3
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS UNDER SECTION 12(b) OR (g) OF
THE SECURITIES EXCHANGE ACT OF 1934
SEGMENTZ, INC.
(Name of Small Business Issuer in Its Charter)
Delaware (I.R.S. Employer Identification No.)
(State or other jurisdiction of 75-2928175
incorporation or organization)
18302 Highwoods Preserve Parkway, Suite 210
Tampa, Florida 33647
(Address of Principal Executive Offices) (Zip Code)
(813) 989-2232
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12 (b) of the Exchange Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
----------------------------- --------------------------------
None None
Securities registered under Section 12 (g) of the Exchange Act:
Common Stock, $0.001 par value
(Title of Class)
The registrant has 6,502,913 shares of its common stock issued
and outstanding as of December 31, 2001.
TABLE OF CONTENTS
PART I.........................................................................4
ITEM 1. DESCRIPTION OF BUSINESS...............................................4
Current Business.................................................4
History of Segmentz..............................................5
History of Trans-Logistics.......................................8
Industry Overview................................................9
Products and Services...........................................12
RISK FACTORS.........................................................22
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION............31
Overview:.......................................................34
Operating Strategy..............................................35
Agent Program...................................................35
RESULTS OF OPERATIONS................................................36
Operating Revenues..............................................37
Salaries, Wages and Benefits....................................37
Depreciation and Amortization...................................38
General and Administrative......................................38
Discontinued Operations.........................................38
Interest........................................................38
Liquidity and Capital Resources.................................39
ITEM 3. DESCRIPTION OF PROPERTY..............................................39
ITEM 4. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT................................40
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS,
PROMOTERS AND CONTROL PERSONS...................................41
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ITEM 6. EXECUTIVE COMPENSATION...............................................43
Executive Officers..............................................43
Employment Agreements...........................................43
Key Man Insurance...............................................43
Stock Option Plan...............................................44
Compensation Table..............................................44
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................45
ITEM 8. DESCRIPTION OF SECURITIES............................................45
Capital Stock...................................................45
Provisions Having A Possible Anti-Takeover Effect...............47
Additional Information..........................................47
Special Note Regarding Forward-Looking Statements; Market Data..48
PART II .....................................................................48
ITEM 1. MARKET PRICE OF AND DIVIDENDS
ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS.................................48
ITEM 2. LEGAL PROCEEDINGS....................................................49
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS........................49
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES..............................49
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS............................50
SIGNATURES....................................................................52
PART F/S.FINANCIAL STATEMENTS.................................................53
PART III......................................................................
ITEM 1. INDEX TO EXHIBITS....................................................
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ITEM 1. DESCRIPTION OF BUSINESS
CURRENT BUSINESS
Segmentz, Inc. (the "Company"), a Delaware corporation, is a Tampa,
Florida based company that provides transportation logistics management services
and support for mid-sized and national corporate clients. The Company serves
direct users of transport, storage, staging, warehouse services and other
logistics services.
The Company and its subsidiary Trans-Logistics, Inc., a Florida
corporation ("Trans-Logistics"), have principal executive offices located at
18302 Highwoods Preserve Parkway, Suite 210, Tampa, Florida 33467. The telephone
number is (813) 989-2232. The internet web site address is
http://www.trans-logistics.com. The Company provides several niche services
within the industry more broadly known as the supply chain management industry,
including transportation logistics, management and delivery. (See "Description
of Business - Products and Services").
The Company serves direct users of transport, storage, staging,
warehouse service and other logistics services, as well as larger companies that
include Bax Global, Quebecor World Logistics, Inc., and CH Robinson, Inc. The
Company offers warehouse locations in two facilities covering the east coast and
is attempting to expand to offer smaller satellite facilities to enable conduit
and direct route trucking solutions on a contracted, dedicated route basis to
larger clients.
Revenue for the second quarter of 2001 was approximately $2,355,000 and
the third quarter was approximately $3,258,000, including the effects of the
World Trade Center disruptions, which are estimated to have cost approximately
$500K for September 2001. There have been some restructuring charges and
aggressive management responses resulting from a failed merger with a NASDAQ
bulletin board company that was terminated in August 2001. The Company earned
significant cash flow in August of over $60K on an EBITDA basis and should
achieve profitability in the fourth quarter of 2001 or the first quarter of
2002. The Company has expended in 2001 approximately $100,000 to prepare for
anticipated increases in revenues and contract opportunities, including
acquisition of enterprise support software and technology expenses in the
completion of internal support software products, and expects key internal
financial benchmarks to strengthen in the fourth quarter of 2001. The Company
has been utilizing factoring and has historically paid in excess of 35% for this
funding, while maintaining profitable margins in the face of such high borrowing
costs. In addition, the Company severed several highly salaried managers in
August 2001 and renegotiated a sublease in the Company's facility in Edison, NJ
to realize $300K in savings. The overall pro-forma savings should approximate $1
Million annually, broken down to $300K in financial savings from restructured
debt facility, $350K in reduction in top level management and $350K in
accounting/legal savings resulting from changes in audit accounting and legal
firms.
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Our strategy is to continue to expand through acquisitions and
internal development. We intend to seek, on a selective basis, acquisition of
businesses that have product lines or services which complement and expand our
existing services and product lines, and provide us with strategic distribution
locations or attractive customer bases. Our ability to implement our growth
strategy will be dependent on our ability to identify, consummate and assimilate
such acquisitions on desirable economic terms. There can be no assurance that we
will be successful in implementing our growth strategy. Our ability to implement
our growth strategy will also be dependent upon obtaining adequate financing. We
may not be able to obtain financing on favorable terms.
(See "Risk Factors")
HISTORY OF SEGMENTZ
The Company's predecessor, WBNI, Inc., originally known as Rose Auto
Stores-Florida, Inc. ("Rose"), was organized for the purpose of operating a
specialty automotive aftermarket parts and accessory retail store in South
Florida. Rose began experiencing financial difficulties in 1990 following its
acquisition by WSR Corporation. By 1997 an involuntary petition of bankruptcy
was filed against Rose. Subsequent thereto, Rose and the committee of unsecured
creditors worked together to develop a plan in bankruptcy.
Rose emerged from the involuntary bankruptcy proceedings by filing a
Plan under Chapter 11 of the United States Bankruptcy Code on February 10, 1999.
The case was administered by the United States Bankruptcy Court, Southern
District of Florida (Miami Division) (the "court"). The court entered an order
approving the Plan on April 22, 1999.
The Plan provided for the liquidation of Rose's assets and distribution
of the proceeds to secured, priority and unsecured creditors. The Plan further
provided that Rose would remain in existence, although all capital stock
outstanding as of the date of the bankruptcy petition was canceled. Under the
Plan, Rose secured post-petition financing in the amount of $ 10,000 from Halter
Financial Group, Inc. ("HFG") to meet the cost and expense of the reorganization
effort. In satisfaction of HFG's administrative claim for such amount and for
the services rendered and expenses incurred in connection with the anticipated
acquisition or merger transaction between Rose and a privately held operating
company, HFG received 60% of the newly-issued shares of common stock of the
reorganized Company. Creditors with allowed unsecured claims received a PRO RATA
distribution of 40% of such common stock.
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The following is a schematic diagram of the history of Segmentz and its
merger with Trans-Logistics:
------------------------------
Rose Auto Stores -- Florida
Inc., ("Rose"} incorporated in
1952
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------------------------------
Rose filed
Petition of Bankruptcy
Pursuant to Chapter 11 on
February 10, 1999
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-----------------------------------------------------
-- April 22, 1999 -- Bankruptcy Plan Confirmed
-- May 17, 2000 -- Rose reincorporated in Delaware
as RAS Acquisition Corp.
-- RAS Acquisition Corp. issues and aggregate
of 500,233 unrestricted shares to unsecured
creditors listed in the Plan of Bankruptcy
pursuant to Section 1145 of the U.S.
Bankruptcy Code
-----------------------------------------------------
-----------------------------------------------------
-- January 31, 2001 -- RAS Acquisition Corp.
completes merger transaction with WBNI, Inc. and
issues to the stockholders of WBNI, Inc. 20,000
shares of its common stock pursuant to the
exemption afforded by Section 4(2) of the Act and
changes its name to WBNI, Inc.
-----------------------------------------------------
-----------------------------------------------------
-- February 5, 2001 -- RAS Acquisition Corp. files a
Certificate of Compliance with Reverse Aquisition
Requirements with the Bankruptcy Court. WBNI, Inc.,
a Delaware corporation has approximately 462
stockholders who own 520,233 shares of common stock
-----------------------------------------------------
------------------------------
On October 29, 2001, WBNI
exchanged 5,982,680 shares for
100 shares of TRANSL Holdings,
Inc., which wholly owns
Trans-Logistics, Inc.
------------------------------
------------------------------
On November 1, 2001, WBNI, Inc.
changed its name to
Segmentz, Inc.
------------------------------
For accounting purposes, the merger is reflected as a reverse
acquisition and recapitulation of WBNI and WBNI'S historical financial
statements presented elsewhere herein are those of Segmentz and its predecessor
WBNI.
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MERGER WITH WBNI, INC. On January 31, 2001, Rose completed a merger
with WBNI, Inc., a privately held Texas corporation pursuant to which Rose
issued an aggregate of 20,000 shares of its common stock in exchange for all of
the issued and outstanding shares of the private company's capital stock. As a
result of the transaction, Rose changed its name to WBNI, Inc ("WBNI"). Timothy
P. Halter resigned as the sole officer and director of Rose and the private
company was dissolved. The merger was entered into as the private company had an
option to acquire the business operation of WorldByNet.com, Inc., a Delaware
corporation that provided business-to-consumer and business-to-business
solutions for the purpose of connecting affinity groups. On February 22, 2001,
it was determined by management of WBNI that it would be in WBNI's best interest
to terminate the option to acquire WorldByNet as a result of its due diligence
inquiry into said entity. On October 29, 2001, WBNI exchanged 5,982,680 shares
of its common stock for 100 shares of the common stock of TRANSL Holdings, Inc.,
a Delaware corporation ("TRANSL"). WBNI now wholly owns TRANSL, which wholly
owns Trans-Logistics, Inc., a Florida Corporation (Trans-Logistics).
Trans-Logistics agreed to pay Turner Capital Partners, LLC a fee of $75,000 for
consulting services related to the WBNI transaction, among other things, of
which $30,000 is due by March 15, 2002.
HISTORY OF TRANS-LOGISTICS
Trans-Logistics is a logistics and brokerage organization serving irregular
route, long haul, and common motor carriers of general commodities. The Company
is a Florida corporation and was formed on April 28, 2000.
Effective January 1, 2001, Trans-Logistics was acquired by Logistics
Management Resources, Inc. The acquisition was for one hundred (100%) percent of
the issued and outstanding common stock at a price of $80,000, plus, four times
Trans-Logistics' gross brokerage commissions for the period of October 1, 2001
through December 31, 2001, plus the value of any accounts receivable immediately
prior to the closing date (which amount was agreed to be not less than
$230,000), minus the aggregate value of any liabilities of Trans-Logistics prior
to the closing date, minus cost of Trans-Logistics' performance of its
obligations under an assignment and assumption agreement with Atech Commercial
Corporation which exceeds $120,000. On August 10, 2001, Trans-Logistics and
Logistics Management Resources, Inc. agreed to rescind and cancel the terms and
conditions of the acquisition agreement. Under the terms of the rescission
agreement, Trans-Logistics agreed to a reimbursement of 1,500,000 shares of
Logistics Management Resources, Inc.'s common stock and a note receivable in the
amount of $450,000. This rescission agreement was effective as of July 1, 2001.
As part of the above noted rescission agreement, the Company has recognized
consulting revenue and a demand note receivable in the amount of $450,000 due
from Logistics Management Resources, Inc. The terms of this note do not include
interest until demand is made for payment. A partial payment on this note is
expected to be made during the second quarter of 2002.
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On November 1, 2001, WBNI, Inc., changed its name to Segmentz, Inc. During
May 2001, the Company acquired the assets of Q Logistic Solutions, Inc. for
$367,385. Q Logistic Solutions, Inc. operated warehouse facilities in Atlanta,
Georgia; Edison, New Jersey; Orlando, Florida and Chicago, Illinois. Operations
in Orlando and Chicago were subsequently discontinued.
INDUSTRY OVERVIEW
Third Party logistics companies provide customized domestic and
international freight transportation of customers' goods and packages, via
truck, rail, airplane and ship, and provide warehousing and storage of those
goods. Many companies utilize information systems and expertise to reduce
inventories, cut transportation costs, speed delivery and improve customer
service. The third-party logistics services business has been bolstered in
recent years by the competitiveness of the global economy, which causes shippers
to focus on reducing handling costs, operating with lower inventories and
shortening inventory transit times. The third-party logistics services sector of
the domestic logistics market was approximately $53.4 billion in 2000. Using a
network of transportation, handling and storage providers in multiple
transportation modes, third-party logistics services companies seek to improve
their customers' operating efficiency by reducing their inventory levels and
related handling costs. Many third-party logistics service providers are
non-asset-based, primarily utilizing physical assets owned by others in multiple
transport modes. The third-party logistics services business increasingly relies
upon advanced information technology to link the shipper with its inventory and
as an analytical tool to optimize transportation solutions. This trend favors
the larger, more professionally managed companies that have the resources to
support a sophisticated information technology infrastructure.
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According to the INTERNATIONAL WAREHOUSE LOGISTICS ASSOCIATION, the U.S.
outsourced logistics industry is currently an estimated $54 billion in 2000. On
average, U.S. companies spend $14 billion per year alone on warehousing and
inventory costs, taxes, obsolescence, depreciation and insurance and make up
15-20 percent of finished product costs.
A survey by ERNST & YOUNG LLP released in 2001 identified that nearly 75
percent of U.S. manufacturers and suppliers are either using or considering a
contract third-party logistics service. About 60 percent of 123 companies
surveyed using a third-party logistics firm said logistics was a core
competency, and almost 80 percent thought that logistics represented a key
competitive advantage. Over 80 percent of respondents that are using third-party
logistic services are very satisfied with the results. With the proliferation of
technology in recent years, the successful logistics companies have had to move
from an asset based business model to one where information is the foundation.
Technologies such as global tracking via satellite, real-time warehouse systems,
electronic data exchange (EDI), the Internet, and customized software have
allowed companies to access product information during all phases of the value
chain. Experts expect the third-party logistics industry to grow to $80 billion
by 2003. Much of this growth is expected to come from future advances in
technology and from the continuing demand for efficient logistics solutions from
companies that have not invested in that initiative. Firms will expand overseas
at an increasing pace to manage freight movement on all points of the globe as
trade grows and multinational corporations consolidate their international
logistics operations.
Trucking and Air Freight is still the dominant form of transportation. More
than 85% of money spent on domestic transportation is spent in these two areas.
Almost all household or business products, for example, food, clothing,
furniture, office equipment, automobiles, and machinery have been on a truck or
plane at some point in time.
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By outsourcing all non-core business services to third party providers,
companies can help to control costs, eliminate staff and focus on internal
business.
According to Forrester Research, the "logistics chaos" of fulfilling online
orders remains a serious problem. Less than half of the Internet retailers make
a profit on each shipped package and few accurately track the product and its
costs. Eighty five percent (85%) of these Internet retailers still cannot handle
international fulfillment. Many e-commerce companies have built their business
models with little consideration to how they are going to store, handle, or
deliver their products to their customers. In many cases, e-commerce companies
have lost significant business as a result of a lack of efficiencies in these
areas and are in need of solutions provided by logistics experts.
Manufacturers and retailers are facing increasingly complex supply chain
management issues due to rapidly changing freight patterns, increased
international trade and global sourcing, more prevalent just-in-time inventory
systems, increasingly demanding customer fulfillment requirements and pressures
to reduce costs. Growth within the logistics industry is being driven by the
continuing trend of companies outsourcing their logistics needs in order to
focus on their core businesses and achieve the cost savings third-party
logistics providers can provide through improved efficiency, lower inventory
requirements, volume rate savings and other economies of scale. Total U.S.
third-party logistics spending grew 16.5% in 1999 and is projected to grow 34.3%
per year from $45.3 billion in 1999 to over $198.0 billion in 2004. Total U.S.
logistics spending, including freight transportation and carrying costs, is
projected to grow 8.7% per year from $921.0 billion in 1999 to $1.4 trillion in
2004. As transportation management becomes increasingly sophisticated, and the
cost effectiveness of outsourcing increases, the Company believe companies will
continue to seek full service supply chain management support from a single
company like us, who can manage their multiple transportation requirements.
PRODUCTS AND SERVICES
NATIONWIDE TRUCKLOAD AND LESS-THAN-TRUCKLOAD SERVICE
The Company arranges truckload transportation with dedicated Company
equipment, owner operator fleet and extensive agent partners throughout 48
states. The Company provides trailers that are either 48 or 53 feet in length.
By utilizing volume discounts, the Company can cost effectively arrange
less-than-truckload (LTL) shipments for their customers from distribution
centers or vendor locations. Tracking capabilities are available via the web
site through carrier links.
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DEDICATED OR TIME-DEFINITE TRANSPORTATION
The Company offers its customers time-definite ground transportation of
cargo as a cost effective, reliable alternative to air transportation. By
utilizing team drivers the Company provides expedited delivery and shorter
transit times.
THIRD-PARTY LOGISTICS SERVICE
The Company's strategic carrier alliances with national pricing
agreements enable them to provide specialized or heavy haul services. Shipment
tracking is available for customers via a custom designed web site and carrier
links. On-time percentage tracking and service failure reports are also
available. Third-party logistics billing is fully electronic and automated.
FORWARDING
The Company provides enhanced freight forwarding services designed to
deliver products on time to any location worldwide by whatever means necessary.
REVERSE LOGISTICS
Many logistics solutions providers only offer their services from the
warehouse to the end customer (for example, after the product has been purchased
and received from the vendor). The Company can offer to handle the customer's
product from the vendor all the way to the end customer and even handle any
needs after the product reaches its final destination or dispose of the product.
IN-TRANSIT MERGE
The Company provides In-transit Merge by strategically managing
logistics information in an effort to minimize the handling of product with
complex routing that includes multiple product origins/destinations and/or
multiple vendors. The Company positions itself as a member of the customer's
distribution team, sharing data and interacting virtually with vendors and the
customer.
ASSEMBLY, PACKING AND DISTRIBUTION
The Company customizes its "pick-and-pack" or packaging, labeling and
inventorying services to meet each customer's specific needs. Customers can
utilize the Company's warehouse and distribution facilities that are fully
automated (barcode and UCC compliant) or operate at their own site. The Company
utilizes over 300,000 square feet of floor space with additional multi-tier rack
capacity which is secure and bonded. Additionally, packaging sanitization and
custom branding services are available. This comprehensive outsourcing service
includes trucking as well as tracking services.
SUPPLY CHAIN MANAGEMENT
The Company provides infrastructure and equipment, integrated with its
customers' existing systems, to handle distribution planning, just-in-time
delivery and automated ordering throughout their operations, and additionally
will provide and manage warehouses, distribution centers and other facilities
for them. The Company also consults on identifying bottlenecks and
inefficiencies and eliminating them by analyzing freight patterns and costs,
optimizing distribution centers and warehouse locations, and
analyzing/developing internal policies and procedures for its customers. The
Company has enterprise-wide technology solutions that enable real-time tracking
and monitoring of various products and offers these and other related solutions
under long term contracts to a host of customers. The third-party service
platform provides guaranteed service level agreements (SLAs) to ensure stable,
predictable delivery and tracking of many products through the supply chain. The
industry should grow in all segments, especially during difficult and
unpredictable economic climates due to the capital-intensive nature of
warehousing, transportation and technology equipment needed to track and monitor
products as they are shipped, staged and delivered.
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FINANCING
The Company has a credit facility with a current availability of one
million dollars, of which $559,535 is outstanding as of period ending September
30, 2001. The facility bears interest at six percent annually. The credit
facility is provided by Bryant Plastics,Inc., a customer of the Company.
The Company factors substantially all of its accounts receivable.
During the nine months ended September 30, 2001, the Company utilized the
services of two factoring companies. Accounts receivable are sold to the
factoring companies with recourse for unpaid invoices in excess of 90 days old.
The most recent agreement provides for the payment of factoring fees at 2.5% of
each invoice factored.
Accounts receivable transferred to the factoring companies were as
follows:
Factored accounts $5,310,294
Customer payments (charge backs) (4,723,026)
---------
Amount due to factoring companies $ 587,268
=======
The Company will need to continue to obtain financing, of which there
can be no assurance (See "Risk factors - Need for substantial additional
financing").
GROWTH STRATEGY
The Company acquired certain unencumbered assets of Q Logistics, for a
purchase price of $367,385, out of bankruptcy reorganization in May 2001. In
connection with the acquisition of Q-Logistics, the Company entered into a
demand note for $245,000. The note was subsequently converted to a term note
that matures on December 31, 2002 and currently bears interest at 6% per annum.
(See Note 7 to the Financial Statements). The rationale behind the transaction
was that warehouse management, inventory staging, shipping management,
electronic inventory tracking and management and other related services would be
accretive to the transport brokerage business, adding levels of captive clients
that the Company could offer various support services to over long-term
relationships.
The Company anticipates acquisition of several entities in the supply
chain management industry that are profitable and available on what the Company
believes to be favorable terms. The Company anticipates the need for additional
credit facilities to complete acquisitions currently under surveillance. The
Company plans on maintaining EBITDA that will service debt with a ratio of 2:1
or greater as companies are acquired utilizing credit and equity.
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The growth market for third-party logistics support and supply chain
management services continues to expand significantly and the Company intends to
combine its disparate product offerings to customers to create an integrated
suite of management tools, decisioning tools, reporting tools and support
services that will enable sole source and limited source contract opportunities
for existing and new clients. The Company has significant experience, acquired
in its Quebacor relationship, that will provide evidence, to existing and new
clients, of its ability to deliver a managed turnkey solution for staging,
transportation, inventory and distribution of products across the supply chain.
However, if the Company is unable to successfully integrate acquisitions,
profitability could be adversely affected.
Identifying, acquiring and integrating businesses requires substantial
management, financial and other resources and may pose risks with respect to
customer service and market share. Further, acquisitions involve a number of
special risks, some or all of which could have a material adverse effect on the
business, financial condition and results of operation. These risks include:
o Unforeseen operating difficulties and expenditures;
o Difficulties in assimilation of acquired personnel, operations and
technologies;
o The need to manage a significantly larger and more geographically
dispersed business;
o Amortization of goodwill and other intangible assets;
o Diversion of management's attention from ongoing development of the
Company's business or other business concerns;
o Potential loss of customers;
o Failure to retain key personnel of the acquired businesses; and
o The use of substantial amounts of the Company's available cash.
We have acquired businesses in the past and may consider acquiring
businesses in the future that provide complementary services to those we
currently provide or expand our geographic presence. There can be no assurance
that the businesses that we have acquired in the past or any businesses that we
may acquire in the future can be successfully integrated. While we believe that
we have sufficient financial and management resources to successfully conduct
our acquisition activities, there can be no assurance in this regard or that we
will not experience difficulties with customers, personnel or others. Our
acquisition activities involve more difficult integration issues than those of
many other companies because the value of the companies we acquire comes mostly
from their business relationships, rather than their assets. The integration of
business relationships poses more of a risk than the integration of tangible
assets because relationships may suddenly weaken or terminate. Further,
logistics businesses we have acquired and may acquire in the future compete with
many customers of our wholesale operations and these customers may shift their
business elsewhere if they believe our retail operations receive favorable
treatment from our wholesale operations. In addition, although we believe that
our acquisitions will enhance our competitive position, business and financial
prospects, there can be no assurances that such benefits will be realized or
that any combination will be successful.
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SALES AND MARKETING
The Company plans to increase market share by implementing sophisticated
state-of-the-art technology to optimize efficiency, profitability and improve
corporate image. The Company also plans to increase brand awareness through
marketing initiatives such as a newly designed web site, direct mail,
advertising, collateral, trade shows, etc.
The Company plans to increase non-asset based agent development program
in strategic locations and cross train sales staff to expand new services to
existing customers.
COMPETITION
The transportation services industry is highly competitive. Its retail
businesses compete primarily against other domestic non-asset based
transportation and logistics companies, asset-based transportation and logistics
companies, third-party freight brokers, internal shipping departments and other
freight forwarders. Its wholesale business competes primarily with over-the-road
full truckload carriers, conventional intermodal movement of trailers on flat
cars, and containerized intermodal rail services offered directly by railroads.
We also face competition from Internet-based freight exchanges, which attempt to
provide an online marketplace for buying and selling supply chain services.
Historically, competition has created downward pressure on freight rates, and
continuation of this rate pressure may materially adversely affect the Company's
net revenues and income from operations. In addition, some of the Company's
competitors have substantially greater financial and other resources than we do.
The Company has identified several direct competitors. These companies
offer each of the individual services that the Company offers. However, the
Company believes these identified competitors offer many of these individual
services merely as ancillary services and tend to focus on one main service
offering (for example, truck leasing, freight forwarding, etc.). These direct
competitors include:
RYDER INTEGRATED LOGISTICS, INC. is a subsidiary of the $4.9 billion
transportation and logistics provider Ryder Systems, Inc. Ryder's primary
business is providing truck leasing services.
MENLO LOGISTICS, INC. is a subsidiary of $5.5 billion transportation and
logistics services provider CNF. Menlo's primary business is less-than-truckload
(LTL) transportation services.
C.H. ROBINSON WORLDWIDE ("CHR") is one of the largest third-party logistics
providers in North America. CHR's primary business is international freight
forwarding brokerage.
EXEL LOGISTICS, a British logistics company with $5.3 billion in 1999 revenues,
provides global freight management, integrated transportation and warehousing.
Exel's primary business is warehousing services.
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SUPPLIERS
The Company utilizes the services of various third party transportation
companies. No significant third party provider results in over 10% of the
Company's revenue.
CUSTOMERS
The Company's largest customer constitutes approximately 22% of the
Company's revenue. The top 6 debtor balances comprised 40% of outstanding
accounts receivable balances, and include clients like Quebecor, Camtex, Inc.,
Air Ride, Beaulieu, Murphy and Ricoh.
EMPLOYEES
As of November 15, 2001 the Company had seventy three (73) full time
employees. We consider our employee relations to be good, and we have never
experienced a work stoppage.
REGULATORY MATTERS
The Company, its suppliers and its customers are subject to changes in
government regulation, which could result in additional costs and thereby affect
the Company's results of operations.
The transportation industry is subject to legislative or regulatory
changes that can affect its economics. Although the Company operates in the
intermodal segment of the transportation industry, which has been essentially
deregulated, changes in the levels of regulatory activity in the intermodal
segment could potentially affect the Company and its suppliers and customers.
Future laws and regulations may be more stringent and require changes in
operating practices, influence the demand for transportation services or require
the outlay of significant additional costs. Additional expenditures incurred by
the Company, or by its suppliers, who would pass the costs onto the Company
through higher prices, would adversely affect the Company's results of
operation.
If the Company expands its services internationally, the Company may
become subject to international economic and political risks. Doing business
outside the United States subjects the Company to various risks, including
changing economic and political conditions, major work stoppages, exchange
controls, currency fluctuations, armed conflicts and unexpected changes in
United States and foreign laws relating to tariffs, trade restrictions,
transportation regulations, foreign investments and taxation. Significant
expansion in foreign countries will expose the Company to increased risk of loss
from foreign currency fluctuations and exchange controls as well as longer
accounts receivable payment cycles. The Company has no control over most of
these risks and may be unable to anticipate changes in international economic
and political conditions and, therefore, unable to alter business practices in
time to avoid the adverse effect of any of these changes.
If the Company fails to comply with or lose any required licenses,
governmental regulators could assess penalties or issue a cease and desist order
against the Company's operations that are not in compliance.
There are newly adopted and pending laws regarding transportation,
whether by air, sea, freight or rail, which may have an effect on the Company.
At this time, the Company cannot ascertain the full effects of such laws. (See
"Risk factors-The Company may face Interruption of Business Due to Increased
Security Measures in Response to Terrorism"). Internet Regulation - Few laws or
regulations are currently directly applicable to the Company's access to the
Internet or conducting business on the Internet. However, because of the
Internet's popularity and increasing use, new laws and regulations may be
adopted. Such laws and regulations may cover issues such as: user privacy,
pricing, content, copyrights, distribution, and characteristics and quality of
products and services.
-15-
In addition, the growth of the Internet and electronic commerce,
coupled with publicity regarding Internet fraud, may lead to the enactment of
more stringent consumer protection laws. These laws may impose additional
burdens on the Company's business. The enactment of any additional laws or
regulations may impede the growth of the Internet, which could decrease the
Company's potential revenues from electronic commerce or otherwise adversely
affect the Company's business, financial condition and operating results.
Laws and regulations directly applicable to electronic commerce or
Internet communications are becoming more prevalent. Congress recently enacted
Internet laws regarding online copyright infringement. Although not yet enacted,
Congress is considering laws regarding Internet taxation. In addition, various
state jurisdictions are considering legislation directed to electronic commerce
which if enacted could affect the Company's business. The applicability of many
of these laws to the Internet is uncertain and could expose the Company to
substantial liability. Any new legislation or regulation regarding the Internet,
or the application of existing laws and regulations to the Internet, could
materially and adversely affect the Company. If the Company was alleged to
violate federal, state or foreign, civil or criminal law, even if the Company
could successfully defend such claims, it could materially and adversely affect
the Company.
Several telecommunications carriers are seeking to have
telecommunications over the Internet regulated by the Federal Communications
Commission in the same manner as other telecommunications services.
Additionally, local telephone carriers have petitioned the Federal
Communications Commission to regulate Internet service providers and online
service providers in a manner similar to long distance telephone carriers and to
impose access fees on such providers. If either of these petitions are granted,
the cost of communicating on the Internet could increase substantially. This, in
turn, could slow the growth of Internet use. Any such legislation or regulation
could materially and adversely affect the Company's business, financial
condition and operating results.
INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS
The Company has developed Broker/Agent and Internal Company software
that enables the management, analysis and deployment of transportation and
logistics solutions over Internet connections or via secure dial in access. The
Company maintains all rights to the code, concepts and visual appearance of this
software and is in the process of cataloguing the unique features of these
software products, with the intention of filing for patent or copyright
protection. However, the Company has not filed for any patents, copyrights or
trademarks. The Company name has not been federally trademarked.
RESEARCH AND DEVELOPMENT
We believe that the independent transportation businesses; truckers,
brokers and agents ultimately continue to provide value added services in the
fragmented transportation marketplace. Our research and development efforts have
been centered on development of electronic support systems, software products
and platforms that enable small operators to access sophisticated quotation,
financial and industry support platform software that is hosted by Segmentz.
This empowers small niche transport service providers to ensure captive clients,
providers and third party agents with compelling cause to do business with
Segmentz service divisions and to partner with Segmentz to procure and retain
business.
-16-
RISK FACTORS
Purchase of the Company's Shares involves significant risk. An
investment should be made only after careful consideration of the significant
risk factors set forth below as well as information set forth elsewhere in this
Form 10-SB and should be undertaken only for long-term investment purposes by
persons who can afford to sustain a loss of their entire investment. In addition
to considerations bearing on their individual financial positions and the
factors set forth elsewhere herein, prospective purchasers should consider the
following:
RISKS ASSOCIATED WITH THE BUSINESS
The Company's business is dependent upon a number of factors beyond its
control that may have a material adverse effect on the business. These factors
include excess capacity in the trucking industry and significant increases or
rapid fluctuations in fuel prices, interest rates, fuel taxes, government
regulations, governmental and law enforcement anti-terrorism actions, tolls,
license and registration fees and insurance premiums. It is difficult at times
to attract and retain qualified drivers and owner-operators. Operations also are
affected by recessionary economic cycles and downturns in the Company's
customers' business cycles, particularly in market segments and industries (such
as retail and paper products) in which the Company has a significant
concentration of customers. Seasonal factors could also adversely affect the
Company. Customers tend to reduce shipments after the winter holiday season and
operating expenses tend to be higher in the winter months primarily due to
increased operating costs in colder weather and higher fuel consumption due to
increased idle time. Regional or nationwide fuel shortages could also have
adverse affects.
The trucking industry is dependent upon transportation equipment such
as chassis and containers and rail, truck and ocean services provided by
independent third parties. Periods of equipment shortages have occurred
historically in the transportation industry, particularly in a strong economy.
If the Company cannot secure sufficient transportation equipment or
transportation services from these third parties to meet the customers' needs,
the business, results of operations and financial position could be materially
adversely affected and customers could seek to have their transportation and
logistics needs met by other third parties on a temporary or permanent basis.
The reliance on agents and independent contractors could reduce operating
control and the strength of relationships with customers, and the Company may
have trouble attracting and retaining agents and independent contractors.
-17-
Historically, sectors of the transportation industry have been cyclical
as a result of economic recession, customers' business cycles, increases in
prices charged by third-party carriers, interest rate fluctuations and other
economic factors over which the Company has no control. Increased operating
expenses incurred by third-party carriers can be expected to result in higher
costs, and net revenues and income from operations could be materially adversely
affected if the Company was unable to pass through to the customers the full
amount of increased transportation costs. The Company has a large number of
customers in the automotive and consumer goods industries. If these customers
experience cyclical movements in their business activity, due to an economic
downturn, work stoppages or other factors over which the Company has no control,
the volume of freight shipped by those customers may decrease and operating
results could be adversely affected. Any unexpected reduction in revenues for a
particular quarter could cause the Company's quarterly operating results to be
below the expectations of public market analysts or investors. In this event,
the trading price of the Company's common stock may fall significantly. The
Company's significant debt levels may limit its flexibility in obtaining
additional financing and in pursuing other business opportunities.
If, for any reason, the Company's business of providing warehousing and
logistic services ceases to be a preferred method of outsourcing these
functions, or if new technological methods become available and widely utilized,
the Company's business could be adversely affected.
Moreover, increasing consolidation among customers and the resulting
ability of such customers to utilize their size to negotiate lower outsourcing
costs has and may continue in the future to have a depressing effect on the
pricing of third-party logistic services.
-18-
THE COMPANY MAY FACE INTERRUPTION OF BUSINESS DUE TO INCREASED SECURITY MEASURES
IN RESPONSE TO TERRORISM
Terrorist attacks in New York and Washington, D.C. on September 11,
2001 have disrupted commerce throughout the United States. The continued threat
of terrorism within the United States and the ongoing military action and
heightened security measures in response to such threat may cause significant
disruption to commerce. The Company's business depends on the free flow of
products and services through these channels of commerce. Recently, in response
to terrorists' activities and threats aimed at the United States, transportation
and other services have been slowed or stopped altogether. Further delays or
stoppages in transportation or other services could have a material adverse
effect on the Company's business, results of operations and financial condition.
Furthermore, the Company may experience an increase in operating costs, such as
costs for transportation, insurance and security as a result of the activities
and potential activities. The Company may also face interruption of services due
to increased security measures in response to terrorism. The Company may also
experience delays in receiving payments from payers that have been affected by
the terrorist activities and potential activities. The U.S. economy in general
is being adversely affected by the terrorist activities and potential activities
and any economic downturn could adversely impact our results of operations,
impair our ability to raise capital or otherwise adversely affect our ability to
grow our business.
It is impossible to predict how this may affect our business or the
economy in the U.S. and in the world, generally. In the event of further threats
or acts of terrorism, the Company's business and operations may be severely
adversely affected or destroyed.
THE COMPANY MAY SUBSTANTIALLY ALTER ITS CURRENT BUSINESS AND REVENUE MODEL
The Company's current business and revenue model represents the current
view of the optimal business and revenue structure, i.e., to derive revenues and
achieve profitability in the shortest period of time. There can be no assurance
that current models will not be altered significantly or replaced with an
alternative model that is driven by motivations other than near-term revenues
and/or profitability (E.G. building market share before the Company's
competitors). Any such alteration or replacement of the business and revenue
model may ultimately result in the deferring of certain revenues in favor of
potentially establishing larger market share. The Company cannot assure that any
adjustment or change in the business and revenue model will prove to be
successful.
