<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 15, 1999
REGISTRATION NO. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
---------------------
GEORGIA 58-1915632
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1950 SPECTRUM CIRCLE, SUITE B-100
MARIETTA, GEORGIA 30067
(678) 264-0400
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
DENNIS A. BAKAL
CHIEF EXECUTIVE OFFICER AND PRESIDENT
PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
1950 SPECTRUM CIRCLE, SUITE B-100
MARIETTA, GEORGIA 30067
TELEPHONE: (678) 264-0400
FACSIMILE: (770) 955-2894
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-----------------------
A COPY OF ALL COMMUNICATIONS, INCLUDING COMMUNICATIONS SENT
TO THE AGENT FOR SERVICE
SHOULD BE SENT TO:
JON H. KLAPPER, ESQ.
RED HOT LAW GROUP OF ASHLEY LLC
817 WEST PEACHTREE STREET, SUITE 400
ATLANTA, GEORGIA 30308
TELEPHONE: (404) 575-1900
FACSIMILE: (404) 575-1901
Approximate date of commencement of proposed sale to the public: AS
SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] __________________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
<PAGE> 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE AGGREGATE PRICE AGGREGATE OFFERING AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED PER UNIT(1) PRICE(1) REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMON STOCK, NO PAR VALUE PER SHARE..... 1,000,000 SHARES(2) $0.8125 $812,500 $225.88
- ----------------------------------------------------------------------------------------------------------------------------------
COMMON STOCK, NO PAR VALUE PER SHARE..... 200,000 SHARES(3) $0.8125 $162,500 $ 45.18
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL.................................... $271.06
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 promulgated under the Securities Act of 1933, as
amended.
(2) Represents shares that may be acquired by the selling securityholders
named herein (the "Selling Securityholders") upon conversion of the
Registrant's 4% convertible series A preferred stock (the "Preferred
Stock"). The number of shares of common stock issuable upon conversion
of the Preferred Stock is equal to 77% of the lower of (i) $2.00 or
(ii) the average closing sales price for the five trading days
immediately prior to the date of conversion. The conversion price would
have been $0.8625 if the date of conversion was November 10, 1999.
Includes an indeterminate number of shares which may become issuable in
the event of a stock split, stock dividend or similar transaction
involving the common stock pursuant to the antidilution provisions of
the Preferred Stock.
(3) Represents shares issuable upon exercise of warrants (the "Warrants")
issued to certain of the Selling Securityholders in connection with the
issuance and sale of the Preferred Stock. Includes an indeterminate
number of shares which may become issuable in the event of a stock
split, stock dividend or similar transaction involving the Common Stock
pursuant to the antidilution provisions of the Warrants.
<PAGE> 3
PRELIMINARY PROSPECTUS, SUBJECT TO COMPLETION,
DATED NOVEMBER 15, 1999
1,200,000 SHARES
COMMON STOCK
PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
The selling securityholders named in this prospectus are offering and
selling up to 1,200,000 shares of the common stock of Professional
Transportation Group Ltd., Inc. They may acquire 1,000,000 of those shares upon
conversion of our 4% convertible series A preferred stock and 200,000 shares
upon exercise of warrants.
The selling securityholders may offer the shares from time to time in
public or private transactions on or off the Nasdaq SmallCap Market, at
prevailing market prices or privately negotiated prices. Sales may be made
through brokers, dealers or other agents who may receive compensation in the
form of commissions, discounts or concessions.
Our common stock is quoted on The Nasdaq SmallCap Market under the
symbol "TRUC." On November 9, 1999, the closing sales price of our common stock
on The Nasdaq SmallCap Market was $0.8125.
We will not receive any proceeds from the sale of the common stock, but
will receive the exercise price of the warrants.
YOU SHOULD READ THE DESCRIPTION OF CERTAIN RISKS UNDER THE CAPTION
"RISK FACTORS" BEGINNING ON PAGE 3 BEFORE PURCHASING OUR COMMON STOCK.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
_______, 1999
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE> 4
INFORMATION ABOUT THE COMPANY
At Professional Transportation Group Ltd., Inc., we provide
transportation and logistics services primarily for the air freight and
expedited delivery and floorcovering industries throughout the continental
United States.
We file reports, proxy statements and other information with the SEC.
You may read and copy any document we file at the Public Reference Room of the
SEC at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at
the Regional Offices of the SEC at Seven World Trade Center, Suite 1300, New
York, New York 10048 and at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. Please call 1-800-SEC-0330 for further information
concerning the Public Reference Room. Our filings also are available to the
public from the SEC's website at www.sec.gov. We distribute to our shareholders
annual reports containing audited financial statements.
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information we file later with the
SEC will automatically update and supersede this information. We incorporate by
reference the documents listed below and any future filings we make with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until the offering is completed:
1. Annual Report on Form 10-K for the year ended December 31,
1998.
2. Proxy Statement dated April 21, 1999.
3. Quarterly Reports on Form 10-Q for the quarters ended March
31, 1999, June 30, 1999 and September 30, 1999.
4. The description of the common stock contained in our
Registration Statement on Form 8-A (declared effective on June
19, 1997) under Section 12 of the Securities Exchange Act of
1934.
You may request a copy of these filings, at no cost, by writing or calling us
at:
PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
1950 Spectrum Circle, Suite B-100
Marietta, Georgia 30067
Attention: Chief Financial Officer
Telephone: (678) 264-0400
This prospectus is part of a registration statement we filed with the SEC. You
should rely only on the information or representations provided in this
prospectus. We have not authorized anyone to provide you with different
information. The common stock will not be offered in any state where an offer is
not permitted. You should not assume that the information in this prospectus is
accurate as of any date other than the date on the cover of this prospectus.
2
<PAGE> 5
RISK FACTORS
Before you invest in our common stock, you should be aware that there
are various risks, including those described below. You should consider
carefully these risk factors together with all of the other information included
in this prospectus, including the documents that we incorporate by reference,
before you decide to purchase shares of common stock.
Some of the information in this prospectus may contain forward-looking
statements. Such statements can be identified by the use of forward-looking
terminology such as "may," "will," "expect," "believe," "intend," "anticipate,"
"estimate," "continue" or similar words. These statements discuss future
expectations, estimate the happening of future events or our financial condition
or state other "forward-looking" information. When considering such
forward-looking statements, you should keep in mind the risk factors and other
cautionary statements in this prospectus and the documents that we incorporate
by reference. The risk factors noted in this section and other factors noted
throughout this prospectus, including certain risks and uncertainties, could
cause our actual results to differ materially from those contained in any
forward-looking statement.
WE HAVE A HISTORY OF NET LOSSES
In the last four years, we incurred the following net income or losses:
- 1998: net loss of almost $3.5 million
- 1997: net loss of almost $1.8 million
- 1996: net income of $184,078
- 1995: net loss of $155,200
At the end of September 1999, we had an accumulated deficit of almost
$5.0 million (unaudited). Although much of our recent losses was incurred during
the time we provided less-than-truckload operations for the carpet and
floorcovering industry pursuant to the now terminated marketing agreement with
Continental American Transportation, Inc., there can be no assurance that we
will not continue to lose money in the future.
POSSIBLE NEED FOR ADDITIONAL FINANCING
Our capital requirements have been and will continue to be significant.
We anticipate, based on currently proposed plans and assumptions relating to our
operations, that cash flows from operations and amounts available under our
credit arrangements may not be sufficient to satisfy our contemplated cash
requirements during 1999. If cash flows and amounts available under our credit
arrangements otherwise prove to be insufficient to fund operations (due to
unanticipated expenses, delays, problems, difficulties or otherwise), we will be
required to minimize cash expenditures and/or obtain additional financing in
order to support our plan of operations. Other than the series A preferred
stock, our public warrants and the warrants sold to the selling securityholders,
we have no current arrangements with respect to, or sources of, additional
financing and we cannot guarantee that any additional financing will be
available to us on acceptable terms, or at all.
WE CANNOT ASSURE YOU THAT WE WILL EFFECTIVELY MANAGE OUR GROWTH
Our revenues have grown rapidly since we began operating in 1990.
However, we cannot guarantee that we will continue to grow at a similar pace, or
that we will effectively respond and adapt to any future growth. The growth in
our business in recent years has greatly increased our operating expenses. As we
expand our business further, operating expenses will probably continue to
increase, and revenue may not grow enough for us to meet our operating
expenditures or to earn a profit in the future.
3
<PAGE> 6
WE DEPEND ON A FEW LARGE CUSTOMERS
In 1997, 1998 and for the nine months ended September 30, 1999, our
five largest customers accounted for approximately 65%, 52% and 70%,
respectively, of our revenue. FedEx was our largest customer during these
periods, with 41%, 33% and 38%, respectively, of revenue, and Panalpina, Inc.,
was our second largest, with 13%, 10% and 10%, respectively, of revenue. These
two customers are the only ones that have signed written agreements with us;
all other customers can cancel our services anytime. Also, under FedEx's
contract, it does not have to use our services and can cancel the agreement
with 30 days written notice. Our business and finances will be negatively
affected if we lose FedEx or Panalpina as customers, or if many other customers
stop using our services.
