Share Exchange Agreement

EXECUTION COPY


SHARE EXCHANGE AND REORGANIZATION AGREEMENT, dated as of September 8, 2003 (the "Agreement"), between PRINT DATA CORP., a Delaware corporation ("Print Data"); and ATLANTIC COMPONENTS LIMITED, a Hong Kong corporation ("Atlantic"), and MR. CHUNG-LUN YANG, the sole beneficial stockholder of Atlantic (the "Atlantic Shareholder") and REITLER BROWN LLC, a New York limited liability company, solely with respect to Section 3.04 in its capacity as escrow agent as provided therein.


INTRODUCTION


Print Data desires to acquire all of the issued and outstanding shares of Atlantic capital stock solely in exchange for an aggregate of 22,380,000 shares of authorized, but theretofore unissued shares of common stock, par value $0.001 per share (the "Print Data Common Stock"), of Print Data, pursuant to the applicable laws of the State of Delaware and Hong Kong. The Atlantic Shareholder desires to exchange all of his beneficially owned shares of Atlantic capital stock solely for shares of Print Data Common Stock in the amount set forth herein.


Prior to the date hereof, the respective boards of directors or analogous governing body of each of Print Data and Atlantic have, and the Atlantic Shareholder has, approved and adopted this Agreement and it is the intent of the parties hereto that the transactions contemplated hereby be structured so as to qualify as a tax-free exchange under Subchapter C of the Internal Revenue Code of 1986, as amended (the "IRC"), and the provisions of this Agreement will be interpreted in a manner consistent with this intent.


NOW, THEREFORE, in consideration of the premises and mutual representations, warranties and covenants herein contained, the parties hereby agree as follows:


ARTICLE I


ACQUISITION AND EXCHANGE OF SHARES


SECTION 1.01 THE AGREEMENT. The parties hereto hereby agree that Print Data shall acquire all of the issued and outstanding shares of capital stock of Atlantic and/or other securities representing all of the equity ownership interests in Atlantic (the "Atlantic Capital Stock") solely in exchange for an aggregate of 22,380,000 shares of authorized, but theretofore unissued shares of Print Data Common Stock. The parties hereto agree that at the closing of the transactions contemplated by this Agreement (the "Closing"): (i) Atlantic will become a wholly-owned subsidiary of Print Data subject to the conditions and provisions of Section 1.03 hereof; (ii) the management and business operations of Print Data will be reorganized into a newly formed wholly owned subsidiary of Print Data ("Historic Print Data Subsidiary") and (iii) Print Data will file a fictitious name application with the relevant state authorities to do business as "ACL Semiconductors Inc.".


SECTION 1.02 EXCHANGE OF SHARES.


(a) At the Closing, Print Data will cause to be issued and held for delivery to the Atlantic Shareholder or his designees, stock certificates representing an aggregate of 22,380,000 shares of Print Data Common Stock, in exchange for all of the issued and outstanding shares of Atlantic Capital Stock, which shares will be delivered to Print Data at the Closing.


(b) The shares of Print Data Common Stock to be issued pursuant to paragraph (a) of this Section 1.02 will be authorized, but theretofore unissued shares of Print Data Common Stock, and will be issued to the Atlantic Shareholder.


(c) All shares of Print Data Common Stock to be issued hereunder shall be deemed "restricted securities" as defined in paragraph (a) of Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), and the Atlantic Shareholder will represent in writing that he is acquiring said shares for investment purposes only and without the intent to make a further distribution of the shares. All shares of Print Data Common Stock to be issued under the terms of this Agreement shall be issued pursuant to an exemption from the registration requirements of the Securities Act, under Section 4(2) of the Securities Act and the rules and regulations promulgated thereunder. Certificates representing the shares of Print Data Common Stock to be issued hereunder will bear a restrictive legend in substantially the following form:


THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE DISPOSED OF,
EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH
ACT OR PURSUANT TO AN EXEMPTION FROM SUCH REGISTRATION
PROVISIONS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO
THE SATISFACTION OF THE COMPANY.


