Exhibit 1 - Agreement and Plan of Reorganization by and Among Proactive
Technologies, Inc., Xxxxx Children's Trust and PDk Properties,
Inc.
EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION BY AND AMONG
PROACTIVE TECHNOLOGIES, INC., XXXXX CHILDREN'S TRUST
AND PDK PROPERTIES, INC.
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is entered into this
8th of January, 1999, by and among PROACTIVE TECHNOLOGIES, INC., a Delaware
corporation (hereinafter referred to as "Buyer"); and the XXXXX CHILDREN'S
TRUST, (hereinafter referred to as "Seller"), being the sole shareholder of
PDK PROPERTIES, INC., a Georgia corporation (hereafter collectively referred
to as "Company").
WHEREAS, Seller is the owner of record and beneficially owns One Thousand
(1,000) shares of the issued and outstanding shares of Common Stock of PDK
Properties, Inc. (the "Shares");
WHEREAS, PDK Properties, Inc. owns 100% of Stratos Inns LLC, a Georgia
Limited Liability Company (hereafter referred to as "Stratos");
WHEREAS, the Shares represent 100% of all the issued and outstanding shares
of the Company;
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer
desires to purchase the Shares, upon the terms and conditions set forth
herein; and
WHEREAS, the parties intend that the exchange of Shares for shares of
Buyer's common stock, as contemplated herein, qualify as a tax free
transaction under Section 368 of the Internal Revenue Code;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt
adequacy and sufficiency of which are hereby acknowledged, and subject to
the accuracy of the representations and warranties of the parties, the
parties hereto agree as follows:
SALE AND PURCHASE OF THE SHARES
SALE AND PURCHASE. Subject to the terms and conditions hereof, at the
Closing (as defined in paragraph 1.2 below), Seller agrees to sell, assign,
transfer, convey and deliver to Buyer, and Buyer agrees to purchase from
Seller, the Shares listed in Exhibit "A", attached hereto, which constitute
100% of the issued and outstanding Shares of Common Stock of the Company.
CLOSING. The purchase shall be consummated at a closing ("Closing") to take
place at 10:00 o'clock a.m., at the offices of Buyer's counsel on January 8,
1999 ("Closing Date").
PURCHASE PRICE. The aggregate purchase price ("Purchase Price") for the
Shares shall be Three Million Six Hundred Thousand (3,600,000) shares of
common stock of the Buyer ("Buyer Shares"). The purchase price shall be
paid at Closing by issuance and delivery of Buyer's Shares to Seller against
receipt of certificates representing the Shares, duly endorsed for transfer
to Buyer.
OTHER AGREEMENTS. At the Closing, the indicated parties shall execute and
deliver the following additional agreements in substantially the form
attached hereto:
Execution of a Closing Certificate between the Company and the Seller.
Stock certificates representing all of the Shares, duly endorsed to Buyer
and in blank or assignments separate from the certificates, transferring
the Shares from Seller to Buyer.
BASIC AGREEMENTS AND TRANSACTIONS DEFINED. This Agreement and other
agreements listed in paragraph 1.4, are sometimes referred to as the "Basic
Agreement". The transactions contemplated by the Basic Agreement are
sometimes referred to as the "Transactions.
REPRESENTATIONS AND WARRANTIES
REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and warrants
to Buyer as follows:
TITLE TO THE SHARES. At Closing, Seller shall own of record and
beneficially the number of the Shares listed in Exhibit "A", of the Company,
free and clear of all liens, encumbrances, pledges, claims, options, charges
and assessments of any nature whatsoever, with full right and lawful
authority to transfer the Shares to Buyer. No person has any preemptive
rights or rights of first refusal with respect to any of the Shares. There
exists no voting agreement, voting trust, or outstanding proxy with respect
to any of the Shares. There are no outstanding rights, options, warrants,
calls, commitments, or any other agreements of any character, whether oral
or written, with respect to the Shares.
ORGANIZATION. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Georgia. The
Company has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. The Company is duly
qualified and in good standing as a foreign corporation in each jurisdiction
where its ownership of property or operation of its business requires
qualification.
