EXHIBIT "A"
ACQUISITION AGREEMENT
BETWEEN
PROFESSIONAL WRESTLING
ALLIANCE CORPORATION
AND
GATEWAY DISTRIBUTORS, LTD.
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ACQUISITION AGREEMENT
TABLE OF CONTENTS
Purchase and Sale..............................................................2
Purchase Price.................................................................2
Warranties and Representations of Gateway .....................................2
Warranties and Representations of PWA..........................................3
Term...........................................................................5
The PWA Shares.................................................................5
Conditions Precedent to Closing................................................6
Termination....................................................................7
Exhibits.......................................................................7
Miscellaneous Provisions.......................................................7
Closing........................................................................7
Effective Date.................................................................8
Governing Law..................................................................8
Counterparts...................................................................8
Index to Exhibits ............................................................9
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ACQUISITION AGREEMENT
THIS ACQUISITION AGREEMENT dated October 12, 2000, by, between and among
Professional Wrestling Alliance Corporation, a Delaware corporation ("PWA"), and
Gateway Distributors, Ltd., a Nevada corporation, ("Gateway").
WHEREAS, Gateway is the owner of those certain assets described and set
forth on Exhibit "A" attached hereto ("Assets"); and
WHEREAS, Gateway desires to sell and PWA desires to purchase the Assets;
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties herein contained, the parties hereby agree as
follows:
I. Purchase and Sale. Gateway hereby agrees to sell, transfer, assign and
convey to PWA and PWA hereby agrees to purchase and acquire the Assets, as
set forth in Exhibit "A", from Gateway.
II. Purchase Price. The aggregate purchase price to be paid by PWA for the
Assets shall be thirteen million four hundred eighty eight million six
hundred sixty shares (post 1 for 20 reverse split shares) of PWA common
voting stock (the "PWA Purchase Shares") which will equal approximately
eighty five percent (85%) of the issued and outstanding shares of PWA.
III. Warranties and Representations of Gateway. In order to induce PWA to enter
into the Agreement and to complete the transaction contemplated hereby,
Gateway warrants and represents to PWA that:
A. Organization and Standing. Gateway is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Nevada, is qualified to do business as a foreign corporation in every
other state or jurisdiction in which it operates to the extent
required by the laws of such states and jurisdictions, and has full
power and authority to carry on its business as now conducted and to
own and operate its assets, properties and business. No changes
thereto will be made in any of the said documents before the Closing.
B. Ownership of the Assets. As of the Date hereof, Gateway is the sole
owner of the Assets, free and clear of all liens, encumbrances and
restrictions of any nature whatsoever.
C. Ownership of Assets. Gateway has good, marketable title, without any
liens or encumbrances of any nature whatever, to all of the Assets.
D. No Misleading Statements or Omissions. Neither the Agreement nor any
financial
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statement, exhibit, schedule or document attached hereto or presented
to PWA in connection herewith, contains any materially misleading
statement, or omits any fact or statement necessary to make the other
statements or facts therein set forth not materially misleading.
E. Validity of the Agreement. All corporate and other proceedings
required to be taken by Gateway in order to enter into and to carry
out the Agreement have been duly and properly taken. The Agreement has
been duly executed by Gateway, and constitutes the valid and binding
obligation of Gateway, except to the extent limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other laws
relating to or affecting generally the enforcement of creditors
rights. The execution and delivery of the Agreement and the carrying
out of its purposes will not result in the breach of any of the terms
or conditions of, or constitute a default under or violate Gateway's
Certificate of Incorporation or document of undertaking, oral or
written, to which Gateway is a party or is bound or may be affected,
nor will such execution, delivery and carrying out violate any order,
writ, injunction, decree, law, rule or regulation of any court,
regulatory agency or other governmental body.