SECTION 1.03 CLOSING. The Closing will take place at a date and time (the "Closing Date") and place to be mutually agreed upon by the parties hereto, and will be subject to the provisions of Article IV of this Agreement. At the Closing:


(a) Atlantic will deliver to Print Data stock certificates representing all of the issued and outstanding shares of Atlantic Capital Stock, duly endorsed, so as to make Print Data the holder thereof, free and clear of all claims and encumbrances;


(b) Print Data will deliver to the Atlantic Shareholder, stock certificates representing an aggregate of 22,380,000 shares of Print Data Common Stock, which certificates will bear a standard restrictive legend in the form customarily used with restricted securities and as set forth in Section 1.02(c) above and which shares shall represent approximately 80.4% of the outstanding Print Data Common Stock giving effect to the issuance thereof and the issuance of the 2,620,000 shares of Print Data Common Stock issued pursuant to Section 3.01(q);


(c) Print Data will deliver an Officer's Certificate as described in Sections 4.02(a) and 4.02(b) hereof, dated the Closing Date, that all representations, warranties, covenants, and conditions set forth herein by Print Data are true and correct as of, or have been fully performed and complied with by, the Closing Date; and


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(d) Atlantic will deliver an Officer's Certificate as described in Sections 4.01(a) and 4.01(b) hereof, dated the Closing Date, that all representations, warranties, covenants and conditions set forth herein by Atlantic are true and correct as of, or have been fully performed and complied with by, the Closing Date;


SECTION 1.04 RATIFICATION BY BOARD OF DIRECTORS. In anticipation of
this Agreement, Print Data has taken all necessary and requisite
corporate and other action, including without limitation, actions of
the Board of Directors in order to: ratify this Agreement and all
transactions contemplated hereby.


SECTION 1.05 CONSUMMATION OF TRANSACTION. If at the Closing, no condition exists which would permit any of the parties to terminate this Agreement, or a condition then exists and the party entitled to terminate because of that condition elects not to do so, then the transactions herein contemplated shall be consummated upon such date, and then and thereupon, Print Data will file any additional necessary documents that may be required by the State of Delaware, the United States of America, or otherwise.


ARTICLE II


REPRESENTATIONS AND WARRANTIES


SECTION 2.01 REPRESENTATIONS AND WARRANTIES OF PRINT DATA. Print Data hereby represents and warrants to, and agrees with, Atlantic and the Atlantic Shareholder:


(a) Organization and Qualification. Other than as set forth in Section A of the disclosure letter, of even date herewith, from Print Data to Atlantic and the Atlantic Shareholder (the "Print Data Disclosure Letter"), Print Data has no subsidiaries or affiliated corporation or owns any interest in any other enterprise (whether or not such enterprise is a corporation). Print Data is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware, with all requisite power and authority, and all necessary consents, authorizations, approvals, orders, licenses, certificates, and permits of and from, and declarations and filings with, all federal, state, local, and other governmental authorities and all courts and other tribunals, to own, lease, license, and use its properties and assets and to carry on the businesses in which it is now engaged and the businesses in which it contemplates engaging. Other than as set forth in Section A of the Print Data Disclosure Letter, Print Data is duly qualified to transact the businesses in which it is engaged and is in good standing as a foreign corporation in every jurisdiction in which its ownership, leasing, licensing, or use of property or assets or the conduct of its businesses makes such qualification necessary.


(b) Capitalization. The authorized capital stock of Print Data consists of (i) 50,000,000 shares of Print Data Common Stock, of which 2,829,936 shares are outstanding; and (ii) 20,000,000 shares of "blank check" preferred stock, par value $0.001, 600,000 of which are designated as series A preferred stock, 510,400 of which are issued and outstanding. Each of such outstanding shares of Print Data Common Stock and preferred stock is validly authorized, validly issued, fully paid, and nonassessable, has not been issued and is not owned or held in violation of any preemptive or similar right of stockholders. The preferred stock is held by the


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owners set forth in Section A of the Print Data Disclosure Letter, in each case free and clear of all liens, security interests, pledges, charges, encumbrances, stockholders' agreements, and voting trusts. Except as described in Section A to the Print Data Disclosure Letter, there is no commitment, plan, or arrangement to issue, and no outstanding option, warrant, or other right calling for the issuance of, any share of capital stock of Print Data or any security or other instrument convertible into, exercisable for, or exchangeable for capital stock of Print Data. Except as described in Section A of the Print Data Disclosure Letter, there is outstanding no security or other instrument convertible into or exchangeable for capital stock of Print Data.