AUTHORIZED CAPITALIZATION. The authorized capitalization of the Company
consists of Two Hundred Fifty Million (250,000,000) shares of Common Stock,
$.01 par value, consisting of One Hundred Twenty-Five Million (125,000,000)
shares of Class "A" Voting Stock, of which One Thousand (1,000) shares are
issued and outstanding and One Hundred Twenty-Five Million (125,000,000)
shares of Class "B" Non-Voting Stock, of which no shares are issued and
outstanding. The Shares have been duly authorized, validly issued, are
fully paid and nonassessable with no personal liability attaching to the
ownership thereof and were offered, issued, sold and delivered by the
Company in compliance with all applicable state and federal laws. Except
as set forth in Exhibit "B" attached hereto, the Company does not have any
outstanding rights, options, warrants, calls, commitments, conversion or
any other agreements of any character, whether oral or written, obligating
it to issue any shares of its capital stock, whether authorized or not.
Except as set forth in Exhibit "C" attached hereto, the Company is not a
party to and are not bound by any agreement, contract, arrangement or
understanding, whether oral or written, giving any person or entity any
interest in, or any right to share, participate in or receive any portion
of, the Company's income, profits or assets, or obligating the Company to
distribute any portion of its income, profits or assets.
AUTHORITY. Seller has full power and lawful authority to execute and
deliver the Basic Agreements and to consummate and perform the Transactions
contemplated thereby. The Basic Agreements constitute (or shall, upon
execution, constitute) valid and legally binding obligations upon Seller,
enforceable in accordance with their terms. Neither the execution and
delivery of the Basic Agreements by Seller, nor the consummation and
performance of the Transactions contemplated thereby, conflicts with,
requires the consent, waiver or approval of, results in a breach of or
default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by which
Seller or the Company is a party or by which Seller or the Company or any
of their respective properties or assets are bound or affected.
COMPANY FINANCIAL STATEMENTS. Both the Company's and Stratos' Financial
Statements furnished to Buyer are complete, were prepared in accordance
with generally accepted accounting principles applied on a basis consistent
with prior periods and fairly present the financial position of the Company
as of December 31, 1998.
NO UNDISCLOSED LIABILITIES. Except as set forth in both the Company's and
Stratos' Financial Statements previously delivered to Buyer and as set forth
on Exhibit "D", Seller is not aware of any liabilities for which the Company
is liable or will become liable in the future.
TAXES. The Company has filed all federal, state, local tax and other
returns and reports which were required to be filed with respect to all
taxes, levies, imposts, duties, licenses and registration fees, charges or
withholdings of every nature whatsoever ("Taxes"), and there exists a
substantial basis in law and fact for all positions taken in such reports.
No waivers of periods of limitation are in effect with respect to any taxes
arising from and attributable to the ownership of properties or operations
of the business of the Company.
PROPERTIES. The Company has good and marketable title to all its real
property, in each case free and clear of all liens, claims and encumbrances
of every kind and character, except as set forth in Exhibit "E".
BOOKS AND RECORDS. The books and records of the Company and Stratos are
complete and correct in all material respects, have been maintained in
accordance with good business practices and accurately reflect in all
material respects the business, financial condition and results of
operations of the Company and Stratos as set forth in the Company Financial
Statements.
INSURANCE. Exhibit "F" contains an accurate and complete list and brief
description of all performance bonds and policies of insurance, including
fire and extended coverage, general liability, workers compensation,
property, and other forms of insurance or indemnity bonds held by the
Company and Stratos. Neither the Company nor Stratos are in default with
respect to any provisions of any such policy or indemnity bond and has not
failed to give any notice or present any claim thereunder in due and timely
fashion. All policies of insurance and bonds are: (1) in full force and
effect; (2) are sufficient for compliance by the Company with all
requirements of law and of all agreements and instruments to which the
Company is a party; (3) are valid, outstanding and enforceable; (4) provide
adequate insurance coverage for the assets, business and operations of the
Company and Stratos in amounts at least equal to customary coverage in the
Company's industry; (5) will remain in full force and effect through the
Closing; and (6) will not be affected by, and will not terminate or lapse
by reason of, the transactions contemplated by this Agreement.
TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in Exhibit "G", the
Company has no outstanding agreement, understanding, contract, lease,
commitment, loan or other arrangement with any officer, director or
shareholder of the Company or any relative of any such person, or any
corporation or other entity in which such person owns a beneficial interest.
