SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
Under the Securities Exchange Act of 1934
Date of Report
February 5, 1999
_________________
Commission File Number 1-8662
PROACTIVE TECHNOLOGIES, INC.
(formerly KEYSTONE MEDICAL CORPORATION)
(Exact name of registrant as specified in its charter)
Delaware 23-2265039
(State of Incorporation) (IRS Employer Identification No.)
7118 Beech Ridge Trail
Tallahassee, Florida 32312
(Address of Principal Executive Offices) (Zip Codes)
Registrant's telephone number, including area code:
(850) 668-8500
_______________________________________________________________________
Item 1. Changes in Control of Registrant
If and to the extent that Mark A. Conner's beneficial ownership of
8,559,077 shares of Common Stock and his position as President and Chairman
of the Board represented control of Proactive Technologies, Inc. (the
"Registrant"), the sale by Mr. Conner to the Registrant of 5,000,000
shares of common stock of the Registrant, as reported in Item 2. below,
taken together with his resignation as an officer and director of the
Registrant, may represent a change in control of the Registrant. Mr.
Conner now beneficially owns 17.2% of the issued and outstanding shares
of common stock of the Registrant. He has expressed a willingness to sell
the remainder of his shares. Since Mr. Conner's shares were sold to the
Registrant, persons who had previously acquired shares now own a
greater percentage of the Registrant.
As noted, Mr. Conner resigned as a director and officer of the
Registrant. On February 2, 1999, the directors elected William Astrop
as a director to fill the vacancy created by Mr. Conner's resignation.
As previously reported by the Registrant on Form 8-K filed January 19,
1999, and incorporated herein by reference on December 30, 1998, Arthur G.
Weiss and certain members of his family acquired the right to receive an
aggregate of 3,100,000 shares of the Registrant's Common Stock pursuant to
the terms of that certain Agreement and Plan of Reorganization ("Weiss
Reorganization Agreement") dated December 28, 1998. As a result of the
Conner stock sale, Mr. Weiss now beneficially owns 15.0% of the issued and
outstanding shares of common stock of the Registrant.
As previously reported on Form 8-K dated January 25, 1999, and
incorporated herein by reference, on January 8, 1999, the Lance Children's
Trust (the "Trust"), a trust for the benefit of the children of Mr. Beverly
Lance, acquired 3,600,00 shares (the "Shares") of the Registrant's Common
Stock pursuant to the terms of that certain Agreement and Plan of
Reorganization ("Lance Reorganization Agreement"), dated January 8,
1999 between the Registrant and the Trust. As a result of the Conner
stock sale, Mr. Lance now beneficially owns 17.4% of the issued and
outstanding shares of Common Stock of the Registrant.
On January 29, 1999, the Wendell M. Starke Trust ("Starke Trust")
acquired 2,500,000 shares of the Registrant's Common Stock for $1,000,000
in cash from personal funds. Wendell M. Starke is the Trustee and Beneficiary
of the Starke Trust. As a result of the Conner stock sale, Mr. Starke now
owns 12.1% of the issued and outstanding shares of Common Stock of the
Registrant.
The preceding transactions were not subject to or conditioned on the
occurrence of any of the other transactions.
On February 5, 1999, Ben S. Branch and Robert E. Maloney, Jr. resigned
as directors of the Registrant. The resignations of Mr. Branch and Mr.
Maloney were not the subject of any prior arrangement or understanding.
As previously noted in the Schedule 13D filed by Mr. Lance and the Trust,
they intend to seek representation on the Registrant's Board of Directors.
Accordingly, Mr. Lance will seek nomination to fill one of the vacancies
on the Board.
The above-referenced persons have not had any formal arrangements or
understandings with respect to other changes in the Registrant, but Mr.
Weiss and Mr. Lance are working together with management to develop a
comprehensive plan to attempt to improve the Registrant's financial
performance.
Item 2. Disposition of Assets
On January 21, 1999, the Registrant closed the sale of its wholly-
owned subsidiary, Henry Holdings, Inc., a Florida corporation (the
"Subsidiary") to Mark A. Conner, the Registrant's former President, in
exchange for 5,000,000 shares of Common Stock of the Registrant that were
held by Mr. Conner. Under the terms of the Agreement, Conner was to receive
cash or cash and property with an agreed upon value of not greater than
$2,000,000. At January 21, 1999, the Subsidiary, a real estate holding
company had an asset of $700,000 in cash. The remaining value of
$1,300,000 was to be generated from the closing of a contract with an
unrelated third party purchaser or by conveyance via warranty deed to Henry
Holdings, Inc. on January 28, 1999 in the event that the third party
purchasers did not close on the land, of the following real estate holdings:
38 lots in The Landings at Golden Eagle Phase I; 39 developed lots in Golden
Eagle Units 5 & 7; 40 developed lots in Golden Eagle Unit 8; raw land
for The Landings at Golden Eagle Phase II; raw land for Golden Eagle Unit
6; and the office building and land located at 7118 Beech Ridge Trail,
Tallahassee, Florida. The above real estate holdings were subject to
approximately $3,667,500 in mortgage indebtedness, which was to be paid off
at closing, or assumed by Mr. Conner, if the transaction to the third party
purchasers did not occur. The transaction closed to the third party
purchasers on January 28,1999. The assets sold by the Registrant had a
book value of $6,396,416.33 as of December 31, 1998 and were sold at a
contract price of $5,112,902. The actual cash paid for the 5,000,000 shares
of stock was $1,570,000.00, with an additional $200,000 held in escrow to
be released upon the fulfillment of certain continigencies by Mr. Conner.
