UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[x] ANNUAL REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File No: 000-26463
BACTROL TECHNOLOGIES, INC. f/k/a Owl Capital Corp.
(Name of small business issuer in its charter)
New York 11-2665282
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
c/o Associates Investment Corporation, Inc.
1109 North 21 Avenue, Suite 120
Hollywood, Florida 33021
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number: (954) 923-6002
Securities issued under Section 12(b) of the Exchange Act: None
Securities issued under Section 12(g) of the Exchange Act: None
Check whether the issuer (1) filed all reports required to filed by Section 13
or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such a reports), and (2) has
been subject to such filing requirements for the past 90 days. [ ] yes [ ]
no.
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure
contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10KSB or any amendment to this form. [ ]
State the issuer's revenues for its most recent fiscal year. None.
The aggregate market value of the common voting stock held by non-affiliates as
of March __, 2000: Not determinable.
Shares outstanding of the registrant's common stock as of December 31, 1999:
593,500 shares
PART I - DESCRIPTION OF THE BUSINESS
Bactrol Technologies, Inc. (the "Company") was incorporated under the
laws of the State of New York on the 31st day of August, 1983, under the
name Owl Capital Corp. The company became public when its registration
Statement under the Securities Act of 1933 was filed with the Securities and
Exchange Commission became effective on December 2, 1983 and closed on
March 2, 1984 as Owl Capital, Corp. Upon the sale of 2,000,000 shares of its
common stock to the public. The company was originally developed to provide
financial consulting services. In 1984, the company ceased doing business
and had not engaged in any enterprises since that time.
On May 16, 1988 the amended its Articles of Incorporation to change
its name to Bactrol Technologies, Inc in anticipation of the acquisition
of a private business operating under a similar name. Subsequently that
acquisition contract was rescinded and the company remained as a
non-functioning non-trading public shell corporation with no assets.
In 1998 the company filed a Form 10-SB with the Securities and
Exchange Commission in an attempt to seek out,
investigate and acquire any suitable assets, property or other business
potential. No specific business or industry was originally contemplated.
The company was then a "blank check" company for the purpose of
seeking a business acquisition without regard to any specific industry
of business.
On October 4, 1999, at a special meeting of the Board of Directors, the
Board unanimously approved a 1 to 20 reverse split of the Company's common
stock and authorized an amendment to the Company's Articles of Incorporation
to change its authorized common shares to 593,500 sharers of common stock,
par value $.0001 per share. The Amendment will be filed with the New York
Secretary of State upon ratification by the company's majority stockholders.
A stockholder meeting is presently scheduled for June 30, 2000. The
reverse stock split was effective on October 4, 1999.
On 15th day of October, 1999 the company held a special meeting of the
Board of Directors the Board unanimously approved a Plan and Agreement of
Merger with Military Resale Group, Inc. This merger is dependent upon
Bactrol Technologies, Inc. becoming listed on the NASD Bulletin Board at
which time the merger would come into full force and effect concurrent
with that listing.
ITEM 2. - DESCRIPTION OF PROPERTY
The company's executive offices are located at in care of Associates
Investment Corporation, Inc., 1109 North 21 Avenue, Suite 120, Hollywood,
Florida 33020 telephone (954) 923-6002 The company neither owns nor rents
any real properties. The company is currently sharing space with Associates
Investment Corp., which is the office space of Guy Galluccio, who is the
President of Bactrol Technologies, Inc. This office space is fully equipped
with a computer, fax machine copying machine, files and bookcase. The
company has no written lease. The term of the oral lease is on a month to
month basis at no cost to the company.
ITEM 3 - LEGAL PROCEEDINGS
The company is not involved in any litigation nor does management
know of any litigation involving the company which may be filed in the
future.
ITEM 4 - SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders through solicitation
of proxies or otherwise during the fourth quarter of the fiscal year covered by
this report.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS
The company's common stock is not currently trading, but the company
is in the process of attempting to become listed on the NASD Bulletin Board.
The company believes there will be a market for the common stock of the
company on the over-the-counter market. The market for the company's common
stock will depend upon the ultimate value of the business which the company may
acquire. Should the business become profitably productive, management
believes that a fair market price for the stock will develop. In the event
the company's operations show a profit beyond the company's need for
expansion capital it is the intention of management to declare quarterly
cash dividends. It should be noted that, since the company has not as yet
started or acquired any business, the above is speculation on the part of
management.
On the 15th day of October, 1999 the company issued 1,000 common
shares, $.0001 par value to Alan Finfer and issued 2,500 common shares,
$.0001 par value to Richard Tannebaum in exchange for serving in their
respective capacities as of September 30, 1998.
The approximate number of shares held by record holders of the
Company's common stock as of December 31, 1999 is 593,500.
The company has not paid any cash dividends to date and does not
anticipate or contemplate paying dividends in the foreseeable future. It is
the present intention of management to utilize all available funds for the
development of the company's business.
ITEM 6 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Since its inception, the company has had no revenues from operations
and has relied almost exclusively on stockholder loans and the sales of
securities to raise capital to fund operations. As of December 31, 1999
the company had no cash.
The Company has a non-interest bearing demand note receivable from
Bionic Financial Corporation at December 31, 1999 and December 31, 1998.
ITEM 7 - FINANCIAL STATEMENTS
Audited, consolidated balance sheets as of December 31, 1999 and
December 31, 1998, and related statements of operations, stockholders'
equity (deficiency) and cash follows are included after Item 12 herein.
ITEM 8 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Management is not aware, and has not been advised by any former
accountants, of any disagreement on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure.
management has not consulted the accountants regarding either the application
of accounting principles to any specified transaction or any disagreement
with any former accountant.
PART III
ITEM 9 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS:
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
The current directors of the Company will serve until the next annual
(or special in lieu of annual) meeting of shareholders at which time
directors are elected and qualified. Names, age, period served and
positions held with the company are as follows:
Name Age Positions with Company
Guy A. Galluccio, Sr. 62 President and Director
Alan Finfer 64 Secretary, Treasurer and
Director
GUY A. GALLUCCIO, SR. -- President and Director In 1998, Mr. Galluccio became
the President and a member of the Board of Directors of the company. His
duties are the general administration of the company and carrying out the
policies established by the Board of Directors. In addition since 1996 he has
worked as President and a Director of Associates Investment Corporation and
has conducted a business brokerage service for that company since its
inception. From 1988 to 1996, Mr. Galluccio was the President and Director of
Omni Financial Management, Inc. which was incorporated in 1988. Mr. Galluccio
also conducted a business brokerage business for this entity. His duties with
that company included the general management of the company. Education: Mr.
Galluccio's formal education was terminated when he graduated from Manhattan
Aviation School in 1954.
ALAN FINFER -- Vice President and Director Mr. Finfer was elected
Vice-President Secretary, Treasurer and Director on May 15, 1998. He assists
Mr. Galluccio in the administration of the company. From 1997 to the present,
Mr. Finfer has been employed by Lois Inc. (Law Office Information Systems),
which is located in Van Buren, Arkansas, as a Sales Representative in
Florida for this legal publisher. Prior to that time, Mr. Finfar was a sales
representative for Lawyers Coop Publishing Company. During his thirteen years
in their employment Mr. Finfer was awarded the Presidents Club Award for
reaching the highest interest over quota in his Region. Education: Mr. Finfer
obtained his degree specializing in dentistry from New York City Community
College in 1955.