(c) Financial Condition. Print Data has filed with the United States Securities and Exchange Commission (the "SEC") true and correct copies of the following: audited balance sheets of Print Data as of December 31, 2000, 2001, and 2002; unaudited balance sheets of Print Data as of June 30, 2002 and 2003; audited statements of income, statements of stockholders' equity, and statements of cash flows of Print Data for the years ended December 31, 2000, 2001, and 2002; and the unaudited statements of income, statements of stockholders' equity, and statements of cash flows of Print Data for the six months ended June 30, 2002 and 2003. Each such balance sheet presents fairly the financial condition, assets, liabilities, and stockholders' equity of Print Data as of its respective date; each such statement of income and statement of stockholders' equity presents fairly the results of operations of Print Data for the period indicated; and each such statement of cash flows presents fairly the information purported to be shown therein. The financial statements referred to in this Section 2.01(c) have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved and are in accordance with the books and records of Print Data. Since June 30, 2003:


(i) There has at no time been a material adverse
change in the financial condition, results of operations,
businesses, properties, assets, liabilities, or future
prospects of Print Data.


(ii) Print Data has not authorized, declared, paid,
or effected any dividend or liquidating or other distribution
in respect of its capital stock or any direct or indirect
redemption, purchase, or other acquisition of any stock of
Print Data.


(iii) The operations and businesses of Print Data
have been conducted in all respects only in the ordinary
course, except as discussed in filings made by Print Data with
the SEC.


There is no fact known to Print Data which materially adversely affects or in the future (as far as Print Data can reasonably foresee) may materially adversely affect the financial condition, results of operations, businesses, properties, assets, liabilities, or future prospects of Print Data; provided, however, that Print Data expresses no opinion as to political or economic matters of general applicability. Print Data has made known, or caused to be made known, to the accountants or auditors who have prepared, reviewed, or audited the aforementioned consolidated financial statements all material facts and circumstances which could affect the preparation, presentation, accuracy, or completeness thereof.


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(d) Tax and Other Liabilities. Print Data does not have any material liability of any nature, accrued or contingent, including, without limitation, liabilities for federal, state, local, or foreign taxes and penalties, interest, and additions to tax ("Taxes"), and liabilities to customers or suppliers, other than the following:


(i) Liabilities for which full provision has been
made on the consolidated balance sheet and the notes thereto
(the "Last Print Data Balance Sheet") as of June 30, 2003 (the
"Last Print Data Balance Sheet Date") referred to in Section
2.01(c); and


(ii) Other liabilities arising since the Last Print
Data Balance Sheet Date and prior to Closing in the ordinary
course of business (which shall not include liabilities to
customers on account of defective products or services) which
are not inconsistent with the representations and warranties
of Print Data or any other provision of this Agreement.


Without limiting the generality of the foregoing, the amounts set up as provisions for Taxes on the Last Print Data Balance Sheet are sufficient for all accrued and unpaid Taxes of Print Data, whether or not due and payable and whether or not disputed, under tax laws, as in effect on the Last Print Data Balance Sheet Date or now in effect, for the period ended on such date and for all fiscal periods prior thereto. The execution, delivery, and performance of this Agreement by Print Data will not cause any Taxes to be payable other than by the Atlantic Shareholder or cause any lien, charge, or encumbrance to secure any Taxes to be created either immediately or upon the nonpayment of any Taxes other than on the properties or assets of the Atlantic Shareholder. The Internal Revenue Service has audited and settled or the statute of limitations has run upon all federal income tax returns of Print Data for all taxable years up to and including the taxable year ended December 31, 1997. Print Data has filed all federal, state, local, and foreign tax returns required to be filed by it; has delivered to the Atlantic Shareholder a true and correct copy of each such returns which was filed in the past six years; has paid (or has established on the Last Print Data Balance Sheet a reserve for) all Taxes, assessments, and other governmental charges payable or remittable by it or levied upon it or its properties, assets, income, or franchises which are due and payable; and has delivered to the Atlantic Shareholder a true and correct copy of any report as to adjustments received by it from any taxing authority during the past six years and a statement as to any litigation, governmental or other proceeding (formal or informal), or investigation pending, threatened, or in prospect with respect to any such report or the subject matter of such report.


(e) Litigation and Claims. Except as described in Section G of the Print Data Disclosure Letter, there is no litigation, arbitration, claim, governmental or other proceeding (formal or informal), or investigation pending or, to the best of Print Data's knowledge, threatened, or in prospect (or any basis therefor known to Print Data) with respect to Print Data or any of its businesses, properties, or assets. Print Data is not affected by any present or threatened strike or other labor disturbance nor to the knowledge of Print Data, is any union attempting to represent any employee of Print Data as collective bargaining agent. Print Data is not in violation of, or in default with respect to, any law, rule, regulation, order, judgment, or


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decree which violation or default would have a material adverse effect on Print Data; nor is Print Data required to take any action in order to avoid such violation or default.