The sale was made pursuant to a Stock Exchange Agreement, filed as Exhibit
2.1. The purchase price was set based upon the written offer to purchase
that the Registrant received from the unrelated third party purchasers. In
connection with this sale, Mr. Conner resigned as President of the Registrant
and the Registrant and Mr. Conner entered into a Consulting Agreement, an
Indemnification Agreement and a Profit Sharing Agreement, each of which is
filed as an Exhibit hereto. Further information regarding this transaction
is included in the Registrant's press release, filed as Exhibit 99.1 and
incorporated herein by this reference.
The Profit Sharing Agreement provided that, in the event that (i.)
the third party purchaser did not close on the above transaction, and (ii.)
the property was conveyed by warranty deed to Henry Holdings, Inc., and
(iii.) Mr. Conner agreed that if he sold the property within 67 days of
January 21, 1999, then he would pay any amounts received in excess of
$1,300,000, over and above all closing costs and encumbrances, to the
Registrant. The property closed to the third party purchaser on January 28,
1999. The Profit Sharing Agreement will terminate without any payment.
Item 3. Bankruptcy or Receivership
Not Applicable
Item 4. Changes in Registrant's Certifying Accountant
Not Applicable
Item 5. Other Events
Not Applicable
Item 6. Resignations of Registrant's Directors
Not Applicable
Item 7. Financial Statements and Exhibits
(a) Financial Statements.
Not Applicable
(b) Unaudited Pro Forma Condensed Consolidated Financial
Information.
Set forth below are thefollowing unaudited pro forma condensed
consolidated financial statements:
1. Introduction to Condensed Consolidated Pro Forma
Financial Statements.
2. Pro Forma Condensed Consolidated Statements of
Income for the Year Ended June 30, 1998 and the Three Months Ended
September 30, 1998.
3. Pro Forma Condensed Consolidated Balance Sheet
as of September 30, 1998.
Unaudited Pro Forma Condensed Consolidated
Financial Information
Introductory Note: The following unaudited pro forma condensed balance
sheet and statements of income reflect the financial position at September
30, 1998 and results of operations for the year ended June 30, 1998 and
the three months ended September 30, 1998 of Proactive Technologies, Inc.
(the "Registrant" or the "Company") as if the disposition of the assets
on January 21, 1999 had occurred on September 30, 1998 for balance sheet
purposes and July 1, 1997 for statement of income purposes.
The unaudited pro forma condensed consolidated balance sheet and statement
of income do not purport to represent the Registrant's financial position
or results of operations had the transactions actually occurred on September
30, 1998 or July 1, 1997, respectively, or to project the Registrant's
consolidated results of operations for any future periods.
The pro forma adjustments are based upon available information. These
adjustments are directly attributable to the transaction referred to above,
and are expected to have a continuing impact on the Registrant's business,
results of operations and financial position. The following unaudited pro
forma condensed consolidated financial statements should be read in
conjunction with the historical financial statements of the Registrant,
which are included in its Form 10-KSB for the year ended June 30, 1998 and
its Form 10-QSB for the three months ended September 30, 1998.
<TABLE>
Proactive Technologies, Inc.
Proforma Condensed Consolidated Statement of Income
Year Ended June 30, 1998
(in 000's)
Proactive Pro Forma
Technologies, Inc. Pro Forma Consolidated
Year Ended Adjustments Year Ended
06/30/98 06/30/98
------------------ -------------- --------------
<S> <C> <C> <C>
Sales (A) $ 15,134 $ 5,113 $ 20,247
Cost of Sales (B) 11,888 6,507 18,395
------------- -------------- ---------------
Gross Profit 3,246 (1,394) 1,852
Selling, general and
administrative exp. (C) ( 2,787) 8 (2,779)
Interest expense (D) ( 1,270) 194 (1,076)
Equity in earnings of
affiliated companies 21 0 21
Minority interest 0 0 0
Loss on attempted
acquisition of Killearn (369) 0 ( 369)
Other income, net 177 0 177
------------- --------------- --------------
(Loss) income before
income taxes and
discontinued operations (982) (1,192) (2,174)
Income tax benefit
(expense) (E) 332 405 737
------------- --------------- ---------------
Net (loss) income
before discontinued
operations (650) ( 787) (1,437)
Discontinued operations:
Loss from investment in
Decocrete (less applicable
benefit of $138,801
(230) 0 ( 230)
-------------- --------------- ---------------
Net (loss) income $ (880) ( 787) (1,667)
(Loss) earnings per share
before discontinued
operations ($ 0.04) ($ 0.14)
Discontinued operations ($ 0.01) ($ 0.01)
-------------- ---------------
(Loss) earnings per share ($ 0.05) ($ 0.15)
Weighted average shares
outstanding 16,845,746 11,845,746
</TABLE>
(A) Reflect sale of properties
(B) Reflect cost of properties sold and closing costs
(C) Eliminate selling and marketing expenses associated with the properties
(D) Eliminate interest expense to reflect the assumption of bank borrowings
(E) Income tax benefit related to the above transactions at the Company's
effective income tax rate (34%).
