<PAGE> 1
File No. [33-________]
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PAN ENVIRONMENTAL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 91-1632888
(State or other (I.R.S. Employer
jurisdiction of Identification
incorporation or No.)
organization)
19239 Aurora Avenue North
Shoreline, WA 98133-3930
(Address of principal executive office, including zip code)
VARIOUS EMPLOYMENT AND CONSULTANT CONTRACTS
(Full Title of the Plan)
Jerry Cornwell, President
PAN ENVIRONMENTAL CORPORATION
19239 Aurora Avenue North
Shoreline, WA 98133-3930
(206) 546-9660
(Name, address, including zip code, telephone number, including area code, of
agent for service)
CALCULATION OF REGISTRATION FEE*
<TABLE>
<CAPTION>
Title of Each Class of Number of Shares Proposed Maximum Proposed Maximum Registration
Securities to be to be Offering Price Aggregate Offering fee
Registered Registered Per Share Price
<S> <C> <C> <C> <C>
Common Stock, par value
$0.001 490,250 Shares $0.96875 $474,930 $140.10
</TABLE>
* Computed in accordance with Rule 457 under the Securities act of 1933, as
amended, solely for the purpose of calculating the registration fee and based on
the average of the bid and asked prices reported by the national quotation
bureau for over-the-counter trading for September 22, 1998.
<PAGE> 2
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information
Not required to be filed.
Item 2. Registrant Information and Employee Plan Annual Information.
Not required to be filed.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The following documents filed by Pan Environmental Corporation (the
Company) with the Securities and Exchange Commission (the Commission) are
incorporated by reference in this Registration Statement:
1. The description of the Company's Class A Common Voting Equity
Stock ("Common") on Form 8-A filed on February 3, 1994, as
amended.
2. The Company's Annual Reports on Form 10-K for the fiscal years
ended December 31, 1997, December 31, 1996, December 31, 1995
and December 31, 1994.
3. The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1998, September 30, 1997, June 30,
1997, March 31, 1997, September 30, 1996, June 30, 1996, March
31 1996, September 30, 1995 and March 31, 1995.
In addition, all documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the Exchange Act), prior to the filing of a post-effective amendment that
indicates that all securities offered hereby have been sold or that deregisters
all such securities then remaining unsold, shall be deemed to be incorporated by
reference into this registration statement and to be a part hereof from the date
of filing such documents.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
The Company is a Delaware corporation. Section 145 of the Delaware
General Corporation Law provides, in summary, that directors and officers of
Delaware corporations are entitled, under certain circumstances, to be
indemnified against all expenses and liabilities (including attorney's fees)
incurred by them as a result of suits brought against them in their capacity as
a director or officer, if they acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the
Company,
<PAGE> 3
and, with respect to any criminal action or proceeding, if they had no
reasonable cause to believe their conduct was unlawful; provided that no
indemnification may be made against expenses in respect of any claim, issue or
matter as to which they shall have been adjudged to be liable to the Company,
unless and only to the extent that the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, they are fairly and
reasonably entitled to indemnity for such expenses which the court shall deem
proper. Any such indemnification may be made by the Company only as authorized
in each specific case upon a determination by the shareholders or disinterested
directors that indemnification is proper because the indemnitee has met the
applicable standard of conduct. The Certificate of Incorporation and Bylaws of
the Company provide for indemnification of its directors and officers to the
fullest extent permitted by Delaware law, as the same may be amended from time
to time.
Item 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits:
Exhibit No. Description
4.1 Restated Certificate of Incorporation of P.A.N. Environmental
Services Corporation changing name to PAN Environmental
Corporation filed with the State of Delaware on February 22,
1994. Incorporation by reference to Exhibit 3.2 of the
Company's Form 8-K filed March 2, 1994 which is incorporated
herein by reference.
4.2 Bylaws of P.A.N. Environmental Services Corporation.
Incorporation by reference to Exhibit 3.2 of the Company's
January 31, 1993 10-K, which are incorporated herein by
reference.
4.3 Amended and Restated Bylaws of PAN Environmental Corporation.
Incorporation by reference to Exhibit 3.4 of the Company's
Form 8-K, filed March 2, 1994, which is incorporated herein by
reference.
5. Opinion of McGuire Woods Battle & Boothe LLP as to the
validity of the original issuance of the securities being
registered.*
23.1 Consent of William T. Butcher.*
23.2 Consent of McGuire Woods Battle & Boothe LLP (included in
Exhibit 5).
24. Powers of Attorney (included as part of signature page).
99.1 Letter Agreement dated August 28, 1998, between the Company
and Forte Communications, Inc., under which 50,000 Common
shares can be issued for services rendered.*
99.2 Finder's Fee Agreement dated August 4, 1998, between the
Company and Kaufman & Associates, Inc., under which 6,250
Common shares can be issued for services rendered. *
99.3 Representation Agreement dated January 2, 1998, between the
Company and Bristol Media Ltd., under which 96,000 Common
shares can be issued for services rendered.*
99.4 Agreement and Plan of Business Combination dated April 17,
1998, between the Company and Bristol Media Ltd., under which
50,000 Common shares can be issued for services rendered.*
<PAGE> 4
99.5 Consulting Agreement dated July 1, 1998, between the Company
and Quality Tax Service, Inc., under which 28,000 Common
shares can be issued for services rendered.*
99.6 Employment Agreement dated July 1, 1998, between the Company
and Jerry Cornwell, under which issued 120,000 Common shares
can be issued for services rendered.*
99.7 Employment Agreement dated July 1, 1998, between the Company
and Clifford M. Johnston under which issued 100,000 Common
shares can be issued for services rendered.*
99.8 Employment Agreement dated July 1, 1998, between the Company
and Judy Morton Johnston under which issued 40,000 Common
shares can be issued for services rendered.*
* Filed Herewith.
Item 9. Undertakings.
(a). The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by
section 10(a)(3) of the Securities Act of
1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of
the registration statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the registration
statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the registration statement;
Provided, however, that paragraphs (a)(1)(i)
and (a)(1)(ii) do not apply if the
information required to be included in a
post-effective amendment by those paragraphs
is contained in periodic reports filed by
the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a new
registration statement relating to the securities
offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities being
registered which remain unsold at the termination of
this offer.
(b). The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new
<PAGE> 5
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c). Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
<PAGE> 6
POWER OF ATTORNEY
Each person whose signature appears below hereby authorizes the agent
for service named in the registration statement as attorney-in-fact, to sign on
his behalf individually and in each capacity stated below and file all
amendments and post effective amendments to the registration statement, and the
Company hereby confers like authority to sign and file on its behalf.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Shoreline, Washington, on SEPT. 30, 1998.
Pan Environmental Corporation
/s/ JERRY CORNWELL
--------------------------------------------
by Jerry Cornwell
President, Chief Executive Officer, Director
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities indicated on SEPT. 30, 1998.