MATERIAL CONTRACTS. Except as set forth in Exhibit "H", the Company has no
purchase, sale, commitment, or other contract, the breach or termination of
which would have a materially adverse effect on the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
EMPLOYMENT MATTERS. Exhibit "I" contains a list of all officers, their base
salaries, accrued vacation pay, sick pay, and severance pay through December
31, 1997. Except as set forth in Exhibit "I", the Company is not a party to
any employment agreement, or any pension, profit sharing, retirement or
other deferred compensation plan or agreement. The Company has not incurred
any unfunded deficiency or liability within the meaning of the Employee
Retirement Income Security Act of 1974 ("ERISA"), has not incurred any
liability to the Pension Benefit Guaranty Corporation established under
ERISA in connection with any employee benefit plan and has no outstanding
obligations or liabilities under any employee benefit plan. The Company has
not been a party to a "prohibited transaction," which would subject the
Company to any tax or penalty. There is no collective bargaining agreement
or negotiations therefor, labor grievance or arbitration proceeding against
the Company pending or threatened, and to the knowledge of the Seller, there
are no union organizing activities currently pending or threatened against
or involving the Company.
AUTHORIZATIONS. The Company has no licenses, permits, approvals and other
authorizations from any governmental agencies and any other entities that
are necessary for the conduct of its business, except as set forth in
Exhibit "J" which contains a list of all licenses, permits, approvals, and
other authorizations, as well as a list of all copyrights, patents,
trademarks, tradenames, servicemarks, franchises, licenses and other
permits, each of which is valid and in full force and effect.
NO POWERS OF ATTORNEY. The Company has no powers of attorney or similar
authorizations outstanding.
COMPLIANCE WITH LAWS. The Company is not in violation of any federal, state,
local or other law, ordinance, rule or regulation applicable to its
business, and have not received any actual or threatened complaint, citation
or notice of violation or investigation from any governmental authority.
COMPLIANCE WITH ENVIRONMENTAL LAWS. The Company is in compliance with all
applicable pollution control and environmental laws, rules and regulations.
The Company has no environmental licenses, permits and other authorizations
held by the Company relative to compliance with environmental laws, rules
and regulations.
NO LITIGATION. There are no actions, suits, claims, complaints or
proceedings pending or threatened against the Company, at law or in equity,
or before or by any governmental department, commission, court, board,
bureau, agency or instrumentality; and there are no facts which would
provide a valid basis for any such action, suit or proceeding. There are
no orders, judgments or decrees of any governmental authority outstanding
which specifically apply to the Company or any of its assets.
VALIDITY. All contracts, agreements, leases and licenses to which the
Company is a party or by which it or any of its properties or assets are
bound or affected, are valid and in full force and effect; and no breach
or default exists, or upon the giving of notice or lapse of time, or both,
would exist, on the part of the Company or by any other party thereto.
NO ADVERSE CHANGES. Since December 31, 1998, there have been no actual or
threatened developments of a nature that is materially adverse to or
involves any materially adverse effect upon the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Company.
FULL DISCLOSURE. All statements of Seller contained in the Basic Agreements
and in any other written documents delivered by or on behalf of the Company
or Seller to Buyer are true and correct in all material respects and do not
omit any material fact necessary to make the statements contained therein
not misleading in light of the circumstances under which they were made.
There are no facts known to Seller which could have a materially adversely
affect upon the business, financial condition, results of operations,
assets, liabilities, or prospects of the Company, which have not been
disclosed to Buyer in the Basic Agreements.
REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to
Seller as follows:
ORGANIZATION. The Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Delaware. The
Buyer has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business. The Buyer is duly
qualified and in good standing as a foreign corporation in each jurisdiction
where its ownership of property or operation of its business requires
qualification.
AUTHORIZED CAPITALIZATION. The authorized capitalization of the Buyer
consists of Sixty Million (60,000,000) shares of Common Stock, $.04 par
value, of which Nineteen Million Five Hundred Forty-Nine Thousand Two
Hundred Fifty-Three (19,549,253) shares have been issued and are outstanding.
All shares have been duly authorized, validly issued, are fully paid and
nonassessable with no personal liability attaching to the ownership thereof
and were offered, issued, sold and delivered by the Buyer in compliance with
all applicable state and federal laws. Except as set forth in Exhibit "L"
attached hereto, the Buyer does not have any outstanding rights, options,
warrants, calls, commitments, conversion or any other agreements of any
character, whether oral or written, obligating it to issue any shares of its
capital stock, whether authorized or not. Buyer is not a party to and is
not bound by any agreement, contract, arrangement or understanding, whether
oral or written, giving any person or entity any interest in, or any right
to share, participate in or receive any portion of, the Buyer's income,
profits or assets, or obligating the Buyer to distribute any portion of its
income, profits or assets.