THE SUCCESS OF OUR BUSINESS DEPENDS ON ECONOMIC FACTORS BEYOND OUR CONTROL
We have little or no control over many economic factors that affect our
business, including:
- fuel prices;
- cost of employees and employee benefits;
- interest rates;
- insurance premiums; and
- customers' business cycles.
These factors are important because if the cost of any one of them increases
more than our revenues, or if any of them affect our customers, it could
negatively affect our overall business and finances.
THE TRUCKLOAD TRANSPORTATION INDUSTRY IS VERY COMPETITIVE
The truckload transportation industry is very fragmented and intensely
competitive. It includes many regional, inter-regional and national truckload
carriers, none of which dominates the market. We compete with both small
operators, who often have lower overhead costs, and with significantly larger
companies, who have greater financial and other resources than us. Companies in
this industry compete with one another on freight rates, service, efficiency,
and availability of equipment.
OUR BUSINESS DEPENDS ON THE AVAILABILITY OF DRIVERS
We utilize the services of both employee drivers and independent
contractors. The trucking industry has in the past and will probably continue in
the future to experience shortages of qualified drivers and independent
contractors. Such a shortage in the future could negatively affect our business
and finances, particularly if we have prolonged difficulty in attracting or
keeping qualified drivers or independent contractors.
WE MAY NEED ADDITIONAL FINANCING
Our business is very capital intensive. We depend on operating leases
and debt financing to expand and maintain a modern operating fleet. If we are
unable to obtain acceptable leases or additional financing, we will be forced to
limit our growth or use our fleet for longer periods of time, which could
negatively affect our business and finances.
CHANGES IN GOVERNMENT REGULATIONS COULD AFFECT OUR BUSINESS
The government regulates our operations at the local, state and federal
level. Thus far, we have been able to comply with these laws and regulations
without much difficulty, but any additions or changes to current laws and
regulations could negatively affect our business and finances.
4
<PAGE> 7
OUR INSURANCE MAY NOT COVER ALL LIABILITIES OR LOSSES
The business of moving freight by its nature creates a risk of
liability. This risk may grow as we expand our operations. We believe that our
current commercial liability insurance is sufficient to cover any losses.
However, we cannot guarantee that our coverage will fully protect our business
and assets from all claims or that we can obtain additional insurance at
commercially reasonable rates. Any losses or claims that go beyond the limits or
scope of our coverage could negatively affect our business and finances.
OUR SUCCESS DEPENDS UPON OUR ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL
Our success depends in large part on the continued services and efforts
of Dennis A. Bakal, our President and CEO, and other key personnel. In April
1997, we entered into three-year renewable employment agreements with Mr. Bakal
and several other executive officers. If we lose the services of these
individuals, it could negatively affect our business and finances. Our success
and plans for future growth will also depend on our ability to attract and keep
on satisfactory terms additional qualified management and other employees.
ONE EXECUTIVE OWNS A LARGE NUMBER OF SHARES
Our President and CEO, Dennis A. Bakal, beneficially owns 2.9 million
shares of common stock, or about 60% of the outstanding shares. As a result,
Mr. Bakal is able to control the outcome of shareholder votes, including the
election of directors, as well as the selection of management and the direction
of company policy.
WE MAY HAVE CONFLICTS OF INTEREST WITH OUR MAJORITY SHAREHOLDER
Dennis A. Bakal, our Chairman, President and CEO and majority
shareholder, is also an officer, director or shareholder of several other
businesses. In the past, we have transacted business with Mr. Bakal and his
affiliate businesses. For example, we sublease office and warehouse space from
Professional Sales Group, Inc., which Mr. Bakal owns. As a result of these
transactions, our interests may sometimes be inconsistent with Mr.
Bakal's interests in his affiliated businesses.
CERTAIN MEASURES THAT WE HAVE ADOPTED HAVE ANTI-TAKEOVER EFFECTS
Our articles of incorporation and bylaws include provisions that may
discourage or prevent changes in control, even in cases where you could receive
a high price for your shares. Under one such provision, the board of directors
can issue 100,000 shares of "blank check" preferred stock, with whatever rights
and preferences the Board chooses, without your approval. If the board issued
preferred stock with rights superior to the common stock, it could negatively
affect you and could lower the price or value of your stock. The issuance of
this preferred stock could make it more difficult for outside parties to take us
over or remove management and could discourage bids for control that might give
you a high price for your stock.
SHAREHOLDER PROPOSALS AND NOMINATIONS MUST MEET CERTAIN REQUIREMENTS
Our bylaws require shareholders who want to bring up business or
nominate candidates for election as directors at a shareholders meeting to
provide timely written notice. This means that we must receive your notice at
our main office between 60 and 90 days before the meeting. The bylaws also set
out a required written format for these notices. These provisions could prevent
such matters or nominations from being brought before the meeting.
WE DO NOT PLAN TO PAY DIVIDENDS
We intend to use all future earnings in the development of our business
and do not plan to pay cash dividends in the foreseeable future.
5
<PAGE> 8
WE ARE INVOLVED IN LITIGATION
From time to time we are involved in lawsuits, the outcome of which are
uncertain. In the event that we are not successful in defending against these
actions, we may be required to pay money damages, which could negatively affect
our business and finances.
FAILURE TO BE YEAR 2000 READY MAY NEGATIVELY AFFECT OUR BUSINESS
The year 2000 issue is the result of potential problems with computer
systems or any equipment with computer chips that store dates as two digits
rather than four (e.g. "99" for 1999). On January 1, 2000, these systems and
equipment may read "00" as 1900 instead of the year 2000.
Our business and relationships with customers depend significantly on
numerous computer software programs, operating systems and networks. If any of
these are affected by a failure to be year 2000 compliant, it could have a
negative affect on our business and finances and those of our customers. We have
done a preliminary review of our internal accounting and operating programs and
systems, and we currently believe that they, as well as the network connections
they maintain, either are ready for the year 2000 or can be corrected without
significant cost or delay. However, we could face material financial risks if we
are unable to deal with this issue in a timely manner or if third parties which
we rely on are not adequately prepared for the year 2000.
WE CANNOT GUARANTEE THAT OUR SECURITIES WILL CONTINUE TO MEET THE LISTING AND
MAINTENANCE CRITERIA FOR THE NASDAQ SYSTEM; "PENNY STOCK" REGULATIONS
The Nasdaq SmallCap Market is the market on which our securities are
traded. Continued inclusion on the Nasdaq SmallCap Market currently requires net
tangible assets of $2 million, market capitalization of $35 million or net
income of $500,000 in the most recently completed fiscal year or in two of the
last three most recently completed fiscal years. If we fail to maintain the
minimum threshold requirements to maintain our inclusion on the Nasdaq SmallCap
Market, our securities would lose their listing, and trading would be conducted,
if at all, in the over-the-counter market known as the NASD OTC Electronic
Bulletin Board. As a result, an investor may find it more difficult to dispose
of, or to obtain accurate quotations as to the market value of, our securities.
As of September 30, 1999, we did not meet the minimum requirements and have been
informed by Nasdaq that if we do not meet one of the requirements by October 20,
1999, our securities may be delisted.
The SEC has adopted regulations which generally define "penny stock" to
be any equity security that has a market price less than $5.00 per share or an
exercise price of less than $5.00 per share subject to certain exceptions. If
our securities are removed from listing on the Nasdaq SmallCap Market, and are
traded at a price below $5.00, they may become subject to rules that impose
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and institutional
accredited investors. For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchase of the securities
and have received the purchaser's written consent to the transaction prior to
the purchase. Additionally, for any transaction involving a penny stock, unless
exempt, the rules require the delivery, prior to the transaction, of a
disclosure schedule prepared by the SEC relating to the penny stock market and
the risks of investing in our securities. The broker-dealer also must disclose
the commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities, and, if the broker-dealer
is the sole market-maker, the broker-dealer must disclose this fact and the
broker-dealer's presumed control over the market. Finally, monthly statements
must be sent disclosing recent price information for the penny stock held in the
account and information on the limited market in penny stocks. Consequently, the
"penny stock" rules may restrict the ability of broker-dealers to sell our
securities and may affect your ability to sell our securities in the secondary
market.
POSSIBLE VOLATILITY OF MARKET PRICE FOR OUR COMMON STOCK
From time to time and in particular during the last several years, the
stock market generally has experienced a high level of price and volume
volatility, and market prices for the securities of many companies have
experienced wide price fluctuations not necessarily related to the operating
performance of such companies. We believe that factors such as announcements of
developments related to our business, sales of our common stock in the public
market, and shortfalls or changes in our financial results from analysts'
expectations could cause the price of our securities to fluctuate substantially.
6
<PAGE> 9
ADDITIONAL SHARES WILL BE ELIGIBLE FOR PUBLIC SALE IN THE FUTURE
As of November 12, 1999, there were 4,474,757 shares of our common
stock outstanding. An additional 2,242,747 shares of common stock are issuable
upon the exercise of outstanding options and warrants, including warrants to
purchase 200,000 shares of common stock issued to certain of the selling
securityholders. Substantially all of these shares, when issued, may be
immediately resold in the public market pursuant to effective registration
statements under the Securities Act of 1933 or pursuant to Rule 144 under the
Securities Act.