/s/ JERRY CORNWELL
- --------------------------------------------
Jerry Cornwell
President, Chief Executive Officer, Director
/s/ CLIFFORD M. JOHNSTON
- --------------------------------------------
Clifford M. Johnston
Vice President and Chief Financial Officer
/s/ KENNETH A. BURNS
- --------------------------------------------
Kenneth A. Burns
Secretary/Treasurer, Director
<PAGE> 7
Exhibit Index
4.1 Restated Certificate of Incorporation of P.A.N. Environmental
Services Corporation changing name to PAN Environmental
Corporation filed with the State of Delaware on February 22,
1994. Incorporation by reference to Exhibit 3.2 of the
Company's Form 8-K filed March 2, 1994 which is incorporated
herein by reference.
4.2 Bylaws of P.A.N. Environmental Services Corporation.
Incorporation by reference to Exhibit 3.2 of the Company's
January 31, 1993 10-K, which are incorporated herein by
reference.
4.3 Amended and Restated Bylaws of PAN Environmental Corporation.
Incorporation by reference to Exhibit 3.4 of the Company's
Form 8-K, filed March 2, 1994, which is incorporated herein by
reference.
5. Opinion of McGuire Woods Battle & Boothe LLP as to the
validity of the original issuance of the securities being
registered.*
23.1 Consent of William T. Butcher.*
23.2 Consent of McGuire Woods Battle & Boothe LLP (included in
Exhibit 5).
24. Powers of Attorney (included as part of signature page).
99.1 Letter Agreement dated August 28, 1998, between the Company
and Forte Communications, Inc. under which 50,000 Common
shares can be issued for services rendered.*
99.2 Finder's Fee Agreement dated August 4, 1998, between the
Company and Kaufman & Associates, Inc., under which 6,250
Common shares can be issued for services rendered. *
99.3 Representation Agreement dated January 2, 1998, between the
Company and Bristol Media Ltd., under which 96,000 Common
shares can be issued for services rendered.*
99.4 Agreement and Plan of Business Combination dated April 17,
1998, between the Company and Bristol Media Ltd., under which
50,000 Common shares can be issued for services rendered.*
99.5 Consulting Agreement dated July 1, 1998, between the Company
and Quality Tax Service, Inc., under which 28,000 Common
shares can be issued for services rendered.*
99.6 Employment Agreement dated July 1, 1998, between the Company
and Jerry Cornwell, under which issued 120,000 Common shares
can be issued for services rendered.*
99.7 Employment Agreement dated July 1, 1998, between the Company
and Clifford M. Johnston under which issued 100,000 Common
shares can be issued for services rendered.*
99.8 Employment Agreement dated July 1, 1998, between the Company
and Judy Morton Johnston under which issued 40,000 Common
shares can be issued for services rendered.*
<PAGE> 1
September 22, 1998
Pan Environmental Corporation
19239 Aurora Avenue North
Shoreline, WA 98133-3930
Ladies and Gentlemen:
With respect to the Registration Statement on Form S-8 of Pan
Environmental, Corporation (the "Company") in connection with the registration
of 490,250 shares of common stock, par value $0.001, ("Common Stock") which have
been reserved for issuance pursuant to various employment agreements and service
provider agreements, We are of the opinion that the Common Stock when issued in
accordance with the terms and provisions of the agreements will be duly
authorized, legally issued, fully paid and nonassessable.
This opinion is limited to the laws of the State of Delaware, and we
disclaim any opinion as to the laws of any other jurisdiction. We further
disclaim any opinion as to any statute, rule, regulation, ordinance, order or
other promulgation of any other jurisdiction or any regional or local
governmental body or as to any related judicial or administrative opinion. We
express no opinion as to the applicable choice of law provisions contained in
any agreement.
This opinion is rendered to you in connection with the issuance of the
Common Stock and is solely for your benefit. This opinion may not be relied upon
by any other person, firm, corporation or other entity for any purpose, without
prior written consent.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement.
Very truly yours,
/s/ MCGUIRE, WOODS BATTLE & BOOTHE LLP
McGuire Woods Battle & Boothe LLP
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Registration
Statement of Pan Environmental Corporation on Form S-8 of our report dated
January 6, 1998, incorporated by reference in the Annual Report on Form 10-K of
Pan Environmental Corporation for the year ended December 31, 1997.
/s/ WILLIAM L. BUTCHER, CPA P.S.
------------------------------------
William L. Butcher, CPA P.S.
Everett, Washington
<PAGE> 1
[PAN ENVIRONMENTAL LETTERHEAD]
August 28, 1998
Forte Communications, Inc.
Today's Investor
50 Broadway, 28th Floor
New York, NY 10004
RE: Your invoice #10394
Gentlemen:
This is to confirm that we will pay you 50,000 common shares to be registered in
our upcoming S-8 registration as payment for your activities in promoting the
corporate visibility of PAN Environmental Corporation. It is our understanding
that you will be undertaking this promotion through a series of newspaper
articles and through other advertising media as evidenced by your attached
invoice to us.
Sincerely,
PAN ENVIRONMENTAL CORPORATION
/s/ JERRY CORNWELL
Jerry Cornwell
President
<PAGE> 2
FORTE COMMUNICATIONS, INC. INVOICE
TODAY'S INVESTOR -----------------------
50 Broadway, 23rd Floor INVOICE NO. DATE
New York, NY 10004 10394 8/28/98
Telephone: 212-785-6300 -----------------------
Facsimile: 212-785-6205 TERMS
A.S.A.P.
-----------------------
Jerry Cornwell, President Telephone: 888-259-8333
PAN Environmental Corporation Facsimile: 206-533-1156
19239 Aurora Avenue North
Shoreline WA 98133 Shipped:
<TABLE>
- --------------------------------------------------------------------------------------------------------------
QUANTITY
ORDERED DESCRIPTION UNIT PRICE AMOUNT
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MEDIA ADVERTISING - NATIONWIDE 50,000.00
ORDER # 245
Eleven (11)-2 column newspaper stories @ $3,950, each
cost $43,450
Ten (10) - Radio Features 60 Second timed scripts @ $3,950 each
cost $39,500
-------
Total $82,950
DESCRIPTION
As per your discussions with representatives of NewsUSA, this program
will be designed, developed and executed through News USA, Inc.
We accept 50,000 shares of free trading stock in Environmental
Corporation (PAN OTC:PANE) in lieu of cash compensation as full
payment of this invoice upon receipt of the shares.
TAX 0.00
----
SHIPPING & HANDLING
PO.NO
REPRESENTATIVE TOTAL $50,000.00
==========
- --------------------------------------------------------------------------------------------------------------
Charge
- --------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
[KAUFMAN & ASSOCIATES, INC. LETTERHEAD]
FINDER'S FEE AGREEMENT
This Finder's Fee Agreement ("Agreement") is made between Kaufman &
Associates, Inc., an Illinois corporation ("KAI") and the undersigned
("Client") as of the 4th day of August, 1998.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:
1. Nonexclusive Representation Transactions. Client hereby engages and
appoints KAI as its representative, during the term, and in accordance with the
provisions, of this Agreement, to contact and introduce Client to third parties
for the purpose of facilitating one or more transactions. A "transaction", or
each of several transactions, for purposes hereof, shall mean and, may take the
form, alternatively, or in combination, of, without limitation, (a) a
dedication by Client of goods and/or services, (b) an exchange of Client goods,
(c) a sale of Client goods, or (d) a purchase by Client of goods or services.