NEED FOR SUBSTANTIAL ADDITIONAL FINANCING
The Company has a line of credit from a customer in the amount of
$1,000,000, of which $559,535 is outstanding as of September 30, 2001. The
Company is seeking to convert such debt into equity. If the Company is unable to
convert such debt or is unable to do so on favorable terms, the Company and its
Stockholders may be materially adversely affected. The Company also relies on
factors to expedite cash flow. There is no assurance that the Company will
continue to be able to factor its receivable or to obtain, either replacement or
additional financing on acceptable terms.
-19-
The Company's continued viability depends on its ability to raise
capital. Changes in economic, regulatory or competitive conditions may lead to
cost increases. Management may also determine that it is in the best interest of
the Company to expand more rapidly than currently intended, to expand marketing
activities, to develop new or enhance existing services or products, to respond
to competitive pressures or to acquire complementary services, businesses or
technologies. In any such case or other change of circumstance, additional
financing will be necessary. If any additional financing is required, there can
be no assurances that the Company will be able to obtain such additional
financing on terms acceptable to the Company and at times required by the
Company, if at all. In such event, the Company may be required to materially
alter its business plan or curtail all or a part of its expansion plans. Any
such additional financing may result in significant dilution to existing
stockholders or the issuance of securities with rights superior to those of the
existing Common Stock. In the event that the Company is unable to raise or
borrow additional funds, the Company may be required to curtail significantly
one or more of its marketing and/or development programs or seek additional
third-party funds by relinquishing the marketing, distribution, development or
other rights to the Company's products and services.
RISKS ASSOCIATED WITH MANAGEMENT
There are several risks associated with the management of the Company.
If the Company loses key personnel and qualified technical staff, the ability to
manage the day-to-day aspects of the business will be weakened.
The Company believes that the attraction and retention of qualified
personnel is critical to success. If the Company loses key personnel or is
unable to recruit qualified personnel, the ability to manage the day-to-day
aspects of the business will be weakened. The Company's operations and prospects
depend in large part on the performance of the senior management team. The loss
of the services of one or more members of the senior management team, could have
a material adverse effect on the business, financial condition and results of
operation. You should be aware that the Company faces significant competition in
the attraction and retention of personnel who possess the skill sets that are
needed. Because the senior management team has unique experience with the
Company and within the transportation industry, it would be difficult to replace
them without adversely affecting the business operations. In addition to their
unique experience, the management team has fostered key relationships with the
Company's suppliers. Such relationships are especially important in an
increasingly non-asset based company such as Segmentz. Loss of these
relationships could have a material adverse effect on the Company's
profitability.
The Company's business is highly dependent upon the services of
Management, particularly Allan Marshall, Chief Executive Officer, and Dennis
McCaffrey, Vice President of Transportation and Logistics Operations and Douglas
Parks, Vice President of Distribution and Warehousing. The loss of the services
of these members of management could have a material adverse effect on the
Company's operations and future profitability.
-20-
RISK FACTORS RELATING TO THE COMMON STOCK
Allan Marshal and Christine Otten collectively own approximately 92% of the
outstanding common stock. As a result, they are able to control all matters
requiring stockholder approval, including the election of directors and the
approval of significant corporate transactions, such as acquisitions, and to
block an unsolicited tender offer. This concentration of ownership could delay,
defer or prevent a change in control of the Company or impede a merger,
consolidation, takeover or other business combination which a stockholder, may
otherwise view favorably.
Provisions of the certificate of incorporation and bylaws may
discourage, delay or prevent a change in control of the Company that a
stockholder may consider favorable. These provisions could also discourage proxy
contests and make it more difficult for you and other shareholders to elect
directors and take other corporate actions.
The market price of the Company's common stock may be volatile, which
could cause the value of your investment to decline. Any of the following
factors could affect the market price of the Company's common stock:
o changes in earnings estimates and outlook by financial analysts;
o the Company's failure to meet financial analysts' and investors'
performance expectations;
o changes in market valuations of other transportation and logistics
companies; and
o general market and economic conditions.
In addition, many of the risks described elsewhere in this "Risk
Factors" section could materially and adversely affect the stock price. The
stock markets have experienced price and volume volatility that has affected
many companies' stock prices. Stock prices for many companies have experienced
wide fluctuations that have often been unrelated to the operating performance of
those companies. Fluctuations such as these may affect the market price of the
Company's common stock.
VOLATILITY OF STOCK PRICES
The Company's common stock is a new issue of securities for which there
is currently no trading market. Although the Company expects its common stock to
be quoted on the NASDAQ Over the Counter Market ("NASDAQ OTC"), an active
trading market for the Company's common stock may not develop or be sustained.
In the event that an established public market does develop for the
Company's shares, market prices will be influenced by many factors, and will be
subject to significant fluctuation in response to variations in operating
results of the Company and other factors such as investor perceptions of the
Company, supply and demand, interest rates, general economic conditions and
those specific to the industry, international political conditions, development
with regard to the Company's activities, future financial condition and
management.
-21-
FUTURE SALES OF THE COMMON STOCK IN THE PUBLIC MARKET MAY DEPRESS THE
STOCK PRICE
The market price of the common stock could decline as a result of sales
by the Company's existing stockholders of a large number of shares of the common
stock. These sales might also make it more difficult for the Company to sell
additional equity securities at a time and price that the Company deems
appropriate.
APPLICABILITY OF LOW PRICED STOCK RISK DISCLOSURE REQUIREMENTS
The common stock of the Company may be considered a low priced security
under rules promulgated under the Exchange Act. Under these rules,
broker-dealers participating in transactions in low priced securities must first
deliver a risk disclosure document which describes that risks associated with
such stock, the broker-dealer's duties, the customer's rights and remedies, and
certain market and other information, and make a suitability determination
approving the customer for low priced stock transactions based on customer's
financial situation, investment experience and objectives. Broker-dealers must
also disclose these restrictions in writing and provide monthly account
statements to the customer, and obtain specific written consent of the customer.
With these restrictions, the likely effect of designation as a low prices stock,
would be to decrease the willingness of broker-dealers to make a market for the
stock, to decrease the liquidity of the stock and increase the transaction cost
of sales and purchase of such stocks compared to other securities.
CONTROL BY PRESENT STOCKHOLDERS
The present stockholders own a majority of the outstanding common stock
of the Company. Since there are no cumulative voting rights under the Company's
Certificate of Incorporation, the present stockholders will remain in control of
the Company and will be able to elect all Directors of the Company and the
purchasers of the shares will not be able to elect any Directors of the Company
and they will have no input or decision making authority with respect to the
business decisions and policies of the Company.
-22-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following analysis of the financial condition of Trans-Logistics as
of September 30, 2001 and the results of operation for the nine month period
ended September 30, 2001, should be read in conjunction with the Financial
Statements of Trans-Logistics, Inc., including footnote disclosures, and it
should be understood that this discussion is qualified in its entirety by the
foregoing and other, more detailed financial information appearing elsewhere
herein. The Company acquired all outstanding capital stock of TRANSL Holdings on
October 29, 2001, which owns Trans-Logistics, Inc.
Historical results of operations and the percentage relationships among
any amounts included in the Statement of Operations of Trans-Logistics and any
trends which may appear to be inferable there from, should not be taken as being
necessarily indicative of trends of operations or results of operations for any
future periods.
These and other statements, which are not historical facts, are based
largely on current expectations and assumptions of management and are subject to
a number of risks and uncertainties that could cause actual results to differ
materially from those contemplated by such forward-looking statements.
Assumptions and risks related to forward-looking statements, include
that we are pursuing a growth strategy that relies in part on the completion of
acquisitions of companies in the non-asset based logistics segment of the
transportation industry, as well as the integration of third party brokers and
agents into our back office, contact and support resources.
Assumptions relating to forward-looking statements involve judgments
with respect to, among other things, future economic, competitive and market
conditions and future business decisions, all of which are difficult or
impossible to predict accurately and many of which are beyond our control. When
used in this Quarterly Report, the words "estimates", "projects", and "expect"
and similar expressions are intended to identify forward-looking statements.
Although we believe that assumptions underlying the forward-looking
statements are reasonable, any of the assumptions could prove inaccurate and,
therefore, there can be no assurance that the results contemplated in the
forward-looking information will be realized.
Management decisions are subjective in many respects and susceptible to
interpretations and periodic revisions based on actual experience and business
developments, the impacts of which may cause us to alter our business strategy,
which may in turn, affect our results of operations. In light of the significant
uncertainties inherent in the forward-looking information included herein, the
inclusion of such information should not be regarded as our representation that
statements contained in this Quarterly Report speak only as of the date of this
Quarterly Report, and we do not have any obligation to publicly update or revise
any of these forward-looking statements.
Such statements may include, but are not limited to, projections of
revenues, income, or loss, capital expenditures, plans for future operations,
financing needs or plans, the impact of inflation and plans relating to the
foregoing. Statements in the Company's Form 10-QSB, including Notes to the
Financial Results of Operations, describe factors, among others, that could
contribute to or cause such differences.
-23-
DESCRIPTION OF BUSINESS
General:
Segmentz, Inc. is a holding company engaged in the business of
acquiring, managing and integrating into our company systems transportation
logistics, and establishing relationships with Brokers and Agents (persons who
increase the number of clients we service at a low acquisition cost per client).
The Company is known for specializing in barrel bottom opportunities, those
tasks, within a company's logistics support and service arena, that require
customized solutions and thinking that would be "outside the box" for most major
3PL ("third party logistics") providers. This specialty sales and marketing
approach helps maintain reasonable gross margins and has historically helped the
Company and its management establish trust relationships with its clients that
develop more rapidly than traditional turnkey 3PL relationships.
Our principal business is providing for the transportation needs of
clients through total logistics management, which includes managing clients'
domestic and international transportation, load matching, consolidation and
warehousing. We also intend to utilize proprietary software and support systems
to expand our broker and agent support platforms, empowering agents and brokers
by supporting electronic access to load and transportation information, as well
as back office services including accounting, collections, safety, permitting
and authority for brokers and agents in the 3PL market space.
Brokers and Agents are local entities or individuals that hold personal
relationships with traffic management, logistics management and support
personnel in a wide range of clients and that own assets such as tractors and
trailers to enable completion of 3PL services. Agents and Brokers are the
primary relationship holders in the 3PL business, controlling what is estimated
to be between seventy and eighty percent of all revenues estimated in the
industry. These Brokers and Agents have not consolidated and are facing
increased challenges from the so-called e2e ("End to End") providers of 3PL
services domestically and have responded favorably to our offering, one that
provides them enhanced ability to offer a more rich suite of products to
mid-sized and large clients that may ensure their continued survival and growth
as the market changes, and we feel our support approach will provide Brokers and
Agents with the support tools ("Locator services, tracking, Electronic Data
Interface ("EDI") and reporting tools) to expand their client relationships at
extremely low capital cost of client acquisition to Segmentz.
We intend to expand our business through internal growth and
acquisitions. The transportation and broker and agent marketplaces are highly
fragmented, which provides unique acquisition and integration opportunities. We
are primarily interested in profitable, well managed, non-asset based companies
that can bring positive growth with profits to the bottom line.
OVERVIEW:
The Company operates a regional presence headquartered in Tampa,
Florida, with offices in Atlanta, Georgia, Edison, New Jersey and broker and
agent offices located throughout the US. From its headquarters and remote
warehouse, office and support locations, the Company provides Third Party
Logistics ("3PL") services for mid-sized and large clients.
-24-
We operated the Company profitably in the last fiscal year, with
$13,092 earnings before interest, depreciation and amortization and a pre-tax
profit of $16,009. In the current year we operated the Company for nine months
with $266,218 earnings before interest, depreciation and amortization and a
pre-tax profit of $78,815. The parent company incurred numerous one-time
non-recurrent losses in the most recent quarter, due mostly to the completion of
restructuring of Q Logistics, which was acquired out of Chapter 11 Bankruptcy
proceedings, and the costs related to the rescission of our sale to LMRI, a
public company, which issued stock to us to cover certain consulting expenses
related to our restructuring efforts. Our wholly owned subsidiary,
Trans-Logistics reported quarterly revenues of just over $1 million, $1.5
million and $1.5 million for the first, second, and third quarters respectively.
Additionally net profits (losses) were $61,000 or 5.7%, ($224,000) or (14.8%),
and $222,000 or 14.7% for the first, second, and third quarters of 2001,
respectively.
Our profit for the third quarter nearly completely offset the loss in
the second quarter in spite of a difficult environment in the capital markets
and in the transportation marketplace; the company should be EBITDA positive in
the fourth quarter, 2001. In addition to raising capital, the restructuring of
existing debt will make it possible to cover the expenses associated in
restructuring a company.
We continue to be subject to the risks normally associated with any
business activity, including unforeseeable expenses, delays, and complications.
Accordingly, there is no guarantee that we can or will report operating profits
in the future.
We are in negotiations with several prospective acquisition candidates
at this time.
OPERATING STRATEGY
Our business strategy is to establish our company as a leader and a
preferred provider of high-quality, cost-effective transportation, logistics and
support services for Brokers and Agents in the transportation and 3PL
marketplaces on a national basis while building brand name recognition.
AGENT PROGRAM
We have operated an agency program since our inception. We expect to
see renewed profitable growth in the segment through our wholly owned
subsidiary, Trans-logistics, Inc. The agency program is essentially a
co-operative for smaller truckload carriers whereby Trans-logistics permits
these carriers to operate under its authority as an exclusive agent. The agent
provides its customers and business. Trans-logistics bills the agent carriers
customers and collects the revenues for these shipments. Trans-logistics acts as
an application service provider for its agents by affording access to
Trans-logistics' information technologies and services. In addition, agents
receive economies of scale by participating in the purchase of certain overhead
and other items, such as lower cost of fuel and insurance. Trans-logistics also
provides agents with liability insurance coverage and certain administrative
services such as human resource administration, safety and risk management, DOT
compliance, billing and collecting receivables. Trans-logistics has signed on
several agents over the past several months. We anticipate exciting and
profitable growth in the segment.
-25-
RESULTS OF OPERATIONS
Trans-Logistics began operations in the fourth quarter of 2000,
therefore comparative information does not exist. The following table sets forth
selective financial information that comprises four full quarters of operations
for Trans-Logistics, Inc.:
Quarter Ended: 9/30/01 % 6/30/01 %
------- - ------- -
Operating revenues:
Freight revenue 1,514,479 46.5% 1,513,411 64.3%
Warehousing revenue 1,128,901 34.6% 841,661 35.7%
Other operating revenues 614,723 18.9% - 0.0%
----------- ---------------- ------
Total operating revenues 3,258,103 100.0% 2,355,072 100.0%
----------- ----------------- ------
Operating expenses:
Freight operating expenses 1,296,740 39.8% 1,284,204 54.5%
Warehousing operating expenses 1,064,869 32.7% 822,444 34.9%
General and administrative expenses 460,275 14.1% 439,852 18.7%
----------- ---------------- ------
Total operating expenses 2,821,884 86.6% 2,546,500 108.1%
----------- ---------------- ------
Selective expenses:
Salaries and wages 906,870 27.8% 700,028 29.7%
Atlanta expenses 533,389 16.4% 485,058 20.6%
Chicago expenses (39,617) -1.2% (11,458) -0.5%
Edison expenses 509,808 15.6% 301,497 12.8%
Orlando expenses 61,288 1.9% 47,348 2.0%
Interest expense 62,887 1.9% 107,603 4.6%
Depreciation and amortization 26,306 0.8% 1,943 0.1%
Income before taxes 296,164 9.1% (299,033) -12.7%
Net income 222,627 6.8% (224,275) -9.5%
Balance at: 9/30/01 6/30/01
------- --------
Working Capital (56,657) 421,624
Quarter Ended: 3/31/01 % 12/31/00 %
------- - -------- -
Operating revenues:
Freight revenue 1,080,288 100.0% 370,632 100.0%
Warehousing revenue - 0.0% - 0.0%
Other operating revenues - 0.0% - 0.0%
----------- ----------------- ------
Total operating revenues 1,080,288 100.0% 370,632 100.0%
----------- ----------------- ------
Operating expenses:
Freight operating expenses 883,769 81.8% 335,206 90.4%
Warehousing operating expenses - 0.0% - 0.0%
General and administrative expenses 113,439 10.5% 19,417 5.2%
----------- ---------------- -----
Total operating expenses 997,208 92.3% 354,623 95.7%
----------- ---------------- -----
Selective expenses:
Salaries and wages 12,024 1.1% - 0.0%
Atlanta expenses - 0.0% - 0.0%
Chicago expenses - 0.0% - 0.0%
Edison expenses - 0.0% - 0.0%
Orlando expenses - 0.0% - 0.0%
Interest expense 1,397 0.1% - 0.0%
Depreciation and amortization 6,467 0.6% - 0.0%
Income before taxes 81,684 7.6% 16,009 4.3%
Net income 61,263 5.7% 13,092 3.5%
Balance at: 3/31/01 12/31/00
------- --------
Working Capital 160,788 13,192
Continuing Operations:
OPERATING REVENUES
Total operating revenues increased from $2.4 million to $3.3 million
for the three months ended September 30, 2001. The reasons for this 40% increase
was the increase in sales from operating efficiencies and enhanced capacity in
the warehouse business and new client revenues and increase in existing client
revenues in core 3PL businesses, minus reductions resulting from shutdown of all
business between September 11 and September 20th resulting from acts of war
against the US. The current period revenue was generated from the operations of
Trans-Logistics.
SALARIES, WAGES AND BENEFITS
Salaries, wages and benefits increased from $700,028 for the three
months ended June 30, 2001 to $906,870 for the three months ended September 30,
2001. The reason for the increase was increased activity for the quarter. The
consolidation of operational staff resulting from reduction in management in the
warehouse division, Q Logistics is expected to impact the fourth quarter. Total
salaries, wages and benefits for the nine months ending September 30, 2001 was
$1,618,921.
-26-
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased from $1,943 for the three
months ended June 30, 2001 to $34,716 for the three months ended September 30,
2001. The reason for this increase was the placing of service those assets
acquired in the purchase of Q logistics out of bankruptcy.
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased slightly from $439,852 to
$460,275 for the three months ended September 30, 2001. The reason for this was
primarily due to the recording of an estimate for bad debts of $29,700 due to
the increased activity of the Company.
DISCONTINUED OPERATIONS
Income from discontinued operations decreased from $41,843 for the
three months ended June 30, 2001 to $30,455 for the three months ended September
30, 2001. The Company elected to close the Q Logistics facility in Chicago and
Orlando in August 2001 and consolidate and downsize its Atlanta and Edison
Facilities since the acquisition of Q Logistics in May 2001, both of which
result in reduced overall revenues from those discontinued operations. Thus the
reason for the decrease in income from discontinued operations is the fact that
all operations that were active during the first quarter of 2001 are included in
the discontinued operations caption.
INTEREST
Interest expense decreased to $62,887 for the three months ended
September 30, 2001 from $107,603 for the three months ended June 30, 2001. The
primary reason for the decrease was aggressive cash flow management and the
utilization of a credit facility providing a customer of the Company, that is
unsecured to other lines and available at no interest cost in exchange for third
party relationship business transacted with the principal of the alternate
facility under terms that are fair and favorable to the Company, comparable to
other third parties that provide like services.
LIQUIDITY AND CAPITAL RESOURCES
Our working capital position has decreased since the inception of the
Company to ($56,657). This decrease is primarily due to the increased resources
consumed by the growth of the Company, specifically related to the acquisition
of Q-Logistics. The Company experienced significant one-time losses in
consolidation of the Q-Logistics acquisition into current operations and would
have significantly more working capital and retained earnings if not for
approximately $500,000 in one-time non-recurring losses experienced in reduction
in staff, facilities and streamlining of the Q-logistics operations.
The Company will require significant capital to continue to meet its
expansion goals over the next twelve months. There can be no assurance that the
Company will be able to obtain the capital necessary to continue operations.
(See "Risk factors-Need for substantial Additional financing")
ITEM 3. DESCRIPTION OF PROPERTY
The Company leases its Corporate Headquarters, located at 18302
Highwood's Preserve Parkway, Suite 210, Tampa, FL 33467, which is 2,073 square
feet. The Company pays $3,411 per month and the lease expires May 2006.
A lease period begins in May 2001 and expires in April 2006. The
initial lease term is for a period of 5 years and the lease agreement includes
an optional lease period of an additional three (3) years.
Minimum future rent commitments under this agreement are:
YEAR ENDING DECEMBER 31 AMOUNT
$ 10,235
2002 42,034
2003 43,713
2004 45,468
2005 47,292
Thereafter 15,969
------
Total $204,711
=======
-27-
As part of the lease agreement the Company is liable for an unused
letter of credit in the amount of $40,000. This amount is reduced by $8,000 per
year and may be drawn upon if certain lease commitments have not been met or
have been violated.
On December 15, 2001, the Company moved the location of its northeast
regional support and logistics center from 40 Brunswick Avenue in Edison New
Jersey to 39 Mill Road in Edison New Jersey. This facility was moved in concert
with expansion needs of the Company's largest logistics support client,
increasing the space from 120,000 square feet to 140,000, the number of trailer
bays for loading and unloading products by over fifty percent and a location
that offers enhanced accessibility for ground transportation carriers. The
Company continues to provide comparable services for this client and others from
its new facility.
As the result of its purchase of Q Logistic Solutions, Inc., the
Company utilizes facilities located in Atlanta, Georgia and Edison, New Jersey
on an "at-will" basis; monthly rents for these facilities are approximately
$51,000 and $43,000 respectively.
The Company also has six Sales Agent offices across the United States.
These offices are located at:
- RR 1 Box 385, Clinton, ME 04927
- 11448 Rene Drive, Jacksonville, FL 32218
- 7240 Indiana Avenue, Fort Worth, TX 76137
- 9 Beacon Hill, East Brunswick, NJ 08816
- 2059 S. Hamilton, Dalton, GA 30720
The Company believes that the condition of its facilities is excellent
and that the provided space is sufficient for its use and operation at the
present time. In the opinion of the Company's management, these properties are
adequately insured, in good condition and suitable for the Company's anticipated
future use.
-28-
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The table below sets forth, as of November 27, 2001, certain
information with respect to the beneficial ownership of the common stock of the
Company by each person who the Company knows to be a beneficial owner of more
than 5% of any class or series of the Company's capital stock, each of the
directors and executive officers individually, and all directors and executive
officers as a group.
Name Shares Beneficially Percentage of
Owned Shares Beneficially Owned
Allan Marshall(1) 4,187,876 64.4
Christine Otten(1) 1,794,804 27.6
--------- ----
5,982,680 92.0%
(1) Allan Marshall and Christine Often are husband and wife
The Company currently has 6,502,913 outstanding shares of common stock of
which 520,233 shares are owned by approximately 464 persons. The remaining
5,982,680 shares are owned by the principal shareholders as noted in the above
table.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Directors and Executive Officers
The following sets forth information concerning the officers and
directors, including their ages, present principal occupations, other business
experience during the last five years, membership on committees of the board of
directors and directorships in other publicly-held companies.
NAME AGE POSITION WITH SEGMENTZ
Allan Marshall 34 Chief Executive Officer
Dennis M. McCaffrey 33 Vice President, Transportation and Logistics
Operations
Douglas B. Parks 34 Vice President, Distribution and Warehousing
Allan Marshall was a director of the predecessor company
Trans-Logistics from November 2000 to November 2001, when Trans-Logistics
changed its name to Segmentz. He has served as the Chief Executive Officer of
Segmentz since its acquisition on November 1, 2001. Prior to Trans-Logistics and
Segmentz, Mr. Marshall founded U.S. Transportation in 1995, whose main focus was
third party logistics. U.S. Transportation was sold to Professional
Transportation Group in January of 2000 and Professional Transportation Group
ceased business in November of 2000. Prior to 1995, Mr. Marshall served as Vice
President of U.S. Traffic Ltd, where he founded their USA Logistics division.
Dennis McCaffrey served as the Chief Operations Officer of U.S.
Transportation Services since 1996, before joining the Company in November 2000.
He was responsible for creating and implementing strategic business plans;
supervising operations staff; designing and managing all sales and marketing
programs; assisting in the design and implementation of their internal software
program; and forming strategic alliances with contract carriers including U.S.
Express, MS Carriers, Heartland Express, and Swift Transportation. When U.S.
Transportation Services was sold to Professional Transportation Group in 2000,
Mr. McCaffrey served as an Operations Manager for the Florida division. Mr.
McCaffrey also worked as the Operations Manager for U.S. Traffic Ltd's U.S.
operations from 1992 to 1996. Previously, Mr. McCaffrey served in the United
States Marine Corps from 1988 to 1992. Mr. McCaffrey has a Bachelors degree in
Marketing from the University of South Florida. Mr. McCaffrey, as Vice President
of Transportation and Logistics Operations, is directly responsible for the
management, growth and success of Trans-Logistics transportation, brokerage, and
logistics operations.
Douglas B. Parks was Chief Operating Officer of Q Logistics Solutions,
prior to joining the Company, where he helped secure national accounts and grow
the company to over 12 million in annual revenues. Previously, Mr. Parks was a
manager for Eagle Global Logistics for five years where he was responsible for
opening new service centers and increasing sales and profits. Before that Mr.
Parks held several operations and sales management positions with Emery
Worldwide and CNF (NYSE: CNF), where he was responsible for sale and managing
the sales division. Mr. Parks, as Vice President of Distribution and Warehousing
Operations, is responsible for the growth and management of all four warehousing
and distribution facilities, Atlanta, Newark, Chicago, and Orlando.
-29-
ITEM 6. EXECUTIVE COMPENSATION
Executive Officers
The Company's Board appoints the executive officers to serve at the
discretion of the Board. Directors who are also employees receive no
compensation for serving on the Board. The Company's non-employee directors
receive no compensation for serving on the Board. The Company intends to
reimburse non-employee directors for travel and other expenses incurred in
connection with attending the Board meetings.
Allan Marshall, the Company's Chief Executive Officer, will receive
approximately $75,000 in compensation for the year ended December 31, 2001. None
of the other executive officers are paid more than $100,000 annually.
EMPLOYMENT AGREEMENTS
The Company has entered into an Employment Agreement with Allan Marshall,
the Company's Chief Executive Officer, which terminates on November 15, 2006.
The agreement shall be automatically extended for an additional one-year period
after the initial term unless at least 30 days prior to the termination date
either the Company or Mr. Marshall give written notice to the other that the
Employment Agreement will not be renewed. Mr. Marshall will receive an annual
base salary of $150,000 plus a non-accountable expenses allowance of $35,000 per
year, which may be increased at the discretion of the Board. Additionally, Mr.
Marshall may be eligible to receive an annual bonus based on the Company's
financial performance in the form of stock options and cash not to exceed 15% of
his base salary.
KEY MAN INSURANCE
The Company intends to obtain a life insurance policy in the amount of
$1,000,000 on the life of Allan Marshall, the Company's Chief Executive Officer.
The proceeds of the policy would be payable to the Company.
STOCK OPTION PLAN
On November 1, 2001, the Company's stockholders approved the 2001 Stock
Compensation Plan. The number of shares of common stock which may be issued
under the 2001 Plan shall initially be 600,000 shares which amount may, at the
discretion of the Board, be increased from time to time to a number of shares of
common stock equal to 5% of the total outstanding shares of common stock,
provided that the aggregate number of shares of common stock which may be
granted under the 2001 Plan shall not exceed 6,000,000 shares. The Company may
also utilize the granting of options under the 2001 Plan to attract qualified
individuals to become its employees and non-employee directors, as well as to
ensure the retention of management of any acquired business operations. Under
the 2001 Plan the Company may also grant restricted stock awards. Restricted
stock represents shares of common stock issued to eligible participants under
the 2001 Plan subject to the satisfaction by the recipient of certain conditions
and enumerated in the specific restricted stock grant. Conditions which may be
imposed include, but are not limited to, specified periods of employment,
attainment of personal performance standards or the Company's overall financial
performance. The granting of restricted stock represents an additional incentive
for eligible participants under the 2001 Plan to promote the Company's
development and growth, and may be used by the management as another means of
attracting and retaining qualified individuals to serve as the Company's
employees and directors. Currently, no options have been granted to employees,
consultants, officers or directors.
-30-
COMPENSATION TABLE
The information set forth below concerns the cash and non-cash
compensation to certain of the Company's executive officers for each of the past
three fiscal years ended December 31, 2000 and 1999. In each case, the
compensation listed was paid by Trans-Logistics. Except for Allan Marshall, the
Company's Chief Executive Officer, no executive officer has an employment
agreement with the Company and all executive officers serve at the discretion of
the Board.
Summary Compensation Table
NAME/TITLE ANNUAL COMPENSATION LONG-TERM COMPENSATION AWARDS
- --------------------------------------------------------------------------------------------------
SECURITIES
OTHER UNDERLYING
ANNUAL RESTRICTED OPTIONS/SARs/
YEAR SALARY/BONUS COMPENSATION STOCK AWARDS WARRANTS
Allan Marshall 2001* $75,000 N/A None None
Chief Executive
Officer and Director 2000 $0 N/A None None
*Estimated
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has as of September 30, 2001 a payable of $211,850 to Allan
Marshall, the Chief Executive Officer of the Company and a payable of $6,521 to
Atech Commercial Corporation ("ATECH"), a corporation controlled by the
President of the Company. The Company utilized facilities, equipment, and
employees of this related company in return for a commission paid equal to 85%
of operating revenues less direct expenses. For the nine months ended September
30, 2001 these transactions totaled $144,146 and was included in operating
expenses. As of January 1, 2002, the Company does not intend to conduct any
business with ATECH, without obtaining approval of the Board of Directors.
ITEM 8. DESCRIPTION OF SECURITIES
Capital Stock
The Company's authorized capital stock consists of 40,000,000 shares of
common stock, par value $.001 and 10,000,000 shares of preferred stock, par
value $.001. Each share of common stock entitles a shareholder to one vote on
all matters upon which shareholders are permitted to vote. No shareholder has
any preemptive right or other similar right to purchase or subscribe for any
additional securities issued by the Company, and no shareholder has any right to
convert the common stock into other securities. No shares of common stock are
subject to redemption or any sinking fund provisions. All the outstanding shares
of the Company's common stock are fully paid and non-assessable. Subject to the
rights of the holders of the preferred stock, if any, the Company's shareholders
of common stock are entitled to dividends when, as and if declared by the Board
from funds legally available therefore and, upon liquidation, to a pro-rata
share in any distribution to shareholders. The Company does not anticipate
declaring or paying any cash dividends on the common stock in the year 2001 or
in the foreseeable future.
Pursuant to the Company's Articles of Incorporation, the Board has the
authority, without further shareholder approval, to provide for the issuance of
up to 10,000,000 shares of the Company's preferred stock in one or more series
and to determine the dividend rights, conversion rights, voting rights, rights
in terms of redemption, liquidation preferences, the number of shares
constituting any such series and the designation of such series. The Company's
Board has the power to afford preferences, powers and rights (including voting
rights) to the holders of any preferred stock preferences, such rights and
preferences being senior to the rights of holders of common stock. No shares of
the Company's preferred stock are currently outstanding. Although the Company
has no present intention to issue any shares of preferred stock, the issuance of
shares of preferred stock, or the issuance of rights to purchase such shares,
may have the effect of delaying, deferring or preventing a change in control of
the Company.
As a WBNI successor, the Company is prohibited from issuing non-equity
voting securities under Section 1123(a)(6) of the United States Bankruptcy Code.
If there are to be any classes of securities issued in the future, all shall
possess voting power, an appropriate distribution of such voting power among
such classes, including, in the case of any class of equity securities having a
preference over another class of equity securities with respect to dividends,
and adequate provision for the election of directors representing such preferred
class in the event of default in the payment of such dividends.
-31-
PROVISIONS HAVING A POSSIBLE ANTI-TAKEOVER EFFECT
The Company's Articles of Incorporation and Bylaws contain certain
provisions, that are intended to enhance the likelihood of continuity and
stability in the composition of the Company's Board and in the policies
formulated by the Board and to discourage certain types of transactions which
may involve an actual or threatened change of control of the Company. In
addition, the Board has the authority, without further action by the Company's
shareholders, to issue up to 10,000,000 shares of its preferred stock in one or
more series and to fix the rights, preferences, privileges and restrictions
thereof. The issuance of the Company's preferred stock or additional shares of
common stock could adversely affect the voting power of the holders of common
stock and could have the effect of delaying, deferring or preventing a change in
the Company's control.
ADDITIONAL INFORMATION
Statements contained in this registration statement regarding the
contents of any contract or any other document are not necessarily complete and,
in each instance, reference is hereby made to the copy of such contract or other
document filed as an exhibit to the registration statement. As a result of this
registration statement, the Company will be subject to the informational
requirements of the Securities Exchange Act of 1934 and, consequently, will be
required to file annual and quarterly reports, proxy statements and other
information with the SEC. The registration statement, including exhibits, may be
inspected without charge at the SEC's principal office in Washington, D.C., and
copies of all or any part thereof may be obtained from the Public Reference
Section, Securities and Exchange Commission, 450 Fifth Street, NW, Washington,
D.C. 20549 upon payment of the prescribed fees. You may obtain information on
the operation of the Public Reference Room by calling the SEC at 1.800.SEC.0330.
The SEC maintains a Website that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with it. The address of the SEC's Website is http://www.sec.gov.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS;
MARKET DATA
This registration statement contains forward-looking statements. These
statements relate to future events or the Company's future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms or other comparable terminology. Forward-looking statements are
speculative and uncertain and not based on historical facts. Because
forward-looking statements involve risks and uncertainties, there are important
factors that could cause actual results to differ materially from those
expressed or implied by these forward-looking statements, including those
discussed under "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Description of Business."
Although the Company believes that the expectations reflected in the
forward-looking statements are reasonable, the Company cannot guarantee future
results, levels of activity, performance, or achievements. Moreover, neither the
Company nor any other person assumes responsibility for the accuracy and
completeness of such statements. The reader is advised to consult any further
disclosures made on related subjects in the Company's future SEC filings.
-32-
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Market Information
The Company's common stock is listed on the Over-the-Counter Pink
Sheets. Since the Company's common stock has not begun trading, there is not an
established active public market for its common stock. No assurance can be given
that an active market will exist for the Company's common stock and the Company
does not expect to declare dividends in the foreseeable future since the Company
intends to utilize its earnings, if any, to finance its future growth, including
possible acquisitions.
The Company is filing this Registration Statement on Form 10- SB for
the purpose of enabling its common stock to commence trading on the NASD OTC
Bulletin Board.
The Company's Registration Statement on Form 10 must be declared
effective by the SEC prior to it being approved for trading on the NASD OTC
Bulletin Board, and until such time as this Form 10- SB is declared effective,
the Company's common stock will continue to be quoted on the "Pink Sheets." The
Company's market makers must make an application to the National Association of
Securities Dealers, Inc., or NASD, following the effective date of this Form
10-SB in order to have the common stock quoted on the NASD OTC Bulletin Board.
Holders. As of November 15, 2001, there were a total of 6,502,913
shares of the Company's common stock outstanding, held by approximately 464
shareholders of record.
Dividends. The Company has not declared any dividends on its common
stock during the last two fiscal years.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any legal proceedings.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not Applicable
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Pursuant to the Reorganization Plan of WBNI, all of its outstanding
capital stock as of February 10, 1999, the date of its bankruptcy petition, was
canceled. Subsequently, WBNI issued an aggregate of 520,233 shares of common
stock to certain of its creditors. The 520,233 shares were issued in accordance
with Section 1145 under the United States Bankruptcy Code and the transaction
was thus exempt from the registration requirements of Section 5 of the
Securities Act of 1933.
On October 29, 2001, WBNI's majority stockholders approved a merger with
TRANSL Holdings and issued 5,982,680 shares of common stock. Minority
stockholders were mailed notices of such action as well as other actions taken
by the majority stockholders pursuant to the Delaware General Corporation law.
WBNI was the surviving entity and changed its name to Segmentz, Inc. The Company
relied on Section 4(2) of the Securities Act of 1933 for the issuance of the
5,982,680 shares because the transaction did not involve a public offering and
was therefore exempt from the registration requirements of Section 5 of the
Securities Act. No underwriters were used in connection with this transaction.
