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U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS
ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
FIRST AID DIRECT, INC.
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(Name of Small Business Issuer in its charter)
FLORIDA 65-591796257
- ------------------------ ------------------------------------
(State of incorporation) (I.R.S. Employer Identification No.)
10211 Northeast 53rd Street,
Sunrise, Florida 33351
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(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number (954) 749-9926
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Securities to be registered pursuant to 12(b) of the Act: None
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Securities to be registered pursuant to 12(g) of the Act:_______________________
Common Stock $.001 Par Value
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(Title of Class)
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ITEM 1. DESCRIPTION OF BUSINESS.
General
First Aid Direct, Inc. ("First Aid" or the "Company") was organized in
July 1977 in the State of Florida under the name of Rehabilitation Institute of
South Florida, Inc. It remained dormant until it began active operations in
September 1997. First Aid is a national distribution business that wholesales
first aid products to first aid distributors across the nation. Most of the
distributors operate mobile first aid van services that sell and service the
industrial first aid kits, mandated by OSHA regulations. These kits are placed
in many different types of businesses and industrial locations such as
factories, distribution warehouses, offices, auto repair shops and dealerships,
hotels and retail stores.
A distributor typically operates a number of routes. Each route
consists of several hundred locations that are visited by the route
driver/salesman at least once a month. The driver/salesman will typically visit
some 20 locations each day. The driver/salesman operates a van stocked with
first aid supplies and uses the inventory to refill the kits that are placed in
each location. The kits contain a mix of first aid products designed and
packaged for industrial use, including bandages, tapes, gauze, antiseptics,
ointments and over-the-counter medications such as aspirin, cough medications,
etc. First Aid has specialized packaging that lends itself to the workplace. All
items are packed in multilingual boxes that wherever possible are dispenser
packs that offer each individual product in a sanitary sealed package as part of
a tear off strip.
In addition, First Aid provides a direct to business program called
"Direct Ship". This program involves direct shipments to businesses. These
companies typically are not our distributor types of customers because their
usage is too limited for a driver/salesman to service monthly or they need
centralized billing, control and pricing. First Aid offers these customers a
direct order system using phone, fax or the First Aid Internet web site.
Industry Background
The first aid business is comprised of many independent distributors of
first aid and safety products to the workplace via mobile van services. Products
and services include first aid cabinets, over-the-counter medications and
general first aid supplies. Certain distributors also offer safety products and
a variety of related training programs.
These independent distributors purchase their products through
value-added wholesale distribution companies. There are approximately 12 such
companies operating in the United States. Typically, a wholesale company will
recruit distributors within the industry to distribute products under the
wholesaler's names. The typical business relationship between wholesaler and
distributor features restrictions such as limited territories, non-compete
agreements and agreements to use the wholesale company's name as the
distributor's product line.
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Today, the market for these distributors is virtually any business. The
reason is that the Federal Occupational Safety & Health Administration (OSHA)
has a regulation (29 CFR 1910.151(b)) that requires that First Aid supplies be
readily available in the workplace. It is more convenient for the business
operator to use the services of the first aid distributor to supply the correct
product mix of required first aid supplies that are not only designed for use in
the workplace, but are refilled and kept current each month.
A consolidation has taken place in the first aid distribution business.
Zee Medical, a subsidiary of wholesale distributor McKesson Corp., currently is
one of the oldest and also has a large market share. Cintas Corp. decided to
penetrate this market quickly, and therefore adopted an acquisition strategy.
The first acquisition was in February 1997, and that was followed by three
additional acquisitions, another in 1997 and two in 1998. Both of these major
organizations place broad restrictions on their distributors, including
geographical restraints on distribution.
As a result of this consolidation, distributors working within the same
territory that previously bought from competing companies are now being supplied
by the same parent company. First Aid believes that many of these distributors
desire more independence and choice than the new combined entities can offer. We
believe these market conditions provide an opportunity for First Aid to emerge
and compete for the business of the first aid distributors dissatisfied with the
new corporate structure brought on by the consolidation in the industry.
Company Background
The Company began active operations in September 1997 in Fort
Lauderdale, Florida as a national distribution company to wholesale first aid
products to distributors across the nation. On August 12, 1997, prior to
conducting active operations, the Company issued 2,100,000 shares to Mr. Scott
Siegel for equipment, vans, inventory and customer lists. In addition, nominal
liabilities were assumed. This increased the total issued and outstanding shares
to 2,500,000 shares, and the Company changed its name to First Aid Select, Inc.
in October 1997. First Aid's concept was also to provide a distinct corporate
account program for end users by offering nationwide companies the option of
on-site first aid cabinet replenishment service or a direct order system. Mr.
Siegel also contributed his mobile van business to First Aid.
Mr. Siegel had owned and operated an eight-van first aid company as a
distributor for Affirmed Medical, a national supplier of first aid products.
During 1997 and 1998, Affirmed Medical along with other national suppliers were
purchased by Cintas.
The Cintas roll-up brought previously competing regional first aid
distributors under the same umbrella organization. As a South Florida regional
operator, First Aid recognized that this new organization might not be welcomed
by all operators. The roll-up had the effect of constricting the geographic
markets for distributors servicing the same area. Limited by territory
agreements that prevented them from competing with other operators in their
buying group, the Cintas consolidation
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was viewed by many distributors as another limitation on their future expansion
and a form of compelled cooperation with operators which had formerly been
direct competitors.
The Cintas roll-up had the effect of limiting new distributors from
entering the business. Cintas now controlls, along with Zee Medical, the
industry founder, a substantial majority of the existing market. With Cintas and
Zee dominating the market, new entries could no longer readily find a national
brand to affiliate with.
Recognizing these market factors and in response to certain distributor
dissatisfaction with this consolidation, management founded First Aid Select,
Inc. The intent of the new venture was to offer existing distributors displeased
with consolidation an alternative source of supply while offering new entries
into the first aid business a national brand of products and support. First Aid
places no territorial restrictions on its distributors, giving existing
operators, dissatisfied with their territorial restriction agreements with the
majors, the opportunity to expand regionally.
Van Dyne-Crotty Transactions
On December 16, 1999, Scott Siegel and Robert Sussman entered into a
Share Purchase Agreement with Van Dyne-Crotty, Inc. under which Van Dyne-Crotty
acquired 1,000,000 shares of First Aid's common stock from Mr. Siegel and
400,000 shares of First Aid's common stock from Mr. Sussman. The purchase price
for all of these shares was $2,100,000 or $1.50 per share. At the time of the
agreement, the closing sales price of First Aid's common stock on the OTC
Bulletin Board ranged from $1.75 to $2.25 between December 1, 1999 and December
16, 1999. The transaction was completed on January 3, 2000. Scott Siegel
retained 300,000 shares of common stock in First Aid and Robert Sussman retained
100,000 shares. In addition, in connection with the transfer of First Aid's
assets representing its van business to Van Dyne-Crotty (discussed below), Mr.
Siegel severed his relationship with First Aid and became employed with Van
Dyne-Crotty's first aid supply distribution entity, operating under the name of
First Aid Select. Mr. Sussman received at this time an option for 150,000 shares
exercisable at $1.50 per share. We also changed our name to First Aid Direct,
Inc.
In conjunction with the share purchase agreement, Van Dyne-Crotty and
First Aid Select entered into an Asset Purchase Agreement. First Aid transferred
all of the assets represented by its van distribution business to Van
Dyne-Crotty, consisting of motor vehicles, accounts receivable and various
permits. The purchase price for these assets was $350,000 which was paid in cash
and Van Dyne-Crotty also assumed debt of approximately $60,000 associated with
the mobile van distribution business. The parties also simultaneously entered
into a Supply Agreement under which Van Dyne-Crotty agreed to purchase all of
its requirements for first aid products and supplies from First Aid for a
five-year term, unless First Aid were sold to a competitor of Van Dyne-Crotty.
Under the terms of this supply agreement, First Aid is required to sell the
products at the lowest of the prevailing market price for the best grade for
each type of item covered. First Aid may alter the price of any item upon
notice, but Van Dyne-Crotty may discontinue purchasing its total
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requirements of any item if the price is not comparable or the quality of the
item is not competitive with similar types of products.
First Aid received a valuation fairness opinion relative to the sale of
its van division from Stenton Leigh Capital Corp. This opinion concluded, based
on First Aid's lack of historical profitability, and only recent limited
profitability, limited cash resources and continued need for funding, along with
potential benefits from the ongoing relationship with Van Dyne-Crotty, that the
transaction was fair to First Aid's shareholders.
Strategy
Our strategy is to offer existing distributors which are dissatisfied
with consolidation an alternative source of supply and to offer new entries into
the first aid business a national brand of products and support. First Aid
places no territorial restrictions on its distributors, giving existing
operators the opportunity to expand regionally. Without territory agreements,
First Aid is able to offer large national companies a centralized and uniform
direct buying program.
First Aid Direct is introducing many innovations to the industry like
retail quality packaging, no territorial restrictions, direct E-Commerce
ordering and direct ship programs. First Aid will promote its approach to doing
business in an industry that management believes has not seen many market
innovations for the last several years.
Products and Services
Our product line and services includes the following type of items and
services:
o Cabinets and Fist Aid Kits: Lightweight and durable, wall
mounted cabinets come in a variety of sizes to fit company or
individual needs. Each kit is dust-proof and designed to be
installed in a visible and accessible location.
o First Aid Treatments: Bandages, tapes, wraps and dressings -
all designed to keep minor scraps, wounds and abrasions -
clean, covered, and secure. Individually packaged antiseptics,
burn treatments and eye-care products, designed to minimize
injuries, speed up recovery and reduce lost time in the
workplace.
o First Aid Tablets: Over the counter medications that are
sealed in tamper-resistant unit dosage packets for fast, safe
and effective relief from on-the-job illness and pain.
o Safety Equipment: Signage, protective eyewear, ergonomic
items, hearing protection respiratory protection, biohazard
safety, oxygen, and protective clothing.
o Training and Compliance: OSHA compliance and safety training
videos. These programs are designed to be used in a classroom
setting, or by individuals, to instruct
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and inform about safety and compliance issues in the
workplace. These are available in Spanish and English.
o Distributor Services: We are committed to helping our
distributors grow their businesses by offering a variety of
classroom and field training sessions in the national training
center at our corporate offices. Our instructors draw on their
20 plus collective years of industry knowledge to guide and
educate our distributors through all aspects of starting,
managing, and maintaining a successful operation
Suppliers
First Aid works with approximately 70 suppliers and manufacturers at
any given time for its product line. At the present time, three of our suppliers
account for approximately 40% of our supplies. However, other suppliers are
available in the event any of these suppliers were not able to fulfill our
requirements at any time. Our supplies are provided through normal purchase
orders, and we have no term contracts with any of our suppliers.
Assembly of Products
First Aid assembles approximately 20% of its products at its own
facility. We outsource the balance of assembly of our products to a local
workshop. This workshop "ARC Broward Incorporated" is a Florida State run
facility that employs disabled citizens which assembles and packs for many
companies on contract bases. This facility is located in the immediate area.
Product Liability
We maintain product liability insurance in the amount of $5,000,000.
Our suppliers also maintain product liability insurance. Our purchase orders
with our suppliers do not limit or allocate liability between the parties.
Marketing and Sales
Our sales team, which consists of one sales director and one salesman,
are responsible for developing new business. They solicit distributor and direct
ship customers by telephone and in- person sales calls. We also participate in a
number of national trade shows and associations to develop new customers and to
meet with existing ones.
Operating from corporate headquarters in Sunrise, Florida, our
salespersons handle the identification and qualification of prospected
customers. Once qualified, catalog and samples are sent by mail.
Management believes that three criteria drive the purchase of first aid
products. They are price, quality and service. We believe we are offering
pricing and quality comparable to our
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competitors. First Aid has established a number of services like a fully
interactive website allowing for direct purchases online for both distributor
and direct ship customers. In addition, we work with our distributors through
virtually every aspect of starting, managing and maintaining a productive
operation, offering a variety of classroom and field training sessions.
Competition
Zee Medical, the largest company in the industry, pioneered the market
about 30 years ago and management believes commands a 40% market share with
approximately 90 distributors. Zee is owned by wholesale drug distribution
giant, McKesson Corporation. Previously, Zee's key competitors, American First
Aid, Life & Safety Products, Respond Industries and Affirmed, Inc., each had an
estimated 10% market share with about 400 to 500 distributors combined. Most of
the distributors for the four companies were smaller in size and scope than
Zee's distributors. The remaining 600 or more distributors sell first aid and
safety products in addition to their primary business, which ranges from fire
extinguishers, coffee services, industrial supplies, etc.