AUTHORITY. Buyer has full power and lawful authority to execute and deliver
the Basic Agreements and to consummate and perform the Transactions
contemplated thereby. The Basic Agreements constitute (or shall, upon
execution, constitute) valid and legally binding obligations upon Buyer,
enforceable in accordance with their terms. Neither the execution and
delivery of the Basic Agreements by Buyer, nor the consummation and
performance of the Transactions contemplated thereby, conflicts with,
requires the consent, waiver or approval of, results in a breach of or
default under, or gives to others any interest or right of termination,
cancellation or acceleration in or with respect to, any agreement by which
Buyer is a party or by which Buyer or any of its respective properties or
assets are bound or affected.
BUYER'S FINANCIAL STATEMENTS. The Buyer's Financial Statements are complete,
were prepared in accordance with generally accepted accounting principles
applied on a basis consistent with prior periods and fairly present the
financial position of the Buyer as of September 30, 1998.
TAXES. The Buyer has filed all federal, state, local tax and other returns
and reports which were required to be filed with respect to all taxes,
levies, imposts, duties, licenses and registration fees, charges or
withholdings of every nature whatsoever ("Taxes"), and their exists a
substantial basis in law and fact for all positions taken in such reports.
No waivers of periods of limitation are in effect with respect to any taxes
arising from and attributable to the ownership of properties or operations
of the business of the Company.
BOOKS AND RECORDS. The books and records of the Buyer are complete and
correct in all material respects, have been maintained in accordance with
good business practices and accurately reflect in all material respects
the business, financial condition and results of operations of the Buyer
as set forth in the Buyer's Financial Statements.
TRANSACTIONS WITH CERTAIN PERSONS. Except as disclosed in Exhibit "J", the
buyer has no outstanding agreement, understanding, contract, lease,
commitment, loan or other arrangement with any officer, director or
shareholder of the Buyer or any relative of any such person, or any
corporation or other entity in which such person owns a beneficial interest.
MATERIAL CONTRACTS. The Buyer has no purchase, sale, commitment, or other
contract, the breach or termination of which would have a materially adverse
effect on the business, financial condition, results of operations, assets,
liabilities, or prospects of the Buyer.
EMPLOYMENT MATTERS. Exhibit "K" contains a list of all officers, their
base salaries, accrued vacation pay, sick pay, and severance pay through
September 30, 1998. The Buyer is not a party to any employment agreement,
or any pension, profit sharing, retirement or other deferred compensation
plan or agreement. The Buyer has not incurred any unfunded deficiency or
liability within the meaning of the Employee Retirement Income Security Act
of 1974 ("ERISA"), has not incurred any liability to the Pension Benefit
Guaranty Corporation established under ERISA in connection with any employee
benefit plan and has no outstanding obligations or liabilities under any
employee benefit plan. The Buyer has not been a party to a "prohibited
transaction," which would subject the Buyer to any tax or penalty. There
is no collective bargaining agreement or negotiations therefor, labor
grievance or arbitration proceeding against the Buyer pending or threatened,
and to the knowledge of the Buyer, there are no union organizing activities
currently pending or threatened against or involving the Buyer.
AUTHORIZATIONS. The Buyer has no licenses, permits, approvals and other
authorizations from any governmental agencies and any other entities that
are necessary for the conduct of its business, except as set forth in
Exhibit "L" which contains a list of all licenses, permits, approvals, and
other authorizations, as well as a list of all copyrights, patents,
trademarks, tradenames, servicemarks, franchises, licenses and other permits,
each of which is valid and in full force and effect.
COMPLIANCE WITH LAWS. The Buyer is not in violation of any federal, state,
local or other law, ordinance, rule or regulation applicable to its business,
and have not received any actual or threatened complaint, citation or notice
of violation or investigation from any governmental authority.
VALIDITY. All contracts, agreements, leases and licenses to which the Buyer
is a party or by which it or any of its properties or assets are bound or
affected, are valid and in full force and effect; and no breach or default
exists, or upon the giving of notice or lapse of time, or both, would exist,
on the part of the Buyer or by any other party thereto.