<TABLE>
Proactive Technologies, Inc.
Pro Forma Condensed Consolidated Statement of Income
Three Months Ended September 30, 1998
(Unaudited) (In 000's)
Proactive Pro Forma
Technologies, Inc. Consolidated
Three Months Pro Forma Three Months
Ended 9/30/98 Adjustments Ended 9/30/98
------------------- ------------- ----------------
<S> <C> <C> <C>
REVENUES:
Net Sales (A) $ 1,327 $ 5,113 $ 6,440
Cost of Sales (B) 1,389 6,507 7,896
Selling, general and
administrative exp. (C) 454 ( 1) 453
-------------- ------------- --------------
(Loss) income from
operations ( 516) (1,393) (1,909)
Other income (deductions):
Interest (expense) (D) ( 138) 48 ( 90)
Other income, net 120 0 120
Minority interest 0 0 0
-------------- ------------- --------------
(Loss) income from
continuing operations
before income taxes ( 534) (1,345) (1,879)
Income tax benefit (E) 186 457 643
-------------- ------------- --------------
Net (loss) income before
discontinued operations ($ 348) ($ 888) ($ 1,236)
Discontinued operations:
Loss from operations of
Decocrete Worldwide, less
applicable tax benefit of 0 0 0
--------------- -------------- --------------
Net (loss) income ($ 348) ($ 888) ($ 1,236)
--------------- -------------- --------------
(Loss) earnings per share
before discontinued
operations ($ 0.02) ( $ 0.11)
Discontinued operations $ 0.00 $ 0.00
--------------- --------------
Earnings per share ($ 0.02) ( $ 0.11)
---------------
Adjusted shares outstanding
primary and fully diluted 16,499,253 11,499,253
Dividends paid NONE NONE
</TABLE>
(A) Reflect sale of properties
(B) Reflect cost of properties sold and closing costs
(C) Eliminate selling and marketing expenses associated with the properties
(D) Eliminate interest expense to reflect the assumption of bank borrowings
(E) Income tax benefit related to the above transactions at the Company's
effective income tax rate (34%).
<TABLE>
Proactive Technologies, Inc.
Pro Forma Condensed Consolidated Balance Sheet
September 30, 1998
Proactive Consolidated
Technologies, Inc. Pro Forma
September 30, Pro Forma September 30,
1998 Adjustments 1998
------------------ ---------------- -----------------
ASSETS:
<S> <C> <C> <C>
Real estate
inventories (A) $ 33,449 ($ 6,161) $ 27,288
Cash and equivalents (B) 98 172 270
Property and equipt, net 393 (235) 158
Investment in Killearn 1,188 0 1,188
Other investments 197 0 197
Other assets 274 0 274
Notes receivable 1,055 0 1,055
-------------- --------------- ---------------
Total Assets $ 36,654 ($ 6,224) $ 30,430
-------------- --------------- ---------------
-------------- --------------- ---------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
<S> <C> <C> <C>
Notes payable (C) $ 21,095 ($ 3,634) $ 17,461
Accounts payable and
accrued expenses (D) 1,096 700 1,796
Income taxes payable (E) 1,237 ( 457) 780
Deferred income
tax liability 112 0 112
Deferred revenue 109 0 109
Deferred comp. payable 0 0 0
Customer deposits (F) 190 ( 175) 15
--------------- ---------------- --------------
Total liabilities $ 23,839 ($ 3,566) $ 20,273
Minority interest 0 0 0
Stockholders' Equity:
Common Stock - par value
$0.04 per share; authorized
60,000,000 shares; issued
17,092,657, (G) 684 (200) 484
Paid in capital (G) 12,328 (1,570) 10,758
Retained earnings 1,753 ( 888) 865
Treasury stock (1,950) 0 ( 1,950)
---------------- ---------------- -------------
Total stockholders'
equity $ 12,815 ($ 2,658) $ 10,157
Total Liabilities and
Stockholders'
equity $ 36,654 ($ 6,224) $ 30,430
---------------- ---------------- -------------
---------------- ---------------- -------------
(A) Eliminate properties
(B) Reflect net increase in cash due to sale of properties
(C) Eliminate mortgages
(D) Accrue liability for cash portion of stock purchases
(E) Reflect accrual of taxes
(F) Reflect reeturn of deposits
(G) Repurchase of shares of common stock
(c) Exhibits.
Exhibit
Number Description
2.1* Stock Exchange Agreement dated as of January 19, 1999
among Proactive Technologies, Inc. and Mark A. Conner
10.1 Consulting Agreement between Proactive Technologies,
Inc. and Mark A. Conner
10.2 Indemnification Agreement between Proactive
Technologies, Inc. and Mark A. Conner
10.3 Profit Sharing Agreement between Proactive
Technologies, Inc. and Mark A. Conner
99.1 Press Release - 1/21/99
* In accordance with Item 601(b)(2) of Regulation S-K, the schedules
have been omitted. There is a list of scedhules at the end of the Exhibit,
briefly describing them. The Registrant will furnish supplementally a
copy of any omitted schedule to the Commission upon request.
Item 8. Change in Fiscal Year
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this registration statement to be signed on
its behalf by the undersigned, thereto duly authorized.
PROACTIVE TECHNOLOGIES, INC.