We cannot give you any assurance as to the effect, if any, that future
sales of common stock, or the availability of shares of common stock for future
sales, will have on the market price of our common stock from time to time.
Sales of substantial amounts of common stock (particularly shares issued upon
conversion of the series A preferred stock), or the possibility of such sales,
could negatively affect the market price of our common stock and also impair our
ability to raise capital through an offering of equity securities in the future.
EFFECT OF ISSUANCE OF COMMON STOCK UPON EXERCISE OF WARRANTS AND OPTIONS
As of November 12, 1999, there were outstanding options and warrants to
purchase 2,242,747 shares of our common stock, including the warrants sold to
certain of the selling securityholders and upon exercise of stock options
granted pursuant to the Company's employee stock option plans; and 1,437,500
shares issuable upon exercise of the warrants issued in the Company's initial
public offering at an exercise price of $3.00 per share.
The exercise of warrants or options and the sale of the underlying
shares of common stock (or even the potential of such exercise or sale) could
have a negative effect on the market price of our common stock, and will have a
dilutive impact on other shareholders. Moreover, the terms upon which we will be
able to obtain additional equity capital may be negatively affected since the
holders of outstanding warrants and options can be expected to exercise them, to
the extent they are able, at a time when we would, in all likelihood, be able to
obtain any needed capital on terms more favorable than those provided in such
warrants or options.
FORWARD-LOOKING INFORMATION IS UNCERTAIN AND COULD BE WRONG
This prospectus contains forward-looking statements that involve risks
and uncertainties. These statements deal with our future plans and growth
strategies, as well as trends we anticipate in our industry. We base these
forward-looking statements largely on our expectations, which are subject to
risks and uncertainties often beyond our control. Our actual results could
differ materially from those anticipated in these forward-looking statements as
a result of many factors, including those described in this section and
elsewhere in this prospectus. In light of these risks and uncertainties, there
can be no assurance that the forward-looking information contained in this
prospectus will in fact occur or prove to be accurate.
7
<PAGE> 10
SELLING SECURITYHOLDERS
The following table sets forth the names of the selling
securityholders, the number of shares of common stock beneficially owned by each
selling securityholder as of November 12, 1999, and the number of shares that
each may offer, and the number of shares of common stock beneficially owned by
each selling securityholder upon completion of the offering, assuming all of the
shares offered are sold. The number of shares sold by each selling
securityholder may depend upon a number of factors, including, among other
things, the market price of the common stock. None of the selling
securityholders has, or within the past three years has had, any position,
office or other material relationship with us or any of our predecessors or
affiliates.
<TABLE>
<CAPTION>
SHARES OF SHARES OF SHARES OF
COMMON STOCK BENEFICIALLY COMMON STOCK OFFERED COMMON STOCK BENEFICIALLY
OWNED BEFORE OFFERING (1) IN THE OFFERING(1) OWNED AFTER CLOSING
------------------------- ------------------ -------------------
NAME OF SELLING SECURITYHOLDER NUMBER PERCENT(2) NUMBER NUMBER PERCENT
- ------------------------------ ------ ---------- ------ ------ -------
<S> <C> <C> <C> <C>
GPS America Fund Ltd. (2) 125,000 2.6% 125,000 0 --
Cache Capital (USA) L.P. (2) 200,000 4.2% 200,000 0 --
J.P. Carey Securities, Inc. (3) 200,000 4.2% 200,000 0 --
</TABLE>
- -----------------------------
* Represents less than 1%
(1) Unless otherwise indicated, each person has sole investment and voting power
with respect to the shares indicated. For purposes of computing the percentage
of outstanding shares held by each selling securityholder, any security which
such person has the right to acquire within 60 days after such date is deemed to
be outstanding for the purpose of computing the percentage ownership for such
person, but is not deemed to be outstanding for the purpose of computing the
percentage ownership of any other person.
(2) Except as otherwise stated, calculated based upon 4,792,348 shares of common
stock outstanding, and assumes that all outstanding series A preferred stock
will be converted at a price of $1.00 per share. The actual conversion price
will be 77% of the lower of (i) $2.00 or (ii) the average closing sales price
for the five trading days immediately prior to the date of conversion.
(3) Represents the maximum number of shares into which the series A preferred
stock may be converted, based upon an assumed conversion price of $1.00 per
share. The debentures are not convertible for any number of shares of common
stock in excess of that number which would (i) render a selling securityholder
at the time of the conversion the beneficial owner of more than 4.9% of the then
issued and outstanding shares of common stock or (ii) result in the issuance of
an aggregate number of shares of common stock representing more than 19.9% of
the number of shares of common stock issued and outstanding on October 15, 1999,
the date upon which the series A preferred stock was first issued.
(4) Represents shares that may be acquired upon the exercise of warrants under a
Warrant Purchase Agreement dated as of October 15, 1999 at $2.00 per share.
8
<PAGE> 11
We are registering the shares for resale by the selling securityholders
in accordance with registration rights granted to the selling securityholders.
We will pay the registration and filing fees, printing expenses, listing fees,
blue sky fees, if any, and fees and disbursements of our counsel in connection
with this offering, but the selling securityholders will pay any underwriting
discounts, selling commissions and similar expenses relating to the sale of the
shares, as well as the fees and expenses of their counsel. In addition, we have
agreed to indemnify the selling securityholders, underwriters who may be
selected by the selling securityholders and certain affiliated parties, against
certain liabilities, including liabilities under the Securities Act, in
connection with the offering. The selling securityholders may agree to indemnify
any agent, dealer or broker-dealer that participates in transactions involving
sales of the shares against certain liabilities, including liabilities under the
Securities Act. The selling securityholders have agreed to indemnify us and our
directors and officers, as well as any person controlling the company, against
certain liabilities, including liabilities under the Securities Act. Insofar as
indemnification for liabilities under the Securities Act may be permitted to our
directors or officers, or persons controlling the company, we have been informed
that in the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
9
<PAGE> 12
PLAN OF DISTRIBUTION
The selling securityholders (or, subject to applicable law, their
pledgees, donees, distributees, transferees or other successors in interest) may
sell shares from time to time in public transactions, on or off The Nasdaq
SmallCap Market, or private transactions, at prevailing market prices or at
privately negotiated prices, including but not limited to the following types of
transactions:
- ordinary brokerage transactions and transactions in which the
broker solicits purchasers;
- a block trade in which the broker-dealer so engaged will
attempt to sell the shares as agent but may position and
resell a portion of the block as principal to facilitate the
transaction;
- purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this
prospectus; and
- face-to-face transactions between sellers and purchasers
without a broker-dealer.
In effecting sales, brokers or dealers engaged by the selling
securityholders may arrange for other brokers or dealers to participate in the
resales. The selling securityholders may enter into hedging transactions with
broker-dealers, and in connection with those transactions, broker-dealers may
engage in short sales of the shares. The selling securityholders have agreed
that they will not enter into any short position with respect to the common
stock. The selling securityholders also may enter into option or other
transactions with broker-dealers which require the delivery to the broker-dealer
of the shares, which the broker-dealer may resell pursuant to this prospectus.
The selling securityholders also may pledge the shares to a broker or dealer and
upon a default, the broker or dealer may effect sales of the pledged shares
pursuant to this prospectus.
Brokers, dealers or agents may receive compensation in the form of
commissions, discounts or concessions from selling securityholders in amounts to
be negotiated in connection with the sale. The selling securityholders and any
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales and any such
commission, discount or concession may be deemed to be underwriting
compensation.
Information as to whether underwriters who may be selected by the
selling securityholders, or any other broker-dealer, are acting as principal or
agent for the selling securityholders, the compensation to be received by
underwriters who may be selected by the selling securityholders, or any
broker-dealer, acting as principal or agent for the selling securityholders and
the compensation to be received by other broker-dealers, in the event the
compensation of such other broker-dealers is in excess of usual and customary
commissions, will, to the extent required, be set forth in a supplement to this
prospectus. Any dealer or broker participating in any distribution of the shares
may be required to deliver a copy of this prospectus, including a prospectus
supplement, if any, to any person who purchases any of the shares from or
through such dealer or broker.
We have advised the selling securityholders that during such time as
they may be engaged in a distribution of the shares they are required to comply
with Regulation M promulgated under the Securities Exchange Act of 1934. With
certain exceptions, Regulation M precludes any selling securityholder, any
affiliated purchasers and any broker-dealer or other person who participates in
such distribution from bidding for or purchasing, or attempting to induce any
person to bid for or purchase any security which is the subject of the
distribution until the entire distribution is complete. Regulation M also
prohibits any bids or purchases made in order to stabilize the price of a
security in connection with the distribution of that security. All of the
foregoing may affect the marketability of the common stock.
10
<PAGE> 13
LEGAL MATTERS
The validity of the shares of common stock offered hereby has been
passed upon by Red Hot Law Group of Ashley LLC, Atlanta, Georgia.
EXPERTS
The consolidated financial statements of Professional Transportation
Group Ltd., Inc. at December 31, 1998 and for the years ended December 31, 1996,
1997 and 1998, appearing in our Annual Report (on Form 10-K) for the year ended
December 31, 1998 incorporated by reference in this registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in accounting and auditing
in giving said report.
