AGREEMENT AND PLAN OF REORGANIZATION BY AND
AMONG PROACTIVE TECHNOLOGIES, INC., XXXXXX XXXXX AND XXX XXXXX AND
WEST SIDE INVESTORS, INC.
THIS AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") is entered into
this 28th of December, 1998, by and among PROACTIVE TECHNOLOGIES, INC., a
Delaware corporation (hereinafter referred to as "Buyer"); and XXXXXX XXXXX and
XXX XXXXX (hereinafter referred to as "Seller"), being the sole shareholders of
WEST SIDE INVESTORS, INC., a Georgia corporation (hereafter collectively
referred to as "Company").
WHEREAS, Seller is the owner of record and beneficially owns Three
Thousand (3,000) shares of the issued and outstanding shares of Common Stock of
the Company (the "Shares");
WHEREAS, the Company owns 100% of P&W Stonebridge, L.L.C. and P&W
Headland, L.L.C., both Georgia Limited Liability Companies (collectively
referred to as "P&W");
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:
I.
SALE AND PURCHASE OF THE SHARES
1.1 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 together constitute
100% of the issued and outstanding Shares of Common Stock of the Company.
1.2 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 December
30, 1998 ("Closing Date").
1.3 Purchase Price. The aggregate purchase price ("Purchase Price") for the
Shares shall be Three Million One Hundred Thousand (3,100,000) 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.
1.4 Allocation of Shares. All shares of stock of Buyer to be issued to
Seller or his assigns pursuant to this Agreement shall be issued as described in
Exhibit "A" hereto.
1.5 Other Agreements. At the Closing, the indicated parties shall execute
and deliver the following additional agreements in substantially the form
attached hereto:
(a) Execution of a Closing Certificate between the Company and the
Seller.
(b) Stock certificates representing all of the Shares, duly endorsed
to Buyer and in blank or 1.6 Basic Agreements and Transactions Defined.
This Agreement and other agreements listed in paragraph 1.5 are sometimes
referred to as the "Basic Agreement". The transactions contemplated by the
Basic Agreement are sometimes referred to as the "Transactions."
II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer as follows:
(a) 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.
(b) 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.
(c) Authorized Capitalization. The authorized capitalization of the
Company consists of One Million (1,000,000) shares of Common Stock, $1.00
par value, of which Three Thousand (3,000) shares have been issued and are
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 "D" 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 "E" attached hereto, the Company 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 Company's income, profits or assets, or obligating the Company to
distribute any portion of its income, profits or assets.
(d) 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.
(e) Company Financial Statements. The P&W 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
October 30, 1998.
(f) No Undisclosed Liabilities. Except as set forth in the P&W
Financial Statements previously delivered to Buyer and as set forth on
Exhibit "E", Seller is not aware of any liabilities for which the Company
is liable or will become liable in the future.
(g) 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.
(h) Properties. P&W 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 "F". The assets
and properties owned, operated or leased by P&W and used in their business
are in good operating condition, reasonable wear and tear excepted, and
suitable for the uses for which intended.
(i) Books and Records. The books and records of the Company and P&W
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 conditions and results of
operations of the Company and P&W as set forth in the Company Financial
Statements.
(j) Insurance. Exhibit "G" 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 P&W. Neither the Company nor P&W 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 P&W 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.
(k) Transactions with Certain Persons. Except as disclosed in Exhibit
"H", 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.
(l) Material Contracts. Except as set forth in Exhibit "I", 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.
(m) Employment Matters. Exhibit "J" 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 "J", 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.
(n) 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 "K" 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.
(o) No Powers of Attorney. The Company has no powers of attorney or
similar authorizations outstanding.
(p) 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 has not received any actual or threatened
complaint, citation or notice of violation or investigation from any
governmental authority.
(q) 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.
(r) 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.
(s) 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.
(t) No Adverse Changes. Since October 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.
(u) 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 would have a
materially adverse effect 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.
2.2 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) 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.
(b) Authorized Capitalization. The authorized capitalization of
the Buyer consists of Sixty Million (60,000,000) shares of Common
Stock, $.04 par value, of which Sixteen Million Four Hundred
Forty-Nine Thousand Two Hundred Fifty-Three (16,449,253) 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.
(c) 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.
(d) 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.
(e) 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 withholding 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.
(f) 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.
(g) 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.
(h) 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.
(i) Employment Matters. Exhibit "Q" 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.
(j) 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 "R" 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.
(k) 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 has not received any actual or
threatened complaint, citation or notice of violation or investigation
from any governmental authority.
(l) 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.
(m) 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 conditions, results of operations, assets,
liabilities, or prospects of the Buyer.
(n) 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 would have a materially adverse effect 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.
III.
