STOCK EXCHANGE AGREEMENT
Flowers Properties, Inc.
This Stock Purchase Agreement (Agreement) is entered into this 12th day
of August, 1996, by and among PROACTIVE TECHNOLOGIES, INC., a Delaware
corporation (hereinafter referred to as PTE), FLOWERS PROPERTIES , INC., a
Georgia corporation (hereinafter referred to as Company or FPI) and XXXXXXX
X. XXXXXXX, XXXXXXX X. XXXXXXX, XX., XXXXXXXX XXXXXXX RICH, XXXXXXXXX XXXXXXX
XXXXXXXX, XXXX XXXXXX FLOWERS and XXXXXXX XXXXXXX XXXXXXX, (hereinafter
Flowers Group) being the sole shareholders of the Company.
WHEREAS, Flowers Groups are the owners of record and beneficially own all
of the issued and outstanding shares of the Common Stock of the Company (the
Shares):
WHEREAS, the Flowers Groups desire to sell all of their issued and
outstanding shares to PTE, and PTE wishes to buy all of the outstanding shares
as follows:
Xxxxxxx X. Xxxxxxx 31.5%
Xxxxxxx X. Xxxxxxx, Xx. 13.7%
Xxxxxxxx Xxxxxxx Rich 13.7%
Xxxxxxxxx Xxxxxxx Rich 13.7%
Xxxx Xxxxxx Flowers 13.7%
Xxxxxxx Xxxxxxx Xxxxxxx 13.7%
WHEREAS, PTE and Flowers Groups agree that the intent of this transaction
is to be a B reorganization under Section 368(1)(B) of the Internal Revenue
Code of 1986; and
WHEREAS, 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, the parties hereby agree as
follows:
ARTICLE I.
EXCHANGE OF THE SHARES
1.1 Exchange. Subject to the terms and conditions hereof, at the Closing
(as defined below), Flowers Groups agree to assign, transfer, convey and
deliver to PTE, and PTE agrees to exchange from Flowers Group, the shares of
FPI stock, copies of said shares which are attached as Exhibit A hereto.
1.2 Closing. The exchange shall be consummated at the Closing to take
place at the office of the PTE on or before August 12, 1996, unless otherwise
mutually agreed upon by the parties.
1.3 Exchange Terms. The aggregate exchange shares (Exchange Shares)
for the shares shall be as follows Three Hundred Fifty Thousand (350,000)
shares of the stock of PTE;
The above stock shall be paid at closing to the individual holders
in restricted stock, which PTE asserts to file with the SEC to have said stock
registered and unrestricted with all reasonable speed.
The parties agree that if the per share stock price of the Company,
as of the last ten trading days prior to December 31, 1996 (the average
closing stock price), shall not average at least $3.50 per share, then the
Flowers Group shall be given the number of shares of PTE stock which would
make up any difference between the average closing stock price and $3.50.
The individual disbursement of PTEK shares to the individual holders
of FPI stock shall be as follows:
Xxxxxxx X. Xxxxxxx 31.5% 110,250 PTEK shares
Xxxxxxx X. Xxxxxxx, Xx. 13.7% 47,950 PTEK shares
Xxxxxxxx Xxxxxxx Rich 13.7% 47,950 PTEK shares
Xxxxxxxxx Xxxxxxx XxXxxxxx
13.7% 47,950 PTEK shares
Xxxx Xxxxxx Flowers 13.7% 47,950 PTEK shares
Xxxxxxx Xxxxxxx Xxxxxxx 13.7% 47,950 PTEK shares
TOTAL 100% 350,000
ARTICLE II.
REPRESENTATIONS AND WARRANTIES
2.1. Representations and Warranties of Company. The Company represents
and warrants to PTE as follows:
A.) Organization. The Company is a corporation, duly incorporated,
validly existing in good standing under the laws of the State of Georgia, and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business.
B.) Authorized Capitalization. The authorized capitalization of
the Company consists of ( ) Shares of $ par value Common
Stock, of which ( ) shares have been issued and are
outstanding. The Shares have been duly authorized, validly issued, are fully
paid are non assessable and have no liability attaching to the ownership
thereof. The Company does not have any outstanding rights, call, options,
which obligate it to issue any of its shares of Capital Stock, whether
authorized or not. Further, the Company is not bound by any agreement,
contract, arrangement or understanding, whether oral or written, giving any
person or entity the right to participate, share in, or in any way, obligating
the Company to distribute any portion of its income, profits or assets.
