement is made and entered this 24th day of October 2001.
Company: PAN:
Twin Faces East Entertainment Pangaea Education Systems, LLC
Corporation
By: By:
Xxxxxxx Xxxxxxxxx, PhD, CEO Xxxxx X. Xxxxxx, Ph.D., CEO, Member
Date Xxxxxxx Xxxxxx, Ph.D., President, Member
Xxxxxxx Xxxxx, Member
Date
Exhibit A
To Asset Acquisition Agreement
ASSET LIST
Trademarks- None
Copyrights- None
Company name(s), product name(s)
Pangaea Education
Pangaea
Pangaea Education, Inc.
Other names as reflected in Due Diligence Binder provided by PAN
Contracts and Agreements
Services Contract(s) with Magellan Concepts
Services Contract(s) with FL Gulf Coast Univ. (HIPPA)
Intent Letters with ADSI, ADSE, and other related unnamed entities
Intent Letters with Empower and related entities
Ownership interest in the company known as "The Core Group LLC"
Other Intellectual Properties
Any and all other work in process Agreements, Seminars, Intent Letters, and
other revenue generating opportunities relating to Pangaea (in any form or
under any name), its successors or assigns, since January 1, 2001.
Company: PAN:
Twin Faces East Entertainment Pangaea Education Systems, LLC
Corporation
By: By:
Xxxxxxx Xxxxxxxxx, PhD, CEO Xxxxx X. Xxxxxx, Ph.D., CEO
Date Date
Exhibit B
To Asset Acquisition Agreement
CONSULTING AGREEMENT - XXXXXX
This Consulting Agreement (the Agreement) is made this 24TH day of
October 2001 by and between Xxxxx X. Xxxxxx, Ph.D., member and CEO of Pangaea
Education Systems, LLC (the Consultant), and Pangaea Education Systems, Inc.,
a Nevada Corporation with primary offices located in Henderson, Nevada (the
Company).
Whereas Consultant has expertise in effective communications with
potential investors, relationships with health care and related companies
requiring substantial HIPPA and COPA compliance, potential Company clients
for privacy and security related analysis and training and a knowledge of the
Company; and
Whereas the Company desires to retain Consultant to advise and assist in
development of its client base and business of distance learning and privacy
and security training and development of clients and potential clients; and
Whereas Consultant has promised to use the best of his skills and
abilities to use this working knowledge to develop a stronger client base and
convert potential Company clients into revenue producing customers, and offer
the Right of First Refusal to the Company for any existing or potential
Consultant client related to the Company's business under the terms set forth
below.
1-Engagement. Consultant will use his total resources, database,
client base and other means at his disposal to develop additional clients and
business and expand upon current business in place or in development for the
company.
2-Term. For a period of one year commencing this date.
3-Time and Effort. Consultant shall use his best efforts to accomplish
those goals contained herein.
4-Compensation. The Company shall pay Consultant $3,000 per month plus
give Consultant the option to become employed by the Company as its Chairman
of the Board at a compensation package equal to that of the President of the
Company.
Additional compensation may be awarded solely at the Company
discretion based on additional performance. Such additional
compensation is neither implied not guaranteed but totally at the
Company's direction.
5-Independent Contractor and No Agency Relationship. Consultant shall
be paid as an independent contractor with no employee relationship or agency
and principal relationship and shall thereby be responsible for all this own
taxes, insurance, licenses and fees and expenses related to his business and
this Agreement.
6-Termination. Either party may terminate this relationship with 30
days notice to the other without cause, provided all compensation is current
at anytime after the initial one-year term.
7-Governing Law. This Agreement is being executed under and will be
governed by the laws of the State of Nevada.
In witness whereof, the parties have executed this Agreement on the date
written below:
The Company Consultant
Pangaea Education Systems, Inc. Xxxxx X. Xxxxxx
By: By:
Xxxxxxx X. Xxxxxx, Xxxxx Xxxxxx
Secretary/Treasurer
Date: Date:
Exhibit B - (Continued)
To Asset Acquisition Agreement
EMPLOYMENT AGREEMENT (Xxxxxx)
This Agreement is made this date, by and between TWIN FACES EAST
ENTERTAINMENT CORPORATION ("Employer and/or Company") and Xxxxxxx Xxxxxx,
("Employee").
WHEREAS, the Employer is engaged in the business of development of
intellectual and entertainment properties; and
WHEREAS, the Employer desires to retain the services of the Employee in the
capacity as President of its Pangaea Education Systems, Inc. operating
Subsidiary (Pangaea).
NOW THEREFORE IT IS AGREED AS FOLLOWS:
Section 1. Employment. The Employer agrees to employ the Employee and
the Employee agrees to accept the employment described in this Agreement.