DIRECTORSHIPS
Alan Finfer is a director of Sun Reporter, Inc. now called Photon
Pharm, Inc. However, Sun Reporter is not engaged in any business at the
present time and there is no conflict between Mr. Finfer's duties with
Bactrol and his duties with Photon Pharm, Inc.
IDENTIFICATION OF CERTAIN SIGNIFICANT EMPLOYEES
None
FAMILY RELATIONSHIPS
None
ITEM 10 - EXECUTIVE COMPENSATION
None of the officers or directors have received any compensation for their
services with the company to date nor will they receive any remuneration from
the company for serving in these positions other than reimbursement for
out-of- pocket expenses incurred on behalf of the company during the year
ending December 31, 1999. Out of pocket expenses is defined as the moneys
expended on behalf of the company while engaged in the company's business
such as travel expenses and items purchased for the company, etc. After that
time, future salaries of the officers and directors will be set by the Board
of Directors depending on the financial condition of the company. There are
no arrangements or understandings pursuant to which any persons were or are
to be selected as an officer or director of the company nor do any of the
officers or directors serve as a nominee for another person.
ITEM 11 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Name & Address of Amount & Nature or Percent of
Beneficial Owner Beneficial Ownership Class
Alan Finfer 1,000 Common stock .17%
745 NW 73 Avenue
Plantation, FL 33313
Guy A. Galluccio, Sr. 45,900 Common stock 7.73%
1109 North Second Avenue
Apartment 120
Hollywood, FL 33020
ITEM 12 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
No transactions have taken place during the last two years between
the company and any of its officers, directors, any nominees for such
offices or shareholders nor are there any proposed such transactions,
other than the sharing of office space previously mentioned in Item 6
above or the issuance of shares of stock set forth in Item 5.
PART F/S
BACTROL TECHNOLOGIES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
INDEPENDENT AUDITOR'S REPORT
To The Stockholders of
Bactrol Technologies, Inc.
We have audited the accompanying balance sheets of Bactrol Technologies, Inc.
as of December 31, 1999 and 1998 and the related statements of operations,
stockholders' deficit and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatements. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Bactrol Technologies, Inc.
as of December 31, 199 and 1998 and the results of its operations and cash
flows for the years then ended, in conformity with generally accepted
accounting principles.
/S/
Puritz & Weintraub, LLP
Weston, Florida
March 15, 2000
BACTROL TECHNOLOGIES, INC.
BALANCE SHEETS
ASSETS
December 31,
1999 1998
Notes Receivable $ 1,500 $ 1,500
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payables and other
Liabilities $ 3,680 $11,430
Corporate taxes payable 0 $11,310
Loan Payable 27,511 0
Total current liabilities 31,191 22,740
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value
50,000,000 shares authorized,
593,500 and 590,000 shares
issued and outstanding at
December 31, 1999 and 1998,
Respectively 59 59
Additional paid-in capital 16,193 5,193
Deficit (45,943) (26,492)
Total stockholders' deficit (29,691) (21,240)
TOTAL LIABILITIES AND STOCKHOLDERS'
DEFICIT $ 1,500 $ 1,500
Notes to financial statements are an integral part of this statement.
BACTROL TECHNOLOGIES, INC.
STATEMENT OF OPERATIONS
For the year ended
December 31,
1999 1998
Revenue $0 $0
Expenses:
Interest 0 1,902
Office expense 1,000 0
Penalties 0 1,672
Professional Fees 18,400 950
State corporate charter 51 325
Total expenses 19,451 4,849
Net (Loss) $(19,451) (4,849)
Net (Loss) per common share
(basic and diluted) $ (0.03) $(0.01)
Average shares outstanding 590,875 590,000
Notes to financial statements are an integral part of this statement.
BACTROL TECHNOLOGIES, INC.
STATEMENT OF STOCKHOLDERS DEFICIT
For the years ended December 31,1999 and 1998
Addition
Common Stock Paid-in
Shares Amount Capital Deficit
Balance at December 31,1997 590,000 $ 59 $ 5,193 $ (21,643)
1998 net loss 0 0 0 (4,849)
Balance at December 31,1998 590,000 59 5,193 (26,492)
Sales of common stock 3,500 - 11,000
December 31, 1999 net loss 0 0 0 (19,451)
Balance at December 31, 1999 593,500 $ 59 $ 16,193 $ (45,943)
Notes to financial statements are an integral part of this statement.
BACTROL TECHNOLOGIES, INC.
STATEMENTS OF CASH FLOWS
For the year ended
December 31,
2000 1998
OPERATING ACTIVITIES
Net (Loss) $(19,451) $(4,849)
Adjustments to reconcile net (loss to
Cash (used in) operating activities:
Increase (decrease) in
Corporate taxes payable (11,310) 3,899
Increase (decrease) in accounts
Payable and other liabilities ( 7,750) 950
Cash provided by (used in) operating
Activities $(38,511) 0
FINANCING ACTIVITIES
Sale of common stock 11,000 0
Proceeds from loan 27,511 0
Cash was provided by financing activities $ 38,511 0
New increase (decrease) in cash 0 0
Cash, beginning of the year 0 0
Cash, end of the year 0 0
Notes to financial statements are an integral part of this statement.
BACTROL TECHNOLOGIES, INC.
NOTES TO FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Business Activities
The Company was incorporated August 31, 1983, under the laws of the State of
New York, as Owl Capital Corp., for the purpose of providing financial
consulting services. On May 16, 1988 the Company changed its name to Bactrol
Technologies, Inc.
In 1989 the Company attempted to bring its stock to the public market and
incurred printing and professional fees. The intent was to raise additional
capital for potential acquisitions.
The Company has been inactive since November 1984.
2. Note Receivable
The Company has a non-interest bearing demand note receivable from Bionic
Financial Corporation at December 31, 1999 and December 31, 1998.
3. Corporate Tax Payable
The Company had not filed its annual New York State taxes since 1984 and had
its corporate status dissolved. During January 1999, management filed all of
the delinquent tax returns and is awaiting the Company's reinstatement.
4. Other Matters
During 1999, the Company entered into a plan and agreement of merger with
Military Resale Group, Inc. The merger is dependent upon Bactrol
Technologies, Inc. becoming listed on the NASD Bulletin Board at which time
the merger comes into full force and effect concurrent with that listing.
The Company is a former reporting company with the Securities and Exchange
Commission and is currently in the process of updating all required SEC
filings so that it can have it's securities traded.
On October 4, 1999, the Board of Directors approved a 20 to 1 reverse stock
split of its issued and outstanding common stock. These financial statements
reflect its retroactive effect of the reverse stock split in all periods
presented.
ITEM 13 - EXHIBITS AND REPORTS
(12) Additional Exhibits
(a) Plan and Agreement of Merger Relating to the
Merger of Military Resale Group, Inc. into
Bactrol Technologies, Inc.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
BACTROL TECHNOLOGIES, INC.
By: ___________________________
GUY A. GALLUCCIO, SR., President
June 1, 2000
In accordance with the Exchange Act, this report has been signed
below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
By:___________________________________
GUY A. GALLUCCIO, SR.,
President and Director
By:__________________________________
ALAN FINFER
Secretary, Treasurer and
Director
Exhibit (12) Proposed Merger Agreement
PLAN AND AGREEMENT OF MERGER
Relating to the Merger of
MILITARY RESALE GROUP, INC.
Into
BACTROL TECHNOLOGIES, INC.