2. Finder's Fee. (a) When and if Client, or any affiliate of Client, or any
person acting in conjunction with or under the direction of Client, directly or
indirectly, purchases or sells, or acquires by trade, barter or exchange, goods
or services or acquires any rights or interest therein, at any time during the
term of this Agreement, or for a period of two years following termination of
this Agreement, as the result of or in connection with any transaction
identified, or any introduction or contact made, during the term of this
Agreement, Client shall unconditionally pay KAI a fee in the amount equal to
twelve and one-half percent (12-1/2%) of the gross value of the transaction (the
"Finder's Fee"). The Finder's Fee shall be due and payable immediately upon the
consummation of the transaction. The Finder's Fee may be paid to KAI in the form
of shares of stock or other securities transferred to KAI, or by transfer of
like-kind property or other assets, having equivalent value, as determined by
KAI in its discretion. In the event KAI accepts securities as consideration
hereunder, such securities shall be transferred to KAI free and clear of any and
all liens, claims, security interests and other encumbrances.
(b) The gross value of the transaction, for purposes hereof, shall be that
value which is stated and agreed upon by the parties thereto; provided, that
such value is not less than fair market value. In the event that no specific
gross value is stated, or in the further event that the gross value as stated
is deemed by KAI to be unreasonably low or below fair market value, the gross
value of the subject transaction shall be conclusively deemed to be the full
fair market value of all goods, services, and other benefits received, acquired
and/or inuring to the Client.
3. Non-circumvention. As Client's representative with respect to the subject
matter of this Agreement, Client agrees that it will engage and use KAI on its
behalf in connection with any contemplated transaction, and that neither Client
nor its affiliates will in any manner whatsoever attempt to circumvent KAI's
appointment as set forth in Section I hereof. Further, Client agrees that it
shall not, without the express prior written consent of KAI, enter into or
otherwise engage in bilateral or multi-party negotiations between itself and
any KAI contact without providing notice thereof to KAI.
<PAGE> 2
KAUFMAN & ASSOCIATES, INC.
PAGE 2
4. Confidentiality. Client will keep and hold in strict confidence and shall
not disclose to any third party or use in any way (other than as
contemplated by this Agreement) any proprietary and confidential
information of KAI during the term of this Agreement and thereafter for so
long a period as is permitted by applicable law. Client hereby agrees to
indemnify and hold KAI harmless from and against any and all demands,
claims, actions, causes of action, liabilities, costs and expenses
resulting from the disclosure by Client, its agents, Affiliates or
employees to any third party of the confidential and proprietary
information of KAI in connection with and in violation of this Agreement.
Client recognizes that certain breaches of this Agreement will cause KAI
irreparable harm and damage for which KAI cannot be adequately compensated
at law and, thus, in addition to any and all remedies which may be
provided by law, KAI shall have the right to restrain the breach of any
provision of this Agreement and to obtain an injunction against further
breach.
5. Term of Agreement. The term of this Agreement shall be one year,
commencing on the date set forth hereinabove, and terminating on the first
anniversary of such date. Client's obligations as set forth in this
Agreement shall survive the termination of this Agreement.
6. Indemnification. Client shall indemnify, save and keep KAI and its
successors and assigns, forever harmless against and from all liability,
demands, claims, actions or causes of action, assessments, losses, fines,
penalties, costs, damages and expenses, including reasonable attorneys'
fees, sustained or incurred by KAI as a result of, or arising out of, or
by virtue of, any (i) breach of any representation, warranty, covenant,
agreement or obligation of Client or by its affiliates herein, and (ii)
act or omission by or of Client or any of its affiliates.
7. Taxes. Client shall be responsible for and shall pay any and all personal
property, sales, use, excise or similar taxes incurred as a result of or in
connection with any transaction contemplated hereby.
8. Entire Agreement. This Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof. Any amendments, or
alternative or supplementary provisions to this Agreement must be made in
writing and duly executed by an authorized representative or agent of
each of the parties hereto.
9. Non-Waiver. The failure in any one or more instances of a party to insist
upon performance of any of the terms, covenants or conditions of this
Agreement shall not be deemed to constitute a waiver of any right or
privilege in this Agreement. No waiver shall be effective unless it is in
writing and signed by an authorized representative of the waiving party.
10. Severability. The invalidity of any provision of this Agreement or portion
of a provision shall not affect the validity of any other provision of
this Agreement or the remaining portion of the applicable provision.
11. Applicable Law. This Agreement shall be governed and controlled as to
validity, enforcement, interpretation, construction, effect, and in all
other respects by the internal laws of the State of Illinois applicable to
contracts made in that State. The parties submit to any proper court of
competent jurisdiction located in the State of Illinois, in the event of
any dispute arising between the parties hereunder.
<PAGE> 3
KAUFMAN & ASSOCIATES, INC.
Page 3
12. Prevailing Party. In the event that Kai takes legal action to enforce its
rights hereunder, KAI shall be entitled to recover and Client agrees to pay
KAI's reasonable attorneys' fees and expenses in addition to all other
rights and remedies of KAI in connection with such enforcement action.
13. Binding Effect; Benefit. (a) This Agreement shall inure to the benefit of
and be binding upon the parties hereto, and their successors and permitted
assigns. This Agreement may not be assigned by either party hereto without
the prior written consent of the other party. Nothing in this Agreement,
express or implied, is intended to confer on any person other than the
parties hereto, and their respective successors and permitted assigns any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
(b) Notwithstanding anything contained herein to the contrary, Client
shall cause the terms and provisions of this Agreement to be binding
upon its shareholders, members, officers, directors, partners,
employees and any of its/their associates and affiliates acting in any
capacity, whether jointly or alone, or together with or as agent for
any person, firm, company, corporation, partnership, association or
other entity whatsoever, whether directly or indirectly.
14. Limitation of Representations of KAI: Relationship of Parties. KAI makes no
representation or warranties to Client and all such representations and
warranties, whether expresses or implied, are hereby disclaimed. Other than
to use reasonable efforts to make introductions and contacts on behalf of
Client, KAI shall have no obligations or duties to Client and, thus, shall
have no liability to Client. Client acknowledges that KAI is not, and
possesses no licence or permit to be, a broker, broker-dealer, investment
advisor, market-maker or other similar agent, as such terms are defined by
the regulations promulgated by the Securities and Exchange Commission.
KAI's relationship to Client and affiliates of Client shall be as
independent contractors, only as set forth herein and nothing contained
herein shall make or constitute either party as an agent, broker, licensor,
partner, joint venturer, franchisor or franchisee, or employee or employer,
one with the other.