11
<PAGE> 14
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses payable by the Registrant in connection with the issuance
and distribution of the securities being registered are estimated below:
<TABLE>
<S> <C>
SEC registration fee.................................$ 271.06
Listing fees...........................................17,500.00
Legal fees and expenses................................15,000.00
Printing expenses.......................................2,000.00
Accounting fees.........................................3,500.00
Miscellaneous...........................................1,728.94
Total.......................................$ 40,000.00
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article VII of the Registrant's by-laws provides that a director,
officer, employee or agent of the Registrant or of another entity at the request
of the Registrant shall be indemnified against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement in connection with
certain actions, suits or proceedings, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation--a
"derivative action") if he acted in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. In the case of derivative actions, indemnification only extends to
expenses (including attorneys' fees) incurred in connection with the defense or
settlement of such an action, if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, except that no person who has been adjudged to be liable to the
Registrant shall be entitled to indemnification unless a court determines that
despite such adjudication of liability but in view of all of the circumstances
of the case, the person seeking indemnification is fairly and reasonably
entitled to be indemnified for such expenses as the court deems proper.
Article 7.3 of the Registrant's by-laws further provides that directors
and officers may, as authorized by the Board generally or as to a specific case
or person(s), be paid by the Registrant the expenses incurred in defending the
proceedings specified above in advance of their final disposition, provided that
such payment will only be made upon delivery to the Registrant by the
indemnified party of an undertaking to repay all amounts so advanced if it is
ultimately determined that the person receiving such payments is not entitled to
be indemnified.
Article 7.4 of the Registrant's by-laws provides that the right to
indemnification and the advancement of provided in the Article will not be
exclusive of any other right which any person may have or acquire under the
by-laws, any agreement, or otherwise.
12
<PAGE> 15
Finally, Article 7.5 of the Registrant's by-laws provides that the
Registrant may purchase and maintain insurance on behalf of persons entitled to
indemnification under this Article against any liability, whether or not the
Registrant would have the power to indemnify such persons against such liability
under the provisions of Article VI of the by-laws. The Registrant maintains and
has in effect such insurance.
Article VIII of the Registrant's articles of incorporation eliminates
the personal liability of the Registrant's directors to the Registrant or its
shareholders for monetary damages for breach of their fiduciary duties as a
director to the fullest extent provided by Georgia law. Section 14-2-856(b) of
the OCGA provides for the elimination off such personal liability, except for
liability (i) for any appropriation, in violation of the director's duties, of
any business opportunity of the Registrant, (ii) for acts or omissions that
involve intentional misconduct or a knowing violation of law, (iii) under
Section 14-2-832 of the OCGA or (iv) for any transaction from which the director
received any improper personal benefit.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Registrant pursuant to the foregoing provisions, the Registrant has been
informed that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- --- -----------
<S> <C>
3.1 Amendment to Amended and Restated Articles of Incorporation,
including Certificate of Designations for Series A Preferred
Stock
4.1 Form of Purchase Agreement for Series A Preferred Stock.
5.1 Opinion of Red Hot Law Group of Ashley LLC
23.1 Consent of Red Hot Law Group of Ashley LLC (included in
Exhibit 5.1)
23.2* Consent of Arthur Andersen LLP
</TABLE>
- --------------
* To be filed by amendment.
ITEM 17. UNDERTAKINGS.
(A) RULE 415 OFFERING
The undersigned small business issuer hereby undertakes that it will:
(1) File, during any period in which it offers or sells securities, a
post-effective amendment to this registration statement to:
(i) Include any prospectus required by section l0(a) (3) of the
Securities Act of 1933.
(ii) Reflect in the prospectus any facts or events which,
individually or in the aggregate, represent a fundamental change in the
information set forth in the registrant statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
13
<PAGE> 16
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent
no more than a 20% change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement.
(iii) Include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement.
(2) For determining any liability under the Securities Act of 1933, each such
post-effective amendment shall be deemed a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time to be the initial bona fide offering thereof.
(3) Remove from registration by means of a post-effective amendment any of the
securities being registered that remain unsold at the termination of the
offering.
(B) REQUEST FOR ACCELERATION OF EFFECTIVE DATE
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or otherwise,
the small business issuer has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the small business issuer of the expenses incurred or paid by a
director, officer, or controlling person of the small business issuer 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 small business issuer 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 Securities Act and will be governed by
the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, hereunto duly
authorized, in the City of Calhoun, State of Georgia, on November 12, 1999.
PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
<TABLE>
<S> <C>
By: By:
/s/ Dennis A. Bakal /s/ Susan P. Dial
- ------------------------------------- -----------------------------------------
Dennis A. Bakal Susan P. Dial
Chief Executive Officer and President Chief Financial Officer
(Principal Executive Officer) (Principal Financial and Accounting Officer)
</TABLE>
14
<PAGE> 17
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Dennis A. Bakal or Susan P. Dial as his true and
lawful attorney-in-fact and agent, 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, granting unto said attorney-in-fact and agent, full power and
authority to do and perform each and ever act and thing requisite and necessary
to be done in and about the premises, as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, 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 by the following persons in the
capacities indicated on November 12, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ---------- -----
<S> <C>
/s/ Dennis A. Bakal Chief Executive Officer, President and Director
- ----------------------------------------------------- (Principal Executive Officer)
Dennis A. Bakal
/s/ Susan P. Dial Chief Financial Officer
- ----------------------------------------------------- (Principal Financial and Accounting Officer)
Susan P. Dial
/s/ Robert E. Altenbach Director
- -----------------------------------------------------
Robert E. Altenbach
/s/ Gregory G. Hardwick Director
- -----------------------------------------------------
Gregory G. Hardwick
/s/ Linda K. Roberts Director and Vice President/Administration
- -----------------------------------------------------
Linda K. Roberts
</TABLE>
15
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ----------- -----------
<S> <C>
3.1 Amendment to Amended and Restated Articles of Incorporation,
including Certificate of Designations for Series A Preferred
Stock
4.1 Form of Purchase Agreement for Series A Preferred Stock
5.1 Opinion of Red Hot Law Group of Ashley LLC
23.1 Consent of Red Hot Law Group of Ashley LLC (included in
Exhibit 5.1)
23.2* Consent of Arthur Andersen LLP
</TABLE>
- ------------------
* To be filed by amendment.
16
<PAGE> 1
AMENDMENT TO
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
PROFESSIONAL TRANSPORTATION GROUP LTD. INC.
On October 8, 1999, the following amendment to the Amended and Restated
Articles of Incorporation of PROFESSIONAL TRANSPORTATION GROUP LTD., INC., a
Georgia corporation (hereinafter referred to as the "Corporation"), was duly
adopted by unanimous vote of the Board of Directors:
1. AMENDMENT TO ARTICLES. The Amended and Restated Articles of
Incorporation of the Corporation are hereby amended by incorporating the
Certificate of Designations of the Series A Preferred Stock attached hereto and
incorporated herein as Exhibit "A".
2. AUTHORIZATION. The within and foregoing amendment to the Amended and
Restated Articles of Incorporation was duly approved by unanimous written
consent of the Board of Directors in accordance with the provisions of Section
14-2-602(d)(4) of the Georgia Business Corporation Code. This Amendment was
adopted by the Board of Directors without shareholder action. Shareholder action
was not required.
3. RESTATEMENT. Except as amended hereby, the Amended and Restated
Articles of Incorporation of the Corporation shall remain in full force and
effect as originally set out.
4. EFFECTIVE DATE. This Amendment shall become effective upon the
filing thereof with the Secretary of State for the State of Georgia.
IN WITNESS WHEREOF, the Corporation has caused this amendment to
Amended and Restated Articles of Incorporation to be executed by its duly
authorized officers, this 8th day of October, 1999.
PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
By: /s/ Dennis A. Bakal
-----------------------------------------
Dennis A. Bakal, President and CEO
<PAGE> 2
EXHIBIT A
CERTIFICATE OF DESIGNATIONS
OF THE
SERIES A PREFERRED STOCK
This Amendment to the Amended and Restated Articles of Incorporation of
Professional Transportation Group Ltd., Inc. (the "Corporation") provides for a
class of shares of stock designated of the Corporation's Preferred Stock.
NOW, THEREFORE, BE IT RESOLVED, that there shall be one series of
Preferred Stock of the Corporation that is designated "Series A Preferred Stock"
(hereinafter referred to as the "Series A Preferred Stock"). The number of
authorized shares of Series A Preferred Stock shall be Three Thousand (3,000),
no par value. The powers, designations, preferences and relative rights of the
Series A Preferred Stock, and the qualifications, limitations and restrictions
of such preferences and rights shall be as follows:
1. Definitions.
For purposes of this Section, the following definitions shall apply:
(a) "Additional Shares of Common Stock" shall have the meaning
set forth in subparagraph 6(j) hereof.
(b) "Board" shall mean the Board of Directors of the Corporation.
(c) "Common Stock" shall mean the Common Stock, no par value, of
the Corporation.
(d) "Conversion Price" shall have the meaning set forth in
paragraph 6(b) hereof.
(e) "Face Amount" shall mean, with respect to any share of
Series A Preferred Stock, an amount equal to One Thousand Dollars ($1,000).