-33-
ITEM 5. INDEMNIFICATION OF OFFICERS AND DIRECTORS
Segmentz is a Delaware corporation. The Company certificate of
incorporation provides that the Company will indemnify and hold harmless its
officers, directors and others serving the corporation in various capacities to
the fullest extent permitted by the DGCL. Section 145 of the DGCL provides that
a Delaware corporation has the power to indemnify officers and directors in
specified circumstances.
Under Section 145 of the DGCL, a corporation may indemnify its
directors and officers as well as other employees and individuals against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement in connection with specified actions, suits or proceedings, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation, referred to as a derivative action) if they acted
in good faith and in a manner they reasonably believed to be in or not opposed
to the best interests of the corporation, and with respect to any criminal
action or proceeding, had no reasonable cause to believe their conduct was
unlawful. A similar standard of conduct is applicable in the case of derivative
actions, except that indemnification only extends to expenses (including
attorneys' fees) incurred in connection with defense or settlement of that
action, and Section 145 requires court approval before there can be any
indemnification where the person seeking indemnification has been found liable
to the corporation.
Section 145 of the DGCL further provides that to the extent that a
director or officer has been successful on the merits or otherwise in the
defense of any action, suit or proceeding referred to above or in the defense of
any claim, issue or matter within that action, suit or proceeding, that person
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by that person in connection with that defense. The
Company's certificate of incorporation provides that the indemnification rights
described above shall be contract rights and shall include the right to be paid
expenses incurred in defending any proceeding in advance of its final
disposition subject to any undertakings required under the DGCL. Section 145
requires an undertaking to repay any amount advanced if the director or officer
receiving that amount is ultimately determined not to be entitled to
indemnification.
Indemnification provided for by Section 145 of the DGCL and the Company's
certificate of incorporation is not to be deemed exclusive of any other rights
to which the indemnified party may be entitled. Both Section 145 and the
Company's certificate of incorporation permit the Company to maintain insurance
on behalf of a director, officer or others against any liability asserted
against that person and incurred by that person, whether or not the Company
would have the power to indemnify that person against those liabilities under
Section 145. Anyone claiming rights to indemnification under the Company's
certificate of incorporation may bring suit if that indemnification is not paid
within thirty days.
-34-
SIGNATURES
In accordance with Section 12 of the Exchange Act, the Company caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized.
SEGMENTZ, INC.
DATE: January , 2002 By: /s/ Allan Marshall
--------------------
Allan Marshall, President
-35-
PART F/S
TRANS-LOGISTICS, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
TRANS-LOGISTICS, INC.
FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
TABLE OF CONTENTS
-----------------
PAGE
Accountants' Review Report 1
Balance Sheet 2
Statement of Income and Retained Earnings 3
Statement of Cash Flows 4
Notes to Financial Statements 5-9
[GRAPHIC OMITTED][GRAPHIC OMITTED]
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors of
Trans-Logistics, Inc.
Tampa, Florida
We have reviewed the accompanying balance sheet of Trans-Logistics, Inc. as of
September 30, 2001, and the related statements of income and retained earnings,
and cash flows for the nine months then ended, in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these financial
statements is the representation of the management of Trans-Logistics, Inc.
A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying financial statements in order for them to be in
conformity with generally accepted accounting principles.
/s/ VALIENTE HERNANDEZ P.A.
- ----------------------------
Certified Public Accountants
Tampa, Florida
December 28, 2001
F-1
TRANS-LOGISTICS, INC.
BALANCE SHEET
SEPTEMBER 30, 2001
ASSETS
------
Current assets:
Cash $ 31,240
Accounts receivable --
Trade receivables, less allowance for
uncollectible accounts of $45,000
(Notes 3 and 10) 1,465,192
Advances to drivers 2,300
Employee loans 18,533
Note receivable (Note 4) 450,000
Prepaid expenses and deposit 128,561
----------
Total current assets $2,095,826
Property and equipment, net (Note 5) 374,464
----------
Total assets $2,470,290
==========
LIABILITIES AND STOCKHOLDER'S EQUITY
------------------------------------
Current liabilities:
Due to factor (Note 3) $ 587,268
Line of credit (Note 6) 559,535
Accounts payable 755,440
Accrued expenses 31,869
Payable to related party (Note 8) 218,371
----------
Total current liabilities $2,152,483
Note payable (Note 7) 245,000
----------
Total liabilities 2,397,483
Commitments and contingencies (Notes 10 and 13)
Stockholder's equity:
Capital stock (1,000 shares authorized
500 shares issued and outstanding) 100
Retains earnings 72,707
----------
Total stockholder's equity 72,807
----------
Total liabilities and stockholder's equity $2,470,290
==========
See accountants' report and accompanying notes to financial statements.
F-2
TRANS-LOGISTICS, INC.
STATEMENT OF INCOME AND RETAINED EARNINGS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
OPERATING REVENUES:
Freight revenue $4,108,178
Warehousing revenue 1,970,562
Consulting revenue (Note 1) 598,500
Other operating revenues 16,223
----------
TOTAL OPERATING REVENUES $6,693,463
OPERATING EXPENSES:
Freight operating expenses (Note 8) 3,464,713
Warehousing operating expenses 1,887,313
General and administrative expenses 1,013,566
----------
TOTAL OPERATING EXPENSES 6,365,592
----------
OPERATING INCOME 327,871
OTHER INCOME (EXPENSE):
Loss on sale of marketable securities (78,998)
Interest income 1,829
Interest expense (171,887)
----------
TOTAL OTHER INCOME (EXPENSE) (249,056)
----------
INCOME BEFORE TAXES 78,815
PROVISION FOR INCOME TAXES (Note 11) 19,200
----------
NET INCOME 59,615
RETAINED EARNINGS:
Beginning of period 13,092
----------
End of period $ 72,707
==========
See accountants' report and accompanying notes to financial statements.
F-3
TRANS-LOGISTICS, INC.
STATEMENT OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 59,615
Adjustments to reconcile net income to
net cash provided by operating activities --
Depreciation and amortization 34,716
Loss on sale of investment 78,998
Receipt of marketable securities for
services rendered (148,500)
(Increase) decrease in current assets--
Trade receivables (1,196,580)
Advances to drivers (2,300)
Employee loans (17,187)
Note receivable (450,000)
Prepaid expenses and deposit (128,561)
Increase (decrease) in current liabilities--
Accounts payable 634,227
Accrued expenses 21,452
Payable in rerlated party 91,526
----------
NET CASH USED BY OPERATING ACTIVITIES (1,022,594)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments 69,502
Acquisition of property and equipment (409,180)
----------
NET CASH USED BY INVESTING ACTIVITIES (339,678)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from factoring accounts receivable 5,310,294
Repayments to factors (4,723,026)
Proceeds from line of credit borrowings 1,155,285
Repayments of line of credit (595,750)
Proceeds from notes payable 245,000
----------
NET CASH USED BY FINANCING ACTIVITIES 1,391,803
----------
Net increase in cash 29,531
Cash, beginning of period 1,709
----------
Cash, end of period $ 31,240
==========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for--
Interest $ 162,135
==========
Income taxes $ --
==========
See accountants' report and accompanying notes to financial statements.
F-4
TRANS-LOGISTICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
NOTE 1 - ORGANIZATION AND NATURE OF OPERATIONS
Trans-Logistics, Inc. (the "Company") is a logistics and brokerage organization
serving irregular route, long haul, and common motor carriers of general
commodities. The Company is a Florida corporation and was formed on April 28,
2000.
The Company's corporate headquarters are located in Tampa, Florida.
During May 2001, the Company acquired the assets of Q Logistic Solutions, Inc.
for $367,385. Q Logistic Solutions, Inc. operated warehouse facilities in
Atlanta, Georgia; Edison, New Jersey; Orlando, Florida and Chicago, Illinois.
Operations in Orlando and Chicago were subsequently discontinued.
Effective January 1, 2001, the Company was acquired by Logistics Management
Resources, Inc. The acquisition was for one hundred percent of the issued and
outstanding common stock at a price of $80,000, plus, four times the Company's
gross brokerage commissions for the period of October 1, 2001 through December
31, 2001, plus the value of any accounts receivable immediately prior to the
closing date (which amount was agreed to be not less than $230,000), minus the
aggregate value of any liabilities of the Company prior to the closing date,
minus cost of the Company's performance of its obligations under an assignment
and assumption agreement with Atech Commercial Corporation exceeds $120,000. On
August 10, 2001, the Company and Logistics Management Resources, Inc. agreed to
rescind and cancel the terms and conditions of the acquisition agreement. Under
the terms of the rescission agreement, the agreed to a reimbursement of
1,500,000 shares of Logistics Management Resources, Inc.'s common stock and a
note receivable in the amount of $450,000. This rescission agreement was
effective as of July 1, 2001.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH: For the purpose of reporting cash flows, cash includes all demand accounts
and cash on hand.
REVENUE RECOGNITION: Operating revenue is recognized on the date the freight is
received for shipment. Related costs of delivery of shipments in transit are
accrued as incurred.
PROVISION FOR DOUBTFUL ACCOUNTS: The Company provides for estimated losses on
accounts receivable based on bad debt experience and a review of existing
receivables.
PROPERTY AND EQUIPMENT: Property and equipment are recorded at cost less
accumulated depreciation. The Company uses the straight-line method of
depreciation. Estimate useful lives for property and equipment is 5 to 7 years.
It is the policy of the Company to capitalize purchases of property and
equipment that benefit future periods.
F-5
TRANS-LOGISTICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
INCOME TAXES: Income taxes are provided for the tax effects of transactions
reported in the financial statements and consist of taxes currently due plus
deferred taxes related primarily to differences between the bases of certain
assets and liabilities for financial and tax reporting where applicable.
CREDIT RISK: Financial instruments, which potentially subject the Company to
concentrations of credit risk, include trade receivables. Concentration of
credit risk with respect to trade receivables is limited due to the Company's
large number of customers and wide range of industries and locations served. Two
customers, Quebecor World Logistics, Inc. and Huff Timber Company, Inc. comprise
approximately 26% and 18% of the September 30, 2001 customer accounts receivable
balance respectively. The Company maintains its cash accounts in substantially
one financial institution located in Tampa, Florida. The balances are insured by
the Federal Deposit Insurance Corporation up to $100,000. At September 30, 2001,
uninsured cash was $2,150.
FINANCIAL INSTRUMENTS: The Company believes the carrying amount of cash,
accounts receivable (net of allowances), notes receivable, accounts payable and
accrued expenses approximates fair value due to their short maturity.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 3 - DUE TO FACTOR
The Company factors substantially all of its accounts receivable. During the
nine months ended September 30, 2001, the Company utilized the services of two
factoring companies. Accounts receivable are sold to the factoring companies
with recourse for unpaid invoices in excess on 90 days old. The most recent
agreement provides for the payment of factoring fees at 2.5% of each invoice
factored.
Accounts receivable transferred to the factoring companies were as follows:
Factored accounts $ 5,310,294
Customer payments (charge backs) (4,723,026)
----------
Amount due to factoring companies $ 587,268
========
F-6
TRANS-LOGISTICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
NOTE 4 - NOTE RECEIVABLE
As part of the above noted rescission agreement, the Company has recognized
consulting revenue and a demand note receivable in the amount of $450,000 due
from Logistics Management Resources, Inc. The terms of this note do not include
interest until demand is made for payment. Payment on this note is expected to
be during the second quarter of 2002.
NOTE 5 - PROPERTY AND EQUIPMENT
Property and equipment as of September 30, 2001 consists of the following:
Leasehold improvements $ 3,685
Office equipment 26,746
Warehouse equipment 164,260
Warehouse shelving 90,000
Computer equipment 89,475
Computer software 35,014
---------
409,180
Less: accumulated depreciation (34,716)
---------
Net property and equipment $ 374,464
========
Total depreciation expense on property and equipment was $34,716 for the nine
months ended September 30, 2001.
NOTE 6 - LINE OF CREDIT
The Company has a credit facility with a current availability of one million
dollars, of which $559,535 is outstanding as of period ending September 30,
2001. The facility bears interest at six percent annually. The credit facility
is provided by Bryant Plastics Inc., a customer of the Company.
NOTE 7 - NOTE PAYABLE
In connection with the acquisition of Q-Logistics, the Company entered into a
demand note for $245,000. The note was subsequently converted to a term note,
which matures on December 31, 2002 and currently bears interest at 6% per annum.
NOTE 8 - RELATED PARTY TRANSACTIONS
Amounts described as payable to related party comprise as of September 30, 2001
a payable of $211,850 to Allan Marshall, the president of the Company and a
payable of $6,521 to Atech Commercial Corporation, a corporation controlled by
the president of the Company.
F-7
TRANS-LOGISTICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
The Company utilized facilities, equipment, and employees of this related
company in return for a commission paid equal to 85% of operating revenues less
direct expenses. For the nine months ended September 30, 2001 these transactions
totaled $144,146 and was included in operating expenses.
NOTE 9 - MAJOR CUSTOMERS
For the nine months ended September 30, 2001, one customer comprised 23% of
revenues.
NOTE 10 - OPERATING LEASES
The Company signed an agreement to lease office space for its headquarters. The
lease period begins in May 2001 and expires in April 2006. The initial lease
term is for a period of 5 years and the lease agreement includes an optional
lease period of an additional three (3) years.
Minimum future rent commitments under this agreement are:
YEAR ENDING DECEMBER 31 AMOUNT
----------------------- ------
2001 $ 10,235
2002 42,034
2003 43,713
2004 45,468
2005 47,292
Thereafter 15,969
-------
Total $204,711
=======
As part of the lease agreement the Company is liable for an unused letter of
credit in the amount of $40,000. This amount is reduced by $8,000 per year and
may be drawn upon if certain lease commitments have not been met or have been
violated.
NOTE 10 - CONTINGENCIES
The Company is contingently liable for the landlord's increase in operating
expenses over $6.25 per rentable square foot on its pro-rata basis of the
rentable area occupied. It is not possible to estimate the amount due to the
landlord as a result of unknown increases in the landlord's operating expenses.
The Company is also contingently liable to the factor for unpaid customer
invoices in excess of 90 days old. It is not possible to estimate the amount due
to the factors as a result of the collection of accounts receivable. However, a
provision for uncollectable accounts in the amount of $45,000 has been recorded
by the Company.
F-8
TRANS-LOGISTICS, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 2001
As the result of its purchase of Q Logistic Solutions, Inc., the Company
utilizes facilities located in Atlanta, Georgia and Edison, New Jersey on an
"at-will" basis; monthly rents for these facilities are approximately $51,000
and $43,000 respectively.
NOTE 11 - PROVISION FOR INCOME TAXES
The provision for income taxes is comprised of current tax expenses in the
amount of $19,200 and includes both federal and state income taxes.
NOTE 12 - SUBSEQUENT EVENTS
On October 20, 2001, the Company's shareholder tendered her shares to TL
Holdings, Inc., which subsequently merged with Segmentz, Inc., a Delaware
corporation, through a stock for stock exchange that resulted in the Company
being listed for trading on the "pink sheets" under the symbol SGMZ.
On December 15, 2001, the Company moved the location of its northeast regional
support and logistics center from 40 Brunswick Avenue in Edison New Jersey to 39
Mill Road in Edison New Jersey. This facility was moved in concert with
expansion needs of the Company's largest logistics support client, increasing
the space from 120,000 square feet to 140,000, the number of trailer bays for
loading and unloading products by over fifty percent and a location that offers
enhanced accessibility for ground transportation carriers. The Company continues
to provide comparable services for this client and others from its new facility.
NOTE 13 - GOING CONCERN
The Company's financial statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.
As shown in the accompanying financial statements, as of September 30, 2001, the
Company's current liabilities exceeded its current assets by $56,657. This
condition creates an uncertainty as to the Company's ability to continue as a
going concern. Management has taken certain steps intended to reduce operating
expenses and improve its liquidity through refinancing of its line of credit.
The ability of the Company to continue as a going concern is dependent upon the
success of these actions. The financial statements do not include any
adjustments relating to the recoverability of recorded asset amounts or the
amounts of liabilities that might be necessary should the Company be unable to
continue as a going concern.
F-9
PART III
ITEM 1. INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- -------------------------------------
2.0 Amended Joint Plan of Reorganization Dated February 10, 1999, as filed
with the United States Bankruptcy Court for the Southern District of
Florida, Miami Division.
2.1 Order (I) Confirming Amended Joint Plan of Reorganization Dated
February 10, 1999, as Modified, and (II) Limiting Notice with Respect
to Post-Confirmation Matters.
2.2 Certificate of Compliance with Reverse Acquisition Requirements, as
filed with the United States Bankruptcy Court for the Southern
District of Florida, Miami Division, on February 5, 2001.
2.3 Stock Exchange Agreement by and among WBNI, Inc., TRANSL Holdings,
Inc., the Stockholders of TRANSL Holdings, Inc. and Halter Financial
Group, Inc., dated October 29, 2001.
3.0 Agreement and Plan of Merger dated February 10, 2000, by and between
Rose Auto Stores - Florida, Inc., a Florida corporation and RAS
Acquisition Corp., a Delaware corporation.
3.1 Articles of Merger filed on May 15, 2000 with the Florida Department
of State, by and between Rose Auto Stores - Florida, Inc. and RAS
Acquisition Corp.
3.2 Certificate of Merger filed on May 17, 2000 with the Delaware
Secretary of State, by and between RAS Liquidating, Inc. and RAS
Acquisition Corp.
3.3 Certificate of Merger filed on February 1, 2001 with the Texas
Secretary of State, by and between WBNI, Inc. and RAS Acquisition
Corp.
3.4 Certificate of Merger filed on February 1, 2001 with the Delaware
Secretary of State, by and between WBNI, Inc. and RAS Acquisition
Corp.
-36-
3.5 Certificate of Incorporation of RAS Acquisition Corp, as filed on May
8, 2000 with the Delaware Secretary of State
3.6 Certificate of Amendment of Certificate of Incorporation of WBNI, Inc.
as filed with the Secretary of State of Delaware on November 1, 2001.
3.7 Bylaws of RAS Acquisition Corp.
10.0 Employment Agreement, by and between Segmentz, Inc and Allan Marshall.
10.1 Segmentz, Inc. 2001 Stock Option Plan.
21.0 Subsidiaries of the Registrant: Trans-Logistics, Inc., a Florida
corporation.
-37-
EXHIBIT 2.0
-----------
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
ROSE AUTO STORES - FLORIDA, INC., Case No. 97-13411 BKC-RAM
Debtor Chapter II
AMENDED JOINT PLAN OF REORGANIZATION DATED FEBRUARY 10, 1999
------------------------------------------------------------
Pursuant to Sections 1121 (a) and 1129 of the Bankruptcy Code, RAS
Liquidating, Inc. f/k/a Rose Auto Store Florida, Inc. and the Official Unsecured
Creditors' Committee for Rose Auto Stores-Florida, Inc., hereby proposes this
AMENDED JOINT PLAN OF REORGANIZATION dated February 10, 1999:
ARTICLE I
DEFINITIONS AND CONSTRUCTION
----------------------------
A. TERMS DEFINED IN THE PLAN.
--------------------------
In addition to such other terms as are defined in other sections of
this Plan, the following terms shall have the following meanings ascribed
thereto:
1. "ADMINISTRATIVE CLAIM" means a claim entitled to priority
pursuant to Sections 503(b) and 507(a)(1) of the Code, including, without
limitation, the actual and necessary costs and expenses of preserving and
operating the Estate, compensation and reimbursement of expenses for legal and
other services awarded under Sections 328, 330(a) and 331 of the Code, and all
fees and charges assessed against the Estate pursuant to Chapter 123 off Title
28, United States Code.
2. "ALLOWED ADMINISTRATIVE CLAIM" means that portion of any
Administrative Claim that is an Allowed Claim.
3. "ALLOWED CLAIM" means a Claim against the Debtor that is: (a)
listed in the Schedules, other than a Claim scheduled as disputed, contingent or
unliquidated; (b) proof of which was timely filed with the Court, and as to
which no objection has been filed; or (c) has otherwise been allowed by a Final
Order.
4. "ALLOWED PRIORITY CLAIM" means that portion of any Tax Claim
that is an Allowed Claim.
5. "ALLOWED TAX CLAIM" means that portion of any Tax Claim that
is an Allowed Claim.
6. "BANKRUPTCY DATE" means May 2, 1997.
7. "BANKRUPTCY RULES" means The Federal Rules of Bankruptcy
Procedure promulgated by the United States Supreme Court pursuant to Section
2075 of Title 28, United States Code, and the Local Bankruptcy Rules, as same
may be applicable to the Case.
8. "BUSINESS DAY" means any day except Saturday, Sunday or any
other day on which the law authorized federally insured banks in Miami, Florida
to close.
9. "CASE" means the Chapter 11 case of Debtor.
10. "CLAIM" means (a) any right to payment against the Debtor,
including claims for administrative expenses, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; and (b)
any right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment against the Debtor, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured, in either case, however, only to the
extent such right arose prior to the Confirmation Date.
2
11. "CLASS" means a class of Claims or Interests as designated in
Article III of this Plan.
12. "CODE" means the Bankruptcy Code, as codified in Title 11 of
the United States Code, II U.S.C.ss.ss.101 et seq., including all amendments
thereto, to the extent such amendments are applicable to the Case.
13. "COMMITTEE" means the Official Unsecured Creditors' Committee
appointed in the Case by the Office of the United States Trustee on or about
June 22, 1997 pursuant to Section 1102 of the Code.
14. "CONFIRMATION" means the entry of the Confirmation Order.
15. "CONFIRMATION ORDER" means the Order of the Court confirming
this Plan pursuant to Section 1129 of the Code.
16. "CONSUMMATION OF THE PLAN" means when all of the requirements
of the Plan are met. The Consummation of the Plan will occur after substantial
consummation, as that term is defined in Section 1101(2) of the Code, and will
occur only upon the Consummation of the Plan Date.
17. "CONSUMMATION OF THE PLAN DATE" means the date on which the
reverse merger or acquisition described in Article VI is completed. Such date
shall not be later than twenty-one (21) months form the Effective Date of the
Plan or the discharge of the Reorganized Debtor will be deemed vacated and the
issuance of the Plan Shares under the Plan will be deemed canceled and void.
Notwithstanding the Consummation of the Plan being achieved, any and all claims
by Creditors as to a default under the Plan can only be asserted against the
Creditor Trust that is established by the Plan. The Consummation of the Plan
Date may be extended, as set forth in Article
3
V.C., if the Trustee does not meet the requirements set forth in Article V.C.
within the time period referenced in that Article.
18. "COURT" means the United States Bankruptcy Court for the Southern
District of Florida, or such other Court as may have jurisdiction over the Case.
19. "CREDITOR"' means the holder of a Claim, whether or not such Claim
is an Allowed Claim.
20. "CREDITOR TRUST" means the entity which, on and after the Effective
Date, will hold title to and control all assets to be distributed to Creditors
and holders of Interests, and shall have such powers, duties and obligations as
are set forth in (a) the Plan, (b) the Creditor Trust Agreement, (c) the
Confirmation Order, (c) other order of the Court, or (d) applicable bankruptcy
or non-bankruptcy law. The Creditor Trust will be represented by and act through
the Trustee of the Creditor Trust, who will be John T. Grigsby, Jr.
21. "CREDITOR TRUST AGREEMENT" means the agreement, in the form annexed
to the Confirmation Order, governing the affairs and administration of the
Creditor Trust.
22. "DEBTOR" means RAS Liquidating, Inc., a Florida corporation,
formerly known as Rose Auto Stores-Florida, Inc. whether as debtor or as debtor
in possession in the Case.
23. "DELAWARE CERTIFICATE" shall mean the Certificate of Incorporation
of the Reorganized Debtor subsequent to the reincorporation merger described in
this Plan.
24. "DELAWARE BYLAWS" shall mean the Bylaws of the Reorganized Debtor
subsequent to the reincorporation merger described in this Plan.
25. "DISCLOSURE STATEMENT" means the Disclosure Statement corresponding
to the Plan, as approved by the Court pursuant to an order entered _____, 1999.
4
26. "DISPUTED CLAIM" means a Claim other than an Allowed Claim.
including a Claim (a) scheduled as disputed, contingent or unliquidated in the
Schedules; or (b) as to which an objection has been filed and which objection
(i) has not been withdrawn. or (ii) has not been determined by a Final Order.
27 "EFFECTIVE DATE". means the eleventh (11th) day after the entry of
the Confirmation Order.
28. "ESTATE" means the estate in this Case created pursuant to Section
541(a) of the Code.
29. "ESTATE CASH" means all cash and cash equivalents of the Estate,
but not including the $5,000 fund to remain with the Reorganized Debtor upon
Confirmation of the Plan.
30. "FINAL ORDER" means an order, judgment or other decree of the Court
or any Court of competent jurisdiction: (a) the operation or effect of-which has
not been reversed, stayed, modified or amended; (b) as to which any appeal that
has been or may be taken has been fully and finally resolved; or (c) as to which
the time for appeal, review or rehearing has expired.
31. ""HFG" or "HALTER FINANCIAL GROUP, INC."., means the Texas
corporation that will be responsible for locating a reverse merger or
acquisition transaction for the Reorganized Debtor as described in this Plan. In
exchange for waiving its Claims totaling $10,000 against the Debtor and the
Estate and the agreements, promises and other consideration to be provided by
HFG as more fully described in this Plan, HFG will receive sixty percent (60%)
of the Plan Shares issued by the Reorganized Debtor as described in this Plan.
5
32. "INTEREST" means (a) the common stock or any ownership rights in
the common stock of Debtor, and (b) any right, warrant or option, however
arising, to acquire the common stock or any other equity interest, or any rights
therein, of Debtor.
33. "PLAN" means this Amended Joint Plan of Reorganization Dated, 1999,
as amended or modified, including all exhibits thereto.
34. "PLAN SHARES" means any shares of common stock of the Reorganized
Debtor to be issued to the holders of Class 3 Allowed Claims and to HFG under
ss. 1145 of the Bankruptcy Code as more fully described in Article VI.
35. "PCC" means the Post Confirmation Committee established under
Article XI of this Plan.
36. "PRESENT VALUE RATE" means an interest rate of(i) six percent (6%)
or (ii) such other interest rate the Court determines in connection with
Confirmation of the Plan.
37. "PRIORITY CLAIM" means a Claim entitled to priority under Section
507(a) of the Code other than an Administrative Claim or a Tax Claim.
38. "PRO RATA" means the ratio that the amount of a particular Allowed
Claim bears to the total amount of Claims of the same Class.
39. "RECOVERY RIGHTS" means any and all causes of action, claims,
obligations, suits, debts, judgments and demands, whether in law or in equity,
which are property of the Debtor and/or of the Estate, whether directly,
indirectly or derivatively as of the Effective Date, including without
limitation, the right to prosecute, compromise, determine not to compromise and
entitlement to proceeds. No Recovery Right is released in any manner affected
under this Plan regardless of whether any party against whom a Recovery Right
may be asserted votes in favor of the Plan.
6
40. "REORGANIZED DEBTOR" means the Debtor subsequent to the
Confirmation Date. As soon as practicable after the Confirmation Date, the
Debtor will be reincorporated in the State of Delaware by means of a merger with
and into a Delaware corporation formed for the purpose of effecting such
reincorporation merger. The term "Reorganized Debtor" also refers to the
surviving Delaware corporation subsequent to the completion of the
reincorporation merger.
41. "RESIDUAL PROPERTY" means all cash and cash equivalents that are
property of the Creditor Trust, however arising, including as a result of monies
received from the prosecution of the Recovery Rights, the sale of other
property of the Estate, or the collection of amounts owing to the Debtor or the
Estate, less amounts paid on account of(i) Allowed Administrative Claims, (ii)
Allowed Tax Claims, (iii) Allowed Claims in Class 1 priority claims and Class 2
secured claims, and (iv) all costs, fees and expenses incurred in connection
with the administration of the Creditor Trust.
42. "SCHEDULES" means the Schedules of Assets and Liabilities
originally filed in the Case on or about June 3, 1997, as modified or amended
from time to time, filed with the Court by the Debtor in accordance with Section
521 of the Code and Bankruptcy Rule 1007.
43. "SECURED CLAIM" means a Claim which is secured by a properly
perfected lien or security interest against property of the Estate. to the
extent of the value of the interest of the holder of such Claim in the Estate's
interest in such property.
44.."SUBSTANTIAL CONSUMMATION"- shall have the meaning set forth in
Section 1101(2) of the Bankruptcy Code.
45. "TAX CLAIM" means an Unsecured Claim entitled to priority under
Section 507(a)(8) of the Code
7
46. "TRUSTEE" means John T. Grigsby, Jr. the Trustee of the Creditor
Trust, possessing the powers and duties as set forth herein, the Creditor Trust
Agreement and/or applicable law.
47. "UNCLAIMED DISTRIBUTION" means any funds or other property of the
Creditor Trust (together with any interest earned thereon) distributed to the
party entitled thereto, but which are unclaimed at the end of one year after the
distribution thereof by the Creditor Trust, including checks which have been
returned as undeliverable without a proper forwarding address, or which were
not mailed or delivered because of the absence of a proper address to which to
mail or deliver such property.
48. "UNSECURED C1AIM" means any Claim which is not a Secured Claim,
Priority Claim, Administrative Claim or Tax Claim.
B. INTERPRETATION: RULES OF CONSTRUCTION: COMPUTATION OF TIME
1. Any term used in this Plan that is not defined herein, whether in
this Article or elsewhere, but that is used in the Code or the Bankruptcy Rules,
has the meaning subscribed to that term in (and shall be construed in accordance
with the rules of construction under) the Code or the Bankruptcy Rules, as
applicable.
2. The words "herein," "hereof," "hereto," "hereunder" and others of
similar import refer to this Plan as a whole and not to any particular article,
section, subsection or clause contained in this Plan.
3. Unless specified otherwise in a particular reference, a reference
in this Plan to an article or a section is a reference to that article or
section of this Plan.
8
4. Any reference in this Plan to a document being in particular form
means that the document shall be in substantially such form.
5. Any reference in this Plan to an existing document means such
document(s), as it may have been amended, modified or supplemented from time to
time.
6. Whenever from the context it is appropriated, each term stated in
either the singular or the plural shall include both the singular and the
plural.
7. In addition to the foregoing, the rules of construction set forth in
Section 102 of the Code shall apply to this Plan.
8. In computing any period of time prescribed or allowed by the Plan.
the provisions of Bankruptcy Rule 9006 (a) shall apply.
9. All Exhibits to this Plan are incorporated into this Plan, and shall
be deemed to be included in this Plan, regardless of when filed with the Court.
10. Use of the word "including" shall not be in any manner limiting
such that the use of the term "including" shall mean" including without
limitation."
ARTICLE II
ADMINISTRATIVE AND TAX CLAIMS
-----------------------------
A. ADMINISTRATIVE CLAIMS. Unless the holder of an Allowed
Administrative Claim agrees otherwise, the Creditor Trust shall pay to each
holder of an Allowed Administrative Claim cash equal to the then-unpaid portion
of such Allowed Administrative Claim, on the later of (a) the Effective Date (or
as soon as practicable thereafter), or (b) the date on which, pursuant to a
Final Order, such Creditor becomes the holder of an Allowed Administrative
Claim, or (c) such later date as agreed to by the holder of the Allowed
Administrative Claim. HFG shall, prior to Confirmation,
9
file its election as to whether it accepts the treatment under this Plan
(converting its Administrative Claims to the right to receive the Plan Shares to
be issued hereunder) or elects to be paid pursuant to its promissory note.
B. TAX CLAIMS. The Creditor Trust shall pay to each holder of an
Allowed Tax Claim (a) cash equal to the then unpaid portion of such Allowed Tax
Claim on the later of(i) the Effective Date, or (ii) the date on which, pursuant
to a Final Order, such holder or a Tax Claim becomes the holder of an Allowed
Tax Claim; or (b) cash payments, over a period not exceeding six years after the
date of the assessment of such claim, sufficient to pay the allowed amount of
such Tax Claim plus interest at the Present Value Rate.
C. DISALLOWANCE OF CERTAIN INTEREST AND PENALTIES ON TAX Claims Unless
otherwise allowable as set forth above, holders of Allowed Tax Claims shall not
receive any payment on account of post-Bankruptcy Date interest on, or penalties
with respect to, or arising in connection with, such Tax Claims, except as
allowed by Final Order. The Plan, the Confirmation Order and Section 1141(d) of
the Code (to the extent that the Reorganized Debtor is entitled to a discharge)
provide for the discharge of any such Claims for post-Bankruptcy Date interest
or penalties. Holders of Tax Claims shall not assess or attempt to collect such
interest or penalties from the Estate, the Creditor Trust, the Reorganized
Debtor, any holder of an Allowed Claim or recipient of any distribution pursuant
to the Plan or any property thereof.
ARTICLE III
CLASSIFICATION OF CLAIMS AND INTERESTS
--------------------------------------
A. MANNER OF CLASSIFICATION OF CLAIMS AND INTERESTS. Various types of
Claims and Interests are defined and hereinafter designated in respective
Classes. Administrative Claims and Tax
10
Claims of the Code have not been classified and are excluded from the following
Classes in accordance with Section 1123(a}(I) of the Code. The Plan is intended
to and shall incorporate and treat any and all Claims against, and Interests in,
the Debtor, whether or not previously allowed by the Court pursuant to Section
502 of the Code. Only Allowed Claims will receive any distribution under this
Plan.
B. LIMITATION INCLUSION IN A CLASS. A Claim shall be deemed classified
in a particular Class only to the extent that the Claim qualifies within the
description of that Class.
C. CLASSIFICATION. Claims and Interests are divided into the following
Classes:
1. CLASS 1 consists of all Priority Claims, if any.
2. CLASS 2 consists of all Secured Claims, if any, each of which shall
be a separate sub-Class within Class 2.
3. CLASS 3 consists of all other Claims, however arising, including
Claims, if any, arising from the rejection of executory contracts and unexpired
leases, not included in any other class herein.
4. CLASS 4 consists of all Interests.
ARTICLE IV
TREATMENT OF CLAIMS AND INTERESTS
---------------------------------
I. CLASS 1 CLAIMS. Allowed Claims in Class I are not impaired under
this Plan. Each holder of an Allowed Class I Claim shall be paid in full in cash
on the later of (a) Effective Date (or as soon as practicable thereafter), (b)
the date on which, pursuant to the Final Order, such Creditor becomes the holder
of an Allowed Class I Claim such Claims or (c) such later date as agreed to by
the holder of an Allowed Priority Claim so agrees.
11
2. CLASS 2 SECURED CLAIMS. Class 2 Claims are impaired under this Plan.
Except to the extent that the holder of such Claim agrees to a different
treatment, each holder of an Allowed Class 2 Claim shall, at the sole election
of the Creditor Trust made not later than thirty (30) days after the Effective
Date, receive one of the following treatments: (a) the right to retake any
property of the Estate which causes such Claim to constitute a Secured Claim, or
(b) cash in the full allowed amount of such Secured Claim on the date such
Secured Claim becomes an Allowed Secured Claim.
3. CLASS 3 CLAIMS. Class 3 Claims are impaired under this Plan. In full
settlement, satisfaction and discharge thereof (to the extent that the
Reorganized Debtor is entitled to a discharge). each holder of an Allowed Class
3 Claim shall receive cash equal to a Pro Rata distribution of:
(i) All Residual Property of the Creditor Trust; plus
(ii) Provided HFG elects to receive sixty percent (60%) of the
Plan Shares, a Pro Rata portion of forty percent (40%) of the Plan Shares issued
by the Reorganized Debtor as set forth in this Plan. HFG will not receive any
other distribution, under the Plan, on account of any Claim it may possess,
should it elect to take Plan Shares as set forth above.
4. CLASS 4 INTERESTS. Class 4 Interests are impaired under the Plan.
The holders of Class 4 interests will receive no distribution on account of such
Interests and all shares of common stock of the Debtor outstanding as of the
Chapter 11 Date will be canceled by entry of the Confirmation Order.