Dated: , 1999
PLAN AND AGREEMENT OF MERGER
This PLAN AND AGREEMENT OF MERGER ("Agreement") entered
into this day of , 1999, by and among MILITARY
RESALE GROUP, INC., a Maryland corporation ("MRG") and BACTROL
TECHNOLOGIES, INC., a New York corporation ("BTI"). (MRG and
BTI are sometimes collectively referred to herein as the
"Constituent Corporations").
BACKGROUND OF AGREEMENT
WHEREAS, MRG is a corporation organized under the laws of
the State of Maryland. MRG has authorized capital of 10,000,000
shares of common stock, par value $0.01 per share, of which
approximately 5,360,000 shares are issued and outstanding.
WHEREAS, BTI is a corporation organized under the laws of
the State of New York. The authorized stock of BTI consists of
shares of common stock, with a par value of $0.0001 per share,
of which approximately 12,700,000 shares are validly issued and
outstanding.
WHEREAS, MRG proposes to merge into BTI, with shareholders
of MRG (sometimes hereinafter referred to as "Shareholders")
surrendering their MRG stock in exchange for common stock of
BTI.
WHEREAS, the Boards of Directors of MRG and BTI have
determined that a merger of MRG into BTI is in the best
interests of MRG and BTI, and such companies desire to set forth
in this Agreement their entire agreement respecting such merger
(sometimes hereinafter "Merger").
WHEREAS, the parties intend that the Merger qualify as a
tax-free reorganization within the meaning of the provisions of
Section 368 of the Internal Revenue Code of 1986, as amended
from time to time (the "Code").
Whereas, BTI shall complete prior to closing the following:
filed with and obtained the approval of the Securities and
Exchange Commission ("SEC") re Form 10; be in full compliance
with all SEC requirements; completed the 20 for 1 reverse split
with less than 640,000 shares issued and outstanding; registered
with the State of New York and/or any other appropriate
regulator to sell up to 2,000,000 freely tradable shares of its
stock; sold a minimum of 500,000 shares of stock and have in
escrow at least $220,000 after offering expenses; and filed with
the NASDAQ the Form 15c-2-11 and taken any other steps so that its
stock is trading on the NASDAQ-OTC-BB.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements herein contained, the parties hereto, intending
to be legally bound hereby, agree as follows:
ARTICLE I
MERGER OF MRG AND BTI
Section 1.1 Closing.
The closing of the transaction contemplated by this
Agreement shall take place no later than five (5) business days
after all conditions necessary to consummate the Merger, as
provided in this Agreement, have been complied with and the
approvals described in Section 4.1 and 4.2 have been obtained
("Closing") at the offices of Richard H. Tanenbaum, Esquire,
7315 Wisconsin Avenue, Suite 775 North, Bethesda, Maryland,
20814 or such other place or date as the parties hereto may
agree to in writing, at which time the documents referred to in
Articles IX and X will be exchanged and, immediately thereafter,
the filing of a Certificate of Merger and Articles of Merger (as
described in Section 4.3) will be performed.
Section 1.2 Merger.
MRG and BTI shall be merged on the Effective Date, as
defined in Section 4.4, into a single corporation in accordance
with the applicable provisions of the Maryland Corporation Code,
by MRG merging into BTI, the surviving corporation. (BTI shall
sometimes hereinafter be referred to as the "Surviving
Corporation"). The separate existence of MRG shall cease upon
the Effective Date, and BTI shall thereafter possess all of the
rights, privileges, immunities, powers, licenses, permits and
franchises, both of public and private nature, and all the
property, real, personal and mixed, all debts due on any account
and all chooses in action belonging to or inuring to either of
the Constituent Corporations, and shall be subject to all the
restrictions, disabilities and duties of each of the Constituent
Corporations. Any claim existing or action or proceeding
pending by or against either of the Constituent Corporations may
be prosecuted as if the Merger had not taken place or BTI may be
substituted in its place. Neither the rights of creditors nor
any liens upon the property of either of the Constituent
Corporations shall be impaired by the Merger.
ARTICLE II
ARTICLES, BYLAWS, DIRECTORS AND OFFICERS
Section 2.1 BTI Articles and Bylaws.
The Articles of Incorporation and Bylaws of BTI as in
effect on the Effective Date shall continue in full force and
effect, unless and until subsequently amended, as the articles
of incorporation and bylaws of the Surviving Corporation.
However, BTI shall change its place of domicile from the State
of New York to the State of Delaware and shall change its
corporate name to Military Resale Group, Inc., on or before the
Closing hereunder.
Section 2.2 BTI's Directors and Officers.
The directors and officers of BTI in office on the
Effective Date shall resign as the directors and officers of the
Surviving Corporation upon the Closing hereunder and their
successors shall be duly elected and qualified pursuant to
Section 2.3 below.
Section 2.3 MRG Representation on BTI Board.
Upon Closing hereunder and consummation of the Merger, MRG
representatives designated by Edward T. Whelan shall be entitled
to nominate the individuals who shall serve as the Board of
Directors of BTI in accordance with the Bylaws of the Surviving
Corporation.
Section 2.4 Edward T. Whelan.
Edward T. Whelan shall be appointed as Chairman of the
Board of Directors and Ethan D. Hokit shall be appointed as
President of BTI as soon as reasonably practicable following
consummation of the Merger.
ARTICLE III
CONVERSION, EXCHANGE AND CANCELLATION OF SHARES
Section 3.1 BTI Capital Stock.
Prior to Closing hereunder, in accordance with BTI's Board
of Directors action on October 4, 1999, BTI shall effectuate a
reverse split of each share of common stock of BTI which shall
be issued and outstanding immediately prior to the date hereof,
and without any additional action required to be taken by the
holder thereof, with the BTI Stock outstanding converted
automatically into one (1) share of BTI common stock for each
twenty (20) shares of common stock of BTI ("BTI Stock") as held
immediately prior thereto. Thus as of Closing hereunder, there
shall be a total of 640,000 shares of BTI currently outstanding
stock before issuance of stock to holders of MRG common stock as
a result of the subject Merger. It is understood that upon
execution of this Agreement, MRG and BTI agree and shall facilitate
the sale of a minimum of 500,000 shares of BTI stock
to raise the funds required to effectuate the subject merger
transaction, in which case the total shares of BTI stock
outstanding at closing may be 1,140,000 shares.
In addition, upon the Effective Date, each share of common
stock of MRG which shall be issued and outstanding immediately
prior thereto, other than Dissenting Shares as defined in
Section 3.5, by reason of the Merger shall be converted
automatically into the right to receive one (1) share of BTI
common stock for each one (1) share of common stock of MRG held
immediately prior thereto. The BTI Stock shall be registered in
the name of, and in each case delivered to, the holder of such
MRG common stock on the Effective Date or thereafter (as
provided in Section 3.3 hereof) upon surrender of their share
certificate(s) of MRG stock (MRG Certificate) in proper form
endorsed in blank, or such lost certificate affidavits and bonds
as are deemed appropriate by BTI's officers.
Section 3.2 Treasury Shares.
Each share of MRG common stock, if any, held in the
treasury of MRG shall, by virtue of the Merger, be canceled and
cease to exist, and no payment shall be made with respect to
such stock.
Section 3.3 Exchange of Shares.
(a) Deposit of Stock. On the Effective Date, or promptly
thereafter, BTI shall make available, by transferring to the Surviving
Corporation or the Exchange Agent shares of BTI stock
issuable in exchange for outstanding shares of common stock of
MRG.
