As filed with the Securities and Exchange Commission on February 6, 1997
Registration No. 333-8963
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1 to FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
CONTINENTAL AMERICAN TRANSPORTATION, INC.
(Exact name of Registrant as specified in its Charter )
COLORADO 4213 84-1089599
(State or other jurisdiction (Primary Standard (I.R.S. Employer
of incorporation or organization)Classification Code Number)(Identification No.)
495 Lovers Lane Road
Calhoun, Georgia 30701
(706) 629-8682
(Address, including zip code, and telephone number, including
area code of registrant's principal executive offices)
Erik Bailey, Chief Financial Officer
Continental American Transportation, Inc.
495 Lovers Lane Road
Calhoun, Georgia 30701
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Joseph J. Tomasek, Esq.
75-77 North Bridge Street
Somerville, New Jersey 08876
(908)429-0030
Approximate date of commencement of the
proposed sale to the public:
From time to time after this registration statement becomes
effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following
box: [X]
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a),
may determine.
Calculation of Registration Fee
Title of Each Class Amount to Proposed Proposed Amount of
of Securities to be be Registered Maximum Maximum Registra-
Registered Offering Aggregate tion Fee
Price Per Offering
Share(1) Price
Common Stock (2) 2,368,441 Shares $7.50 $17,763,308 $6,125.00
Common Stock (3) 750,000 Shares $7.50 $ 5,625,000 $1,940.00
(1) Estimated solely for the purposes of calculating the registration fee
pursuant to Rule 457(g)(1), on the basis of the highest price at which
the Warrant(s) may be exercised, i.e., $7.50 per share.
(2) Common Stock reserved for issuance upon exercise of the 13 Warrants,
which have exercise prices ranging from $.25 to $7.50 to purchase 2,068,441
Common Shares which are exercisable from time to time, in whole or in part. The
13 Warrants are not being registered herein and are exercisable from time to
time, in whole or in part, at any time during the period from their date of
issuance through the 12-month period commencing upon the effective date of this
Post-Effective Amendment No. 1 to the Registration Statement filed with the
Securities and Exchange Commission ("SEC") and declared effective on November
29, 1996, with respect to 11 Warrants; from November 28, 1996 through the last
day of the thirty-six (36) month period beginning on the date this
Post-Effective Amendment No. 1 to the Registration Statement is filed with the
SEC with respect to 1 Warrant, and; the exerciseability of one (1) Warrant is
conditional and subject to certain requirements. This number of Common Shares
also includes 300,000 shares of Common Stock reserved for issuance upon the
conversion of 400,000 shares of the Company's 10% Convertible Preferred Shares,
200,000 of which shares have been purchased and 200,000 of which shares the
Company anticipates placing pursuant to Regulation S in the near future. The
200,000 10% Convertible Preferred Shares which have been sold may be converted
into Common Stock after December 5, 1996. The conversion dates for the remaining
200,000 10% Convertible Preferred Shares will commence no sooner than the 41st
day following their sale and placement. See "Convertible Shares" below.
(3) Common Stock to be registered on behalf of the Selling Securityholders,
Herr's Motor Express, Inc., Robert R. Herr, Wayne S. Herr and
Charles B. Prater.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
CROSS REFERENCE SHEET
Pursuant to item 501(4) of Regulation S-B
===============================================================================
Post-Effective Amendment No. 1 Prospectus Caption
to Form S-3 Item or Location
Number and Heading
-------------------------------- -------------------------------------
1. Forepart of the Registration Facing page of Registration Statement;
Statement and Outside Front Cross Reference Sheet; Outside Front
Cover Page of Prospectus Cover Page of Prospectus
2. Inside Front and Outside Back Inside Front Cover Page of Prospectus;
Cover Pages of Prospectus Outside Back Cover Page of Prospectus;
Additional Information; Incorporation
of Certain Documents by Reference
3. Summary Information, Risk Factors Prospectus Summary; Risk Factors
and Ratio of Earnings to
Fixed Charges Prospectus Summary; Use of Proceeds
4. Use of Proceeds Not Applicable
5. Determination of Offering Price Not Applicable
6. Dilution
Prospectus Summary; Selling
7. Selling Securityholders Securityholders and the Selling
Relationship between the Company and
the Selling Securityholders; Plan of
Distribution
8. Plan of Distribution Prospectus Summary; Plan of
Distribution
9. Description of Securities to Prospectus Summary; Description of
be Registered Securities
10. Interests of Named Experts Legal Opinions; Experts
and Counsel
11. Material Changes Additional Information;Incorporation
of certain Documents by Reference;
Prospectus Summary; Selling
Securityholders and Relationship
between the Company and the Selling
Securityholders
12. Incorporation of Certain Additional Information; Incorporation
Information by Reference of certain Documents by Reference
13. Disclosure of Commission Not Applicable
Position on Indemnification
for Securities Act Liabilities
===============================================================================
DATED February 6, 1997
PROSPECTUS
CONTINENTAL AMERICAN TRANSPORTATION, INC.
2,068,441 Common Shares Issuable upon
exercise of 13 Common Stock Purchase Warrants
300,000 Common Shares Issuable upon the conversion
of 400,000 10% Convertible Preferred Shares
750,000 Common Shares
This Prospectus relates to the issuance and the offer and sale by
certain of the securityholders of Continental American Transportation, Inc., a
Colorado Corporation (the "Company" and the "Selling Securityholders",
respectively) of (a) up to 2,068,441 shares of common stock, no par value, (the
"Common Shares") of the Company issuable upon the exercise of thirteen (13)
non-redeemable common stock purchase warrants (the "Warrants"), (b) up to
300,000 Common Shares issuable upon the conversion of 400,000 10% Convertible
Preferred Shares, $1.00 par value per share, of the Company (the "Convertible
Shares"), and (c) 750,000 Common Shares held of record by certain Selling
Securityholders, all of whom are named in the "Selling Securityholders and
Relationship between the Company and the Selling Securityholders" section of
this Prospectus. The Warrants are exercisable from time to time, in whole or in
part, at any time during certain periods from June 28, 1996, through December
10, 1996, their respective grant dates, and terminating twelve (12) months
following the filing date of Post-Effective Amendment No. 1 to the Registration
Statement of which this Prospectus is a part with respect to 11 of the Warrants;
from November 28, 1996 through the last day of the thirty-six (36) month period
beginning on the date of the filing of Post-Effective Amendment No. 1 to the
Registration Statement with respect to one (1) Warrant, and; the exerciseability
of one (1) Warrant is conditional and subject to certain requirements.
The Warrants entitle their holders to purchase between fifteen thousand
(15,000) and six hundred thousand (600,000) Common Shares for prices between
$.25 and $7.50 per share.
The Convertible Shares entitle their holder to convert such shares into
Common Shares of the Company based upon a conversion rate equal to the ratio of
$1.00 (the par value of a Convertible Share) to the amount represented by
seventy-five (75%) percent of the average closing bid price of the Company's
Common Shares for
any two consecutive trading days immediately prior to conversion. The
conversions of the 200,000 Convertible Shares previously sold may commence on
December 5, 1996, and are convertible in tranches of 25,000 shares, with an
aggreggate conversion limitation of 50,000 Convertible Shares per week.
The Common Shares are quoted on the Electronic Bulletin Board of the
National Association of Securities Dealers, Inc. under the symbol "COAW". On
February 4, 1997 the closing bid quotation price of the Common Shares was
$1.287.
The Selling Securityholders directly, through agents designated from
time to time or through dealers or underwriters also to be designated, may sell
the securities offered for sale by the Selling Securityholders pursuant to this
Prospectus (all such securities being referred to herein as the "Securities")
from time to time on terms to be determined at the time of sale. To the extent
required, the specific Securities to be sold, the purchase price, the public
offering price, the names of any such agents, dealers or underwriters and any
applicable commissions or discounts with respect to a particular offer will be
set forth in an accompanying Prospectus supplement. The distribution of the
Securities of the Selling Securityholders may be effected in one or more
transactions that may take place on the over-the-counter market, including
ordinary broker's transactions, privately negotiated transactions or through
sales to one or more dealers for resale of such securities as principals, at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. Usual and customary or
specifically negotiated brokerage fees, commissions or discounts may be paid by
the Selling Securityholders in connection with such sales.
The Selling Securityholders and any broker-dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the Securities may be deemed to be "Underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Act"), and any
commissions received by them and any profit on the resale of the Securities
purchased by them may be deemed to be underwriting commissions or discounts
under the Act. See "Plan of Distribution" for certain indemnification
arrangements.
The purchase of the securities offered by this prospectus involves a
substantial degree of risk. Prospective investors should carefully consider the
factors set forth under "Risk Factors."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is February 6, 1997
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AVAILABLE INFORMATION
The Company has filed its Registration Statement on Form S-3 (together
with all amendments thereto referred to as the "Registration Statement") under
the Act, with the Securities and Exchange Commission (the "Commission") covering
the Common Shares issuable upon the exercise of the Warrants and certain Common
Shares held of record by certain named Selling Securityholders. This Prospectus
does not contain all the information set forth or incorporated by reference in
the Registration Statement and the exhibits and schedules relating thereto,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information with respect to the
Company and the Securities offered by this Prospectus, reference is made to the
Registration Statement and the exhibits and schedules thereto which are on file
at the offices of the Commission and may be obtained upon payment of the fee
prescribed by the Commission, or may be examined without charge at the offices
of the Commission. Statements contained in this Prospectus or in any document
incorporated by reference in this Prospectus as to the contents of any contract
or other documents referred to are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement or such other document, each such
statement being qualified in all respects by such reference.
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files periodic reports, proxy statements and other
information with the Commission. The Registration Statement, as well as such
periodic reports, proxy statements and other information, can be inspected and
copied at the public reference facilities maintained by the commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; Suite 1400, Northwest
Atrium Center, 500 West Madison Street, Chicago, Illinois 60661; and 7 World
Trade Center, New York, New York 10048. Copies of such material can also be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission (File No. 0-18729)
pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal
year ended June 30, 1996, as amended by the Company's Form 10-KSB/A
and Form 10-KSB/A-2;
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2. The Company's Quarterly Report on Form 10-QSB for the
fiscal quarter ended September 30, 1996, as amended by the
Company's Form 10-QSB/A;
3. The Company's Form 8-K filed with the Securities and
Exchange Commission via EDGAR on November 19, 1996, concerning the
commencement of a lawsuit against a former Company shareholder;
4. The Company's Form 8-K filed with the Securities and Exchange
Commission via EDGAR on December 30, 1996, concerning the Company's accounts
receivable lender terminating its contract with the Company's wholly owned
subsidiary, Carpet Transport, Inc.; and
5. The description of Common Stock contained in the Company's Form 10
Registration Statement, filed with the Commission on August 1, 1990.
All documents subsequently filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the termination of this
offering shall be deemed to be incorporated by reference in this Prospectus and
to be a part of this Prospectus from the date of filing thereof. Any statement
contained in a document incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or verbal request of any such
person, a copy of any or all of the documents which have been incorporated
herein by reference, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference into such documents). Requests for
such documents should be directed to Continental American Transportation, Inc.,
495 Lovers Lane Road, Calhoun, Georgia 30701, Attention: Secretary, Telephone
(706)629-8682.