F. Enforceability of the Agreement. When duly executed and delivered, the
Agreement and the Exhibits hereto which are incorporated herein and
made a part hereof are legal, valid, and enforceable by PWA according
to their terms, except to the extent limited by applicable bankruptcy,
reorganization, insolvency, moratorium or other laws relating to or
affecting generally the enforcement of creditors rights and that at
the time of such execution and delivery, PWA will have acquired title
in and to the Assets free and clear of all claims, liens and
encumbrances.
IV. Warranties and Representations of PWA. In order to induce Gateway to enter
into the Agreement and to complete the transaction contemplated hereby, PWA
warrants and represents to Gateway that:
A. Organization and Standing. PWA is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Delaware, is qualified to do business as a foreign corporation in
every other state in which it operates to the extent required by the
laws of such states, and has full PWA and authority to carry on its
business as now conducted and to own and operate its assets,
properties and business.
B. Capitalization PWA's entire authorized equity capital consists of
shares of voting common stock, $.001 par value and shares of preferred
stock $.001 par value. As of the Closing, PWA will have 200,000,000
shares Common Stock, $.001 par value, authorized, of which 48,606,832
shares of voting common stock of PWA will be issued and outstanding,
which does not include the shares being issued to Gateway hereunder
pursuant to Section 4(2) of the '33 Act, at closing. As of the
Closing,
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PWA will have 5,000,000 shares Preferred Stock, $.001 par value,
authorized, of which zero (0) shares of Preferred Stock of PWA will be
issued and outstanding Upon issuance, all of the PWA Common Stock will
be validly issued fully paid and non-assessable. The relative rights
and preferences of PWA's equity securities are set forth in the
Articles of Incorporation, as amended and PWA's By-Laws. Except as set
forth above, there are no voting or equity securities convertible into
voting stock, and no outstanding subscriptions, warrants, calls,
options, rights, commitments or agreements by which PWA is bound,
calling for the issuance of any additional shares of common stock or
any other voting or equity security. The By-Laws of PWA provide that a
simple majority of the shares voting at a stockholders' meeting at
which a quorum is present may elect all of the directors of PWA.
Cumulative voting is not provided for by the By-Laws or Articles of
Incorporation of PWA. Accordingly, as of the Closing the shares being
issued to and acquired by Gateway will constitute approximately 85% of
the Common Shares of PWA which will then be issued and outstanding,
which includes inter alia, that same percentage of PWA's voting power,
right to receive dividends, when, as and if declared and paid, and the
right to receive the proceeds of liquidation attributable to common
stock, if any.
C. Ownership of Shares. By PWA's issuance of the PWA Shares to Gateway
pursuant to the Agreement, PWA will thereby acquire good absolute
marketable title thereto, free and clear of all liens, encumbrances
and restrictions of any nature whatsoever, except by reason of the
fact that such PWA shares will not have been registered under the '33
Act.
D. Taxes. PWA has filed all federal, state and local income or other tax
returns and reports that it is required to file with all governmental
agencies, wherever situate. All of such returns are true and complete.
E. No Pending Actions. Except as may be disclosed in the Form 10-KSB/A
filed by PWA on April 18, 2000, a copy of which is attached as exhibit
"B," or in the Form 10-QSB filed by PWA on August 18, 2000, a copy of
which is attached hereto as exhibit "C," There are no legal actions,
lawsuits, proceedings or investigations, either administrative or
judicial, pending or threatened, against or affecting PWA, or against
any of PWA's officers or directors and arising out of their operation
of PWA. PWA has been in compliance with, and has not received notice
of violation of any law, ordinance or regulation of any kind whatever,
including, but not limited to, the '33 Act, the '34 Act, the Rules and
Regulations of the SEC or the Securities Laws and Regulations of any
state. PWA is not now and never has been required to file reports
under the '33 Act or the '34 Act.
F. Corporate Records. All of PWA's books and records, including without
limitation, its book of account, corporate records, minute book, stock
certificate books and other records are up-to-date, complete and
reflect accurately and fairly the conduct of its business in all
respects since its date of incorporation.