(f) "Junior Stock" shall mean the Common Stock of the Corporation
and any other class or series of stock of the Corporation issued on or after the
Original Issue Date and not entitled to receive any assets or amounts
distributable upon liquidation, dissolution or winding up of the Corporation
prior to or preferentially to the Series A Preferred Stock or any Parity Stock.
(g) "Original Issue Date" for a share of the Series A Preferred
Stock shall mean the date on which such share of such Preferred Stock was
originally issued. With respect to a particular share of the Series A Preferred
Stock, the "Issue Date" for such share shall be the date on which such share was
issued.
<PAGE> 3
(h) "Original Issue Price" shall mean $1,000.00 per share of
Series A Preferred Stock.
(i) "Parity Stock" shall mean any class or series of stock of the
Corporation issued on or after the Original Issue Date (whether or not the
liquidation prices per share thereof shall be different from those of the Series
A Preferred Stock) if the holders thereof and the holders of the Series A
Preferred Stock shall be entitled to receive assets or amounts distributable
upon liquidation, dissolution or winding up of the Corporation, in proportion to
their liquidation prices, without preference or priority of one over the other.
(j) "Person" means any individual, corporation, partnership,
joint venture, limited liability company, association, joint-stock company,
trust, estate, unincorporated organization or government or any agency or
political subdivision thereof.
(k) "Priority Stock" means any class or series of stock of the
Corporation issued on or after the Original Issue Date and entitled to receive
assets or amounts distributable upon liquidation, dissolution or winding up of
the Corporation prior or preferentially to the Series A Preferred Stock or any
Parity Stock.
(l) "Subsidiary" shall mean any corporation at least fifty
percent (50%) of whose outstanding voting stock shall at the time be owned
directly or indirectly by the Corporation or by one or more Subsidiaries.
2. Designation of Series. Three Thousand (3,000) shares of the
Preferred Stock, no par value, of the Corporation shall constitute a series of
Preferred Stock designated as Series A Convertible Preferred Stock.
3. Dividends. The holders of record of the then outstanding
shares of Series A Preferred Stock shall be entitled to receive out of funds
legally available therefor, dividends at an annual rate of $40.00 per share,
payable quarterly in arrears and prorated for any partial year, prior and in
preference to any declaration of payment of any dividend on the Common Stock.
Such dividend shall commence on the last day of each quarter of the
Corporation's fiscal year and shall be payable on the last day of each quarter
of each fiscal year thereafter. Such dividend shall be cumulative and shall
accrue whether or not declared by the Board of Directors of the Corporation.
Except as may be provided herein, no dividends may be paid with respect to the
Common Stock of the Corporation so long as shares of the Series A Preferred
Stock are issued and outstanding. Except as may be provided herein, the
Corporation shall be under no obligation to pay such dividends unless so
declared by the Board of Directors.
4. Liquidation Rights.
(a) In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, after paying debts and
distributions to holders of Priority Stock, but before any payment or
distribution of the assets of the Corporation shall be made to or set apart for
the holders of any Junior Stock of the Corporation, the holder of each share of
the Series A Preferred Stock shall be entitled to receive from the assets of the
Corporation available
2
<PAGE> 4
for distribution to the shareholders an amount in cash (the "Liquidation
Preference") equal to their Original Issue Price per share plus all accrued and
unpaid dividends. If, after such payment, assets remain in the Corporation,
these assets would be allocated on a pro rata basis to all existing shareholders
(inclusive of Series A Preferred Stockholders) as if the Series A Preferred
Stock had converted each share of Series A Preferred Stock into the Common Stock
at the applicable Conversion Price in effect at the time of the liquidation
prior to the aforementioned payment.
(b) Any merger, reorganization, consolidation where the
Corporation is not the survivor, or sale of substantially all of the assets to
another Person or entity, or the sale of eighty percent (80%) or more of the
outstanding Common Stock of the Corporation by the holders thereof, in a single
transaction or in a series of related transactions, or stock of the Corporation
shall be regarded as a liquidation, dissolution or winding up of the affairs of
the Corporation within the meaning of this paragraph 4; and in such event, each
holder of shares of Series A Preferred Stock then outstanding shall have the
right to elect the benefits of the provisions of subparagraph 6(h) hereof in
lieu of receiving payment of the Liquidation Preference and other payments
pursuant to this paragraph 4.
5. Voting Rights. Except for the rights otherwise provided for
herein or by law, the holders of the Series A Preferred Stock shall be entitled
to no voting rights.
6. Conversion. The holders of the Series A Preferred Stock shall
have the following conversion rights (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock
shall be convertible, at the option of the holder thereof, at any time after the
date provided below until October _____, 2001, at the office of the Corporation
or any transfer agent for the Series A Preferred Stock or Common Stock, into
fully paid and nonassessable shares of Common Stock, at the Conversion Price (as
hereafter defined) therefor in effect at the time of conversion determined as
provided herein. One third (1/3) of the shares of Series A Preferred Stock held
on the Original Issue Date shall be eligible for conversion on or after January
1, 2000, one third (1/3) on or after February 1, 2000 and the final one-third
(1/3) on or after March 1, 2000. In the event that the average closing sales
price for the Corporation's Common Stock for any five consecutive trading days
exceeds $2.00 per share, all shares of Series A Preferred Stock will be
immediately eligible for conversion hereunder.
(b) Conversion Price. Shares of Series A Preferred Stock shall be
convertible into the number of shares of Common Stock that results from dividing
the Original Issue Price multiplied by the number of shares of Series A
Preferred Stock being converted by the Conversion Price per share in effect at
the time for conversion. The Conversion Price per share for the Series A
Preferred Stock shall equal 77% of the lower of (i) $2.00 or (ii) the average
closing sales price for the Corporation's Common Stock for the five trading days
prior to the date of conversion.
(c) Mechanics of Conversion: Unpaid Dividends. Before any holder
of Series A Preferred Stock shall be entitled to convert the same into shares of
Common Stock, he shall surrender the certificate or certificates therefor, duly
endorsed, at the office of the Corporation or
3
<PAGE> 5
of any transfer agent for the Series A Preferred Stock or Common Stock, and
shall give written notice by mail, postage prepaid, to the Corporation at such
office that he elects to convert the same and shall state therein the number of
shares of Series A Preferred Stock being converted which shall include the name
or names in which the certificate or certificates for shares of Common Stock are
to be issued. Thereupon the Corporation shall promptly issue and deliver at such
office to such holder of Series A Preferred Stock or to the nominee or nominees
of such holder a certificate or certificates for the number of shares of Common
Stock to which he shall be entitled.
Such conversion shall be deemed to have been made immediately prior to
the close of business on the date of such surrender of the shares of Series A
Preferred Stock to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock on
such date. All dividends accrued and unpaid, if any, prior to surrender of
shares of Series A Preferred Stock surrendered for conversion shall be forfeited
upon conversion thereof.
(d) Adjustment for Stock Splits and Combinations. If the
Corporation shall at any time or from time to time after the Original Issue Date
effect a subdivision of the outstanding Common Stock, the Conversion Price then
in effect immediately before that subdivision shall be proportionately
decreased. If the Corporation shall at any time or from time to time after the
Original Issue Date reduce the outstanding shares of Common Stock, by
combination or similar transaction, the Conversion Price then in effect
immediately before the combination shall be proportionately increased. Any
adjustment under this paragraph 6(d) shall become effective at the close of
business on the date the subdivision or combination becomes effective.
(e) Adjustment for Certain Dividends and Distributions. In the
event the Corporation at any time or from time to time after the Original Issue
Date shall make or issue, or fix a record date for the determination of holders
of Common Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in each such event the Conversion
Price for the Series A Preferred Stock then in effect shall be decreased as of
the time of such issuance or, in the event such a record date shall have been
fixed, as of the close of business on such record date, by multiplying the
Conversion Price for the Series A Preferred Stock then in effect by a fraction:
(i) the numerator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, and
(ii) the denominator of which shall be the total number of
shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date, plus the number of
shares of Common Stock issuable in payment of such dividend or distribution;
provided, that if such record date shall have been fixed and such dividend is
not fully paid or if such distribution is not fully made on the date fixed
therefor, the Conversion Price for the Series A Preferred Stock shall be
recomputed accordingly as of the close of business on such record date and
thereafter the Conversion Price for the Series A
4
<PAGE> 6
Preferred Stock shall be adjusted pursuant to this paragraph 6(e) as of the time
of actual payment of such dividends or distributions.
(f) Adjustments for Other Dividends and Distributions. In the
event that the Corporation at any time or from time to time after the Original
Issue Date shall make or issue, or fix a record date for the determination of
holders of Common Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Common Stock, then
and in each such event provision shall be made so that the holders of Series A
Preferred Stock shall receive upon conversion thereof, in addition to the number
of shares of Common Stock receivable thereupon, the amount of securities of the
Corporation that they would have received had their Series A Preferred Stock
been converted into Common Stock on the date of such event and had thereafter,
during the period from the date of such event to and including the conversion
date, retained such securities receivable by them as aforesaid during such
period giving application to all adjustments called for during such period under
this paragraph 6(f) with respect to the rights of the holders of the Series A
Preferred Stock.