C. Authority. The Company has full power and lawful authority to
execute and deliver this Agreement and the Stock Certificates in order to
consummate and perform all of the matters contemplated herein. The executed
Agreement and Stock Certificates constitute valid and legally binding
obligations upon the Company, enforceable in accordance with the terms
thereof. The execution and/or delivery of the Agreement or the Stock
Certificates and the consummation and performance of these matters conflicts
with, requires the consent, waiver or approval of, results in a breach or
default of or gives rise to others and interest or right of termination,
cancellation or acceleration of any material matter contained in this
Agreement or any other Agreement which the Company is a part thereof.
D. Property. As of Closing, the Flowers Group warrants and represents
that the Company has the following assets and debt at Closing, and the
valuations given are true and correct and the Flowers Group have a reasonable
basis and have used the same generally accepted accounting principles to
arrive at these values.
Site Est. Sales Value Debt Equity
Fairways at Xxxx Xxxxx
$ 744,100 79,985 664,115
Woodlands 988,000 148,956 831,044
Pine Summit Phase I 27,000 27,000
Pine Summit Phase II 270,000 100,277 169,723
Subtotal 2,021,100 329,218 1,691,882
Projected Equity
Phase III 490,000 224,000 266,000
Totals 2,511,100 553,218 1,957,882
Pine Summit Phase III
28 lots @ $17,500 sales
490,000
28 lots @ $8,000 dev.cost
(224,000)
Projected Equity 266,000
A schedule of lots owned by Company, as well as copies of all
encumbrances thereon are attached as Composite Exhibit B and are warranted and
represented by the Flowers Group to be the only assets and liabilities of the
Company as of the date of Closing.
E. Company's Financial Statements. The Company's statements are
complete, were provided to Buyers and Buyers have had ample time to read and
understand said financial statements and perform due diligence required to the
satisfaction of the Buyer. Except as disclosed in the financial statements,
the company is not aware of any material liabilities for which the Company is
liable or will become liable in the future. Further, Sellers agree to provide
audited financials within forty five (45) days of the date hereof.
F. Taxes. The Company has filed all taxes, state, federal, and
local, as well as any other reports and returns which were required to be
filed and there exists a substantial basis in law or fact for any positions
taken in such reports. To the best of the knowledge of the Company, there are
no back taxes, penalties or interest due at this time.
G. Books and Records. The Company's books and records are complete and
correct and have been maintained according to good business practices and
accurately reflect in all material respects reflects the business, financial
condition and results of the operation of the Company as set forth in the
Company's Financial statements.
H. Insurance.The Company has the following insurance associated with
its policies of general liability, fire and extended coverage, worker's
compensation, products liability, property and indemnity and performance bonds
as listed on Exhibit D, and is not in default with any provisions thereof, and
said insurance is sufficient for compliance by Company with all requirements
of law and all agreements affecting Company. Company warrants that these
coverages will remain in full force and effect through Closing of this
transaction and will not be affected by, terminate or lapse by reason of the
transactions contemplated in this Agreement.
I. Material Agreements. All material agreements, employment
agreements, contracts or other material arrangement with any officer, director
or shareholder of the Company or any relative of such person, or any
agreements which would have a material affect on the business, financial
condition, results of operation, assets, liabilities, or prospects of the
Company have been disclosed in the attached Exhibit E. If not disclosed in
this exhibit, Company warrants that it does not exist.
J. Permits. All necessary permits, licenses, approvals, or other
authorizations that are materially necessary for the conduct of its business
are set forth in Exhibit F, and all are still in full force and effect and are
agreed to be transferred as a part of this transaction.
K. Compliance. The Company is not in violation of any federal, state
or local law, ordinance or rule or regulation applicable to its business, nor
has it received any actual or threatened complaint, notice or citation of
violation from any governmental authority. Further, Company is in compliance
with all applicable pollution control and environmental laws, rules and
regulations in all material respects, and has no environmental licenses,
permits or authorizations.