NO ADVERSE CHANGES. Since September 30, 1998, there have been no actual or
threatened developments of a nature that is materially adverse to or
involves any materially adverse effect upon the business, financial
condition, results of operations, assets, liabilities, or prospects of the
Buyer.
FULL DISCLOSURE. All statements of Buyer contained in the Basic Agreements
and in any other written documents delivered by or on behalf of the Buyer
to Seller are true and correct in all material respects and do not omit any
material fact necessary to make the statements contained therein not
misleading in light of the circumstances under which they were made. There
are no facts known to Buyer which could have a materially adverse affect
upon the business, financial condition, results of operations, assets,
liabilities, or prospects of the Buyer, which have not been disclosed to
Buyer in the Basic Agreements.
COVENANTS
COVENANTS OF SELLER. Seller covenants and agrees that from the date hereof
to the Closing without the prior written consent of Buyer:
ORDINARY COURSE OF BUSINESS. Seller will operate the business of the
Company only in the ordinary course and will use their best efforts to
preserve the Company's business, organization, goodwill and relationships
with persons having business dealings with them.
MAINTAIN PROPERTIES. Seller will maintain all of the Company's properties
in good working order, repair and condition (reasonable wear and use
excepted) and cause Stratos to take all steps reasonably necessary to
maintain in full force and effect its patents, trademarks, servicemarks,
trade names, brand names, copyrights and other intangible assets.
COMPENSATION. Seller will not permit the Company nor Stratos to (1) enter
into or alter any employment agreements; (2) grant any increase in
compensation other than normal merit increases consistent with the Company's
general prevailing practices to any officer or employee; or (3) enter into
or alter any labor or collective bargaining agreement or any bonus or other
employee fringe benefit.
NO INDEBTEDNESS. Seller will not permit the Company nor Stratos to create,
incur, assume, guarantee or otherwise become liable with respect to any
obligation for borrowed money, indebtedness, capitalized lease or similar
obligation, except in the ordinary course of business consistent with past
practices where the entire net proceeds thereof are deposited with and used
by and in connection with the business of the Company and Stratos.
MAINTAIN BOOKS. Seller will cause the Company and Stratos to maintain its
books, accounts and records in the usual, regular ordinary and sound
business manner and in accordance with generally accepted accounting
principles applied on a basis consistent with past practices.
NO AMENDMENTS. Seller will not permit the Company and Stratos to amend its
corporate charter or bylaws (or similar documents) without prior consent of
Buyer and will cause the Company to maintain their corporate existence,
licenses, permits, powers and rights in full force and effect.
TAXES AND ACCOUNTING MATTERS. Seller will cause the Company and Stratos to
file when due all federal, state and local tax returns and reports which
shall be accurate and complete, including but not limited to income,
franchise, excise, ad valorem, and other taxes with respect to its business
and properties, and to pay as they become due all taxes or assessments,
except for taxes for which adequate reserves are established and which are
being contested in good faith by appropriate proceedings. Seller will not
permit the Company to change their accounting methods or practices or any
depreciation, amortization or inventory valuation policies or practices.
NO DISPOSITION OR ENCUMBRANCE. Except in the ordinary course of business
consistent with past practice, Seller will not permit the Company nor
Stratos to (1) dispose of or encumber any of its properties and assets, (2)
discharge or satisfy any lien or encumbrance or pay any obligation or
liability (fixed or contingent) except for previously scheduled repayment
of debt, (3) cancel or compromise any debt or claim, (4) transfer or grant
any rights under any concessions, leases, licenses, agreements, patents,
inventions, proprietary technology or process, trademarks, servicemarks or
copyrights, or with respect to any know-how, or (5) enter into or modify in
any material respect or terminate any existing license, lease, or contract.
INSURANCE. Seller will cause the Company to maintain in effect all its
current insurance policies.
NO SECURITIES ISSUANCES. Seller will not permit the Company nor Stratos to
issue any shares of any class of capital stock or enter into any contract,
option, warrant or right calling for the issuance of any such shares of
capital stock, or create or issue any securities convertible into any
securities of the Company except for the transactions contemplated herein.
NO DIVIDENDS. Seller will not permit the Company nor Stratos to declare,
set aside or pay any dividends or other distributions of any nature
whatsoever.