Dated: February 5, 1999 /s/ Robert E. Maloney, Jr.
By: _____________________________
Robert E. Maloney, Jr., Vice-President
</TABLE>
STOCK EXCHANGE AGREEMENT
THIS STOCK EXCHANGE AGREEMENT ("Agreement") is entered into this _____ of
January, 1999, by and among Proactive Technologies, Inc.., a Delaware
corporation (hereinafter referred to as "Buyer"); and Mark Conner
(hereinafter referred to as "Seller").
WHEREAS, Seller is the owner of record and beneficially owns Five Million
(5,000,000) shares of the issued and outstanding shares of Common Stock of
Proactive Technologies, Inc. (the "Shares"); and
WHEREAS, Seller desires to sell all of the Shares to Buyer, and Buyer
desires to purchase the Shares, upon the terms and conditions set forth
herein, and
WHEREAS, the parties intend that the exchange of Shares for shares of
Seller's common stock, as contemplated herein, qualify as a tax free
transaction under Section 368 of the Internal Revenue Code.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt,
adequacy and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
I.
SALE AND PURCHASE OF THE SHARES
1.1 Sale and Purchase. Subject to the terms and conditions hereof,
at the Closing (as defined in paragraph 1.2 below), Seller agrees to sell,
assign, transfer, convey and deliver to Buyer, and Buyer agrees to purchase
from Seller, the Shares listed in Exhibit "A", attached hereto.
1.2 Closing. The purchase shall be consummated at a closing
("Closing") to take place at 11:00 o'clock a.m., at the offices of Seller's
counsel on January ___, 1999 ("Closing Date").
1.3 Purchase Price. The aggregate purchase price ("Purchase Price")
for the Shares shall be One Hundred (100) shares of Henry Holdings, Inc., a
Florida corporation ("Henry") common stock, attached hereto as Exhibit"B"
which represents 100% of all the issued and outstanding shares of Henry.
1.4 Other Agreements. At the Closing, the indicated parties shall
execute and deliver the following additional agreements in substantially the
form attached hereto:
(a) Stock certificates representing all of the Shares, duly endorsed
to Buyer and in blank or assignments separate from the certificates,
transferring the Shares from Seller to Buyer, copies of which are attached
hereto as Exhibit "C".
(b)Consulting Agreement between Buyer and Mark Conner attached
hereto as Exhibit "D".
(c)Resignation of Mark Conner as President and Director of Proactive
Technologies, Inc. and all of its subsidiaries.
(d)Mutual Release Agreement between Buyer and Seller attached hereto
as Exhibit "E".
(e)Indemnification Agreement attached hereto as Exhibit "F".
(f)Profit Sharing Agreement attached hereto as Exhibit "G".
1.5 Basic Agreements and Transactions Defined. This Agreement and
the other agreement listed in paragraph 1.4, are sometimes referred to as the
"Basic Agreements". The transactions contemplated by the Basic Agreements are
sometimes referred to as the "Transactions".
II.
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of Seller. Seller represents and
warrants to Buyer, with respect to the Shares owned by Seller, as
follows:
(a) Title to the Shares. Seller owns at Closing and of record and
beneficially the number of the Shares listed in Exhibit "A", of the Company,
free and clear of all liens, encumbrances, pledges, claims, options, charges
and assessments of any nature whatsoever, with full right and lawful authority
to transfer the Shares to Buyer. No person has any preemptive rights or
rights of first refusal with respect to any of the Shares. There exists no
voting agreement, voting trust, or outstanding proxy with respect to any of
the Shares. There are no outstanding rights, options, warrants, calls,
commitments, or any other agreements of any character, whether oral or
written, with respect to the Shares.
(b) Authorization of Transaction. The Seller has full power and
authority (including, if the Seller is a corporation, full corporate power and
authority) to execute and deliver the Basic Agreements and to perform his
obligations thereunder. The Basic Agreements constitute a valid and legally
binding obligation of the Seller, enforceable in accordance with its terms and
conditions. The Seller need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by
the Basic Agreements.
(c)Brokers' Fees. The Seller has no liability or obligation to pay
any fees or commissions
to any broker, finder, or agent with respect to the transactions contemplated
by this Agreement for which the Buyer could become liable or obligated.
2.2 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:
(a) Organization. Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Delaware. Buyer
has all requisite corporate power and authority to complete this transaction
and carry on its business. Buyer is duly qualified and in good standing with
the State of Delaware.
(b) Authorization of Transaction. The Buyer has full power and
authority (including, if the Buyer is a corporation, full corporate power and
authority) to execute and deliver the Basic Agreements and to perform his
obligations thereunder. The Basic Agreements constitute a valid and legally
binding obligation of the Buyer, enforceable in accordance with its terms and
conditions. The Buyer need not give any notice to, make any filing with, or
obtain any authorization , consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by
the Basic Agreements.
(c) Assets of Henry. which will have $700,000 in cash and
Golden Eagle tract of property, which is currently under contract with the
Hobbs group, Twin Action realty, and which consists of the following
property: 38 lots in The Landing at Golden Eagle Phase I, 39 developed lots
in Golden Eagle Units 5 & 7, 40 lots in Golden Eagle Unit 8, raw land for The
Landings at Golden Eagle Phase II, raw land for Golden Eagle Unit 6, and the
office building located at 7118 Beech Ridge Trail, Tallahassee, Florida.