(b) Surrender and Exchange of Certificates. On the
Effective Date or as soon as practicable thereafter, the
Surviving Corporation or, at MRG's election, a bank or trust
company selected by MRG acting as Exchange Agent for the
exchange of MRG Stock (the "Exchange Agent") shall mail to each
holder of record of MRG Certificates (I) a form letter of
transmittal, and (ii) instructions for the surrender of the MRG
Certificate in exchange for certificates representing BTI Stock.
Upon surrender of the MRG Certificate to the Surviving
Corporation for cancellation or, if an Exchange Agent has been
designated, to the Exchange Agent or to another agent or agents
selected by MRG, together with the letter of transmittal, duly
executed and completed, the holder of the MRG Certificate shall
be entitled to receive, in exchange, a certificate representing
that number of shares of BTI Stock into which the shares of MRG
Stock represented by the surrendered certificates were converted
under the provisions of this Article III, and the surrendered MRG
Certificate shall forthwith be canceled.
(c) Dividends. No dividends or other distributions
in respect of BTI Stock declared after the Effective Date for
BTI Stock and payable to holders of record after the Effective
Date shall be paid to the holder of any unsurrendered MRG
Certificate for the shares of BTI Stock until the holder of
record surrenders the MRG Certificate. Subject to the effect,
if any, of applicable law, after the subsequent surrender and
exchange of a MRG Certificate, the holder shall be entitled to
receive any dividends or other distributions, without interest,
which previously became payable for shares of BTI Stock
represented by the MRG Certificate.
(d) Share Transfers Prior to Exchange. If any
certificate representing shares of BTI Stock is to be issued in
a name, other than that in which the MRG Certificate surrendered
is registered, it shall be a condition of such registration that
the surrendered MRG Certificate shall be properly endorsed or
otherwise in proper form for transfer. In addition, the person
requesting such registration shall pay any transfer or other
taxes required by reason of the payment to a person other than
the registered holder of the surrendered MRG Certificate or
establish to the satisfaction of the Surviving Corporation that
the tax has been paid or is not applicable.
(e) Effect of Share Exchange. All shares of BTI
Stock for which shares of common stock of MRG are exchanged
shall be deemed to have been issued in full satisfaction of all
rights pertaining to the exchanged shares of common stock of
MRG.
(f) Fractional Shares. No fractional shares of BTI
Stock will be issued in connection with the exchange, and no
certificate for a fractional share of BTI Stock will be issued.
Each holder of a MRG certificate shall receive the number of
whole shares to which the holder is entitled under Section 3.1
of this Agreement, rounded up to the next greatest whole number.
Each holder of an MRG Certificate shall receive at least one
share of BTI Stock.
(g) Company Stock Transfer Books. After the
Effective Date, there shall be no further registration of
transfers on the stock transfer books of the Surviving
Corporation of the shares of common stock of MRG which were
outstanding immediately prior to the Effective Date. If, after
the Effective Date, MRG Certificates representing MRG common
stock shares are presented to the Surviving Corporation, they
shall be canceled and exchanged for BTI Stock as provided in
this Article III.
Section 3.4 Adjustments.
If, between the date of this Agreement and the Effective
Date the outstanding shares of common stock of MRG (5,360,000
shares) or the BTI Stock (12,700,000 shares, subject to the
reverse split described above with 640,000 shares [or, upon the
sale of an additional 500,000 shares of BTI stock, up to
1,140,000 shares] being outstanding as of the Effective Date
without adjustment), as the case may be, change into a different
number of shares or a different class by reason of any issuance
or cancellation of shares or any reclassification,
recapitalization, split-up, combination, exchange of shares or
readjustment, or due to a stock dividend declared with a record
date within said time period other than the contemplated reverse
split of BTI Stock ("Adjustment Event"), then the number and
class of shares of BTI Stock to be issued and delivered in the
Merger in exchange for each outstanding share of common stock of
MRG shall be appropriately adjusted upon the Adjustment Event.
For purposes of this Section 3.4, the term "Adjustment
Event" shall not include the contemplated 1 for 20 reverse split
of the BTI Stock or any subsequent issuance of securities by
BTI, agreed to by MRG in a transaction negotiated in good faith,
in connection with any investment in, capital contribution to,
acquisition of any interest in or assets or properties of, or
any merger with, any person, firm, entity, corporation or
enterprise.
Section 3.5 Dissenting Shares.
Notwithstanding anything in this Agreement to the contrary,
except as otherwise provided by applicable law, shares of common
stock of MRG that are outstanding immediately prior to the
Effective Date and that are held by stockholders who, prior to
the taking of the vote of the stockholders of MRG on the Merger,
have filed with MRG a written objection to the Merger, who have not
voted the shares in favor of the Merger, and who, after the
taking of the vote, properly demanded payment for the shares in
accordance with the Maryland Corporation Code (the "Dissenting
Shares") shall not be exchangeable for the right to receive the
consideration provided in Section 3.1 of this Agreement. The
holders of Dissenting Shares shall be entitled to payment for
the shares under the applicable provision of the Maryland Corporation Code.
However, if:
(a) any holder of Dissenting Shares subsequently
delivers a written withdrawal of the holder's demand for
appraisal of the shares (with the written approval of BTI, if
the withdrawal is not tendered within 60 days after the taking
of the vote), or
(b) any holder fails to establish the holder's entitlement to
appraisal rights as provided in the Maryland Corporation Code, or
(c) neither any holder of Dissenting Shares nor the
Surviving Corporation has filed a petition demanding a
determination of the value of all Dissenting Shares within the
time provided in the Maryland Corporation Code, the holder or
holders (as the case may be) shall forfeit the right to
appraisal of the shares and the shares shall then be deemed
converted into, and to have been exchanged for, as of the
Effective Date, BTI Shares as provided in Section 3.1 of this
Agreement, without interest, upon surrender of the MRG
certificate representing the Dissenting Shares.
ARTICLE IV
MERGER PROCEDURE
Section 4.1 Approval by MRG Shareholders.
This Agreement shall be submitted to the MRG Shareholders
for their approval at a meeting to be held as soon as
practicable after all disclosure filings and other legal
procedures required to be done, held, performed or accomplished
prior thereto have been properly and lawfully done, held,
performed or accomplished.
Section 4.2 Approval by BTI Shareholders.
This Agreement is hereby approved by BTI and Guy Gallucio
and Alan Finer, as the majority shareholders of BTI. BTI shall
take all steps necessary to provide any disclosures, filings and
other legal procedures required to be done, held, performed and
accomplished prior to the Effective Date and shall see same have
been properly and lawfully done, held, performed or
accomplished.
Section 4.3 Filing of Articles of Merger.
Forthwith upon the approval of this Agreement by the
Shareholders of BTI and MRG as provided in Sections 4.1 and 4.2
hereof and the completion of the reverse split of stock by BTI
as contemplated in Section 3.1 and change of BTI's domicile and
corporate name as provided in Section 2.1, if the Agreement has
not then been terminated pursuant to Article XI hereof, then
Articles of Merger shall be filed by MRG and recorded in
accordance with the General and Business Corporation Law of Maryland.
Such documents, duly executed by the proper officers
of the Constituent Corporations, shall be held in the interim by
a law firm selected by MRG for dating and filing by that firm,
without further instructions, upon being advised that the
approvals referred to in Sections 4.1 and 4.2 have been
obtained. The function of such law firm shall be purely
ministerial and each party hereto shall indemnify and hold such
firm harmless from any conduct consistent herewith.