L. Litigation. There are no actions, suits, claims, complaints,
proceedings pending or threatened against the Company or the Flowers Groups,
or either of them, at law or in equity; and there are no facts which would
provide a legitimate basis for any such action, suit or proceeding, which if
decided against the Company or Flowers Groups or either of them, would have a
materially adverse effect on the Company. Further, there are no outstanding
orders, judgments or decrees of any person or governmental authority which
specifically affect the Company or any of its assets.
M. Validity of existing contracts. All material contracts,
agreements. Leases and licenses, which the Company is a party or by which 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 giving timely notice,
would exist on the part of the Company or of any other party.
N. No material changes. Since July 1, 1996, there have been no
actual or threatened developments of a nature that is materially adverse or
materially adversely affects the business, financial condition of the
business, its assets, liabilities or prospects.
O. Fees. All negotiations relating to this Transaction have been
conducted in such a manner so as not to give rise to any finder's fees,
broker's commissions, advisory fees for which the Company or the PTE will or
may be liable.
P. Full Disclosure. All statements of the Company contained in this
Agreem ent and other documentation delivered on behalf of the Company or the
Flowers Group to PTE are true and correct in all material respects and do not
omit any material fact necessary to make the statements contained therein
misleading in light of the circumstances under which they were made.There are
no facts known to the Company, which could have a materially adverse affect on
the business, financial condition, results of operation, assets, liabilities,
or prospects of the Company, which have not been disclosed to PTE in this
Agreement or its exhibits.
2.2 Representations and Warranties of Flowers Group. Flowers Group
represents and warrants to PTE, with respect to the Shares owned by the
Flowers Group, as follows:
a. Title to the Shares. At Closing, Flowers Groups shall own of
record and beneficially the number of shares listed in Paragraph 1.3 of the
Company, free and clear of all encumbrances, liens, pledges, claims, options,
charges and assessments of any nature whatsoever, with full right and
authority to transfer said shares to PTE. 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, nor are there any outstanding rights options, warrants, or calls
with respect to the Shares.
b. Ownership Rights. Flowers Group warrant that as of Closing they
will be the record owner of all of the properties, rights to contracts,
assignee of permits, etc. as set forth in Paragraph 2.1 (d), (e) and (f), and
that said property has estimated fair market values as set forth therein.
2.3 Representations of the Warranties of PTE. PTE represents and warrants
as follows:
a. Organization. PTE is a corporation, duly incorporated, validly
existing, and in good standing under the laws of the State of Delaware, and
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business.
b. Authority. PTE has full power and authority to execute and
deliver this Agreement and to consummate and perform the transactions
contemplated thereby. These agreements shall constitute legal and binding
obligations on the PTE, enforceab le in accordance with their xxxxx.Xx consent
or approval must be obtained from any other person or entity. Further, the
consummation and performance of the transactions contained herein, does not
conflict with, require the approval of , result in a breach or default
hereunder, or give to other any interest or right of termination, cancellation
or acceleration, in or with respect to, any material agreement to which PTE is
a party or by which PTE or any of its material assets or properties are
affected.
c. Investment intent. PTE is acquiring the shares for its own account,
for investment purposes only, and not with a view toward the sale or
distribution of any part thereof, and PTE has no present intention of selling,
granting participation in, or otherwise distributing same to any entity to
which it does not control. PTE understands the specific risks related to any
investment in the shares, especially as it relates to the financial
performance of the Company.
d. No Litigation. There are no action, suits, claims, complaints, or
proceedings pending or threatened against PTE, at law or in equity, or before
any governmental department; and there are no facts which would provide a
legitimate basis for any such action, suit, or proceeding, which, if
determined adversely to the PTE, which would have a material affect on the
PTE. There are no judgments, orders, r decrees outstanding which specifically
apply to any of the PTE's assets.
ARTICLE III.
COVENANTS.