12
ARTICLE V
IMPLEMENTATION OF THE PLAN
--------------------------
AND MEANS OF EXECUTION
----------------------
A. IMPLEMENTATION OF PLAN. Debtor proposes to implement and consummate
the Plan through the means contemplated by Sections 1123(a)(5)(A),(B),(C), (D)
and (I), 1123(b)(I); 1123(b)(2), 1123(b)(3)(A) and (B), and 1123(b)(4) of the
Code.
B. THE CREDITOR TRUST
1. On the Effective Date, Debtor shall execute the Creditor
Trust Agreement and, thereupon, and until all payments and distributions to
holders of all Allowed Claims have been made under the Plan, the Creditor
Trust shall remain constituted and in existence, with the affairs and
administration thereof governed by the Plan, the Confirmation Order, the
Creditor Trust Agreement, and applicable bankruptcy and non-bankruptcy law.
2. The Creditor Trust shall have all rights and powers of a
debtor in possession under Section 1107 of the Code and, in accordance with
Section 1123(b)(3)(8) of the Code, shall be designated and serve as the
Representative of the Estate.
3. The Creditor Trust shall be authorized, with the approval
of the PCC, to employ such professionals and other persons as it may deem
necessary to enable it to perform its functions and fulfill its duties
hereunder, and the costs of such employment and other expenditures shall be paid
from the property of the Creditor Trust. Such attorneys, accountants or other
professionals, if any, shall be compensated and shall be reimbursed for their
reasonable and necessary out-of-pocket expenses from the Creditor Trust, upon
approval of such fees and expenses by the PCC. The PCC shall have ten (10) days
from the submission of an invoice within which to
13
object to the invoice or to all or any portion of the compensation requested
therein. Any dispute in fees, expenses, engagement or other matters concerning
professionals retained or sought to be retained by the Creditor Trust shall be
decided by the Court, after a hearing on notice.
4. On the Effective Date, Debtor shall transfer to the
Creditor Trust all property of the Estate, save and except for the $5,000 to be
retained by the Reorganized Debtor, free and clear of any liens, claims or
encumbrances, except those expressly recognized by this Plan. Thereafter, the
Creditor Trust shall complete the liquidation and monetization of such assets.
The proceeds thereof will be expended by the Creditor Trust for (a) first. the
administration of the Creditor Trust, and (b) second, the payment and
satisfaction of Allowed Claims in accordance with the provisions of this Plan.
5. On the Effective Date, the Debtor shall execute and deliver
all documents reasonably required by the Creditor Trust, including the
endorsement of any instruments, all business records of the Debtor, and
authorizations to permit the Creditor Trust to access all bank records, tax
returns and other files and records of the Debtor. All business records of the
Debtor shall constitute the business records of the Creditor Trust pursuant to
Federal Rule of Evidence 803(b) in any subsequent legal proceedings. The
Creditor Trust, after the Effective Date, shall control all of the Debtor's
applicable legal privileges. including control over the work product and
attorney-client privilege, for matters arising from or relating to transactions
occurring, in whole or in part, prior to the Effective Date.
6. On the Effective Date, Debtor will assign and transfer to the
Creditor Trust, for the benefit of the Estate and its Creditors, all Recovery
Rights, including, but not limited to, causes of action and claims for relief on
account and in respect of the provisions of Sections 362.
14
510,542,544,545,547,548,549, 550, and 553 of the Code and any causes of action
or claims for relief existing under state or federal law. Pursuant to, among
other authority, Section 1123(b)(3)(8) of the Code, the Creditor Trust shall
have the full power, authority and standing to prosecute, compromise or
otherwise resolve such Recovery Rights, with all proceeds derived therefrom to
become property of the Creditor Trust and distributed in accordance with the
Plan, but the Creditor Trust must file all Recovery Rights actions within 120
days after the Effective Date. The Creditor Trust shall not be subject to any
counterclaims in respect of the Recovery Rights, provided, however, that the
Recovery Rights will be subject to any setoff rights to the same extent as if
the Debtor had pursued the Recovery Rights.
7. Notwithstanding anything to the contrary in the Plan or in the
Disclosure Statement, the provisions of the Disclosure Statement and the Plan
that permit the Debtor, the Committee or the Creditor Trust to enter into
settlements and compromises of any potential litigation shall not have, and are
not intended to have, any RES JUDICATA effect with respect to any pre-petition
claims and causes of action that arc not otherwise treated under the Plan and
shall not be deemed a bar to asserting such claims and causes of action. The
Creditor Trust shall have the authority to settle claims and litigation provided
that all such settlements shall nevertheless be subject to settlement standards
imposed by Bankruptcy Rule 9019 and the standards set forth in IN RE JUSTICE
Oaks II, Ltd., 898 F.2d 1544, 1549 (11th Cir. 1990), cert den., 498 U .S. 959,
1126 L.Ed. 398, 111 S.Ct. 389 (1990), Furthermore, notwithstanding any provision
or interpretation to the contrary, nothing in the Plan or the Confirmation
Order, including the entry thereof, shall constitute or be deemed to constitute
a release, waiver, impediment, relinquishment or bar, in whole or in part, of or
to any Recovery Rights or any other claim, right or cause of action possessed by
the Debtor prior
15
to the Effective Date. In the event that the Court, or any other court of
competent jurisdiction, determines that the assignment of any claim, right or
cause of action, including without limitation, the Recovery Rights, to the
Creditor Trust pursuant to this Plan is invalid or does not grant to the
Creditor Trust the standing and all other right necessary to pursue such claim,
right or cause of action, then in such case the Creditor Trust shall be deemed
appointed as the Representative of the Estate for purposes of pursuing such
claim, right or cause of action, including without limitation, the Recovery
Rights, and the proceeds thereof shall be distributed in accordance with terms
of the Plan.
8. The Creditor Trust shall have the standing and authority to object
to Claims, as filed with the Court, scheduled by the Debtor or otherwise and to
defend any counterclaims asserted in connection therewith. Objections, if any,
shall be filed and served in accordance with Local Rule 3007-1(8).
9. Upon approval of the PCC, and without further Court order, the
Creditor Trust shall be authorized to enter in compromise of Disputed Claims or
to compromise or settle any Recovery Right.
10. Upon completion of its function as designated herein, the Creditor
Trust shall be dissolved.
11. In any instance where an action of the Creditor Trust requires the
approval of the PCC, and such approval is not given or obtained, the Creditor
Trust may seek approval of such action from the Court.
C. FILING OF TAX RETURNS. The Creditors Trustee shall use reasonable
efforts to cause to be prepared and filed on behalf of the Debtor any necessary
federal, state or local tax returns for 1998 and any preceding years for which
no such tax returns have been filed and are due. The
l6
Trustee shall use his reasonable judgment in determining which tax returns are
necessary; provided however, that in the event that such tax returns are not
filed with the Internal Revenue Service and with the appropriate authorities in
the state of incorporation of the Debtor by the later of the applicable due date
and within 90 days after the Effective Date, then the Consummation of the Plan
Date shall be extended by the number of days required to file such tax returns
beyond such 90-day period. The Trustee shall be authorized to execute and file
on behalf of the Debtor and the Creditor Trust all state and federal tax returns
required to be filed under applicable law and to pay any taxes due in connection
with such returns.
ARTICLE VI
IF HFG ELECTS TO TAKE PLAN SHARES UNDER THE PLAN, WHICH ELECTION
SHALL OCCUR ON OR BEFORE THE CONFIRMATION HEARING DATE, THEN THE FOLLOWING
PROVISIONS OF THIS PLAN WILL APPLY:
CONTINUED CORPORATE EXISTENCE AND FUTURE GOVERNANCE
---------------------------------------------------
A. The state of incorporation of the Reorganized Debtor will be changed
from the State of Florida to the State of Delaware by means of a merger with and
into a Delaware corporation formed for the purpose of effecting such
reincorporation merger. Subsequent to the reincorporation merger, Debtor will be
known as "RAS Acquisition Corporation." The Reorganized Debtor will thereafter
continue its corporate existence as a Delaware corporation and will be governed
by the General Corporation Laws of Delaware, the Delaware Certificate and the
Delaware Bylaws.
B. The entry of the Confirmation Order will be deemed to meet all
necessary shareholder approval requirements under any applicable provisions of
Delaware law necessary to complete the reincorporation merger. All applicable
restrictions set forth in Section 1123(6) of the Bankruptcy
17
E. Although the Reorganized Debtor will not have any significant assets
or operations, it will possess a shareholder base which makes it an attractive
acquisition or merger candidate to operating privately-held corporations seeking
to become publicly-held. Such merger or acquisition transactions are typically
referred to as "reverse mergers" or "reverse acquisitions." The terms "reverse
merger" or "reverse acquisition" as used in this Plan are intended to permit any
kind of business combination, including a stock exchange, which would benefit
the shareholders of the Reorganized Debtor by allowing them to own an interest
in a viable, operating business enterprise.
F. The Reorganized Debtor shall complete a reverse merger or
acquisition transaction by the Consummation of the Plan Date. In the event that
the Reorganized Debtor does not complete such a transaction by the Consummation
of the Plan Date, all of its outstanding Plan Shares shall be canceled and the
holders thereof will receive no payment or other distribution of any kind
therefor, and the discharge of the Debtor as provided in this Plan and the
Confirmation Order shall be deemed vacated.
G. The terms and conditions of the proposed reverse merger or
acquisition transaction shall be approved by the holders of a majority of the
outstanding shares of common stock of Reorganized Debtor that are (1) held by
shareholders other than HFG and (2) are actually voted on such matter. Except as
otherwise set forth in the Plan, any other matters presented to the shareholders
of the Reorganized Debtor prior to the completion of the reverse merger or
acquisition shall be approved by shareholders in a manner consistent with any
applicable law.
DISTRIBUTION OF THE PLAN SHARES
19
H. The Reorganized Debtor will issue a sufficient number of Plan Shares
to meet the requirements of the Plan. Such number is estimated to be
approximately 500,000 Plan Shares. The Plan Shares shall all be of the same
class. The Plan Shares will be issued as soon as practicable after the Trustee
has determined all Allowed Class 3 Unsecured Claims and calculated the exact
number of Plan Shares to be issued to HFG and the holders of Allowed Class 3
Unsecured Claims and the delivery to HFG of the list described in VI.I.
Approximately 60% of the Plan Shares of the Reorganized Debtor will be issued to
HFG in exchange for the release of its rights to an Administrative Claim and an
Unsecured Claim and for the performance of certain services and the payment of
certain fees related to the anticipated reverse merger or acquisition
transactions described in the Plan. The remaining 40% of the Plan Shares of the
Reorganized Debtor will be issued to holders of Allowed Unsecured Claims on a
Pro Rata basis. No fractional Plan Shares will be issued. One full share will be
issued in lieu of any fractional share. The Creditors Trust shall bear the cost
of the claims allowance process. The Reorganized Debtor shall bear the cost of
issuing the Plan Shares and shall provide a written report to the Trustee, after
such Plan Shares are issued, showing the number of Plan Shares issued and to
whom they were issued.
I. The Plan Shares may also be issued in multiple phases, at the sole
discretion of the Reorganized Debtor, prior to the completion of the Claims
allowance process and the resolution of Recovery Rights actions, upon receipt of
the following information from the Trustee, no later than 90 days after the
Effective Date:
i. A listing of the claimants and the amount of each Allowed Class 3
Claim
ii. A listing of those holders of Class 3 Claims subject to objection
and the amounts listed of each such Claim and the amount of recovery sought in
any Recovery Rights action
20
This information will enable the Trustee and the Reorganized Debtor to properly
take into account all asserted Claims.
J. Once the Reorganized Debtor has elected to issue the Plan Shares in
multiple phases, the Trustee and the Reorganized Debtor will determine (i) the
number of Plan Shares to be issued to holders of Allowed Class 3 Claims not
subject to objection or Recovery Rights actions and (ii) the approximate number
of Plan Shares to be allocated for future issuance to holders of Claims subject
to objection or a Recovery Rights action(s).
K. As soon as practicable after the Trustee and the Reorganized Debtor
have made such determination, the Reorganized Debtor will issue the Plan Shares
to the holders of Allowed Class 3 Claims. Holders of Class 3 Claims subject to
objection or subject to a Recovery Rights action(s) will each receive their Pro
Rata share of the Plan Shares allocated for future issuance as soon as
practicable after resolution of the objection or the Recovery Rights action. The
approximate number of Plan Shares allocated for future issuance to the holders
of Class 3 Claims subject to objection or a Recovery Rights action is an
estimate only and the number of Plan Shares actually received by such holder may
differ from such number. Any portion of the Plan Shares allocated, but not
issued to a holder of a Class 3 Claim that is subject to an objection or a
Recovery Rights action, upon a determination of the actual amount of the Allowed
Class 3 Claim, will be accumulated and issued Pro Rata to all Allowed Class 3
Claim holders once all of the objections and Recovery Rights actions are
resolved either by written agreement by and between the claimant and the Trustee
or by Final Order of the Bankruptcy Court.
L. In the event that the R organized Debtor shall at any lime prior
to the issuance of all of the Plan Shares (i) declare a dividend on its
outstanding common stock in shares of its capital
21
stock, (ii) subdivide its outstanding common stock, (iii) combine its
outstanding common stock into a smaller number of shares, or (iv) issue any
shares of its capital stock by reclassification of its common stock (including
any such reclassification in connection with a consolidation or merger in which
the Reorganized Debtor is the continuing corporation, then, in such case, the
number of allocated but issued Plan Shares shall be proportionately adjusted so
that the holders of Class 3 Unsecured Claims who have not yet received their Pro
Rata portion of the Plan Shares shall each be entitled to receive the aggregate
number of Plan Shares which, if such holder had owned such shares immediately
prior to the record date of such dividend, subdivision, combination or
reclassification, such holder would be entitled to receive or own by virtue of
such dividend, subdivision, combination or reclassification. Any portion of the
Plan Shares allocated for, but not issued to holders of Class 3 Unsecured Claims
subject to unresolved objections and which are to be issued to holders of
Allowed Class 3 Unsecured Claims Pro Rata shall be adjusted in the same manner.
M. In the event that Shares are issued in multiple phases and a reverse
merger or acquisition transaction is presented to shareholders for a vote or
consummated prior to the resolution of all Disputed Claims, the Reorganized
Debtor may elect to issue the Plan Shares that have been allocated for future
issuance directly to the Trustee, as nominee holders prior to the record date of
the transaction. In such event, the Trustee would not vote the Plan Shares in
the transaction. If the transaction is consummated, the Plan Shares, as adjusted
in connection with the transaction (if applicable), would then be delivered as
soon as practicable thereafter to holders of Class 3 Unsecured Claims which were
no longer subject to an objection at such time and to the remaining holders of
Disputed Class 3 Unsecured Claims as soon as practicable after such Claims were
no longer subject to an objection. Notwithstanding anything contained in the
Plan to the contrary,
22
holders of Class 3 Unsecured Claims that are subject to unresolved objections as
of the date any matter is presented to the Plan Share holders for a vote by the
Reorganized Debtor including the approval of a reverse merger or acquisition,
after the Effective Date, shall not be entitled to vote thereon.
N. The Plan Shares will be issued pursuant to provisions of Section I
145(a)(I)(A) of the Code and will not be subject to any statutory restrictions
on transferability, except those set forth in Section 1145 or otherwise
applicable federal law. However, prior to the completion of a reverse merger or
acquisition and certain required filings to be made thereafter, there will be no
established trading market for the Plan Shares. Moreover, to ensure compliance
with Section 1141(d)(3) of the Code in order for Debtor to obtain a discharge
thereunder, the holders of the Plan Shares shall be enjoined by the Confirmation
Order from trading Plan Shares until the earlier of: (i) the completion of a
reverse merger or acquisition or (ii) the applicable Consummation of the Plan
Date. To further assure that a11 applicable laws are otherwise complied with,
the Confirmation Order will enjoin the trading, selling or assigning of Class 3
Unsecured Claims from and after the Effective Date of the Plan up to the date of
the issuance of Plan Shares of the Reorganized Debtor to specific creditors. HFG
may transfer a portion of its Plan Shares in a private transaction without any
restriction in a manner consistent with all applicable state and federal
securities laws to a single transferee or group of transferees under common
control. HFG may also transfer a portion of its Plan Shares prior to such time
in a private transaction, without any restriction, in a manner consistent with
all state and federal securities laws to its employees and representatives. Any
such transferee or group of transferees shall be subject to the same
restrictions under the Plan as HFG. In any event, HFG may not transfer its
responsibility to find a reverse merger or acquisition candidate and complete
the tasks
23
set forth in the Plan pertaining thereto. Any such transfer by HFG that does not
comply with this section will be void.
0. HFG will be responsible for assisting the Reorganized Debtor in
identifying a potential reverse merger or reverse acquisition candidate. HFG
will be solely responsible for the Reorganized Debtor's costs and expenses
associated with the reverse merger or reverse acquisition transaction. HFG will
also provide certain other consulting services at its own cost, which may
include: (1) preparing proposals involving the structure of the transaction; (2)
preparing the merger or stock exchange agreement; and (3) preparing necessary
documents to obtain the shareholder approval described herein.
0. Post Consummation Date Reporting. The officers of the Reorganized
Debtor shall:
(a) upon completion of a reverse merger or acquisition prior to the
Consummation of the Plan Date automatic expiration period, file a certificate of
completion regarding the reverse merger or acquisition.
(b) forward to each Plan Share holder written confirmation of the
completion of a reverse merger or acquisition transaction within 15 days after
such completion; and
(c) forward notice of the per share market value of the Plan Shares
within 15 days of the first trading date on a public market.
ARTICLE VII
DISPUTED CLAIMS; INTERIM AND FINAL DISTRIBUTIONS
------------------------------------------------
A. DISTRIBUTIONS CLAIMS. For purposes of calculating Pro Rata or any
other distributions to be made under this Plan to holders of Claims against the
Debtor in any Class, the amount of the total Allowed Claims in such Class shall
be computed as if all Disputed Claims still outstanding on the date of any such
distribution were allowed in the full amount thereof.
B. DISTRIBUTIONS.
24
1. INITIAL DISTRIBUTION DATE. As soon as practicable after the
Effective Date, the Creditor Trust shall distribute the property Pro Rata to be
distributed under this Plan to the holders of Claims that, as of the Effective
Date, constitute Allowed Claims.
2. SUBSEQUENT DISTRIBUTION DATES. Thereafter, the Creditor Trust shall
make additional, periodic Pro Rata distributions to the holders of Allowed
Claims as and when, in its sole and absolute discretion, the Creditor Trust
deems it appropriate to do so.
3. DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS. Distributions shall be
made with respect to any Disputed Claim which becomes an Allowed Claim on or as
soon as practicable after the date on which each such Disputed Claim becomes an
Allowed Claim. The amount of such distribution shall, on a Pro Rata basis be
equal to the total distributions prior to the date of such allowance on other
Allowed Claims in the same Class.
4. UNCLAIMED DISTRIBUTIONS. If the holder of an Allowed Claim fails to
negotiate a check issued to such Creditor within six (6) months after such check
was issued, then the amount of such distribution shall be deemed to be an
Unclaimed Distribution, and the payee of such check shall have no further right
thereto or to the amount represented thereby. Thereafter, all right, title and
interest therein shall vest in the Creditor Trust, which shall distribute such
Unclaimed Distribution among the holders of other Claims Pro Rata as provided in
the Plan.
5. DE MINIMIS DISTRIBUTIONS. In the event that a distribution on
account of an Allowed Claim is less than Fifteen Dollars ($15.00), the Creditor
Trust need not make such de minimis distribution, but shall accumulate such
distributions and make the distribution on the next Subsequent Distribution Date
when such Creditor's accumulated distribution, in the aggregate, exceeds $15.00
or upon the Final Distribution.
25
6. SURRENDER Notwithstanding any other provision of this Article, no
holder of an Allowed Claim shall receive any distribution under this Plan in
respect of such Allowed Claim until such holder has surrendered to the Creditor
Trust any certificated security or promissory note evidencing such Allowed
Claim, or until evidence of loss and indemnity satisfactory to the Creditor
Trust sha11 have been delivered to the Creditor Trust in the case of any
certificated security or note, alleged to be lost, stolen or
destroyed.
7. FINAL DISTRIBUTION. Upon resolution of all outstanding objections to
Disputed Claims and upon realization of all property thereof, the Creditor Trust
shall distribute all assets of the Creditor Trust not previously distributed to
holders of Allowed Claims and Interests as provided in the plan; provided,
however, that upon motion of the Creditor Trust, the Court may approve a final
distribution of the property of the Creditor Trust at such other time or in such
other manner as the Court deems appropriate.
8. DISTRIBUTIONS BY CREDITOR TRUST. The Creditor Trust shall cause
distributions to be made to all holders of Allowed Claims in a manner consistent
with this Article IV of the Plan, and as more fully set forth in the Creditor
Trust Agreement.
ARTICLE VIII
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
----------------------------------------
A. REJECTION OF ALL EXECUTORY CONTRACTS. All executory contracts and
unexpired leases of Debtor, not already assumed or rejected as of the Effective
Date, are rejected. The Request for Confirmation of the Plan, to the extent
required under applicable law, shall also constitute a request to authorize
rejection of all unassumed executory contracts and unexpired leases of the
Debtor pursuant to 11 U.S.C.ss.365.
26
B. PROOFS OF CLAIM WITH RESPECT TO REJECTION DAMAGES. Pursuant to the
Confirmation order and Bankruptcy Rule 3002(c)(4), and except as otherwise
provided by the Court, proofs of claim for Claims arising from the rejection of
an executory contract or unexpired lease shall be filed with the Court no later
than the earlier of (i) the time provided under an order of the Court approving
such rejection; (ii) the Bar Date, if applicable; or (iii) thirty (30) days
after the Confirmation Date, or such Claim shall be forever barred.
ARTICLE IX
RETENTION OF JURISDICTION
-------------------------
Notwithstanding Confirmation or the Effective Date having occurred, the
Court shall retain jurisdiction for the following purposes:
A. ALLOWANCE OF CLAIMS. To hear and determine the allowability of all
Claims and Interests upon objections to such Claims or Interests;
B. PLAN INTERPRETATION. To resolve controversies and disputes regarding
the interpretation of this Plan;
C. PLAN IMPLEMENTATION To implement and enforce the provisions of this
Plan and enter orders in aid of confirmation and implementation of this Plan;
D. PLAN MODIFICATION. To modify this Plan pursuant to Section 1127 of
the Code and the applicable Bankruptcy Ru1es;
E. ADJUDICATION OF CONTROVERSIES. To adjudicate such contested matters
and adversary proceedings as may be pending or initiated in the Court;
27
F. INJUNCTIVE RELIEF. To issue any injunction or other relief
appropriate to implement the intent of this Plan and to enter such further
orders enforcing any injunctions or other relief issued under this Plan or in
the Confirmation Order;
G. CORRECT MINOR DEFECTS. To correct any defect, cure any omission or
reconcile any inconsistency or ambiguity in this Plan, the Confirmation order or
any document executed or to be executed in connection therewith, as may be
necessary to carry out the purposes and intent of this Plan, provided that the
rights of any holder of an Allowed Claim are not materially and adversely
affected thereby;
H. POST-CONFIRMATION ORDERS REGARDING Confirmation. Regarding
Confirmation, enter and implement such order as may be appropriate in event the
Confirmation order is, for any reason, stayed, reversed, revoked, modified or
vacated;
I. CREDITOR TRUST DISPUTES. To adjudicate any dispute that may arise
between the Creditor Trust and the PCC, between members of the PCC or concerning
professionals engaged by the Creditor Trust or the PCC and to enter any orders,
determine disputes, interpret provisions of the Creditor Trust and to clarify
any matters concerning the Creditor Trust, whether brought by or disputed by the
Creditor Trustee. the PCC or any other person, or as otherwise provided in the
Creditor Trust;
J. EXECUTORY CONTRACTS AND UNEXPIRED LEASES. To determine any and all
pending applications for the rejection, assumption or assumption assignment of
executory contracts or for the rejection, assumption or assumption assignment,
as the case may be, of unexpired leases to which the Debtor is a party or with
respect to which the Debtor may be liable, and to hear and determine, if the
need be to liquidate, any and all Claims arising therefrom;
28
K. FINAL DECREE. To enter a final decree closing the Case;
L. OTHER MATTERS. To determine such other matters as may be provided
for in the Confirmation order or as may from time to time be authorized under
the provisions of the Code or any other applicable law;
M. ENFORCEMENT OF ORDERS. T enforce all orders, judgments, injunctions
and rulings entered in connection with the Case; and
N. AID OF CONFIRMATION. BAR DATES. To enter such orders as may be
necessary or appropriate in aid of Confirmation, to protect assets of the Debtor
and to facilitate implementation of the Plan including but not limited to orders
to limit the time to file any Proofs of Claims.
0. REVERSE MERGER OR ACQUISITION. To supplement the order confirming
the Plan to deny the Reorganized Debtor a discharge under Section 1141, if the
conditions required to be met before the Consummation of the Plan Date are not
met; to reopen any of the cases for the purpose of filing a certificate of
completion to evidence compliance with the Consummation of the Plan
requirements, which filing shall be deemed cause for opening the respective
case; and to resolve disputes concerning the Plan Shares or the issuance of the
Plan Shares and claims for disputed distributions.
ARTICLE X
EFFECT OF THE PLAN ON CLAIMS AND INTERESTS
------------------------------------------
A. DISCHARGE OF CLAIMS. If on or before the Consummation of the Plan
Date, the Reorganized Debtor has completed a reverse merger or acquisition, then
the Reorganized Debtor will be discharged from all Claims or other debts that
arose before the Confirmation Date. Additionally, all persons who have Claims
against the Debtor which arise prior to Confirmation shall also be prohibited
from asserting such Claims against the Creditor Trust or the property thereof,
except as
29
provided in the Plan. The officer of the Reorganized Debtor upon completion of a
reverse merger or acquisition prior to the Consummation of the Plan Date's
automatic expiration period, shall file a certificate of completion regarding
the reverse merger or acquisition.
B. INJUNCTION. Except as provided in the Plan or confirmation order, as
of the Effective Date, all entities that have held, currently hold or may hold a
Claim or other debt or liability against the Debtor or an interest or other
right of an equity security holder in the Debtor are permanently enjoined from
taking any of the following actions on account of any such Claims, debts,
liabilities or interests: (1) commencing or continuing in any manner any action
or other proceedings against the Reorganized Debtor, the Creditor Trust or the
property thereof; (2) enforcing, attaching, collecting or recovering in any
manner any judgment, award, decree or order against the Reorganized Debtor, the
Creditor Trust or the property thereof; (3) creating, perfecting or enforcing
any lien or encumbrance against the Reorganized Debtor, the Creditor Trust or
the property thereof; (4) asserting against the Reorganized Debtor, the Creditor
Trust or the property thereof, a setoff, right or claim of subordination or
recoupment of any kind against any debt, liability or obligation due to the
Debtor; and (5) commencing or continuing any action, in any manner, in any place
that does not comply with or is inconsistent with the provisions of the Plan.
Provided that Reorganized Debtor completes a reverse merger or acquisition on or
before the applicable Consummation of the Plan Date, then the holders of Claims
against such Debtor shall be forever barred from asserting such Claims against
such Reorganized Debtor by virtue of the discharge granted under this Plan.
Additionally, a) the transfer of any Class 3 Claim from and after the Effective
Date, until the Plan Shares are issued to a specific Allowed Class 3 Claim; and
b) the transfer of the Plan Shares of the
30
Reorganized Debtor issued to specific Allowed Class 3 Unsecured Claim holders
under Section 1145 of the Code shall be enjoined until such time as the reverse
merger or acquisition is completed.
C. If Consummation of the Plan Date passes without the completion of a
reverse merger or acquisition, the Plan Shares will be deemed canceled as
described in the Plan, and the discharge and injunction provisions set forth
above shall be deemed dissolved without further order of the Court.
D. Neither the Creditor Trust, the PCC, the members of the PCC, nor any
of the Creditor Trust or PCC's respective agents shall incur any liability to
the Debtor, the Creditors, or to any other person or entity for any act or
failure to act in furtherance of the rights and obligations under the Plan and
the Creditor Trust, except to the extent that such act or failure to act
constitutes gross negligence, or willful misconduct.
E. As of the Effective Date, Debtor's officers, directors and employees
shall be terminated for all purposes. Unless action is commenced within 120
days after the Effective Date. any causes of action, claims, liabilities,
counterclaims, and damages belonging to the Debtor or the Estate relating in any
manner to participation in the Debtor's case against such officers, directors or
employees of the Debtor, or such Committee members or representatives thereof,
shall be released on the one-hundred twenty first (121) day after the Effective
Date. Moreover, as of the Effective Date, the Debtor and the Estate shall
release each attorney, accountant or other professional employed by the Debtor
or the Committee in the case from any and all causes of action, claims,
liabilities, counterclaims and damage relating in any manner to such
professional's participation in the Case. The releases set forth herein (1) only
apply to postpetition transactions or occurrences; and
31
(2) do not release any party who may be liable with the Debtor to any party on
account of any debt for which the Debtor receives a discharge.
ARTICLE XI
POST CONFIRMATION COMMITTEE
---------------------------
A. The persons who shall compromise the PCC shall be designated in the
Confirmation Order.
B. Neither the PCC, nor any of its voting members, shall be deemed to
be a trustee of the Creditor Trust, or a director of the Debtor or any other
entity. The purpose for the PCC is to provide the Creditor Trust with a readily
available group of Creditors to discuss actions and strategies of the Creditor
Trust and to provide Creditors with limited oversight of the Creditor Trust
C. The PCC shall have the right to object to all dispositions,
compromises, of any claims or causes of action, the engagement of professionals,
objections to and compromise of Claims, and other Creditor Trust activities that
involve a transaction that will impact the Creditor Trust's liquidation by an
amount in excess of $30,000. The PCC may delegate to one or more members of the
PCC the right to approve matters that impact the Debtor's liquidation by less
than $100,000.
D. Actions taken by the PCC require majority approval by voting PCC
members in attendance at a meeting of the PCC. All PCC meetings shall be
scheduled during normal business hours and may be conducted via conference call.
PCC may vote upon matters via written proxy. Unless reasons for abstention
exist, such as the vote impacts a particular PCC member's Allowed Claim or
Recovery Right, each PCC member shall have one vote with respect to each matter
that is sought to be approved or disapproved.
32
E. The PCC shall supersede the Committee, which shall cease to exist as
of the Effective Date. The PCC shall constitute a party-in-interest, possess the
right to be heard, be entitled to notice and opportunity for hearing and to
object, possess standing, and otherwise possess no fewer rights or entitlements
than the Committee; provided, however, the PCC shall not be entitled to employ
separate counsel unless an actual conflict or objection arises with respect to
the terms of the Creditor Trust. Professionals representing the PCC shall not
file any applications for approval of payment of fees and expenses. Any invoice
for the payment of professional fees shall be submitted to the PCC and the
Creditor Trust. If no objection to the invoice or to the amount requested
therein is made within ten (10) days, then the Creditor Trust shall promptly pay
the amount of said invoice. If an objection is filed, such objection shall be
adjudicated by the Court after a hearing on notice. Notwithstanding the filing
of an objection, the Creditor Trust shall be authorized to pay the undisputed
portion, if any, of said invoice. Nothing set forth herein shall preclude
professionals engaged by the Committee from representing the Creditor Trust.
F. The PCC may execute bylaws that are consistent with the Plan.
G. The members of the PCC shall be entitled to reimbursement of all
reasonable out-of-pocket expenses solely from the Creditor Trust for services
rendered on behalf of the PCC.
H. The PCC shall automatically dissolve without any further action by
the PCC or the Court thirty (30) days after the date of dissolution of the
Creditor Trust.
I. The PCC shall have no authority or right as to the Reorganized
Debtor, by virtue of its existence. Any PCC member who is a creditor who
receives Plan Shares will have its rights as a shareholder.
33
ARTICLE XII
MODIFICATION, MISCELLANEOUS
---------------------------
A. MODIFICATION. Debtor reserves the right to amend or modify this Plan
prior to Confirmation.
B. PROVISIONS SEVERABLE. Should any provision in this Plan be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any or all other provisions of
this Plan.
C. PAYMENT. Whether any payment or distribution to be made under this
Plan shall be due on a day other than a business day, such payment or
distribution shall instead be made, without interest, on the immediately
following business day. Whenever payment of a fraction of a cent would otherwise
be called for, the actual payment shall reflecting a rounding of such fraction
down to the nearest whole cent. To the extent Cash remains undistributed as a
result of the rounding of such fraction to the nearest whole cent, such Cash
shall be treated as Unclaimed Distributions under Article IX of this Plan.
D. POST-CONFIRMATION QUARTERLY FEES. All post confirmation fees due the
Office of the United States Trustee pursuant to 28 U .S.C.ss.1930 will be paid
by the Creditors Trust until the Case is either converted, dismissed, or a final
decree is entered. whichever occurs first. Additionally, the Creditor Trust will
prepare and file post-confirmation status reports with the Office of the United
States Trustee.
E. TAX WITHHOLDING. The Creditor Trust may withhold from any property
distributed under the Plan any property that it determines must be withheld for
taxes payable by the person or entity entitled to such property to the extent
required by applicable law.
34
F. HEADINGS DO NOT CONTROL. In interpreting this Plan, the headings of
individual sections are provided for convenience only, and are not intended to
control over the text of any section.
G. Taking Action. After the Effective Date, to the extent this Plan
requires an action by Debtor, the action may be taken by the Creditor Trust on
behalf of Debtor.
H. CONTROLLING LAW. Except to the extent governed by the Code or other
federal law, the rights, duties and obligations arising under the Plan shall be
governed by, and construed in accordance with, the laws of the State of Florida.
ARTICLE XIII
CONFIRMATION REQUEST
--------------------
If necessary, Debtor requests Confirmation pursuant to Section 1129(b)
of the Code.
DATED: FEB. 10, 1999 RAS LIQUIDATING, INC.
---------
f/k/a ROSE AUTO STORES-FLORIDA. INC.
a Florida corporation
By: /S/ JOHN T. GRIGSBY, JR.
------------------------
John T. Grigsby, Jr.
Chief Executive Officer
THE OFFICIAL UNSECURED
CREDITORS' COMMITTEE FOR ROSE
AUTO STORES-FLORIDA. INC.
By: _________________
Thomas Torp
Chairman
35
F. HEADINGS DO NOT CONTROL. In interpreting this Plan, the headings of
individual sections are provided for convenience only, and are not intended to
control over the text of any section.
G. Taking Action. After the Effective Date, to the extent this Plan
requires an action by Debtor, the action may be taken by the Creditor Trust on
behalf of Debtor.
H. CONTROLLING LAW. Except to the extent governed by the Code or other
federal law, the rights, duties and obligations arising under the Plan shall be
governed by, and construed in accordance with, the laws of the State of Florida.
ARTICLE XIII
CONFIRMATION REQUEST
--------------------
If necessary, Debtor requests Confirmation pursuant to Section 1129(b)
of the Code.
DATED: FEB. 4, 1999 RAS LIQUIDATING, INC.
--------
f/k/a ROSE AUTO STORES-FLORIDA. INC.
a Florida corporation
By: _________________
John T. Grigsby, Jr.
Chief Executive Officer
THE OFFICIAL UNSECURED
CREDITORS' COMMITTEE FOR ROSE
AUTO STORES-FLORIDA. INC.
By: /S/ THOMAS TORP
---------------------
Thomas Torp
Chairman
35
APPROVED AS TO FORM:
/S/ JORDI GUSO, ESQ.
- --------------------
Counsel for Debtor
Jordi Guso, Esq.
Berger, Davis & Singerman
/S/ JOSEPH M. COLEMAN, ESQ.
- ---------------------------
Creditors Committee
Joseph M. Coleman, Esq.
Kane, Russell, Coleman & Logan
EXHIBIT 2.1
-----------
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
ROSE AUTO STORES-FLORIDA, INC. CASE NO. 97-1341 l-BKC-RAM
n/k/a RAS LIQUIDATING, INC., CHAPTER II
Debtor.