III.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF BUYER TO CLOSE
The obligation of Buyer to close the Transactions contemplated hereby is
subject to the fulfillment by Seller prior to Closing of each of the following
conditions, which may be waived in whole or in part by Buyer:
3.1 Compliance with Representations and Warranties . The
representations and warranties of Seller contained in this Agreement shall
have been true and correct when made and shall be true and correct as of the
Closing with the same force and effect as if made at the Closing. Seller
shall have performed all agreements, covenants and conditions required to be
performed by Seller prior to the Closing.
3.2 No Legal Proceedings. No suit, action or other legal or
administrative proceeding before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the
Transactions contemplated hereby.
3.3 Documents to be Delivered by Seller. The Company and Seller
shall have delivered the following documents:
(a) Stock certificates representing all of the Shares, duly endorsed
to Buyer and in blank or accompanied by duly executed stock powers, copies of
which are attached as Exhibit "B".
(b) Such other documents or certificates as shall be reasonably
required by Buyer or its counsel in order to close and consummate this
Agreement.
IV.
CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF SELLER TO CLOSE
The obligation of Seller to close the Transactions is subject to the
fulfillment prior to Closing of each of the following conditions, any of which
may be waived in whole or in part by Seller:
4.1 Compliance with Representations, Warranties and Covenants. The
representations and warranties made by Buyer in this Agreement shall have been
true and correct when made and shall be true and correct in all material
respects at the Closing with the same force and effect as if made at the
Closing, and Buyer shall have performed all agreements, covenants and
conditions required to be performed by Buyer prior to the Closing.
4.2 No Legal Proceedings. No suit, action or other legal or
administrative proceedings before any court or other governmental agency shall
be pending or threatened seeking to enjoin the consummation of the
Transactions contemplated hereby.
4.3 Other Agreements. All parties other than Seller shall have
executed and delivered the Basic Agreements.
4.4 Payments. Buyer shall deliver stock certificates to Seller
representing all of the issued and outstanding shares of Henry Holdings, Inc.
duly endorsed to Seller. At Closing, the Company shall execute two deeds to
be held in escrow, one deeding the aforementioned Golden Eagle tract property
to Twin Action Properties, Inc., pursuant to the existing contract, and
another deeding the same property to Henry Holdings, Inc., a Florida
corporation, which deed is to be recorded in the event that Twin Action does
not consummate its transaction by January 28, 1999.
4.5 Assignment of Agreements. The Company agrees to assign both
its agreement with the Golden Eagle Country Club and its agreement with
Talquin Electric Cooperative to the party receiving the deed to the property
at Closing.
V.
MODIFICATION, WAIVERS, TERMINATION
AND EXPENSES
5.1 Modification. Buyer and Seller may amend, modify or supplement
this Agreement in any manner as they may mutually agree in writing.
5.2 Waivers. Buyer and Seller may in writing extend the time for or
waive compliance by the other with any of the covenants or conditions of the
other contained herein.
5.3 Termination and Abandonment. This Agreement may be terminated
and the purchase of the Shares may be abandoned before the Closing:
(a) By the mutual consent of Seller and Buyer;
(b) By Buyer, if the representations and warranties of Seller set
forth herein shall not be accurate, or the conditions precedent set forth in
Article III shall have not have been satisfied, in all material respects; or
(c) By Seller, if the representations and warranties of Buyer set
forth herein shall not be accurate, or the conditions precedent set forth in
Article IV shall not have been satisfied in all material respects.
Termination shall be effective on the date of receipt of written notice
specifying the reasons therefor.
VI.
MISCELLANEOUS
6.1 Representations and Warranties to Survive. Unless otherwise
provided, all of the representations and warranties contained in this
Agreement and in any certificate, exhibit or other document delivered pursuant
to this Agreement shall survive the Closing for a period of two (2) years. No
investigation made by any party hereto or their representatives shall
constitute a waiver of any representation or warranty, and no such
representation or warranty shall be merged into the Closing.
6.2 Binding Effect of the Basic Agreements. The Basic Agreements and
the certificates and other instruments delivered by or on behalf of the
parties pursuant thereto, constitute the entire agreement between the
parties. The terms and conditions of the Basic Agreements shall inure to the
benefit of and be binding upon the respective heirs, legal representatives,
successor and assigns of the parties hereto. Nothing in the Basic Agreements,
expressed or implied, confers any rights or remedies upon any party other than
the parties hereto and their respective heirs, legal representatives and
assigns. Whenever Seller is authorized to act hereunder, any action
authorized by members of Seller holding a majority of the Shares shall be
deemed the act of and binding on all members of Seller.
6.3 Applicable Law. The Basic Agreements are made pursuant to, and
will be construed under, the laws of the State of Florida.
6.4 Notices. All notices, requests, demands and other communications
hereunder shall be in writing and will be deemed to have been duly given when
delivered or mailed, first class postage prepaid:
(a) If to Seller, to:
Mark Conner
2500 Deerlake Road
Tallahassee, FL 32312
Telephone: (850) 668-0083
(b) If to Buyer, to:
Proactive Technologies, Inc.
ATTN: Arthur Weiss
7118 Beech Ridge Trail
Tallahassee, FL 32312
Telephone: (850) 668-8500
Fax: (850) 668-9100
These addresses may be changed from time to time by written notice to the
other parties.