This Prospectus relates to the offer and sale by the Selling
Securityholders of up to 2,068,441 Common Shares issuable upon the exercise of
the 13 Warrants, up to 300,000 Common Shares issuable upon the conversion of the
400,000 Convertible Shares and 750,000 Common Shares held of record by certain
of the Selling Securityholders. Unless otherwise indicated, no effect is given
in this Prospectus to the exercise of stock options to purchase any Common
Shares reserved for issuance under the Company's Stock Option Plan; (the
"Options"). See "Risk Factors-Outstanding Options."
5
The Company will furnish to holders of its Common Shares annual reports
containing audited financial statements. The Company may also distribute
quarterly reports containing unaudited financial information for the first three
quarters of each fiscal year.
6
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and the financial statements which have been incorporated by
reference in this Prospectus. As used in this Prospectus, the "Company" refers
to Continental American
Transportation, Inc.
THE COMPANY
The Company and its subsidiaries are principally engaged in the
business of operating a full, non-union full and less than truckload carrier
fleet and freight brokerage and logistics businesses throughout the Continental
United States. Since its acquisition of Carpet Transport, Inc., effective
February 29, 1996, the Company's primary business is focused on serving the
transportation and distribution needs of the carpet manufacturing industry
located in the southeastern corridor of the United States. The Company utilizes
approximately 733 tractors, 1,381 trailers and 264 refrigerated trailers in its
transportation business. In addition, the Company maintains 18 truck terminals
throughout the Country to facilitate distribution of customer shipments and to
provide regional maintenance service for its revenue equipment. The terminals
located in Baton Rouge, Louisiana, Orlando and Tampa, Florida are Company-owned
while it leases the other 15 terminals.
The Company has approximately 1,035 employees, of which 725 are
drivers; 42 are in the maintenance department(s); and 268 are in the Company's
management and administration. Most of the Company's personnel work at its
corporate headquarters and main operating facility located in Calhoun, Georgia
(the "Calhoun Operations Center") which is situated 70 miles north of the City
of Atlanta. Owned by the Company, the Calhoun Operations Center provides an
aggregate 122 loading bays and includes separate facilities for tractor, trailer
and tire maintenance; two office buildings house the Company's management,
dispatch and clerical personnel and other structures provide designated areas
for driver recruitment and training, doctor's offices and security.
The Company, through its subsidiary, Chase Brokerage, Inc., also
operates a nationwide freight brokerage business located in its Company-rented
Palatka, Florida facility.
The Company is a Colorado corporation organized in 1983 under the
predecessor name MAS Ventures, ltd. The Company's principal executive office is
located at 495 Lovers Lane Road, Calhoun, Georgia 30701, telephone number,
(706)629-8682.
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The Offering
Securities Offered
Hereby.......... 2,068,441 Common Shares issuable upon the
exercise of 13 Warrants. Each Warrant is
exercisable from time to time and in
whole or in part to purchase between
15,000 and 600,000 Common Shares at
prices ranging from $.25 to $7.50 per
share at any time, with respect to 11 of
the Warrants, during the periods from
their respective dates of grant, and
terminating twelve (12) months following
the filing of Post-Effective Amendment
No. 1 to the Registration Statement of
which this Prospectus forms a part; from
November 28, 1996 through the last day of
the thirty-six (36) month period
following the filing of Post-Effective
Amendment No. 1 to the Registration
Statement with respect to 1 Warrant, and;
the exerciseability of one (1) Warrant is
conditional and subject to certain
requirements (the "Warrant Exercise
Period"). See "Description of
Securities." The 13 Warrants are not
being registered hereunder. See
"Description of Securities".
750,000 Common Shares held of record by
certain Selling Securityholders. See
"Selling Securityholders and Relationship
Between the Company and the Selling
Securityholders".
Common Shares Currently
Outstanding........ 5,074,615 shares
Common Shares Issuable
Upon Exercise of the
Warrants...... 2,068,441 shares.
Common Shares Issuable Upon
Conversion of the Convertible
Shares...... Up to 300,000 Common Shares issuable
upon the conversion of 400,000
Convertible Shares. Commencing December
5, 1996, the 200,000 Convertible Shares
already placed and sold are convertible
commencing December 5, 1996, in tranches
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of 25,000 Convertible Shares, at a
conversion rate based upon the ratio of
$1.00 (the par value of the Convertible
Shares) to the amount represented by 75% of
the average closing bid price of the
Company's Common Shares for any two
consecutive trading days immediately prior
to conversion.
Estimated proceeds to
the Company If the holders of the 13 Warrants offered
hereby elect to exercise their Warrants,
the estimated gross proceeds to the
Company would be approximately $3,576,259
if exercised during the Warrant Exercise
Period. The expenses of this offering
are estimated to be approximately
$23,565.
Use of Proceeds...... Proceeds from the exercise of the
Warrants offered hereby will be added to
the Company's working capital and will be
used for general corporate purposes.
There can be no assurance that any
Warrants will be exercised and that any
proceeds will be received by the Company.
All of the proceeds from the sale of
Common Shares offered hereby will be
received by the Selling Securityholders.
The Company will not receive any of the
proceeds from the sale of such Common
Shares.
Selling Securityholders The Warrants and the Common Shares
issuable upon the exercise thereof:
Affililated Services, Inc., Ocean
Marketing Corp., Pyramid Holdings, Inc.,
Universal Solutions, Inc., Global
Financial Group, Inc., Mr. Scott Sieck,
BCR Media, Inc., Meridian Holdings, Inc.,
Mr. Arden Brown, Christie & Company, and
Explorer Financial Services, Inc. The
Convertible Shares and the Common Shares
issuable upon the conversion thereof:
Seatex AG. In addition, Herr's Motor
Express, Inc., Mr. Robert R. Herr, Mr.
Wayne S. Herr and Charles B. Prater are
selling an aggregate of 750,000 Common
Shares. See "Selling Securityholders and
Relationship between the Company and the
Selling Securityholders."
NASD Symbol........ "COAW" - Common Shares
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RISK FACTORS
The purchase of the securities offered hereby involves a substantial
degree of risk. Prospective Investors should carefully consider, among other
matters, the following risks and other factors before making a decision to
purchase the securities being offered hereby.
Recruitment and Retention of Qualified Drivers
Competition to recruit qualified drivers is extremely intense, and the
Company occasionally has experienced difficulty attracting and retaining a
sufficient number of qualified drivers to operate its rapidly expanding fleet.
Although the Company currently retains an adequate number of drivers for its
current business, there is a chronic, industry-wide shortage of qualified
drivers. There can be no assurance that the shortage of qualified drivers will
not affect the Company's operations and profitability in the future. Difficulty
in attracting or retaining qualified drivers would materially adversely affect
the Company's operations and ability to grow.
Business Cycles and Industry-Wide Cost Increases
The Company has little or no control over economic factors such as fuel
prices and taxes, insurance costs, liability claims, interest rate fluctuations,
fluctuation in the resale value of revenue equipment, economic recessions and
customers' shipping demands. Significant increases or rapid fluctuations in fuel
prices, interest rates or increases in insurance costs or liability claims, to
the extent not offset by increases in freight rates, would adversely affect the
Company's operating results, profitability and expansion. Economic recessions or
downturns in customers' business cycles or shipping demands could also have a
materially adverse effect upon the growth and profitability of the Company. If
the resale value of the Company's revenue equipment were to decline, the Company
could be forced to retain some of its equipment longer, with a resulting
increase in operating expenses for maintenance and repairs.
Capital Requirements; Leverage
The Company historically has relied upon debt and operating leases to
finance new revenue equipment, and it has granted its lenders a lien on
substantially all of the Company's assets. If in the future the Company were
unable to borrow sufficient funds, enter into acceptable operating lease
arrangements or raise additional equity, the resulting capital shortage would
adversely affect the Company's growth and profitability. The Company currently
is highly leveraged and has a debt-to-capitalization
10
ratio higher than many of its competitors. As of September 30, 1996, the Company
had a ratio of long-term debt to capitalization of approximately $7.75 to $1.00.
Competition
The trucking industry is extremely competitive and includes regional,
inter-regional and national truckload carriers, none of which dominates the
market. The Company also competes with alternative forms of transportation, such
as railroads, rail-truck intermodel and air-freight intermodal service. This
competition historically has created downward pressure on the truckload
industry's pricing structure. The Company competes with a number of trucking
companies that have greater financial resources, operate more revenue equipment
and transport more freight than the Company.
Dependence on Key Personnel
The Company's success depends in large part upon a number of key
management personnel. The loss of the services of one or more of its management
personnel, in particular Timothy Holstein, the Company's President and Chief
Executive Officer, or Erik Bailey, the Company's Chief Financial Officer, could
have a material adverse effect on the Company.
Government Regulation
Truckload carriers are subject to regulation by various federal and state
agencies, including the Interstate Commerce Commission ("ICC") and the United
States Department of Transportation ("DOT"). These regulatory authorities
exercise broad powers, generally governing activities such as authorization to
engage in motor carrier operations, operational safety, accounting systems,
rates and charges, certain mergers, consolidations and acquisitions as well as
financial reporting. The Company is also subject to regulations promulgated by
the Environmental Protection Agency ("EPA") and similar state agencies with
respect to fuel storage tanks. Although the Company believes that its operations
are in material compliance with current laws and regulations, there can be no
assurance that current regulatory requirements will not change, that currently
unforeseen environmental incidents will not occur or that contamination or past
noncompliance with environmental laws, will not be discovered on properties on
which the Company has operated.
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Self-Insured Claims
The Company maintains liability insurance policies on its fleet
equipment for personal injury and prooperty damage up to a maximum limit of
$1,000,000 per occurrence with a $5,000 deductible. The Company is self-insured
for workmen's compensation claims to a maximum of $250,000 per occurrence. If
the Company were to experience numerous claims in significant amounts for which
it is self-insured, or if significant increases in insurance costs should occur
and could not be offset by higher freight rates, the Company's results of
operations could be materially adversely affected.
Proceeds of the Offering
The Company will not receive any of the proceeds of the offering of
Securities by the Selling Securityholders. Only the proceeds from the exercise
of the Warrants will be received by the Company. There can be no assurance that
any Warrants will be exercised and that any proceeds will be received by the
Company.
Dividends
The Company has not paid and does not anticipate paying cash dividends
on its Common Shares in the foreseeable future, but it intends to retain its
earnings, if any, for use in its business.
Control of Company to Remain with Existing Stockholders
Timothy Holstein, Erik Bailey and Brian Henninger, the officers and
directors of the Company, collectively own 1,305,418 Company Common Shares,
representing approximately 26% of all the issued and outstanding Company Common
Shares as of February 4, 1997. Assuming they were to act collectively, Messrs.
Holstein, Bailey and Henninger would likely be able to continue to determine the
affairs and policies of the Company.