ORDER (I) CONFIRMING AMENDED JOINT
PLAN OF REORGANIZATION DATED FEBRUARY 10, 1999,
-----------------------------------------------
AS MODIFIED, AND (II) LIMITING NOTICE WITH RESPECT
--------------------------------------------------
TO POST-CONFIRMATION MATTERS
----------------------------
A hearing was held on April 22, 1999 to consider the confirmation
of the Amended Joint Plan of Reorganiztion, dated February 10, 1999, filed by
Rose Auto Stores-Florida, Inc., n/k/a RAS Liquidating, Inc. (the "Debtor") and
the Official Committee of Unsecured Creditors (the "Committee") under chapter 11
of the Bankruptcy Code, as modified on April 22, 1999 (the "Plan"), as well as
the ore tenus request of the Debtor and the Committee to limit notice with
respect to all post-confirmation matters.
The Plan having been transmitted to creditors and equity interest
holders; and
It having been determined after hearing on notice that:
1. The Plan has been accepted in writing by the creditors whose
acceptance is required by law; and
2. Adequate notice of the hearing to consider confirmation of the Plan
has been provided as required by FRBP 2002, and Local Rule 2002-(l8); and
3. The provisions of chapter 11 of the Bankruptcy Code have been
compiled and that the Plan has been proposed in good faith and not by any means
forbidden by law; and
4. With respect to each impaired class of claims, each holder of a
claim has accepted the Plan, or will receive or retain under the Plan on account
of such claim property of a value, as of the effective date of the Plan, that is
not less than the amount that such holder would receive or retain if the debtor
were liquidated under chapter 7 of the Bankruptcy Code on such date. The Plan
does not discriminate unfairly, and is fair and equitable, with respect to each
class of claims that are impaired under the Plan, and had not accepted the Plan:
and
5. All parties in interest have had adequate notice of these
proceedings and an opportunity to be heard; and
6. The failure to reference or discuss all or part of any particular
provision of the Plan herein shall have no effect on the validity, binding
effect and enforceability of such provision, and such provision shall have the
same validity, binding effect and enforceability as every other provision of the
Plan. To the extent of any inconsistencies between, the terms of this order and
the Plan, the terms of this Order shall prevail, except as otherwise provided
herein; and
7. The Plan does not have as its principal purpose the avoidance of the
application of Section 5 of the Securities Act of 1933; and
8. The issuance of Plan Shares to Class 3 Creditors and to HFG account
of their allowed claims, satisfies the criteria of 11 U.S.C. 1145 (a) and any
recipient of any securities pursuant thereto is not an "underwriter" as defined
in 11 U.S.C. 1145(b) of the Bankruptcy Code; and
9. The Debtor, together with HFG and the Committee, has demonstrated a
reasonable probability that a reverse merger or acquisition by the Reorganized
Debtor will take place
2
prior to the Consummation of the Plan Date by demonstrating previous success
with such transactions in other bankruptcy and non-bankruptcy contexts; and
10. For purposes of 11 U.S.C. Section 1125(c), the proponents of the
Plan and HFG, as applicable, have solicited acceptances and rejections of the
Plan and otherwise participated in the offering and issuance of securities of
the Reorganized Debtor under the Plan in good faith and in compliance with the
applicable provisions of'the Bankruptcy Code; and
11. The Debtor shall be deemed to have received a discharge pursuant to
11 U.S.C. 1141(d)(1)(A) upon meeting the conditions set forth in the Plan prior
to the Consummation of the Plan Date; and
12. If any provision of this Order is hereafter modified, vacated or
reversed by subsequent order of this Court or any other court, such reversal,
modification or vacation shall not affect the validity of the obligations
incurred or undertaken under or in connection with the Plan
prior to the Debtors' receipt of written notice of any such order; nor shall
such reversal, modification or vacation hereof effect the validity or
enforceability of such obligations. Notwithstanding any reversal, modification
or vacation hereof, any such obligation incurred or undertaken pursuant to and
in reliance on this order prior to the effective date of such reversal,
modification or vacation shall be governed in all respects by the provisions
hereof and of the Plan, and all documents, instruments and agreements related
thereto, or any amendments or modifications thereo.
IT IS THEREFORE:
ORDERED that the Plan is confirmed; and it is further
3
ORDERED, that the Modification to the Plan dated April 22, 1999 (the
"Modification") is approved. Based upon the approval of the Modification, the
Objection to Confirmation articulated by Acktion, Inc., in connection with
Acktion Inc.'s objection to the adequacy of the Disclosure Statement is
overruled ; and it is further
ORDERED, except as set forth in the Plan, on and after the Confirmation
Date, every holder of a Claim or Equity Interest shall be precluded and enjoined
from asserting against the Debtor, the assets of the Reorganized Debtor and the
assets held by the Creditor Trust pursuant to the Plan, any claim based on any
document, instrument, judgment, award, order, act, omission, transaction or
other activity of any kind or nature that occurred prior to the Confirmation
Date; and it is further
ORDERED, that the holders of Class 3) Claims which are entitled to
receive Plan Shares of the Reorganized Debtor issued pursuant to the Plan are
hereby enjoined from selling or otherwise
trading their claims and are enjoined from selling or otherwise trading the Plan
Shares when received until the completion of each reverse merger or reverse
acquisition as provided for in the Plan; and it is further
ORDERED, that Timothy P. Halter, as the sole officer and director of
the Reorganized Debtor, is hereby authorized to execute any necessary documents
to meet the statutory requirements for filing the necessary papers with the
states of Florida and Delaware to effectuate the terms of the Plan; and it is
further
ORDERED, that if the Reorganized Debtor, in meeting its requirement to
file a certificate of completion of a reverse merger or acquisition by no later
than the Consummation of the Plan Date, as set forth in Plan Article VI (0)(a)
and Article IX (0), files such certificate after a final decree is entered and
this case is closed, then such filing of the certificate shall be deemed to be
an allowed
4
reopening of this case, pursuant to 11 U.S.C.ss.350 (b) and F.R.B.P. 5010 that
is related to the Reorganized Debtor's discharge and as such no fee will be
required for Filing the certificate of completion of a reverse merger or
acquisition under 28 U.S.C. 1930 (b); it is further
ORDERED, that John T. Grigsby, Jr., the Chief Executive Officer of the
Debtor, is authorized and directed to execute all documents reasonably necessary
to make the Plan effective, including, but not limited to, the ("Creditor Trust;
and it is further
ORDERED, that the debtor shall pay the United States Trustee the fees
imposed pursuant to 28 U.S.C. Section 1930(a)(6) within ten (10) days of the
entry of this order for pre-confirmation periods and simultaneously provide to
the United States Trustee an appropriate affidavit indicating the cash
disbursements for the relevant period; and the Creditor Trust shall further pay
the United States Trustee the fee imposed pursuant to 28 U.S.C. ss. 1930(a)(6)
for post-confirmation periods within the time period set forth in 28 U.S.C. ss.
1930(a)(6), until the earlier of the closing of this case by the issuance of a
Final Decree by the Court, or upon the entry of an Order by this Court
dismissing this case or converting this case to another chapter under the United
States Bankruptcy Code and the party responsible for paying the
post-confirmation United States Trustee fees shall provide to the United States
upon the payment of each post-confirmation payment an appropriate affidavit
indicating all the cash disbursements for the relevant period; and it is further
ORDERED, that pursuant to Article V.A of the Plan, on the Effective
Date all property of the Debtor, including, but not limited to, all cash (other
than $10,000 which shall be retained by the Reorganized Debtor), shall be
transferred to the RAS Liquidating, Inc. Liquidating Trust Indenture (the
"Creditor Trust"). John T. Grigsby, Jr., shall serve as the Trustee (the
"Liquidating Trustee") of the Creditor Trust and shall serve without
compensation. The Creditor Trust shall make
5
distributions pursuant to, and in accordance with, the terms of the Plan and in
accordance with the terms and conditions as set forth in the Creditor Trust
which was attached to the Plan, as modified. Creditor Trust shall, not later
than sixty (60) days after July 29, 1999, file a Final Report of Estate and
Motion for Final Decree Closing Case on the Court approved local form. Failure
to timely file the Final Report of Estate and Motion For Final Decree Closing
Case may result in the imposition of sanctions against the debtor's counsel,
which may include the return of attorney's fees; and its is further
ORDERED, that Debtor and the Creditor Trust shall remain subject to the
jurisdiction of this Court until the Consummation of the Plan Date. Subsequent
to the Consummation of the Plan Date, this Court shall retain jurisdiction over
such other matters as may be pending on the Consummation of the Plan Date, and
shall retain jurisdiction to resolve any disputes arising under the Plan for
which relief may be granted under the Bankruptcy Code and Bankruptcy Rules,
including but not limited to those matters described in the Plan; and it is
further
ORDERED, that the ORE TENUS motion of the Debtor and the Committee to
limit notice of ali post-confirmation matters is GRANTED. All pleadings, notices
or other matters filed or served from and after the confirmation Date (other
than this Order) shall be served only upon counsel of record, the twenty largest
unsecured creditors and any other party who makes a written request for service
upon counsel for the Debtor.
6
ORDERED. that the Court will conduct a post-confirmation status
conference on July 29, 1999 at 10:00 a.m. in Courtroom 1406, 51 S.W. First
Avenue, Miami, Florida, to determine whether the Debtor has complied with the
provisions of this Order.
DONE and ORDERED in the Southern District this 22nd day of April, 1999.
/s/ ROBERT A. MAPK
---------------------
ROBERT A. MAPK, JUDGE
United States Bankruptcy Court
cc: Attorney for Debtor
U.S. Trustee
All Creditors
(The Debtor's counsel is directed to immediately mail a conformed copy of this
Order to all creditors and parties in interest and file a certificate of mailing
with the Court).
7
COPY
EXHIBIT 2.2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF FLORIDA R
MIAMI DIVISION @0
ROSE AUTO STORES - FLORIDA, INC., Case No. 97-13411 BKC-RAM
Debtor Chapter 11
CERTIFICATE OF COMPLIANCE
WITH REVERSE ACQUISITION REQUIREMENTS
TO THE HONORABLE BANKRUPTCY JUDGE OF SAID COURT:
RAS Acquisition Corp., the reorganized debtor formerly known as Rose
Auto Stores-Florida, Inc., files this its Certificate of Compliance with Reverse
Acquisition Requirements and would respectfully show the Court as follows:
1. The Joint Plan of Reorganization For Rose Auto Stores-Florida, Inc.,
(the"Plan") was confirmed by order of this Court entered on April 23, 1999.
2. Pursuant to the Plan, RAS Acquisition Corp. was required to complete
a reverse merger or acquisition by the Consummation of the Plan Date in order
to secure the discharge under 11 U.S.C. ss 1141. The Consummation of the Plan
Date is defined as twenty-one months from the Effective Date of the Plan. The
Effective Date under the Plan is defined as the eleventh (11th) day after the
entry of the Confirmation Order. There was no appeal of the confirmation. The
Confirmation order was entered on April 233, 1999. The Plan became final and
non-appealable on May 4, 1999. The Effective Date of the Plan therefore is
May 4, 1999 and the Consummation of the Plan Date is May 4, 2001.
Page 1
3. RAS Acquisition Corp. closed a reverse acquisition with WBNI,
Inc. on January 9, 2001. RAS Acquisition Corp. herein certifies to this Court
that the closing that took place on this date and that the requirements of
the Plan in that regard have been met.
4. Pursuant to this Court's order, the filing of this certificate does
not require a fee for the reopening of this case under 28 U.S.C. ss 1930(b)
since, pursuant to 11 U.S.C. ss 350(b) and FRBP 5010, this filing involves
the Debtor's discharge. (See attached Exhibit "A".)
Respectfully submitted,
HANCE SCARBOROUGH WRIGHT
GINSBERG & BRUSILOW, LLP
By /s/ E. P. Keiffer
---------------------
E. P. Keiffer
State Bar No. 11181700
2900 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270-2199
(214) 742-2900 - telephone
(214) 748-6815 - facsimile
ATTORNEYS FOR RAS ACQUISITION CORP.
Page - 2
EXHIBIT 2.3
-----------
STOCK EXCHANGE AGREEMENT
BY AND AMONG
WBNI, Inc.
TRANSL Holdings, Inc.
the Stockholders of. TRANSL Holdings, Inc.
and
Halter Financial Group, Inc.
* * * * *
October 29, 2001
STOCK EXCHANGE AGREEMENT
This Stock Exchange Agreement dated as of October 29, 2001 (this
"Agreement") is made and entered into by and among WBNI. Inc.. a Delaware
corporation ( "WBNI"). TRANSL Holdings, Inc., a Delaware corporation
("Holdings"), each of the stockholders of Holdings as identified on Schedule
"A" hereto (collectively. the "Stockholders") and Halter Financial Group. Inc.,
a Texas corporation ("HFG").
WHEREAS, the Stockholders are the owners of 100 shares (the "Holdings
Shares") of the common capital stock of Holdings, which represent all said
entities issued and outstanding common capital stock. and each desires to
participate in the proposed stock exchange transaction (the "Exchange") as
provided for herein:
WHEREAS, the respective Boards of Directors of WBNI and Holdings have
adopted resolutions approving and adopting the proposed Exchange upon the terms
and conditions hereinafter set forth in this Agreement.
WHEREAS, the Stockholders of WBNI have approved the Exchange by
consent in lieu of special meeting, dated as of even date herewith; and
WHEREAS, HFG agrees to be a party to this Agreement as a result of
the duties and obligations imposed upon it pursuant to the provisions of Section
4.1 of this Agreement.
NOW, THEREFORE. the parties hereto intending to be legally bound,
agree as follows:
ARTICLE 1
THE EXCHANGE
1.1 THE EXCHANGE. Upon the terms and subject to the conditions
hereof, at the Closing (as hereinafter defined) the Stockholders will sell,
convey, assign, transfer and deliver to WBNI stock certificates, duly endorsed,
representing the Holdings Shares, and WBNI will issue to the Stockholders, in
exchange for the Holdings Shares, stock certificates representing an aggregate
of 5,982,680 shares of its common stock (the "WBNI Shares"), all as more
specifically set forth on Schedule "A" hereto. The WBNI Shares shall represent
92% of the total issued and outstanding shares of WBNI's common capital stock
immediately subsequent to the Exchange.
1.2 CLOSING. The closing of the Exchange (the "Closing") shall take
place upon the execution of this Agreement. Such date is herein referred to as
the "Closing Date."
1
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF HOLDINGS
AND THE STOCKHOLDERS
Holdings and the Stockholders hereby jointly and severally represent
and warrant to WBNI as follows:
2.1 ORGANIZATION. Holdings has been duly incorporated, validly exists
as a corporation and is in good standing under the laws of it state of
incorporation, and has the requisite corporate power to carry on its business as
now conducted.
2.2 CAPITALIZATION. The authorized capital stock of Holdings consists
of 200 shares of common stock, $.01 par value, of which 100 shares are issued
and outstanding, and no shares of preferred stock. All of the issued and
outstanding shares of common stock are duly authorized, validly issued, fully
paid, non-assessable and free of preemptive rights. There are no outstanding or
authorized options, rights, warrants, calls, convertible securities, rights to
subscribe, conversion rights or other agreements or commitments to which
Holdings is a party or which are binding upon Holdings providing for the
issuance or transfer by Holdings of additional shares of its capital stock and
Holdings has not reserved any shares of its capital stock for issuance, nor are
there any outstanding stock option rights, phantom equity or similar rights,
contracts, arrangements or commitments. There is no voting trusts or any other
agreements or understandings with respect to the voting of Holdings' capital
stock.
2.3 CERTAIN CORPORATE MATTERS. Holdings is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the ownership of its properties, the employment of its personnel or the
conduct of its business requires it to be so qualified, except where such
failure would not have a material adverse effect on Holdings' financial
condition, results of operations or business. Holdings has full corporate power
and authority and all authorizations, licenses and permits necessary to carry on
the business in which it is engaged and to own and use the properties owned and
used by it. Holdings is the sole stockholder of Trans-Logistics, Inc., a Florida
corporation ("Trans-Logistics").
2.4 AUTHORITY RELATIVE TO THIS AGREEMENT Each of Holdings and the
Stockholders has the requisite corporate power and authority to enter into this
Agreement and to carry out their obligations hereunder. The execution , delivery
and performance of this Agreement by Holdings and the Stockholders and the
consummation by Holdings and the Stockholders of the transactions contemplated
hereby have been duly authorized by the Board of Directors of Holdings and no
other actions on the part of either Holdings or the Stockholders are necessary
to authorize this Agreement or the transactions contemplated hereby: This
Agreement has been duly and validly executed and delivered by Holdings and the
Stockholders and constitutes a valid and binding agreement of both Holdings and
the Stockholders, enforceable against both Holdings and the Stockholders in
accordance with its terms, except as such enforcement may be limited by
bankruptcy. insolvency or other similar laws affecting the enforcement of
creditors' rights generally or by general principles of equity.
2
2.5 CONSENTS AND APPROVALS; NO VIOLATIONS. No filing with, and no
permit authorization, consent or approval of any third party, public body or
authority is necessary for the consummation by Holdings or the Stockholders of
the transactions contemplated by this Agreement. Neither the execution and
delivery of this Agreement by Holdings and the Stockholders nor the consummation
by Holdings and the Stockholders of the transactions contemplated hereby, nor
compliance by Holdings and the Stockholders with any of the provisions hereof,
will (a) conflict with or results in any breach of any provisions of the Charter
or Bylaws of Holdings, (b) results in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise to
any right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any notes, bond mortgage, indenture, license,
contract, agreement or other instrument or obligation to which Holdings or the
Stockholders is a party or by which either of them or their properties or assets
may be bound or (c) violate any order, writ, injunction, decree, statute, rule
or regulation applicable to Holdings or the Stockholders, or any of their
properties or assets, except in the case of clauses (b) and (c) for violations,
breaches or defaults which are not in the aggregate material taken as a whole.
2.6 OWNERSHIP OF THE HOLDINGS SHARES. The Stockholders own,
beneficially and of record, good and marketable title to the Holdings Shares.
Free and clear of all security interests, liens, adverse claims, encumbrances,
equities, Proxies, options or stockholders' agreements. At the Closing, the
Stockholders will convey to WBNI good and marketable title to the Holdings
Shares, free and clear of any security interests, liens, adverse claims,
encumbrances, equities, proxies, options, stockholders' agreements or
restrictions.
2.7 DISCLOSURE OF INFORMATION. The Stockholders acknowledge that they
have been furnished such information regarding the management, financial
condition, results of operations and business of WBNI necessary to make an
informed decision regarding the Exchange. The Stockholders have had an
opportunity to ask questions and receive answers regarding WBNI and its
financial condition, results or operations or business and the terms and
conditions of the Exchange.
2.8 INVESTMENT EXPERIENCE. The Stockholders acknowledge that they are
able to fend for themselves, can bear the economic risk of their investment in
the WBNI Shares and have such knowledge and experience in financial and business
matters that they are capable of evaluating the merits and risks of an
investment in the WBNI Shares. The Stockholders are acquiring the WBNI Shares
for their own account, for investment purposes only and not with a view to
further distribution thereof.
2.9 RESTRICTED SECURITIES. The Stockholders acknowledge that the WBNI
Shares will not be registered pursuant to the Securities Act of 1933, as amended
(the "Securities Act") or any applicable state securities laws that the WBNI
Shares wi11 be characterized as "restricted securities" under federal securities
laws, and that under such laws and applicable regulations the WBNI Shares cannot
be sold or otherwise disposed of without registration under the Securities Act
or an exemption therefrom. In this regard, the Stockholders are familiar with
Rule 144 promulgated under
3
Securities Act, as currently in effect, and understand the resale limitations
imposed thereby and by the Securities Act. Stop transfer instructions may be
issued to the transfer agent (or a notation may be made in the appropriate
records of the Company) in connection with the WBNI Shares.
2.10 LEGEND. The Stockholders acknowledge that the certificates
representing the WBNI Shares shall each conspicuously set forth on the face or
back thereof a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REIGSTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES UNDER SAID ACT OR PURSUANT TO AN EXEMPTION FROM
REGISTRATION OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT SUCH REGISTRATION IS NOT REQUIRED.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF WBNI
WBNI hereby represents and warrants to Holdings and the Stockholders
as follows:
3.1 ORGANIZATION. WBNI is a corporation duly organized, validly
existing and in good standing under the laws of the state of Delaware, its state
of incorporation, and has the requisite corporate power to carry on its business
as now conducted.
3.2 CAPITALIZATION. WBNI authorized capital stock consists of
40,000,000 shares of common stock, of which 520,233 shares are issued and
outstanding and 10,000,000 shares of preferred stock, par value $.001 per share,
of which none are presently issued and outstanding. All issued and outstanding
shares of common stock are duly authorized, validly issued, fully paid,
non-assessable and free or preemptive rights. Attached hereto as Schedule 3.2 is
a stockholders list prepared by WBNI's transfer agent dated March 23, 2001. When
issued, the WBNI Shares will be duly authorized, validly issued, fully paid,
non-assessable and free of preemptive rights, there are no outstanding or
authorized options, rights, warrants, calls, convertible securities, rights to
subscribe, conversion rights or other agreements or commitments to which WNBI is
a party or which are binding upon WBNI providing for the issuance by WBNI or
transfer by WBNI of additional shares of WBNI capital stock and WBNI has not
reserved any shares of its capital stock for issuance, nor are there any
outstanding stock option rights, phantom equity or similar rights, contracts,
arrangements or commitments. There is no voting trusts or any other agreements
or understandings with respect to the voting of WBNI capital stock.
3.3 CERTAIN CORPORATE MATTERS. WBNI is duly licensed or qualified to
do business and is in good standing as a foreign corporation in every
jurisdiction in which the character of WNBI' properties or nature of WBNI'
business requires it to be so licensed or qualified other than such
jurisdictions in which the failure to be so licensed or qualified does not, or
insofar as can reasonably
4
be foreseen, in the future will not, have a material adverse effect
on its financial condition, results of operations or business. WBNI
has full corporate power and authority and all authorizations,
licenses and permits necessary to carry on the business in which it
is engaged or in which it proposes presently to engage and to own and
use the properties owned and used by it. WBNI has delivered to
Holdings true, accurate and complete copies of its Certificate of
Incorporation and Bylaws, which reflect all restatements of and
amendments made thereto at any time prior to the date of this
Agreement. The records of meetings of the stockholders and Board of
Directors of WBNI are complete and correct in all material respects.
The stock records of WBNI and the stockholder list of WBNI that WBNI
has previously furnished to Holdings are complete and correct in all
material respects and accurately reflect the record ownership and
beneficial ownership of all the outstanding shares of WBNI' capital
stock and any other outstanding securities issued by WBNI. WBNI is
not in default under or in violation of any provision of its
Certificate of Incorporation or Bylaws in any material respect. WBNI
is not in any default or in violation of any restriction, lien,
encumbrance, indenture, contract, lease, sublease, loan agreement,
note or other obligation or liability by which it is bound or to
which any or its assets is subject.
3.4 AUTHORITY RELATIVE TO THIS AGREEMENT. WBNI has the requisite
corporate power and authority to enter into this Agreement and carry out its
obligations hereunder. The execution, delivery and performance of this Agreement
by WBNI and the consummation of the transactions contemplated hereby have been
duly authorized by the Board of Directors of WBNI and no other actions on the
part of WBNI are necessary to authorize this Agreement or the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by WBNI and constitutes a valid and binding obligation of WBNI,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights generally or by general principles of equity.
3.5 CONSENTS AND APPROVALS; NO VIOLATIONS. Except for applicable
requirements of federal securities laws and state securities or blue-sky laws,
no filing with, and no permit, authorization, consent or approval of, any third
party, public body or authority is necessary for the consummation by WBNI of the
transactions contemplated by this Agreement. Neither the execution and delivery
of this Agreement by WBNI nor the consummation by WBNI of the transactions
contemplated hereby, nor compliance by WBNI with any of the provisions hereof,
will (a) conflict with or result in any breach of any provisions of the Charter
or Bylaws of WBNI, (b) result in a violation or breach of, or constitute (with
or without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, agreement or other instrument or obligation to which WBNI is a party
or by which it or any of its properties or assets may be bound or (c) violate
any order, writ, injunction, decree, statute, rule or regulation applicable to
WBNI, or any of its properties or assets, except in the case of clauses (b) and
(c) for violations, breaches or defaults which are not in the aggregate material
to WBNI taken as a whole.
3.6 SUBSIDIARIES. WBNI does not own, directly or directly, any of the
capital stock of any other corporation or any equity, profit sharing,
participation or other interest in any corporation, partnership, joint venture
or other entity.
5
3.7 EVENTS SUBSEQUENT TO DECEMBER 31, 2000. Since December 31, 2000,
there has not been:
(a) Any sale, lease, transfer, license or assignment of any assets,
tangible or intangible, of WBNI:
(b) Any damage, destruction or property loss, whether or not covered
by insurance, affecting adversely the properties or business of WBNI;
(c) Any declaration of setting aside or payment of any dividend or
distribution with respect to the shares of capital stock of WBNI or
any redemption, purchase or other acquisition of any such shares.
(d) Any subjection to any lien on any of the assets, tangible or
intangible, of WBNI;
(e) Any incurrence of indebtedness or liability or assumption of
obligations by WBNI;
(f) Any waiver or release by WBNI of any right of any material value;
(g) Any compensation or benefits paid to officers or directors of
WBNI
(h) Any change made or authorized in the Certificate of Incorporation
or Bylaws of WBNI; or
(i) Any loan to or other transaction with any officer, director or
stockholder of WBNI giving rise to any claim or right or WBNI against
any such person or of such person against WBNI.
3.8 UNDISCLOSED LIABILITIES: Except as otherwise disclosed under this
Agreement and as reflected in WBNI audited financial statements for the fiscal
year ended December 31, 2000, WBNI has no material liability or obligation
whatsoever, either direct or indirect, matured or unmatured, accrued, absolute,
contingent or otherwise. There is no basis unknown to WBNI for assertion against
WBNI of any such liability, obligation or commitment.
3.9 TAX MATTERS.
(a) WBNI has (and as of the Closing Date will have) duly filed all
material federal, state, local and foreign tax returns required to be
filed by or with respect to it with the Internal Revenue Service or
other applicable taxing authority, and no extensions with respect to
such tax returns have (or as of the Closing Date will have) been
requested or granted;;
(b) WBNI has paid, or adequately reserved against all material taxes
due, or claimed by any taxing authority to be due, from or with
respect to it;
6
(c) To the best knowledge of WBNI, there has been no material issue
raised or material adjustment proposed (and none is pending) by the
Internal Revenue Service or any other taxing authority in connection
with any of the tax returns:
(d) No waiver or extension of any statute of limitations as to any
material federal. state. local or foreign tax matter has been given
by or requested from WBNI; and
(e) WBNI has not filed a consent under Section 341 (f) of the
Internal Revenue Code of 1986, as amended.
For the purposes of this SECTION 3.9. a tax is due, (and must
therefore either be paid or adequately reserved against) only on the last date
payment of such tax can be made without interest or penalties, whether such
payment is due in respect of estimated taxes, withholding taxes, required tax
credits or any other tax.
3.10 REAL PROPERTY. WBNI does not own or lease any real property.
3 .11 BOOKS AND RECORDS. The books and records of WBNI fairly reflect
the transactions to which WBNI is a party or by which its properties are bound.
3.12 QUESTIONABLE PAYMENTS. Neither WBNI nor any employee, agent or
representative of it has, directly or indirectly, made any bribes, kickbacks,
illegal payments or illegal political contributions using WBNI' funds or made
any payments from WBNI' funds to governmental official for improper purposes or
made any illegal payments from WBNI' funds to obtain or retain business.
3.13 ENVIRONMENTAL MATTERS.
(a) Definitions. For the purpose of this Agreement, the following
terms shall have the meaning herein specified:
(i) "Governmental Authority" shall mean the United States, each
state, each county, each city and each other political subdivision in
\\hich WBNI' business is located, and any court, political
subdivision, agency or instrumentality with jurisdiction over WBNI'
business.
(ii) "Environmental Laws" shall mean (A) the Comprehensive
Environmental Response. Compensation and Liability Act of 1980, as
amended by the Superfund Amendments and Reauthorization Act of 1986.
42 U.S.C.A. 9601 et seq. ("CERCLA"). (B) the Resource Conservation
and Recovery Act, as amended by the Hazardous and Solid Waste
Amendment of 1984,. 42 U.S.C.A. 6901 et seq. ("RCRA"). (C) the Clean
Air Act, 42 U.S.C.A. 7401 et seq.. (D) the Federal Water Pollution
Control Act, as amended, 33 U.S.C.A. 1251 et seq., (E) the Toxic
Substances Control Act. 15 U.S.C.A. 2601 et seq., (F) a!1 applicable
state laws, and ;
7
(G) all other laws and ordinances relating to municipal waste, solid
waste, air pollution, water pollution and/or the handling, discharge,
disposal or recovery of on-site or off-site hazardous substances or
materials, as each of the foregoing has been or may hereafter be
amended from time to time.
(iii) "Hazardous Materials" shall mean, among others, (A) any
"hazardous waste" as defined by RCRA, and regulations promulgated
thereunder; (B) any "hazardous substance" as defined by CERCLA,
and regulations promulgated hereunder; (C) any "toxic pollutant"
as defined in the Federal Water Pollution Prevention and Control
Act, as amended, 33 U.S.C. 1251 et seq., (commonly known as "CWA"
for "Clean Water Act"), and any regulations thereunder; (D) any
"hazardous air pollutant" as defined in the Air Pollution
Prevention and Control Act, as amended, 42 U.S.C. 7401 et seq.
(commonly known as "CAA" for "Clean Air Act") and any regulations
thereunder; (E) asbestos; (F) polychlorinated biphenyls; (G) any
substance the presence of which on the Business Location (as
hereinafter defined) is prohibited by any Environmental Laws; and
(H) any other substance which is regulated by any Environmental
Laws.
(iv) "Hazardous Materials Contamination" shall mean the presence
of Hazardous Materials in the soil, groundwater, air or any other
media regulated by the Environmental Laws on, under or around
WBNI' facilities at levels or concentration which trigger any
requirement under the Environmental Laws to remove, remediate,
mitigate, abate or otherwise reduce the level or concentration of
the Hazardous Materials. The term "Hazardous Materials
Contamination" does not include the presence of Hazardous
Materials in process tanks, lines, storage or reactor vessels,
delivery trucks or any other equipment or containers, which
Hazardous Materials are used in the manufacture, processing
distribution, use, storage, sale, handling, transportation,
recycling, reuse or disposal of the products that were
manufactured and/or distributed by WBNI.
(b) REPRESENTATIONS AND WARRANTIES. Based on the foregoing, WBNI
represents and warrants that:
(i) To the best knowledge of WBNI, there has been no material
failure by WBNI to comply with all applicable requirements of
Environmental Laws relating to WBNI, WBNI' operations. and WBNI'
manufacture, processing, distribution, use, treatment generation,
recycling, reuses, sale, storage, handling, transportation or
disposal of any Hazardous Material and WBNI is not aware of any
facts or circumstances which could materially impair such
compliance with all applicable Environmental Laws.
(ii) WBNI has not, through the Closing Date, received notice from
any Governmental Authority or any other person of any actual or
alleged violation of any Environmental Laws, nor is any such
notice anticipated.
8
(iii) To the best knowledge of WBNI, Environmental Laws do not
require that any permits, licenses or similar authorizations to
construct, occupy or operate any equipment or facilities used in
the conduct of WBNI' business.
(iv) No Hazardous Materials are now located at the Business
Location, and to the best knowledge of WBNI, WBNI has not ever
caused or permitted any Hazardous Materials to be generated,
placed, stored, held, handled, located or used at the Business
Location, except those which may lawfully be used, transported,
stored, held, handled, generated or placed at the Business
Location in the conduct of WBNI' business.
(v) WBNI has not received any notices, whether from a
Governmental Authority or some other third party that Hazardous
Material Contamination exists at the Business Location or at any
other location utilized by WBNI in the conduct of its business
nor is WBNI aware of any circumstances that would give rise to an
allegation of such contamination.
(vi) To the best knowledge of WBNI, no investigation,
administrative order, consent order or agreement litigation or
settlement with respect to Hazardous Materials or Hazardous
Materials Contamination is proposed, threatened, anticipated,
pending or otherwise in existence with respect to the Business
Location or with respect to any other site controlled or utilized
by WBNI in the operation of its business. To the best knowledge
of WBNI. the Business Location is not currently on, and has never
been on, any federal or state "Superfund" or "Superlien" list.
3.14 INTELLECTUAL PROPERTY. WBNI does not own o ruse any trademarks,
trade names, service marks, patents, copyrights or any applications with respect
thereto. WBNI has not knowledge of any claim that, or inquiry as to whether, any
product, activity or operation of WBNI infringes upon or involves, or has
resulted in the infringement of, any trademarks, trade-names, service marks,
patents, copyrights or other proprietary rights of any other person, corporation
or other entity; and no proceedings have been instituted, are pending or are
threatened.
3.15 INSURANCE. WBNI has no insurance policies in effect.
3.16 CONTRACTS. WBNI has no material contracts, leases, arrangements
and commitments (whether oral or written). WBNI is not a party to or bound by or
affected by any contract, lease, arrangement or commitment (whether oral or
written) relating to: (a) the employment of any person; (b) collective
bargaining with, or any representation of any employees by, any labor union or
association; (c) the acquisition of services, supplies, equipment or other
personal property; (d) the purchase or sale of real property; (e) distribution,
agency or construction; (f) lease of real or personal property as lessor or
lessee or sublessor or sublessee; (g) lending or advancing of funds; (h)
borrowing of funds or receipt of credit; (i) incurring any obligation or
liability; or (j) the sale of personal property.
9
3.17 LITIGATION. WBNI is not subject to any judgment or order of any
court or quasijudicial or administrative agency of any jurisdiction, domestic or
foreign, nor is there any charge, complaint, lawsuit or governmental
investigation pending against WBNI. WBNI is not a plaintiff in any action,
domestic or foreign, judicial or administrative. There are no existing actions,
suites, proceedings or investigations. There are no unsatisfied judgments,
orders, decrees or stipulations affecting WBNI or to which WBNI is a party.
3.18 EMPLOYEES Except for George Gilman, WBNI's sole officer and
director, WBNI does not have any employees. WBNI does not owe any compensation
of any kind, deferred or otherwise, to any current or previous employees. WBNI
has not written or oral employment agreements with any officer or director of
WBNI. WBNI is not a party to or bound by any collective bargaining agreement.
There are no loans or other obligations payable or owing by WBNI to any
stockholder, officer, director or employee of WBNI, nor are there any loans or
debts payable or owing by any of such persons to WBNI or any guarantees by WBNI
of any loan or obligation of any nature to which any such person is a party.
3.19 EMPLOYEE BENEFIT PLANS. WBNI has no (a) non-qualified deferred
or incentive compensation or retirements plans or arrangements, (b) qualified
retirement plans or arrangements, (c) other employee compensation, severance or
termination pay or welfare benefit plans, programs or arrangements or (d) any
related trusts, insurance contracts or other funding arrangements maintained,
established or contributed to by WBNI.
3.20 LEGAL COMPLIANCE. To the best knowledge of WBNI, no claim has
been filed against WBNI alleging a violation of any applicable laws and
regulations of foreign, federal, state and local governments and all agencies
thereof. WBNI holds all of the material permits, licenses, certificates or other
authorizations of foreign, federal, state or local governmental agencies
required for the conduct of its business as presently conducted.
3.21 BROKER'S FEES. Neither WBNI, nor anyone on its behalf has any
liability to any broker, finder, investment banker or agent, or has agreed to
pay any brokerage fees, finder's fees or commissions, or to reimburse any
expenses of any broker, finder, investment banker or agent in connection with
this Agreement .
3.22 DISCLOSURE. The representations and warranties and statements of
fact made by WBNI in this Agreement are, as applicable, accurate, correct and
complete and do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained herein not false or misleading
3.23 INSOLVENCY WBNI is able to pay its debts as they mature and the
transfer of the WBNI Shares (and the transactions contemplated hereby) by WBNI,
in accordance with the terms of this Agreement, shall not constitute a voidable
preference or transfer in fraud by any creditor of WBNI under applicable federal
or state insolvency law.