Section 2. Duties. The Employee shall serve as President of Pangaea with
such duties as are customarily associated with such position. The Employee
shall be responsible for day-to-day management of operations, strategic
planning, and implementation of the Employer's business as directed by the
Company President.
Section 3. Extent of Services. The Employee shall devote the majority of
her working time, attention, and energies to the performance of his duties
and shall not be engaged in any competing business activity, whether or not
pursued for gain. The Employee shall at all times faithfully and to the best
of his ability perform his duties under this Agreement. The duties shall be
rendered either at the Employer's offices or from his home, or at other place
or places of business and at such times as the needs of the Employer may
dictate.
Section 4. Term. The term of this agreement shall begin upon
execution of this Agreement and shall continue for a five-year period. The
parties presently anticipate that the employment relationship may continue
beyond this five-year term primarily pending project availability and
funding. This Agreement shall not give the Employee and enforceable right to
employment beyond this term.
Section 5. Compensation. (to immediately accrue and be paid upon funding)-
5.1 Base Compensation. The Employee will receive a base salary of $150,000
per year, payable in accordance with the Employer's standard payroll
procedures. The Employee is eligible for performance-based bonuses, but
there is no assurance or expectation that the bonuses will be paid. Bonuses
will be paid, if at all, at the sole discretion of the Board of Directors.
5.2 Benefits. The Employee shall receive immediate family medical insurance
coverage, life insurance equal to twice (two times) the annual base salary,
and other fringe benefits provided to full time, non-union employees of the
Employer. An auto allowance will be provided, or alternately, a leased
vehicle for company use at a cost not to exceed $600 per month plus
insurance, fuel, and operating maintenance.
5.3 Expenses. The Employer shall reimburse the Employee for reasonable out-
of-pocket expenses incurred by the Employee in fulfilling his duties. The
Employer shall, within its financial means and constraints, provide the
Employee with suitable office facilities, equipment, supplies, and staff.
Section 6. Termination.
6.1 For Cause. The Employer may terminate the Employee's employment at
any time "for cause" with immediate effect upon delivering written notice to
the Employee. For purposes of this Agreement, "for cause" shall include: (a)
embezzlement, theft, larceny, material fraud, or other acts of dishonesty;
(b) material violation by Employee of any of his obligations under this
Agreement; (c) conviction of or entrance of a plea of guilty or nolo
contendere to a felony or other crime which has or may have a material
adverse effect on the Employee's ability to carry out his duties under this
Agreement or upon the reputation of the Employer; (d) conduct involving moral
turpitude; (e) gross insubordination or repeated insubordination after
written warning by the Chair of the Board; or (f) material and continuing
failure by the Employee to perform duties described in this Agreement in a
quality and professional manner for at least sixty (60) days after written
warning by the President or Board of Directors or its Chair. Upon
termination "for cause", the Employer's sole and exclusive obligation will be
to pay the Employee his compensation earned through the date of termination,
and the Employee shall not be entitled to any compensation after the date of
termination.
6.2 Upon Death. In the event of the Employee's death during the term of
this Agreement, the Employer's sole and exclusive obligation will be to pay
the Employee's spouse, if living, or siblings, if living, or his estate, if
his spouse and/or siblings are not then living, the Employee's compensation
earned through the date of death, including any stock issuance due at time of
death or in the future, plus 3 months base compensation as severance.
6.3 Upon Disability. The Employer may terminate the Employee's employment
upon the Employee's total disability. The Employee shall be deemed to be
totally disabled if he is unable to perform his duties under the Agreement by
reason of mental or physical illness or accident, for a period of three
consecutive months. Upon termination by reason of the Employee's disability,
the Employer's sole and exclusive obligation will be to pay the Employee his
compensation earned through the date of termination plus three months base
compensation severance.
Section 7. Covenant Not to Compete.
7.1 Covenant. For a period of five years from the Effective Date of this
Agreement, and for such period after five years as the Employee continues to
be employed by the Employer, and for a one year period after the Employee's
employment with the Employer has been terminated by either party, the
Employee will not directly or indirectly:
A. Enter into or attempt to enter into "Restricted Business" (as
defined below) in the entertainment business;
B. Induce or attempt to persuade any former, current or future
employee, agent, manager, consultant, director, or other participant in the
Employer's business to terminate such employment or other relationship in
order to enter into any relationship with the Employee, any business
organization in which the Employee is a participant in any capacity
whatsoever, or any other business organization in competition with the
Employer's business; or
C. Use contracts, proprietary information, trade secrets, confidential
information, customer lists, mailing lists, goodwill, or other intangible
property used or useful in connection with the Employer's business.