6.5 Headings. The headings contained in this Agreement are for
reference only and will not affect in any way the meaning or interpretation of
this Agreement.
6.6 Counterparts. This Agreement may be executed in counterparts,
each of which will be deemed an original and all of which together will
constitute one instrument.
6.7 Severability. If any one or more of the provisions of this
Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable under applicable law this Agreement shall be construed as if
such invalid, illegal or unenforceable provision had never been contained
herein. The remaining provisions of this Agreement shall be given effect to
the maximum extent then permitted by law.
6.8 Forbearance; Waiver. Failure to pursue any legal or equitable
remedy or right available to a party shall not constitute a waiver of such
right, nor shall any such forbearance, failure or actual waiver imply or
constitute waiver of subsequent default or breach.
6.9 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.
6.10 Expenses. Each party shall pay all fees and expenses incurred
by it incident to this Agreement and in connection with the consummation of
all transactions contemplated by this Agreement.
6.11 Integration. This Agreement and all documents and instruments
executed pursuant hereto merge and integrate all prior agreements and
representations respecting the Transactions, whether written or oral, and
constitute the sole agreement of the parties in connection therewith. This
Agreement has been negotiated by and submitted to the scrutiny of both Seller
and Buyer and their counsel and shall be given a fair and reasonable
interpretation in accordance with the words hereof, without consideration or
weight being given to its having been drafted by either party hereto or its
counsel.
IN WITNESS WHEREOF, the undersigned parties hereto have duly executed this
Agreement on the date first written above.
"BUYER"
PROACTIVE TECHNOLOGIES, INC.
By:________________________________
Arthur Weiss, Vice-President
"SELLER"
___________________________________
Mark Conner
List of Exhibits to Agreement:
A Shares of Stock Owned by Seller
B Outstanding Warrants, Options, Calls with regard to its Stock
C Contracts and Agreements of the Company re Profits or Assets
D Undisclosed Liabilities
E Exceptions to Title
F Insurance held by the Company
G Transactions with Certain Persons
H Material Contracts of the Company
I Employment Matters of the Company
J Authorizations of the Company
L Outstanding Rights, Options, Warrants, Commitments etc. to
Issue Shares of Buyer
K Employment Matters of Buyer
L Authorizations of Buyer
CONSULTING AGREEMENT
THIS AGREEMENT is made and entered into on this ___ day of January, 1999
by and between CAPITAL FIRST HOLDINGS, a Florida corporation, (hereinafter
"Capital First") and MARK A. CONNER, a resident of the State of Florida
(hereinafter "Conner").
W I T N E S S E T H
WHEREAS, Conner has submitted his resignation as an officer and director
of Capital First and its subsidiaries and has terminated his employment
contract; and
WHEREAS, Capital First desires to contract with Conner to provide
consulting services to ensure a smooth transition with new management; and
WHEREAS, Conner desires to provide such consulting services to Capital
First.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein and Ten Dollars ($10.00), the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
1.Appointment. Capital First hereby retains Conner to serve as a
management consultant for Capital First, which services shall include
assisting all personnel with transition into new management and continue to
aid the Company with sales of real property.
2.Compensation. Capital First shall pay Conner for his services to be
rendered a flat fee of $25,000.00, payable as follows: a.) $12,500.00
payable on February 1, 1999; and b.) $12,500.00 payable on March 1, 1999.
3.Independent Contractor. Conner shall be deemed an independent
contractor for all purposes hereunder. Nothing contained herein shall be
construed to make Conner a partner, employee, or agent of Capital First, nor
shall either party have any authority to bind the other in any respect, it
being intended that each shall remain independent contractors responsible for
their own actions.
4.Manner of Performance. Without limiting the other provisions herein,
Conner shall perform his duties hereunder pursuant to the following terms and
conditions:
A.Conner shall be furnished with and use Capital First's equipment and
materials during the course of his performance hereunder;
B.Conner shall be allowed to work from Capital First's Tallahassee office
location, and exercise his own judgment as to the method and manner of his
services;
C.Conner shall not be prevented from engaging in other reasonable
employment, provided, however, that such other employment does not create any
conflict of interest hereunder; and
D.Conner shall pay his own workman's compensation, unemployment
compensation, insurance, social security and withholding and all other
federal, state and local taxes or assessments and shall hold Proactive
harmless therefrom.
5.Expenses. Capital First agrees to reimburse Conner for reasonable expenses
associated with travel, postage and telephone incurred on behalf of Proactive.
6.Term. The term of this agreement shall commence on the ____ day of
January, 1999 and shall continue until April 15, 1999.
7.Assignment. The agreement and the obligations hereunder may not be
assigned by Conner without the express, prior written consent of Capital
First.
8.Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of Florida.
In WITNESS WHEREOF, the parties have execute this Consulting Agreement on the
day and year first above written.
"Capital First""Conner"
CAPITAL FIRST HOLDINGS, INC.,
A Florida Corporation
By:_____________________________ By:______________________________
Arthur G. Weiss, Vice-President Mark A. Conner
INDEMNIFICATION AGREEMENT
THIS AGREEMENT, is made this _____ day of January, 1999, by and between
MARK A. CONNER, of 2500 Deer Lake Road, Tallahassee, FL 32312, (hereinafter
"Conner") , and PROACTIVE TECHNOLOGIES, INC., a Delaware corporation, whose
post office address is 7118 Beech Ridge Trail, Tallahassee, FL 32312.