10
3.24 BANKRUPTCY. WBNI has paid all claims required to be paid
pursuant to the Amended Joint Plan of Reorganization confirmed on April 22, 1999
(the "Plan") to which WBNI was once a party, including without limitation. all
claims, entitled to administrative expense priority pursuant to Section S04(b)
of Title 11 of the United States Bankruptcy Code. WBNI has no liability or
obligation under the Plan. WBNI is under no obligation to obtain court approval
of this Agreement and the transactions contemplated hereunder. The transfer of
the WBNI Shares as of the Closing will be free and clear of any and all liens,
rights of offsets, recoupment, claims, interests, charges and encumbrances
therein, thereon and/or thereagainst of whatever kind, type, nature, or
description including, without limitation, any lien, security interest, pledge,
hypothecation encumbrance or other charge, interest or claim (including. but not
limited to, any "claim" as defined in Section 101(5) of the Bankruptcy Code) in,
against or with respect to the WBNI Shares, having arisen, existed or accrued
prior to and through the Closing, whether direct or indirect, absolute or
contingent, choate or inchoate, fixed or contingent, matured or unmatured,
liquidated or unliquidated, arising by agreement, stature or otherwise and
whether arising prior to, on or after the bankruptcy filing date.
3.25 ACCOUNTANTS CONSENTS. WBNI will obtain the consent of its
current accountant to permit the use of applicable audited financial statements
of WBNI to be included in any registration statement WBNI or its successor and
assigns may file.
3.26 VOTING REQUIREMENTS. Stockholder approval for this transaction
has been obtained pursuant to consent of stockholders in lieu of special
meeting.
3.27 ANTI TAKEOVER PLAN. WBNI does not have in effect any plan,
scheme, device, or arrangement, commonly known as a "poison pill" or
"anti-takeover" plan. No other state takeover statute or similar statute or
regulation applies or purports to apply to this transaction, this Agreement or
any of the transactions contemplated by this Agreement.
ARTICLE 4
ADDITIONAL AGREEMENTS AND
POST CLOSING MATTERS
4.1 HFG/POST EXCHANGE ADJUSTMENTS. Subject to the provisions of the
second paragraph of this Section 4.1, if WBNI. Holdings and Trans-Logistics
report on a consolidated basis, earnings before interest, taxes, depreciation
and amortization ("EBITDA"), of at least $750,000 for the fiscal year ending
December 31, 2001 (the "Reporting Period") based on the findings of the
Auditor's Report (as hereinafter defined), HFG shall sell, transfer and assign
to WBNI, for no additional consideration, 117,052 shares of WBNI's common stock
(the "HFG Shares") currently issued in the name of and held by HFG. A
certificate evidencing the shares to be returned shall be duly endorsed in favor
of and delivered to WBNI within five (5) business days of the date that the
Auditors' Report is delivered to HFG (the "Adjustment Date"). However, if the
entities fail to report, on a consolidated basis, EBITDA of at least $400,000
for the Reporting Period as set forth in the Auditors' Report, WBNI shall
deliver to HFG within five (5) business days of the Adjustment Date a warrant
(the "Warrant") to purchase 78.035 shares of WBNI's common stock at
11
a per share purchase price of $.01 during the three year period following the
date of the agreement evidencing the warrant. HFG agrees that it shall reserve
the HFG Shares for transfer to WBNI during the period commencing on the date
hereof and ending on the Adjustment Date. HFG further agrees that stop transfer
instructions shall be given to WBNI's transfer agent for the purpose of
restricting the disposition of the HFG Shares until the passing of the
Adjustment Date.
The consolidated entities shall be obligated under this Section 4.1
to provide HFG with a report of the current independent auditor of
Trans-Logistics (the "Auditors' Report") setting forth the combined entities'
EBITDA for the Reporting Period assuming that the entities did not expense
during the applicable fiscal year one time charges resulting from the
acquisition of Q-Logistics, a wholly owned subsidiary of Trans-Logistics. A
determination as to whether the HFG Shares are to be transferred or the Warrant
issued in accordance with this section shall be based on the results of the
Auditors' Report. HFG shall within five days of the Adjustment Date advise WBNI
of any concerns it has over the Auditors' Report. If a concern is raised, HFG
may, as its sole expense, engage a party of its designation to confer with the
firm who prepared the Auditors' Report for the purpose of resolving all
outstanding matters. If the parties cannot reach agreement on the disputed
matters, an independent third party, agreed to by both WBNI and HFG, shall be
engaged to resolve all outstanding issues. The determination of the third party
shall be binding upon both HFG and WBNI and shall be non-appealable.
4.2 RESIGNATION OF GEORGE GILMAN. Upon completion of the Exchange,
George Gilman shall resign as the sole officer and director of WBNI and Allan
Marshall shall be appointed as President and Secretary of WBNI, to serve until
his sooner death, resignation or removal from office.
4.3 APPOINTMENT OF NEW MEMBERS TO BOARD OF Directors. Upon
consummation of the Exchange, Allan Marshall will be appointed to the Board of
Directors of WBNI, to serve in such capacity until the sooner of his death,
resignation, or removal from office or until the calling of a special or annual
meeting of stockholders of WBNI at which directors are elected.
4.4 SERVICES AGREEMENT WITH HFG. Upon completion of the Exchange,
WBNI and Holdings shall enter with that certain Services Agreement with HFG, the
form of which is attached hereto as Exhibit "A".
4.5 LEGAL OPINIONS. At the Closing, WBNI shall deliver to
Trans-Logistics and the Stockholders the legal opinion of Souter & Diamond, P.C.
the form of which is attached hereto as Exhibit "B".
4.6 AGREEMENTS, SCHEDULES AND EXHIBITS. All statements contained
herein or in any schedule, certificate, exhibit, list or other document
delivered pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties for purposes of this
Agreement.
4.7 SURVIVAL OF REPRESENTATIONS. The representations and warranties
of each of the parties hereto shall survive the Closing for the period of twelve
(12) months following the Closing Date
12
(with the exception of the representation and warranty contained in Section 3.9
herein, which shall survive until the date of expiration of the applicable
statute of limitations, including, but not limited to, with respect to all tax
returns filed and any extensions thereof) and shall not be affected by any
investigation conducted by any such party in the exercise of its due diligence
prior to the consummation of the transactions contemplated herein.
ARTICLE 5
GENERAL PROVISIONS
5. 1 INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. References to Sections and Articles refer to
sections and articles of this Agreement unless otherwise stated.
5.2 SEVERABILITY. If any term. Provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated and the parties shall negotiate
in good faith to modify this Agreement to preserve each party's anticipated
benefits under this Agreement.
5.3 MISCELLANEOUS. This Agreement (together with all other documents
and instruments referred to herein): (a) constitutes the entire agreement and
supersedes all other prior agreements and undertakings, both written and oral,
among the parties with respect to the subject matter hereof; (b ) except as
expressly set forth herein, is not intended to confer upon any other person any
rights or remedies hereunder and (c) shall not be assigned by operation of law
or otherwise, except as may be mutually agreed upon by the parties hereto.
5.4 SEPARATE COUNSEL. Each party hereby expressly acknowledges that
it has been advised and urged to seek its own separate legal counsel for advice
with respect to this Agreement.
5.5 GOVERNING LAW This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Delaware.
5.6 NOTICES. Any notice, demand, claim or other communication under
this Agreement shall be in writing and shall be deemed to have been given upon
the delivery, mailing or transmission thereof, as the case may be, if delivered
personally, or sent by certified mail, return receipt requested, postage
prepaid, or sent by facsimile or prepaid overnight courier to the parties at the
addresses set forth below their names on the signature pages of this Agreement
(or at such other addresses as shall be specified by the parties by like
notice). A copy of any notices shall be sent as follows:
Copies of all notices delivered to Holdings shall also he sent to:
Rosen & Tetelman, LLP
501 Fifth Avenue, Suite 1404
New York. New York 10017
Attention: Ted D. Rosen. Esq.
13
Fax No.: 212.972.3555
Copies of all notices delivered to WBNI shall also be sent to:
Souter & Diamond, P.C.
7701 Las Colinas Ridge, Suite 250
Irving, Texas 75063
Attention: George I. Diamond
Fax No.: 972-373-8201
5.7 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, which together shall constitute a single agreement.
5.8 AMENDMENT. This Agreement may be amended, modified or
supplemented only by an instrument in writing executed by all parties hereto.
5.9 PARTIES IN INTEREST: NO THIRD PARTY BENEFICIARIES: Except as
otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of an be binding upon the respective heirs,, legal
representative, successors and assigns of the parties hereto. This Agreement
shall not be deemed to confer upon any person not a party hereto any rights or
remedies hereunder.
5.10 WAIVER. No waiver by any party of any default or breach by
another party of any representation, warranty, covenant or condition contained
in this Agreement shall be deemed to be a waiver of any subsequent default or
breach by such party of the same or any other representation, warranty, covenant
or condition. No act, delay, omission or course of dealing on the part of any
party in exercising any right, power or remedy under this Agreement or at law or
in equity shall operate as a waiver thereof or otherwise prejudice any of such
party's rights, powers and remedies. All remedies, whether at law or in equity,
shall be cumulative and the election of any one or more shall not constitute a
waiver of the right to pursue other available remedies.
5.11 EXPENSES. The parties hereto shall pay all of their own expenses
relating to the transactions contemplated by this Agreement, including, without
limitation, the fees and expenses of their respective counsel and financial
advisers.
14
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
WBNI, INC.
By /S/ GEORGE GILMAN
- ---------------------
George Gilman
President
710 North Post Oak Road, Suite 400
Houston, Texas 77024
TRANSL HOLDINGS, INC.
By /S/ ALLAN MARSHALL
- ---------------------
Allan Marshall, President
18302 Highwoods Preserve Parkway, Suite 210
Tampa, Florida 33647
THE STOCKHOLDERS
- ----------------------------
Christine Otten, Stockholder
/S/ ALLAN MARSHALL
- ---------------------
Allan Marshall, Stockholder
HAL TER FINANCIAL GROUP, INC.
/S/ TIMOTHY P. HALTER
- ---------------------
Timothy P. Halter, President
7701 Las Colinas Ridge, Suite 250
Irving, Texas 75063
15
SCHEDULE A
STOCK EXCHANGE AGREEMENT
NAMES OF HOLDINGS* NUMBER OF HOLDINGS* NUMBER OF WBNI
STOCKHOLDERS SHARES TO BE EXCHANGED SHARES TO BE RECEIVED
------------ ---------------------- ---------------------
Christine Otten 30 1,794,804
Allan Marshall 70 4,187,876
-- ---------
TOTAL 100 5,982,680
EXHIBIT 3. 0
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), made this 1Oth
day of May, 2000, by and between Rose Auto Stores - Florida, Inc., a Florida
corporation (the "Company"), and RAS Acquisition Corp., a Delaware corporation
("Delaware Merger Corp.") (the two corporate parties hereto being sometimes
collectively referred to as the "Constituent Corporations"),
WITNESSETH:
WHEREAS, the proposed reincorporation merger (the "Merger") of the
Company with Delaware Merger Corp. is being effected pursuant to the Company's
Amended Joint Plan of Reorganization (the "Plan") dated February 10, 1999 as
confirmed by order of the United States Bankruptcy Court for the Southern
District of Florida, Miami Division on April 22, 1999,
WHEREAS, the Company has been authorized to effect the Merger in
accordance with the Florida Business Corporation Act,
WHEREAS, the Merger has been authorized by Delaware Merger Corp. in
accordance with Section 252 of the Delaware General Corporation Law,
WHEREAS, under the Plan, all of the Company's outstanding securities
were cancelled and certain of the Company's creditors are entitled to receive
shares of its common stock or the common stock of the Company's successors, and
WHEREAS, in this regard, Delaware Merger Corp. will issue shares of its
common stock to such persons and entities in accordance with the Plan after the
Merger;
NOW, THEREFORE, the Constituent Corporations do hereby agree to merge
on the terms and conditions herein provided, as follows:
ARTICLE I
General
1.1 Agreement to Merge. The parties to this Agreement agree to effect
the Merger herein provided for, subject to the terms and conditions set forth
herein.
1.2 Effective Time of the Merger. The Merger shall be effective upon
the filing of (i) the Articles of Merger with the Florida Department of State
and (ii) the Certificate of Merger with the Secretary of State of Delaware. The
date and time the Merger becomes effective is referred to as the "Effective Time
of the Merger."
1.3 Surviving Corporation. Upon the Effective Time of the Merger, the
Company shall be merged into Delaware Merger Corp., and Delaware Merger Corp.
shall be the surviving corporation, governed by the laws of the State of
Delaware (hereinafter sometimes called the "Surviving Corporation").
1.4 Certificate of Incorporation and Bylaws. Upon the Effective Time of
the Merger, the Certificate of Incorporation and Bylaws of Delaware Merger Corp.
in effect immediately prior to the Effective Time of the Merger shall be the
Certificate of Incorporation and Bylaws of the Surviving Corporation, subject
always to the right of the Surviving Corporation to amend its Certificate of
Incorporation and Bylaws in accordance with the laws of the State of Delaware
and the provisions of the Certificate of Incorporation and Bylaws.
1.5 Directors and Officers. The directors and officers of Delaware
Merger Corp. in office at the Effective Time of the Merger shall be and
constitute the directors and officers of the Surviving Corporation, each
holding the same office and/or directorship in the Surviving Corporation as they
held in Delaware Merger Corp. for the terms elected and/or until their
respective successors shall be elected or appointed and qualified.
1.6 Effect of the Merge. On and after the Effective Time of the Merger,
subject to the terms and conditions of this Agreement, the separate existence of
the Company shall cease, the separate existence of Delaware Merger Corp., as the
Surviving Corporation, shall continue unaffected by the Merger, except as
expressly set forth herein, and the Surviving Corporation shall succeed, without
further action, to all the properties and assets of the Company of every kind,
nature and description and to the Company's business as a going concern. The
Surviving Corporation shall also succeed to all rights, title and interests in
any real or other property owned by the Company without reversion or impairment,
without further act or deed, and without any transfer or assignment having
occurred, but subject to any existing liens thereon. All liabilities and
obligations of the Company shall become the liabilities and obligations of the
Surviving Corporation and any proceedings pending against the Company will be
continued as if the Merger had not occurred.
1.7 Further Assurances. The Company hereby agrees that at any time, or
from time to time, as and when requested by the Surviving Corporation, or by its
successors and assigns, it will execute and deliver, or cause to be executed and
delivered in its name by its last acting officers, or by the corresponding
officers of the Surviving Corporation, all such conveyances, assignments,
transfers, deeds or other instruments, and will take or cause to be taken such
further or other action and give such assurances as the Surviving Corporation,
its successors or assigns may deem necessary or desirable in order to evidence
the transfer, vesting of any property, right, privilege or franchise or to vest
or perfect in or confirm to the Surviving Corporation, its successors and
assigns, title to and possession of all the property, rights, privileges,
powers, immunities, franchises and interests referred to in this Article I and
otherwise to carry out the intent and purposes thereof
Delaware Merger Corp., as the Surviving Corporation, agrees that it
will pay to any dissenting stockholder of any Delaware Merger Corp., in
accordance with any applicable provisions of the laws of Delaware, such amount
as such dissenting stockholder shall be entitled to receive under applicable law
as a dissenting stockholder.
-2-
ARTICLE II
Capital Stock of the Constituent Corporations
2.1 Delaware Merger Corp. Capital Stock. Upon the Effective Time of the
Merger, by virtue of the Merger and without any action on the part of the
Company, Delaware Merger Corp. or the holders of any of the common stock
("Delaware Merger Corp. Common Stock") of Delaware Merger Corp., each share of
Delaware Merger Corp. Common Stock issued and outstanding immediately prior to
the Effective Time of the Merger shall be cancelled without any merger
consideration therefore and shall no longer be outstanding.
2.2 Right to Receive Company Capital Stock. Upon the Effective Time of
the Merger, by virtue of the Merger and without any action on the part of the
Company or Delaware Merger Corp., each share of common stock ("Company Common
Stock") of the Company that persons and entities are entitled to receive in
accordance with the Plan shall be converted into the right to receive one share
of Delaware Merger Corp. Common Stock.
2.3 Issuance of Delaware Merger Corp. Common Stock. Following the
Effective Time of the Merger, Delaware Merger Corp. shall issue shares of
Delaware Merger Corp. Common Stock in accordance with the Plan.
2.4 Dissenting Shares. Each share of Delaware Merger Corp. Common
Stock issued and outstanding immediately prior to the Effective Time of Merger
not voted in favor of the Merger and the holder of which has given written
notice of the exercise of dissenter's rights as required by applicable law is
herein called a "Dissenting Share." Dissenting Shares shall not be converted
into or represent the right to receive the merger consideration pursuant to this
Agreement and shall be entitled only to such rights as are available to such
holder pursuant to applicable law unless the holder thereof shall have withdrawn
or forfeited his dissenter's rights. Each holder of Dissenting Shares shall be
entitled to receive the value of such Dissenting Shares held by him in
accordance with the provisions of applicable law. If any holder of Dissenting
Shares shall effectively withdraw or forfeit his dissenter's rights under
applicable law, such Dissenting Shares shall be converted into the right to
receive the merger consideration in accordance with this Agreement.
ARTICLE III
Termination and Amendment
3.1 Termination. This Agreement may be terminated and abandoned at any
time prior to the Effective Time of the Merger by the mutual written consent of
the Boards of Directors of the Company and Delaware Merger Corp.
3.2 Consequences of Termination. In the event of the termination and
abandonment of this Agreement pursuant to the provisions of Section 3. 1 hereof,
this Agreement shall be of no further force or effect.
-3-
3.3 Modification. Amendment, etc. Any of the terms or conditions of
this Agreement may be waived at any time by the party entitled to the benefits
thereof, and this Agreement may be modified or amended at any time to the full
extent permitted by the corporate laws of the States of Massachusetts and
Delaware. Any waiver, modification or amendment shall be effective only if
reduced to writing and executed by the duly authorized representatives of the
Constituent Corporations.
ARTICLE IV
Miscellaneous
4.1 Expense . The Surviving Corporation shall pay all expenses of
carrying this Agreement into effect and accomplishing the Merger herein provided
for.
4.2 Headings. Descriptive headings are for convenience only and shall
not control or affect the meaning or construction of any provisions of this
Agreement.
4.3 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original instrument, and all such counterparts together shall constitute only
one original.
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by an officer duly authorized thereunto
as of the date first above written.
ROSE AUTO STORES - FLORIDA, INC.
By: /S/ TIMOTHY P. HALTER
--------------------------------
Timothy P. Halter, President
RAS ACQUISITION CORP.
By: /S/ TIMOTHY P. HALTER
------------------------
Timothy P. Halter, President
-4-
EXHIBIT 3.1
[STATE LOGO]
FLORIDA DEPARTMENT OF STATE
Katherine Harris
Secretary of State
May 17, 2000
Mr. George L. Diamond
Halter Financial Group, Inc.
7701 Las Colinas Ridge, Suite 250
Irving, TX 75063
The Articles of Merger were filed on May 15, 2000, for RAS ACQUISITION CORP.,
the surviving Delaware corporation not authorized to transact business in
Florida.
Should you have any further questions regarding this matter, please feel free to
call (850) 487-6050, the Amendment Filing Section.
Susan Payne
Senior Section Administrator
Division of Corporations Letter Number: 90OA00027828
Division of Corporations - P.O. Box 6327 - Tallahassee, Florida 32314
ARTICLES OF MERGER
(PROFIT CORPORATIONS)
The following articles of merger are submitted in accordance with the Florida
Business Corporation Act, pursuant to section 607.1105,F.S.
FIRSt: The name and jurisdiction of the SURVIVING corporation is:
NAME JURISDICTION
- ---- ------------
RAS ACQUISITION CORP. DELAWARE
- --------------------- --------
SECOND: The name and Jurisdiction of each MERGING corporation is:
NAME JURISDICTION
- ---- ------------
RAS ACQUISITION CORP. DELAWARE
- --------------------- --------
ROSE AUTO STORES - FLORIDA, INC. FLORIDA
- -------------------------------- -------
THIRD: The Plan of Merger is attached.
FOURTH: The merger shall become effective on the date the Articles of Merger are
filed with the Florida Department of State.
FIFTH: The Plan of Merger was adopted by the board of directors of the surviving
corporation on May 10, 2000 and shareholder approval was not required.
SIXTH: The Plan of Merger was not approved by either the shareholders or the
board of directors of the merging corporation as it was ordered and approved by
the United States Bankruptcy Court for the Southern District of Florida, Miami
Division pursuant to that Amended Joint Plan of Reorganization (the "Bankruptcy
Plan") dated February 10, 1999 and confirmed on April 22, 1999. The Bankruptcy
Plan is attached.
SIGNATURE PAGE FOLLOWS
-1-
SEVENTH: SIGNATURES FOR EACH CORPORATION
NAME OF CORPORATION SIGNATURE TYPED OR PRINTED OF INDIVIDUAL
& TITLE
- --------------------------------------------------------------------------------
RAS ACQUSITION CORP /S/TIMOTHY P. HALTER TIMOTHY P. HALTER, PRESIDENT
ROSE AUTO STORES - /S/TIMOTHY P. HALTER TIMOTHY P. HALTER, PRESIDENT
FLORIDA, INC
-2-
EXHIBIT 3.2 State of Delaware PAGE 1
Office of the Secretary of State
--------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
MERGER, WHICH MERGES:
"RAS LIQUIDATING, INC.", A FLORIDA CORPORATION,
WITH AND INTO "RAS ACQUISITION CORP." UNDER THE NAME OF "RAS
ACQUISITION CORP.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE
STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE SEVENTEENTH DAY OF
MAY, A.D. 2000, AT 12 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[STATE SEAL]
/S/ EDWARD J. FREEL
----------------------
Edward J. Freel, Secretary of State
3224563 8100M
AUTHENTICATION: 0443704
001250906 DATE: 05-17-00
CERTIFICATE OF MERGER
Merging
RAS LIQUIDATING, INC.
(a Florida corporation)
with and into
RAS ACQUISITION CORP.,
(a Delaware corporation)
The undersigned Corporation DOES HEREBY CERTIFY:
FIRST- That the name and state of incorporation of each of the
constituent corporations of the merger is as follows:
Name State of Incorporation
RAS Liquidating, Inc. Florida
RAS Acquisition Corp. Delaware
SECOND: That an Agreement and Plan of Merger (the "Plan of Merger")
between the parties to the merger has been approved, adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with the requirements of Section 252 of the General Corporation Law of Delaware.
THIRD: That the name of the surviving corporation of the merger is
RAS Acquisition Corp., a Delaware corporation.
FOURTH: The Certificate of Incorporation and Bylaws of RAS
Acquisition Corp., a Delaware corporation, which is the surviving corporation,
shall continue in full force and effect as the Certificate of Incorporation and
Bylaws of the surviving corporation.
FIFTH: That the executed Plan of Merger is on file at the principal
place of business of the surviving corporation, the address of which is 7701 Las
Colinas Ridge, Suite 250, Irving, Texas 75063,
SIXTH: That a copy of the Plan of Merger will be furnished by the
surviving corporation, on request and without cost, to any stockholder of any
constituent corporation.
Dated May 10, 2000.
RAS ACQLUSITION CORP.,
a Delaware corporation
By: TIMOTHY P. HALTER
-------------------
Timothy P. Halter, President
EXHIBIT 3.3
[state logo]
THE STATE OF TEXAS
SECRETARY OF STATE
CERTIFICATE OF MERGER
The undersigned, as Secretary of State of Texas, hereby certifies that the
attached Articles of Merger of
WBNI, INC,
A Texas Corporation
with
RAS ACQUISITION CORP.
A Delaware No Permit Entity
have been received in this office and are found to conform to law. ACCORDINGLY,
the undersigned, as Secretary of State, and by virtue of the authority vested
in the Secretary by law, hereby issues this Certificate of Merger.
Filed FEBRUARY 1, 2001
Effective FEBRUARY 1, 2001
[STATE SEAL] /S/ HENRY CUELLAR
-----------------
Henry Cuellar
Secretary of State
FILED
IN THE OFFICE OF THE
ARTICLES OF MERGER SECRETARY OF
OF STATE OF TEXAS
WBNI, INC. FEB 01 2001
WITH AND INTO CORPORATIONS SECTION
RAS ACQUISITION CORP.
Pursuant to the provisions of Article 5.04 of the Texas Business
Corporation Act, the undersigned corporations certify the following articles
of merger adopted for the purpose of effecting a merger in accordance with the
provisions of Part Five of the Texas Business Corporation Act.
1. The name of each of the undersigned corporations that are a party to
the Agreement and Plan of Merger (the "Plan of Merger") and the states under the
laws of which they are organized are as follows:
Name of Corporation State
------------------- -----
RAS Acquisition Corp. Delaware
WBNI, Inc. Texas
2. A Plan of Merger has been adopted and approved in accordance with
the provisions of Article 5.03 of The Texas Business Corporation Act providing
for the combination of WBNI, Inc. with and into RAS Acquisition Corp. and
resulting in RAS Acquisition Corp. being the surviving corporation in the
merger.
3. The Certificate of Incorporation and Bylaws of RAS Acquisition
Corp. will be the Certificate of Incorporation and Bylaws of the Surviving
Corporation until thereafter chanced or amended as provided therein or by
applicable law. Except as set forth below, no amendments or changes in the
Certificate of Incorporation or Bylaws of the surviving corporation are to be
effected by the Mercer. Article First of the Certificate of Incorporation of RAS
Acquisition Corp. shall be amended so as to change the entities name to WBNI,
Inc.
4. An executed Plan of Merger is on file at the principal place of
business of RAS Acquisition Corp. at 7701 Las Colinas Ridge, Suite 250, Irving,
Texas 75063 and a copy of the Plan of Merger will be furnished by RAS
Acquisition Corp., on written request and without cost, to any shareholder of
each domestic corporation that is a party to the plan of merger and to any
creditor or obligee of the parties to the merger at the time of the merger if
such obligation is then outstanding.
5. As to the undersigned domestic corporation, the approval of whose
shareholders is required, the number of shares outstanding, and, if the shares
of any class or series are entitled to vote as a class, the designation and
dumber of outstanding shares of each such class or series are as follows:
Number of Number of Shares
Shares Entitled to Vote as
Name of Corporation Outstanding Class or Series a Class or Series
------------------- ----------- --------------- -----------------
WBNI, Inc. 1,000 Common --
6. As to the undersigned domestic corporation, the approval of whose
shareholders is required, the number of shares, not entitled to vote only as a
class, voted for and against the Plan of Merger, respectively, and, if the
shares of any class or series are entitled to vote as a class, the number of
shares of each such class or series voted for and against the plan respectively,
are as follows:
Number of Shares Entitled to
Total Total Vote as a Class or Series
Voted Voted Class or Voted Voted
Name of Corporation For Against Series For Against
- --------------------------------------------------------------------------------
WBNI, Inc. 1,000 -0- -- -- --
7. As to the undersigned domestic corporation that is a party to the
Plan of Merger, the approval of the Plan of Merger and performance of its terms
were duly authorized by all action required by the laws of the State of Texas
and by its constituent documents.
9. As to the undersigned foreign corporation that is a parry to the
Plan of Merger, the approval of the Plan of Merger and performance of its terms
were duly authorized by all action required by the laws, under which it was
incorporated and by its constituent documents.
9. The surviving corporation will be responsible for the payment of all
fees and franchise taxes on the merger corporation and will be obligated to pay
such fees and franchise taxes if the same are not timely paid,
10. These Articles of Merger and the merger under the Plan of Merger
shall be effective on the date of filing with the Secretary of State of Texas.
SIGNATURE PAGE FOLLOWS
Dated: January 31, 2001 WBNI, INC.
By:
----------------------------
George Gilman
President
Dated: January 31, 2001 RAS ACQUISITION CORP.
By: /s/ TIMOTHY P. HALTER
------------------------
Timothy P. Halter
President
Dated: January 31, 2001 WBNI, INC.
By: /S/ GEORGE GILMAN
---------------------------
George Gilman
President
Dated: January 31, 2001 RAS ACQUISITION CORP.
By:
------------------------------
Timothy P. Halter
President
STATE OF DELAWARE
EXHIBIT 3. 4 PAGE 1
OFFICE OF THE SECRETARY OF STATE
-----------------------------
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE,
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
MERGER, WHICH MERGES:
"WBNI, INC.", A TEXAS CORPORATION,
WITH AND INTO "RAS ACQUISITION CORP." UNDER THE NAME OF "WBNI, INC.", A
CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE STATE OF DELAWARE, AS
RECEIVED AND FILED IN THIS OFFICE THE FIRST DAY OF FEBRUARY, A.D. 2001, AT 2:30
O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[state seal] /s/ HARRIET SMITH WINDSOR
--------------------------
Harriet Smith Windsor, Secretary of State
3224563 8100M A ATHENTICATION: 0950989
010053819 DATE: 02-01-01
CERTIFICATE OF MERGER
Merging
WBNI, INC.
(a Texas corporation)
with and into
RAS ACQUISITION CORP.
(a Delaware corporation)
The undersigned corporation DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of the
constituent corporations of the merger is as follows:
Name State of Incorporation
---- ----------------------
WBNI, Inc. Texas
RAS Acquisition Corp. Delaware
SECOND: That an Agreement and Plan of Merger (the "Plan of Merger")
between the parties to the merger has been approved. adopted, certified,
executed and acknowledged by each of the constituent corporations in accordance
with The requirements of Section 252 of the General Corporation Law of Delaware.
THIRD: That the name of the surviving corporation of the merger is RAS
Acquisition Corp., a Delaware corporation.
FOURTH: Except as otherwise amended hereby, the Certificate of
Incorporation and Bylaws of RAS Acquisition Corp., a Delaware corporation, which
is the surviving corporation, shall continue in full force and effect as the
Ccrilficate of Incorporation and Bylaws of the surviving corporation:
Article FIRST of the Certificate of Incorporation of the surviving
corporation shall be amended to read in its entirety as follows:
"FIRST: The name of this corporation is WBNI, Inc."
FIFTH: That the executed Plan of Merger is on file at the principal
place of business of the surviving corporation, the address of which is 7701
Las Colinas Ridge, Suite 250, Irving, Texas 75063.
SIXTH: That a copy of the Plan of Merger will be furnished by the
surviving corporation, on request and without cost, to any stockholder of any
constituent corporation.
Dated January 31, 2001.
RAS ACQUISITION CORP.,
a Delaware corporation
By: /s/ TIMOTHY P. HALTER
---------------------
Timothy P. Halter, President
EXHIBIT 3.5 State of Delaware PAGE 1
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "RAS ACQUISITION CORP.", FILED IN THIS OFFICE ON THE EIGHTH DAY
OF MAY, A.D. 2000, AT 3:30 O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/S/ EDWARD J. FREEL
--------------------------------
[STATE SEAL] Edward J. Freel, Secretary of State
3224563 8100 AUTHENTICATION: 0425518
001233212 DATE: 05-08-00
CERTIFICATE OF INCORPORATION
OF
RAS ACQUISITION CORP.
I, the undersigned natural person acting as an incorporator of a
corporation (hereinafter called the "Corporation") under the General Corporation
Law of the State of Delaware, as amended from time to time, (the "DGCL"), do
hereby adopt the following Certificate of Incorporation for the Corporation:
FIRST: The name of this corporation is RAS Acquisition Corp.
SECOND: The registered office of the Corporation in the State of
Delaware is located at Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, Delaware 19801, County of New Castle. The name of the registered
agent of the Corporation at such address is The Corporation Trust Company.
THIRD: The purpose for which the Corporation is organized is to engage
in any and all lawful acts or activity for which corporations may be organized
under the DGCL. The Corporation will have perpetual existence.
FOURTH: The Corporation shall have authority to issue two classes of
shares to be designated respectively, "Common Stock" and "Preferred Stock". The
total number of shares, which the Corporation is authorized to issue, is
50,000,000 shares of which 40,000,000 shall be Common Stock and 10,000,000
shall be Preferred Stock. Each share of Common Stock shall have a par value of
$.001, and each share of Preferred Stock shall have a par value of $.001
The Preferred Stock authorized by this Certificate of Incorporation may
be issued form time to time in one or more series, each of which shall have such
designation(s) on title(s) as may be fixed by the Board of Directors prior to
the issuance of any shares thereof The Board of Directors is hereby authorized
to fix or alter the dividend rates, conversion rights, rights and terms of
redemption including sinking fund provisions, the redemption price, or prices,
voting rights and liquidation preferences of any wholly unissued series of
Preferred Stock, and the number of shares constituting any such series and the
designation thereof, or any of them. The rights, powers, preferences limitations
and restrictions, if any, accompanying such shares of Preferred Stock shall be
set forth by resolution of the Board of Directors providing for the issue
thereof prior to the issuance of any shares thereof, in accordance with the
applicable Provisions of the DGCL Each share of any series of Preferred Stock
shall be identical with all other shares of such series, except as to the date
from which dividends, if any, shall accrue.
Shares of Common Stock may be issued for such consideration, having a
value of not less than the stated par value thereof, as determined from time to
time by the Board of Directors.
FIFTH: The name of the incorporator is George L. Diamond, and the
mailing address of such incorporator Is 7701 Las Colinas Ridge, Suite 250,
Irving, Texas 75063.
SIXTH: The number of directors constituting the initial board of
directors is one, and the name and address of the person who is to serve as
director until the first annual meeting of stockholders or until his successors
are elected and qualified is as follows:
NAME ADDRESS CITY, STATE
---- ------- -----------
Timothy P. Halter 7701 Las Colinas Ridge, Suite 1-50 Irving, Texas 75063
SEVENTH: Directors of the Corporation need not be elected by written
ballot unless the bylaws of the Corporation otherwise provide.
EIGHTH: The directors of the Corporation shall have the power to adopt,
amend and repeal the bylaws of the Corporation.
NINTH. No contract or transaction between the Corporation and one or
more of its directors, officers or stockholders, or between the Corporation and
any person (as used herein "person" means other corporation, partnership,
association, firm, trust, joint venture, political subdivision, or
instrumentality) or other organization in which one or more, of its directors,
officers or stockholders are directors, officers or stockholders, or have a
financial interest, shall be void or voidable solely for this reason, or solely
because the director or officer is present at or participates in the meeting of
the board or committee which authorizes the contract or transaction, or solely
because his, her or their votes are counted for such purpose, if: (i) the
material facts as to his or her relationship or interest and as to the contact
or transaction are disclosed or are known to the board of directors or the
committee, and the board of directors or committee in good faith authorizes the
contract or transaction by the affirmative votes of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum, or (ii) the material facts as to his or her relationship or interest and
as to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders, or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified by the board of directors, a committee thereof, or the
stockholders Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the board of directors or of a committee
which authorizes the contract or transaction.
TENTH: The Corporation shall indemnify any person who was, is or is
threatened to be made a party to a proceeding (as hereinafter defined) by reason
of the fact that he or she (i) is or was a director or officer of the
Corporation or (ii) while a director or officer of the Corporation, is or was
serving at the request of the Corporation as a director, officer, partner,
venturer, proprietor, trustee, employee, agent or similar functionary of another
foreign or domestic corporation, partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise, to the
fullest extent permitted under the DGCL, as the same exists or may hereafter be
amended. Such right shall be a contract right and as such shall run to the
benefit of any director or officer who is elected and accepts the position of
director or officer of the Corporation or elects to continue to serve as a
director or officer of the Corporation while this Article Tenth is in effect.
Any repeal or amendment of this Article Tenth shall be prospective only and
shall not limit the rights of any such director or officer or the obligations of
the Corporation with respect to any claim arising from or related to the
services of such director or officer in any of the foregoing capacities prior to
any such repeal or amendment to this Article Tenth. Such right shall include the
right to be paid by the Corporation expenses incurred in defending any such
proceeding in advance of its final disposition to the maximum extent permitted
under the DG1CL, as the same exists or may hereafter be amended if a claim for
indemnification or advancement of expenses hereunder is not paid in full by the
Corporation within sixty (60) days after a written claim has been received by
the Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim, and if successful in
whole or in part, the claimant shall also be entitled to be paid the expenses of
prosecuting such claim. It shall be a defense to any such action that such
indemnification or advancement of costs of defense are not permitted under the
DGCL, but the burden of proving such defense shall be on the Corporation.