We estimate that the total first aid service market is worth
approximately $ 400 million in revenues today. The first aid service market has
been flat for some time since Zee has not actively grown the market for several
years. Recently, Cintas, a $1.8 billion uniform company, evaluated the market
and determined to enter the market through an aggressive acquisition program. As
a result of their study, Cintas proceeded to buy Affirmed Inc., American First
Aid, Life & Safety Products and Respond Industries, thereby effectively
capturing a large position in the market through acquisitions.
Because of the recent consolidation, two companies, Zee and Cintas,
control the market. There are many independent distributors who view this
consolidation as detrimental to their business. We believe they will prefer to
do business with independently owned and operated wholesale companies.
Trademarks
The United States Patent and Trademark Office have approved the
following trademark applications for registration:
Trademark Serial No. The Mark
-------------------- --------
75/580,502 For The Global Workplace
75/552,491 COLDCRUSHER
75/522,489 IBUPLUS
75/552,494 ACIDSPOILER
75/552,940 PAINCRUSHER
75/558,499 COLDCRUNCHER
75/522,490 SINUPLUS
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We also own the Internet domain name "firstaiddirect.com."
Government Regulation
The Federal Occupational Safety & Health administration (OSHA) has a
regulation 29 CFR 1910.151(b) that require First Aid supplies be readily
available in the workplace.
A license to manufacture distribute, import, or export a List I
chemicals has been granted to us by the United States Department of Justice,
Drug Enforcement Administration (DEA). This annual license, DEA registration
number 002099FDY, expires September 30, 2000. We do not anticipate any
difficulties in renewing this license.
Employees
First Aid currently employs ten persons, seven of whom are full-time
employees, in the following capacities: one executive officer, one
administrator, two in sales and marketing, two in office staff and four in
warehouse and assembly. The Company's employees are not represented by a
collective bargaining agreement, and the Company considers its relations with
its employees to be good.
ITEM 2. DESCRIPTION OF PROPERTY.
First Aid Direct's corporate headquarters and distribution center is
located at 10211 NW 53rd Street, Sunrise, Florida, 33351. The business has been
at this location for two years. We do approximately 20% of packaging at our own
facility. The operation is located in a modern warehouse complex and currently
occupies 7,200 square feet of fully air conditioned space consisting of 1,500
square feet of office space, a 250 square foot assembly area and 5,450 square
feet of warehouse. We lease the facility through July 31, 2004 from Mr. Robert
Sussman, our chief executive officer, at a $53,000 annual rental, in a multiple
tenant facility. The terms of the lease are comparable with that provided to
non-related tenants.
ITEM 3. DIRECTORS, EXECUTIVE OFFICERS AND SIGNIFICANT EMPLOYEES
PROMOTERS AND CONTROL PERSONS.
The following table sets forth the names, positions and ages of the
executive officers and directors of the Company. Directors will be elected at
the Company's annual meeting of shareholders and serve for one year or until
their successors are elected and qualify. Officers are elected by the Board and
their terms of office are, except to the extent governed by employment contract,
at the discretion of the Board.
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<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Robert Sussman 42 Chief Executive Officer, Director,
President, Treasurer and Secretary
Kevin M. Crotty 44 Director
Stephen D. Smiley 47 Director
</TABLE>
ROBERT SUSSMAN - Mr. Sussman first joined First Aid in January 1998 as
Chief Executive Officer, Director and Secretary. Following the transaction with
Van Dyne-Crotty, Mr. Sussman also took on the roles of President and Treasurer.
Mr. Sussman has experience in product development, introduction and distribution
through his prior experience in a family-owned company and as an independent
consultant. Between 1994 and January 1998, Mr. Sussman served as an independent
consultant for various companies including A.J. Sirus, Inc., and managed his own
investments. Between 1978 and 1987, Mr. Sussman and other members of his family
organized Pretty Neat Industries, Inc., a sales, manufacturing and distribution
company for injection molded cosmetic bath and office organizers.
KEVIN M. CROTTY - Mr. Crotty was elected a Director of First Aid
following the transaction with Van Dyne-Crotty in January 2000. Mr. Crotty
currently serves as Executive Vice President of Van Dyne-Crotty, which is
engaged in uniform distribution and textile services out of Dayton, Ohio. Mr.
Crotty has been with that company for 24 years and has served in a range of
capacities involving service, distribution, production and sales. Mr. Crotty is
a member of the Board of Directors of Van Dyne-Crotty.
STEVEN D. SMILEY - Mr. Smiley was also elected a Director of First Aid
following the transaction with Van Dyne-Crotty in January 2000. Mr. Smiley
currently serves as Vice President of Administration for Van Dyne-Crotty. Mr.
Smiley has been with Van Dyne-Crotty for 20 years, acting in various capacities
including District and General Management, Manager and Regional Manager.
ITEM 6. REMUNERATION OF DIRECTORS AND OFFICERS.
Summary Compensation Table
The following table sets forth information relating to the compensation
paid by FAS in each of the last three fiscal years to: (i) its Chief Executive
Officer; and (ii) each of its executive officers whose annual compensation
exceeded $100,000 during this period.
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<TABLE>
<CAPTION>
Fiscal Other Annual LTIP All Other
Name and Principal Position Year Salary Bonus Compensation Options/ (#) Payouts Compensation
- --------------------------- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Scott Siegel, Chairman 1999 81,500 0 0 0 0 0
1998 81,500 0 0 0 0 0
1997 15,000 0 0 0 0 0
Robert Sussman, CEO 1999 80,000 0 0 150,000 0 0
1998 0 0 0 0 0 0
1997 0 0 0 1,050,000 0 0
</TABLE>
Robert Sussman received options to purchase 1,050,000 shares
exercisable at $.01 per share in November 1997. He exercised options for 75,000
shares in 1997, options for 325,000 shares in 1998 and options for 100,000
shares in 1999. In 1998, he surrendered options for 550,000 shares.
Option Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Percent of
Number of Total Options/
Securities Granted
Underlying To Employees Exercise
Options/SARs In Fiscal Price
Name Granted (#) Year ($/Sh) Expiration Date
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert Sussman 150,000 100% 1.50 1/20/10
</TABLE>
Employment Agreements
In connection with an employment agreement between First Aid and Robert
Sussman, Mr. Sussman was granted options to purchase 150,000 shares exercisable
at $1.50 per share. The options vest over the following term:
Date No of Shares
---- ------------
12/20/00 15,000
12/20/01 30,000
12/20/02 30,000
12/20/03 37,500
12/20/04 37,500
In conjunction with a transaction with Van Dyne-Crotty, First Aid
entered into a five-year employment agreement with Mr. Sussman at December 20,
1999. The base compensation under this agreement is $100,000 per year with the
possibility of bonuses as determined by independent members of the Board of
Directors not employed by First Aid. Mr. Sussman will also receive an increase
of his base salary in the year following First Aid having net income of in
excess of
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$250,000. The agreement also provides for the grant of options to purchase
150,000 shares of First Aid as described above. Mr. Sussman is also entitled to
normal reimbursement for expenses and three weeks vacation.
ITEM 5. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND CERTAIN SECURITY HOLDERS
As of April 30, 2000, there are 3,905,000 shares of common stock issued
and outstanding. The following table sets forth, as of April 30, 2000,
information with respect to the beneficial ownership of the Company's common
stock by (i) persons known by First Aid to beneficially own more than 5% of the
outstanding shares of common stock, (ii) each director and officer of First Aid
and (iii) all directors and officers as a group.
Common Stock Beneficially Owned
Name Shares Percent
---- ------ -------
Scott Siegel 300,000 7.7%
10211 Northeast 53rd Street
Sunrise, Florida 33351
Robert Sussman 150,000 3.8%
10211 Northeast 53rd Street
Sunrise, Florida 33351
Kevin M. Crotty 1,000 0.02%
3233 Newmark Drive
Miamisburg, OH 45342
Daniel W. Crotty 369,000 9.5%
3233 Newmark Drive
Miamisburg, OH 45342
Stephen D. Smiley 0 0
3233 Newmark Drive
Miamisburg, OH 45342
Van Dyne-Crotty, Inc. 1,631,000 41.8%
3233 Newmark Drive
Miamisburg, OH 45342
All officers, directors
and Van Dyne-Crotty as a group 2,082,000 51.3%
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Scott Siegel is the former Chairman of the Board of First Aid and now
is an executive with First Aid Select, which is a division of Van Dyne-Crotty.
Kevin Crotty and Stephen D. Smiley are directors of First Aid and also
executive officers and members of management of Van Dyne-Crotty. Van Dyne-Crotty
acquired an additional 200,000 shares at $1.50 per share from a non-affiliate of
First Aid at the time of its transaction with First Aid and 31,000 shares in
April 2000 from Robert Sussman. The principal shareholders of Van Dyne-Crotty
are L. William Crotty, Dan Crotty, Kevin Crotty, Bob Crotty, Brian Crotty and
Shane Crotty. These individuals in their management capacity have the right to
voting and dispositive power for the Van Dyne-Crotty holdings.
Robert Sussman's entire shares include 150,000 shares underlying an
option which vests over a five-year period beginning December 20, 2000.
Daniel Crotty is voting trustee under a voting trust agreement executed
in connection with the Van Dyne-Crotty transaction. He has the right to vote Mr.
Siegel's shares and 69,000 shares acquired by members of Van Dyne-Crotty's
management. He also has the right to vote any shares Mr. Sussman receives upon
exercise of his option.
As indicated above, Scott Siegel and certain of his relatives, Robert
Sussman and Van Dyne- Crotty entered into a voting trust agreement with Daniel
W. Crotty serving as voting trustee. The voting trust agreement has a term of 10
years. The voting trust covers all existing securities as well as any shares of
common stock received upon exercise of stock options or warrants. The agreement
also provides that the shareholders other than Van Dyne-Crotty may not transfer
their shares over a five-year period without giving Van Dyne-Crotty an
opportunity to purchase the shares at the same price that the shares could be
sold to the third party included in the notice of the transaction.
ITEM 6. INTERESTS OF MANAGEMENT AND OTHERS IN CERTAIN
TRANSACTIONS
The Company leases office and warehouse space for its corporate
facility from Robert Sussman, its Chief Executive Officer under a five year
operating lease expiring July 31, 2004. Annual rent is approximately $53,000.
Rent expense for 1999 was $45,000 and $28,000 1999 and 1998, respectively.
On December 20, 1999, Van Dyne-Crotty acquired 1,000,000 shares of
common stock of First Aid from Scott Siegel and 400,000 shares of common stock
of First Aid from Robert Sussman for a total purchase price of $2,100,000 or
$1.50 per share. Mr. Siegel was the Chairman of the Board of First Aid at the
time of the transaction and Mr. Sussman was Chief Executive Officer at the time
of the transaction and continues in that position. The market price of the
common stock of First Aid at the time of the transaction was $1.75 to $2.25. At
the same time, Van Dyne-Crotty entered into an Asset Purchase Agreement with
First Aid under which we sold our retail van and distribution business and
related assets for $350,000 plus the assumption of $60,000 in debt. This
division accounted for approximately $668,211 in revenues during the fiscal year
ended December 31, 1999 and net income of $27,286 from this division.
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In connection with the Asset Purchase Agreement, Van Dyne-Crotty and
First Aid also entered into a Supply Agreement. In the Supply Agreement, Van
Dyne-Crotty agreed to purchase its total requirements for first aid products for
a period of five years. However, the supply agreement will terminate in the
event First Aid's shares are sold to a competitor of Van Dyne-Crotty in the same
business. The agreement further provides that the prices for the products to be
sold will be no higher than the lowest of the prevailing market prices for the
best grade of comparable products in the marketplace. First Aid may revise the
price on written notice for supplied items under the same condition that they
represent the lowest of the prevailing market for the best grade of these
products. During the first quarter of the 2000 fiscal year, Van Dyne-Crotty
purchased $108,337 of our products which represented approximately 18% of our
total revenues for the first fiscal quarter of the 2000 fiscal year.
In April 2000, Van Dyne-Crotty and members of its management acquired
100,000 shares of First Aid from Robert Sussman for a purchase price of $69,000
or $0.69 per share.
ITEM 7. DESCRIPTION OF SECURITIES
Common Stock
First Aid is authorized to issue 50,000,000 shares of common stock. par
value $.001 of which 3,905,000 are issued and outstanding as of the date of this
report,
Holders of shares of common stock are entitled to share, on a ratable
basis, such dividends as may be declared by the board of directors out of funds
legally available therefor. Upon liquidation, dissolution or winding up, after
payment to creditors, First Aid's assets will be divided pro rata on a per share
basis among the holders of the common stock.