(Hereinafter "PTE" or the "Company")
W I T N E S S E T H
WHEREAS, on or about January ____, 1999, the parties hereto have executed
or will execute a Stock Exchange Agreement whereby Conner will exchange
5,000,00 shares of restricted voting common stock of Proactive Technologies,
Inc. (AMEX:PTE) in exchange for 100% of the issued and outstanding shares of
Henry Holdings, Inc., a wholly owned subsidiary of PTE.
WHEREAS, the Company, through its subsidiaries, Proactive First Holdings,
Inc., a Florida corporation, successor by Articles of Merger to Jamesmark,
Inc., a Florida corporation, Marketprice Properties, Inc., a Florida
corporation, North Beach Holdings, Inc., a Florida corporation and Proactive
First, Inc., a Florida corporation; Proactive First Holdings, Inc. of Georgia,
a Georgia corporation, Proactive First Holdings of Albany, Inc., a Georgia
corporation, Barrier Dunes Development Corporation, a Florida corporation, has
executed various obligations with various lenders on various property owned by
the Company through its subsidiaries, which obligations are in the form of
promissory notes secured by underlying mortgages on the various properties;
and
WHEREAS, as part and parcel of the above mentioned obligations secured by
property of the Company through its subsidiaries, Conner, and in some cases,
Conner's spouse, LISA CONNER, was required on many of the obligations to sign
as personal unconditional or conditional guarantor of said obligations.
WHEREAS, the parties have discussed this agreement and wish to
memorialize their agreement in writing.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, it is agreed as follows:
1.The Company, as part and parcel of the consideration set forth above as
well as the consideration of the sale of his 5,000,000 shares of restricted
voting common stock, agrees to forever indemnify and hold harmless Mark and/or
Lisa Conner from and against any and all claims suits damage or damages and or
loss or losses and or action or actions of any kind as a result of and arising
out of any liability associated with any debt of the Company on which Mark
and/or Lisa Conner remains as a guarantor.
2.The Company agrees to use all reasonable effort to obtain a legal and
binding release, to the satisfaction of Mark and/or Lisa Conner, or their
counsel, which removes Mark and/or Lisa Conner as a guarantor from any loan on
which they remain, but in the event that said release is not obtained, then
the Company agrees as follows:
A.If the Company fails to pay any monthly interest payment or monthly or
quarterly principal and interest payment as obligated under any of the
aforementioned Notes and Mortgages on any obligation to any lender for a
delinquency period of fifteen (15) days, then the Company shall be deemed to
be in Default , and the Company agrees to deed any property underlying any
unpaid obligation to Conner immediately. In the event Company fails to so
deliver a deed for the aforementioned property in recordable form within three
(3) days after the fifteenth day, then Company shall be deemed to be in breach
and Conner may be allowed any and all available remedies provided under law,
including specific performance.
3.Representations and Warranties to Survive. Unless otherwise provided,
all of the representations and warranties contained in this Agreement and in
any certificate, exhibit or other document delivered pursuant to this
Agreement shall survive the Closing for a period of two (2) years, with the
exception of the indemnification, which shall survive until the notes
underlying the personal guaranty of Conner is paid in full. No investigation
or lack of investigation made by any party hereto or their representatives
shall constitute a waiver of any representations or warranty, and no such
representation or warranty shall be merged into Closing.
4. Modification. The Company or Conner may amend, modify, or
supplement this Agreement in any manner as they mutually agree only in
writing.
5. Assignability. PTE or Conner may not assign this Agreement
without the express prior written consent of each other.
6. 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.
7. Governing Law. This Agreement and Transaction is are made
pursuant to and will be construed under, the laws of Florida.
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.
IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement
on the date first written above.
"PTE" or "COMPANY" "CONNER"
PROACTIVE TECHNOLOGIES, INC.
_________________________________ ___________________________________
By: Arthur G. Weiss, Vice President By:Mark A. Conner
Signed, sealed and delivered Signed, sealed and delivered
in the presence of in the presence of
____________________________ _____________________________
Unofficial Witness Unofficial Witness
____________________________ (SEAL) _____________________________ (SEAL)
Notary Public Notary Public
My commission expires: My commission expires:
______________________________ ___________________________
PROFIT SHARING AGREEMENT
THIS PROFIT SHARING AGREEMENT, is made this _____ day of January, 1999,
by and between MARK A. CONNER, of 2500 Deer Lake Road, Tallahassee, FL 32312,
(hereinafter "Conner") and HENRY HOLDINGS, INC., 2500 Deer Lake Road,
Tallahassee, FL 32312, (hereinafter "HENRY HOLDINGS") and Proactive
TECHNOLOGIES, INC., a Delaware corporation, whose post office address is 7118
Beech Ridge Trail, Tallahassee, FL 32312. (Hereinafter "PTE" or the "Company")
W I T N E S S E T H
WHEREAS, on or about January ____, 1999, the parties hereto have executed
or will execute a Stock Exchange Agreement whereby Conner will exchange
5,000,00 shares of restricted voting common stock of Proactive Technologies,
Inc. (AMEX:PTE) in exchange for 100% of the issued and outstanding shares of
Henry Holdings, Inc., a wholly owned subsidiary of PTE.