Neither the failure of the Corporation (including its board of directors or any
committee thereof, independent legal counsel, or stockholders) to have made its
determination prior to the commencement of such action that indemnification of,
or advancement of costs of defense to, the claimant is permissible in the
circumstances nor an actual determination by the Corporation (including its
board of directors or any committee thereof, independent legal counsel, or
stockholders) that such Indemnification or advancement is not permissible shall
be a defense to the action or create a presumption that such indemnification or
advancement is not permissible, In the event of the death of any person having a
right of indemnification under the foregoing provisions, such right shall inure
to the benefit of his or her heirs, executors, administrators and personal
representatives. The rights conferred above shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute, bylaw,
resolution of stockholders or directors, agreement, or otherwise.
Without limiting the generality of the foregoing, to the extent
permitted by then applicable law, the grant of mandatory indemnification
Pursuant to this Article Tenth shall extend to proceedings involving the
negligence of such person.
The Corporation may additionally indemnify any employee or agent of the
Corporation to the fullest extent permitted by law.
As used herein, the term "proceeding" means any threatened, pending or
completed action, suit or proceeding, whether civil, criminals administrative,
arbitrative or investigative, any appeal in such an action, suit or proceeding,
and any inquiry or investigation that could lead to such an action, suit or
proceeding.
The Corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the Corporation would have the power to indemnify him against
such liability under Section 145 of the DGCL.
ELEVENTH: A director of the Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or
knowing violation of law, (iii) under Section 174 of the DGCL, or (iv) for any
transaction from which the director derived an improper benefit. Any repeal or
amendment of this Article Eleventh by the stockholder Corporation shall be
prospective only, and shall not adversely affect any limitation on the personal
liability of a director of the Corporation arising from an act or omission
occurring prior to the time of such repeal or amendment. In addition to the
circumstances in which a director of the Corporation is not personally liable as
set forth in the foregoing provisions of this Article Eleventh, a director shall
not be liable to the Corporation or its stockholders to such further extent as
permitted by any law hereafter enacted, including, without 1imitation, any
subsequent amendment to the DGCL.
TWELFTH Cumulative voting with respect to the election of directors
is expressly prohibited.
THIRTEENTH. The Corporation expressly elects not to be governed by
Section 203 of the DGCL.
I, the undersigned, for the purpose of forming the Corporation under
the laws of the State of Delaware, do make, file and record this Cert.ificate of
Incorporation and do certify that this is my act and deed and that the facts
stated herein are true and, accordingly, I do hereunto set my hand on this 8th
day of May, 2000.
/s/ GEORGE L. DIAMOND
---------------------
George L. Diamond
EXHIBIT 3.6
State of Delaware
Office of title Secretary of State PAGE 1
I, HARRIET SMITH WINDSOR, SECRETARY OF STATE OF THE STATE OF DELAWARE,
DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "WBNI, INC.", CHANGING ITS NAME FROM "WBNI, INC." TO "SEGMENTZ,
INC.", FILED IN THIS OFFICE ON THE FIRST DAY OF NOVEMBER, A.D. 2001, AT 3
O'CLOCK P.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
/S/ HARRIET SMITH WINDSOR
--------------------------
[STATE SEAL] Harriet Smith Windsor, Secretary of State
3224563 8100 AUTHENTICATION: 1424460
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 03:00 PM 11/01/2001
010552474 - 3224563
STATE OF DELAWARE
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
FIRST: That pursuant to the Provisions Of Section 141(f) of the
Delaware General Corporation Law setting (the "Act") the Board of Directors of
WBNI, Inc. duly adopted resolutions setting forth proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Certificate of Incorporation of this corporation be
amended by changing the Article FIRST thereof so that, as amended, said Article
shall be and read as follows;
FIRST: The name of this corporation is Segmentz, Inc.
SECOND: That thereafter, pursuant to resolution of the Board of
Directors, a consent of stockholders in lieu of meeting was duly executed by
stockholders holding the necessary number of shares as required by statue to
ratify such amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Sections 228 and 242 of the Act.
FOURTH: That the capital of said corporation, shall not be reduced
under or by reason of said amendment.
Executed this 26h day of October 2001.
By:/S/ GEORGE GILMAN
------------------
George Gilman, President
EXHIBIT 3.7
BYLAWS
OF
RAS ACQUISITION CORP.
TABLE OF CONTENTS
ARTICLE I OFFICES
Section 1. Registered Office ...................................... 1
Section 2. Other Offices .......................................... 1
ARTICLE II STOCKHOLDERS
Section 1. Place of Meetings ...................................... 1
Section 2. Annual Meeting ......................................... 1
Section 3. List of Stockholders ................................... 1
Section 4. Special Meetings ....................................... 1
Section 5. Notice ................................................. 2
Section 6. Quorum ................................................. 2
Section 7. Voting ................................................. 2
Section 9. Method of Voting ....................................... 2
Section 9. Record Date ............................................ 2
Section 10.Action by Consent ...................................... 3
Section 11.Stockholder Proposals .................................. 3
Section 12.Nomination of Directors ................................ 4
ARTICLE III BOARD OF DIRECTORS
Section 1. Management ............................................. 5
Section 2. Qualification: Election: Term .......................... 5
Section 3. Number ................................................. 5
Section 4. Removal ................................................ 5
Section 5. Vacancies .............................................. 5
Section 6. Place of Meetings ...................................... 5
Section 7. Annual Meeting ......................................... 5
Section 8. Regular Meetings ....................................... 5
Section 9. Special Meetings ....................................... 6
Section 10.Quorum ................................................. 6
Section 11.Interested Directors ................................... 6
Section 12.Committees ............................................. 6
Section 13.Action by Consent ...................................... 6
Section 14.Compensation of Directors .............................. 6
ARTICLE IV NOTICE
Section 1. Form of Notice ......................................... 7
Section 2. Waiver ................................................. 7
ARTICLE V OFFICERS AND AGENTS
Section 1. In General ............................................. 7
Section 2. Election ............................................... 7
-i-
Section 3. Other Officers and Agents .............................. 7
Section 4. Compensation ........................................... 7
Section 5. Term of Office and Removal ............................. 7
Section 6. Employment and Other Contracts ......................... 8
Section 7. Chairman of the Board of Directors ..................... 8
Section 8. Chief Executive Officer ................................ 8
Section 9. President .............................................. 8
Section 10.Chief Financial Officer ................................ 8
Section 11.Secretary .............................................. 8
Section 12.Bonding ................................................ 8
ARTICLE VI CERTIFICATES REPRESENTING SHARES
Section 1. Form of Certificates ................................... 9
Section 2. Lost Certificates ...................................... 9
Section 3. Transfer of Shares ..................................... 9
Section 4. Registered Stockholders ................................ 9
ARTICLE VII GENERAL PROVISIONS
Section 1. Dividends .............................................. 10
Section 2. Reserves ............................................... 10
Section 3. Telephone and Similar Meeting .......................... 10
Section 4. Books and Records ...................................... 10
Section 5. Fiscal Year ............................................ 10
Section 6. Seal ................................................... 10
Section 7. Advances of Expenses ................................... 10
Section 8. Indemnification ........................................ 11
Section 9. Insurance .............................................. 11
Section 10.Resignation ............................................ 11
Section 11 Amendment of Bylaws .................................... 11
Section 12.Invalid Provisions ..................................... 12
Section 13.Relation to the Certificate ............................ 12
ii
BYLAWS
OF
RAS ACQUISITION CORP.
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office and registered
agent of RAS Acquisition Corp. (the "Corporation") will be as from time to time
set forth in the Corporation's Certificate of Incorporation (as may be amended
from time to time) or in any certificate filed with the Secretary of State of
the State of Delaware and the appropriate county Recorder or Recorders. as the
case may be to amend such information.
SECTION 2. OTHER OFFICES. The Corporation may, also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE 11
STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of the stockholders for
the election of Directors will be held at such place. within or without the
State of Delaware. as may, be fixed from time to time by the Board of Directors.
Meetings of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as may be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
SECTION 2. ANNUAL MEETING. An annual meeting of the stockholders will
be held at such time as may be determined by the Board of Directors, at which
meeting the stockholders will elect a Board of Directors, and transact such
other business as may properly be brought before the meeting.
SECTION 3. LIST OF STOCKHOLDERS. At least ten days before each
meeting of stockholders, a complete list of the stockholders entitled to vote at
said meeting, arranged in alphabetical order, with the address of and the number
of voting shares registered in the name of each, will be prepared by the officer
or agent having charge of the stock transfer books. Such list will be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary bus ness hours, for a period of at least ten day prior to the
meeting, either at a place within the city where the meeting is to be held,
which place will be the notice of the meeting, or if not so specified at the
place where the meeting is to be held. Such list will be produced and kept open
at the time and place of the meeting during the whole time thereof, and will be
subject to the inspection of any stockholder who may be present.
SECTION 4. SPECIAL MEETINGS. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by law, the Certificate
of Incorporation or these Bylaws, may be called by the Chairman of the Board,
the Chief Executive Officer. the President or the Board of Directors. Business
transacted at all special meetings will be confined to the purposes stated in
the notice of the meeting unless all stockholders entitled to vote are present
and consent.
-1-
SECTION 5. NOTICE. Written or printed notice stating the place, day and
hour of any meeting of the stockholders and, in case of a special meeting, the
purpose or purposes for which the meeting is called, will be delivered not less
than ten nor more than sixty days before the date of the meeting, either
personally or by mail, by or at the direction of the Chairman of the Board, the
Chief Executive Officer, the President, the Secretary, or the officer or person
calling the meeting, to each stockholder of record entitled to vote at the
meeting. If mailed, such notice will be deemed to be delivered when deposited in
the United States mail, addressed to the stockholder at his address as it
appears on the stock transfer books of the Corporation, with postage thereon
prepaid.
SECTION 6. QUORUM. At all meetings of the stockholders, the presence in
person or by proxy of the holders of a majority of the shares issued and
outstanding and entitled to vote will be necessary and sufficient to constitute
a quorum for the transaction of business except as otherwise provided by law,
the Certificate of Incorporation or these Bylaws. If, however, such quorum is
not present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, will have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present or represented. If the
adjournment is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting will
be given to each stockholder of record entitled to vote at the meeting. At such
adjourned meeting at which a quorum is presented or represented, any business
may be transacted that might have been transacted at the meeting as originally
notified.
SECTION 7. VOTING. When a quorum is present at any meeting of the
Corporation's stockholders, the vote of the holders of a majority of the shares
entitled to vote on, and voted for or against, any matter will decide any
questions brought before such meeting, unless the question is one upon which, by
express provision of law, the Certificate of Incorporation or these Bylaws, a
different vote is required, in which case such express provision will govern and
control the decision of such question. The stockholders present in person or by
proxy at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.
SECTION 8. METHOD OF VOTING. Each outstanding share of the
Corporation's capital stock, regardless of class, will be entitled to one vote
on each matter submitted to a vote at a meeting of stockholders, except to the
extent that the voting rights of the shares of any class or classes are limited
or denied by the Certificate of Incorporation, as amended from time to time. At
any meeting of the stockholders, every stockholder having the right to vote will
be entitled to vote in person, or by proxy appointed by an instrument in writing
subscribed by such stockholder and bearing a date not more than three years
prior to such meeting, unless such instrument provides for a longer period. Each
proxy will be revocable unless expressly provided therein to be irrevocable and
if, and only as long as, it is coupled with an interest sufficient in law to
support an irrevocable power. A proxy may be made irrevocable regardless of
whether the interest with which it is coupled is an interest in the stock itself
or an interest in the Corporation generally. Such proxy will be filed with the
Secretary of the Corporation prior to or at the time of the meeting. Voting on
any question or in any election, other than for directors, may be by voice vote
or show of hands unless the presiding officer orders, or any stockholder
demands, that voting be by written ballot.
SECTION 9. RECORD DATE. The Board of Directors may fix in advance a
record date for the purpose of determining stockholders entitled to notice of or
to vote at a meeting of stockholders, which record date will not precede the
date upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date will not be less than ten nor more than sixty
days prior to such meeting. In the absence of any action by the Board of
Directors, the close of business on the date next preceding the day on which the
notice is given will be the record date, or, if notice is waived, the close of
business on the day next preceding the day on which the meeting is held will be
the record date.
-2-
SECTION 10. ACTION BY CONSENT. Any action required or permitted by
law, the Certificate of Incorporation or these Bylaws to be taken at a meeting
of the stockholders of the Corporation may be taken without a meeting if a
consent or consents in writing, setting forth the action so taken, is signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting at
which all shares entitled to vote thereon were present and voted and will be
delivered to the Corporation by delivery to its registered office in Delaware,
its principal place of business or an officer or agent of the Corporation having
custody of the minute book.
SECTION 11. STOCKHOLDER PROPOSALS. No proposal by a stockholder made
pursuant to this Article II may he voted upon at a meeting of stockholders
unless such stockholder shall have delivered or mailed in a timely manner (as
set herein) and in writing to the Secretary of the Corporation (i) notice of
such proposal, (ii) the text of the proposed alteration, amendment or repeal, if
such proposal relates to a proposed change to the Corporation's Certificate of
Incorporation or Bylaws, (iii) evidence reasonably satisfactory to the Secretary
of the Corporation of such stockholder's status as such and of the number of
shares of each class of capital stock of the Corporation of which such
stockholder is the beneficial owner, (iv) a list of the names and addresses of
other beneficial owners of shares of the capital stock of the Corporation, if
any, with whom such stockholder is acting in concert, and the number of shares
of each class of capital stock of the Corporation beneficially owned by each
such beneficial owner and (v) an opinion of counsel, which counsel and the form
and substance of which opinion shall be reasonably satisfactory to the Board of
Directors of the Corporation, to the effect that the Certificate of
Incorporation or Bylaws resulting from the adoption of such proposal would not
be in conflict with the laws of the State of Delaware, if such proposal relates
to a proposed change to the Corporation's Certificate of Incorporation or
Bylaws. To be timely in connection with an annual meeting of stockholders, a
stockholder's notice and other aforesaid items shall be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
ninety nor more than 180 days prior to the earlier of the date of the meeting or
the corresponding date on which the immediately preceding year's annual meeting
of stockholders was held. To be timely in connection with the voting on any such
proposal at a special meeting of the stockholders, a stockholder's notice and
other aforesaid items shall be delivered to or mailed and received at the
principal executive offices of the Corporation not less than forty days nor more
than sixty days prior to the date of such meeting, provided, however, that in
the event that less than fifty days notice or prior public disclosure of the
date of the special meeting of the stockholders is given or made to the
stockholders, such stockholder's notice and other aforesaid items to be timely
must be so received not later than the close of business on the seventh day
following the day on which such notice of date of the meeting was mailed or such
public disclosure was made. Within thirty days (or such shorter period that may
exist prior to the date of the meeting) after such stockholder shall have
submitted the aforesaid items, the Secretary and the Board of Directors of the
Corporation shall respectively determine whether the items to be ruled upon by
them are reasonably satisfactory and shall notify such stockholder in writing of
their respective determinations. If such stockholder fails to submit a required
item in the form or within the time indicated, or if the Secretary or the Board
of Directors of the Corporation determines that the items to be ruled upon by
them are not reasonably satisfactory, then such proposal by such stockholder may
not be voted upon by the stockholders of the Corporation at such meeting of
stockholders. The presiding person at each meeting of stockholders shall, if the
facts warrant, determine and declare to the meeting that a proposal was not made
in accordance with the procedure prescribed by these Bylaws, and if he should so
determine, he shall so declare to the meeting and the defective proposal shall
be disregarded. The requirements of this Section II shall be in addition to any
other requirements imposed by these Bylaws, by the Corporation's Certificate of
Incorporation or the law.
-3-
SECTION 12. NOMINATION OF DIRECTORS. Nominations for the election of
directors may be made by the Board of Directors or by any stockholder (a
"Nominator") entitled to vote in the election of directors. Such nominations,
other than those made by the Board of Directors, shall be made in writing
pursuant to timely notice delivered to or mailed and received by the Secretary
of the Corporation as set forth in this Section 10. To be timely in connection
with an annual meeting of stockholders, a Nominator's notice, setting forth the
name and address of the person to be nominated, shall be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
ninety days nor more than 180 days prior to the earlier of the date of the
meeting or the corresponding date on which the immediately preceding year's
annual meeting of stockholders was held. To be timely in connection with any
election of a director at a special meeting of the stockholders, a Nominator's
notice, setting forth the name and address of the person to he nominated, shall
be delivered to or mailed and received at the principal executive offices of the
Corporation not later than the close of business on the tenth day following the
day on which such notice of date of the meeting was mailed or such public
disclosure was made, whichever first occurs. At such time, the Nominator shall
also submit written evidence, reasonably satisfactory to the Secretary of the
Corporation, that the Nominator is a stockholder of the Corporation and shall
identify in writing (i) the name and address of the Nominator, (ii) the number
of shares of each class of capital stock of the Corporation of which the
Nominator is the beneficial owner, (iii) the name and address of each of the
persons with whom the Nominator is acting in concert and (iv) the number of
shares of capital stock of which each such person with whom the Nominator is
acting in concern, is the beneficial owner pursuant to which the nomination or
nominations are to be made. At such time, the Nominator shall also submit in
writing (i) the information with respect to each such proposed nominee that
would be required to be provided in a proxy statement prepared in accordance
with Regulation 14A under the Securities Exchange Act of 1934, as amended, and
(ii) a notarized affidavit executed by each such proposed nominee to the effect
that, if elected as a member of the Board of Directors, he will serve and that
he is eligible for election as a member of the Board of Directors. Within thirty
days (or such shorter time period that may exist prior to the date of the
meeting) after the Nominator has submitted the aforesaid items to the Secretary
of the Corporation, the Secretary of the Corporation shall determine whether the
evidence of the Nominator's status as a stockholder submitted by the Nominator
is reasonably satisfactory and shall notify the Nominator in writing of his
determination. If the Secretary of the Corporation finds that such evidence is
not reasonably satisfactory, or if the Nominator fails to submit the requisite
information in the form or within the time indicated, such nomination shall be
ineffective for the election at the meeting at which such person is proposed to
be nominated. The presiding person at each meeting of stockholders shall, if the
facts warrant, determine and declare to the meeting that a nomination was not
made in accordance with the procedures prescribed by these bylaws, and if he
should so determine, he shall so declare to the meeting and the defective
nomination shall be disregarded. The requirements of this Section 12 shall be in
addition to any other requirements imposed by these bylaws, by the Certificate
of Incorporation or by law.
-4-
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. MANAGEMENT. The business and affairs of the Corporation
will be managed by or under the direction of its Board of Directors who may
exercise all such powers of the Corporation and do such lawful acts and things
as are not by law, by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised or done by the stockholders.
SECTION 2. QUALIFICATION; ELECTION; TERM. None of the Directors need
be a stockholder of the Corporation or a resident of the State of Delaware. Each
Director shall hold office for a term expiring at the next annual or special
meeting of stockholders held for the purpose of electing Directors, with each
member to hold office until whichever of the following occurs first: his
successor is elected and qualified, his resignation, his removal from office by
the stockholders or his death. Directors shall be elected by a plurality of the
votes of the shares present in person or represented by proxy and entitled to
vote on the election of Directors at any annual or special meeting of
stockholders. Such election shall be by written ballot.
SECTION 3. NUMBER. The number of Directors of the Corporation will be
at least one and not more than nine. The number of Directors authorized will be
fixed as the Board of Directors may from time to time designate, or if no such
designation has been made, the number of Directors will be the same as the
number of members of the initial Board of Directors as set forth in the
Certificate of Incorporation.
SECTION 4. REMOVAL. Any Director may be removed, only for cause, at
any special meeting of stockholders by the affirmative vote of the holders of a
majority in number of all outstanding voting stock entitled to vote; provided
that notice of the intention to act upon such matter has been given in the
notice calling such meeting.
SECTION 5. VACANCIES. Newly created directorships resulting from any
increase in the authorized number of Directors and any vacancies occurring in
the Board of Directors caused by death, resignation, retirement,
disqualification or removal from office of any Directors or otherwise, may be
filled by the vote of a majority of the Directors then in office, though less
than a quorum, or a successor or successors may be chosen at a special meeting
of the stockholders called for that purpose, and each successor Director so
chosen will hold office until the next election of the class for which such
Director has been chosen or until whichever of the following occurs first: his
successor is elected and qualified, his resignation, his removal from office by
the stockholders or his death.
SECTION 6. PLACE OF MEETINGS. Meetings of the Board of Directors,
regular or special, may be held at such place within or without the State of
Delaware as may be fixed from time to time by the Board of Directors.
SECTION 7. ANNUAL MEETING. The first meeting of each newly elected
Board of Directors will be held without further notice immediately, following
the annual meeting of stockholders and at the same place, unless by unanimous
consent, the Directors then elected and serving change such time or place.
SECTION 8. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held without notice at such time and place as is from time to
time determined by resolution of the Board of Directors.
-5-
SECTION 9. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the Chairman of the Board, the Chief Executive
Officer or the President on oral or written notice to each Director, given
either personally, by telephone, by telegram or by mail; special meetings will
be called by the Chairman of the Board, Chief Executive Officer, President or
Secretary in like manner and on like notice on the written request of at least
three Directors. The purpose or purposes of any special meeting will be
specified in the notice relating thereto.
SECTION 10. QUORUM. At all meetings of the Board of Directors the
presence of a majority of the number of Directors fixed by these Bylaws will be
necessary and sufficient to constitute a quorum for the transaction of business,
and the affirmative vote of at least a majority of the Directors present at any
meeting at which there is a quorum will be the act of the Board of Directors,
except as may be otherwise specifically provided by law, the Certificate of
Incorporation or these Bylaws. If a quorum is not present at any meeting of the
Board of Directors, the Directors present thereat may adjourn the meeting from
time to time without notice other than announcement at the meeting, until a
quorum is present.
SECTION 11. INTERESTED DIRECTORS. No contract or transaction between
the Corporation and one or more of its Directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of the Corporation's Directors or officers are
directors or officers or have a financial interest, will be void or voidable
solely for this reason, solely because the Director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose if: (i) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the affirmative vote of a
majority of the disinterested Directors, even though the disinterested Directors
be less than a quorum, (ii) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified by the Board of Directors, a committee thereof
or the stockholders. Common or interested directors may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or
of a committee that authorizes the contract or transaction.
SECTION 12. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the entire Board, designate committees, each committee
to consist of two or more Directors of the Corporation, which committees will
have such power and authority and will perform such functions as may be provided
in such resolution. Such committee or committees will have such name or names as
may be designated by the Board and will keep regular minutes of their
proceedings and report the same to the Board of Directors when required.
SECTION 13. ACTION BY CONSENT. Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee of the Board of
Directors may be taken without such a meeting if a consent or consents in
writing, setting forth the action so taken, is signed by, all the members of the
Board of Directors or such committee, as the case may be.
SECTION 14. COMPENSATION OF DIRECTORS. Directors will receive such
compensation for their services and reimbursement for their expenses as the
Board of Directors, by resolution, may establish; provided that nothing herein
contained will be construed to preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.
-6-
ARTICLE IV
NOTICE
SECTION 1. FORM OF NOTICE. Whenever by law, the Certificate of
Incorporation or of these Bylaws, notice is to be given to any Director or
stockholder, and no provision is made as to how such notice will be given, such
notice may be given in writing, by mail, postage prepaid, addressed to such
Director or stockholder at such address as appears on the books of the
Corporation. Any notice required or permitted to be given by mail will be deemed
to be given at the time the same is deposited in the United States mail.
SECTION 2. WAIVER. Whenever any notice is required to be given to any
stockholder or Director of the Corporation as required by law, the Certificate
of Incorporation or these Bylaws, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated in such notice, will be equivalent to the giving of such notice.
Attendance of a stockholder or Director at a meeting will constitute a waiver of
notice of such meeting, except where such stockholder or Director attends for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business on the ground that the meeting has not been
lawfully called or convened.
ARTICLE V
OFFICERS AND AGENTS
SECTION 1. IN GENERAL. The officers of the Corporation will consist
of a Chief Executive Officer, President, Chief Financial Officer and Secretary
and such other officers as shall be elected by the Board of Directors or the
Chief Executive Officer. Any two or more offices may be held by the same person.
SECTION 2. ELECTION. The Board of Directors, at its first meeting
after each annual meeting of stockholders, will elect the officers. none of whom
need be a member of the Board of Directors.
SECTION 3. OTHER OFFICERS AND AGENTS. The Board of Directors and
Chief Executive Officer may also elect and appoint such other officers and
agents as it or he deems necessary, who will be elected and appointed for such
terms and will exercise such powers and perform such duties as may be determined
from time to time by the Board or the Chief Executive Officer.
SECTION 4. COMPENSATION. The compensation of all officers and agents
of the Corporation will be fixed by the Board of Directors or any committee of
the Board, if so authorized by the Board.
SECTION 5. TERM OF OFFICE AND REMOVAL. Each officer of the
Corporation will hold office until his death, his resignation or removal from
office. or the election and qualification of his successor, whichever occurs
first. Any officer or agent elected or appointed by the Board of Directors or
the Chief Executive Officer may be removed at any time, for or without cause,
by, the affirmative vote of a majority of the entire Board of Directors or at
the discretion of the Chief Executive Officer (without regard to how the agent
or officer was elected), but such removal will not prejudice the contract
rights, if any, of the person so removed. If the office of any officer becomes
vacant for any, reason, the vacancy may be filled by the Board of Directors or,
in the case of a vacancy in the office of officer other than Chief Executive
Officer and President, such vacancy may be filled by the Chief Executive
Officer.
-7-
SECTION 6. EMPLOYMENT AND OTHER CONTRACTS. The Board of Directors may
authorize any officer or officers or agent or agents to enter into any contract
or execute and deliver any instrument in the name or on behalf of the
Corporation, and such authority may be general or confined to specific
instances. The Board of Directors may, when it believes the interest of the
Corporation will best be served thereby, authorize executive employment
contracts that will have terms no longer than ten years and contain such other
terms and conditions as the Board of Directors deems appropriate. Nothing herein
will limit the authority of the Board or Directors to authorize employment
contracts for shorter terms.
SECTION 7. CHAIRMAN OF THE BOARD OF DIRECTORS. If the Board of
Directors has elected a Chairman of the Board, he will preside at all meetings
of the stockholders and the Board of Directors.
SECTION 8. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer will
be the chief executive officer of the Corporation and, subject to the control of
the Board of Directors, will supervise and control all of the business and
affairs of the Corporation. The Chief Executive Officer shall have the authority
to elect any officer of the Corporation other than the Chief Executive Officer
or President. He will, in the absence of the Chairman of the Board, preside at
all meetings of the stockholders and the Board of Directors. The Chief Executive
Officer will have all powers and perform all duties incident to the office of
Chief Executive Officer and will have such other powers and perform such other
duties as the Board of Directors may from time to time prescribe. During the
absence or disability of the President, the Chief Executive Officer will
exercise the powers and perform the duties of President.
SECTION 9. PRESIDENT. The President will have responsibility, for
oversight of the Corporation's operating and development activities. In the
absence or disability of the Chief Executive Officer and the Chairman of the
Board, the President will exercise the powers and perform the duties of the
Chief Executive Officer. The President will render to the Directors whenever
they may requires it an account of the operating and development activities of
the Corporation and will have such other powers and perform such other duties as
the Board of Directors may from time to time prescribe or as the Chief Executive
Officer may from time to time delegate to him.
SECTION 10. CHIEF FINANCIAL OFFICER. The Chief Financial Officer will
have principal responsibility for the financial operations of the Corporation.
The Chief Financial Officer will render to the Directors whenever they may
require it an account of the operating results and financial condition of the
Corporation and will have such other powers and perform such other duties as the
Board of Directors may from time to time prescribe or as the Chief Executive
Officer may from time to time delegate to him.
SECTION 11. SECRETARY. The Secretary will attend all meetings of the
stockholders and record all votes and the minutes of all proceedings in a book
to be kept for that purpose. The Secretary will perform like duties for the
Board of Directors and committees thereof when required. The Secretary will
give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors. The Secretary will keep in safe
custody the seal of the Corporation. The Secretary will be under the supervision
of the Chief Executive Officer. The Secretary will have such other powers and
perform such other duties as the Board of Directors may from time to time
prescribe or as the Chief Executive Officer may from time to time delegate to
him.
SECTION 12. BONDING. The Corporation may secure a bond to protect the
Corporation from loss in the event of defalcation by any of the officers, which
bond may be in such form and amount and with such surety as the Board of
Directors may deem appropriate.
-8-
ARTICLE VI
CERTIFICATES REPRESENTING SHARES
SECTION 1. FORM OF CERTIFICATES. Certificates, in such form as may be
determined by the Board of Directors, representing shares to which stockholders
are entitled will be delivered to each stockholder. Such certificates will be
consecutively numbered and will be entered in the stock book of the Corporation
as they are issued. Each certificate will state on the face thereof the holder's
name, the number, class of shares, and the par value of such shares or a
statement that such shares are without par value. They will be signed by the
Chief Executive Officer or President and the Secretary or an Assistant
Secretary, and may be sealed with the seal of the Corporation or a facsimile
thereof. If any certificate is countersigned by a transfer agent, or an
assistant transfer agent or registered by a registrar, either of which is other
than the Corporation or an employee of the Corporation, the signatures of the
Corporation's officers may be facsimiles. In case any officer or officers who
have signed, or whose facsimile signature or signatures have been used on such
certificate or certificates, ceases to be such officer or officers of the
Corporation, whether because of death, resignation or otherwise, before such
certificate or certificates have been delivered by the Corporation or its
agents, such certificate or certificates may nevertheless be adopted by the
Corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the Corporation.
SECTION 2. LOST CERTIFICATES. The Board of Directors may direct that
a new certificate be issued in place of any certificate theretofore issued by
the Corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing such issue of a new certificate, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost or destroyed certificate, or his
legal representative, to advertise the same in such manner as it may require
and/or to give the Corporation a bond, in such form, in such sum, and with such
surety or sureties as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost or destroyed. When a certificate has been lost, apparently destroyed
or wrongfully taken, and the holder of record fails to notify the Corporation
within a reasonable time after such holder has notice of it, and the Corporation
registers a transfer of the shares represented by the certificate before
receiving such Notification, the holder of record is precluded from making any
claim against the Corporation for the transfer of a new certificate.
SECTION 3. TRANSFER OF SHARES. Shares of stock will be transferable
only on the books of the Corporation by the holder thereof in person or by such
holder's duly authorized attorney. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate representing shares duly
endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it will be the duty of the Corporation or the transfer
agent of the Corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
SECTION 4. REGISTERED STOCKHOLDERS. The Corporation will be entitled
to treat the holder of record of any share or shares of stock as the holder in
fact thereof and, accordingly, will not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person, whether or not it has express or other notice thereof, except as
otherwise provided by law.
-9-
ARTICLE VII
GENERAL PROVISIONS
SECTION 1. DIVIDENDS. Dividends upon the outstanding shares of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board Directors at any regular or special meeting.
Dividends may be declared and paid in cash, in property, or in shares of the
Corporation, subject to the provisions or the General Corporation Law of the
State of Delaware and the Certificate of Incorporation. The Board of Directors
may fix in advance a record date for the purpose of determining stockholders
entitled to receive payment of any dividend, such record date will not precede
the date upon which the resolution fixing the record date is adopted, and such
record date will not be more than sixty days prior to the payment date of such
dividend. In the absence of any action by the Board of Directors, the close of
business on the date upon which the Board of Directors adopts the resolution
declaring such dividend will be the record date.
SECTION 2. RESERVES. There may be created by resolution of the Board
of Directors out of the surplus of the Corporation such reserve or reserves as
the Directors from time to time, in their discretion, deem proper to provide for
contingencies, or to equalize dividends, or to repair or maintain any property
of the Corporation, or for such other purpose as the Directors may deem
beneficial to the Corporation, and the Directors may modify or abolish any such
reserve in the manner in which it was created. Surplus of the Corporation to the
extent so reserved will not be available for the payment of dividends or other
distributions by the Corporation.
SECTION 3. TELEPHONE AND SIMILAR MEETINGS. Stockholders, directors
and committee members may participate in and hold meetings by means of
conference telephone or similar communications equipment by which all persons
participating in the meeting can hear each other. Participation in such a
meeting will constitute presence in person at the meeting, except where a person
participates in the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the ground that
the meeting has not been lawfully called or convened.
SECTION 4. BOOKS AND RECORDS. The Corporation will keep correct and
complete books and records of account and minutes of the proceedings of its
stockholders and Board of Directors, and will keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.
SECTION 5. FISCAL YEAR. The fiscal year of the Corporation will be
fixed by resolution of the Board of Directors.
SECTION 6. SEAL. The Corporation may have a seal, and the seal may be
used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. Any officer of the Corporation will have authority to
affix the seal to any document requiring it.
SECTION 7. ADVANCES OF EXPENSES. The Corporation will advance to its
directors and officers expenses incurred by them in connection with any
"Proceeding," which term includes any threatened, pending or completed action,
suit or proceeding, whether brought by or in the right of the Corporation or
otherwise and whether of a civil, criminal, administrative or investigative
nature (including all appeals therefrom), in which a director or officer may be
or may, have been involved as a party or otherwise, by reason of the fact that
he is or was a director or officer of the Corporation, by reason of any action
taken by him or of any inaction on his part while acting as such, or by reason
of the fact that he is or was serving at the request of the Corporation as a
director, officer, trustee, employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
("Official," which term also includes directors and officers of the Corporation
in their capacities as directors and officers of the Corporation), whether or
not he is serving in such capacity at the time any liability or expense is
incurred; provided that the Official undertakes to repay all amounts advanced
unless:
-10-
(i) in the case of all Proceedings other than a Proceeding by
or in the right of the Corporation, the Official establishes to the
satisfaction of the disinterested members of the Board of Directors
that he acted in good faith or in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation and,
with respect to any criminal proceeding, that he did not have
reasonable cause to believe his conduct was unlawful, provided that
the termination of any such Proceeding by judgment, order of court,
settlement. conviction, or upon a plea of nolo contendere or its
equivalent, shall not by itself create a presumption as to whether
the Official acted in good faith or in a manner he reasonably
believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal proceeding, as to
whether he had reasonable cause to believe his conduct was unlawful;
or
(ii) in the case of a Proceeding by or in the right of the
Corporation, the Official establishes to the satisfaction of the
disinterested members of the Board of Directors that he acted in good
faith or in a manner he reasonably believed to be in or not opposed
to the best interests of the Corporation, provided that if in such a
Proceeding the Official is adjudged to be liable to the Corporation,
all amounts advanced to the Official for expenses must be repaid
except to the extent that the court in which such adjudication was
made shall determine upon application that despite such adjudication,
in view of all the circumstances, the Official is fairly and
reasonably entitled to indemnity for such expenses as the court may
deem proper.
SECTION 8. INDEMNIFICATION. The Corporation will indemnify its
directors and officers to the fullest extent permitted by the General
Corporation Law of the State of Delaware and may, if and to the extent
authorized by the Board of Directors, so indemnify such other persons whom it
has the power to indemnify against any liability, reasonable expense or other
matter whatsoever.
SECTION 9. INSURANCE. The Corporation may at the discretion of the
Board of Directors purchase and maintain insurance on behalf of the Corporation
and any person whom it has the power to indemnify pursuant to law, the
Certificate of Incorporation, these Bylaws or otherwise.
SECTION 10. RESIGNATION. Any director, officer or agent may resign by
giving written notice to the President or the Secretary. Such resignation will
take effect at the time specified therein or immediately if no time is specified
therein. Unless otherwise specified therein, the acceptance of such resignation
will not be necessary, to make it effective.
SECTION 11. AMENDMENT OF BYLAWS. Other than as set forth herein,
these Bylaws may be altered, amended, or repealed at any meeting of the Board of
Directors at which a quorum is present, by the affirmative vote of a majority of
the Directors present at such meeting.
-11-
SECTION 12. INVALID PROVISIONS. If any part of these Bylaws is held
invalid or inoperative for any reason, the remaining parts, so far as possible
and reasonable, will be valid and operative.
SECTION 13. RELATION TO THE CERTIFICATE OF INCORPORATION. These
Bylaws are subject to, and governed by, the Certificate of Incorporation of the
Corporation as amended from time to time.