COVENANTS
3.1 Covenants of Seller. Seller covenants and agrees that from the date
hereof to the Closing without the prior written consent of Buyer:
(a) Ordinary Course of Business. Seller will operate the
business of P&W 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.
(b) Maintain Properties. Seller will maintain all of the P&W's
properties in good working order, repair and condition (reasonable wear
and use excepted) and cause P&W 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.
(c) Compensation. Seller will not permit the Company nor P&W
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.
(d) No Indebtedness. Seller will not permit the Company nor
P&W to create, incur, assume, guarantee or otherwise become liable with
respect to any obligation for borrowed money, indebtedness, capitalized
lease or similar obligations, 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 P&W.
(e) Maintain Books. Seller will cause the Company and P&W 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.
(f) No Amendments. Seller will not permit the Company and P&W
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.
(g) Taxes and Accounting Matters. Seller will cause the
Company and P&W 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.
(h) No Disposition or Encumbrance. Except in the ordinary
course of business consistent with past practice, Seller will not
permit the Company nor P&W to (1) dispose of or encumber any of its
properties and assets, (2) discharge or satisfy any lien or encumber 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.
(i) Insurance. Seller will cause P&W to maintain in effect all
its current insurance policies.
(j) No Securities Issuances. Seller will not permit the
Company nor P&W 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.
(k) No Dividends. Seller will not permit the Company nor P&W
to declare, set aside or pay any dividends or other distributions of
any nature whatsoever.
(l) Contracts. Seller will not permit the Company nor P&W 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.
(m) No Breach. Seller will not permit the Company nor P&W to
do any act or omit to do any act which would cause a breach of any
contract, commitment or obligation of the Company.
(n) Due Compliance. Seller will cause the Company and P&W to
comply with all laws, regulations, rules and ordinances applicable to
it and to the conduct of its business.
(o) No Waivers of Rights. Seller will not permit the Company nor
P&W to amend, terminate or waive any material right whether or not in
the ordinary course of business.
(p) Capital Commitments. Seller will not permit the Company nor
P&W to make or commit to make any capital expenditure, capital
addition or capital improvement.
(q) No Related Party Transactions. Seller will not permit the
Company nor P&W to make any loans to, or enter into any transaction,
agreement, arrangement or understanding of any other nature with, any
officer, director or employee of the Company.
(r) 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 P&W.
(s) Consents. Seller will use their, and will cause the Company
and P&W 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.
IV.
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:
4.1 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.
4.2 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 operations, assets, liabilities or prospects of the Company.
4.3 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.
4.4 Documents to be Delivered by Seller. Seller shall have delivered
the following documents:
(a) 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".
(b) 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 "T".
(c) All agreements referred to in paragraph 1.5 above,
executed by all parties thereto other than Buyer.
(d) 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.
(e) Such other documents or certificates as shall be
reasonably required by Buyer or its counsel in order to close and
consummate this Agreement.
V.
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:
5.1 Compliance with Representations, Warranties and Covenants. The
representations and warranties 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.
5.2 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.
5.3 Other Agreements. All parties other than Seller and the Company shall
have executed and delivered the Basic Agreements.
5.4 Payments. Seller shall have received from Buyer all Common Stock to
be issued at the Closing by Buyer pursuant to all the Basic Agreements.
VI.
MODIFICATION, WAIVERS, TERMINATION AND EXPENSES
6.1 Modification. Buyer and Seller may amend, modify or supplement this
Agreement in any manner as they may mutually agree in writing.
6.2 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.
6.3 Termination and Abandonment. This Agreement may be terminated and
the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) 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 been satisfied, in all material
respects; or
(c) 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.
VII.
MISCELLANEOUS
7.1 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.
7.2 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, successors 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.
7.3 Applicable Law. The Basic Agreements are made pursuant to, and will be
construed under, the laws of the State of Georgia.
7.4 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:
(a) If to Seller, to:
Mr. Xxxxxx Xxxxx
West Side Investors, Inc.
0000 Xxxxxxxxx Xxxx, X.X., #000
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) 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.
7.5 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.
7.6 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.
7.7 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 provisions had never been contained herein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
7.8 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.
7.9 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.
7.10 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.
7.11 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"
WESTSIDE INVESTORS, INC.
By: /s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx, President
"P&W"
PAW STONEBRIDGE, L.L.C.
By: /s/Xxxxxx Xxxxx
Xxxxxx Xxxxx, Manager
P&W HEADLAND, L.L.C.
By: /s/Xxxxxx Xxxxx
Xxxxxx Xxxxx, President
"SELLER"
/s/ Xxxxxx Xxxxx
Xxxxxx Xxxxx
By: /s/Xxx Xxxxx
Xxx Xxxxx