CONTRACTS. Seller will not permit the Company nor Stratos to enter into or
assume any contract, agreement, obligation, lease, license, or commitment
except in the ordinary course of business consistent with past practice or
as contemplated by this Agreement.
NO BREACH. Seller will not permit the Company nor Stratos to do any act or
omit to do any act which would cause a breach of any contract, commitment or
obligation of the Company.
DUE COMPLIANCE. Seller will cause the Company and Stratos to comply with
all laws, regulations, rules and ordinances applicable to it and to the
conduct of its business.
NO WAIVERS OF RIGHTS. Seller will not permit the Company nor Stratos to
amend, terminate or waive any material right whether or not in the ordinary
course of business.
CAPITAL COMMITMENTS. Seller will not permit the Company nor Stratos to make
or commit to make any capital expenditure, capital addition or capital
improvement.
NO RELATED PARTY TRANSACTIONS. Seller will not permit the Company nor
Stratos to make any loans to, or enter into any transaction, agreement,
arrangement or understanding or any other nature with, any officer,
director or employee of the Company.
NOTICE OF CHANGE. Seller will promptly advise Buyer in writing of any
material adverse change, or the occurrence of any event which involves any
substantial possibility of a material adverse change, in the business,
financial condition, results of operations, assets, liabilities or prospects
of the Company or Stratos.
CONSENTS. Seller will use their, and will cause the Company and Stratos to
use its, best good faith efforts to obtain the consent or approval of each
person or entity whose consent or approval is required for the consummation
of the Transactions contemplated hereby and to do all things necessary to
consummate the Transactions contemplated by the Basic Agreements.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby is
subject to the fulfillment by Seller prior to Closing of each of the
following conditions, which may be waived in whole or in part by Buyer:
COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of Seller contained in this Agreement shall
have been true and correct when made and shall be true and correct as of
the Closing with the same force and effect as if made at the Closing.
Seller shall have performed all agreements, covenants and conditions
required to be performed by Seller prior to the Closing.
NO ADVERSE CHANGE. There shall have been no event which has had or may
have a material adverse effect upon the business, financial condition,
results of operation, assets, liabilities or prospects of the Company.
NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative
proceeding before any court or other governmental agency shall be pending
or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
DOCUMENTS TO BE DELIVERED BY SELLER. Seller shall have delivered the
following documents:
Stock certificates representing all of the Shares, duly endorsed to Buyer
and in blank or accompanied by duly executed stock powers, copies of which
are attached as Exhibit "A".
A copy of (i) the Certificate of Incorporation of the Company, certified as
correct by the Company; and (ii) the Bylaws of the Company certified as
correct by the Company; and (iii) a certificate of the Georgia Tax
Commission, Franchise Tax Division, to the effect that the Company is in
good standing and has paid all franchise taxes in such state, all as
attached hereto as Exhibit "M";
All agreements referred to in paragraph 1.4 above, executed by all parties
thereto other than Buyer. All corporate and other records of or applicable
to the Company included but not limited to, current and up-to-date minute
books, stock transfer books and registers, books of accounts, leases and
material contracts. Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and
consummate this Agreement.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of
which may be waived in whole or in part by Seller:
COMPLIANCE WITH REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties made by Buyer in this Agreement shall have
been true and correct when made and shall be true and correct in all
material respects at the Closing with the same force and effect as if made
at the Closing, and Buyer shall have performed all agreements, covenants and
conditions required to be performed by Buyer prior to the Closing.
NO LEGAL PROCEEDINGS. No suit, action or other legal or administrative
proceedings before any court or other governmental agency shall be pending
or threatened seeking to enjoin the consummation of the Transactions
contemplated hereby.
OTHER AGREEMENTS. All parties other than Seller and the Company shall have
executed and delivered the Basic Agreements.
PAYMENTS. Seller shall have received from Buyer all Common Stock to be
issued at the Closing by Buyer pursuant to all the Basic Agreements.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
MODIFICATION. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
WAIVERS. Buyer and Seller may in writing extend the time for or waive
compliance by the other with any of the covenants or conditions of the other
contained herein.