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G. No Misleading Statements or Omissions. Neither the Agreement nor any
financial statement, exhibit, schedule or document attached hereto or
presented to Gateway in connection herewith contains any materially
misleading statement, or omits any fact or statement necessary to make
the other statements of facts therein set forth not materially
misleading.
H. Validity of the Agreement. All corporate action and proceedings
required to be taken by PWA in order to enter into and to carry out
the Agreement have been duly and properly taken. The Agreement has
been duly executed by PWA, and constitutes a valid and binding
obligation of PWA. The execution and delivery of the Agreement and the
carrying out of its purposes will not result in the breach of any of
the terms or conditions of, or constitute a default under or violate,
PWA's Certificate of Incorporation or By- Laws, or any agreement,
lease, mortgage, bond, indenture, license or other document or
undertaking, oral or written, to which PWA is a party or is bound or
may be affected, nor will such execution, delivery and carrying out
violate any order, writ, injunction, decree, law, rule or regulation
of any court regulatory agency or other governmental body.
I. Enforceability of the Agreement. When duly executed and delivered, the
Agreement and the Exhibits hereto which are incorporated herein and
made a part hereof are legal, valid, and enforceable by Gateway
according to their terms, and that at the time of such execution and
delivery, Gateway will have acquired good, marketable title in and to
the PWA Common Shares acquired pursuant hereto, free and clear of all
liens and encumbrances.
J. Access to Books and Records. Gateway will have full and free access to
PWA's books and records during the course of this transaction prior to
and at the Closing.
K. PWA Financial Condition. The financial condition of PWA is set forth
in the financial statements contained in PWA's Forms 10-KSB/A,
attached hereto as Exhibit "B" and 10-QSB attached hereto as exhibit
"C."
V. Term. All representations, warranties, covenants and agreements made herein
and in the exhibits attached hereto shall survive the execution and
delivery of the Agreement and payment pursuant thereto.
VI. The PWA Shares. All of the PWA Common Shares shall be validly issued,
fully-paid and non- assessable shares of PWA Common Stock, with full voting
rights, dividend rights, and the right to receive the proceeds of
liquidation, if any, as set forth in the respective Articles of
Incorporation.
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VII. Conditions Precedent to Closing.
A. The obligations of Gateway under the Agreement, including the
obligation to close the Agreement, shall be and are subject to
fulfillment, prior to or at the Closing of each of the following
conditions:
1. That PWA and its management's representations and warranties
contained herein shall be true and correct at the time of closing
as if such representations and warranties were made at such time;
2. That PWA and its management shall have performed or complied with
all agreements, terms and conditions required by the Agreement to
be performed or complied with by them prior to or at the time of
Closing;
3. That PWA's stockholders, by proper and sufficient vote, shall
have properly approved all of the matters described in Section
VII(B)(1) herein, if required to do so under Delaware Corporate
Law; and
B. The obligations of PWA under the Agreement, including the obligation
to close the agreement, shall be and are subject to fulfillment, prior
to or at the Closing of each of the following conditions:
1. That PWA stockholders, if necessary by proper and sufficient vote
of its stockholders, shall have approved the Agreement and the
transactions contemplated hereby and will have approved such
other changes as are consistent with the Agreement for submission
to PWA stockholders, if required to do so under Delaware
Corporate Law;
2. That Gateway's representations and warranties contained herein
shall be true and correct at the time of Closing as if such
representations and warranties were made at such time; and
3. That Gateway shall have performed or complied with all
agreements, terms and conditions required by the Agreement to be
performed or complied with by it prior to or at the time of
Closing.
4. That Rick Bailey, the current president of Gateway, shall have
been appointed as president and CEO of PWA;
5. That Rick Bailey shall have caused three hundred fifty thousand
dollars ($350,000) to be raised on behalf of PWA;
6. That any monies raised from investors prior to the closing be
held in escrow until sufficient monies have been raised in the
offering to make all payments due and owing to Hudson Consulting
Group and World Alliance Group by PWA, Gateway or Rick Bailey.
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7. That no shares of PWA will be delivered to investors in a capital
raising venture until at least three hundred fifty thousand
dollars ($350,000) has been raised.