Each share of common stock entitles its holders to one vote. Holders of
common stock do not have cumulative voting rights, which means that the holders
of more than 50% of the shares voting for the election of directors can elect
all of the directors if they choose. In this event, the holders of the remaining
shares will not be able to elect any directors. First Aid's by-laws require that
only a majority of our issued and outstanding shares need be represented to
constitute a quorum and to transact business at a shareholders' meeting. First
Aid's common stock has no preemptive, subscription or conversion rights and is
not redeemable by us.
Preferred Stock
First Aid is not authorized to issue shares of preferred stock.
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Certain Florida Legislation
Florida has enacted legislation that may deter or frustrate takeovers
of Florida corporations. The Florida Control Share Act generally provides that
shares acquired in excess of certain specified thresholds will not possess any
voting rights unless such voting rights are approved by a majority of a
corporation's disinterested shareholders. The Florida Affiliated Transactions
Act generally requires supermajority approval by disinterested shareholders of
certain specified transactions between a public corporation and holders of more
than 10% of the outstanding voting shares of the corporation (or their
affiliates). Florida law and First Aid's Articles and Bylaws also authorize
First Aid to indemnify our directors, officers, employees and agents. In
addition, the our Articles and Florida law presently limit the personal
liability of corporate directors for monetary damages, except where the
directors (i) breach their fiduciary duties; and (ii) such breach constitutes or
includes certain violations of criminal law, a transaction from which the
directors derived an improper personal benefit, certain unlawful distributions
or certain other reckless, wanton or willful acts or misconduct.
Anti-takeover Effects of Certain Provisions of the Company's Articles of
Incorporation and Bylaws
Certain provisions of First Aid's Articles and By-laws may be
considered to have an anti-takeover effect and may delay, defer or prevent a
tender offer or takeover attempt, including attempts that might result in a
premium being paid over the market price for the shares held by shareholders.
Despite the belief of First Aid as to the benefits to shareholders of these
provisions of our Articles of Incorporation, these provisions may also have the
effect of discouraging a future takeover attempt which would not be approved by
First Aid's Board, but pursuant to which the shareholders may receive a
substantial premium for their shares over then current market prices. As a
result, shareholders who might desire to participate in such a transaction may
not have any opportunity to do so. These provisions will also make the removal
of our board of directors and management more difficult and may tend to
stabilize our stock price, thus limiting gains which might otherwise be
reflected in price increases due to a potential merger or acquisition. The board
of directors, however, believes that the potential benefits of these provisions
outweigh the possible disadvantages. Pursuant to applicable regulations, at any
annual or special meeting of its shareholders, we may adopt additional
provisions regarding the acquisition of its equity securities that would be
permitted to a Florida corporation.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
Our common stock has traded on the Over-The-Counter Bulletin Board
under the symbol "FASL" since May 1998. The following table sets forth the high
and low bid quotations for the common stock for the periods indicated. These
quotations reflect prices between dealers, do not
14
<PAGE>
include retail mark-ups, mark-downs, and commissions and may not necessarily
represent actual transactions.
Period High Low
- ------ ---- ---
Quarter ended 06/30/98 $ 2.25 $ 0.9375
Quarter ended 09/30/98 $ 1.25 $ 0.625
Quarter ended 12/31/98 $ 0.75 $ 0.28125
Quarter ended 03/31/99 $ 1.125 $ 0.34375
Quarter ended 06/30/99 $ 1.0625 $ 0.4375
Quarter ended 09/30/99 $ 2.25 $ 0.5625
Quarter ended 12/31/99 $ 2.25 $ 0.20
Quarter ended 03/31/00 $ 1.00 $ .21
04/01 to 04/30/00 $ .75 $ .51
Our transfer agent is Florida Atlantic Stock Transfer, Inc. 7130 Nob
Hill Road, Tamarac, Florida 33321.
As of March 31, 2000, there were approximately 70 holders of record of
our common stock.
We have never paid cash dividends on our common stock. We presently
intend to retain future earnings, if any, to finance the expansion of our
business and we do not anticipate that any cash dividends will be paid in the
foreseeable future. The future dividend policy will depend on our earnings,
capital requirements, expansion plans, financial condition and other relevant
factors. Declaration and payment of future dividends, if any, will be at the
sole discretion of the board of directors.
ITEM 2. LEGAL PROCEEDINGS
We are not a party to any material legal proceeding, nor is any
officer, director or affiliate a part adverse to us in any legal proceeding.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Not Applicable.
ITEMS 4. RECENT SALES OF UNREGISTERED SECURITIES
In November 1997, First Aid issued 2,100,000 shares of common stock to
Scott Siegel, its former Chairman of the Board and principal shareholder, for
various first aid products, equipment and supplies prior to beginning active
operations. Mr. Siegel was a sophisticated business person
15
<PAGE>
who had access to relevant information and had sufficient financial and other
resources to undertake the transaction. Accordingly, the transaction was exempt
under Section 4(2) of the Securities Act.
Between September 1997 and March 1999, First Aid issued a total of
1,000,000 shares of its common stock to 59 investors for a total purchase price
of $1,000,000 or $1.00 per share. This financing was completed under Rule 504 of
the Securities Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Florida Business Corporation Act permits the indemnification of
directors, employees, officers and agents of Florida corporations. First Aid's
Articles of Incorporation and Bylaws provide that we will shall indemnify our
directors and officers to the fullest extent permitted by the Corporation Act.
Insofar as indemnification for liabilities arising under the Securities Act may
be permitted to directors, officers or persons controlling the First Aid
pursuant to the foregoing provisions, First Aid 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.
16
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS:
<TABLE>
<CAPTION>
Exhibit Description of Documents
------- ------------------------
<S> <C>
2.1 Asset Purchase Agreement between Van Dyne-Crotty, Inc. and First Aid
Select, Inc.
3.1 Articles of Incorporation, as Amended
3.2 By-Laws
9.1 Voting Trust Agreement
10.1 Employment contract with Robert Sussman
10.2 Share Purchase Agreement between Van Dyne-Crotty, Inc., Scott Siegel and
Robert Sussman
10.3 Supply Agreement between Van Dyne-Crotty, Inc. and First Aid Select, Inc.
10.4 Lease Agreement between First Aid Select and Robert Sussman
27.1 Financial Data Schedule
</TABLE>
17
<PAGE>
PART F/S
Following are our audited financial statements for the years ended
December 31, 1999 and 1998, including the independent auditor's report, the
balance sheets as of December 31, 1999 and 1998 and the related statements of
operations in shareholders' equity and cash flows for the years then ended.
18
<PAGE>
FIRST AID DIRECT, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1999
<PAGE>
FIRST AID DIRECT, INC.
INDEX TO FINANCIAL STATEMENTS
-----------------------------
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS F-1
FINANCIAL STATEMENTS
Balance Sheet F-2
Statements of Operations F-3
Statements of Stockholders' Equity F-4
Statements of Cash Flows F-5
Notes to Financial Statements F-6 - F-13
SUPPLEMENTARY INFORMATION
Cost of Sales F-14
General and Administrative Expenses F-14
</TABLE>
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
--------------------------------------------------
To the Board of Directors and Stockholders
First Aid Direct, Inc.
Sunrise, Florida
We have audited the accompanying balance sheet of First Aid Direct, Inc. as of
December 31, 1999 and the related statements of operations, stockholders' equity
and cash flows for the two years then ended. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of First Aid Direct, Inc. as of
December 31, 1999, and the results of its operations and its cash flows for the
two years then ended in conformity with generally accepted accounting
principles.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplementary
information is presented for the purpose of additional analysis and is not a
required part of the basic financial statements. Such information has been
subjected to the auditing procedures applied in the audit of the basic financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the basic financial statements taken as a whole.
RACHLIN COHEN & HOLTZ LLP
Fort Lauderdale, Florida
January 26, 2000
F-1
<PAGE>
FIRST AID DIRECT, INC.
BALANCE SHEET
DECEMBER 31, 1999
<TABLE>
<CAPTION>
ASSETS
------
Current Assets:
<S> <C>
Cash and cash equivalents $ 270,839
Accounts receivable, net of allowance for doubtful
accounts of $20,000 312,593
Inventories 305,813
-----------
Total current assets 889,245
Property and Equipment, Net 86,284
Other Assets 28,196
-----------
$ 1,003,725
===========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current Liabilities:
Accounts payable and accrued liabilities $ 199,000
Income taxes payable 6,500
-----------
Total current liabilities 205,500
-----------
Commitments, Contingencies and Other Matters --
Stockholders' Equity:
Common stock, $.001 par value; 50,000,000 shares authorized;
3,905,000 and 3,793,000 shares issued and outstanding 3,905
Additional paid-in capital 1,671,207
Deficit (871,887)
-----------
803,225
Less stock subscription receivable 5,000
-----------
798,225
$ 1,003,725
===========
</TABLE>
F-2
<PAGE>
FIRST AID DIRECT, INC.
STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net Sales $ 1,999,361 $ 637,951
Cost of Sales 1,424,025 503,547
----------- -----------
Gross Margin 575,336 134,404
General and Administrative Expenses 638,503 390,694
----------- -----------
Loss From Continuing Operations Before Income Taxes (63,167) (256,290)
Income Taxes Benefit (85,746) (3,497)
----------- -----------
Income (Loss) From Continuing Operations 22,579 (252,793)
----------- -----------
Discontinued Operations:
Income from discontinued operations, less applicable income taxes
of $4,000 and $3,500 23,193 19,817
Gain on disposal of discontinued operations, less applicable income
taxes of $88,000 150,097 --
----------- -----------
Total discontinued operations 173,290 19,817
----------- -----------
Net Income (Loss) $ 195,869 $ (232,976)
=========== ===========
Net Income (Loss) Per Common Share - Basic and Diluted:
Continuing operations $ .01 $ (.08)
Discontinued operations .04 .01
----------- -----------
Net income (loss) $ .05 $ (.07)
=========== ===========
</TABLE>
F-3
<PAGE>
FIRST AID DIRECT, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
Common Stock Additional
------------- Paid-in
Shares Amount Capital Deficit
------ ------ ------- -------
<S> <C> <C> <C> <C>
Balance, December 31, 1997 2,900,000 $ 2,900 $ 1,043,402 $ (834,780)
Year Ended December 31, 1998:
Sale of common stock 488,000 488 487,512 --
Issuance of common stock for services -- -- 1,560 --
Options exercised 405,000 405 10,845 --
Net loss -- -- -- (232,976)
---------- ----------- ----------- -----------
Balance, December 31, 1998 3,793,000 3,793 1,543,319 (1,067,756)
Year Ended December 31, 1999:
Sale of common stock 112,000 112 111,888 --
Acquisition of treasury stock -- -- -- --
Issuance of common stock for services -- -- 15,000 --
Options exercised -- -- 1,000 --
Net income -- -- -- 195,869
----------- ----------- ----------- -----------
Balance, December 31, 1999 3,905,000 $ 3,905 $ 1,671,207 $ (871,887)
=========== =========== =========== ===========
</TABLE>
[RESTUBBED]
<TABLE>
<CAPTION>
Treasury Stock
--------------- Stock
Subscription
Shares Amount Receivable Total
------ ------ ---------- -----
<S> <C> <C> <C> <C>
Balance, December 31, 1997 $ -- $- $ (750) $ 210,772
Year Ended December 31, 1998:
Sale of common stock -- - -- 488,000
Issuance of common stock for services -- - -- 1,560
Options exercised -- - (3,250) 8,000
Net loss -- - -- (232,976)
--------- -- ----------- -----------
Balance, December 31, 1998 -- (4,000) 475,356
Year Ended December 31, 1999:
Sale of common stock -- 112,000
Acquisition of treasury stock 125,000 - -- --
Issuance of common stock for services (25,000) - -- 15,000
Options exercised (100,000) - (1,000) --
Net income -- - -- 195,869
--------- -- ----------- -----------
Balance, December 31, 1999 $- $- $ (5,000) $ 798,225
========= == =========== ===========
</TABLE>
F-4
<PAGE>
FIRST AID DIRECT, INC.
STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1999 AND 1998
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $ 195,869 $(232,976)
Adjustments to reconcile net income (loss) to net cash
used in operating activities:
Depreciation 15,289 8,681
Provision for doubtful accounts 22,973 12,332
Gain on sale of discontinued operations (238,250) --
Change in net assets and liabilities of discontinued operations (31,249) --
Stock issued for compensation 15,000 1,560
Changes in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable (177,809) (160,228)
Inventories 3,790 (125,874)
Other assets (24,046) 1,363
Increase in:
Accounts payable and accrued liabilities 84,991 64,703
Income taxes payable 6,500 --
--------- ---------
Net cash used in operating activities (126,942) (430,439)
--------- ---------
Cash Flows from Investing Activities:
Purchase of equipment (59,767) (45,606)
Proceeds from sale of discontinued operations 350,000 --
--------- ---------
Net cash provided by (used in) investing activities 290,233 (45,606)
--------- ---------
Cash Flows from Financing Activities:
Repayments on notes payable (25,000) (16,685)
Proceeds from sale of common stock 112,000 496,000
--------- ---------
Net cash provided by financing activities 87,000 479,315
--------- ---------
Net Increase in Cash and Cash Equivalents 250,291 3,270
Cash and Cash Equivalents, Beginning 20,548 17,278
--------- ---------
Cash and Cash Equivalents, Ending $ 270,839 $ 20,548
========= =========
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest $ 584 $ 5,299
========= =========
</TABLE>
F-5
<PAGE>
FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Capitalization
First Aid Direct, Inc. (the Company) was incorporated in the State
of Florida in July 1977 as Rehabilitation Institute of South
Florida, Inc. The Articles of Incorporation, as amended on August
5, 1997, authorize the Company to issue and have outstanding at any
one time 50,000,000 shares of common stock with a par value of
$.001. A second amendment to the Articles of Incorporation on
December 22, 1999 ratified the name change from First Aid Select,
Inc. to First Aid Direct, Inc.
Business
The Company distributes nationally wholesale first aid products to
first aid distributors and also to nationwide companies on a direct
order system as end users. The Company operated a regional retail
van distribution business which was sold on December 20, 1999 and
is presented as discontinued operations in the accompanying
financial statements (see Note 9).
Cash and Cash Equivalents
The Company considers all highly liquid investments with original
maturities of three months or less to be cash equivalents.
Inventories
Inventories, which are comprised of first aid products held for
sale, are stated at the lower of cost or market. Cost is determined
on the first-in, first-out (FIFO) method.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed
using the straight-line method over the estimated useful lives of
the assets. Gain or loss on disposition of assets is recognized
currently. Repairs and maintenance which do not extend the lives of
the respective assets are charged to expense as incurred. Major
replacements or betterments are capitalized and depreciated over
the remaining useful lives of the assets.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to
concentrations of credit risk are cash and accounts receivable.
F-6
<PAGE>
FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentrations of Credit Risk (Continued)
Cash
The Company maintains deposit balances at financial institutions
that, from time to time during the year, may exceed federally
insured limits. At December 31, 1999, the Company had deposits of
approximately $24,000 in excess of federally insured limits. The
Company maintains its cash with a high quality financial
institution which the Company believes limits these risks.
Accounts receivable
The Company generally sells product to a wide variety of customers
without requiring collateral. The Company monitors exposure to
credit losses and maintains allowances for anticipated losses
considered necessary under the circumstances.
Income Taxes
The Company accounts for its income taxes using Statement of
Financial Accounting Standards (SFAS) No. 109, Accounting for
Income Taxes, which requires the recognition of deferred tax
liabilities and assets for expected future tax consequences of
events that have been included in the financial statements or tax
returns. Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial statement
and tax bases of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to
reverse.
Revenue Recognition
The Company recognizes revenue, (including shipping and handling
fees) when the merchandise is shipped to customers. Allowances for
estimated returns are provided when sales are recorded.
Advertising Costs
Advertising costs are expensed as incurred. Advertising costs
incurred for the years ended December 31, 1999 and 1998 were
approximately $23,000 and $9,000, respectively.
Stock-Based Compensation
The Company has elected to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB No.
25"), and related interpretations, in accounting for its employee
stock options rather than the alternative fair value accounting
allowed by SFAS No. 123, "Accounting for Stock-Based Compensation."
APB No. 25 provides that the compensation expense relative to the
Company's employee stock options is measured based on the intrinsic
value of the stock option. SFAS No. 123 requires companies that
continue to follow APB No. 25 to provide a pro-forma disclosure of
the impact of applying the fair value method of SFAS No. 123.
F-7
<PAGE>
FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock-Based Compensation (Continued)
The Company follows SFAS No. 123 in accounting for stock options
issued to non-employees.
Net Income (Loss) Per Common Share
Basic net income (loss) per common share has been computed using the
net income (loss) from continuing operations divided by the weighted
average shares outstanding. Diluted income per common share assumes
exercising options granted.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial
statements and accompanying disclosures. Although these estimates
are based on management's knowledge of current events and actions it
may undertake in the future, they may ultimately differ from actual
results.
Recent Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board issued SFAS
No. 130, "Reporting Comprehensive Income" and No. 131, "Disclosures
About Segments of an Enterprise and Related Information". SFAS No.
130 establishes standards for reporting and displaying comprehensive
income, its components and accumulated balances. SFAS No. 131
establishes standards for the way that public companies report
information about operating segments in annual financial statements
and requires reporting of selected information about operating
segments in interim financial statements issued to the public. Both
SFAS No. 130 and SFAS No. 131 are effective for periods beginning
after December 15, 1997. The Company adopted these new accounting
standards in 1998, and their adoption had no effect on the Company's
financial statements and disclosures.
In June 1998, the Financial Accounting Standards Board issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging
Activities". SFAS No. 133 requires companies to recognize all
derivatives contracts as either assets or liabilities in the balance
sheet and to measure them at fair value. If certain conditions are
met, a derivative may be specifically designated as a hedge, the
objective of which is to match the timing of the gain or loss
recognition on the hedging derivative with the recognition of (i)
the changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk or (ii) the earnings effect of
the hedged forecasted transaction. For a derivative not designated
as a hedging instrument, the gain or loss is recognized in income in
the period of change. On June 30, 1999, the FASB issued SFAS No.
137, "Accounting for Derivative Instruments and Hedging Activities -
Deferral of the Effective Date of FASB Statement No. 133." SFAS No.
133 as amended by SFAS No. 137 is effective for all fiscal quarters
of fiscal years beginning after June 15, 2000.
F-8
<PAGE>
FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting Pronouncements (Continued)
Historically, the Company has not entered into derivatives contracts
to hedge existing risks or for speculative purposes. Accordingly,
the Company does not expect adoption of this standard on January 1,
2001 to affect its financial statements.
<TABLE>
<CAPTION>
NOTE 2. PROPERTY AND EQUIPMENT
Estimated
Useful Lives
<S> <C> <C>
Furniture and equipment 5 years $ 86,730
Leasehold improvements 5 years 20,584
--------
107,314
Less accumulated depreciation 21,030
--------
$ 86,284
=========
</TABLE>
NOTE 3. RELATED PARTY TRANSACTIONS
Leases
The Company leases office space for its corporate facility from a
related party under a five year operating lease expiring July 31,
2004. Annual rent is approximately $53,000. Rent expense for 1999
was $45,000 and $28,000 for 1999 and 1998, respectively.
Stock Issued For Services
During 1998, a then major stockholder of the Company transferred
2,600 shares of common stock to certain employees in exchange for
services. These shares have been accounted for as compensation
expense at the estimated fair value of the shares issued, with a
corresponding credit to additional in paid-in capital.
Employment Agreement
The CEO of the Company entered into a five-year employment agreement
with the Company effective December 20, 1999. The base compensation
is approximately $100,000, with bonus increases provided that
certain performance requirements are met. The employment agreement
also provides for 150,000 stock options to be granted January 1,
2000, exercisable over a five-year vesting period. The option
exercise price is $1.50, which approximates market value on the date
of grant.
F-9
<PAGE>
FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 3. RELATED PARTY TRANSACTIONS (Continued)
Treasury Stock
During 1999, a former stockholder was required to forfeit 125,000
shares, which were returned to the Company, due to non-performance
of his employment contract, and accounted for as treasury stock. Of
the shares which were held in treasury, 25,000 shares were reissued
to the CEO and other consultants, and accounted for as compensation,
at the estimated fair value of these shares, and 100,000 shares were
reissued upon the exercise of certain stock options (see Note 8). No
treasury shares remained as of December 31, 1999.
NOTE 4. INCOME TAXES
The Company accounts for income taxes under the provisions of
Statement of Financial Accounting Standards (SFAS) No. 109, Accounting
for Income Taxes. SFAS No. 109 is an asset and liability approach for
computing deferred income taxes.
A reconciliation of income tax computed at the statutory federal rate
to income tax expense (benefit) is as follows:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C> <C>
Tax provision at the statutory rate of 34% $ 68,800 $(79,000)
State income taxes, net of federal income tax 1,500 (7,000)
Benefit of net operating loss carryforward (37,700) -
Exercised stock options (39,400) -
Change in valuation allowance - 98,000
Other 13,300 (12,000)
------- ------
$ 6,500 $ -
======= =========
The components of current tax expense (benefit) are as follows:
1999 1998
---- ----
Continuing operations $(85,500) $(3,500)
Discontinued operations 92,000 3,500
------- ------
Income tax expense $ 6,500 $ -
======== =======
</TABLE>
F-10
<PAGE>
FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 4. INCOME TAXES (Continued)
The net tax effects of temporary differences between the carrying
amount of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes are reflected in deferred
income taxes. Significant components of the Company's deferred tax
assets as of December 31, 1999 are as follows:
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Net operating loss carryforward $148,000 $186,000
Stock and stock options issued for compensation - 39,000
Start-up costs 40,000 60,000
Less valuation allowance (188,000) (285,000)
------- -------
Net deferred tax asset $ - $ -
======= ========
</TABLE>
As of December 31, 1999, sufficient uncertainty exists regarding the
realizability of these deferred tax assets and, accordingly, a 100%
valuation allowance has been established.
At December 31, 1999, the Company had net operating loss carryforwards
for federal income tax purposes of approximately $400,000.
In accordance with certain provisions of the Tax Reform Act of 1986, a
change in ownership of greater than 50% of a corporation within a three
year period will place an annual limitation on the corporation's
ability to utilize its existing tax benefit carryforwards. Such a
change in ownership occurred in 1997. As a result, based upon the
amount of the taxable loss incurred to December 31, 1997, the Company
estimates that an annual limitation will apply to the net operating
loss carry forward existing as of that date in the amount of $155,000
annually. The Company's utilization of its tax benefit carryforwards
may be further restricted in the event of subsequent changes in the
ownership of the Company.
NOTE 5. NET INCOME (LOSS) PER COMMON SHARE
The Company follows Statement of Financial Accounting Standards (SFAS)
No. 128, "Earnings Per Share" which requires the presentation of both
basic and diluted net income (loss) per share.
Basic net income (loss) per common share has been computed based upon
the weighted average number of shares of common stock outstanding
during the period. The number of shares used in the computation was
3,887,000 and 3,237,000 for 1999 and 1998, respectively. Diluted income
(loss) per common share has not been presented, since the effect of
common share equivalents is not material in 1999 and would be
anti-dilutive in 1998.
F-11
<PAGE>
FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 6. PRIVATE PLACEMENT OF SECURITIES
During the period from September 1997 through December 31, 1999, the
Company has raised substantially all of its capital through the private
placement of its equity securities. The sales of these securities
resulted in the issuance of an aggregate of 1,000,000 shares of its
common stock and the receipt of $1,000,000 of total proceeds as of
December 31, 1999.
NOTE 7. STOCK OPTIONS
In 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123"). As permitted by SFAS No. 123, the Company
continues to apply the recognition and measurement provisions of
Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees" ("APB 25"). The differences between the
recognition and measurement provisions of SFAS No. 123 and APB 25 had
no material effect on the Company's results of operations for 1999 and
1998.
The Company estimates the fair value of each stock option at the grant
date by using the Black-Sholes option-pricing model with the following
weighted-average assumptions used for grants in 1997; no dividend
yield; an expected life of five years; 50% expected volatility, and
6.00% risk free interest rate. No options were granted in 1998 or 1999.
The option valuation model was developed for use in estimating the fair
value of traded options which have no vesting restrictions and are
fully transferable. In addition, valuation models require the input of
highly subjective assumptions including the expected price volatility.
Since the Company's stock options have characteristics significantly
different from those of traded options, and since variations in the
subjective input assumptions can materially affect the fair value
estimate, the actual results can vary significantly from estimated
results.
A summary of the status of options as of December 31, 1999 and changes
during the year ended on that date are presented below:
<TABLE>
<CAPTION>
Range of
Exercise
Options Price
------- -----
<S> <C> <C>
Summary of Activities in Stock Options:
Balance, December 31, 1997 585,000 $.01 to $.10
Year Ended December 31, 1998:
Granted -
Exercised 405,000 $.01 to $.10
-------
Balance, December 31, 1998 180,000 $.01 to $.10
Year Ended December 31, 1999:
Granted -
Exercised 100,000 $.01
-------
Balance, December 31, 1999 80,000 $.10
========
</TABLE>
F-12
<PAGE>
FIRST AID DIRECT, INC.