Shares Eligible for Future Sale
With the exception of the 519,897 Common Shares held by Erik Bailey,
the 739,521 Common Shares held by Timothy Holstein, and the 46,300 Common Shares
held by director and officer Brian Henninger whose total includes options to
purchase 36,000 Common Shares, and approximately 975,358 shares issued in
certain transactions, which are "restricted securities" as that term is defined
under Rule 144 promulgated under the Act, all of the currently outstanding
Common Shares are now eligible or shortly will be eligible for sale in the
public market. The Company is unable to predict the effect that sales made under
Rule 144 or otherwise may have upon the then prevailing market prices of the
Common Shares or Warrants, although such sales may depress such prices. Mr. John
Christie, a former officer and director of the Company, owns approximately
50,000 Common Shares which he will be able to sell on the open market
12
under Rule 144 without volume limitations when and if he is deemed a
"non-affiliate" of the Company as such term is defined under Rule 144: the
Company cannot predict the effect on the then prevailing market prices of the
Common Shares or Warrants if this invididual proceeds to sell his shares.
Outstanding Options and Convertible Securities
The Company has granted options to purchase 36,000 Common Shares
representing the remaining balance of stock options available under the
Company's 1994 Stock Incentive Plan. The Company has adopted and shareholders
approved the Company's 1996 Stock Option Plan pursuant to which the Company has
reserved 500,000 shares of its Common Stock for issuance pursuant to options
that may be granted thereunder: the Company has not granted any stock options
under this Plan as of the date hereof. In addition, the Company has
approximately $1,500,000 in aggregate principal of its 7% Convertible Debentures
outstanding which may be converted into Company Common Shares at the conversion
price equal to the lesser of (i) the average closing bid price of the Common
Shares as reported for the 5 consecutive trading days immediately prior to
August 19, 1996 or (ii) 78% of the average closing bid price of the Common
Shares as reported for the 5 consecutive trading days immediately preceding
conversion. Also, the Company has approximately $1,750,000 in aggregate
principal amount of its 10% Convertible Promissory Notes outstanding which may
be converted into Company Common Shares at the conversion price equal to the
lesser of (i) 80% of the market price of the Company's Common Stock on the date
of conversion, or (ii) 120% of the market price as of the date of the issuance
of the 10% Convertible Promissory Notes. If the foregoing options are exercised,
and/or the foregoing convertible securities and/or notes are converted, the
percentage of Common Shares held by the stockholders will be reduced
accordingly.
Penny Stock Regulations.
If the Common Stock becomes subject to the existing or proposed
regulations on penny stocks, the market liquidity for the Common Stock could be
materially adversely affected by limiting the ability of broker-dealers to sell
the Common Stock and the ability of stockholders to sell their Common Stock in
the secondary market. The Commission recently has adopted rules that regulate
broker-dealer practices in connection with transactions in "penny stocks." Penny
stocks generally are equity securities with a price of less than $5.00 (other
than securities registered on certain national securities exchanges or quoted on
Nasdaq, provided that current price and volume information with respect to
transactions in such securities is provided by the exchange or system). The
penny stock rules require a broker-dealer, prior to a transaction in a penny
stock not otherwise exempt from the rules, to deliver a standardized risk
disclosure document prepared by the issuer that
13
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction, and monthly account
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
such rules, the broker-dealer must make a special written determination that the
penny stock is a suitable investment for the customer and receive the customer's
written agreement to the transaction. These disclosure requirements may have the
effect of reducing the level of trading activity in the secondary market for a
security that becomes subject to the penny stock rules. If the Common Stock
becomes subject to the penny stock rules, purchasers in this offering may find
it more difficult to sell such Common Stock.
Securities and Exchange Commission Investigation.
The Company has learned that a former shareholder of the Company filed
a complaint with the Securities and Exchange Commission alleging that the
Company illegally canceled his stock certificate being held in escrow. Following
a thorough internal audit, the Company has responded to this complaint alleging,
among other things, that this individual made a claim to these shares without
providing any proof of consideration or payment for them. On the basis of this
complaint, the Securities and Exchange Commission is conducting a preliminary
investigation into the Company's past stock trading activities (the "Denman
Investigation"). Company management is fully cooperating with this preliminary
investigation and intends to vigorously defend against this action. Moreover,
the Company has commenced a lawsuit against this former shareholder in federal
district court seeking a declaratory judgment that its actions in cancelling
said former shareholder's shares were legal and justified.
The Registration Statement of Which This Prospectus Forms A Part
Has Not Been Reviewed by the Securities and Exchange Commission
Due to the Denman Investigation, the Division of Corporation Finance of the
Securities and Exchange Commission (the "Commission") has declined to review the
Registration Statement of which this Prospectus forms a part. The Commission,
however, has permitted the Company to request that the Registration Statement be
declared effective on condition that the Company acknowledge full responsibility
for the adequacy and accuracy of the disclosures contained in the Registration
Statement and further acknowledge to
14
the Commission that in the event the Commission declares the Registration
Statement effective, the Company recognizes that such Commission action does not
foreclose the Commission from taking any action with respect to the Registration
Statement and that the Company will not assert such a Commission declaration or
order of effectiveness as a defense in any future proceeding that may be brought
by the Commission. The Company sent to the Commission the above described
acknowledgments and requested the Commission to declare the Registration
Statement of which this Prospectus forms a part effective. In reply, the
Commission declared the Registration Statement effective on November 29, 1996.
Accordingly, the public and potential offerees should be aware that the
Registration Statement of which this Prospectus forms a part has not been
reviewed by the Commission or amended as a result of any Commission comments
made normally during such an Commission review. Generally, Commission review of
filings such as the Company's Registration Statement incorporate procedures
which serve to better protect potential investors by requiring full and complete
disclosure of all material facts.
USE OF PROCEEDS
If the holders of the 13 Warrants offered hereby elect to exercise
their Warrants, the estimated gross proceeds to the Company would be
approximately $3,576,259. The expenses of this offering are estimated to be
approximately $23,565.00.
Proceeds from the exercise of Warrants will be added to the Company's
working capital and will be used to fund the continued growth of the Company and
for general corporate purposes. There can be no assurance that any Warrants will
be exercised and that any proceeds will be received by the Company.
All of the proceeds from the sale of Common Shares offered hereby will
be received by the Selling Securityholders. The Company will not receive any of
the proceeds from the sale of such Common Shares.
COMMON SHARE PRICE RANGE
The Common Shares are traded on the Electronic Bulletin Board
of the National Association of Securities Dealers, Inc. under the
trading symbol "COAW".
The following table sets forth the high and low bid prices for the
Common Shares for the period which commenced June 19, 1995, the date the
Company's Common Shares were qualified for trading on the Electronic Bulletin
Board, for the fiscal year end date, June 30, 1995, and for the quarters ended
September 30, 1995, December 31, 1995, March 31, 1996, June 30, 1996, September
30, 1996 and
15
December 31, 1996, based on transaction data as reported by NASD:
Common Shares
Fiscal Year Ended High Low
---- ---
June 30, 1995 $ .375 $ .25
September 30, 1995 $12.14 $ .97
December 31, 1995 $ 6.55 $1.58
March 31, 1996 $ 3.87 $2.49
June 30, 1996 $ 4.75 $2.25
September 30, 1996 $ 3.44 $3.31
December 31, 1996 $ 1.62 $1.12
-----
The closing bid quotation price of the Common Shares on February 4,
1997 was $1.287.
As of February 4, 1997, there were 298 holders of record of the Common
Shares. The Company believes that there were approximately 818 beneficial
shareholders of the Common Shares as of such date.
The Company has paid no cash dividends on its Common Shares since its
inception. Any future declaration of cash dividends will depend upon the
Company's earnings, financial condition, capital requirements and other relevant
factors. The Company does not intend to pay cash dividends in the foreseeable
future, but intends to retain its earnings, if any, for use in its business.
SELLING SECURITYHOLDERS AND RELATIONSHIP BETWEEN THE COMPANY AND
THE SELLING SECURITYHOLDERS
Because the Selling Securityholders may offer all or some part of the
Securities pursuant to this Prospectus and because this offering is not being
underwritten on a firm commitment basis, no estimate can be given as to the
amount of securities to be offered for sale at any given time by the Selling
Securityholders upon termination of this offering. See "Plan of Distribution."
To the extent legally required, the specific amount of Securities to be sold by
the Selling Securityholders in connection with a particular offer will be set
forth in an accompanying supplement to this Prospectus.
The following table sets forth the amount and type of Securities
offered by this Prospectus which are owned by such Selling Securityholders.
16
===============================================================================
WARRANTS COMMON
(and Common Shares SHARES
issuable upon
exercise ofsuch
NAME Warrants)
Affiliated Services, Inc. 1 75,000
Ocean Marketing Corp. 1 75,000
Pyramid Holdings, Inc. 1 75,000
Universal Solutions, Inc. 1 75,000
Global Financial Group, Inc. 1 238,441
Scott Sieck 1 350,000
BCR Media, Inc. 1 300,000
Meridian Holdings, Inc. 1 100,000
Arden Brown 3 105,000
Christie & Company 1 75,000
Explorer Financial Services, Inc 1 600,000
Seatex AG(1) 1 300,000
Wayne S. Herr 0 50,000
Robert R. Herr 0 50,000
Herr's Motor Express, Inc. 0 150,000
Charles B. Prater 0 500,000
===============================================================================
(1) Seatex AG has purchased 200,000 shares of the total series of 400,000
shares of the Company's 10% Convertible Preferred Stock (the
"Convertible Shares"). The Company is registering a total of 300,000
common shares to cover the conversions of all 400,000 Convertible
Shares in anticipation that Seatex AG, a Selling Securityholder, will
purchase the remaining authorized 200,000 Convertible Shares in the
near future.
17
Based upon information provided by the Selling Securityholders and
except with respect to the 200,000 Convertible Shares yet to be placed with
Seatex AG and the approximate 150,000 Common Shares being registered to
accommodate future conversions thereof, each Selling Securityholder owns that
number of Common Shares or Warrants, as appropriate, indicated in the table
above. The historical relationship between the Selling Securityholders and the
Company is described below.
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 20,000,000 Common Shares, no par
value, of which 5,074,615 shares were issued and outstanding as of February 4,
1997.
After this offering, assuming the exercise of all 13 Warrants and
conversion of all the Convertible Shares, there will be 7,443,056 Common Shares
outstanding.
Holders of Common Shares are entitled to dividends when, as and if
declared by the Board of Directors out of funds legally available therefor.
However, the Company does not anticipate paying dividends on its Common Shares
in the foreseeable future, but intends to retain its earnings, if any, for use
in its business.
Holders of Common Shares are entitled to cast one vote for each share
held at all stockholder meetings for all purposes, including the election of
directors. The holders of a majority of the Common Shares issued and outstanding
and entitled to vote,constitute a quorum at all meetings of stockholders and the
vote of the holders of a majority of Common Shares present at such a meeting
will decide any question brought before each meeting, except for certain actions
such as amendments to the Company's certificate of incorporation, mergers or
dissolutions which require the vote of the holders of a majority of the
outstanding Common Shares.
Upon liquidation or dissolution, the holder of each outstanding Common
Share will be entitled to share equally in the assets of the Company legally
available for distribution to such stockholder after the payment of all debts
and other liabilities and after distribution to preferred stockholders legally
entitled thereto.