(f) Properties.


(i) Print Data owns no real property. Print Data has good title to all personal properties and assets material to Print Data and used in its businesses or owned by it (except real and other properties and assets material to Print Data as are held pursuant to leases or licenses described in Section B or C of the Print Data Disclosure Letter), free and clear of all liens, mortgages, security interests, pledges, charges, and encumbrances (except such as are listed in Section D of the Print Data Disclosure Letter).


(ii) Set forth in Section B of the Print Data Disclosure Letter is a true and complete list of all tangible properties and assets owned by Print Data or leased or licensed by Print Data from or to a third party (including inventory but not including Intangibles (as hereinafter defined)), and with respect to such properties and assets leased or licensed by Print Data from or to a third party, a description of such lease or license. All such properties and assets (including Intangibles) owned by Print Data are reflected on the Last Print Data Balance Sheet (except for acquisitions subsequent to the Last Print Data Balance Sheet Date and prior to the Closing Date, which are either noted in Section B or C of the Print Data Disclosure Letter or are approved in writing by Atlantic). All tangible properties and assets owned by Print Data or leased or licensed by Print Data from or to a third party are in good and usable condition (reasonable wear and tear which is not such as to affect adversely the operation of the businesses of Print Data excepted).


(iii) To the best of Print Data's knowledge, no real property leased or licensed by Print Data from or to a third party lies in an area which is, or will be, subject to zoning, use, or building code restrictions which would prohibit, and, to the best of Print Data's knowledge, no state of facts relating to the actions or inaction of another person or entity or his or its ownership, leasing, or licensing of any real or personal property exists or will exist which would prevent, the continued effective ownership, leasing, or licensing of such real property in the businesses in which Print Data is now engaged or the businesses in which it contemplates engaging.


(iv) The properties and assets (including Intangibles) owned by Print Data (other than those leased or licensed by Print Data to a third party) or leased or licensed by Print Data from a third party constitute all such properties and assets which are necessary to the businesses of Print Data as presently conducted.


(v) Print Data has not caused or permitted its businesses properties, or assets to be used to generate, manufacture, refine, transport, treat, store, handle, dispose of, transfer, produce, or process any Hazardous Substance (as such term is defined in this Section 2.01(f)(v)) except in compliance with all applicable laws, rules, regulations, orders, judgments, and decrees, and has not caused or permitted the Release (as such term is defined in this Section 2.01(f)(v)) of any Hazardous Substance on or off the site of any property of Print Data. The term "Hazardous Substance" shall mean any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any hazardous substance, as defined by 42 U.S.C. ss.9601(14), any pollutant or contaminant, as defined by 42 U.S.C. ss.9601(33), and all


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toxic substances, hazardous materials, or other chemical substances regulated by any other law, rule, or regulation. The term "Release" shall have the meaning set forth in 42 U.S.C. ss.9601(22).