(g) Adjustment for Reclassification, Exchange or Substitution. If
the Common Stock issuable upon the conversion of the Series A Preferred Stock
shall be changed into the same or a different number of shares of any class or
classes of stock, whether by capital reorganization, reclassification or
otherwise (other than a subdivision or combination of shares or stock dividend
provided for in subparagraph 6(d) above, or a reorganization, merger,
consolidation or sale of assets provided for in subparagraph 6(h) below), then
and in each such event the holder of each share of Series A Preferred Stock
shall have the right thereafter to convert such share into the kind and amounts
of shares of stock and other securities and property receivable upon such
reorganization, reclassification or other change, by holders of the number of
shares of Common Stock into which such shares of Series A Preferred Stock might
have been converted immediately prior to such reorganization, reclassification
or change, all subject to further adjustment as provided herein.
(h) Reorganization, Mergers, Consolidations or Sales of Assets.
If at any time or from time to time there shall be a capital reorganization of
the Common Stock (other than a subdivision, combination, reclassification or
exchange of shares provided for above in this paragraph 6) or a merger or
consolidation of the Corporation with or into another corporation, or the sale
of all or substantially all the Corporation's properties and assets to any other
person, then, as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the holders of the Series A Preferred Stock
shall thereafter be entitled to receive upon conversion of the Series A
Preferred Stock, the number of shares of stock or other securities or property
of the Corporation, or of the successor corporation resulting from such merger
or consolidation or sale, to which a holder of that number of shares of Common
Stock deliverable upon conversion of the Series A Preferred Stock would have
been entitled on such capital reorganization, merger, consolidation or sale. In
any such case, appropriate adjustment shall be made in the application of the
provisions of this paragraph 6 with respect to the rights of the holders of the
Series A Preferred Stock after the reorganization, merger, consolidation or sale
to the end that the provisions of this paragraph 6 (including adjustment of the
Conversion Price then in effect and the number of shares purchasable upon
conversion of the Series A Preferred Stock) shall be applicable after that event
as nearly equivalent as may be practicable. Each
5
<PAGE> 7
holder of shares of Series A Preferred Stock, upon the occurrence of a capital
reorganization, merger or consolidation of the Corporation or the sale of all or
substantially all its assets and properties as such events are more fully set
forth in this subparagraph 6(h), shall have the option of electing treatment of
his shares of Series A Preferred Stock under either this subparagraph 6(h) or
paragraph 4 hereof, notice of which election shall be submitted in writing to
the Corporation at its principal office no later than ten (10) days before the
effective date of such event.
(i) Sale of Shares Below Conversion Price.
(i) If at any time or from time to time after the
Original Issue Date, the Corporation shall issue or sell Additional Shares of
Common Stock (as hereinafter defined), other than as a dividend as provided in
subparagraph 6(f) above, and other than upon a subdivision or combination of
shares of Common Stock as provided in subparagraph 6(d) above, for a
consideration per share less than the then existing Conversion Price for the
Series A Preferred Stock (or, if an adjusted Conversion Price shall be in effect
by reason of a previous adjustment, then less than such adjusted Conversion
Price), then and in each case the then Conversion Price for the Series A
Preferred Stock shall be reduced, as of the opening of business on the date of
such issue or sale, to a price determined by multiplying that Conversion Price
by a fraction, (A) the numerator of which shall be (1) the number of shares of
Common Stock outstanding immediately prior to such issue or sale, plus (2) the
number of shares of Common Stock that the aggregate consideration received by
the Corporation for the total number of Additional Shares of Common Stock so
issued would purchase at such Conversion Price, and (B) the denominator of which
shall be the number of shares of Common Stock outstanding immediately prior to
such issue or sale plus the number of such Additional Shares of Common Stock so
issued.
(ii) For the purpose of making any adjustment in the
Conversion Price or number of shares of Common Stock purchasable on conversion
of Series A Preferred Stock as provided above, the consideration received by the
Corporation for any issue or sale of securities shall,
(A) to the extent it consists of cash, be
computed at the net amount of cash received by the Corporation after deduction
of any underwriting or similar commissions, concessions or compensation paid or
allowed by the Corporation in connection with such issue or sale;
(B) to the extent it consists of services or
property other than cash, be computed at the fair value of such services or
property as determined in good faith by the Board; and
(C) if Additional Shares of Common Stock,
Convertible Securities (as hereinafter defined), or rights or options to
purchase either Additional Shares of Common Stock or Convertible Securities are
issued or sold together with other stock or securities or other assets of the
Corporation for a consideration that covers both, be computed as the portion of
the consideration so received that may be reasonably determined in good faith by
the Board to be
6
<PAGE> 8
allocable to such Additional Shares of Common Stock, Convertible Securities or
rights or options.
(iii) For the purpose of the adjustment provided in
subsection (1) of this subparagraph 6(i), if at any time or from time to time
after the Original Issue Date, the Corporation shall issue any rights or options
for the purchase of, or stock or other securities convertible into, Additional
Shares of Common Stock (such convertible stock or securities being hereinafter
referred to as "Convertible Securities"), then, in each case, if the Effective
Price (as hereinafter defined) of such rights, options or Convertible Securities
shall be less than the then existing Conversion Price for the Series A Preferred
Stock, the Corporation shall be deemed to have issued at the time of the
issuance of such rights or options or Convertible Securities the maximum number
of Additional Shares of Common Stock issuable upon exercise or conversion
thereof and to have received as consideration for the issuance of such shares an
amount equal to the total amount of the consideration, if any, received by the
Corporation for the issuance of such rights or options or Convertible
Securities, plus, in the case of such options or rights, the minimum amounts of
consideration, if any, payable to the Corporation upon exercise or conversion of
such options or rights. For purposes of this subsection (iii), "Effective Price"
shall mean the quotient determined by dividing the total of all such
consideration by such maximum number of Additional Shares of Common Stock. No
further adjustment of the Conversion Price adjusted upon the issuance of such
rights, options or Convertible Securities shall be made as a result of the
actual issuance of Additional Shares of Common Stock on the exercise of any such
rights or options or the conversion of any such Convertible Securities.
If any such rights or options or the conversion
privilege represented by any such Convertible Securities shall expire without
having been exercised, the Conversion Price adjusted upon the issuance of such
rights, options or Convertible Securities shall be readjusted to the Conversion
Price that would have been in effect had an adjustment been made on the basis
that the only Additional Shares of Common Stock so issued were the Additional
Shares of Common Stock, if any, actually issued or sold on the exercise of such
rights or options or rights of conversion of such rights or options or rights of
conversion of such Convertible Securities, and such Additional Shares of Common
Stock, if any, were issued or sold for the consideration actually received by
the Corporation upon such exercise, plus the consideration, if any, actually
received by the Corporation for the granting of all such rights or options,
whether or not exercised, plus the consideration received for issuing or selling
the Convertible Securities actually converted plus the consideration, if any,
actually received by the Corporation on the conversion of such Convertible
Securities.
(j) Definition. The term "Additional Shares of Common
Stock" as used herein shall mean all shares of Common Stock issued or deemed
issued by the Corporation after the Original Issue Date, whether or not
subsequently reacquired or retired by the Corporation, other than (1) shares of
Common Stock issued upon conversion of the Series A Preferred Stock, or upon
conversion of Parity Stock or Priority Stock, and (2) such number of shares of
Common Stock (as adjusted for all stock dividends, stocks splits, subdivisions
and combinations) issued to employees, officers, directors, consultants or
members of the Board of Directors of the Corporation, or other persons
performing services for the Corporation, pursuant to any stock
7
<PAGE> 9
option plan, stock purchase plan or management incentive plan, agreement or
arrangement approved by the Board or its Compensation Committee.
(k) Accountants' Certificate of Adjustment. In each case of an
adjustment or readjustment of the Conversion Price for the number of shares of
Common Stock or other securities issuable upon conversion of the Series A
Preferred Stock, the Corporation, at its expense, shall cause independent
certified public accountants of recognized standing selected by the Corporation
(who may be the independent certified public accountants then auditing the books
of the Corporation) to compute such adjustment or readjustment in accordance
herewith and prepare a certificate showing such adjustment or readjustment, and
shall mail such certificate, certified or registered mail, return receipt
requested, postage prepaid, to each registered holder of the Series A Preferred
Stock at the holder's address as shown in the Corporation's books. The
certificate shall set forth such adjustment or readjustment, showing in detail
the facts upon which such adjustment or readjustment is based including a
statement of (A) the consideration received or to be received by the Corporation
for any Additional Shares of Common Stock issued or sold or deemed to have been
issued or sold, (B) the Conversion Price at the time in effect for each series
of the Series A Preferred Stock and (C) the number of Additional Shares of
Common Stock and the type and amount, if any, of other property which at the
time would be received upon conversion of the Series A Preferred Stock.