Section 4.4 Effective Date.
The Merger contemplated hereunder shall become effective at
5:00 p.m., Eastern Standard Time, on the date on which both the
Certificate of Merger has been filed with the Secretary of State
of Maryland and the Articles of Merger have been filed with the
Secretary of State of Maryland ("Effective Date").
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MRG
In order to induce BTI to enter into this Agreement and to
consummate the transactions contemplated hereby, MRG makes the
following representations and warranties to BTI:
Section 5.1 Organization and Good Standing.
MRG is a corporation, duly organized, validly existing and
in good standing under the laws of the State of Maryland. MRG
has no subsidiary or affiliated companies. MRG has the power to
carry on its business as and where conducted and is entitled to
own, lease or operate its business assets. MRG has delivered to
BTI complete and correct copies of its Articles of
Incorporation, as amended, and Bylaws, as amended, and in effect
on the date of this Agreement. As of the Effective Date the
entire issued and outstanding capital stock of MRG shall consist
of the shares of common stock referred to in Schedule 5.1 held
by the Shareholders, and MRG shall not, as of such date, have
any outstanding stock options, warrants, or other obligations to
issue its capital stock, except as listed on Schedule 5.1.
Section 5.2 Authorization of Agreement.
This Agreement and all other agreements and instruments to
be executed in connection herewith have been authorized by all
requisite corporate action on the part of MRG, have been duly
executed and delivered by MRG and, upon approval by the
Shareholders, shall constitute the legal, valid and binding
obligation of MRG enforceable in accordance with their
respective terms.
Section 5.3 Ownership of Shares.
The capitalization of MRG is set forth on Schedule 5.1.
The Shareholders listed on Schedule 5.1 are the lawful owners of
all issued and outstanding shares of capital stock of MRG in the
denominations therein set forth, and have full power and
authority to approve this Agreement. Each issued share is
validly issued, fully paid, nonassessable and each outstanding
share is entitled to one vote. No shares were issued in
violation of pre-emptive rights. Such shares are owned free and
clear of all liens, mortgages, pledges, security interests,
restrictions, prior assignments, spouses' rights, encumbrances
and claims of any kind or nature whatsoever, except as set forth
on Schedule 5.1. As of the Effective Date, MRG shall not have
any outstanding stock options, warrants, or other obligations to
issue its capital stock.
Section 5.4 Financial Statements.
MRG has delivered to BTI the following audited financial
statements for the years ending December 31, 1997 and December
31, 1998;
(a) Balance Sheet
(b) Statement of Operations
(c) Statement of Shareholders' Equity
All such financial reports are true and complete as of
their respective dates, and have been prepared in accordance
with generally accepted accounting principles and practices
consistently applied, except as otherwise indicated in the
footnotes thereto. Each such report sets forth fairly and
accurately as of its date MRG's financial condition, results in
operations and assets and liabilities for the period then ended.
Except as set forth on Schedule 5.4, on the date hereof and as
of the Effective Date, there is and will have been no material
adverse change in the condition of MRG since December 31, 1998.
Section 5.5 Litigation.
Except as listed on Schedule 5.5, there is no claim,
action, investigation, suit or proceeding of any nature pending
before any court or governmental agency, authority or body and,
to the best of the knowledge of MRG, there is no such claim,
action, investigation, suit or proceeding threatened or
contemplated by any third party which, if it were to result in a
decision adverse to MRG, would materially and adversely affect
the business operations, properties, assets or conditions of
MRG. Neither MRG nor its business and assets are subject to or
directly affected by any order, judgment, decree or ruling of
any court or governmental agency, except any of the foregoing as
they may be of general application to businesses similar to that
conducted by MRG.
Section 5.6 No Conflict With Other Instruments.
As of the Effective Date, the consummation of the
transactions contemplated by this Agreement will not result in
the breach of any term or provision of or constitute a default
under any indenture, mortgage, deed of trust, or other material
agreement or instrument to which BTI is a party.
Section 5.7 Insurance.
MRG shall obtain and maintain in full force and effect
valid policies of fire and extended coverage casualty insurance
with respect to its assets, as well as valid policies of public
liability and unemployment compensation with respect to its
business.
Section 5.8 Licenses and Permits; Governmental Authorizations.
MRG has all licenses, franchises, permits, approvals and other
governmental authorizations necessary for the conduct of its business
operations.
ARTICLE VI
ADDITIONAL COVENANTS AND AGREEMENTS OF MRG
MRG hereby covenants and agrees to the following, the
fulfillment of each of which shall constitute, at and as of the
Effective Date, a condition precedent to the obligations of BTI
hereunder:
Section 6.1 Existence, Rights and Franchises.
From and after the date of this Agreement and until the
Effective Date, MRG shall comply with all applicable laws and
regulations, take all necessary actions to keep in full force
and effect its existence, rights and franchises, and shall not
amend its articles of incorporation or bylaws except as may be
necessary to carry out the provisions of this Agreement.
Section 6.2 Conduct of Business Before the Closing.
From and after the date of this Agreement and until the
Effective Date:
(a) Diligent Conduct. Except as consented to by BTI,
MRG shall conduct its business diligently in the ordinary
course. MRG shall use its best efforts to preserve its business
organization intact, to keep available to BTI the services of
MRG's present officers and to preserve for the benefit of BTI
the goodwill of MRG's suppliers, customers and others having
business relations with MRG.
(b) Properties and Assets. MRG shall not, without
the prior written consent of BTI, sell or transfer any of its
assets, other than in the ordinary course of business or subject
any of its assets to any mortgage, pledge, lien, charge or
encumbrance of any kind.
(c) Contracts; Liabilities. MRG shall not, without
the prior written consent of BTI: (I) amend, alter or terminate
any contract to which it is a part except in the ordinary course
of business, (ii) enter into or become a party to any plan,
contract or agreement except in the ordinary course of business;
(iii) borrow or agree to borrow any funds, or otherwise become
subject to, by way of guarantee or otherwise, any obligations or
liability except in the ordinary course of business and
consistent with past practice; or (iv) pay or discharge any
claim, liability or obligation, except in the ordinary course of
business and consistent with past practice.
(d) Insurance. MRG shall continue in force its
existing insurance policies as set forth on Schedule 6.2(d),
subject only to variations in coverage amounts required by the
ordinary operation of its business.
(e) Distributions. Except as set forth on Schedule
6.2(e) hereto, MRG shall not make any distributions with respect
to or in redemption or partial redemption of any of its shares
of capital stock, or any payment of any indebtedness to
shareholders or any bonus or other increases in compensation to
employees, including without limitation employees who are
shareholders, except compensation in the ordinary course of
business.
Section 6.3 Access and Information.
MRG will afford to BTI and its counsel, accountants and
other representatives reasonable access to the books, records
and assets of MRG and shall furnish to BTI and its counsel,
accountants and other representatives all information which BTI
may reasonably request.
Section 6.4 Shareholder Approval.
MRG covenants to (I) comply with the provisions of Section
4.1 hereof; (ii) use its best efforts to take all corporate
action and obtain all waivers and consents necessary to
effectuate the provisions of this Agreement; (iii) use its best
efforts to insure that the Shareholders approve the Merger
provided for herein; and (iv) insure that each member of its
Board of Directors votes his shares of MRG, and encourage all
other Shareholders to vote their shares, in favor of such
Merger.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF BTI
In order to induce MRG to enter into this Agreement and to
consummate the transactions contemplated hereby, BTI makes the
following representations and warranties to MRG:
Section 7.1 Organization and Good Standing; Capital.