No holder of Common Shares has a preemptive or preferential
right to purchase or subscribe for any part of any unissued or any
additional authorized stock or any securities of the Company
convertible into shares of its stock. The outstanding Common
18
Shares are, and the shares offered hereby will be fully paid and nonassessable.
Warrants
Ten (10) of the Warrants were issued in consideration of services
rendered to the Company during its fiscal year ending June 30, 1997, pursuant to
consulting agreements by and between the Company and the Selling
Securityholders, one (1) Warrant pursuant to the terms of an agreement by and
between the Company and a Selling Securityholder, dated February 22, 1996 and
two (2) of the Warrants were issued to a Selling Securityholder for his services
rendered to the Company in a capital-raise transaction; the 750,000 Company
Common Shares are being registered herein pursuant to the terms of two
agreements, dated February 29, 1996 and August 22, 1995, respectively, by and
between the Company and the Selling Securityholders. For a complete description
of the terms of these Agreements, reference is made to Exhibit 4(d) to the
Registration Statement of which this Prospectus forms a part. See "Additional
Information" and "Incorporation of Certain Documents by Reference." Generally,
each Warrant entitles the registered holder to purchase from the Company from
between 15,000 to 600,000 Common Shares at exercise prices of between $.25 and
$7.50 per share during the period commencing upon their respective grant dates,
and continuing for the twelve month period following the filing of the
Post-Effective Amendment No. 1 to the Registration Statement of which this
Prospectus forms a part with respect to 11 of the Warrants, from November 28,
1996 through the last day of the thirty-six (36) month period beginning on the
filing of Post-Effective Amendment No. 1 to the Registration Statement of which
this Prospectus forms a part for 1 Warrant, and; the exerciseability of one (1)
Warrant is conditional and subject to certain requirements.
Convertible Shares
The Company authorized the issuance of up to 400,000 shares of 10%
Convertible Preferred Stock, par value $1.00 per share (the "Convertible
Shares"), in preparation of the placement of the Convertible Shares with Seatex
AG, a Swiss based corporation, pursuant to the exemption from the registration
requirements of the Securities Act of 1933, as amended, provided by Regulation S
promulgated thereunder. On October 25, 1996, Seatex AG purchased 200,000
Convertible Shares which are convertible commencing December 5, 1996 into
Company Common Shares in tranches of 25,000 shares at a conversion rate based
upon the ratio of $1.00 (the par value of the Convertible Shares) to the amount
equal to seventy-five (75%) percent of the average closing bid price of the
Common Shares of the Company over the two (2) consecutive trading days prior to
conversion. No more than 50,000 Convertible Shares may be converted during any
seven day period. For example, if the average closing bid price of the Company's
Common Shares over the two (2) consecutive trading days prior to conversion is
$2.00, then 25,000
19
Convertible Shares would be convertible into 16,666 Common Shares. The Company
is registering 150,000 Common Shares to accommodate the conversion of the
200,000 Convertible Shares already placed with Seatex AG; the Company is
registering an additional 150,000 Common Shares to accommodate the conversion of
the remaining 200,000 Convertible Shares which it anticipates placing also with
Seatex AG in the near future.
Directors' Liability
As authorized by the Colorado Corporation Law (the "CCL"), the
Company's Articles of Incorporation (the "Company Certificate") provides that no
director or officer of the Company shall be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a director
except in the event such director or officer is adjudged in the subject action,
suit or proceeding to be liable for (i) gross negligence (ii) or willful
misconduct. The effect of the provisions in the Company Certificate is to
eliminate the rights of the Company and its stockholders (through stockholders'
derivative suits on behalf of the Company) to recover monetary damages against a
director for breach of the fiduciary duty of care as a director except in the
situations described in clauses (i) and (ii) above. This provision does not
limit nor eliminate the rights of the Company or of any stockholder to seek
non-monetary relief such as an injunction or rescission in the event of a breach
of director's duty of care.
Transfer Agent and Registrar
The transfer agent and registrar for the Common Shares and Warrants is
United Stock Transfer, located at 13275 East Fremont
Place, Suite 302, Englewood, Colorado 80112.
PLAN OF DISTRIBUTION
The Company
Thirteen (13) Warrants were issued by the Company to the Selling
Securityholders between June 28, 1996 and December 10, 1996, respectively.
Between 15,000 and 600,000 Common Shares are issuable by the Company upon the
exercise of each of the 13 Warrants for an aggregate of 2,068,441 Common Shares.
On October 25, 1996, 200,000 Convertible Shares were sold by the Company to
Seatex AG and the Company is registering 150,000 Common Shares to accommodate
the conversions anticipated which may commence on December 5, 1996. See "The
Convertible Shares" above. The Company is registering an additional 150,000
Common Shares to accommodate the future conversions of the remaining and unsold
200,000 Convertible Shares which the Company anticipates placing also with
Seatex AG in the near future. No persons have been engaged to solicit or will be
compensated for soliciting, the exercise of the Warrants, or the conversion of
the Convertible Shares.
20
The Selling Securityholders
Any or all of the Securities may be sold from time to time to
purchasers directly by the Selling Securityholders. Alternatively, the Selling
Securityholders may from time to time offer the Securities through underwriters,
dealers or agents who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Securityholders and/or
the purchasers of Securities for whom they may act as agents. The Selling
Securityholders and any such underwriters, dealers or agents that participate in
the distribution of Securities may be deemed to be underwriters under the Act,
and any profit on the sale of the Securities by them and any discounts,
commissions or concessions received by them may be deemed to be underwriting
discounts and commissions under the Act. The Securities may be sold from time to
time in one or more transactions at a fixed offering price, which may be
changed, or at varying prices determined at the time of sale or at negotiated
prices. The distribution of securities by the Selling Securityholders may be
effected in one or more transactions that may take place on the over-the-counter
market, including ordinary broker's transactions, at privately-negotiated
prices. Usual and customary or specifically negotiated brokerage fees, discounts
and commissions may be paid by the Selling Securityholders in connection with
such sales of securities.
At the time a particular offer of Securities is made, to the extent
required, a supplement to this Prospectus will be distributed (or, if required,
a post-effective amendment to the Registration Statement of which this
Prospectus is a part will be filed) which will identify and set forth the
aggregate amount of Securities being offered and the terms of the offering,
including the name or names of any underwriters, dealers or agents, the purchase
price paid by any underwriter for Securities purchased from the Selling
Securityholders, any discounts, commissions and other items constituting
compensation from the Selling Securityholders and/or the Company and any
discounts, commissions or concessions allowed or disallowed or paid to dealers,
including the proposed selling price to the public. In addition, an underwritten
offering will require clearance by the National Association of Securities
Dealers of the underwriter's compensation arrangements. The Company will not
receive any of the proceeds from the sale by the Selling Securityholders of the
Securities offered hereby. All of the filing fees and or the expenses of this
Registration Statement will be borne in full by the Company, other than any fees
or expenses of counsel to the Selling Securityholders and underwriting fees,
discounts and commissions relating to this offering.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Securities may not simultaneously engage
in market making activities with respect to the Securities for a period of two
business days prior to the
21
commencement of such distribution. In addition and without limiting the
foregoing, the Selling Securityholders will be subject to applicable provisions
of the Exchange Act and the rules and regulations thereunder, including without
limitation Rules 10b-6 and 10b-7, which provisions may limit the timing of
purchases and sales of the Securities by the Selling Securityholders.
In order to comply with certain states' securities laws, if applicable,
the Securities will be sold in such jurisdiction only through registered or
licensed brokers or dealers. In certain states the Securities may not be sold
unless the Securities have been registered or qualified for sale in such state,
or unless an exemption from registration or qualification is available and is
obtained.
LEGAL OPINIONS
The legality of the Warrants and the Common Shares issuable upon
exercise of the Warrants has been passed upon for the Company by Joseph J.
Tomasek, Esq., Somerville, New Jersey.
EXPERTS
The financial statements incorporated in this Prospectus by reference
from the Company's Annual Report on Form 10-KSB for the year ended June 30,
1996, as amended by the Company's Form 10-KSB/A and Form 10-KSB/A-2, have been
audited by Rosenberg Rich Baker Berman & Company, independent auditors, as
stated in their reports, which are incorporated hereby by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
22
No dealer, salesman or any other person has been authorized to give any
information or to make an representation other than those contained in this
Prospectus, and, if given or made, such information or representations must not
be relied upon as having been authorized by the Company or the Underwriter. This
Prospectus does not constitute an offer to sell or a solicitation or an offer to
buy, by any person in any jurisdiction in which it is unlawful for such person
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any offer, solicitation or sale made hereunder shall, under any circumstances,
create any implication that the information herein is correct as of any time
subsequent to the date of this Prospectus.
TABLE OF CONTENTS
Page
Available Information ............ 4
Incorporation of Certain Documents
by Reference.................... 4
Prospectus Summary................ 7
Risk Factors...................... 10
Use of Proceeds................... 15
Common Share Price Range.......... 15
Selling Securityholders and
Relationship between the
Company and the Selling
Securityholders.................. 16
Description of Securities.......... 18
Plan of Distribution............... 20
Legal Opinions..................... 22
Experts............................ 22
CONTINENTAL AMERICAN
TRANSPORTATION, INC.
2,068,441 Common Shares issuable
Upon Exercise of 16 Common
P R O S P E C T U S
February 6, 1997
23
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses relative to this
offering, all of which are to be borne by the Registrant. Expenses
other than filing fees are estimated.
Filing Fee - Securities and Exchange Commission . $ 8,065.00
Filing Fee - NASD . . . . . . . . . . . . . . . . $ 0
Accounting Fees and Expenses: . . . . . . . . . . $ 1,000.00
Legal Fees and Expenses . . . . . . . . . . . . . $ 7,500.00
Printing Fees . . . . . . . . . . . . . . . . . . $ 2,000.00
Miscellaneous . . . . . . . . . . . . . . . . . . $ 5,000.00
----------
Total Expenses . . . . . . . . . . . . . . . . . $23,565.00
==========
Item 15. Indemnification of Directors and Officers
As authorized by the Colorado Corporation law (the "CCL"), the
Company's Articles of Incorporation (the "Company Certificate") provides that no
director or officer of the Company shall be personally liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a director
except in the event such director or officer is adjudged in the subject action,
suit or proceeding to be liable for (i) gross negligence (ii) or willful
misconduct. The effect of the provisions in the Company Certificate is to
eliminate the rights of the Company and its stockholders (through stockholders'
derivative suits on behalf of the Company) to recover monetary damages against a
director for breach of the fiduciary duty of care as a director except in the
situations described in clauses (i) and (ii) above. This provision does not
limit nor eliminate the rights of the Company or of any stockholder to seek
non-monetary relief such as an injunction or rescission in the event of a breach
of director's duty of care.
24
Item 16. Exhibits Page
4(a)* Specimen of Common Stock Certificate.
4(b)* Specimen of Warrant certificate.
4(d)(1)* Agreement, dated as of February 22, 1996,
by and between Continental American
Transportation, Inc. and Meridian Holdings,
Inc.; Agreement to Modify Purchase
Agreements and Security Agreement, dated
August 22, 1995, by and between Continental
American Transportation, Inc., Herr's Motor
Express, Inc., Robert R. Herr, Wayne S. Herr,
Timothy Holstein and Erik Bailey.