15. Definition of Affiliates. For the purposes hereof, "affiliate" shall mean
with respect to any person or entity, any other person, corporation,
partnership, trust or other entity that directly or indirectly, through one
or more intermediaries, is controlled by, controls or is under common
control with, such person or entity. Client shall use reasonable efforts to
procure written acknowledgments from each of the foregoing stating that
they join in and agree to be personally bound by the terms of this
Agreement as set forth in this Section. Client shall provide written
evidence of the acknowledgments to KAI or its nominee upon request.
<PAGE> 4
KAUFMAN & ASSOCIATES, INC.
Page 4
IN WITNESS WHEREOF, the parties have executed this Finder's Fee Agreement
on the date first above written.
CLIENT:
Bristol Media Ltd
By: /s/ Clifford M. Johnston
------------------------------------
Its: Managing Member
-----------------------------------
Address 19239 aurora ave north
Shoreline, Wa. 98133
Telephone No 206-546-9660
Fax No 206-533-1156
KAUFMAN & ASSOCIATES, INC.
By: /s/ Craig Kaufman
------------------------------------
Its: President
-----------------------------------
Address 5675 n. Lincoln Ave.
Chicago, Il. 60659
Telephone No 773-334-1631
Fax No 773-334-2549
<PAGE> 5
[KAUFMAN & ASSOCIATES, INC. LETTERHEAD]
<PAGE> 1
REPRESENTATION AGREEMENT
AGREEMENT made this 2nd day of January, 1998 by and between TCKTS,
L.L.C. dba Bristol Media, Ltd. ("Bristol") and PAN Environmental Corporation, a
Delaware corporation ("the Company").
WITNESS THAT:
WHEREAS, Bristol is a consulting firm which represents publicly traded
companies, and
WHEREAS, the Company is publicly held company and its common stock is
traded on the "over the counter" market called NASD's "Electronic Bulletin
Board", and
WHEREAS, the Company is desirous of acquiring a successful private
corporation which the Company believes has the potential to become sufficiently
profitable to make a successful public company, and
WHEREAS, the Company desires to publicize itself with the intentions of
making its name and business better known to shareholders, brokerage houses, and
the financial community and desires to find sources of venture capital, and
WHEREAS, Bristol as an independent contractor, is willing to accept the
Company as a client acting in the capacity as consultant,
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed:
1. ENGAGEMENT: The Company hereby engages Bristol to create a broker
package and to publicize the Company to brokers, market makers,
prospective investors and shareholders described in paragraph 2 of this
Agreement, and subject to the further provisions of this Agreement.
Bristol hereby accepts the Company as a client and agrees to publicize
the Company as described in paragraph 2 of this Agreement and to assist
the Company in finding sources of venture capital.
2. MARKETING PROGRAM: Consists of the following components:
A. Bristol will review and analyze all aspects of the Company's
goals and make recommendations on feasibility and achievement of
the desired goals.
Representation Agreement
Bristol/PAN
Page 1 of 5
<PAGE> 2
B. Bristol will review all of the general information and recent
filings from the Company and produce a Corporate profile in
brokerage style format to be approved by the Company prior to
circulation.
C. Bristol will provide, through its network of firms and brokers
interested in participating (becoming an active market maker),
the necessary due diligence and obtain the required approvals
necessary for those firms to participate. Bristol will also
interview and make determinations on any firms or brokers
referred to it by the Company with regard to their participation.
D. Bristol will be available to the Company to field any calls from
firms and brokers inquiring about the Company. Bristol will only
provide information which is otherwise available to the public.
E. Bristol will perform its required duties in a responsible and
legal manner in accordance with state and federal securities
acts.
F. Bristol will not make any statements or disseminate and
information about the Company that is not verified by the Company
in advance.
G. Bristol will complete negotiations with a NASD registered broker
dealer to act as the Placement Agent or with the Company itself
to act as its own placement agent for a possible public offering
or private placement of the Company's securities on terms
agreeable to the Company if such a need for venture capital is
warranted.
H. Bristol will provide back to the Company periodic status reports
in its efforts as consultant to the Company, providing disclosure
as to firms interested in participating as investors, market
makers and/or broker dealers, along with contact person, contact
number and other information relevant to Bristol in its capacity
to the Company.
3. TIME OF PERFORMANCE: Services to be performed under this Agreement shall
commence upon the execution of this Agreement and shall continue until
completion, which generally is expected to occur within twenty-four (24)
months.
4. COMPENSATION AND EXPENSES: In consideration of the investor relations
services to be performed by Bristol, PAN agrees to pay compensation to
Bristol's contractors in the amount of $4,000 per month commencing on
January 2, 1998. In addition, PAN agrees to advance telephone, postage
and delivery expenses in the amount of $1,000 per month commencing on
January 2, 1998. Accounting for such advances shall be furnished back to
PAN within 30 days after such advances. Any other expenses shall be
authorized and paid as mutually agreed.
Representation Agreement
Bristol/PAN
Page 2 of 5
<PAGE> 3
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY: The Company represents
and warrants to Bristol, each such representation and warranty being
deemed to be material, that:
A. The Company will cooperate fully and timely with Bristol to
enable Bristol to perform its obligations under the contract.
B. The execution and performance of this Agreement by the Company
has been duly authorized by the Board of Directors of the Company
in accordance with applicable law;
C. The performance by the Company of this Agreement will not violate
any provisions of the organizational documents of the Company or
any contractual obligation by which the Company may be bound;
D. The Company will promptly deliver to Bristol a complete due
diligence package to include the latest Annual Report and
quarterly reports, including financial statements, last twelve
months of press releases and all other relevant materials,
including but not limited to corporate reports, brochures, and
news worthy events.
E. The Company will promptly delivery to Bristol a list of names,
addresses and phone numbers of all shareholders of the Company of
which it is aware.
F. The Company will promptly delivery to Bristol a list of
investors, brokers and market makers of the company's securities
which are interested in the Company.
G. Because Bristol will rely upon information to be supplied it by
the Company, all such information shall be true, accurate, and
not misleading, in all respects to the best knowledge and belief
of the Company.
H. The Company will act diligently and promptly in reviewing
materials submitted to it by Bristol to enhance timely
distribution of the materials and will inform Bristol of any
inaccuracies contained therein prior to the projected publication
date.
6. DISCLAIMER BY BRISTOL: BRISTOL WILL BE SUPERVISOR OF CERTAIN PROMOTIONAL
MATERIALS. BRISTOL MAKES NO REPRESENTATION THAT: (A) ITS SERVICES WILL
RESULT IN ANY ENHANCEMENT TO THE COMPANY, (B) THE PRICE WILL INCREASE,
(C) ANY PERSON WILL PURCHASE SECURITIES IN THE COMPANY AS A RESULT OF
THE CONTRACT, OR (D) ANY INVESTOR WILL LEND MONEY TO OR INVEST IN OR
WITH THE COMPANY.