NOTES TO FINANCIAL STATEMENTS
(Continued)
NOTE 7. STOCK OPTIONS (Continued)
The following table summarizes information about outstanding options at
December 31, 1999:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
-------------------------------------------------- -----------------------------------------------------
Number Weighted Number
Outstanding Average Weighted Exercisable Weighted
Range of at Remaining Average at Average
Exercise December 31, Contractual Exercise December 31, Exercise
Prices 1999 Life Price 1999 Price
------ ---- ---- ----- ---- -----
<S> <C> <C> <C> <C> <C> <C>
$.10 80,000 2.5 $.10 80,000 $.10
==== ====== === ==== ====== ====
</TABLE>
Subsequent to December 31, 1999, 150,000 options were granted to an
employee pursuant to an employment agreement (see Note 4).
NOTE 8. SALE OF RETAIL OPERATIONS
On December 20, 1999, the Company entered into an asset purchase
agreement to sell the regional retail van distribution business and all
related assets for $350,000, to be paid in cash. The results of
operations of the van distribution business for the respective periods
are presented as discontinued operations in the accompanying statements
of operations. Additionally, the gain recognized on the sale is
presented separately as a component of discontinued operations.
The following table represents the summarized results of operations of
the discontinued division.
<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
Revenue $668,211 $547,248
Expenses 640,925 523,934
------- -------
Income from discontinued operations $ 27,286 $ 23,314
======== ========
</TABLE>
The Company had various equipment installment notes (approximately
$7,000 in 1998, which increased to $70,000 in 1999), payable to a bank,
collateralized by certain vans. These loans were assigned to the
purchaser as part of the sale of the retail division. The outstanding
principal balance of such obligations at December 20, 1999 was
approximately $60,000. The Company remains the maker of record and
legally liable for such obligations.
F-13
<PAGE>
FIRST AID DIRECT, INC.
SUPPLEMENTARY INFORMATION
DECEMBER 31, 1999 AND 1998
<PAGE>
FIRST AID DIRECT, INC.
SUPPLEMENTAL INFORMATION
YEARS ENDED DECEMBER 31, 1999 AND 1998
1999 1998
---- ----
Cost of Sales:
Inventory, beginning $ 309,603 $ 203,625
Purchases 1,220,356 534,145
Freight in 171,230 42,289
Warehouse salaries 28,649 27,839
Contract packaging -- 5,252
1,729,838 813,150
Inventories, ending -- 309,603
$1,729,838 $ 503,547
General and Administrative Expenses:
Payroll 296,442 137,841
Professional fees 49,057 29,343
Office 67,943 45,752
Payroll taxes 38,135 15,863
Rent 45,119 27,788
Travel 19,693 17,906
Telephone 12,427 7,331
Insurance 19,626 6,165
Employee benefits 25,967 23,676
Advertising 3,066 4,334
Property maintenance 23,038 3,655
Depreciation 15,289 5,312
Bad debts 12,973 2,332
Utilities 9,728 7,316
Start-up costs -- 56,080
-------- ------
$ 638,503 $ 390,694
========== ==========
F-14
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
First Aid Direct, Inc. has caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
FIRST AID DIRECT, INC.
By: /s/ Robert Sussman
------------------------------
Robert Sussman, Chief
Executive Officer
Date: May 12, 2000
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Description of Documents
------- ------------------------
<S> <C>
2.1 Asset Purchase Agreement between Van Dyne-Crotty, Inc. and First Aid
Select, Inc.
3.1 Articles of Incorporation, as Amended
3.2 By-Laws
9.1 Voting Trust Agreement
10.1 Employment contract with Robert Sussman
10.2 Share Purchase Agreement between Van Dyne-Crotty, Inc., Scott Siegel and
Robert Sussman
10.3 Supply Agreement between Van Dyne-Crotty, Inc. and First Aid Select, Inc.
10.4 Lease Agreement between First Aid Select and Robert Sussman
27.1 Financial Data Schedule
</TABLE>
Exhibit 2.1
================================================================================
ASSET PURCHASE AGREEMENT
between
VAN DYNE-CROTTY, INC.
as Purchaser
and
FIRST AID SELECT, INC.
as Seller
================================================================================
Effective
December 20, 1999
================================================================================
<PAGE>
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made this
16th day of December, 1999, between FIRST AID SELECT, INC., a Florida
corporation (the "Seller"), and VAN DYNE-CROTTY, INC. (the "Purchaser").
RECITALS
A. Seller is engaged in the retail/route sales of first aid and safety
supplies.
B. Purchaser desires to purchase from Seller, and Seller desires to
sell to Purchaser, upon the terms and conditions specified herein, all of the
Purchased Assets, as defined herein, of such business.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals, and in
consideration of the promises, covenants, terms and conditions specified herein,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, the following defined terms shall
have the meanings set forth in this Article I:
1.1 "Accounts Receivable" means all of the monies owed to the Seller by
its customers of the Business, including by way of example, but not limitation,
current receivables, delinquent receivables and finance charges.
1.2 "Business" means the First Aid Supply Business conducted by Seller
prior to the Closing Date.
1.3 "Closing" means the actions taken as provided in Article VI in
connection with the consummation of the transactions contemplated by this
Agreement.
1.4 "Closing Date" means the time and date when the Closing of the
transactions contemplated by this Agreement shall be effective, which shall be
12:01 a.m. on December 20, 1999.
1.5 "Code" means the Internal Revenue Code of 1986, as amended.
<PAGE>
1.6 "Contracts" means all written or oral contracts, agreements,
commitments and orders (including but not limited to Customer Contracts,
purchase orders, Leases and license agreements) of Seller in the Business, but
does not include any contracts, agreements or arrangement for or in regard to
leased employees.
1.7 "Customer Contracts" means all or oral written contracts,
agreements, commitments and orders from customers of the Business.
1.8 "Encumbrance" means any mortgage, pledge, security interest, lien,
claim, charge, encumbrance, option, lease, restriction or restraint on transfer.
1.9 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.10 "ERISA Plan" means any and all employee pension benefit plans (as
defined in Section 3(2) of ERISA) and any and all employee welfare benefit plans
(as defined in Section 3(1) of ERISA).
1.11 "Financial Statements" means the financial statements of the
Seller, including a balance sheet and statement of income and expenses as at
December 31, 1998 and as at September 30, 1999.
1.12 "First Aid Supply Business" means Seller's retail van delivery
first aid and safety supply business.
1.13 "Inventory" means all of Seller's inventory and salable goods used
in the Business valued at their cost to retailers and which is physically
located in the Seller's retail delivery vehicles as determined by a physical
inventory of such by Seller and Purchaser as of the Closing Date.
1.14 "Lease" means any lease, sublease or rental agreement by which
Seller leases or rents any real property or other tangible property as lessee.
1.15 "Litigation" means claims, suits, actions, investigations or
proceedings.
1.16 "Name" means First Aid Direct.
1.17 "Permits" means licenses, qualifications, permits, approvals,
franchises, zoning variations and authorizations (federal, state and local) used
in the Business.
1.18 "Purchase Price" means the sum of $350,000.
1.19 "Purchased Assets" means all of the following assets of Seller
used in the Business as of the Closing Date:
-2-
<PAGE>
(a) Seller's equipment, machinery, furniture, fixtures and other
personal property listed on Schedule 3.4.
(b) The motor vehicles specifically listed and identified (by serial
number or otherwise) on Schedule 3.4.
(c) The Inventory.
(d) The Accounts Receivable.
(e) The right to use the Name only with respect to retail sales of
first aid and safety supplies.
(f) All of Seller's right, title, and interest in and to all Contracts.
(g) All of Seller's Permits.
(h) All of Seller's Records.
The Purchased Assets do not, however, include Seller's cash and bank
deposits of the Business.
1.20 "Records" means all books and records of Seller used in the
Business, including without limitation, all of its property and equipment
records, production records, engineering records, purchasing and sales records,
personnel and payroll records, accounting records, magnetic copies of computer
files and documentation, all customer lists and other records and files kept or
used by Seller in the ordinary course or conduct of the Business, but not
including Seller's tax returns, minute books or shareholder records.
1.21 "Taxes" means corporate taxes, franchise taxes, sales taxes, use
taxes, real property taxes, personal property taxes, state business taxes,
federal, state and local income taxes, FICA taxes and FUTA taxes, other payroll
taxes and all related assessments, charges, duties, deficiencies, penalties,
interest and fines.
1.22 "Vehicle Loans" means the Encumbrances against the motor vehicles
listed and identified on Schedule 3.4.
ARTICLE II
PURCHASE AND SALE
2.1 Purchase and Sale. As of the Closing Date, upon the terms, subject
to the conditions, and for the consideration hereinafter set forth, Seller shall
sell,
-3-
<PAGE>
convey, assign, transfer and deliver all of the Purchased Assets to Purchaser by
such appropriate bills of sale, conveyances, assignments or other instruments of
transfer as may be reasonably requested by counsel for Purchaser.
2.2 Purchase Price. Purchaser shall pay to Seller the Purchase Price
for the Purchased Assets by wire transfer on December 20, 1999.
2.3 Allocation of Purchase Price. The purchase price shall be allocated
as follows:
Accounts Receivable Book Value
Tangible Fixed Assets Book Value
Inventory Wholesale Price to Customers
Customer Contracts
and Goodwill Balance of Purchase Price
2.4 Payment of Purchase Price. Purchaser shall pay the Seller the
Purchase Price at the Closing by wire transfer of immediately available funds to
such bank account as Seller may specify in writing to Purchaser at least five
days prior to the Closing.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser as of the date of this
Agreement and as of the Closing Date as follows:
3.1 Power and Authority.
Seller is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida and has full power and
authority to carry on the Business as it is presently conducted, and to own,
lease and operate the Purchased Assets. Seller is not required to be qualified
or licensed to do business in any other state or jurisdiction with respect to
the Business where such failure would have a material adverse effect on the
Business.
3.2 Execution and Delivery. The execution, delivery and performance of
this Agreement by Seller, and the consummation of the transactions contemplated
by this Agreement, will not:
(a) violate, result in a breach of any of the terms or conditions of,
or constitute a default under, the Articles of Incorporation or By-Laws or
similar documents of Seller, or under any contract, agreement, commitment,
undertaking, understanding, note, bond, license or other instrument or
obligation to which Seller
-4-
<PAGE>
is a party, or by which any of the Purchased Assets may be bound or affected, or
which would adversely affect the value of the Purchased Assets or the ability of
Seller to transfer good title to and possession of the same to Purchaser; or
(b) violate or conflict with any applicable law, judgment, order, writ,
injunction or decree of any court, administrative agency or governmental body
applicable to Seller.
3.3 Capacity and Authority. Seller has full corporate capacity, power
and authority to enter into this Agreement, and to carry out the transactions
contemplated by this Agreement. The Board of Directors and shareholders of
Seller have duly authorized, and Seller has taken all necessary action to
authorize, the execution, delivery and performance of this Agreement by Seller
and the consummation of the transactions contemplated by this Agreement by
Seller. The obligations of Seller set forth in this Agreement are legal, valid
and binding obligations of Seller enforceable in accordance with their terms.
3.4 Title to and Condition of Properties.
(a) Set forth in Schedule 3.4 is a list of all tangible assets and
property of Seller included in the Purchased Assets having a fair market value
of $500 or more (other than Inventory) and all motor vehicles included in the
Purchased Assets. Except as set forth in Schedule 3.4, Seller has good, valid
and marketable title to all the Purchased Assets, free and clear of all
Encumbrances except for such imperfections or encumbrances which would not have
a material adverse effect on the Purchased Assets, and except for the Vehicle
Loans. At the Closing Seller shall transfer to Purchaser good, valid and
marketable title to each of the Purchased Assets, free and clear of
Encumbrances. The Vehicle Loans are current and no payment or liability
thereunder is in arrears as of the Closing Date.
(b) As of the Closing Date, the equipment, machinery and motor vehicles
included in the Purchased Assets are in good condition and working order,
subject to normal wear and tear in accordance with past experience.
(c) To the best of Seller's knowledge, the Inventory is adequate and
suitable as of the Closing Date for the conduct of the Business as conducted by
Seller, and the quality, quantity and mix is consistent with prior business
practices of the Seller and will be in such condition to be readily saleable at
standard prices.