TERMINATION AND ABANDONMENT. This Agreement may be terminated and the
purchase of the Shares may be abandoned before the Closing:
By the mutual consent of Seller and Buyer; By Buyer, if the representations
and warranties of Seller set forth herein shall not be accurate, or the
conditions precedent set forth in Article IV shall have not have been
satisfied, in all material respects; or By Seller, if the representations
and warranties of Buyer set forth herein shall not be accurate, or the
conditions precedent set forth in Article V shall not have been satisfied
in all material respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
MISCELLANEOUS
REPRESENTATIONS AND WARRANTIES TO SURVIVE. Unless otherwise provided, all
of the representations and warranties contained in this Agreement and in
any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall
constitute a waiver of any representation or warranty, and no such
representation or warranty shall be merged into the Closing.
BINDING EFFECT OF THE BASIC AGREEMENTS. The Basic Agreements and the
certificates and other instruments delivered by or on behalf of the parties
pursuant thereto, constitute the entire agreement between the parties. The
terms and conditions of the Basic Agreements shall inure to the benefit of
and be binding upon the respective heirs, legal representatives, successor
and assigns of the parties hereto. Nothing in the Basic Agreements,
expressed or implied, confers any rights or remedies upon any party other
than the parties hereto and their respective heirs, legal representatives
and assigns.
APPLICABLE LAW. The Basic Agreements are made pursuant to, and will be
construed under, the laws of the State of Georgia.
NOTICES. All notices, requests, demands and other communications hereunder
shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
If to Seller, to:
Mr. C. Xxxxxxx Xxxxx, Trustee
Xxxxx Children's Trust
X.X. Xxx 000000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
If to Buyer, to:
Mr. Xxxx Xxxxxx
Proactive Technologies, Inc.
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
These addresses may be changed from time to time by written notice to the
other parties.
HEADINGS. The headings contained in this Agreement are for reference only
and will not affect in any way the meaning or interpretation of this
Agreement.
COUNTERPARTS. This Agreement may be executed in counterparts, each of which
will be deemed an original and all of which together will constitute one
instrument.
SEVERABILITY. If any one or more of the provisions of this Agreement shall,
for any reason, be held to be invalid, illegal or unenforceable under
applicable law this Agreement shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein. The remaining
provisions of this Agreement shall be given effect to the maximum extent
then permitted by law.
FORBEARANCE; WAIVER. Failure to pursue any legal or equitable remedy or
right available to a party shall not constitute a waiver of such right, nor
shall any such forbearance, failure or actual waiver imply or constitute
waiver of subsequent default or breach.
ATTORNEYS' FEES AND EXPENSES. The prevailing party in any legal proceeding
based upon this Agreement shall be entitled to reasonable attorneys' fees
and expenses and court costs.
EXPENSES. Each party shall pay all fees and expenses incurred by it
incident to this Agreement and in connection with the consummation of all
transactions contemplated by this Agreement.
INTEGRATION. This Agreement and all documents and instruments executed
pursuant hereto merge and integrate all prior agreements and representations
respecting the Transactions, whether written or oral, and constitute the
sole agreement of the parties in connection therewith. This Agreement has
been negotiated by and submitted to the scrutiny of both Seller and Buyer
and their counsel and shall be given a fair and reasonable interpretation
in accordance with the words hereof, without consideration or weight being
given to its having been drafted by either party hereto or its counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first written above.
"BUYER"
PROACTIVE TECHNOLOGIES, INC.
BY: /s/ XXXX XXXXXX
XXXX XXXXXX, PRESIDENT
"COMPANY"
PDK PROPERTIES, INC.
BY: /s/ XXX X. XXXXX
XXX X. XXXXX, PRESIDENT
"STRATOS"
STRATOS INNS LLC
BY: /s/ XXX X. XXXXX
XXX X. XXXXX, MANAGER
"SELLER"
XXXXX CHILDREN'S TRUST
BY: /s/ C. XXXXXXX XXXXX
C. XXXXXXX XXXXX, TRUSTEE
List of Exhibits to Agreement:
A Shares of Stock Owned by Seller
B Outstanding Warrants, Options, Calls with regard to its Stock
C Contracts and Agreements of the Company re Profits or Assets
D Undisclosed Liabilities
E Exceptions to Title
F Insurance held by the Company
G Transactions with Certain Persons
H Material Contracts of the Company
I Employment Matters of the Company
J Authorizations of the Company
L Outstanding Rights, Options, Warrants, Commitments etc. to
Issue Shares of Buyer
K Employment Matters of Buyer
L Authorizations of Buyer