7.2 Indirect Activity. The term "indirectly" as used in section 7.1 above,
includes acting as a paid or unpaid director, officer, agent, representative,
employee of, or consultant to any enterprise, or acting as a proprietor of an
enterprise, or holding any direct or indirect participation in any enterprise
as an owner, partner, limited partner, joint venturer, shareholder, or
creditor.
7.3 Restricted Business. The term "Restricted Business" means the Internet,
Seminar, or similar education training and learning industry but shall not be
construed to include any teaching engagement directly with an accredited
university or college system. Nevertheless, the Employee may own not more
than five percent of the outstanding equity securities of a corporation that
is engaged in the Restricted Business if the equity securities are listed for
trading on a national stock exchange or is a reporting company under the
Securities Exchange Act of 1934.
Section 8. Severability. The covenants set forth in this Agreement above
shall be construed as a series of separate covenants, one for each county in
each of the states of the United States to which such restriction applies.
If, in any judicial proceeding, a court of competent jurisdiction shall
refuse to enforce any of the separate covenants deemed included in this
Agreement, or shall find that the term or geographical scope of one or more
of the separate covenants is unreasonably broad, the parties shall use their
best good faith efforts to attempt to agree on a valid provision which shall
be a reasonable substitute for the invalid provision. The reasonableness of
the substitute provision shall be considered in light of the purpose of the
covenants and the reasonable prospectable interests of the Employer and the
Employee. The substitute provision shall be incorporated into this
Agreement. If the parties are unable to agree on a substitute provision,
then the invalid or unreasonably broad provision shall be deemed deleted or
modified to the minimum extent necessary to permit enforcement.
Section 9. Confidentiality. The Employee acknowledges that he will
develop and be exposed to information that is or will be confidential and
proprietary to the Employer. The information includes customer lists,
marketing plans, pricing data, product plans, software, and other intangible
information. Such information shall be deemed confidential to the extent not
generally known within the trade. The Employee agrees to make use of such
information only in performance of his duties under this Agreement, to
maintain such information in confidence and to disclose the information only
to persons with a need to know.
Section 10. Remedies. The Employee acknowledges that monetary damages
would be inadequate to compensate the Employer for any breach by the Employee
of the covenants set forth in this Agreement. The Employee agrees that, in
addition to other remedies, which may be available, the Employer shall be
entitled to obtain injunctive relief against the threatened breach of this
Agreement or the continuation of any breach, or both, without the necessity
of proving actual damages.
Section 11. Waiver. The waiver by the Employer of the breach of any
provision of this Agreement by the Employee shall not operate or be construed
as a waiver of any subsequent breach by the Employee.
Section 12. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Nevada.
Section 13. Arbitration. If at anytime during the term of this Agreement
any dispute, difference, or disagreement shall arise upon or in respect of
this Agreement, and the meaning and construction thereof, every such dispute,
difference, and disagreement shall be referred to a single arbiter agreed
upon by both parties, or if no single arbiter can be agreed upon, an arbiter
or arbiters shall be selected in accordance with the rules of the American
Arbitration Association (AAA) and such dispute, difference, or disagreement
shall be settled by arbitration in accordance with the then prevailing
commercial rules of the AAA, and judgment upon the award rendered by the
arbiter may be entered in any court having jurisdiction thereof.
Section 14. Attorney Fees. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms, or in
any appeal there from, it is agreed that the prevailing party shall be
entitled to reasonable attorneys fees to be fixed by the arbitrator, trial
court, and/or appellate court.
This Agreement is made and entered this 24th day of October 2001.
Company: PAN:
Twin Faces East Entertainment Pangaea Education Systems, LLC
Corporation By:
By:
Xxxxxxx Xxxxxxxxx, PhD, CEO Xxxxxxx Xxxxxx, Ph.D., President
Date Date
Exhibit C
To Asset Acquisition Agreement
Preferred to Common Conversion Formula
Year End EBITDA Conversion Ratio Preferred to Common
Less than $999,999 .5 share common for every 1 share of preferred
$1,000,000 to $2,999,999 1-share common for each 1 share of preferred
$3,000,000 to $4,999,999 1.5 shares common for each 1 share of preferred
$5,000,000 to $9,999,999 2 shares of common for each 1 share of preferred
$10,000,000 to $19,999,999 3 shares of common for each 1 share of
preferred
$20,000,000 to $49,999,999 4 shares of common for each one share of
preferred
Over $50,000,000 6 shares of common for each one share of preferred
Preferred my be converted to common in increments of 100,000 blocks on an
annual basis as defined in the Agreement.
Company: PAN:
Twin Faces East Entertainment Pangaea Education Systems, LLC
Corporation By:
By:
Xxxxxxx Xxxxxxxxx, PhD, CEO Xxxxx X. Xxxxxx, Ph.D., CEO
Date Date