3.5 Taxes. With respect or relating to the Business, and its business
operations in connection therewith:
(a) Seller has paid or shall timely pay all Taxes due and payable by it
or to become due and payable by it; and
-5-
<PAGE>
(b) Seller shall pay, and shall be solely responsible for, all Taxes
(foreign, federal, state and local) which have accrued or will accrue by virtue
of the consummation of this transaction including by way of example but not
limited to any transfer, sales or use tax and no tax lien has attached or will
attach to any of the Purchased Assets by reason of the consummation of this
transaction or by reason of any activity of Seller prior to the Closing Date.
3.6 Material Events. Since December 31, 1998, there has not been any
material occurrence, event, change in business, financial, or accounting
practices, damage, destruction, or loss, or any other condition or event which
has or would materially adversely affect the properties, assets or business
operations of the Business.
3.7 Compliance with Laws. Seller is in compliance, in all material
respects, with all applicable laws, rules, regulations, ordinances and standards
including, but not limited to, environmental, civil rights, occupational safety
and health and hazardous substances with respect to the Business.
3.8 Licenses, Permits, Etc. Set forth in Schedule 3.8 is a complete and
accurate list of all Permits held by or granted to Seller which are in effect as
of the date of this Agreement and which are materially necessary to the conduct
of the Business. Seller possesses all Permits applicable to Seller which are
necessary for the conduct of the Business as heretofore conducted or the
operation of the Purchased Assets. All such Permits are now, and as of the
Closing Date will be, in full force and effect without modification. Except as
described in Schedule 3.8, all such Permits may be, and on the Closing will be,
effectively transferred or assigned to Purchaser without the consent of any
government agency so as to allow Purchaser to operate the Purchased Assets and
Business in substantially the same manner as they are currently being operated
except where such Permits are not assignable or require the Purchaser's actions
to remain in force. No violation of any such Permit has been recorded and no
proceeding which might result in revocation or limitation thereof is pending or,
to the best of the Seller's knowledge, threatened.
3.9 Litigation. Except as disclosed on Schedule 3.9:
(a) there is no Litigation pending or, to the best of Seller's
knowledge, threatened against, or affecting, the Purchased Assets or the
Business, by any person or entity, including, but not limited to, any
administrative agency, arbitrator or governmental body; and
(b) there is no outstanding order, writ, injunction or decree of any
court, administrative agency, governmental body or arbitration tribunal against
or affecting the Purchased Assets or the Business.
-6-
<PAGE>
3.10 Financial Statements. Seller has delivered to Purchaser true and
complete copies of the Financial Statements. The Financial Statements have been
prepared in conformity with general accepted accounting principles consistently
applied and are a fair, accurate and complete representation of the financial
position of the Business, the results of the Business's operations, and the
related changes in its financial position as of the respective dates thereof and
for the periods then ended. The Financial Statements are substantially in
accordance with the books and records of Seller.
3.11 Contracts.
(a) Set forth on Schedule 3.11 is a complete list of all Contracts of
Seller pertaining to the Business which involve: (i) payments or financial
obligations of $10,000 or more, (ii) which are not terminable by Seller without
cause and without expense or liability to Seller on notice of 30 days or less,
or (iii) matters that are material to the Business. No other contract,
agreement, commitment or order is necessary for Purchaser to conduct the
Business substantially as it is presently conducted. True and complete copies of
all such Contracts will have been furnished to Purchaser by Seller prior to the
Closing.
(b) Except as set forth in Schedule 3.11, each of such Contracts may be
assigned to Purchaser pursuant to this Agreement without any breach, default,
acceleration or termination thereof, and all of the rights of Seller under the
same shall upon assignment to Purchaser pursuant to this Agreement be
enforceable by Purchaser after the Closing Date, without the consent or
agreement of any other person, except such consents as are hereafter obtained by
Seller without any adverse effect upon Purchaser, the Purchased Assets, and/or
the business operations conducted by Purchaser with the Purchased Assets after
the Closing.
(c) The Seller has not received any notice of default with respect to
any Contracts. There are no facts or conditions which have occurred which would
(either with notice or lapse of time, or both) constitute a default with respect
to any Contracts by the Seller, or which would cause the acceleration of any
obligation of Seller to the same.
(d) There are no persons holding powers of attorney from Seller.
(e) To the best of Seller's knowledge, no Contract calls for the
leasing or purchasing by Seller of any premises, goods or services at prices
substantially in excess of prevailing market prices on the Closing Date or, to
the best of Seller's knowledge, the leasing or sale by Seller of any premises,
goods, or services at prices substantially below prevailing market prices on the
Closing Date.
3.12 Customers. Attached as Schedule 3.12 is a true and complete list
of all of the Seller's customers of the Business as of the Closing Date. Such
list shall
-7-
<PAGE>
include the name and address of each customer and the amount of purchases of
each customer for the six month period ending ten days prior to the Closing.
Except as set forth in Schedule 3.12, to the best of Seller's knowledge, no
customer on Seller's customer and route lists is planning to or has threatened
to terminate its business relationship with the Business.
3.13 Employment Agreements and Employee Benefit Plans.
(a) Set forth in Schedule 3.13 is a complete list of all employment
agreements, deferred compensation agreements, incentive and bonus plans, ERISA
Plans and other fringe benefits presently in effect covering any employees of
Seller employed in the Business and the categories of employees covered by each
such agreement, contract, plan or program, and all accrued but unpaid
contributions, premiums or other payments attributable to each such agreement,
contract, plan or program. Except as specifically set forth in Schedule 3.13,
neither Seller nor any entity related to Seller (as defined in Section 4001 of
ERISA) has contributed, is contributing, was obligated to contribute at any time
in the past, or is obligated to contribute (now or in the future) to any
multi-employer pension plan (as defined in Section 3(37) of ERISA).
(b) Seller, as to employees employed in the Business, (i) has not
announced or committed itself to changes in any employment agreement, deferred
compensation agreement, incentive plan, bonus plan, fringe benefits and ERISA
Plans presently in effect (ii) has not announced or committed itself to adopt
any new agreement, contract, plan or program to provide new employee benefits or
fringe benefit programs or to expand or modify existing programs; and (ii) is
not required, by agreement or otherwise, to alter any such agreement, contract,
plan or program. Seller has provided Purchaser with true, correct and complete
copies of all agreements, plan and trust documents, employee communications,
insurance contracts, summary plan descriptions and, if applicable, filings with
the Department of Labor and Internal Revenue Service, including Treasury Forms
5500 for the most recent three years, relating to all agreements and plans
listed in Schedule 3.13 which Purchaser has requested.
3.14 ERISA Compliance. No act, omission, or event has occurred which
could be expected to give rise to a prohibited transaction under Section 406 of
ERISA or to a breach of fiduciary duty or any cause of action under Section 502
of ERISA with respect to any agreement, contract, plan or program listed in
Schedule 3.13. No agreement, contract, plan or program listed in Schedule 3.13
is currently subject to any audit or Litigation in a state or federal court or
before any arbitrator or government agency, and no fiduciary or party in
interest (as defined under ERISA), with respect to any such agreement, contract,
plan or program is involved in any Litigation (either pending or threatened)
involving the administration of or payment of benefits under any such agreement,
contract, plan or program. All agreements, contracts, plans or programs listed
in Schedule 3.13 have been administered in
-8-
<PAGE>
compliance with their governing documents, applicable law and government
regulations.
3.15 Employment Practices. Schedule 3.15 sets forth the name, title or
responsibility, and annual rate of compensation of each employee of Seller
employed in the Business. Schedule 3.15 also sets forth, as of the Closing Date,
the seniority and unused vacation and sick time of each such employee of Seller.
Seller has paid in full to its employees employed in the Business all wages,
salaries, commissions, bonuses and other direct compensation for all services
performed by them, other than amounts which have not yet become payable in
accordance with Seller's customary practices. Seller is not a party to any
collective bargaining contract or other agreement with any labor union. No
organizing efforts, labor trouble or strike exists or, to the best of Seller's
knowledge, is threatened which could adversely affect the Business.
3.16 Insurance; Workers' Compensation. Set forth on Schedule 3.16 is a
list of liability and property insurance policies maintained by Seller in the
Business and the balance of any premiums due thereon. To the best of Seller's
knowledge, no notice of suspension or cancellation of any insurance policies
currently maintained by Seller has been received by Seller or, to the best of
Seller's knowledge, is threatened. Seller maintains workers' compensation
insurance with limits not less than those required under the laws of each state
to which it is subject, or is a certified self-insurer under such laws. All
workers' compensation insurance maintained by Seller is in full force and
effect, and no payments with respect thereto are past due. Schedule 3.16
contains a list of all awards of workers' compensation benefits granted against
Seller or with respect to employees involved in the Business since January 1,
1994.
3.17 Brokerage and Finder's Fees. Seller has not incurred any liability
or obligation to any finder or agent for any brokerage fees, finder's fees or
commissions with respect to the transactions contemplated by this Agreement.
3.18 Customer Accounts. Seller does not presently owe any customer or
customer account of the Business any sum of money or other consideration
whatsoever to secure or retain the patronage of such customer or customer
account.
3.19 Use of Name; No Infringement. Seller has the right to use the Name
in the Business and to transfer the right to use the Name to Purchaser in
accordance with this Agreement free and clear of any Encumbrances. Seller has
filed a trademark application with the U.S. Patent and Trademark Office for the
Name. The Seller has not received any notice that Seller in the operation of the
Business is infringing or violating any patent, trademark, service mark,
copyright or other intellectual property right of any third party and, to the
best of Seller's knowledge, there is no basis for any such claim.
-9-
<PAGE>
3.20 Consents and Approvals. Except as set forth on Schedule 3.20, no
consent, approval, waiver, authorization, registration or qualification is
required to be obtained by the Seller from, and no notice or filing is required
to be given by the Seller to or made by the Seller with, any governmental
authority or other third-party in connection with the execution, delivery and
performance by the Seller of the terms of this Agreement.
3.21 Full Disclosure. No representation or warranty of the Seller
contained in this Agreement (including any Exhibit or Schedule attached hereto)
contains or will knowingly contain any untrue statement of a material fact, or
omits or will omit to state a material fact necessary to make the statements
contained in this Agreement not misleading. In purchasing the Purchased Assets,
Purchaser is relying upon the truth and accuracy of each of the foregoing
representations and warranties, and as stated in this Article III, each of the
same constitutes a basic and bargained for consideration for such purchase by
Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Seller as of the date hereof
and as of the Closing Date, as follows:
4.1 Power and Authority. Purchaser is a corporation duly organized,
validly legally existing and in good standing under the laws of the state of
Ohio and is qualified to do business in the State of Florida.
4.2 Execution and Delivery. The execution, delivery and performance of
this Agreement by Purchaser, and the consummation of the transactions
contemplated by this Agreement contemplated hereby, will not:
(a) violate, result in a breach of any of the terms or conditions of,
or constitute a default under, the Articles of Incorporation or Code of
Regulations of Purchaser, or under any contract, agreement, commitment,
undertaking, understanding, note, bond, license or other instrument or
obligation to which Purchaser is a party, or by which any of the properties or
assets of Purchaser may be bound or affected; or
(b) violate or conflict with any applicable law, judgment, order, writ,
injunction or decree of any court, administrative agency or governmental body
applicable to Purchaser.
4.3 Capacity and Authority. Purchaser has full capacity, power and
authority to enter into this Agreement, and to carry out the transactions
contemplated by this Agreement. Purchaser has taken all necessary action to
-10-
<PAGE>
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated by this Agreement. The obligations of Purchaser
set forth in this Agreement are legal, valid and binding obligations of
Purchaser, enforceable in accordance with their terms.
4.4 Brokerage and Finder's Fees. Purchaser has not incurred any
liability or obligation to any finder or agent for any brokerage fees, finder's
fees or commissions with respect to the transactions contemplated by this
Agreement.
ARTICLE V
NO ASSUMPTION OF LIABILITIES BY PURCHASER; WAIVER OF BULK SALES
5.1 No Assumption of Liabilities. Notwithstanding any other term or
provision of this Agreement, except for the Vehicle Loans on the motor vehicles
listed and identified on Schedule 3.4 and as provided in Section 2.5 of this
Agreement, Purchaser does not assume and shall not be responsible for, any
liability, commitment or obligation of Seller, including, without in any way
limiting the generality of the foregoing, (1) any employment responsibilities or
obligations of Seller, (2) any obligations and liabilities of Seller under any
collective bargaining or labor agreements, (3) any obligation or liability of
Seller arising out of the sponsorship or administration of any ERISA Plan, (4)
any accounts payable, loans or other liabilities which are not otherwise assumed
by Purchaser pursuant to this Agreement, (5) any claims, suits, actions or
Litigation filed prior to the Closing Date, (6) liabilities or obligations to be
paid or performed prior to the Closing Date under the Contracts, (7) any
obligation or liability of Seller with respect to vacation or sick pay or any
other employment obligations of Seller, and/or (8) any product liability, breach
of warranty or similar liability. Seller shall be solely responsible for all
liabilities and obligations and arising out of the operation of the Business or
the ownership, lease or use of the Purchased Assets prior to the Closing Date.