(l) Notices of Record Date. In the event of (i) the fixing of any
record date for the purpose of determining the holders of any class or series of
securities of the Corporation who are entitled to receive any dividend or other
distribution, or (ii) any reclassification or recapitalization of the capital
stock of the Corporation, any merger or consolidation of the Corporation, or any
transfer of all or substantially all the assets of the Corporation to any other
corporation, entity or person, or any voluntary or involuntary dissolution,
liquidation or winding up of the affairs of the Corporation, the Corporation
shall mail in accordance with the provisions of subparagraph 6(o) to each holder
of Series A Preferred Stock, at least fourteen (14) days prior to (A) the record
date specified in clause (i) above, or (B) the effective date of any event
enumerated in clause (ii) above, a notice specifying (A) such record date and a
description of such dividend or distribution, or (B) the date on which any such
reorganization, reclassification, transfer, consolidation, merger, dissolution,
liquidation or winding up is expected to become effective, and the time, if any
is to be fixed, when the holders of record of Common Stock (or other securities)
shall be entitled to exchange their shares of Common Stock (or other securities)
for securities or other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, dissolution, liquidation or
winding up.
(m) Fractional Shares. No fractional shares of Common Stock shall
be issued upon conversion of shares of Series A Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay cash equal to the product of such fraction multiplied by
the fair market value of one share of Common Stock on the date of conversion, as
determined in good faith by the Board. Whether or not fractional shares are
issuable upon such conversion shall be determined on the basis of the total
number of shares of Series A Preferred Stock the holder is at the time
converting into Common Stock and the number of shares of Common Stock issuable
upon such aggregate conversion.
8
<PAGE> 10
(n) Reservation of Stock Issuable Upon Conversion. The Corporation
shall at all times reserve and keep available out of its authorized but unissued
shares of Common Stock, solely for the purpose of effecting the conversion of
the shares of the Series A Preferred Stock, such number of its shares of Common
Stock as shall from time to time be sufficient to effect the conversion of all
outstanding shares of the Series A Preferred Stock. As a condition precedent to
the taking of any action which would cause an adjustment to the Conversion
Price, the Corporation will take such corporate action as may, in the opinion of
its counsel, be necessary to increase its authorized but unissued shares of
Common Stock to such number of shares as shall be sufficient in order that it
may validly and legally issue the shares of its Common Stock issuable based upon
such adjusted Conversion Price.
(o) Notices. Any notice required by the provisions of this
paragraph 6 to be given to a holder of shares of the Series A Preferred Stock
shall be deemed given when personally delivered to such holder or when faxed to
such holder at a number previously furnished to the Corporation by such holder,
or one (1) business day after such notice has been submitted to a reputable
overnight courier service for delivery to a holder at his address appearing on
the books of the Corporation, or three (3) business days after the same has been
deposited in the United States mail, certified or registered mail, return
receipt requested, postage prepaid, and addressed to such holder at his address
appearing on the books of the Corporation.
(p) Payment of Taxes. The Corporation will pay all taxes and other
governmental charges (other than taxes measured by the revenue or income of the
holders of the Series A Preferred Stock) that may be imposed in respect of the
issue or delivery of shares of Common Stock upon conversion of shares of the
Series A Preferred Stock.
(q) No Dilution or Impairment. The Corporation shall not amend its
Articles of Incorporation or participate in any reorganization,
recapitalization, transfer of assets, consolidation, merger, dissolution, issue
or sale of securities or any other voluntary action, in each case for the
purpose of avoiding or seeking to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Corporation, but will at
all times in good faith assist in carrying out all such action as may be
reasonably necessary or appropriate in order to protect the conversion rights of
the holders of the Series A Preferred Stock against dilution or other
impairment.
(r) Conversion Restrictions. At no time will a holder of Series A
Preferred Stock convert shares of Series A Preferred Stock such that at the time
of conversion will result in such holder owning greater than 4.9% of the
outstanding Common Stock of the Corporation. In addition, notwithstanding
anything to the contrary contained herein, in the event that a conversion (when
aggregated with all prior conversions of portions of Series A Preferred Stock of
all holders) requires the Company to issue a number of shares of Common Stock
which would exceed 19.9% of the number of shares of Common Stock issued and
outstanding on the Original Issue Date the Company shall issue only such number
of shares of Common Stock as shall not exceed such limit and shall pay the
Holder cash in the amount of the market price (determined by the average of the
closing sales price for the Common Stock for the five trading days prior to the
date of measurement) for the number of shares of Common Stock in excess of such
number of shares into which the Series A Preferred Stock (or the portion thereof
then being converted) is
9
<PAGE> 11
then convertible at the Conversion Price, unless the Company has obtained
shareholder approval for such issuance pursuant to the rules of The Nasdaq Stock
Market, or as otherwise permitted by The Nasdaq Stock Market.
7. Redemption. The Corporation shall have the right to redeem the
Series A Preferred Stock in whole or in part at any time. At the election of a
majority of the holders of Series A Preferred Stock, the Corporation shall
redeem a number of shares of Series A Preferred Stock outstanding as of the
dates as set forth here below:
<TABLE>
<CAPTION>
Anniversary of Closing Maximum Number of
("Anniversary Date") Outstanding Shares Redeemed
---------------------- ----------------------------
<S> <C>
Third (3rd) year 33.3%
Fourth (4th) year 50.0%
Fifth (5th) year 100.0%
</TABLE>
The redemption price per share of Series A Preferred Stock
(the "Redemption Price") shall be equal to the sum (i) of the Original Issue
Price per share plus (ii) a four percent (4%) annual return on such amount, plus
(iii) accrued and unpaid dividends, commencing on the first Anniversary Date
available as stated above. The holders of the Series A Preferred Stock shall
have a period of ninety (90) days commencing with the first eligible Anniversary
Date stated above to notify the Corporation in writing of their election to
exercise their right to require the Corporation to redeem all shares of Series A
Preferred Stock held by such holder. The Corporation shall have no obligation to
redeem any shares of Series A Preferred Stock held by a holder that fails to
give such written notice to the Corporation within such ninety (90) day period.
The Redemption Price shall be payable within sixty (60) days of receipt of the
holder's election.
8. Restrictions and Limitations. Except as otherwise provided
below, as long as any shares of Series A Preferred Stock remain outstanding, the
Corporation shall not, and shall not permit any Subsidiary to, without the vote
or written consent by the holders of at least a majority of the then outstanding
shares of Series A Preferred Stock:
(a) Except as otherwise provided in Section 7, redeem,
purchase or otherwise acquire for value, any share or shares of Series A
Preferred Stock otherwise than by conversion in accordance with paragraph 6
hereof;
(b) Purchase, redeem or otherwise acquire (or pay into or
set aside for a sinking fund for such purpose) any of the Common Stock;
provided, that this restriction shall not apply to the repurchase of shares of
Common Stock from present or former employees, officers and directors of the
Corporation, members of the Corporation's Board of Directors, or consultants or
other persons performing services for the Corporation or any Subsidiary pursuant
to agreements under which the Corporation has the option to repurchase such
shares upon the occurrence of certain events, such as the termination of
employment;
10
<PAGE> 12
(c) Authorize or issue, or obligate itself to issue, any
other equity security (including any security convertible into or exercisable
for any equity security) senior to or on a parity with the Series A Preferred
Stock as to dividend or redemption rights and liquidation preferences;
(d) Effect any liquidation, transfer of control, sale,
assignment, transfer or other conveyance of all or substantially all the assets
of the Corporation or any of its Subsidiaries, or any recapitalization,
consolidation or merger where the Corporation is not the surviving entity, or
share exchange in which the Corporation is not the surviving entity;
(e) Increase or decrease (other than by conversion) the
total number of authorized shares of Series A Preferred Stock of the Corporation
other than as may be required to comply with terms of this Amendment to the
Amended and Restated Articles of Incorporation of the Corporation;
(f) Amend the Articles of Incorporation or By-Laws of the
Corporation if such amendment alters, in any material respect, the rights,
privileges and preferences of the Series A Preferred Stock; or
(g) Give effect to any vote that could materially
adversely affect the rights, preferences or privileges of the Series A Preferred
Stock;
9. No Reissuance of Series A Preferred Stock. No shares of Series
A Preferred Stock acquired by the Corporation by reason of purchase, F
conversion or otherwise shall be reissued as Series A Preferred Stock. Such
acquired shares shall resume the status of authorized but unissued shares of the
Preferred Stock of the Corporation.
10. Amendment. Any term relating to the rights, preferences or
privileges of the Series A Preferred Stock may be amended and the observance of
any term relating to the Series A Preferred Stock may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the vote or written consent of holders of at least a majority of the
shares of Series A Preferred Stock then outstanding. Any amendment or waiver so
effected shall be binding upon the Corporation and any holder of Series A
Preferred Stock.
11
<PAGE> 1
SERIES A PREF.DOC
PROFESSIONAL TRANSPORTATION GROUP LTD., INC.