BTI is a corporation duly organized and validly existing
and in good standing under the laws of the State of New York.
BTI has no subsidiary or affiliated companies. BTI has the
power to carry on its business as and where conducted, and is
entitled to own, lease or operate its business assets. BTI has
delivered to MRG complete and correct copies of the articles of
incorporation, as amended, and bylaws of BTI as in effect on the
date of this Agreement. As of the Effective Date, the entire
issued and outstanding capital stock of BTI shall consist of the
shares of common stock referred to in Schedule 7.3 held by the
Shareholders, and BTI shall not, as of such date, have any
outstanding stock options, warrants or other obligations to
issue its capital stock except as listed on Schedule 7.3.
Section 7.2 Authorization of Agreement.
This Agreement and all other agreements and instruments to
be executed in connection herewith have been duly authorized by
all requisite corporate action on the part of BTI, have been
duly executed and delivered by BTI and shall constitute the
legal, valid and binding obligations of BTI enforceable in
accordance with their respective terms.
Section 7.3 Issuance of BTI Stock.
BTI has full power and authority to issue the BTI Stock to
the Shareholders under this Agreement. When issued, the BTI
Common Stock will be fully paid, nonassessable, each share
entitled to one (1) vote, free and clear of all liens,
mortgages, pledges, security interests, restrictions, prior
assignments, encumbrances and claims of any kind or nature
whatsoever, except as otherwise set forth on Schedule 7.3 and
each share shall be registered and fully transferrable in the
public market in compliance with all securities laws and
regulations.
Section 7.4 Financial Statements.
BTI has delivered to MRG the following audited financial
statements for years ending December 31, 1997 and through June 30, 1998:
(a) Balance Sheet
(b) Statement of Income
(c) Statement of Shareholders' Equity
All such financial reports are true and complete as of
their respective dates, and have been prepared in accordance
with generally accepted accounting principles and practices
consistently applied, except as otherwise indicated in the notes
thereto. Each such report sets forth fairly and accurately as
of its date BTI's financial condition, results of operations and
assets and liabilities for the period then ended. Except as set
forth on Schedule 7.4, on the date hereof and as of the
Effective Date there is and will have been no material adverse
change in the condition of BTI since June 30, 1998.
Section 7.5 Litigation.
Except as set forth on Schedule 7.5, as of the Effective
Date there are no claims, actions, investigations, suits or
proceedings pending before any court or governmental agency,
authority or body and, to the best of the knowledge of BTI,
there are no such actions, suits or proceedings threatened or
contemplated by any third party which would materially and
adversely affect the business operations, properties, assets or
conditions of BTI. Neither BTI nor its business and assets are
subject to or directly affected by any order, judgment, decree
or ruling of any court or governmental agency, except any of the
foregoing as they may be of general application to businesses
similar to that conducted by BTI.
Section 7.6 No Conflict With Other Instruments.
As of the Effective Date, the consummation of the
transactions contemplated by this Agreement will not result in
the breach of any term or provision of or constitute a default
under any indenture, mortgage, deed of trust, or other material
agreement or instrument to which BTI is a party.
Section 7.7 Employee Relations.
Except as set forth in Schedule 7.7, BTI has no written
employment agreements, collective bargaining agreements,
retirement, welfare, pension, profit sharing, compensation,
bonus, hospitalization, vacation or other employee benefit plan,
practice, agreement or undertaking, and no oral employment
contracts obligating BTI beyond the minimum requirements imposed
on an employer under applicable state or federal law. Except as
set forth on Schedule 7.7, BTI has not ceased operation at any
facility or withdrawn from or terminated any pension plan or
other employee benefit plan in a manner which could subject it
to liability under the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").
Section 7.8 Liabilities and Contractual Commitments.
Except as reflected on the financial statements listed in
Section 7.4 or in any other schedule or exhibit to, or
provisions of this Agreement, and other than open purchase
orders and other obligations entered into in the ordinary course
of business, BTI has no undisclosed liabilities or contractual
commitments, whether accrued, absolute, contingent or otherwise,
to any third party or any shareholder, director or employee of
BTI, other than those set forth on Schedule 7.8.
Section 7.9 Tax Payments.
BTI has timely filed all federal, state and local tax
returns required to be filed as of the date of this Agreement
and shall timely file all of such returns as of the Effective
Date, and has fully paid or shall pay all taxes, penalties and
interest reflect on such returns or otherwise owing for the
period covered thereby, except as set forth in Schedule 7.9. At
the Effective Date there shall be no federal, state or local
taxes due and payable with respect to the business and assets of
BTI with respect to any tax reporting period ending on or
before the Effective Date. Adequate accruals shall have been
established on the books of BTI prior to the Effective Date for
all federal, state and local taxes (including taxes, if any,
incurred by BTI in connection with the transactions contemplated
in this Plan and Agreement of Merger) accrued prior to the
Effective Date but unpaid. No extension of time for the
assessment of taxes by any taxing authority having jurisdiction
over BTI is in effect, and BTI has no knowledge of any
unassessed tax deficiency proposed or threatened against it.
Section 7.10 Insurance; Claims.
BTI has maintained and now maintains in full force and
effect valid policies of fire and extended coverage casualty
insurance with respect to its assets, as well as valid policies
of public liability and unemployment compensation insurance with
respect to its business, in the amounts as is usually carried by
companies engaged in similar businesses and owning or operating
similar properties, all such policies being set forth on
Schedule 7.10. All claims filed by BTI under any such policies,
including without limitation workers' compensation, automobile,
and general and product liability claims, are set forth on
Schedule 7.10.
Section 7.11 Equipment Leases; Title to Properties.
BTI has and on the Effective Date will have leases for all
personal property of which it is the lessee. All such personal
property leases are listed on Schedule 7.11. Furthermore, BTI
has and on the Effective Date will have to the best of its
knowledge good and marketable title to all of the equipment,
merchandise, inventory, materials, supplies, assets and other
property of every kind, tangible or intangible, used in its
business and/or contained in its offices, plants and other
facilities or shown as assets in its records and books of
account, free and clear of all material liens, encumbrances and
charges except as set forth on Schedule 7.11
Section 7.12 Real Property; Leases and Contingent Obligations.
As of the Effective Date, BTI does not own (and, except as
set forth on Schedule 7.12, never has owned) any land or
buildings, and is not subject to any liens, claims or
encumbrances with regard to any land or buildings. BTI has no
leases under which it is entitled to occupy and use in its
business. All real property leases and contracts to which BTI is
a party or by which it is bound are set forth on Schedule 7.12.
Section 7.13 Licenses and Permits; Government Approvals.
To the extent required by the laws, rules and regulations
of any applicable jurisdiction with which it is required to
comply in connection with its business operations, BTI has or
will have as of the Effective Date all governmental licenses,
permits, approvals and permissions, necessary to conduct such
business operations as they are now conducted or will be
conducted under this Agreement. All such licenses, permits,
approvals and permissions are listed on Schedule 7.13. BTI has
no knowledge of any violations of law, governmental rules or
regulations, applicable to the operation or BTI business, and
has not received any notice that the licenses, permits and
approvals under which it operates its business are insufficient
to permit such business to continue after the Effective Date in
the same manner and form as it operates on the Effective Date.
Section 7.14 Hazardous Substances and Hazardous Wastes.