7. OWNERSHIP OF MATERIALS: All right, title and interests in and to
materials to be produced by Bristol in connection with the contract and
other services to be rendered
Representation Agreement
Bristol/PAN
Page 3 of 5
<PAGE> 4
under this Agreement shall be and remain the sole and exclusive property
of Bristol, except that if the Company performs fully and timely its
obligations hereunder, it shall be entitled to receive, upon written
request, one (1) copy of all such materials.
8. CONFIDENTIALITY: Until such time as the same may become publicly known,
Bristol agrees that any information provided to it by the Company of a
confidential nature will not be revealed or disclosed to any person or
entity, except in the performance of this Agreement and upon completion
of its services and upon the written request of the Company, any
original documentation provided by the Company will be returned to it.
Bristol will, however, require Confidentiality Agreements from its own
employees and from contractors Bristol reasonably believes will come
into contact with confidential material.
9 NOTICES: All notices hereunder shall be in writing and addressed to the
party at the address herein set forth, or such other address as to which
notice pursuant to this section may be given, and shall be given by
personal delivery, by certified mail (return receipt requested), Express
Mail or by national overnight courier. Notices will be deemed given upon
the earlier of actual receipt or three (3) business days after mailed or
delivered to such courier services.
NOTICES SHALL BE ADDRESSED TO:
TCKTS, L.L.C. dba Bristol Media, Ltd.
19239 Aurora Avenue North
Shoreline, WA 98133-3930
Tel: (206) 546-9660
Fax: (206) 533-1156
and
PAN Environmental Corporation
19239 Aurora Avenue North
Shoreline, WA 98133-3930
Tel: (206) 546-9660
Fax: (206) 533-1156
10. MISCELLANEOUS:
A. EFFECTIVE DATE OF REPRESENTATIONS: January 2, 1998.
B. GOVERNING LAW: This Agreement shall be governed by and
interpreted under the laws of the State of Washington where the
Company is currently
Representation Agreement
Bristol/PAN
Page 4 of 5
<PAGE> 5
transacting business and where this Agreement has been accepted
by Bristol. Securities matters will be interpreted pursuant to
various state and federal laws.
C. CURRENCY: In all instances, references to dollars shall be deemed
to be United States of America dollars.
D. MULTIPLE COUNTERPARTS: This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original. It shall
not be necessary that each party execute each counterpart, or
that any one counterpart be executed by more than one party, so
long as each party executes at least one counterpart.
11. MUTUAL INDEMNIFICATION: The parties to this Agreement agree to indemnify
and hold harmless the other party from any cause of action, claim
liability, damage or penalty suffered as a result to the judgment of
misstatement of fact, of failure to state a fact is material to the
judgment of potential investors or to the conduct of the other party
which liability, claim, damage or penalty results from the act or
actions, or failure to act or disclosure of the other party.
TCKTS, L.L.C. PAN ENVIRONMENTAL
DBA BRISTOL MEDIA, LTD. CORPORATION
By /s/ CLIFFORD M. JOHNSTON By /s/ JERRY CORNWELL
--------------------------- ---------------------------------
Its Managing Member Its President
------------------ ------------------
Date 1-2-98 Date 1-2-98
---------------- ----------------
Representation Agreement
Bristol/PAN
Page 5 of 5
<PAGE> 1
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 Whitfield Holdings, Ltd., an Antigua, West Indies
corporation (hereinafter "Whitfield"), as Acquiree:
WHEREAS, PAN desires to acquire all of the issued and outstanding common
stock of Whitfield incident to a tax-free exchange of capital stock of PAN for
all outstanding capital stock of Whitfield upon the terms and conditions
contained herein,
FURTHER WHEREAS, the shareholders of Whitfield desire to exchange
their 100% ownership of Whitfield 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 Whitfield 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
Whitfield owned by any and all shareholders of Whitfield 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 Whitfield recognize
the importance of obtaining certified audits of Whitfield 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 Whitfield) after consummation of this business combination. The officers
and directors of PAN and Whitfield 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/Whitfield
Page 1 of 15
<PAGE> 2
3. Whitfield Acquisition of Gaming Systems - Whitfield has acquired the
gaming system from United, Inc. dba United Race and Sports Book for 10,000
common shares of Whitfield. 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. Whitfield License-Back of Gaming System Back to United - Whitfield
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 Whitfield
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 Whitfield pro rata in proportion to their shareholdings in
Whitfield. 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 Whitfield,
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 Whitfield under paragraph 3 of the License
Agreement. Such betting volume will be jointly verified by PAN, Whitfield 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 Whitfield 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 Whitfield 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 Jerry Cornwell and
fifty percent (50%) by Clifford M. Johnston. (A copy of the Merger and
Acquisition Consultant Agreement is attached as Exhibit C.)
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Whitfield
Page 2 of 15
<PAGE> 3
8. The $22,500,000 Financing -- Because raising $22,500,000 to expand
Whitfield's operations is one of the reasons for Whitfield entering into this
agreement, PAN agrees, subject to the closing of this Agreement, to grant
Whitfield 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, Whitfield 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 Whitfield 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
Whitfield also hereby acknowledge that the certificates for PAN common shares
to be issued to the shareholders of Whitfield 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 Whitfield shall deliver to PAN appropriate
certificates representing all of their shares of Whitfield, which certificates
shall be properly endorsed, so as to make PAN the sole holder and owner of all
Whitfield 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 Whitfield in this business
AGREEMENT AND PLAN OF
BUSINESS COMBINATION -- PAN/Whitfield
Page 3 of 15
<PAGE> 4
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 Whitfield 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 Whitfield 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 Whitfield; 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/Whitfield
Page 4 of 15
<PAGE> 5
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 Whitfield 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 Whitfield; 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 Whitfield;
(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
Whitfield 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 Whitfield 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/Whitfield
Page 5 of 15
<PAGE> 6
(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 Whitfield and shareholders of Whitfield - As of the
date of this Agreement, and as of the Closing Date of this business combination,
Whitfield hereby represents and warrants the following:
(a) As of the Closing Date of this business combination, all
Whitfield 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 Whitfield executing this Agreement are duly
authorized to execute it on behalf of Whitfield, and they have taken all action
required by law and the Bylaws of Whitfield to properly and legally execute and
validate this Agreement;
(c) Any financial statements of Whitfield 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 Whitfield 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 Whitfield 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 Whitfield 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 Whitfield;
(h) That Whitfield 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 Whitfield and its officers, no material litigation, claims,
assessments or governmental investigation or proceedings are threatened against
Whitfield or any of its properties, or any of its directors or officers incident
to their roles with Whitfield;
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Whitfield
Page 6 of 15
<PAGE> 7
(i) Whitfield 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 Whitfield 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 Whitfield or its
shareholders or officers are party;
(l) The records of all issuances and transfers of records of the
capital stock of Whitfield have been maintained by Whitfield as its own
transfer agent in good and current order and accurately reflect the record
ownership of all issued common stock of Whitfield;
(m) Whitfield 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) Whitfield is not subject to any bankruptcy proceeding or
insolvency action;
(o) As of the Closing Date of this business combination, Whitfield
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 Whitfield incident to this Agreement, Whitfield 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) Whitfield 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 Whitfield have been
threatened, or claims made against Whitfield, with respect to such
incorporation, formation, business operations, capitalizations, or sales and
issuance of securities unless already disclosed by Whitfield in the financial
statements;
(r) Whitfield 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, Whitfield to the
best of its ability and knowledge, has disclosed all events, conditions, and
facts materially affecting the business and prospects of PAN; and Whitfield 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 / Whitfield
Page 7 of 15
<PAGE> 8
reasonable grounds to know, may materially affect the business, worth or
prospects of PAN;
(t) All outstanding common shares of Whitfield have been duly
authorized, validly issued and are fully paid and nonassessable with no
personal liability attaching to the ownership thereof;
(u) Whitfield has not mortgaged, pledged any of its assets, whether
tangible or intangible, other than already disclosed to Whitfield;
(v) Whitfield 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 Whitfield have been disclosed in
full to PAN incident to entering into this Agreement;
(x) Capitalization. Whitfield 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 Whitfield or transfer of any such assets unless
in the ordinary course of business;
ii) Any change in the accounting methods or practices
followed by Whitfield;
iii) Any termination, changes or violations of any leases,
contracts, licenses, commitments or other arrangement or
agreements of Whitfield having a material adverse effect
on the business or assets of Whitfield;
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 Whitfield, 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
Whitfield;
AGREEMENT AND PLAN OF
BUSINESS COMBINATION - PAN/Whitfield
Page 8 of 15
<PAGE> 9
viii) Any loan or other material transaction with any officer
or director or shareholder of Whitfield unless consented
to by PAN; and
ix) Any authorization, issuance, sale or other disposition of
any common shares, or rights thereto, of Whitfield except
with the written consent of PAN.