All periodic obligations of the Business for utilities, rental of personal
property or similar obligations that apply to time periods beginning before and
ending after the Closing Date shall be pro-rated on a daily basis between Seller
and Purchaser.
5.2 Waiver of Bulk Transfers Law. The parties waive compliance with the
provisions of the Bulk Sales Law of any state, and Seller warrants and agrees to
pay and discharge when due all claims of creditors which could be asserted
against Purchaser by reason of such noncompliance. Seller agrees to pay at or
before the Closing all trade payables pertaining to the Business and the
Purchased Assets, or according to terms if such terms extend beyond Closing, and
all sales, withholding, property and other taxes due to the State of Florida or
any other taxing jurisdiction.
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<PAGE>
ARTICLE VI
CLOSING
6.1 Time and Place. The Closing of the transactions contemplated by
this Agreement will take place at the offices of Atlas, Pearlman, Trop &
Borkson, P.A. on December 16, 1999, or such other place and time as the parties
may agree, and shall be effective as of the Closing Date.
6.2 Deliveries by Seller. At the Closing, Seller will, subject to the
satisfaction of the conditions set forth in Article IX, deliver to Purchaser:
(a) A Bill of Sale.
(b) Releases and UCC termination statements from any third party having
a security interest in all or a portion of the Purchased Assets or such other
evidence of termination of such security interests as is reasonably acceptable
to Purchaser.
(c) All other certificates, documents of title, bills of sale and other
instruments of conveyance and transfer, in form satisfactory to Purchaser and
Purchaser's counsel, as Purchaser's counsel shall deem necessary, to vest in
Purchaser good and marketable title to the Purchased Assets.
(d) Copies of all employment agreements with any of the Seller's
employees engaged in the Business.
6.3 Requirements Purchasing Agreement. The Requirements Purchasing
Agreement described in Article 9.3 shall be signed and delivered.
ARTICLE VII
COVENANTS OF THE PARTIES
7.1 Noncompetition Agreement.
(a) During the period of five years after the Closing Date, Seller
shall not, directly or indirectly (as an agent, contractor, consultant, partner,
member, shareholder, owner or otherwise):
(i) Own any interest (other than the ownership of less than 1%
of the outstanding stock of a publicly traded company) in, engage in
or otherwise participate in, whether for compensation or not, any
business that is involved in the First Aid Supply Business;
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<PAGE>
(ii) Request or advise any customer of the Business conducted
by Purchaser to terminate or alter its business relationship with the
First Aid Supply Business, or otherwise interfere with the business
operations of the First Aid Supply Business; or
(iii) Induce or attempt to induce or influence any employee of
Purchaser to terminate employment with Purchaser.
(b) It is the intent of the parties that the provisions of this Section
7.1 shall be enforced to the fullest extent permissible under the laws and
public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, to the extent that the noncompetition restrictions under this
Agreement shall be adjudicated to be invalid or unenforceable in any such
jurisdiction, the court making such determination shall have the power to limit,
construe or reduce the duration, scope, activity and/or area of such provision,
and/or delete specific words or phrases to the extent necessary to render such
provision enforceable to the maximum reasonable extent permitted by applicable
law, such limited form to apply only with respect to the operation of this
Section in the particular jurisdiction in which such adjudication is made.
(c) Seller acknowledges that its adherence to the terms of the
covenants set forth in Section 7.1 is necessary to protect the value of the
Purchased Assets to Purchaser, that a continuing breach of such covenants will
result in irreparable and continuing damage to the value of the Purchased
Assets, and that money damages would not adequately compensate Purchaser for any
such breach and, therefore, that Purchaser would not have an adequate remedy at
law. In the event any action or proceeding shall be instituted by Purchaser to
enforce any provision of Section 7.1, Seller shall waive the claim or defenses
in such action that (i) money damages are adequate to compensate Purchaser for
such breach and (ii) there is an adequate remedy at law available to Purchaser,
and shall not urge in any such action or proceeding the claim or defense that
such remedy at law exists. Purchaser shall have, in addition to any and all
remedies at law, the right to an injunction, both temporary and permanent,
specific performance and/or other equitable relief to prevent the violation of
any obligation under Section 7.1. The parties agree that the remedies of
Purchaser for breach of Section 7.1 by Seller shall be cumulative, and seeking
or obtaining injunctive or other equitable relief shall not preclude the making
of a claim for damages or other relief. Seller also agrees that Purchaser shall
be entitled to such damages as it can show it has sustained by reason of such
breach and shall not be limited in its damages by any provision of, or to the
consideration received by Seller pursuant to, this Agreement. In any action
brought to enforce the covenants set forth in Section 7.1, or to recover damages
for breach thereof, the prevailing party shall be entitled to recover reasonable
attorneys' fees and other expenses of litigation, together with such other and
further relief as may be proper.
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<PAGE>
(d) The parties intend to and do hereby confer jurisdiction to enforce
this Section 7.1 upon the courts of any state within the geographical scope of
the covenants contained in this Agreement. If the courts of any one or more of
such states or jurisdictions shall hold such covenant wholly unenforceable by
reason of the breadth of such scope or otherwise, it is the intention of the
parties that such determination shall not bar or in any way affect the right of
Purchaser to the relief provided above in the courts of any other state or
jurisdiction within the geographical scope of such covenant, as to breaches of
such covenants in such other respective states or jurisdictions; the above
covenants as they relate to each state or jurisdiction being, for this purpose,
severable into diverse and independent covenants.
7.2 Access to Records. Purchaser shall retain the Records for at least
six years. Seller or its agents shall have access to the Records, upon
reasonable notice and during normal business hours, at the Purchaser's Florida
office for legitimate business or tax purposes during such six year period.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING BY PURCHASER
Subject to waiver by Purchaser, each of the agreements of Purchaser to
be performed by it at the Closing pursuant to this Agreement shall be subject to
the fulfillment of each of the following conditions precedent:
8.1 Representations and Warranties. Each of the representations and
warranties of the Seller set forth in this Agreement shall be true, correct and
complete in all material respects on the date of this Agreement and on the
Closing Date, as if made at that time.
8.2 Agreements. Seller shall have performed and complied with all
agreements, undertakings, obligations and covenants which are required to be
performed or complied with by it at or prior to the Closing Date.
8.3 Closing Deliveries. Purchaser shall have received the items to be
delivered to it at Closing as described in Article 6.2.
8.4 Litigation. No notice shall have been received as to Litigation
being commenced or threatened against Purchaser or Seller by any governmental
authority or any other person or entity with regard to this Agreement or the
transactions contemplated by this Agreement.
8.5 Release of Encumbrances. All Encumbrances on any of the Purchased
Assets shall have been fully released.
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<PAGE>
8.6 Satisfaction with Legal Matters. All legal matters in connection
with this Agreement and the transactions contemplated by this Agreement, and the
form and substance of all legal proceedings and papers, instruments and
documents used or delivered herewith or incident to this Agreement shall be
reasonably satisfactory to counsel for Purchaser.
8.7 Third-Party Consents and Approvals; Estoppel Certificates. Seller
and Purchaser have obtained all third-party (including but not limited to
governmental) consents and approvals, if any, required for the transfer or
continuance, as the case may be, of the Contracts and Permits disclosed in
Schedules 3.8 and 3.11 pursuant to the transactions contemplated by this
Agreement.
ARTICLE IX
CONDITIONS PRECEDENT TO CLOSING BY SELLER
Subject to waiver by Seller, each of the agreements of Seller to be
performed by it at the Closing pursuant to this Agreement shall be subject to
the fulfillment of each of the following conditions precedent:
9.1 Representations and Warranties. Each of the representations and
warranties of Purchaser set forth in this Agreement shall be true, correct and
complete in all material respects on the date hereof and on the Closing Date, as
if made at that time.
9.2 Agreements. Purchaser shall have performed and complied with all
agreements, undertakings, obligations and covenants which are required to be
performed or complied with by it at or prior to the Closing Date.
9.3 Requirements Purchasing Agreement. Purchaser and Seller shall have
executed the Requirements Purchasing Agreement in the form attached as Exhibit
9.3.
9.4 Closing Deliveries. Seller shall have received the items to be
delivered to it at Closing as described in Article 6.3.
9.5 Litigation. No notice shall have been received as to Litigation
being commenced or threatened against Purchaser or Seller by any governmental
authority or any other person or entity with regard to this Agreement or the
transactions contemplated by this Agreement.
9.6 Satisfaction with Legal Matters. All legal matters in connection
with this Agreement and the transactions contemplated by it, and the form and
substance of all legal proceedings and papers, instruments and documents used or
delivered herewith or incident hereto shall be reasonably satisfactory to
counsel for Seller.
-15-
<PAGE>
ARTICLE X
INDEMNIFICATION
10.1 Survival. All representations, warranties, covenants, obligations
and undertakings made or contained in this Agreement shall survive the Closing
and shall survive any inspection, investigation or acceptance of possession or
delivery of the Purchased Assets made or done at any time by Purchaser but only
for a period of two years after the Closing Date.
10.2 Indemnification by Seller. Seller shall indemnify, defend and hold
Purchaser harmless from and against any and all loss, liability (including, but
not limited to, consequential damages), damage, deficiency, claim or expense,
including, but not limited to, reasonable attorneys' fees, arising out of or due
to: (a) a breach of or default under any representation, warranty, covenant,
agreement, obligation or undertaking of Seller contained in this Agreement; (b)
any claims asserted against Seller or Purchaser and arising out of the operation
of the Business on or prior to the Closing Date; (c) noncompliance with any laws
relating to bulk sales or other laws for the protection of creditors; (d) the
failure of the Seller to file any federal, state or local returns in connection
with or pay any Taxes due and payable, accrued, incurred or attributable to any
event or circumstance occurring or existing or applicable to any period ending
on or before the Closing Date; and (e) any debt, liability, commitment or
obligation, of any nature, whether accrued, absolute, contingent or other and
whether due or to become due of Seller, or arising out of the business
operations of the Business prior to the Closing Date or Seller's ownership or
use of any of the Purchased Assets prior to the Closing Date.
10.3 Indemnification by Purchaser. Purchaser shall indemnify, defend
and hold Seller harmless from and against any and all loss, liability
(including, but not limited, consequential damages), damage deficiency, clam, or
expense, including, but not limited to, reasonable attorneys' fees, arising out
of or due to: (a) the Vehicle Loans due and payable after the Closing Date; (b)
a breach of or default under any representation, warranty, covenant, obligation
or undertaking of Purchaser contained in this Agreement; (c) any claims asserted
against Seller or Purchaser, and arising out of the operation of the Business
after the Closing Date; and, (d) any debt, liability, commitment or obligation,
of any nature, whether accrued, absolute, contingent or other, and whether due
or to become due, of Purchaser, or arising out of the business operations of the
Business after the Closing Date or Purchaser's ownership or use of any of the
Purchased Assets after the Closing Date.
10.4 Notice and Defense of Claims. A party claiming indemnification
under this Article X (the "Asserting Party") will give prompt written notice
(the "Claim Notice") of the nature and basis of the claim to the party from whom
indemnification is being sought (the "Indemnifying Party"). If the claim for
indemnification arises out of a claim, action or proceeding by a third party (a
"Third Party Claim"), the
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<PAGE>
Indemnifying Party may elect to assume the defense of the Third Party Claim at
its own expense with counsel selected by the Indemnifying Party. If the
Indemnifying Party assumes the defense of the Third Party Claim, the
Indemnifying Party will not be liable for any fees or expenses of counsel for
the Asserting Party incurred in connection with the Third Party Claim. If the
Indemnifying Party does not assume the defense of the Third Party Claim, the
Asserting Party will have the right to defend and settle the Third Party Claim.
The Asserting Party and the Indemnifying Party will cooperate in the defense of
any claim, action or proceeding covered by this Section 10.4. The Asserting
Party will make available to the Indemnifying Party all records and other
materials reasonably required by the Indemnifying Party for use in contesting
the Third Party Claim. Where a third party in a Third Party Claim is a
significant continuing supplier or customer of the Asserting Party and the
conduct of the Third Party Claim may have a material adverse effect on the
continued operation of the business of the Asserting Party, the Indemnifying
Party shall consult with the Asserting Party in good faith with a view to
reducing or eliminating the adverse effect of the conduct of the Third Party
Claim.