4(d)(2) Consulting Agreements, dated December 10, 28
1996, by and between Continental American
Transportation, Inc. and Universal
Solutions, Inc., Pyramid Holdings, Inc.,
Affiliated Services, Inc., Ocean Marketing
Corp., Explorer Financial Services, Inc.,
Christie & Company, Global Financial
Group, Inc., Mr. Arden Brown, Mr. Scott
Sieck and BCR Media, Inc.
4(e)* Specimen of 10% Convertible Preferred Stock
Certificate. 107
5 Opinion of Joseph J. Tomasek, Esq. 109
23(a) Consent of Joseph J. Tomasek, Esq.
(contained in the opinion of counsel
filed as Exhibit 5 hereto).
23(b) Consent of Rosenberg Rich Baker
Berman & Company. 40
24 Power of Attorney (included in Part II
of this Registration Statement).
* Exhibits to the Company's Registration Statement on Form S-3 and Pre-Effective
Amendment No. 1 filed with the Securities and Exchange Commission on July 26,
1996 and November 25, 1996, respectively, incorporated herein by reference.
Item 17. Undertakings
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
25
(i) To include any Prospectus required by
section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the Prospectus any facts or
events which, individually or together, represent a fundamental
change in the information in the Registration Statement; and
(iii) To include any additional or changed
material information on the plan of distribution not previously disclosed in the
Registration Statement or any material change to such information in the
Registration Statement.
Provided, however, that paragraphs (1)(i) and 1(ii) do not
apply if the Registration Statement is on Form S-3, and the information required
to be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
2. That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
3. To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
4. That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
5. Insofar as indemnification for liabilities arising under
the Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
persons of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form S-3 and has duly caused this
Post-Effective Amendment No. 1 to such Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Calhoun,
State of Georgia, on this 6th day of February, 1997.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By: s/Timothy Holstein
Timothy Holstein
Chairman of the Board,
President and Chief Executive officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Timothy Holstein, Erik Bailey and Brian Henninger and each of them, his
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, and hereby grants to such attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents of any of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to
the requirements of the Securities Act of 1933, this Registration Statement has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated.
Title Date
s/Timothy Holstein
Timothy Holstein Chairman of the Board,
President, Chief Executive
Officer and Director February 6, 1997
s/Erik Bailey
Erik Bailey Vice President,
Chief Financial Officer
and Director February 6, 1997
s/Brian Henninger
Brian Henninger Secretary and
Director February 6, 1997
catfms-3.PE1
27
CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and UNIVERSAL
SOLUTIONS, INC., 7457 Aloma Avenue, Suite 302, Winter Park, Florida 32792, or
its assignees ("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofor issued and delivered to the
Consultant during July, 1996, a certain common stock purchase warrant, the terms
and conditions of which are more particularly described in Section 3.1 below
(the "Warrant"), and which Warrant was intended to be issued in connection with
the execution and delivery of, and in consideration for Consultant entering
into, this Consulting Agreement and which Warrant was erroneously delivered to
Consultant prior to the execution and delivery of this Consulting Agreement; and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memoralize the consideration, i.e., Consultant's
services rendered during the Company's fiscal year ending June 30, 1997, in this
Agreement and for which the Warrant was originally issued and delivered to the
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to
28
and consulting with the Company's management concerning marketing surveys,
investor profile information, methods of expanding investor support and
increasing investor awareness of the Company and its products and/or services.
Consultant will also provide additional services to the Company, including
assistance in broker relations, assisting in the preparation and format of due
diligence meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant; Consultant hereby acknowledges
that he has received a Common Stock Purchase Warrant, dated June 28, 1996,
delivered to Consultant in July, 1996, in the form attached hereto ("the
Warrant") to purchase up to a total of eighty thousand (80,000) shares of the
Company's common stock (the "Warrant Shares") at the following exercise prices:
(i) 40,000 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 40,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share.
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
29
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement
on November 29, 1996.
3.1.(b) The Warrant was issued to Consultant upon the signing of this
Agreement. In the event this Agreement is terminated for any reason whatsoever,
the Warrant referred to herein shall remain in full force and effect with
respect to any Warrant Shares which were exercised or which remain exercisable
under the Warrant and Consultant shall have the right to the retention of the
Warrant and the Warrant Shares in consideration of goods provided and for
services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall
30
not offer to sell or sell any such Warrant Shares until a post-effective
amendment to the Form S-3, with a copy of this Consulting Agreement attached as
an exhibit thereto, has been filed with the SEC and become effective. In
addition, the Company will undertake to comply with the various states
securities laws and regulations with respect to the registration of the Warrant
Shares referred to herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
31
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Consultant or any such other person
for any legal or other expenses reasonably incurred by Consultant or any such
other person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the registration
statement, any preliminary prospectus,
32
the prospectus, or any such amendment or supplement, made in reliance upon and
in conformity with written information furnished to the Company by Consultant
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs
33
of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
34
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By s/Timothy Holstein
Timothy Holstein
UNIVERSAL SOLUTIONS, INC.
By s/Charles S. Arnold
Charles S. Arnold, President
catwarnt.unv12/20/96
35
CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and PYRAMID HOLDINGS,
INC., 1049 Corkwood Drive, Oviedo, Florida 32765, or its assignees
("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofor issued and delivered to the
Consultant during July, 1996, a certain common stock purchase warrant, the terms
and conditions of which are more particularly described in Section 3.1 below
(the "Warrant"), and which Warrant was intended to be issued in connection with
the execution and delivery of, and in consideration for Consultant entering
into, this Consulting Agreement and which Warrant was erroneously delivered to
Consultant prior to the execution and delivery of this Consulting Agreement; and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memoralize the consideration, i.e., Consultant's
services rendered during the Company's fiscal year ending June 30, 1997, in this
Agreement and for which the Warrant was originally issued and delivered to the
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to
36
and consulting with the Company's management concerning marketing surveys,
investor profile information, methods of expanding investor support and
increasing investor awareness of the Company and its products and/or services.
Consultant will also provide additional services to the Company, including
assistance in broker relations, assisting in the preparation and format of due
diligence meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant; Consultant hereby acknowledges
that he has received a Common Stock Purchase Warrant, dated June 28, 1996,
delivered to Consultant in July, 1996, in the form attached hereto ("the
Warrant") to purchase up to a total of seventy five thousand (75,000) shares of
the Company's common stock (the "Warrant Shares") at the following exercise
prices:
(i) 15,000 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 60,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share.
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
37
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement
on November 29, 1996.
3.1.(b) The Warrant was issued to Consultant upon the signing of this
Agreement. In the event this Agreement is terminated for any reason whatsoever,
the Warrant referred to herein shall remain in full force and effect with
respect to any Warrant Shares which were exercised or which remain exercisable
under the Warrant and Consultant shall have the right to the retention of the
Warrant and the Warrant Shares in consideration of goods provided and for
services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall
38
not offer to sell or sell any such Warrant Shares until a post-effective
amendment to the Form S-3, with a copy of this Consulting Agreement attached as
an exhibit thereto, has been filed with the SEC and become effective. In
addition, the Company will undertake to comply with the various states
securities laws and regulations with respect to the registration of the Warrant
Shares referred to herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
39
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Consultant or any such other person
for any legal or other expenses reasonably incurred by Consultant or any such
other person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the registration
statement, any preliminary prospectus,
40
the prospectus, or any such amendment or supplement, made in reliance upon and
in conformity with written information furnished to the Company by Consultant
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs
41
of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
42
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By s/Timothy Holstein
Timothy Holstein
PYRAMID HOLDINGS, INC.
By s/Kent T. Allen
Kent T. Allen, President
43
CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and AFFILIATED
SERVICES, INC., Rt. 1 Box 242, 360 Speaks Road, Advance, North Carolina 27006,
or its assignees ("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofor issued and delivered to the
Consultant during July, 1996, a certain common stock purchase warrant, the terms
and conditions of which are more particularly described in Section 3.1 below
(the "Warrant"), and which Warrant was intended to be issued in connection with
the execution and delivery of, and in consideration for Consultant entering
into, this Consulting Agreement and which Warrant was erroneously delivered to
Consultant prior to the execution and delivery of this Consulting Agreement; and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memoralize the consideration, i.e., Consultant's
services rendered during the Company's fiscal year ending June 30, 1997, in this
Agreement and for which the Warrant was originally issued and delivered to the
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to
44
and consulting with the Company's management concerning marketing surveys,
investor profile information, methods of expanding investor support and
increasing investor awareness of the Company and its products and/or services.
Consultant will also provide additional services to the Company, including
assistance in broker relations, assisting in the preparation and format of due
diligence meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant; Consultant hereby acknowledges
that he has received a Common Stock Purchase Warrant, dated June 28, 1996,
delivered to Consultant in July, 1996, in the form attached hereto ("the
Warrant") to purchase up to a total of seventy five thousand (75,000) shares of
the Company's common stock (the "Warrant Shares") at the following exercise
prices:
(i) 15,000 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 60,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share.
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
45
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement
on November 29, 1996.
3.1.(b) The Warrant was issued to Consultant upon the signing of this
Agreement. In the event this Agreement is terminated for any reason whatsoever,
the Warrant referred to herein shall remain in full force and effect with
respect to any Warrant Shares which were exercised or which remain exercisable
under the Warrant and Consultant shall have the right to the retention of the
Warrant and the Warrant Shares in consideration of goods provided and for
services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall
46
not offer to sell or sell any such Warrant Shares until a post-effective
amendment to the Form S-3, with a copy of this Consulting Agreement attached as
an exhibit thereto, has been filed with the SEC and become effective. In
addition, the Company will undertake to comply with the various states
securities laws and regulations with respect to the registration of the Warrant
Shares referred to herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
47
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Consultant or any such other person
for any legal or other expenses reasonably incurred by Consultant or any such
other person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the registration
statement, any preliminary prospectus,
48
the prospectus, or any such amendment or supplement, made in reliance upon and
in conformity with written information furnished to the Company by Consultant
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs
49
of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
50
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By s/Timothy Holstein
Timothy Holstein
AFFILIATED SERVICES, INC.
By s/Tracia N. Arnold
Tracia N. Arnold, President
catwarnA.dec12/20/96
51
CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and OCEAN MARKETING
CORP., 2901 Hill Street, New Smyrna Beach, Florida 32169, or its assignees
("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofor issued and delivered to the
Consultant during July, 1996, a certain common stock purchase warrant, the terms
and conditions of which are more particularly described in Section 3.1 below
(the "Warrant"), and which Warrant was intended to be issued in connection with
the execution and delivery of, and in consideration for Consultant entering
into, this Consulting Agreement and which Warrant was erroneously delivered to
Consultant prior to the execution and delivery of this Consulting Agreement; and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memoralize the consideration, i.e., Consultant's
services rendered during the Company's fiscal year ending June 30, 1997, in this
Agreement and for which the Warrant was originally issued and delivered to the
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to
52
and consulting with the Company's management concerning marketing surveys,
investor profile information, methods of expanding investor support and
increasing investor awareness of the Company and its products and/or services.