15. Covenants of Both Parties - PAN and Whitfield 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 / Whitfield
Page 9 of 15
<PAGE> 10
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/Whitfield
Page 10 of 15
<PAGE> 11
(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 Whitfield 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 Whitfield 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 Whitfield 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/Whitfield
Page 11 of 15
<PAGE> 12
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 Whitfield, 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
Whitfield, 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 Whitfield 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 Whitfield 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/Whitfield
Page 12 of 15
<PAGE> 13
Whitfield 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 Whitfield representing the PAN common shares required by the
exchange set forth in this business combination; and
(b) The Whitfield shareholders shall have delivered all common
shares of Whitfield to PAN legally endorsed for cancellation; and
(c) All corporate, financial and title document books, records and
certificates, as the case may be, of Whitfield shall be delivered to the
possession of PAN; and
(d) Any tangible or intangible assets, properties and rights owned
by Whitfield shall be placed in the control and possession of PAN along with
the rights, books and records of Whitfield; 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/Whitfield
Page 13 of 15
<PAGE> 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 Whitfield:
Attn: Jerry Cornwell, President Attn: Timothy S. Shiah, President
19239 Aurora Avenue North 4420 South Arville, Suite 20
Shoreline, WA 98133-3930 Las Vegas, NV 89103
(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/Whitfield
Page 14 of 15
<PAGE> 15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the year and day first above written.
PAN ENVIRONMENTAL WHITFIELD 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/Whitfield
Page 15 of 15
<PAGE> 1
CONSULTING AGREEMENT
This Consulting Agreement (identified as the "Agreement") is entered into this
1st day of July 1998 and the terms and conditions outlined herein will commence
on July 1, 1998 ("Effective Date"), by and between PAN Environmental
Corporation, a Delaware corporation (the "Company") and Quality Tax Service,
Inc. ("Consultant") (both of whom are sometimes hereinafter referred to
collectively as the "Parties" and each individually as a "Party").
RECITALS
The Company is a full SEC reporting public company with its stock trading under
the trading symbol "PANE" on the NASD's Electronic Bulletin Board (OTC:BB).
The Company, through its subsidiary, Whitfield Holdings, Ltd. ("Whitfield") is
in the business of purchasing and licensing-back race and sports book gaming
systems to legally licensed offshore race and sports books.
Subject to the terms and conditions of this Agreement, the Company desires to
hire Consultant and Consultant desires to be hired by the Company as its
accounting and corporate administration firm.
Both Company and Consultant desire to embody the terms and conditions of
Consultant's engagement in a written agreement which will supersede all prior
agreements of engagement, whether written or oral.
Now, therefore, in consideration of the mutual covenants, duties, obligations
and conditions contained herein, the parties agree as follows:
DUTIES OF CONSULTANT
GENERAL: Consultant shall be engaged in such capacities and with the duties
customarily associated with such engagement, and shall perform such other duties
pertaining to the Company's business as the Company from time to time requests.
The base of operations of Consultant shall be at the Consultant's discretion,
either at the Company's offices or at Consultant's offices.
SPECIFIC: Consultant agrees to devote a sufficient amount of time and effort to
the business and affairs of the Company, to use his best efforts to promote the
interests of Company and to faithfully, industriously and to the best of his
ability, experience and talents, perform to the reasonable satisfaction of the
Company all of the assignments that will be mutually agreed upon.
Consultant understands that there are certain aspects of the business that have
confidentiality factors. Consultant agrees to respect and abide to protecting
these confidentiality factors.
CONSULTING AGREEMENT
PAN / QUALITY TAX
Page 1 of 2
<PAGE> 2
TERM OF ENGAGEMENT
Company hereby engages Consultant and Consultant hereby accepts engagement by
Company for a period of two (2) years ("Term") beginning on January 1, 1998.
Upon the expiration of the Term, Company and Consultant will have the option to
extend and amend this agreement only if both parties mutually agree.
COMPENSATION AND OTHER BENEFITS
PAYMENT: As compensation for the services rendered pursuant to this Agreement,
Company shall pay to Consultant an annual fee of $14,000 payable on a quarterly
basis with stock commencing on January 1, 1998.
Such fee shall be paid in the form of the Company's free-trading common stock
based at $1.00 per share pursuant to the Company's upcoming S-8 Offering. The
shares will be placed in escrow to be distributed at the beginning of each
calendar quarter to Consultant.
Consultant agrees to accept the price risk on the $1.00 per share stock for the
24-month life of this Agreement.
TERMINATION OF THIS AGREEMENT
This Agreement shall terminate:
At such time if any, as the Company or Consultant ceases to do business for any
reason whatsoever;
Consultant fails to comply with any applicable laws/regulations as outlined in
writing by the Company;
At the election of the Company, upon the breach by Consultant of any term or
condition of this Agreement. In the event of termination as above, the unearned
balance of shares shall be canceled and returned to treasury.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
signed below.
DATED: July 1, 1998
PAN ENVIRONMENTAL QUALITY TAX SERVICE, INC.