WHEREAS, the Company, through its subsidiaries, Proactive First Holdings,
Inc., a Florida corporation, successor by Articles of Merger to Jamesmark,
Inc., a Florida corporation, Marketprice Properties, Inc., a Florida
corporation, North Beach Holdings, Inc., a Florida corporation and Proactive
First, Inc., a Florida corporation; Proactive First Holdings, Inc. of Georgia,
a Georgia corporation, Proactive First Holdings of Albany, Inc., a Georgia
corporation, Barrier Dunes Development Corporation, a Florida corporation, has
executed various obligations with various lenders on various property owned by
the Company through its subsidiaries, which obligations are in the form of
promissory notes secured by underlying mortgages on the various properties;
and
WHEREAS, as part and parcel of the above mentioned obligations secured by
property of the Company through its subsidiaries, Conner, and in some cases,
Conner's spouse, LISA CONNER, was required on many of the obligations to sign
as personal unconditional or conditional guarantor of said obligations.
WHEREAS, the parties have discussed this agreement and wish to
memorialize their agreement in writing.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good
and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, it is agreed as follows:
1.PTE, Conner and Henry Holdings agree that the fair market value of the
real estate owned by Henry Holdings ("Real Estate") is equal to One Million
Three Hundred Thousand Dollars and No Cents ($1,300,000.00) after reduction
for the Company's secured indebtedness on the Real Estate.
2.In the event Henry Holdings sells the Real Estate in bulk prior to
April 1, 1999 for net profits in excess of One Million Three Hundred Thousand
Dollars ($1,300,000.00), Conner and Henry Holdings agree to pay PTE all
profits in excess of One Million Three Hundred Thousand Dollars
($1,300,000.00). Net profits shall be equal to the total purchase price less
the following: assumption of debt, commissions and reasonable closing costs.
.
3.The parties agree that this profit sharing agreement and disgorging to
the company shall terminate and be null and void at 12:01 A.M. on Friday April
2, 1999.
4. Modification. The Company or Conner may amend, modify, or
supplement this Agreement in any manner as they mutually agree only in
writing.
5. Assignability. PTE or Conner may not assign this Agreement
without the express prior written consent of each other.
6. 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.
7. Governing Law. This Agreement and Transaction is are made
pursuant to and will be construed under, the laws of Florida.
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.
IN WITNESS WHEREOF, the undersigned parties have duly executed this Agreement
on the date first written above.
"PTE" or "COMPANY""CONNER"
Proactive TECHNOLOGIES, INC.
_______________________________________ _____________________________
By: Arthur G. Weiss, Vice President By:Mark A. Conner
Signed, sealed and delivered Signed, sealed and delivered
in the presence of in the presence of
___________________________ ______________________________
Unofficial Witness Unofficial Witness
____________________________ (SEAL) _____________________________ (SEAL)
Notary Public Notary Public
My commission expires: My commission expires:
___________________________ ______________________________
NEWS RELEASE
FOR IMMEDIATE RELEASE
CONTACT:
Proactive Technologies, Inc. Millennium Holdings Group, Inc.
7118 Beech Ridge Trail (561) 988-2334
Tallahassee, FL 32312
(850) 668-8500
PROACTIVE TECHNOLOGIES, INC. REPURCHASES
5,000,000 SHARES OF ITS STOCK
Tallahassee, Florida, January 21, 1999. Proactive Technologies, Inc.
(American Stock Exchange: PTE) announced today that it has repurchased 5
million shares of Proactive Technologies' stock that had been held by Mark A.
Conner. The stock repurchase, which was approved by the Company's Board of
Directors, was a negotiated transaction. The Company exchanged Mr. Conner
property and cash, through a share exchange, equivalent to $0.40 per share, a
price below the stock's closing price.
Mr. Conner has resigned as a Director, President & CEO of the Company, and as
an officer and director of all of the Company's subsidiaries, in order to
pursue other interests.
Upon acceptance of Mr. Conner's resignation, the Proactive Technologies' Board
elected Arthur G. Weiss as Chairman, President and CEO of the Company. Mr.
Weiss was recently added to the Company's Board after the Company's
acquisition of West Side Investors, Inc. from Mr. Weiss and his family.
In making these announcements, Mr. Weiss stated: "These transactions mark a
turning point for Proactive Technologies. The Company is diversifying from
subdivision development to other activities. We are very enthusiastic about
the Company's recent acquisitions and the opportunities to focus on building
shareholder value."
Proactive Technologies, Inc. is a real estate developer of single-family
subdivisions in Florida and Georgia. Proactive is presently involved in
developing 14 separate communities. Proactive Technologies, Inc. core
business, Capital First Holdings, Inc. is the largest developer in Tallahassee
/ Leon County (the Florida state capital) in north Florida, where it holds a
31% market share.
This release contains forward-looking statements with the meaning of section
21A of the Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. Although the Company believes the expectations reflected in the
forward-looking statements and assumptions upon which forward-looking
statements are based are reasonable it can give no assurance that such
expectations and assumptions will prove to have been correct. See the
Company's Annual Report on Form 10-KSB for additional statements concerning
important factors, such as demand for products, manufacturing costs and
competition, that could cause actual results to differ materially from the
Company's expectations.
# # #