Consultant will also provide additional services to the Company, including
assistance in broker relations, assisting in the preparation and format of due
diligence meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant; Consultant hereby acknowledges
that he has received a Common Stock Purchase Warrant, dated June 28, 1996,
delivered to Consultant in July, 1996, in the form attached hereto ("the
Warrant") to purchase up to a total of seventy five thousand (75,000) shares of
the Company's common stock (the "Warrant Shares") at the following exercise
prices:
(i) 15,000 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 60,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share; and
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
53
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement
on November 29, 1996.
3.1.(b) The Warrant was issued to Consultant upon the signing of this
Agreement. In the event this Agreement is terminated for any reason whatsoever,
the Warrant referred to herein shall remain in full force and effect with
respect to any Warrant Shares which were exercised or which remain exercisable
under the Warrant and Consultant shall have the right to the retention of the
Warrant and the Warrant Shares in consideration of goods provided and for
services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall not
offer to sell or sell any such Warrant Shares until a post-
54
effective amendment to the Form S-3, with a copy of this Consulting Agreement
attached as an exhibit thereto, has been filed with the SEC and become
effective. In addition, the Company will undertake to comply with the various
states securities laws and regulations with respect to the registration of the
Warrant Shares referred to herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
55
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Consultant or any such other person
for any legal or other expenses reasonably incurred by Consultant or any such
other person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the registration
statement, any preliminary prospectus,
56
the prospectus, or any such amendment or supplement, made in reliance upon and
in conformity with written information furnished to the Company by Consultant
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs
57
of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
58
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By s/Timothy Holstein
Timothy Holstein
OCEAN MARKETING CORP.
By s/Richard J. Fixaris
Richard J. Fixaris, President
catwarnO.dec12/20/96
59
CONSULTING AGREEMENT, dated as of December 10, 1996, by and
between CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company")
and EXPLORER FINANCIAL SERVICES, INC. 601B Webster Avenue, Winter
Park, Florida 32789 or its assignees ("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofor issued and delivered to the
Consultant during July, 1996, a certain common stock purchase warrant, the terms
and conditions of which are more particularly described in Section 3.1 below
(the "Warrant"), and which Warrant was intended to be issued in connection with
the execution and delivery of, and in consideration for Consultant entering
into, this Consulting Agreement and which Warrant was erroneously delivered to
Consultant prior to the execution and delivery of this Consulting Agreement; and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memoralize the consideration, i.e., Consultant's
services rendered during the Company's fiscal year ending June 30, 1997, in this
Agreement and for which the Warrant was originally issued and delivered to the
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to
60
and consulting with the Company's management concerning marketing surveys,
investor profile information, methods of expanding investor support and
increasing investor awareness of the Company and its products and/or services.
Consultant will also provide additional services to the Company, including
assistance in broker relations, assisting in the preparation and format of due
diligence meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant; Consultant hereby acknowledges
that he has received a Common Stock Purchase Warrant, dated June 28, 1996,
delivered to Consultant in July, 1996, in the form attached hereto ("the
Warrant") to purchase up to a total of six hundred thousand (600,000) shares of
the Company's common stock (the "Warrant Shares") at the following exercise
prices:
(i) 300,000 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 300,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share; and
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
61
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement.
3.1.(b) The Warrant shall be issued to Consultant upon the signing of
this Agreement. In the event this Agreement is terminated for any reason
whatsoever, the Warrant referred to herein shall remain in full force and effect
with respect to any Warrant Shares which were exercised or which remain
exercisable under the Warrant and Consultant shall have the right to the
retention of the Warrant and the Warrant Shares in consideration of goods
provided and for services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall
62
not offer to sell or sell any such Warrant Shares until a post-effective
amendment to the Form S-3, with a copy of this Consulting Agreement attached as
an exhibit thereto, has been filed with the SEC and become effective. In
addition, the Company will undertake to comply with the various states
securities laws and regulations with respect to the registration of the Warrant
Shares referred to herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
63
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Consultant or any such other person
for any legal or other expenses reasonably incurred by Consultant or any such
other person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the registration
statement, any preliminary prospectus,
64
the prospectus, or any such amendment or supplement, made in reliance upon and
in conformity with written information furnished to the Company by Consultant
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs
65
of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
66
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By s/Timothy Holstein
Timothy Holstein
EXPLORER FINANCIAL SERVICES, INC.
By s/Christopher Bailey
Christopher Bailey, President
catwarnE.dec12/20/96
67
CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and CHRISTIE &
COMPANY, 401 West High Street, Pottstown, Pennsylvania 19464, or its assignees
("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofor issued and delivered to the
Consultant during July, 1996, a certain common stock purchase warrant, the terms
and conditions of which are more particularly described in Section 3.1 below
(the "Warrant"), and which Warrant was intended to be issued in connection with
the execution and delivery of, and in consideration for Consultant entering
into, this Consulting Agreement and which Warrant was erroneously delivered to
Consultant prior to the execution and delivery of this Consulting Agreement; and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memoralize the consideration, i.e., Consultant's
services rendered during the Company's fiscal year ending June 30, 1997, in this
Agreement and for which the Warrant was originally issued and delivered to the
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to
68
and consulting with the Company's management concerning marketing surveys,
investor profile information, methods of expanding investor support and
increasing investor awareness of the Company and its products and/or services.
Consultant will also provide additional services to the Company, including
assistance in broker relations, assisting in the preparation and format of due
diligence meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant; Consultant hereby acknowledges
that he has received a Common Stock Purchase Warrant, dated June 28, 1996,
delivered to Consultant in July, 1996, in the form attached hereto ("the
Warrant") to purchase up to a total of two hundred fifty thousand (250,000)
shares of the Company's common stock (the "Warrant Shares") at the following
exercise prices:
(i) 150,000 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 50,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share; and
(iii) 50,000 Warrant Shares at the exercise price of $5.00 per
Warrant Share.
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
69
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement.
3.1.(b) The Warrant shall be issued to Consultant upon the signing of
this Agreement. In the event this Agreement is terminated for any reason
whatsoever, the Warrant referred to herein shall remain in full force and effect
with respect to any Warrant Shares which were exercised or which remain
exercisable under the Warrant and Consultant shall have the right to the
retention of the Warrant and the Warrant Shares in consideration of goods
provided and for services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall
70
not offer to sell or sell any such Warrant Shares until a post-effective
amendment to the Form S-3, with a copy of this Consulting Agreement attached as
an exhibit thereto, has been filed with the SEC and become effective. In
addition, the Company will undertake to comply with the various states
securities laws and regulations with respect to the registration of the Warrant
Shares referred to herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
71
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Consultant or any such other person
for any legal or other expenses reasonably incurred by Consultant or any such
other person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the registration
statement, any preliminary prospectus,
72
the prospectus, or any such amendment or supplement, made in reliance upon and
in conformity with written information furnished to the Company by Consultant
specifically for use in the preparation thereof. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs
73
of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
74
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By s/Timothy Holstein
Timothy Holstein
CHRISTIE & COMPANY
By s/John Christie
John Christie, President
catwarnC.dec12/20/96
75
CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and ARDEN BROWN, 5761
Northwest 32nd Terrace, Boca Raton, Florida
33496, or his assignees ("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofor issued and delivered to the
Consultant during July, 1996, a certain common stock purchase warrant, the terms
and conditions of which are more particularly described in Section 3.1 below
(the "Warrant"), and which Warrant was intended to be issued in connection with
the execution and delivery of, and in consideration for Consultant entering
into, this Consulting Agreement and which Warrant was erroneously delivered to
Consultant prior to the execution and delivery of this Consulting Agreement; and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memoralize the consideration, i.e., Consultant's
services rendered during the Company's fiscal year ending June 30, 1997, in this
Agreement and for which the Warrant was originally issued and delivered to the
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to
76
and consulting with the Company's management concerning marketing surveys,
investor profile information, methods of expanding investor support and
increasing investor awareness of the Company and its products and/or services.
Consultant will also provide additional services to the Company, including
assistance in broker relations, assisting in the preparation and format of due
diligence meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant; Consultant hereby acknowledges
that he has received a Common Stock Purchase Warrant, dated June 28, 1996,
delivered to Consultant in July, 1996, in the form attached hereto ("the
Warrant") to purchase up to a total of seventy five thousand (75,000) shares of
the Company's common stock (the "Warrant Shares") at the following exercise
prices:
(i) 35,000 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 40,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share.
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement.
77
3.1.(b) The Warrant shall be issued to Consultant upon the signing of
this Agreement. In the event this Agreement is terminated for any reason
whatsoever, the Warrant referred to herein shall remain in full force and effect
with respect to any Warrant Shares which were exercised or which remain
exercisable under the Warrant and Consultant shall have the right to the
retention of the Warrant and the Warrant Shares in consideration of goods
provided and for services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall not
offer to sell or sell any such Warrant Shares until a post-effective amendment
to the Form S-3, with a copy of this Consulting Agreement attached as an exhibit
thereto, has been filed with the SEC and become effective. In addition, the
Company will undertake to comply with the various states securities laws and
regulations with respect to the registration of the Warrant Shares referred to
78
herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
79
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Consultant or any such other person
for any legal or other expenses reasonably incurred by Consultant or any such
other person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the registration
statement, any preliminary prospectus, the prospectus, or any such amendment or
supplement, made in reliance upon and in conformity with written information
furnished to the Company by Consultant specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
80
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
81
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
82
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By s/Timothy Holstein
Timothy Holstein
By s/Arden Brown
Arden Brown
catwarnB.dec12/20/96
83
CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and GLOBAL FINANCIAL
GROUP, INC., 100 Washington Square, Suite 1319, Minneapolis, Minnesota 55401, or
its assignees
("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofore issued and delivered to the
Consultant and its assigns during July, 1996 and December, 1996, 8 common stock
purchase warrants permitting the purchase at various exercise prices of an
aggregate of 238,441 Company Common Shares; that these 8 warrants have been
canceled and replaced by a single warrant permitting Consultant to purchase the
same amount of shares, the terms and conditions of which are more particularly
described in Section 3.1 below (the "Warrant"), and; the Warrant was intended to
be issued to Consultant in connection with the execution and delivery of, and in
partial consideration for Consultant entering into, this Consulting Agreement;
and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memorialize the total consideration, i.e.,
Consultant's services rendered during the Company's fiscal year ending June 30,
1997, in this Agreement and for which the previoius 8 warrants and the new
Warrant were originally issued.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that it shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the
84
Consultant shall advise the Company on matters concerning the marketing and
placement of its securities in the private and public markets, all in accordance
with applicable laws, rules and regulations; such services shall also generally
include advice to and consulting with the Company's management concerning
marketing surveys, investor profile information, methods of expanding investor
support and increasing investor awareness of the Company and its products and/or
services. Consultant will also provide additional services to the Company,
including assistance in broker relations, assisting in the preparation and
format of due diligence meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant: Consultant hereby acknowledges
that it and its assigns originally received 8 Common Stock Purchase Warrants
dated June 28, 1996 and December 10, 1996, respectively, to purchase up to an
aggregate total of two hundred thirty-eight thousand four hundred forty-one
(238,441) shares of the Company's common stock (the "Warrant Shares") which 8
warrants have been canceled and a new Common Stock Purchase Warrant, dated
December 10, 1996, to Consultant, in the form attached hereto ("the Warrants",
or collectively, the "Warrant") consolidating and replacing the previous 8
Warrants, providing for the purchase of the Warrant Shares at the following
exercise prices:
85
(i) 45,625 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 152,191 Warrant Shares at the exercise price of $2.50
per Warrant Share;
(iii) 40,625 Warrant Shares at the exercise price of $5.00
per Warrant Share; and
The Warrants and the Warrant Shares shall be subject to the
registration provisions contained in this Agreement.