8. The liability of PWA to the State of Pennsylvania shall have been
paid in full or otherwise settled and resolved at a cost to PWA
not to exceed $50,000;
9. All amounts due and owing to Hudson Consulting Group and World
Alliance Group by PWA, Gateway or Rick Bailey shall have been
paid in full, which amounts are identified as (1) $150,000
payable to World Alliance Group, (2) $150,000 payable to Hudson
Consulting Services, and (3) all invoices as of the closing date
from Hudson Consulting Group to PWA for consulting services;
10. That the parties jointly and severally indemnify and hold
harmless PWA's former officers, directors, agents and affiliates
against any claims or liabilities, including reasonable
attorney's fees and other reasonable defense costs incurred
defending such claims or liabilities, which may result from any
claims or liabilities asserted against them as to any material
misrepresentation or omission in the Agreement made by any party
hereto.
11. That the final asset list prepared by Gateway (a draft of which
list is attached hereto as Exhibit "A") shall contain assets
acceptable at closing to PWA.
12. That the closing occur within one hundred twenty days of the
signing of this agreement
VIII.Termination. The Agreement may be terminated at any time before or at
Closing, by:
A. The mutual agreement of the parties;
B. Any party if:
1. Any provision of the Agreement applicable to or benefitting a
party shall be materially untrue or fail to be accomplished.
2. Any legal proceeding shall have been instituted or shall be
imminently threatening to delay, restrain or prevent the
consummation of the Agreement.
Upon termination of the Agreement for any reason, in accordance with the terms
and conditions set forth in this paragraph, each said party shall bear all costs
and expenses that each party has incurred and no party shall be liable to the
other.
IX. Exhibits. All Exhibits attached hereto are incorporated herein by this
reference as if they were set forth in their entirety.
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X. Miscellaneous Provisions. This Agreement is the entire agreement between
the parties in respect of the subject matter hereof, and there are no other
agreements, written or oral, nor may the Agreement be modified except in
writing and executed by all of the parties hereto. The failure to insist
upon strict compliance with any of the terms, covenants or conditions of
the Agreement shall not be deemed a waiver or relinquishment of such right
or power at any other time or times.
XI. Closing. The Closing of the transactions contemplated by the Agreement
("Closing") shall take place at 268 West 400 South, Suite 300, Salt Lake
City, Utah 84101 on or before 120 days from the date of this agreement, if
shareholder approval is not required or can be obtained subsequent to
closing by shareholder ratification. If a shareholder's meeting is
required, the closing shall take place either within 120 days of the date
of this agreement or within fifteen days of the ratification of the
agreement by shareholders. The Closing shall occur at the offices of
Richard D. Surber, located at 268 West 400 South, Suite 300, Salt Lake
City, Utah 84101. At the Closing, all of the documents and items referred
to herein shall be exchanged.
XII. Effective Date. The effective date of this agreement shall be October 6,
2000.
XIII.Governing Law. The Agreement shall be governed by and construed in
accordance with the internal laws of the State of Utah. The validity,
interpretation, and performance of this Agreement shall be governed by the
laws of the State of Utah, without regard to its law on the conflict of
laws. Any dispute arising out of this Agreement shall be brought in a court
of competent jurisdiction in Salt Lake County, State of Utah. The parties
waive and exclude any and all statutes, laws and treaties which would allow
or require any dispute to be decided in another forum or by other rules of
decision than provided in this Agreement.
XIV. Counterparts. The Agreement may be executed in duplicate facsimile
counterparts, each of which shall be deemed an original and together shall
constitute one and the same binding Agreement, with one counterpart being
delivered to each party hereto.
IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of
the date and year above first written.
Gateway Distributors, Ltd., a Nevada Corporation
By: /s/ Flo Ternes
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Flo Ternes
Its: Chief Financial Officer
Professional Wrestling Alliance Corporation
By: /s/ Rick Bailey
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Rick Bailey
Its: President
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