1950 SPECTRUM CIRCLE
SUITE B-100
MARIETTA, GEORGIA 30067
ATTENTION: DENNIS A. BAKAL
PURCHASE AGREEMENT
WHEREAS, PROFESSIONAL TRANSPORTATION GROUP LTD., INC. (the "Company")
has determined to sell securities which are exempt from registration under
Section 4(2) of the Securities Act of 1933, as amended (the "Securities Act");
and
WHEREAS, the subscribing person or persons signing below (singularly or
collectively the "Undersigned") hereby subscribes for and agrees to purchase
from the Company the number of shares of 4% Convertible Series A Preferred Stock
(the "Securities") set forth below in paragraph 4 upon the terms and conditions
provided herein and as set forth in the Securities issued by the Company in
connection herewith, and agrees, tenders and represents as set forth herein;
THEREFORE, in consideration of the mutual promises herein contained,
the parties hereto agree as follows:
1. The Company covenants as follows:
1.01 That the Company shall maintain its status as a corporation in
good standing and a reporting issuer within the meaning of the U.S. securities
laws; and
1.02 That the Company will provide the Undersigned with information,
subject to limitations dictated by confidentiality and materiality of non-public
information, regarding the Company, including annual financial statements, at
the Undersigned's request; and
1.03 That the issuance, sale and delivery of the Securities are within
the Company's corporate authority and have been duly authorized by all
appropriate corporate action; when such Securities are issued, they will be
validly issued, fully paid and non-assessable.
1.04 The Company intends to file a registration statement with the U.S.
Securities and Exchange Commission. The Company undertakes to take the
appropriate steps necessary to use its best efforts to cause the registration
statement to be declared effective by the SEC, and to keep such registration
statement effective for a period of twelve months following such registration,
or until such time as all of the Securities offered herein have been converted,
whichever is earlier.
1.05 The terms of the Securities are provided in the Certificate of
Designation, which is attached hereto as Exhibit A and incorporated herein by
this reference.
<PAGE> 2
2. The Undersigned covenants as follows:
2.01 That it is purchasing the Securities in a nonpublic transaction
which is exempt from the registration requirements of the Securities Act, is
purchasing the Securities for its own account and has no present arrangement at
any time to sell the Preferred Stock or common stock into which it is
convertible (the "Conversion Shares') to or through any person or entity;
provided, however, that by making the representations herein, the Undersigned
does not agree to hold such Securities for a minimum or other specific term and
reserves the right to dispose of the Conversion Shares at any time in accordance
with the terms of the Securities and Conversion Shares and in accordance with
federal, state and foreign securities laws applicable to such disposition; and
2.02 That it is either an accredited or institutional investor as
defined by the Securities Act; that it has such experience in business and
financial matters that it is capable of evaluating the merits and risks of an
investment in the Securities and Conversion Shares; and acknowledges that an
investment in the Securities and Conversion Shares is speculative and involves a
high degree of risk; and
2.03 That it is not an affiliate of the Company as defined in the
Securities Act, and that following the purchase of the Securities, and the
conversion of same, neither the Undersigned nor any of its affiliates will be
affiliates of the Company; and
2.04 That at the time of this offer and sale of the Securities, the
Undersigned was not aware of and did not participate in a general solicitation
in connection with the offer or sale of the Securities, and that this
transaction is not and will not be part of any plan or scheme to evade the
Securities Act or its registration provisions; and
2.05 That it is aware that the Securities are not registered and cannot
be sold absent registration or exemption therefrom; and
2.06 That this Agreement and each other agreement which is requested to
be executed by the Undersigned has been duly authorized and validly executed and
delivered and is a valid and binding agreement of the Undersigned enforceable
against it in accordance with its terms.
2.07 That the Undersigned and its affiliates shall not in any manner or
through any entity, whether related or affiliated or not, engage in short sales
of the Company's common stock. In the event that the Company learns of or has
suspicion of any such short sales by the Undersigned and its affiliates or
through any entity at the direction, either direct or indirect, of the
Undersigned and its affiliates, the Company may, without penalty, refuse to
continue to convert the Securities into Conversion Shares or to withdraw any
pending or effective registration statement with respect to the Conversion
Shares.
2.08 That it covenants that it has reviewed this transaction with its
legal counsel and advisors, and covenants that such purchase is in compliance
with its national and local securities laws or regulations, and agrees to advise
the Company if such laws or regulations require the Company to place any legends
or restrictions on the certificates representing the Securities. The Undersigned
undertakes to take all steps necessary to ensure that any purchase, offer or
sale of the Securities will
<PAGE> 3
comply with the laws and regulations of all necessary state, federal or foreign
regulatory or self-regulatory authorities and upon request shall provide to the
Company opinions of legal counsel regarding such compliance.
3. Terms of the Subscription Agreement
3.01 This Subscription Agreement shall become an agreement binding on
the Company only if and when executed in the name and on behalf of the Company,
and when notice of such execution and acceptance, which may be a copy or similar
counterpart hereof, is mailed to the Undersigned.
3.02 The Company reserves the right to reject any subscription tendered
to it, in whole or in part, in which case it will promptly return the
consideration tendered herewith to the Undersigned.
3.03 The Undersigned has reviewed its financial condition and
commitments and it is satisfied that it has no immediate foreseeable need to
make any disposition of the Securities. The Undersigned understands that the
Company may unilaterally refuse to approve any transfer if such would result in
the loss of the securities law exemption.
3.04 The Undersigned acknowledges and understands that no U.S. federal
or state agency has made any finding or determination as to the fairness for
public investment, nor any recommendation or endorsement, of the Securities. The
Undersigned represents that it fully understands the nature of the investment
being made and the substantial risks thereof.
3.05 The Undersigned acknowledges that the Company will advise its
transfer agent upon issuance of the Securities of the limitations upon the
transfer of such Securities.
3.06 The Undersigned agrees that it may not convert the Securities
until January 1, 2000 as to 1/3 of the Securities, February 1, 2000 as to the
second 1/3 of the Securities and March 1, 2000 as to the remainder; provided,
however, that if at any time the five-day average of the closing sales price of
the Company's Common Stock exceeds $2.00 per share, such restrictions on
conversion will terminate.
3.07 The provisions of this Subscription Agreement shall be construed
and enforced according to the laws of the State of Georgia. In the event there
is any conflict between any offering or sales material and this Subscription
Agreement, the terms set forth in this Subscription Agreement shall be
controlling.
3.08 This Subscription Agreement may be executed in any number of
counterparts, all of which shall constitute one and the same agreement. If this
Subscription Agreement is entered into by more than one person, all statements
and representations herein are made and incurred both jointly and severally by
each of the Undersigned.
3.09 The Undersigned confirms that it has been granted the opportunity
to ask questions of, and receive answers from, representatives of the Company
concerning the terms and conditions of the offering, the Company and its
business and financial condition and to obtain any additional information which
it deems necessary to verify the accuracy of the information contained in any
offering or sales materials.
<PAGE> 4
3. 10 The Undersigned recognizes that an investment in the Company
involves certain risks and it has taken full cognizance of and understands all
of the risk factors related to the purchase of Securities. The Undersigned
acknowledges and understands that the purchase of the Securities involves risk,
including the risk of dilution, diminution in value, or total loss of the
Undersigned's investment. The Undersigned covenants that it has sufficient
knowledge and experience to evaluate the merits and risks involved in the
purchase of the Securities.
4. Purchase of Securities:
4.01 The price for purchase of the Securities is a minimum of $1,000
per share and the aggregate consideration for the Securities (the "Total Price")
is the total of $1,000 multiplied by ________ shares being purchased for a Total
Price of $_____________.
4.02 The Undersigned shall tender the Total Price by forwarding this
Subscription Agreement to the Company, or to its designated agent, at the above
address, and by transmitting guaranteed U.S. funds via wire transfer in the
amount of the Total Price payable to the order of the Company, or its escrow
agent.
4.03 The Undersigned requests that the Certificate or Certificates for
the Securities purchased hereunder be registered in the name subscribed below
and the registered address of such security holder in the Company stock register
or books will be the address set forth below:
Name:
---------------------------------------------
Address:
------------------------------------------
------------------------------------------
Telephone:
----------------------------------------
Facsimile:
----------------------------------------
The Undersigned attests that its offices are maintained at the
address listed above.
<PAGE> 5
IN WITNESS WHEREOF, the Undersigned has caused this Agreement to be
executed as of this _______ day of October, 1999.
----------------------------------------------------
Name of Investor
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Agreed and accepted on this _____ day of October, 1999.
Professional Transportation Group Ltd., Inc.
By:
---------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
<PAGE> 1
[Letterhead of Red Hot Law Group]
November 12, 1999
Professional Transportation Group Ltd., Inc.
1950 Spectrum Circle
Suite B-100
Marietta, Georgia 30067
Ladies and Gentlemen:
We have acted as counsel to Professional Transportation Group Ltd., Inc.
(the "Company") in connection with the filing of a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933,
covering the offering of up to 1,200,000 shares (the "Shares") of the Company's
common stock, no par value per share by the selling securityholders named in
the Registration Statement, including (i) up to 1,000,000 shares that they may
acquire upon conversion of the Company's 4% convertible Series A preferred
stock and (ii) up to 200,000 shares that they may acquire upon exercise of
warrants to purchase shares of common stock. In connection therewith, we have
examined such corporate records, certificates of public officials and other
documents and records as we have considered necessary or proper for the purpose
of this opinion.
Based on the foregoing, and having regard to legal considerations which we
deem relevant, we are of the opinion that the Shares, when issued and delivered
as described in the Registration Statement, will be legally issued, fully paid
and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption
"Legal Matters" in the Prospectus contained in the Registration Statement.
Very truly yours,
/s/ Red Hot Law Group of Ashley LLC
Red Hot Law Group of Ashley LLC