The undersigned, being the Secretary of the Corporation, confirms
the adoption and approval of the foregoing Bylaws, effective as of the 10th day
of May, 2000.
/s/ TIMOTHY P. HALTER
----------------------
Timothy P. Halter, Secretary
-12-
EXHIBIT 10.0
EMPLOYMENT AGREEMENT
SEGMENTZ, INC.
AND
ALLAN MARSHALL
THIS EMPLOYMENT AND CONFIDENTIALITY AGREEMENT is made as of
the 1st day of November, 2001, by and among TRANS-LOGISTICS, INC., a Florida
corporation, which has an address at 18302 Highwoods Preserve, Suite 210, Tampa,
Florida 33647 ("Company"), and ALLAN MARSHALL ("Employee"), an individual with
an address c/o the Company.
W I T N E S S E T H :
---------------------
WHEREAS, the Company desires to employ Employee in the
position of Chief Executive Officer of the Company, and Employee desires to
perform the duties as required by such position.
NOW, THEREFORE, the Company and Employee, intending to be
legally bound, agree as follows:
1. SCOPE OF EMPLOYMENT. The Company hereby employs Employee as
Chief Executive Officer of the Company. Employee will be responsible for such
duties as are commensurate with and required by such position or office, as may
be assigned to Employee by the Board of Directors of the Company from time to
time, but the Board of Directors will not assign Employee any duties
inconsistent with Employee's status or alter the nature or status of Employee's
responsibility. In addition, the Employee will execute (upon the written request
of the Company) and comply in all respects with his obligations, duties and
restrictions to be set forth in an Option Agreement of even date herewith by and
between Employee and the Company (the "Option Agreement").
During the term of this Agreement, Employee may engage in any other
business for Employee's own account or accept any employment from any other
business entity, or render any services, give any advice or serve in an advisory
or consulting capacity, whether gratuitously or otherwise, to or for any other
person, firm, or corporation.
2. TERM. The term of this Agreement will be for five (5) years
(the "Term"), commencing on the date hereof, unless sooner terminated pursuant
to Section 7 of this Agreement. This Agreement shall continue for additional one
(1) year periods unless terminated by either party on ninety (90) days prior
written notice to the other.
3. COMPENSATION.
------------
A). The Company will pay Employee on behalf of the Company compensation
calculated at the base rate of One Hundred Fifty Thousand Dollars ($150,000) per
annum through December 31, 2001, and thereafter with annual increases of ten
percent (10%) per annum or such higher amount as the Board of Directors shall
determine, payable in equal installments in accordance with the normal payroll
policies of the Company in effect from time to time. The Company's Board of
Directors will review and determine Employee's base salary and other
compensation on an annual basis, provided, however, that the Company's Board of
Directors may not set Employee's base salary less than as set forth above during
the respective period.
-2-
B). The Company hereby grants employee a stock option to purchase fifteen
percent (15%) of the Company's currently outstanding stock at a price per share
of $.025, for a period of five (5) years form the date hereof.
4. BENEFITS. The Company will provide Employee with such
benefits (the "Benefits") as are provided by the Company to its senior
executives or similar companies publicly traded in your industry (namely life
insurance coverage of $1,000,000, medical and dental insurance, travel and
accident insurance, participation in 401(K) plans and bonus plans, and stock
option plans, incentive compensation plans and other benefits). In addition, the
Company will provide you with an automobile allowance of $600 per month and
shall pay your gasoline, insurance, maintenance repair and parking expenses
relating to said automobile.
5. BUSINESS EXPENSES. The Company will reimburse Employee for
all ordinary and necessary business expenses incurred and paid by Employee in
the course of and within the scope of the performance of Employee's duties in
accordance with this Agreement, provided such expenses are approved by the
President of the Company and adequate documentation of such expenses are
provided upon presentation for any reimbursement.
6. VACATION AND SICK DAYS. Employee will be entitled to a
vacation of four (4) weeks per year without loss of salary. Such vacation will
be cumulative. Employee will be entitled to receive as many paid sick days as he
requires, subject to Paragraph 7 (b) hereof.
7. TERMINATION. This Agreement may be terminated prior to the
expiration of the term set forth in Section 2 or upon the occurrence of any of
the events set forth in, and subject to the terms of, this Section 7.
(a) DEATH. This Agreement will terminate immediately and
automatically upon the death of the Employee.
(b) DISABILITY. This Agreement may be terminated at the Company's
option, immediately upon notice to the Employee, if the
Employee shall suffer a permanent disability. For the purposes
of this Agreement, the term "permanent disability" shall mean
the Employee's inability to perform his duties under this
Agreement for a period of one hundred and eighty (180) days
whether or not consecutive, in any twelve (12) month period,
due to illness, accident or any other physical or mental
incapacity, as determined by a qualified physician.
(c) CAUSE. This Agreement may be terminated at the Company's
option, immediately upon the following events: fraud, criminal
conduct, or dishonesty or embezzlement by the Employee
involving the Company (as evidenced by the conviction of a
felony).
-3-
8. NON-DISCLOSURE OF INFORMATION. Employee acknowledges that
the Company has invested and will continue to invest considerable resources in
the research, development and advancement of its business, which investment has
or will result in the generation of proprietary, confidential and/or trade
secret data, information, techniques and materials, tangible and intangible,
which properly belong to the Company. Employee acknowledges and agrees that it
would be unlawful for Employee to appropriate, to attempt to appropriate, or to
disclose to anyone such data, information, techniques or materials, subject to
the following:
(a) Employee acknowledges that the following constitute
protectable proprietary, confidential or trade secret
information of each Company: all developments, inventions,
discoveries, enhancements, modifications, processes, formulae,
plans, devices, concepts, project outlines, schedules,
treatments, flowcharts, scripts, graphics, edit plans,
computer hardware, source codes, access codes, computer
programs, video tapes, film, records, tapes, research,
software programs (in any medium or form whatsoever and
whether programmable or read only memory), CD-ROM's, know how,
ideas, systems, operating methods, laboratory practices,
equipment, files, any proposals for development, any reports
on findings of tests, investigative studies, consultations or
the like pricing policies, budgets, strategic plans (whether
or not communicated in writing), information concerning the
sales, sales volume, sales methods, sales proposals, customers
and prospective customers, suppliers and prospective
suppliers, all written documents not in the public domain, and
any copies or imitations of the foregoing and all other
proprietary, confidential, or trade secret information,
whether or not copyrighted or patented and whether in
possession of the Company and whether created solely by
Employee, jointly with others, or solely by others.
(b) For purposes of this Agreement, all confidential, proprietary,
or trade secret information enumerated or mentioned in Section
8(a) is hereinafter referred to as "Information" and will
constitute Information whether fully developed or in the
process of development by the Company. Any restrictions on
disclosure and use of the Information will apply to all copies
of the Information, whether in whole or in part.
(c) During the term of this Agreement and at all times after
termination of this Agreement, unless authorized in writing by
the Company or during the Term of this Agreement and as part
of the Employees duties, Employee will not:
(i) use for Employee's benefit or advantage the
Information, or
(ii) use the Information for the benefit of any third
party, or
(iii) disclose or cause to be disclosed the Information or
authorize or permit such disclosure of the
Information to any third party, or
-4-
(iv) use the Information in any way which would be
detrimental to the Company.
(d) In any judicial proceeding, it will be presumed that the
Information constitutes protectable trade secrets, and
Employee will bear the burden of proving that any Information
is publicly or rightfully known by Employee.
(e) Employee will surrender to the Company at any time upon
request, and upon termination of Employee's employment for any
reason, all written or otherwise tangible documentation
representing or embodying the Information, in whatever form,
whether or not copyrighted, patented, or otherwise, and any
copies or imitations of the Information, whether or not made
by Employee. Employee agrees to be available upon request for
consultation after termination of employment to provide
information and details with respect to any work or activity
performed or materials created by Employee alone or with
others during Employee's employment by the Company. In
addition, upon termination of employment, Employee shall
resign as an officer and director of the Company at the
written request of the Company.
10. TERMINATION BY EMPLOYEE. Employee may terminate his
employment with the Company (a) in the event that the Company breaches any of
its obligations hereunder or if Employee is not re-elected Chief Executive
Officer and President, or (b) if there is a "change in control" of the Company
or (c) upon 60 days notice in writing to the Company. A "change of control" of
the Company shall occur when Employee no longer owns more than 50% of the voting
stock of Saliva Diagnostic Systems, Inc., the parent company of the Company or
any other successor parent company of the Company or as such term is defined
under the Securities and Exchange Act of 1934, as amended.
11. COMPENSATION UPON TERMINATION, DURING DISABILITY, OR IN
THE EVENT OF A CHANGE IN CONTROL. In addition to any benefits to which you are
entitled under any insurance program or pension plan or benefit plan then in
effect, you shall be entitled to the following:
(a) In the event you are not terminated for "Cause" or you elect
to terminate your employment under Paragraph 10 hereunder, you
shall be entitled to receive:
(i) the balance of your salary in a lump sum through the
Term of this Agreement;
(ii) you shall be entitled to receive your base salary at
the time of termination for a period of five (5)
years from the end of the Term of this Agreement;
(iii) you shall continue to receive, from the date of
Termination through the Term of this Agreement and
thereafter for a period of five (5) years from the
end of the Term of this Agreement, all Benefits
referred to in Paragraph 4 which you were receiving
immediately prior to Termination, at no cost to
Employee.
-5-
(iv) In lieu of shares of common Stock or other equity or
option plans issuable upon exercise of options
(Options), you shall receive, at your election, the
Option shares or an amount in cash equal to the
product of (A) the difference (to the extent that
such difference is a positive number) obtained by
subtracting the per share exercise price of each
Option held by Employee whether or not fully
exercisable from the higher of (i) the closing price
of the Shares as reported on any securities exchange)
on the Date of Termination, or (ii) the highest price
per Share actually paid in connection with any
"change in control" (as hereinafter defined) of the
Company, or (iii) the number of Shares covered by
each such Option (such amount being herein referred
to as the "Option Share Amount"). The Option share
Amount shall be paid to the Employee within sixty
(60) days of the Termination Date.
(b) In the event any payments hereunder shall be subject to the
excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the "Code") or any interest or
penalties are incurred by Employee with respect to such excise
tax, then Employee shall be entitled to an additional payment
(a "Gross-Up Payment") in an amount calculated as follows:
(i) The Excise Tax shall be computed pursuant to Section
4999 of the Code on the Payments which shall include
the Option share Amount to the extent that such
Amounts shall be deemed to be "parachute payments" as
defined in Section 280G (b) (2) of the Code.
(ii) The Excise Tax shall be computed pursuant to Section
4999 of the Code on the amount of the Payments, which
for purposes of this clause shall not include the
Option Share Amount to the extent that such amounts
shall otherwise be "parachute payments" as defined in
Section 280G (b)(2) of the Code.
(iii) The Excise Tax calculated at clause (ii) shall be
subtracted from the Excise Tax calculated at clause
(i) with the result of such subtraction to be
referred as the "Difference".
(iv) The Difference shall be divided by the following
factor: One (1) minus the sum of (I) the rate of tax
imposed by Section 4999 and (II) Employees marginal
combined Federal, state, city and local income tax
rate in the year in which the payment shall be made.
The resulting amount shall be the amount of the
Gross-Up Payment. The Gross-Up Payment shall be paid
to you promptly after it has been calculated by
Employee's accountants who shall be compensated for
their services by the Company.
(c) In the event of Termination of the Employee for "Cause",
Employee will receive the payments or compensation set forth
in Paragraphs 11 (a) (i), (iii), (iv) and (b).
12. OWNERSHIP OF CREATIONS. Any and all computer programs,
processes, creations, developments, discoveries, inventions, enhancements,
modifications and improvements (hereinafter collectively referred to as
"Creation" or "Creations"), whether or not the Creations are copyrightable,
patentable, or otherwise protectable (such as by contract or implied duty),
conceived, invented, developed, created or produced by Employee alone or with
others during the term of his employment, whether or not during working hours
and whether or not on the premises of the Company, will be the sole and
exclusive property of the Company if the Creation is:
-6-
(a) within the scope of Employee's duties assigned or implied in
accordance with his position with the Company, or
(b) a product, products, or other item which would be in
competition with the products or services offered by the
Company or which is related to the Company's products or
services, whether presently existing, under development, or
under active consideration.
13. ABSENCE OF CONFLICT OF REPRESENTATIONS. Employee warrants
and represents that Employee's performance under this Agreement will not violate
any other agreement to which Employee is a party and that Employee will not
bring any materials which are proprietary to a third party to the Company
without the prior written consent of such third party.
14. UNIQUE NATURE OF AGREEMENT. The Company and Employee agree
that the rights conveyed by this Agreement are of a unique and special nature.
Employee and the Company agree that any violation of this Agreement will result
in immediate and irreparable harm to the Company and that in the event of any
actual or threatened breach or violation of any of the provisions of this
Agreement, the Company will be entitled as a matter of right to an injunction or
a decree of specific performance from any equity court of competent
jurisdiction. Employee waives the right to assert the defense that such breach
or violation can be compensated adequately in damages in an action at law.
Nothing in this Agreement will be construed as prohibiting the Company from
pursuing any other remedies at law or in equity available to the Company for
such breach or violation or threatened violation.
15. SEVERABILITY AND REFORMATION. The covenants, provisions,
and Sections of this Agreement shall be severable, and in the event that any
portion of this Agreement is held to be unlawful or unenforceable, the same will
not affect any other portion of this Agreement, and the remaining terms and
conditions or portions thereof will remain in full force and effect. This
Agreement will be construed in such case as if such unlawful or unenforceable
portion had never been contained in this Agreement, in order to effectuate the
intentions of the Company and Employee in executing this Agreement.
-7-
In furtherance and not in limitation of the foregoing, should
any durational or geographical restriction or restriction on business activities
covered under this Agreement be found by any court of competent jurisdiction to
be overly broad, Employee and the Company intend that such court will enforce
this Agreement in any less broad manner the court may find appropriate by
construing such overly broad provisions to cover only that duration, extent or
activity which may be enforceable. The parties acknowledge the uncertainty of
the law in this respect and expressly agree that this Agreement be given the
construction that renders its provisions valid and enforceable to the maximum
extent permitted by law.
16. ARBITRATION. All disputes between the parties concerning
the interpretation or enforcement of any rights or obligations under this
Agreement, except as otherwise provided herein, will be resolved by final and
binding arbitration pursuant to the Voluntary Arbitration Rules of the AMERICAN
ARBITRATION ASSOCIATION in Tampa, Florida.
17. MISCELLANEOUS. The failure of the Company to object to any
conduct or violation of any of the covenants made by Employee under this
Agreement will not be deemed a waiver by the Company of any rights or remedies
the Company may have under this Agreement.
This Agreement is binding upon the parties hereto and their
respective heirs, personal representatives, successors and assigns. Employee
agrees that his obligations set forth in Section 8, and 10 through 11 of this
Agreement will survive the termination of this Agreement.
The services to be rendered by Employee to the Company under
this Agreement are personal in nature and, therefore, Employee may not assign
Employee's rights under this Agreement without the prior written consent of the
Company's Board. Any attempted assignment by Employee will be void and of no
force or effect.
This Agreement will be governed and construed in accordance
with the laws of Delaware. No alterations, amendments, changes or additions to
this Agreement will be binding upon either the Company or Employee unless
reduced to writing and signed by both parties. No waiver of any right arising
under this Agreement made by either party will be valid unless given in an
appropriate writing signed by that party.
Employee has been represented by counsel in connection with
this Agreement. Employee has carefully read and fully understands all of the
provisions of this Agreement.
This Agreement constitutes the entire understanding between
Employee and the Company and supersede all prior oral or written communications,
proposals, representations, warranties, covenants, understandings or agreements
between Employee and the Company relating to the subject matter of this
Agreement.
IN WITNESS WHEREOF, the parties' duly authorized
representatives have duly executed this Agreement as of the day and year first
above written.
SEGMENTZ, INC.:
BY: S/ALLAN MARSHALL TITLE: CHIEF EXECUTIVE OFFICER
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THE EMPLOYEE:
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/S/ALLAN MARSHALL
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ALLAN MARSHALL
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EXHIBIT 10.1
SEGMENTZ, INC.
2001 STOCK OPTION PLAN
ARTICLE 1.
Establishment, Objectives, and Duration
1.1 Establishment of the Plan. Segmentz, Inc., a Delaware corporation
(hereinafter referred to as the "Company"), hereby establishes an incentive
compensation plan to be known as 2001 Stock Option Plan (hereinafter referred to
as the "Plan"), as set forth in this document.
Subject to the provisions of Article 12 hereof, the Plan shall become
effective as of October 29, 2001 (the "Effective Date") and shall remain in
effect as provided in Section 1.4 hereof.
1.1 Purpose of the Plan. The purpose of this Plan is to benefit the
Company and its subsidiaries by enabling the Company to offer to certain present
and future Employees, Directors, and consultants (including sales associates)
stock based incentives in the Company, thereby giving them a stake in the growth
and prosperity of the Company and encouraging the continuance of their services
with the Company or subsidiaries.
1.2 Duration of the Plan. The Plan shall commence on the Effective Date
and shall remain in effect, subject to the right of the Board of Directors to
amend or terminate the Plan at any time pursuant to Article 9 hereof, until all
Shares subject to it shall have been purchased or acquired according to the
Plan's provisions.
ARTICLE 2.
Definitions
Whenever used in the Plan, the following terms shall have the meanings
set forth below, and when the meaning is intended, the initial letter of the
word shall be capitalized:
"Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
the Exchange Act.
"Board" or "Board of Directors" means the Board of Directors of the
Company.
"Change of Control" of the Company shall mean:
(a) The Company is merged or consolidated or reorganized into or with
another corporation or other legal person (an "Acquiror") and as a result of
such merger, consolidation or reorganization less than 75% of the outstanding
voting securities or other capital interests of the surviving, resulting or
acquiring corporation or other legal person are owned in the aggregate by the
stockholders of the Company, directly or indirectly, immediately prior to such
merger, consolidation or reorganization, other than by the Acquiror or any
corporation or other legal person controlling, controlled by or under common
control with the Acquiror;
(b) The Company sells all or substantially all of its business
and/or assets to an Acquiror, of which less than 75% of the outstanding voting
securities or other capital interests are owned in the aggregate by the
stockholders of the Company, directly or indirectly, immediately prior to such
sale, other than by any corporation or other legal person controlling,
controlled by or under common control with the Acquiror; or
(c) During any period of two consecutive years, individuals
who at the beginning of any such period constitute the directors of the Company
cease for any reason to constitute at least a majority thereof unless the
election, or the nomination for election by the Company's stockholders, of each
new director of the Company was approved by a vote of at least two-thirds of
such directors of the Company then still in office who were directors of the
Company at the beginning of any such period.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation thereto.
"Committee" means the Committee as specified in Article 3 herein
appointed by the Board to administer the Plan with respect to grants of Options.
"Common Stock" means the common stock, par value $.001 of the Company.
"Company" means Segmentz, Inc., a Delaware corporation, as well as any
successor to such entity as provided in Article 11 herein.
"Director" means any individual who is a member of the Board of
Directors of the Company.
"Disability" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan. If no long term disability
plan is in place with respect to a Participant, then with respect to that
Participant, Disability shall mean: for the first 24 months of disability, that
the Participant is unable to perform his or her job; thereafter, that the
Participant is unable to perform any and every duty of any gainful occupation
for which the Participant is reasonably suited by training, education or
experience.
"Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.
"Employee" means any employee of the Company or any Subsidiary.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
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"Fair Market Value" shall (i) for purposes of setting any Option Price,
unless otherwise required by any applicable provision of the Code or any
regulations issued thereunder, or unless the Committee otherwise determines,
mean as of the date of grant of the Option, a). the average of the high and low
sales prices of the Common Stock on the applicable stock exchange (as reported
in The Wall Street Journal) on the trading date immediately preceding such date
of grant or the "book value" of such Shares (if the Company is not traded on any
stock exchange, as determined by the Company's regularly employed accountants
whose determination shall be binding or at the discretion of the Board of
directors, by an independent appraiser selected by the Board, in either case
giving due consideration to recent transactions involving such stock, if any,
the Company's net worth and book value, as determined in accordance with
generally accepted accounting procedures; and (ii) for purposes of the valuation
of any Shares delivered in payment of the Option Price upon the exercise of an
Option, for purposes of the valuation of any Shares withheld to pay taxes due in
connection with the exercise of an Option, mean the average of the high and low
sales prices of the Common Stock on the American Stock Exchange (as reported in
The Wall Street Journal) on the date of exercise (or if the date of exercise is
not a trading day, on the trading day next preceding the date of exercise).
"Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
"Insider" shall mean an individual who is, on the relevant date, an
officer, director or more than ten percent (10%) beneficial owner of any class
of the Company's equity securities that is registered pursuant to Section 12 of
the Exchange Act, all as defined under Section 16 of the Exchange Act and the
regulations promulgated thereunder.
"Named Executive Officer" means a Participant who is one of the group
of covered employees as defined in the regulations promulgated under Code
Section 162(m), or any successor statute.
"Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
"Option" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.
"Option Agreement" means writing provided by the Company to each
Participant setting forth the terms and provisions applicable to Options granted
under this Plan. The Participant's acceptance of the terms of the Option
Agreement shall be evidenced by the continued rendering by the Participant of
services on behalf of the Company or its subsidiaries without written objection
before any exercise of the Option. If the Participant objects in writing, the
grant of the Option shall be revoked.
"Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
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"Participant" means an Employee, a Director or a consultant (including
a sales associate) who has outstanding an Option granted under the Plan.
"Performance-Based Exception" means the exception for performance-based
compensation from the tax deductibility limitations of Code Section 162(m).
"Retirement" means the Participant's termination of employment with the
Company or its Subsidiaries on or after the date on which the Participant
becomes eligible to receive normal or early retirement benefits under Segmentz,
Inc. 401(k) Retirement Plan, or such successor plan as may be implemented in the
future. If the Participant is not a participant in the 401(k) Retirement Plan,
then retirement may occur on or after the date the Participant has achieved the
minimum age or combination of age and service with the Company and its
Subsidiaries that would be required to receive an immediate annuity from the
401(k) Retirement Plan if he or she were a participant. Notwithstanding the
foregoing, the Committee may, in its sole discretion, determine that a
Participant has met the criteria for a Retirement termination from the Company.
"Shares" means shares of Common Stock of the Company.
"Subsidiary" means any corporation, partnership, joint venture,
affiliate, or other entity in which the Company is the direct or indirect
beneficial owner of not less than 20% of all issued and outstanding equity
interests.
ARTICLE 3.
Administration
3.1 The Committee. The Plan shall be administered by the Stock Option
Committee of the Board, or by any other Committee appointed by the Board. If and
to the extent that no Committee exists that has the authority to administer the
Plan, the functions of the Committee shall be exercised by the full Board.
Notwithstanding the foregoing, no option shall be granted to any member of the
Committee unless such grant is approved by the unanimous vote of the Board
(which may be by written consent), and with respect to any such Options to be
granted to a member of the Committee, any reference to the Committee in this
Plan shall instead refer to the full Board.
3.2 Authority of the Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees,
Directors and consultants (including sales associates) who shall participate in
the Plan; determine the sizes and types of Options; determine the terms and
conditions of Options in a manner consistent with the Plan; construe and
interpret the Plan and any agreement or instrument entered into under the Plan;
establish, amend, or waive rules and regulations for the Plan's administration;
and (subject to the provisions of Article 9 herein) amend the terms and
conditions of any outstanding Option to the extent such terms and conditions are
within the discretion of the Committee as provided in the Plan. Further, the
Committee shall make all other determinations which may be necessary or
advisable for the administration of the Plan. As permitted by law, the Committee
may delegate the authority granted to it herein.
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3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, Employees, consultants (including sales
associates) Participants, and their estates and beneficiaries.
ARTICLE 4.
Shares Subject to the Plan and Maximum Number of Shares Subject to
Options
4.1 Shares Available for Options. The aggregate number of Shares which
may be issued or used for reference purposes under this Plan or with respect to
which Options may be granted shall not exceed 600,000 Shares (subject to
adjustment as provided in Section 4.3), which may be either authorized and
unissued Shares or Shares held in or acquired for the treasury of the Company.
Upon:
(a) a cancellation, termination, expiration, forfeiture, or
lapse for any reason of any Option; or
(b) payment of an Option Price and/or payment of any taxes
arising upon exercise of an Option with previously acquired Shares or by
withholding Shares which otherwise would be acquired on exercise, then the
number of Shares underlying any such Option which were not issued as a result of
any of the foregoing actions shall again be available for the purposes of
Options thereafter granted under the Plan.
4.2 Individual Participant Limitations. Unless and until the Committee
determines that an Option to a Named Executive Officer shall not be designed to
comply with the Performance-Based Exception, and subject to adjustment as
provided in Section 4.3 herein, the maximum aggregate number of Options that may
be granted in any one fiscal year to a Participant shall be 100,000 or 15% of
the remaining options available for issue at the time of issuance, whichever is
greater.
4.3 Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares available for Options, the
number and class of and/or price of Shares subject to outstanding Options
granted under the Plan and the number of Shares set forth in Sections 4.1 and
4.2, as may be determined to be appropriate and equitable by the Committee, in
its sole discretion, to prevent dilution or enlargement of rights; provided,
however, that the number subject to any Option shall always be a whole number.
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ARTICLE 5.
Eligibility and Participation
5.1 Eligibility. Persons eligible to participate in this Plan include
all officers and other employees of the Company and its Subsidiaries, Directors
and consultants (including Advisory Board Members and sales associates) of the
Company and its Subsidiaries, as determined by the Committee.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, Directors
and consultants (including sales associates), those to whom Options shall be
granted and shall determine the terms, conditions and amount of each Option.
ARTICLE 6.
Granting of Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to one or more Participants in such number, and upon such
terms, and at any time and from time to time as shall be determined by the
Committee. The Committee may grant Nonqualified Stock Options or Incentive Stock
Options. The Committee shall have complete discretion in determining the number
of Options granted to each Participant (subject to Article 4 herein).
6.2 Option Agreement. Each Option grant shall be evidenced by an Option
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Option Agreement with respect to the Option also
shall specify whether the Option is intended to be an ISO within the meaning of
Code Section 422, or an NQSO whose grant is intended not to fall under the
provisions of Code Section 422.
6.3 Option Price. The Committee shall designate the Option Price for
each grant of an Option under this Plan which Option Price shall be at least
equal to one hundred percent (100%) of the Fair Market Value of a Share on the
date the Option is granted, and which Option Price may not be subsequently
changed by the Committee except pursuant to Section 4.3 hereof or to the extent
provided in the Option Agreement.
6.4 Duration of Options. Each Option granted to a Participant shall
expire at such time as the Committee shall determine at the time of grant;
provided, however, that unless otherwise designated by the Committee at the time
of grant, no Option shall be exercisable later than the tenth (10th) anniversary
date of its grant.
6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 Payment. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares. The Option Price upon exercise of
any Option shall be payable to the Company in full either:
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(a) in cash or its equivalent,
(b) by tendering previously acquired Shares having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price, or
(c) by a combination of (a) and (b).
The Committee also may allow cashless exercises as permitted under
Federal Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law. As soon as practicable
after receipt of a written notification of exercise and full payment, the
Company shall deliver to the Participant, in the Participant's name, Share
certificates in an appropriate amount based upon the number of Shares purchased
under the Option(s).
In connection with the exercise of options granted under the Plan, the
Company may make loans to the Participants as the Committee, in its discretion,
may determine. Such loans shall be subject to the following terms and conditions
and such other terms and conditions as the Committee shall determine not
inconsistent with the Plan. Such loans shall bear interest at such rates as the
Committee shall determine from time to time, which rates may be below then
current market rates or may be made without interest. In no event may any such
loan exceed the Fair Market Value, at the date of exercise, of the shares
covered by the Option, or portion thereof, exercised by the Optionee. No loan
shall have an initial term exceeding two years, but any such loan may be
renewable at the discretion of the Committee. When a loan shall have been made,
Shares having a fair market value at least equal to 150 percent of the principal
amount of the loan shall be pledged by the Participant to the Company as
security for payment of the unpaid balance of the loan.
6.7 Restrictions on Share Transferability/Restrictions Applicable Until
the Company is Subject to Federal Reporting Requirements. a) The Committee may
impose such restrictions on any Shares acquired pursuant to the exercise of an
Option granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares, and b) Notwithstanding any other provisions of this Plan, unless
and until the Company has become a reporting company with respect to any class
of its equity securities under the Securities Exchange Act of 1934, as amended:
(1) no option granted under this Plan may be exercised prior to the calendar
month in which that option is scheduled to expire by its terms (without regard
to any provisions for premature termination or cancellation); prior to that
calendar month in which that option is scheduled to expire by its terms, the
Company has the right, exercisable in it discretion, to cancel and purchase any
such option for an amount in excess, if any of the Fair Market Value of the
stock subject to that option over its exercise price on the date the Company
exercises such right.
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6.8 Termination of Employment, Director Relationship or Consulting
Arrangement. Each Option Agreement shall set forth the extent to which the
Participant shall have the right to exercise the Option following termination of
the Participant's employment, service on the Board of Directors, or consulting
arrangement with the Company and/or its Subsidiaries. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Option Agreement entered into with each Participant, need not be uniform among
all Options issued pursuant to the Plan, and may reflect distinctions based on
the reasons for termination of employment, director relationship or consulting
agreement, including, but not limited to, termination of employment for cause or
good reason, or reasons relating to the breach or threatened breach of
restrictive covenants. Subject to Article 8, in the event that a Participant's
Option Agreement does not set forth such termination provisions, the following
termination provisions shall apply:
(a) In the event a Participant's employment, director
relationship or consulting arrangement with the Company and/or its Subsidiaries
is terminated for any reason other than death, Disability or Retirement, all
Options held by the Participant shall expire and all rights to purchase Shares
thereunder shall terminate immediately; provided, however, that notwithstanding
the foregoing, all Options to which the Participant has a vested right
immediately prior to such termination shall be exercisable for the lesser of (i)
30 days following the date of termination or (ii) the expiration date of the
Option.
(b) In the event a Participant's employment, director
relationship or consulting arrangement with the Company and/or its Subsidiaries
is terminated due to death or Disability, all Options shall immediately become
fully vested on the date of termination.
(c) Subject to Article 8, in the event of termination of the
Participant's employment, director relationship or consulting arrangement, due
to death or Disability, all Options in which the Participant has a vested right
upon termination shall be exercisable for a period of one (1) year following
such termination, or until the expiration date of the Option, whichever is
later.
(d) Subject to Article 8, in the event of termination of the
Participant's employment director relationship or consulting arrangement due to
Retirement, all Options in which the Participant has a vested right upon
termination shall be exercisable until the date which is (i) three years
following the date of termination or (ii) the expiration date of the Option,
whichever is earlier.
6.9 Nontransferability of Options.
(a) Incentive Stock Options. No ISO granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, all ISOs
granted to a Participant under the Plan shall be exercisable during his or her
lifetime only by such Participant.
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(b) Nonqualified Stock Options. Except as otherwise provided
in a Participant's Option Agreement, no NQSO granted under this Article 6 may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, except
as otherwise provided in a Participant's Option Agreement, all NQSOs granted to
a Participant under this Article 6 shall be exercisable during his or her
lifetime only by such Participant.
6.10 Company's Right of First Refusal. While and so long as the stock
of the Company has not been publicly traded for at least ninety days, any stock
issued on exercise of any option granted under this Plan shall be subject to the
Company's right of first purchase. By virtue of that right, (a) such stock may
not be transferred during the optionee's lifetime to any person other than
members of the optionee's family, or a trust or partnership for the benefit of
optionee's immediate family, unless such transfer occurs within fifteen days
following the expiration of thirty days after the Company has been given a
written notice which correctly identified the prospective transferee or
transferees, the terms of the transaction and which offered the Company the
opportunity to purchase such stock at the lower of the offering price form such
third party and payable on the same terms or the Common Stock's Fair Market
Value in cash, and such offer was not accepted within thirty days after the
company's receipt of notice; and (b) upon the optionee's death, the Company
shall have the right to purchase all or some of such Common Stock at the Fair
Market Value within nine months of the date of death. This right of first
purchase shall continue to apply to any stock after the transfer during the
optionee's lifetime of that stock to a member of the optionee's immediate family
or to a family trust or partnership as aforesaid, and after any transfer of that
stock with respect to which the Company expressly waived its right of first
purchase without also waiving its right as to any subsequent transactions
thereof, but it shall not apply after a transfer of stock with respect to which
the Company was offered but did not timely exercise its right of first purchase
or more than nine months after the optionee's death. The Company may assign all
or any portion of its right of first purchase to any one or more of its
stockholders, or to a pension or retirement plan or trust for employees of the
Company, who may then exercise the right so assigned. STOCK CERTIFICATES
EVIDENCING STOCK SUBJECT TO THIS RIGHT OF FIRST PURCHASE SHALL BE APPROPRIATELY
LEGENDED TO REFLECT THAT RIGHT.
ARTICLE 7.
Rights of Employees, Directors and Consultants
7.1 Employment or Consulting Arrangement. Nothing in the Plan shall
interfere with or limit in any way the right of the Company to terminate any
Participant's employment or consulting arrangement at any time, nor confer upon
any Participant any right to continue in the employ of or consulting arrangement
with the Company or any Subsidiary, nor interfere with or limit in any way the
right of the Board to remove any Participant who is a Director from service on
the Board at any time in accordance with the provisions of the Company's By-laws
and applicable law.
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For purposes of this Plan, temporary absence from employment because of
illness, vacation, approved leaves of absence, and transfers of employment among
the Company and its Subsidiaries, shall not be considered to terminate
employment or to interrupt continuous employment. Temporary cessation of the
provision of consulting services because of illness, vacation or any other
reason approved in advance by the Company shall not be considered a termination
of the consulting arrangement or an interruption of the continuity thereof.
Conversion of a Participant's employment relationship to a consulting
arrangement or from a consulting arrangement to an employment relationship shall
not result in termination of previously granted Options.
7.2 Participation. No Employee, Director or consultant shall have the
right to be selected to receive an Option under this Plan, or, having been so
selected, to be selected to receive a future Option.
ARTICLE 8.
Change of Control
Upon the occurrence of a Change of Control, unless otherwise
specifically prohibited under applicable laws, or by the rules and regulations
of any governing governmental agencies or national securities exchanges, any and
all Options granted hereunder shall become immediately exercisable, and shall
remain exercisable throughout their entire term.
ARTICLE 9.
Amendment, Modification, and Termination
9.1 Amendment, Modification, and Termination. The Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part, subject to any requirement of stockholder approval imposed by
applicable law, rule or regulation.
9.2 Options Previously Granted. No termination, amendment, or
modification of the Plan shall adversely affect in any material way any Option
previously granted under the Plan, without the written consent of the
Participant holding such Option.
ARTICLE 10.
Withholding
10.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of the Plan.
10.2 Share Withholding. With respect to withholding required upon the
exercise of Options, Participants may elect, subject to the approval of the
Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares having a Fair Market Value on the date the
tax is to be determined equal to the minimum statutory total tax which would be
imposed on the transaction. All such elections shall be irrevocable, made in
writing, signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
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ARTICLE 11.
Successors
All obligations of the Company under the Plan with respect to Options
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect merger,
consolidation, purchase of all or substantially all of the business and/or
assets of the Company or otherwise.
ARTICLE 12.
Shareholder Ratification
This Plan was adopted by the Board of Directors and Shareholders on May
16, 2000.
ARTICLE 13.
Legal Construction
13.1 Gender and Number. Except where otherwise indicated by the
context, any masculine term used herein also shall include the feminine; the
plural shall include the singular and the singular shall include the plural.
13.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan, and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
13.3 Requirements of Law. The granting of Options and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
13.4 Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions of Rule
16b-3 or its successors under the Exchange Act. To the extent any provision of
the Plan or action by the Committee fails to so comply, it shall be deemed null
and void, to the extent permitted by law and deemed advisable by the Committee.
13.5 Governing Law. To the extent not preempted by federal law, the
Plan, and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Delaware.
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