(g) Contracts and Other Instruments. Section D of the Print Data Disclosure Letter contains a true and correct statement of the information required to be contained therein regarding material contracts, agreements, instruments, leases, licenses, arrangements, or understandings with respect to Print Data. Print Data has furnished to the Atlantic Shareholder (i) the certificate of incorporation (or other charter document) and by-laws of Print Data and all amendments thereto, as presently in effect, and (ii) the following: (A) true and correct copies of all material contracts, agreements, and instruments referred to in Section D of the Print Data Disclosure Letter; (B) true and correct copies of all material leases and licenses referred to in Section B or C of the Print Data Disclosure Letter hereto; and (C) true and correct written descriptions of all material supply, distribution, agency, financing, or other arrangements or understandings referred to in Section B or C of the Print Data Disclosure Letter. To the best of Print Data's knowledge, neither Print Data nor (to the knowledge of Print Data) any other party to any such material contract, agreement, instrument, lease, or license is now or expects in the future to be in violation or breach of, or in default with respect to complying with, any term thereof, and each such material contract, agreement, instrument, lease, or license is in full force and is (to the best of Print Data's knowledge in the case of third parties) the legal, valid, and binding obligation of the parties thereto and (subject to applicable bankruptcy, insolvency, and other laws affecting the enforceability of creditors' rights generally) is enforceable as to them in accordance with its respective terms. Each such material supply, distribution, agency, financing, or other arrangement or understanding is a valid and continuing arrangement or understanding; neither Print Data nor any other party to any such arrangement or understanding has given notice of termination or taken any action inconsistent with the continuance of such arrangement or understanding; and the execution, delivery, and performance of this Agreement will not prejudice any such arrangement or understanding in any way. Print Data enjoys peaceful and undisturbed possession under all material leases and licenses under which it is operating. Print Data is not party to or bound by any contract, agreement, instrument, lease, license, arrangement, or understanding, or subject to any charter or other restriction, which has had or (to the knowledge of Print Data) may in the future have a material adverse effect on the financial condition, results of operations, businesses, properties, assets, liabilities, or future prospects of Print Data. Print Data has not engaged within the last five years in, is not engaging in, and does not intend to engage in any transaction with, and has not had within the last five years, does not now have, and does not intend to have any material contract, agreement, instrument, lease, license, arrangement, or understanding with, any stockholder of Print Data, any director, officer, or employee of Print Data (except for employment agreements listed in Section D of the Print Data Disclosure Letter and employment and compensation arrangements described in Section E of the Print Data Disclosure Letter), any relative or affiliate of any stockholder of Print Data or of any such director, officer, or employee, or any other corporation or enterprise in which any stockholder of Print Data, any such director, officer, or employee, or any such relative or affiliate then had or now has a 5% or greater equity or voting or other substantial interest, other than those listed and so specified in Section D of the Print Data Disclosure Letter. The stock ledgers and stock transfer books relating to all issuances and transfers of stock by Print Data and the minute book records of Print Data and all proceedings of the stockholders and the Board of Directors and


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committees thereof of Print Data since their respective incorporations made available to counsel to Atlantic and the Atlantic Shareholder are the original stock ledgers and stock transfer books and minute book records of Print Data or exact copies thereof. Print Data is not in violation or breach of, or in default with respect to, any term of its certificate of incorporation (or other charter document) or by-laws.


(h) Employees.


(i) Print Data does not have, or contribute to, any pension, profit-sharing, option, other incentive plan, or any other type of Employee Benefit Plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA")), or has any obligation to or customary arrangement with employees for bonuses, incentive compensation, vacations, severance pay, sick pay, sick leave, insurance, service award, relocation, disability, tuition refund, or other benefits, whether oral or written, except as set forth in Section E of the Print Data Disclosure Letter. Print Data has furnished to Atlantic and the Atlantic Shareholder: (A) true and correct copies of all documents evidencing plans, obligations, or arrangements referred to in Section E of the Print Data Disclosure Letter (or true and correct written summaries, so initialed, of such plans, obligations, or arrangements to the extent not evidenced by documents) and true and correct copies, so initialed, of all documents evidencing trusts, summary plan descriptions, and any other summaries or descriptions relating to any such plans; (B) the two most recent annual reports (Form 5500's), if any, including all schedules thereto and the most recent annual and periodic accounting of related plan assets with respect to each Employee Benefit Plan; (C) the two most recent actuarial valuations with respect to each Pension Plan (as defined in Section 3(2) of ERISA) subject to Title IV of ERISA; and (D) the most recent determination letter issued by the Internal Revenue Service with respect to each Pension Plan.


(ii) If any Employee Benefit Plan of Print Data were to be terminated on the day prior to Closing Date, (A) no liability under Title IV of ERISA would be incurred by Print Data or Atlantic and (B) all Accrued Benefits (as defined in this Section 2.01(h)(ii)) to such day prior to the Closing Date (whether or not vested) would be fully funded in accordance with the assumptions contained in the regulations of the Pension Benefit Guaranty Corporation governing the funding of terminated defined benefit plans. For purposes hereof, "Accrued Benefits" shall include the value of disability, pre-retirement, death benefits, and all supplements, subsidized, ancillary, and optional forms of benefits. All Accrued Liabilities (for contributions or otherwise) (as defined in this Section 2.01(h)(ii)) of Print Data as of the Closing Date to each Employee Benefit Plan and with respect to each obligation to, or customary arrangement with, employees for bonuses, incentive compensation, vacations, severance pay, sick pay, sick leave, insurance, service award, relocation, disability, tuition refund, or other benefits, whether oral or written, have been paid or accrued for all periods ending prior to the Closing Date and no payment to any Employee Benefit Plan or with respect to any such obligation or arrangement since the Last Print Data Balance Sheet Date has been disproportionately large compared to prior payments. For purposes hereof, "Accrued Liabilities" shall include a pro rata contribution to each Employee Benefit Plan or with respect to each su ...