3.1 Covenants of the Company. Company covenants and agrees that from the
date hereof to the closing without the prior written consent of PTE the
following will occur:
a. Ordinary Course of Business. The Company will operate its business
only in the ordinary course, and will use its best efforts to preserve the
Company's business, organization, goodwill and relationships with persons
having business dealings with the Company.
b. Maintain Equipment and Properties. The Company will maintain all of
its equipment and properties in good working order and repair, (reasonable
wear and tear excepted) and will take all necessary steps to maintain in full
force and effect its patents trademarks, trade names, goodwill and other
intangible assets.
c. Compensation and Indebtedness. The Company will not enter or
alter any employment agreement or increase any compensation to any officer or
employee or enter into any collective bargaining agreements. Also, the Company
will not make any loans or enter into any transaction, agreement, arrangement
or understanding of any material nature with any of its officers, directors,
or employees. Further, the Company will not create, incur, assume or otherwise
guarantee any obligation for borrowed money, indebtedness, lease, except in
the ordinary course of business consistent with past practices.
d. No Amendments. The Company will not amend its corporate charter,
articles or bylaws without prior consent of PTE, and Company will maintain its
corporate existence, licenses, permits powers, and rights in full force and
effect.
e. No Disposition or Encumbrance. Except in the ordinary course of
business consistent with past practice, the Company will not dispose of any
asset of the Company, or satisfy any liability or obligation, except for
previously scheduled repayment of debt. Further, the Company will not cancel
or compromise any debt or encumbrance, grant any rights under concessions,
licenses, agreements, patents, inventions, technology or process with respect
to any know-how, or modify or terminate any existing license, lease or
contract.
f. Insurance. The Company will maintain in effect all current
insurance policies.
g. No dividends. The Company will not declare, set aside or pay any
dividends or other distributions of any nature whatsoever.
h. No Breach and Due Compliance. The Company will not do any act or
omit to do any act which would cause a breach of any of its material
contracts. Further, the Company will comply with all laws, regulations and
rules applicable to it and to the conduct of its business. The Company will
also not amend, terminate, or waive any material right, whether or not in the
ordinary course of business, without prior written consent of PTE.
I. Notice of Change. The Company will promptly advise PTE in writing
of any material adverse change, or of the occurrence of an event which
involves any substantial possibility of a material adverse, in its business,
financial condition, results of operations, assets, liabilities, or prospects.
j. Tax Free Reorganization. It is the express intent of the parties to
this agreement that the transaction described in this Agreement is intended as
a tax free exchange D reorganization as under Section 368(a) (1) (B) of the
Internal Revenue Code of 1986.
ARTICLE IV.
CONDITIONS PRECEDENT TO CLOSE
The obligation of PTE and Flowers Group to close the Transaction
contemplated hereunder is subject to fulfillment by the Company, Flowers Group
and PTE of each of the following conditions, which may be waived in whole or
in part in writing:
4.1 Compliance with Representations, Warranties and Covenants. The
representations and warranties of the Company and Flowers Groups and of the
PTE have been true and correct when made and shall be true and correct as of
the Closing Date with the same force and effect as if made at Closing. The
Company, Flowers Groups and PTE shall have performed all agreements, covenants
and conditions required to be performed prior to Closing.
4.2 No Adverse Change. Subsequent to the date of this Agreement and the
Closing, there shall have been no event which has had a material adverse
effect upon the business, financial condition, results of operation, assets,
liabilities or prospects of the Company.
4.3 No Legal Proceeding. No suit, action, or other legal or
administrative proceeding before any court or other governmental agency shall
be pending seeking to enjoin the consummation of this Transaction.
4.4 Minimum Fair Market Value. PTE represents that for the ten (10)
trading days prior to December 31, 1996, PTE' stock shall average at least
$3.50 per share. In the event that the average in that time period fails to
meet that requirement, PTE shall deliver more stock to the Flowers Groups to
bring their stock equivalent as if the stock had averaged $3.50 per share as
of December 31, 1996.
4.5 Documents to be Delivered by the Company and Flowers Groups. The
Company and Flowers Groups shall have delivered the following:
A. Stock certificates representing the Shares listed in Paragraph 1.3,
duly endorsed to PTE and in blank or accompanied by duly executed stock powers
B. A copy of the Articles of Incorporation and Bylaws of the Company,
as amended to date, certified as correct by the Company,
C. Certificate of Good Standing from the State of Georgia.
D. All agreements referred to in Paragraph 1.4, executed by all parties
E. All corporate and other records of or applicable to the Company,
including, but not limited to: current and up to date minute books, stock
transfer books and registers, books of accounts, list of properties held or to
be held by the Company, leases and material contracts.