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement.
3.1.(b) The Warrant shall be issued to Consultant upon the signing of
this Agreement. In the event this Agreement is terminated for any reason
whatsoever, the Warrant referred to herein shall remain in full force and effect
with respect to any Warrant Shares which were exercised or which remain
exercisable under the Warrant and Consultant shall have the right to the
retention of the Warrant and the Warrant Shares in consideration of goods
provided and for services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
86
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall not
offer to sell or sell any such Warrant Shares until a post-effective amendment
to the Form S-3, with a copy of this Consulting Agreement attached as an exhibit
thereto, has been filed with the SEC and become effective. In addition, the
Company will undertake to comply with the various states securities laws and
regulations with respect to the registration of the Warrant Shares referred to
herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
87
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any
88
preliminary prospectus, the prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse Consultant or any such
other person for any legal or other expenses reasonably incurred by Consultant
or any such other person in connection with investigating or defending any such
loss, claim, damage, liability, or action, suit or proceeding; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission in
the registration statement, any preliminary prospectus, the prospectus, or any
such amendment or supplement, made in reliance upon and in conformity with
written information furnished to the Company by Consultant specifically for use
in the preparation thereof. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not
89
relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
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17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By
Timothy Holstein
GLOBAL FINANCIAL GROUP, INC.
By
Kevin S. Miller, Chief Financial Officer
catwarnt.glo(1/7/97)
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CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and BCR MEDIA, INC., a
Florida corporation having its principal offices located at 601 B Webster
Avenue, Winter Park, Florida 32789, or its assignees ("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of Consultant
to provide specified services for the Company.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to and
consulting with the Company's management concerning marketing surveys, investor
profile information, methods of expanding investor support and increasing
investor awareness of the Company and its products and/or services. Consultant
will also provide additional services to the Company, including assistance in
broker relations, assisting in the preparation and format of due diligence
meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock
92
ownership or otherwise, the power to control the Company nor to exercise any
dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant, in the form attached hereto,
("the Warrant") to purchase up to a total of three hundred thousand (300,000)
shares of the Company's common stock (the "Warrant Shares") at the following
exercise prices:
(i) 150,000 Warrant Shares at the exercise price of $.25 per
Warrant Share; and
(ii) 150,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share.
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement.
3.1.(b) The Warrant shall be issued to Consultant upon the signing of
this Agreement. In the event this Agreement is terminated for any reason
whatsoever, the Warrant referred to herein shall remain in full force and effect
with respect to any Warrant Shares which were exercised or which remain
exercisable under the Warrant and Consultant shall have the right to the
retention of the Warrant and the Warrant Shares in consideration of goods
provided and for services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
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5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering a
sufficient number of its Common Shares to include the Warrant Shares and such
Registration Statement, filed on Form S-3 with the Securities and Exchange
Commission, has been declared effective on November 29, 1996; the Company hereby
agrees to amend its Form S-3 Registration Statement to include the Warrant
Shares. Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall not
offer to sell or sell any such Warrant Shares until a post-effective amendment
to the Form S-3, with a copy of this Consulting Agreement attached as an exhibit
thereto, has been filed with the SEC and become effective. In addition, the
Company will undertake to comply with the various states securities laws and
regulations with respect to the registration of the Warrant Shares referred to
herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
94
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and
95
other persons substantially involved in common questions of fact or law whose
presence is required if complete relief is to be afforded in arbitration. The
costs and expenses of such arbitration shall be borne in accordance with the
determination of the arbitrators and may include reasonable attorney's fees.
Each party hereby further agrees that service of process may be made upon it by
registered or certified mail or personal service at the address provided for
herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading; and will reimburse Consultant or any such other person
for any legal or other expenses reasonably incurred by Consultant or any such
other person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission in the registration
statement, any preliminary prospectus, the prospectus, or any such amendment or
supplement, made in reliance upon and in conformity with written information
furnished to the Company by Consultant specifically for use in the preparation
thereof. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not
96
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission in the registration statement,
any preliminary prospectus, the prospectus, or any such amendment or supplement,
was made in reliance upon and in conformity with written information furnished
to the Company by Consultant specifically for use in the preparation thereof,
and will reimburse any legal or other expenses reasonably incurred by the
Company or any such other person in connection with investigating or defending
any such loss, claim, damage, liability, or action, suit or proceeding. This
indemnity agreement will be in addition to any liability which Consultant may
otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
97
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By
Timothy Holstein
BCR MEDIA, INC.
By
Scott Sieck, Executive Vice President
catwarn.bcr
98
CONSULTING AGREEMENT, dated as of December 10, 1996, by and between
CONTINENTAL AMERICAN TRANSPORTATION, INC. (the "Company") and SCOTT SIECK,
having an address at 1081 Park Avenue, Winter Park, Florida 32789, or his
assignees ("Consultant").
WHEREAS, the Company is a public company; and
WHEREAS, Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to memoralize its retaining of
Consultant to provide specified services for the Company; and
WHEREAS, the Company has heretofor issued and delivered to the
Consultant during July, 1996, a certain common stock purchase warrant pursuant
to the general terms of which the Consultant had the right to purchase 25,000
Company Common Shares for the purchase price of $.25 per share and 25,000
Company Common Shares for the purchase price of $2.50 per share (the "Warrant"),
and which Warrant was intended to be issued in connection with the execution and
delivery of, and in consideration for Consultant entering into, this Consulting
Agreement and which Warrant was erroneously delivered to Consultant prior to the
execution and delivery of this Consulting Agreement; and
WHEREAS, the Company, in addition to the remedial actions described
below, desires to cancel the Warrant and to execute and deliver to Consultant a
new warrant to provide for the increase in the amount of Company Common Shares
that Consultant may purchase by increasing the Common Shares purchasable at $.25
per share from 25,000 to 175,000 and increasing the Common Shares purchasable at
$2.50 per share from 25,000 to 175,000; and
WHEREAS, the Company and the Consultant desire to enter into this
Consulting Agreement and to memoralize the consideration, i.e., Consultant's
services rendered during the Company's fiscal year ending June 30, 1997, in this
Agreement and for which the Warrant was originally issued and delivered to the
Consultant.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. DUTIES AND INVOLVEMENT
1.1. The Company hereby acknowledges that the Consultant has, since
July 1, 1996, rendered services to the Company described below; Consultant
hereby acknowledges that he shall continue to render the services described
below during the term of this Agreement and that the Company hereby formally
engages Consultant to provide such financial and public relations services
described as follows:
99
Consultant shall undertake market research in the transportation
industry; the Consultant shall identify the Company's competitors in the
industry and provide to the Company information concerning such competition in
the marketplace; the Consultant shall undertake appropriate market and industry
analyses that Consultant deems would be beneficial to the Company's short and
long-term business opportunities and business goals; the Consultant shall advise
the Company on matters concerning the marketing and placement of its securities
in the private and public markets, all in accordance with applicable laws, rules
and regulations; such services shall also generally include advice to and
consulting with the Company's management concerning marketing surveys, investor
profile information, methods of expanding investor support and increasing
investor awareness of the Company and its products and/or services. Consultant
will also provide additional services to the Company, including assistance in
broker relations, assisting in the preparation and format of due diligence
meetings, and attendance at conventions and trade shows.
1.2. Consultant acknowledges that neither it nor any of its employees
or affiliates is an officer, director, or agent of the Company, that in
rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. TERM
The term of this Agreement shall be deemed to have commenced as of July
1, 1996, since Consultant has been rendering services to the Company since that
date, and shall continue until June 30, 1997.
3. COMPENSATION
As total and complete consideration for Consultant's agreement to enter
into this Consulting Agreement and for the services to be provided by Consultant
to the Company, the Company hereby grants to Consultant the following:
3.1. A Common Stock Purchase Warrant; Consultant hereby acknowledges
that he has received a Common Stock Purchase Warrant, dated June 28, 1996,
delivered to Consultant in July, 1996, in the form attached hereto ("the
Warrant") to purchase up to a total of fifty thousand (50,000) shares of the
Company's common stock; and the Company and the Consultant hereby agree that the
Consultant shall receive an amended Common Stock Purchase Warrant, dated
December 10, 1996, in the form annexed hereto as Exhibit A, granting to the
Consultant the right to purchase up to a total of
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three hundred fifty thousand (350,000) shares of the Company's Common Stock (the
"Warrant Shares") at the following exercise prices:
(i) 175,000 Warrant Shares at the exercise price of $.25 per
Warrant Share;
(ii) 175,000 Warrant Shares at the exercise price of $2.50 per
Warrant Share.
The Warrant and the Warrant Shares shall be subject to the registration
provisions contained in this Agreement.
3.1.(a) The Warrant may be exercised from time to time and in whole or
in part for a period commencing upon grant and terminating twelve (12) months
following registration of the Warrant Shares as provided for in this Agreement.
3.1.(b) The Warrant shall be issued to Consultant upon the signing of
this Agreement. In the event this Agreement is terminated for any reason
whatsoever, the Warrant referred to herein shall remain in full force and effect
with respect to any Warrant Shares which were exercised or which remain
exercisable under the Warrant and Consultant shall have the right to the
retention of the Warrant and the Warrant Shares in consideration of goods
provided and for services performed.
4. SERVICES NOT EXCLUSIVE
Consultant shall devote such of its time and effort necessary to the
discharge of its duties hereunder. The Company acknowledges that Consultant is
engaged in other business activities and that it will continue such activities
during the term of this Agreement. Consultant shall not be restricted from
engaging in other business activities during the term of this Agreement.
5. CONFIDENTIALITY
Consultant acknowledges that it may have access to confidential
information regarding the Company and its business. Consultant agrees that it
will not, during or subsequent to the terms of this Agreement, divulge, furnish,
or make accessible to any person (other than with the written permission of the
Company) any knowledge or information or plans of the Company with respect to
the Company or its business, including, but not limited to, the products of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof.
101
6. COVENANT NOT TO COMPETE
During the term of this Agreement, Consultant warrants, represents and
agrees that it will not compete directly with the Company in the Company's
primary industry or related fields.