CORPORATION
/s/ JERRY CORNWELL
- ------------------------------ ---------------------------------
Jerry Cornwell, President Judy Morton Johnston, President
CONSULTING AGREEMENT
PAN / QUALITY TAX
Page 2 of 2
<PAGE> 1
EMPLOYMENT AGREEMENT
This Employment Agreement (identified as the "Agreement") is entered into this
1st day of July 1998 and the terms and conditions outlined herein will commence
on July 1, 1998 ("Effective Date"), by and between PAN Environmental
Corporation, a Delaware corporation ("Employer" or the "Company") and Jerry
Cornwell, an individual ("Employee") (both of whom are sometimes hereinafter
referred to collectively as the "Parties" and each individually as a "Party").
RECITALS
Employer is a full SEC reporting public company with its stock trading under the
trading symbol "PANE" on the NASD's Electronic Bulletin Board (OTC:BB).
Employer, through its subsidiary, Whitfield Holdings, Ltd. ("Whitfield") is in
the business of purchasing and licensing-back race and sports book gaming
systems to legally licensed offshore race and sports books.
Subject to the terms and conditions of this Agreement, Employer desires to
employ Employee and Employee desires to be employed by Employer as President.
Both Employee and Employer desire to embody the terms and conditions of
Employee's employment in a written agreement which will supersede all prior
agreements of employment, whether written or oral.
Now, therefore, in consideration of the mutual covenants, duties, obligations
and conditions contained herein, the parties agree as follows:
DUTIES OF EMPLOYEE
GENERAL: Employee shall be employed in such capacities as Employer may determine
from time to time, with the duties customarily associated with such position,
and shall perform such other duties pertaining to Employer's business as
Employer from time to time directs. The base of operations of Employee shall be
the principal office of Employer, or any other office based in the state of
Washington, unless changed by the Employer and with the express consent of the
Employee.
SPECIFIC: Employee agrees to devote a substantial amount of his time and efforts
to the business and affairs of the Employer, to use his best efforts to promote
the interests of Employer and to faithfully, industriously and to the best of
his ability, experience and talents, perform to the reasonable satisfaction of
Employer all of the duties that may be assigned to him thereafter.
EMPLOYMENT AGREEMENT
PAN / CORNWELL
Page 1 of 3
<PAGE> 2
Employee may engage in any additional employment, either part time or full time,
without the permission of Employer.
Employee understands that there are certain aspects of the business that have
confidentiality factors. Employee agrees to respect and abide to protecting
these confidentiality factors.
TERM OF EMPLOYMENT
Employer hereby employs Employee and Employee hereby accepts employment with
Employer for a period of two (2) years ("Term") commencing on July 1, 1998. Upon
the expiration of the Term, Employer and Employee will have the option to extend
and amend this agreement only if both parties mutually agree.
COMPENSATION AND OTHER BENEFITS
SALARY: As compensation for his services rendered pursuant to this Agreement,
Employer shall pay to Employee an annual salary of $60,000 payable on a
quarterly basis with stock commencing on July 1, 1998.
Such salary shall be paid in the form of Employer's free-trading common stock
based at $1.00 per share pursuant to Employer's upcoming S-8 Offering. The
shares will be placed in escrow to be distributed at the beginning of each
calendar quarter to Employee.
Employee agrees to accept the price risk on the $1.00 per share stock for the
24-month life of this Agreement.
TERMINATION OF THIS AGREEMENT
This Agreement shall terminate:
Upon the death or permanent disability of Employee, "permanent disability" being
defined as any continuous loss of one third or more of time spent by Employee in
the usual daily performance of duties as a result of physical or mental illness
for a continuous period of time deemed reasonable by the Board of Directors;
At such time if any, as Employer ceases to do business for any reason
whatsoever;
Employee fails to comply with any applicable laws/regulations and company policy
as outlined in writing by Employer;
At the election of the Employer, upon the breach by Employee of any term or
condition of this Agreement or upon the dismissal of Employee by Employer with
cause. In the event of termination as above, the unearned balance of shares
shall be canceled and returned to treasury.
EMPLOYMENT AGREEMENT
PAN / CORNWELL
Page 2 of 3
<PAGE> 3
HIRING AT WILL
The continuation of Employee's employment by Employer after the Term of this
Agreement shall constitute hiring at will and shall be subject to termination
with or without cause by either parties' issuance of written notification.
However, future salaries shall be paid on a cash basis and not with stock.
EXCEPTION: Employer agrees to provide Employee with no less than ninety (90)
days written notice of termination should Employer decide to sell or merge
Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
signed below.
DATED: July 1, 1998
PAN ENVIRONMENTAL CORPORATION EMPLOYEE
/s/ JERRY CORNWELL /s/ JERRY CORNWELL
- ------------------------------ ----------------------------
Jerry Cornwell, President Jerry Cornwell
EMPLOYMENT AGREEMENT
PAN / CORNWELL
Page 3 of 3
<PAGE> 1
EMPLOYMENT AGREEMENT
This Employment Agreement (identified as the "Agreement") is entered into this
1st day of July 1998 and the terms and conditions outlined herein will commence
on July 1, 1998 ("Effective Date"), by and between PAN Environmental
Corporation, a Delaware corporation ("Employer" or the "Company") and Clifford
M. Johnston, an individual ("Employee") (both of whom are sometimes hereinafter
referred to collectively as the "Parties" and each individually as a "Party").
RECITALS
Employer is a full SEC reporting public company with its stock trading under the
trading symbol "PANE" on the NASD's Electronic Bulletin Board (OTC:BB).
Employer, through its subsidiary, Whitfield Holdings, Ltd. ("Whitfield") is in
the business of purchasing and licensing-back race and sports book gaming
systems to legally licensed offshore race and sports books.
Subject to the terms and conditions of this Agreement, Employer desires to
employ Employee and Employee desires to be employed by Employer as Vice
President.
Both Employee and Employer desire to embody the terms and conditions of
Employee's employment in a written agreement which will supersede all prior
agreements of employment, whether written or oral.
Now, therefore, in consideration of the mutual covenants, duties, obligations
and conditions contained herein, the parties agree as follows:
DUTIES OF EMPLOYEE
GENERAL: Employee shall be employed in such capacities as Employer may determine
from time to time, with the duties customarily associated with such position,
and shall perform such other duties pertaining to Employer's business as
Employer from time to time directs. The base of operations of Employee shall be
the principal office of Employer, or any other office based in the state of
Washington, unless changed by the Employer and with the express consent of the
Employee.
SPECIFIC: Employee agrees to devote a substantial amount of his time and efforts
to the business and affairs of the Employer, to use his best efforts to promote
the interests of Employer and to faithfully, industriously and to the best of
his ability, experience and talents, perform to the reasonable satisfaction of
Employer all of the duties that may be assigned to him thereafter.
EMPLOYMENT AGREEMENT
PAN / C. JOHNSTON
Page 1 of 3
<PAGE> 2
Employee may engage in any additional employment, either part time or full time,
without the permission of Employer.
Employee understands that there are certain aspects of the business that have
confidentiality factors. Employee agrees to respect and abide to protecting
these confidentiality factors.