F. Such other documents or certificates as shall be reasonably required
by PTE or its attorney to close or consummate the transaction.
4.5 Documents to be delivered by PTE.
A. PTE shall have delivered a certificate of good standing from the
Secretary of State of the State of Delaware.
B. All agreements referred to in Paragraph 1.4, executed by all parties
ARTICLE V.
MISCELLANEOUS
5.1 Modification. PTE, the Company and Flowers Group may amend, modify, or
supplement this Agreement in any manner as they mutually agree only in
writing.
5.2 Termination and Abandonment. This agreement may be terminated and the
purchase of the shares may be abandoned before this Closing:
a. By the mutual consent of the Flowers Group, the PTE, and the
Company.
b. By PTE, if the representations and warranties of the Company or
Flowers Group set forth shall not be accurate; or the condition precedent set
forth in Article IV shall not have been satisfied in all material respects; or
c. By the Company or Flowers Group, if the representations and
warranties of PTE set forth herein shall not be accurate, or the conditions
precedent set forth in Article IV shall not have been satisfied in all
materials respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefore.
5.3 Assignability. PTE may not assign this Agreement without the express,
prior, written consent of Flowers Group.
5.4 Binding Effect. This Agreement, together with all other documentation
delivered as exhibits or part of this transaction constitute the entire
agreement between the parties. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective heirs, legal
representatives, assigns of the parties hereto.
5.5 Applicable Law. This Agreement and Transaction is are made pursuant
to and will be construed under, the laws of Florida.
5.6 Notices. All notices, requests, demands and other communication
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, certified return receipt requested to:
a.) If to PTE, to:
Proactive Technologies, Inc.
Xxxx X. Xxxxxx, President
0000 Xxxxx Xxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
b.) If to Flowers Group, to:
Xxxxxxx X. Xxxxxxx, Xx.
X.X. Xxx 000
Xxxxxxxxxxx, Xxxxxxx 00000-0000
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Fax: (000) 000-0000
Any change in addresses may be made provided written notice is given to the
other parties.
5.7 Headings. The headings contained herein are for reference only and do not
affect in any way the meaning or interpretation of this agreement.
5.8 Severability. If any one or more of the provisions of this Agreement
shall, for any reason, be construed to be invalid, illegal or unenforceable
under applicable law, this Agreement shall be construed as if the invalid,
illegal or unenforceable provision had never been contained therein. The
remaining provisions of this Agreement shall be given effect to the maximum
extent then permitted by law.
5.9 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.
5.10 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 PTE and Flowers Group and
shall be given a fair and reasonable interpretation in accordance with the
words hereof, without consideration or weight to its having been drafted by
either party.
5.11 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.
5.12 Exhibits. The following is a list of the Exhibits attached to this Stock
Purchase Agreement:
Exhibit Section Identification
A. Copies of shares of
stock held in name of
Six FPI shareholders
B. List of Lots and
Properties and
Encumbrances owned by FPI
C. Not Applicable
D. List of Insurance
E. List of Material Agreements of FPI
F. Copies of Permits, Licenses, Approvals, etc.
IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement
on the date first written above.
Witness PTE
Witness PROACTIVE TECHNOLOGIES, INC.
Witness By:
Xxxx X. Xxxxxx,President
Witness
THE COMPANY
Witness
FLOWERS PROPERTIES, INC.
Witness By:
Xxxxxxx X. Xxxxxxx, Xx.,
President
Witness
Witness
Witness FLOWERS GROUP
Witness
Xxxxxxx X. Xxxxxxx
Witness
Witness Xxxxxxx X. Xxxxxxx, Xx.
Witness Xxxxxxxx Xxxxxxx Rich
Witness Xxxxxxxxx Xxxxxxx XxXxxxxx
Witness Xxxx Xxxxxx Flowers
Witness Xxxxxxx Xxxxxxx Xxxxxxx