Except as set forth on Schedule 7.14:
(a) Hazardous Materials Disposal or Release. BTI
does not have knowledge of any presence, disposal, releases, or
threatened releases of any hazardous or toxic substance,
material or waste which is regulated by any local, state or
federal governmental authority (collectively, "Hazardous
Materials") on, from or under any of the leased properties of
BTI in violation of any applicable law. The terms "disposal",
"release" and "threatened release" shall have the definitions
assigned to them by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C., Section 9601,
et seq., as amended.
(b) Hazardous Materials Use or Storage. During the
time that BTI has leased its properties, to the best of BTI's
knowledge, neither BTI nor any third party has used, generated,
manufactured, or stored on, under, or about, the properties or
transported to or from such properties, any Hazardous Materials
in violation of any applicable law or regulation.
Section 7.15 Brokerage and Finder's Fees.
There is no broker, investment banker or finder involved
on behalf of or by BTI or any of its officers or directors, in
connection with the transaction contemplated under this
Agreement. To the extent of any such claims contrary to this
representation, BTI shall be responsible for same.
ARTICLE VIII
COVENANTS AND AGREEMENTS OF BTI
BTI hereby covenants and agrees to the following, the
fulfillment of each of which shall constitute a condition precedent to
the obligations of MRG hereunder.
Section 8.1 Corporate Existence, Rights and Franchises.
Between the date hereof and the Effective Date, BTI shall
take all necessary actions to keep in full force and effect its
corporate existence, rights and franchises. BTI shall by the
Effective Date have changed its name from "Bactrol Technologies,
Inc." to "Military Resale Group, Inc." and shall change its
domicile from the State of New York to the State of Delaware.
Section 8.2 Access and Information.
BTI will afford to MRG, its counsel, accountants and other
representatives reasonable access to the books, records, and
assets of BTI and shall furnish to MRG and its counsel,
accountants, and other representatives all information which MRG
may reasonably request.
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS OF BTI
The Closing shall not take place unless all of the
following conditions not waived by BTI have been fulfilled
before, or will be fulfilled on, the Effective Date.
Section 9.1 Correctness of Representations and Warranties.
All the representations and warranties of MRG contained in
this Agreement shall be true and accurate in all material
respects on the Effective Date with the same material effect as
if made on the Effective Date, and BTI shall have received a
certificate to that effect dated the Effective Date and executed
by the President of MRG.
Section 9.2 Performance of Covenants and Agreements.
All of the covenants and agreements of MRG contained in
this Agreement and required to be performed before the Effective
Date shall have been performed in all material respects, and BTI
shall have received a certificate to that effect dated the
Effective Date executed by the President of MRG.
Section 9.3 Approvals.
(a) Shareholders. This Plan and Agreement of Merger
shall have been duly approved by the vote of the Shareholders in
accordance with applicable law and the Articles of Incorporation
and Bylaws of MRG.
(b) Third Parties; Regulatory Bodies. All notices
to, declarations of filing with and authorizations, consents,
orders, registrations, or approvals ("Approvals") from, third
parties and governmental agencies (copies of which shall be
provided to the other parties) required to complete the
transactions contemplated or planned pursuant to this Agreement
or necessary to maintain in full force and effect all agreements
under which MRG operates or is bound shall have been delivered,
made or obtained.
(c) Company Board of Directors. All action required
to be taken by the Board of Directors of MRG to authorize the
execution, delivery and performance of this Agreement and the
completion of the transactions planned under this Agreement have
been duly and validly taken by the Board of Directors of MRG.
Section 9.4 Delivery of Documents by MRG.
BTI shall have received on or prior to the Effective Date
copies of all stock books, minute books, tax returns, financial
records, and all material agreements, records and documents
pertaining to the business and organization of MRG.
Section 9.5 Adverse Changes.
No material adverse changes shall have occurred in the
financial condition, working capital, assets, liabilities,
reserves, business, sales, customer list, operations, or
prospects or MRG since the date of the financial statements
contained in Schedule 5.4.
Section 9.6 No Governmental Proceeding or Litigation.
No suit, action, investigation, inquiry or other proceeding
by any governmental body has been instituted or threatened which
questions the validity or legality of the transactions planned
under this Agreement or which, if successfully asserted, would
otherwise have a material adverse effect on the conduct of MRG's
business assets or on its properties, or would impose any
material imitation on the ability of BTI effectively to exercise
full rights of ownership of MRG or the assets or business of
MRG.
ARTICLE X
CONDITIONS PRECEDENT TO OBLIGATIONS OF MRG
The Closing shall not take place unless all of the
following conditions not waived by MRG have been fulfilled
before, or will be fulfilled on, the Effective Date:
Section 10.1 Correctiveness of Representations and Warranties.
All the representations and warranties of BTI contained in
this Agreement shall be true and accurate in all material
respects on the Effective Date with the same material effect as
if made on the Effective Date, and MRG shall have received a
certificate to that effect dated the Effective Date and executed
by the President of BTI.
Section 10.2 Performance of Covenants and Agreements.
All of the covenants and agreements of BTI contained in
this Agreement and required to be performed before the Effective
Date shall have been performed in all material respects, and MRG
shall have received a certificate to that effect dated the
Effective Date executed by the President of BTI.
Section 10.3 Resolutions of BTI.
All action required to be taken by the Board of Directors
of BTI to authorize the execution, delivery and performance of
this Agreement and the completion of the transaction planned
under this Agreement have been duly and validly taken by the
Board of Directors of BTI.
Section 10.4 Approvals.
The requisite approval of the Shareholders of BTI has been
obtained, and the other notices, declarations, filings,
authorizations, consents, orders, and approvals referred to in
Section 9.3 (copies of which shall be provided to the other
parties) have been delivered, made or obtained.
Section 10.5 Adverse Changes.
No material adverse changes shall have occurred in the
financial condition, working capital, assets, liabilities,
reserves, business, operations, or prospects of BTI taken as a
whole since the date of BTI's financial statements listed in
Schedule 7.4.
Section 10.6 No Governmental Proceeding or Litigation.
No suit, action, investigation, inquiry or other proceeding
by any governmental body has been instituted or threatened which
questions the validity or legality of the transactions planned
under this Agreement or which, if successfully asserted, would
otherwise have a material adverse effect on the conduct of BTI's
business assets or on its properties. MRG shall cooperate with
BTI in using their reasonable efforts to satisfy any such
condition to completion of the Merger.
Section 10.7 Affirmative Action By BTI.
On or prior to closing BTI shall have completed the following:
(1) Filed with and obtained the approval of the
Securities and Exchange Commission ("SEC") re Form 10;
(2) Be in full compliance with all SEC requirements;
(3) Completed the 20 for 1 reverse split with less than
600,000 shares issued and outstanding;
(4) Registered with the State of New York and/or any other
appropriate regulator to sell up to 2,000,000 freely tradable shares
of its stock;
(5) Sold a minimum of 500,000 shares of stock and have in
escrow at least $220,000 after offering expenses; and
(6) Filed with the NASDAQ the Form 15c-2-11 and taken any other steps
so that its stock is trading on the NASDAQ-OTC-
ARTICLE XI
TERMINATION
In the event that either BTI or MRG shall refuse to close the
transactions contemplated in this Agreement by reason of the failure
of any condition precedent to closing set forth in Articles IX and X
absent waiver by the applicable party thereunder), then this Agreement
shall terminate and neither party shall have any obligation or liability
to the other hereunder by reason of any provision hereof or any actions
taken in contemplation or anticipation of the Closing.