TERM OF EMPLOYMENT
Employer hereby employs Employee and Employee hereby accepts employment with
Employer for a period of two (2) years ("Term") commencing on July 1, 1998. Upon
the expiration of the Term, Employer and Employee will have the option to extend
and amend this agreement only if both parties mutually agree.
COMPENSATION AND OTHER BENEFITS
SALARY: As compensation for his services rendered pursuant to this Agreement,
Employer shall pay to Employee an annual salary of $50,000 payable on a
quarterly basis with stock commencing on July 1, 1998.
Such salary shall be paid in the form of Employer's free-trading common stock
based at $1.00 per share pursuant to Employer's upcoming S-8 Offering. The
shares will be placed in escrow to be distributed at the beginning of each
calendar quarter to Employee.
Employee agrees to accept the price risk on the $1.00 per share stock for the
24-month life of this Agreement.
TERMINATION OF THIS AGREEMENT
This Agreement shall terminate:
Upon the death or permanent disability of Employee, "permanent disability" being
defined as any continuous loss of one third or more of time spent by Employee in
the usual daily performance of duties as a result of physical or mental illness
for a continuous period of time deemed reasonable by the Board of Directors;
At such time if any, as Employer ceases to do business for any reason
whatsoever;
Employee fails to comply with any applicable laws/regulations and company policy
as outlined in writing by Employer;
At the election of the Employer, upon the breach by Employee of any term or
condition of this Agreement or upon the dismissal of Employee by Employer with
cause. In the event of termination as above, the unearned balance of shares
shall be canceled and returned to treasury.
EMPLOYMENT AGREEMENT
PAN / C. JOHNSTON
Page 2 of 3
<PAGE> 3
HIRING AT WILL
The continuation of Employee's employment by Employer after the Term of this
Agreement shall constitute hiring at will and shall be subject to termination
with or without cause by either parties' issuance of written notification.
However, future salaries shall be paid on a cash basis and not with stock.
EXCEPTION: Employer agrees to provide Employee with no less than ninety (90)
days written notice of termination should Employer decide to sell or merge
Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
signed below.
DATED: July 1, 1998
PAN ENVIRONMENTAL CORPORATION EMPLOYEE
/s/ JERRY CORNWELL
- ------------------------------ ----------------------------
Jerry Cornwell, President Clifford M. Johnston
EMPLOYMENT AGREEMENT
PAN / C. JOHNSTON
Page 3 of 3
<PAGE> 1
EMPLOYMENT AGREEMENT
This Employment Agreement (identified as the "Agreement") is entered into this
1st day of July 1998 and the terms and conditions outlined herein will commence
on July 1, 1998 ("Effective Date"), by and between PAN Environmental
Corporation, a Delaware corporation ("Employer" or the "Company") and Judy
Morton Johnston, an individual ("Employee") (both of whom are sometimes
hereinafter referred to collectively as the "Parties" and each individually as a
"Party").
RECITALS
Employer is a full SEC reporting public company with its stock trading under the
trading symbol "PANE" on the NASD's Electronic Bulletin Board (OTC:BB).
Employer, through its subsidiary, Whitfield Holdings, Ltd. ("Whitfield") is in
the business of purchasing and licensing-back race and sports book gaming
systems to legally licensed offshore race and sports books.
Subject to the terms and conditions of this Agreement, Employer desires to
employ Employee and Employee desires to be employed by Employer as Assistant
Secretary/Assistant Treasurer.
Both Employee and Employer desire to embody the terms and conditions of
Employee's employment in a written agreement which will supersede all prior
agreements of employment, whether written or oral.
Now, therefore, in consideration of the mutual covenants, duties, obligations
and conditions contained herein, the parties agree as follows:
DUTIES OF EMPLOYEE
GENERAL: Employee shall be employed in such capacities as Employer may determine
from time to time, with the duties customarily associated with such position,
and shall perform such other duties pertaining to Employer's business as
Employer from time to time directs. The base of operations of Employee shall be
the principal office of Employer, or any other office based in the state of
Washington, unless changed by the Employer and with the express consent of the
Employee.
SPECIFIC: Employee agrees to devote a substantial amount of his time and efforts
to the business and affairs of the Employer, to use his best efforts to promote
the interests of Employer and to faithfully, industriously and to the best of
his ability, experience and talents, perform to the reasonable satisfaction of
Employer all of the duties that may be assigned to him thereafter.
EMPLOYMENT AGREEMENT
PAN / J. JOHNSTON
Page 1 of 3
<PAGE> 2
Employee may engage in any additional employment, either part time or full time,
without the permission of Employer.
Employee understands that there are certain aspects of the business that have
confidentiality factors. Employee agrees to respect and abide to protecting
these confidentiality factors.
TERM OF EMPLOYMENT
Employer hereby employs Employee and Employee hereby accepts employment with
Employer for a period of two (2) years ("Term") commencing on July 1, 1998. Upon
the expiration of the Term, Employer and Employee will have the option to extend
and amend this agreement only if both parties mutually agree.
COMPENSATION AND OTHER BENEFITS
SALARY: As compensation for his services rendered pursuant to this Agreement,
Employer shall pay to Employee an annual salary of $20,000 payable on a
quarterly basis with stock commencing on July 1, 1998.
Such salary shall be paid in the form of Employer's free-trading common stock
based at $1.00 per share pursuant to Employer's upcoming S-8 Offering. The
shares will be placed in escrow to be distributed at the beginning of each
calendar quarter to Employee.
Employee agrees to accept the price risk on the $1.00 per share stock for the
24-month life of this Agreement.
TERMINATION OF THIS AGREEMENT
This Agreement shall terminate:
Upon the death or permanent disability of Employee, "permanent disability" being
defined as any continuous loss of one third or more of time spent by Employee in
the usual daily performance of duties as a result of physical or mental illness
for a continuous period of time deemed reasonable by the Board of Directors;
At such time if any, as Employer ceases to do business for any reason
whatsoever;
Employee fails to comply with any applicable laws/regulations and company policy
as outlined in writing by Employer;
At the election of the Employer, upon the breach by Employee of any term or
condition of this Agreement or upon the dismissal of Employee by Employer with
cause. In the event of termination as above, the unearned balance of shares
shall be canceled and returned to treasury.
EMPLOYMENT AGREEMENT
PAN / J. JOHNSTON
Page 2 of 3
<PAGE> 3
HIRING AT WILL
The continuation of Employee's employment by Employer after the Term of this
Agreement shall constitute hiring at will and shall be subject to termination
with or without cause by either parties' issuance of written notification.
However, future salaries shall be paid on a cash basis and not with stock.
EXCEPTION: Employer agrees to provide Employee with no less than ninety (90)
days written notice of termination should Employer decide to sell or merge
Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
signed below.
DATED: July 1, 1998
PAN ENVIRONMENTAL CORPORATION EMPLOYEE
/s/ JERRY CORNWELL
- ------------------------------ ----------------------------
Jerry Cornwell, President Judy Morton Johnston
EMPLOYMENT AGREEMENT
PAN / J. JOHNSTON
Page 3 of 3