7. REGISTRATION OF SECURITIES
7.1. The Company has filed a registration statement, registering the
Warrant Shares and such Registration Statement, filed on Form S-3 with the
Securities and Exchange Commission, has been declared effective on November 29,
1996: Consultant hereby acknowledges and represents that he/she/it has not
offered to sell or sold any of the Warrant Shares that it has the right to
purchase under the terms of the Warrant and covenants that he/she/it shall not
offer to sell or sell any such Warrant Shares until a post-effective amendment
to the Form S-3, with a copy of this Consulting Agreement attached as an exhibit
thereto, has been filed with the SEC and become effective. In addition, the
Company will undertake to comply with the various states securities laws and
regulations with respect to the registration of the Warrant Shares referred to
herein.
7.2. Subject to Section 7.1 above, at all times following registration
of the Warrant Shares and continuing until the earlier of either the exercise in
full of the Warrant or the Expiration Date, the Company shall maintain and be
current on all filings with the United States Securities and Exchange
Commission, appropriate state securities departments and, as may be required,
with the National Association of Securities Dealers, Inc. and/or national or
regional stock exchanges necessary to allow the Warrant Shares to be freely
tradable in the public market.
8. INVESTMENT REPRESENTATION
The Company represents and warrants that it has provided Consultant
access to all information available to the Company concerning its condition,
financial and otherwise, its management, its business and its prospects. The
Company represents that it has provided Consultant with a copy of the Company's
most recent Form 10-K or Form 10-KSB and any subsequent filing required or filed
under the rules and regulations promulgated under the Securities Act of 1933, as
amended (the "Act"), or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), if any (the "Disclosure Documents"). Consultant acknowledges
that it is aware that because of the Company's financial position and other
factors, the acquisition of the Warrant Shares to be issued to Consultant
involves a high degree of risk, including the risk that Consultant may lose its
entire investment in the Warrant Shares. Consultant further represents that it
and its advisors have been afforded the opportunity to discuss the Company with
its management. The Company represents that it has and will continue to provide
102
Consultant with any information or documentation necessary to verify the
accuracy of the information contained in the Disclosure Documents and will
promptly notify consultant upon the filing of any registration statement or
other periodic reporting documents filed pursuant to the Act or the Exchange
Act. The Company represents that, notwithstanding securities listed in this
Agreement, it does not currently have any of its securities in registration and
further agrees to refrain from offering for sale any additional securities of
the Company and from filing any additional registration statements during the
term of this Agreement without the written consent of Consultant, which consent
shall not be unreasonably withheld.
9. ASSIGNMENT
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
10. ARBITRATION
Any dispute, controversy or claim between the Company and consultant
arising out of or related to this Agreement, or breach thereof, shall be settled
by arbitration, which shall be conducted in accordance with the rules of the
American Arbitration Association then in effect and conducted in the City of
Atlanta and and in the State of Georgia. Any award made by such arbitrators
shall be binding and conclusive for all purposes thereof, may include injunctive
relief, as well as orders for specific performance and may be entered as a final
judgment in any court of competent jurisdiction. No arbitration arising out of
or relating to this Agreement shall include, by consolidation or joinder or in
any other manner, parties other than the Company or Consultant and other persons
substantially involved in common questions of fact or law whose presence is
required if complete relief is to be afforded in arbitration. The costs and
expenses of such arbitration shall be borne in accordance with the determination
of the arbitrators and may include reasonable attorney's fees. Each party hereby
further agrees that service of process may be made upon it by registered or
certified mail or personal service at the address provided for herein.
11. INDEMNIFICATION
11.1. The Company agrees to indemnify and hold harmless Consultant and
its agents and employees against any losses, claims, damages or liabilities,
joint or several, to which Consultant or any such other person may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in the registration statement, any
103
preliminary prospectus, the prospectus, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse Consultant or any such
other person for any legal or other expenses reasonably incurred by Consultant
or any such other person in connection with investigating or defending any such
loss, claim, damage, liability, or action, suit or proceeding; provided,
however, that the Company will not be liable in any such case to the extent that
any such loss, claim, damage or liability arises out of or is based upon an
untrue statement or alleged untrue statement or omission or alleged omission in
the registration statement, any preliminary prospectus, the prospectus, or any
such amendment or supplement, made in reliance upon and in conformity with
written information furnished to the Company by Consultant specifically for use
in the preparation thereof. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
11.2. Consultant will indemnify and hold harmless the Company, each of
its directors, each of its officers who has signed the registration statement
and each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement or
alleged untrue statement of any material fact contained in the registration
statement, any preliminary prospectus, the prospectus, or any amendment or
supplement thereto, or arise out of or are based on the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statement therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission in the registration statement, any preliminary prospectus,
the prospectus, or any such amendment or supplement, was made in reliance upon
and in conformity with written information furnished to the Company by
Consultant specifically for use in the preparation thereof, and will reimburse
any legal or other expenses reasonably incurred by the Company or any such other
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding. This indemnity agreement will
be in addition to any liability which Consultant may otherwise have.
11.3. Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, suit or proceeding, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section, notify the indemnifying party of the
commencement thereof, but the omission so to notify the indemnifying party will
not
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relieve it from any liability which it may have to any indemnified party
otherwise than under this Section. In case any such action, suit or proceeding
is brought against any indemnified party, and it notifies an indemnifying party
of the commencement thereof, the indemnifying party will be entitled to
participate therein, and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party, and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation.
12. NOTICES
All notices required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been duly given: (i) two (2)
hours after delivered personally to the party to be notified; or (ii) three (3)
business days after deposited in the U.S. mail, postage paid via registered or
certified mail, return receipt requested. Notices to the Company shall be
addressed to its president at its principal executive office and to Consultant
to its president at its principal executive office, or to such other addresses
as either party may designate upon at least ten days' notice to the other party.
13. GOVERNING LAW
This Agreement shall be constructed by and enforced in accordance with
the laws of the State of Colorado.
14. ENTIRE AGREEMENT
This Agreement contains the entire understanding and agreement between
the parties. There are no other agreements, conditions or representations, oral
or written, express or implied, with regard thereto. This Agreement may be
amended only in writing signed by both parties.
15. NON-WAIVER
A delay or failure by either party to exercise a right under this
Agreement, or a partial or single exercise of that right, shall not constitute a
waiver of that or any other right.
16. HEADINGS
Headings in this Agreement are for convenience only and shall not be
used to interpret or construe its provisions.
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17. COUNTERPARTS
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
agreement.
18. BINDING EFFECT
The provisions of this Agreement shall be binding upon the parties,
their successors and assigns.
19. SEVERABILITY
If any provisions of this Agreement, except paragraphs 1, 3 and 7, or
application thereof to any person or circumstance shall be deemed or held to be
invalid, illegal or unenforceable to any extent, the remainder of this Agreement
shall not be affected and the application of such affected provisions shall be
enforced to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first written above.
CONTINENTAL AMERICAN TRANSPORTATION, INC.
By s/Timothy Holstein
Timothy Holstein
By s/Scott Sieck
Scott Sieck
catwarnS.dec 1/13/96
106
Exhibit 5
LAW OFFICES OF
JOSEPH J. TOMASEK
ATTORNEY AT LAW
75-77 North Bridge Street
Somerville, New Jersey 08876
February 6, 1997
Board of Directors
Continental American Transportation, Inc.
495 Lovers Lane Road
Calhoun, Georgia 30701
Gentlemen:
I have acted as special counsel to Continental American
Transportation, Inc. (the "Company") in connection with Post-
Effective Amendment No. 1 to the Registration Statement on Form S-3
previously filed with the Securities and Exchange Commission on
July 26, 1996, as amended by Pre-Effective Amendment No. 1 filed
with the Commission on November 25, 1996 (collectively, the
"Registration Statement"), pertaining to the registration of up to
3,118,441 shares of the Company's Common Stock, no par value,
comprised of: (a) 2,068,441 Common Shares which are purchasable
upon the exercise of 13 non-redeemable Common Stock Purchase
Warrants being offered by certain Warrantholders of the Company
(the "Warrants"); (b) 300,000 Common Shares which are issuable,
subject to certain conditions as described in the Registration
Statement, upon the conversion of the Company's 400,000 shares of
its 10% Convertible Preferred Stock, $1.00 par value per share,
and; (c) 750,000 Common Shares which are being registered on behalf
of certain Selling Securityholders identified in the Registration
Statement (the"Common Shares").
In that connection, I have examined originals or copies,
certified or otherwise identified to our satisfaction, of such
documents, corporate records and other instruments as we have
deemed necessary for the purposes of this opinion, including the
following: (a) the Restated Articles of Incorporation and Bylaws
of the Company, as amended and (b) resolutions adopted by the Board
of Directors of the Company at meetings held on June 28, 1996,
November 20, 1996 and February 3, 1997, respectively.
For purposes of this opinion, I have assumed the authenticity
of all documents submitted to me as originals and the conformity to
the originals of all documents submitted to me as copies. I have
also assumed the genuiness of the signatures of persons signing all
documents in connection with which this opinion is rendered, the
authority of such persons signing on behalf of the parties thereto
other than the Company, and the due authorization, execution and
delivery of all documents by the parties thereto other than the
Company.
107
Board of Directors
Continental American
Transportation, Inc.
November 21, 1996
Page -2-
Based on the foregoing, I am of the opinion that:
(1) The Company is a corporation validity existing and in
good standing under the laws of the State of Colorado.
(2) When, as and if Post-Effective Amendment No. 1 (intended
to be filed by the Company on February 6, 1997 via EDGAR with the
Securities and Exchange Commission) to the Registration Statement
previously filed on Form S-3 with the Securities and Exchange
Commission (the "SEC") via EDGAR on July 26, 1996, as amended by
Pre-Effective Amendment No. 1 filed with the Commission on November
25, 1996 by the Company becomes effective pursuant to the
provisions of the Securities Act of 1933, as amended, and subject
to compliance with applicable state securities laws, the Common
Shares will be duly authorized and validly issued.
I hereby consent to the filing of this opinion as exhibit 5 to
Post-Effective Amendment No. 1 to the Registration Statement, and
to the reference to me under the section entitled "Legal Opinions"
in the Registration Statement.
Very truly yours,
s/Joseph J. Tomasek
Joseph J. Tomasek, Esq.
cat-att2.s-3
108
Exhibit 23(b)
Rosenberg Rich Baker Berman & Company
380 Foothill Road
Bridgewater, New Jersey 08807
Independent Auditors' Consent
To the Board of Directors and Stockholders of
Continental American Transportation, Inc. and Subsidiaries
We consent to the incorporation by reference in Post-Effective
Amendment No. 1 to the Registration Statement of Continental
American Transportation, Inc. and Subsidiaries (the "Company") on
Form S-3, to be filed with the Securities and Exchange Commission
on February 6, 1997 (the "Registration Statement") of (1) our
report dated October 11, 1996, appearing in the Annual Report on
Form 10-KSB of the Company for the year ended June 30, 1996; (2)
our reports dated March 1, 1996 appearing in Amendment No. 2 to the
Company's Current Report on Form 8-K filed with the Securities and
Exchange Commission on June 17, 1996, and; (3) to the reference to
us under the heading "Experts" in the Prospectus, which is part of
the Registration Statement.
ROSENBERG RICH BAKER BERMAN & COMPANY
s/Rosenberg Rich Baker Berman & Company
Bridgewater, New Jersey
February 6, 1997
audcons4.s-3
109