ARTICLE XII
INDEMNIFICATION
Section 12.1 Indemnification by BTI.
From and after the Closing, BTI and its successors and
assigns shall indemnify and hold MRG and its directors,
officers, employees, agents, counsel, assigns or representatives
harmless from and against any and all losses, liabilities,
obligations, damages (whether actual, punitive or
consequential), deficiencies, costs or expenses (including
interest, penalties and reasonable attorney's fees and
disbursements), arising from, asserted against or associated
with:
(a) a breach of any representation or warranty made by BTI
herein;
(b) failure by BTI to perform any covenant, obligation
or agreement made herein; or
(c) the past, present or future operations of BTI.
Section 12.2 Indemnification by Guy Gallucio.
Guy Gallucio, together with BTI, jointly and severally
indemnify, defend and hold harmless MRG and its directors,
officers, employees, agents, counsel, successors and assigns
from and against losses, liabilities, obligations, damages
(whether actual, punitive or consequential), deficiencies, costs
or expenses, including without limitation interest, penalties
and reasonable attorneys' fees and disbursements (the
"Indemnifiable Items") of any of the foregoing persons or
entities, arising from, asserted against or associated with:
(a) a breach of any representation or warranty made by
BTI herein;
(b) failure by BTI to perform any covenant,
obligation or agreement made herein; or
(c) the past operations of BTI, including but not limited
to any property or other taxes owing by BTI due to BTI's
prior operations.
Section 12.3 Termination of Indemnification.
An Indemnified Party shall not be entitled to
indemnification for any loss, damage or expense unless the right
to such indemnification is asserted on or before the fifth
anniversary of the date of the Closing, except that if there
then shall be pending any such assertion, dispute, claim,
proceeding or action under this Agreement, the Indemnified Party
shall continue to have the right to indemnification with respect
to such pending assertion, dispute, claim, proceeding or action.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.1 Application.
This Agreement shall be construed and enforced in
accordance with the laws of the State of Maryland, except as to
any technical New York requirement of corporate merger
pertaining to BTI.
Section 13.2 Notices.
All notices, requests, demands and other communications
called for or contemplated hereunder shall be in writing and
shall be deemed to have been duly given when (I) hand delivered;
(ii) sent by telegram, telecopier, telex or wire following by
confirmatory letter; or (iii) sent by United States certified or
registered mail, postage prepaid, addressed to the parties,
their successors in interest, or their assignees at the
following addresses (or at such other addresses as the parties
may designate by like written notice):
BTI: Mr. Guy Gallucio
1109 North 21st Avenue
Suite 120
Hollywood, FL 33020
Telephone (954) 923-6002
Facsimile (954) 923-6141
MRG: Ethan D. Hokit, President
2517 Durango Drive
Colorado Springs, CO 80910
Telephone (719) 391-4564
Facsimile (719) 391-4565
with a copy to: Richard H. Tanenbaum, Esq.
7315 Wisconsin Avenue
Suite 775 North
Bethesda, MD 20814
Telephone (301) 951-1585
Facsimile (301) 951-1525
Section 13.3 Payment of Expenses.
Each party shall pay all fees and expenses incurred by it in
connection with the preparation, negotiation, execution, delivery
and completion of this Agreement and the transactions contemplated
hereunder.
Section 13.4 Assignment.
This Agreement shall not be assignable by any party without
the written consent of the other party hereto.
Section 13.5 Amendment and Waiver.
Subject to the applicable law, this Agreement may be
amended, modified, and supplemented at any time prior to or at
the closing, whether before or after the votes of the
shareholders of MRG and BTI, by written agreement approved by
the Board of Directors of BTI and MRG; provided, however, that
after the votes of shareholders of and MRG no such amendment,
modification or supplement may be made which in any way
materially adversely affects the rights of any class of
shareholders without a further vote by the affected shareholders
to approve such amendment, modification or supplement.
The conditions to each of the parties' obligations to
consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent
permitted by applicable law; provided, however, that any waiver
by a party must be in writing.
Section 13.6 Survival of Representations and Warranties.
All representations and warranties made hereunder by the
parties hereto shall survive the Closing and any investigation
at any time made by or on behalf of the parties hereto. All
representations and warranties herein which are made to the best
knowledge of a party shall require that such party make
reasonable investigation and inquiry with respect thereto to
ascertain the correctness and validity thereof.
Section 13.7 Counterparts.
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
Section 13.8 Captions.
Captions used herein are for convenience of reference only;
such captions are not a part hereof and shall not be used in
construing this Agreement.
Section 13.9 References to Sections.
References to articles and sections herein include all
subsections subsidiary to the sections referred to.
Section 13.10 Entire Agreement.
This Agreement contains the entire agreement of the parties
regarding the subject matter hereof. It supersedes any and all
other agreements, either oral or in writing, between the parties
hereto with respect to the subject matter of this Agreement.
Each party to this Agreement acknowledges that no
representations, inducements, promises or agreements, oral or
otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not embodied herein, and that no
other agreement, statement or promise with respect to the
subject matter hereof not contained in this Agreement shall be
valid or binding.
Section 13.11 Word Meanings.
Any reference herein to the singular form of a word shall
include reference to the plural form thereof, and any reference
herein to the plural form of a word shall include reference to
the singular form thereof, as the context may require. Words
such as "herein", "hereinafter", "hereof", and "hereunder" refer
to this Agreement as a whole and not merely to a subdivision in
which such words appear unless the context otherwise requires.
Section 13.12 Exhibits, Schedules and Attachments.
Each exhibit, schedule and attachment to this Agreement is
incorporated herein by reference for all purposes.
Section 13.13 Further Assurances, Documents.
Each party hereto agrees to use their best efforts to
perform any further act, to cooperate with the other parties and
to execute, deliver and file any further documents and
instruments that may be reasonably necessary to carry out the
provisions of this Agreement and the transactions contemplated
hereby as soon as reasonably practicable.
IN WITNESS WHEREOF, the parties have executed or caused
this Agreement to be signed by their respective duly authorized
officers on the date first mentioned above.
ATTEST: BACTROL TECHNOLOGIES, INC.
BY:
Secretary President
(Corporate Seal)
ATTEST: MILITARY RESALE GROUP, INC.
BY:
Secretary President
(Corporate Seal)
WITNESS:
GUY GALLUCIO
LIST OF SCHEDULES
Schedule 5.1 Shares and Shareholders of MRG Common Stock Issued
as of Effective Date
Schedule 5.4 MRG Financial Statements - Material Changes, if any
Schedule 5.5 Litigation - MRG
Schedule 6.2(d) MRG Insurance Policies
Schedule 6.2(e) MRG Contemplated Distributions With Respect to
Stock/Indebtedness to Shareholders, etc.
Schedule 7.3 Shares and Shareholders of BTI Common Stock Issued
as of Effective Date
Schedule 7.4 BTI Financial Statements - Material Changes, if any
Schedule 7.5 Litigation - BTI
Schedule 7.7 BTI Employment Agreements
Schedule 7.8 BTI Liabilities Other Than Shown on Financial
Statements
Schedule 7.9 BTI Tax Obligation
Schedule 7.10 BTI Insurance
Schedule 7.11 BTI Property Leases
Schedule 7.12 BTI Realty Owned
Schedule 7.13 BTI Licenses, Permits
Schedule 7.14 BTI Hazardous Substance Disclosure