10.5 Maximum Aggregate Liability of the Parties. The maximum aggregate
indemnification liability of the Seller under Section 10.2 and the of Buyer
under Section 10.3 shall not exceed the Purchase Price.
10.6 Threshold. Neither party will be entitled to indemnification under
Section 10.2 unless the aggregate amount incurred by it for which it is
indemnified exceeds $5,000.
10.7 Sole Remedy. Except for the breach of Section 7.1, the Seller or
Purchaser's sole remedies for the breach of the terms of this Agreement shall be
pursuant to this Article X.
ARTICLE XI
MISCELLANEOUS
11.1 Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of each party to this Agreement, but no
rights, obligations or liabilities under this Agreement shall be assignable by
any party without the prior written consent of the other parties.
11.2 Third Parties. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any other person or
entity other than the parties to this Agreement any rights or remedies under or
by reason of this Agreement.
-17-
<PAGE>
11.3 Complete Agreement. Except as expressly set forth in this
Agreement or in an instrument in writing signed by the party to be bound thereby
which makes specific reference to this Agreement, this Agreement sets forth the
entire understanding of the parties concerning the subject matter of this
Agreement and supersedes all prior contracts, arrangements, communications,
discussions, representations and warranties, whether oral or written, between
the parties relating to the subject matter of this Agreement.
11.4 Expenses. Each of the parties to this Agreement shall pay all
costs and expenses incurred or to be incurred by it in negotiating and preparing
this Agreement, and in closing and carrying out the transactions contemplated in
this Agreement.
11.5 Amendment. This Agreement may be amended at any time by a writing
which refers to this Agreement and is executed by Purchaser and Seller.
11.6 Further Assurances. Seller shall from time to time after the
Closing upon the reasonable request of Purchaser, execute, acknowledge and
deliver all such further acts, deeds, assignments, transfers, conveyances and
assurances as may be reasonably required to transfer to and to vest in Purchaser
all good, valid, marketable and indefeasible right, title and interest of the
Seller to the Purchased Assets, and to protect the right, title and interest of
Purchaser in and to all of the Purchased Assets.
11.7 Taxes. Seller shall pay all sales and use taxes and transfer
taxes, if any, applicable to the transactions contemplated by this Agreement.
11.8 Notices. All notices, requests, demands and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been given (a) when delivered personally, (b) when
transmitted by facsimile, (c) on the third business day after being deposited in
the U.S. mail, certified, postage prepaid, return receipt requested, or (d) on
the first business day after being sent by a nationally recognized overnight
express courier service, to a party addressed as follows:
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If to Seller:
Robert I. Sussman, Chief Executive Officer
First Aid Select, Inc.
10211 NW 52nd Street
Sunrise, FL 33351-8024
Fax: (954) 746-6611
If to Purchaser to:
Daniel W. Crotty, President
Van Dyne-Crotty, Inc.
3233 Newmark Drive
Miamisburg, OH 45342
Fax: (937) 435-8390
Any party may change the names and addresses to which such
communications are to be directed by giving notice to the other party of such
change in the manner provided above.
11.9 Severability. Each Article, section, subsection and lesser
section of this Agreement constitutes a separate and distinct undertaking and
covenant. In the event that any provision of this Agreement shall finally be
determined to be unlawful, such provision shall be limited by construction in
scope and effect to the minimum extent necessary to render the same lawful and
if such a limiting construction is not possible, such provision shall be deemed
severed from this Agreement, but in any event every other provision of this
Agreement shall remain in full force and effect.
11.10 Waivers. Any waiver by any party of any violation of, breach of
or default under any provision of this Agreement by the other party shall not be
construed as or constitute a continuing waiver of such provision, or a waiver of
any other violation of, breach of or default under any other provision of this
Agreement.
11.11 Exhibits. The Exhibits and Schedules attached to this Agreement
and/or referred to in this Agreement are part of this Agreement for all
purposes.
11.12 Captions. The captions in this Agreement are intended solely for
convenience of reference and shall not be given any effect in the construction
or interpretation of this Agreement.
11.13 Governing Law. This Agreement shall be exclusively governed by
and construed in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
FIRST AID SELECT, INC.
By:_________________________________
Robert I. Sussman
Chief Executive Officer
"Seller"
VAN DYNE-CROTTY, INC.
By:_____________________________
David S. Senseman
Vice President and Chief
Financial Officer
"Purchaser"
-19-
Exhibit 3.1
FLORIDA DEPARTMENT OF STATE
Katherine Harris
Secretary of State
February 2, 2000
Zebersky & Giulianti, P.A.
Plantation West, Suite 408
8751 West Broward Blvd.
Plantation, FL 33324
Re: Document Number 546003
The Articles of Amendment to the Articles of Incorporation of FIRST AID SELECT,
INC. which changed its name to FIRST AID DIRECT, INC., a Florida corporation,
were filed on January 24, 2000.
Should you have any questions regarding this matter, please telephone (850)
487-6050, the Amendment Filing Section.
Louise Flemming-Jackson
Corporate Specialist Supervisor
Division of Corporations Letter Number: 700A00005060
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
- --------------------------------------------------------------------------------
FIRST AID SELECT, INC.
- --------------------------------------------------------------------------------
(present name)
Pursuant to the provisions of section 607.1006 Florida Statutes, this Florida
profit corporation adopts the following articles of amendment to its articles of
incorporation:
FIRST: Amendment(s) adopted: (indicate article number(s) being amended, added or
deleted)
ARTICLE I Shall be amended to reflect the change of name from FIRST AID
SELECT, INC. to FIRST AID DIRECT INC.
SECOND: If an amendment provides for an exchange, reclassification or
cancellation of issued shares, provisions for implementing the amendment if not
contained in the amendment itself, are as follows:
<PAGE>
THIRD: The date of each amendment's adoption: Dec. 22, 1999
FOURTH: Adoption of Amendment(s) (CHECK ONE)
| | The Amendment(s) was/were approved by the shareholders. The
number of votes cast for the amendment(s) was/were sufficient
for approval.
| | The amendment(s) was/were approved by the shareholders through
voting groups. The following statement must be separately
provided for each voting group entitled to vote separately on
the amendment(s):
"The number of votes cast for the amendment(s)
was/were sufficient for approval by
________________________________________________
voting group
|X| The amendment(s) was/were adopted by the board of directors
without shareholder action and shareholder action was not
required.
| | The amendment(s) was/were adopted by the incorporators without
shareholder action and shareholder action was not required.
Signed this 22 day of December, 1999.
Signature X____________________________________________________________________
(By the Chairman or Vice Chairman of the Board of Directors,
President or other officer if adopted by the shareholders)
OR
(By a director if adopted by the directors)
OR
(By an incorporator if adopted by the incorporators)
ROBERT SUSSMAN
---------------------
Typed or printed name
CEO/SECRETARY/DIRECTOR
----------------------
Title
<PAGE>
Articles of Amendment
A special meeting of the Board of Directors of Rehabilitation Institute of South
Florida, Inc. was held at the principal offices of the corporation at 9:30 am on
August 5, 1997 at 4691 N. University Drive, Suite 365, Coral Springs, FL 33067.
Norman Moskowitz, being the sole member of the Board of Directors. The amendment
was adopted by the shareholders on August 5, 1997.
Mr. Moskowitz adopted the following resolutions:
RESOLVED, that the name is changed to First Aid Select, Inc. and that
an Amendment to the Articles of Incorporation shall be filed with the
Secretary of State to reflect the name change.
RESOLVED, that the address of the Corporation be changed to 10211 NW
53rd Street, Sunrise, FL 33351 and that an Amendment to the Articles of
Incorporation shall be filed with the Secretary of State to reflect the
address change.
RESOLVED, that Mr. Scott Siegel is elected as Chairman and Secretary
and Mr. Jeff Godels is elected as President.
RESOLVED, that Mr. Moskowitz has resigned as an officer and director of
the corporation and that an Amended Corporate Annual Report will be
filed with State of Florida.
The vote was unanimous
There being no further business to come before the Board, the meeting was
adjourned.
/s/ Norman Moskowitz
- ----------------------
Norman Mokowitz
/s/ Scott Siegel
- ----------------------
Scott Siegel
Chairman of Board
<PAGE>
ARTICLES OF INCORPORATION
OF
REHABILITATION INSTITUTE OF SOUTH FLORIDA
ARTICLE I NAME
The name of this corporation is
REHABILITATION INSTITUTE OF SOUTH FLORIDA, INC.
ARTICLE II - BEGINNING OF CORPORATE EXISTENCE
The existence of this corporation shall commence on the 19th day of
July, 1977; provided that if such day be unauthorized under law, then on the
earliest day allowable pursuant to florida law for the commencement of corporate
existence.
ARTICLE III - PURPOSE
This corporation is organized for the purpose of transacting any or all
lawful business.
ARTICLE IV - CAPITAL STOCK
This corporation is authorized to issue 1,000 shares of One ($1.00)
dollar par value common stock.
ARTICLE V - INITIAL REGISTERED OFFICE AND AGENT
The street address of the initial registered office of this corporation
and the name of the initial registered agent of this corporation at such address
are as follows:
Registered Agent Street Address of Registered Office
NORMAN MOSKOWITZ, M.D. 2100 E. Hallandale Beach Blvd.,
Hallandale, Florida 33009
<PAGE>
ARTICLE VI - INITIAL BOARD OF DIRECTORS
This corporation shall have one director initially. The number of
directors may be either increased or diminished from time to time by the by-laws
but shall never be less than one. The initial director of this corporation shall
be the incorporator named below.
ARTICLE VII - INCORPORATOR
The name and address of the person signing these articles is:
Norman Moskowitz, M.D.
2100 E. Hallandale Beach Blvd.
Hallandale, Florida 33009
ARTICLE VIII - INDEMNIFICATION
The corporation shall indemnify all officers and directors, and former
officers and directors to the full extent permitted by law as the law now exists
or may be amended hereafter.
IN WITNESS WHEREOF, the undersigned incorporator has executed these
articles of incorporation this 19 day of July, 1977.
Norman Moskowitz
------------------------------
NORMAN MOSKOWITZ, Incorporator
STATE OF FLORIDA
COUNTY OF BROWARD
Before me, a notary public authorized to take acknowledgements in the
state and county set forth above, personally appeared NORMAN MOSKOWITZ, known to
me and known by me to be the person who executed the foregoing Articles of
Incorporation, and he acknowledged before me that he executed those articles of
incorporation.
2
<PAGE>
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal, in the state and county aforesaid, this 19th days of July, 1977.
Olivia E. McCreary
-------------------------------
Notary Public, State of Florida
My Commission Expires:
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3
Exhibit 3.2
BY-LAWS
OF
FIRST AID SELECT, INC.
a Florida corporation
<PAGE>
<TABLE>
<S> <C>
ARTICLE I.........................................................................................................1
OFFICES .........................................................................................................1
Section 1.01. Principal Office.......................................................................1
Section 1.02. Registered Office......................................................................1
Section 1.03. Other Offices..........................................................................1
ARTICLE II........................................................................................................1
MEETINGS OF SHAREHOLDERS..........................................................................................1
Section 2.01. Annual Meeting.. ......................................................................1
Section 2.02. Special Meeting........................................................................2
Section 2.03. Shareholders' List for Meeting.........................................................2
Section 2.04. Record Date............................................................................3
Section 2.05. Notice of Meetings and Adjournment.....................................................3
Section 2.06. Waiver of Notice.......................................................................4
ARTICLE III.......................................................................................................5
SHAREHOLDER VOTING................................................................................................5
Section 3.01. Voting Group Defined...................................................................5
Section 3.02. Quorum and Voting Requirements for Voting Groups.......................................5
Section 3.03. Action by Single and Multiple Voting Groups............................................5
Section 3.04. Shareholder Quorum and Voting; Greater or
Lesser Voting Requirements...................................6
Section 3.05. Voting for Directors; Cumulative Voting................................................6
Section 3.06. Voting Entitlement of Shares...........................................................7
Section 3.07. Proxies................................................................................8
Section 3.08. Shares Held by Nominees...............................................................10
Section 3.09. Corporation's Acceptance of Votes.....................................................10
Section 3.10. Action by Shareholders Without Meeting................................................11
ARTICLE IV.......................................................................................................11
BOARD OF DIRECTORS AND OFFICERS..................................................................................11
Section 4.01. Qualifications of Directors...........................................................11
Section 4.02. Number of Directors...................................................................12
Section 4.03. Terms of Directors Generally..........................................................12
Section 4.04. Staggered Terms for Directors.........................................................12
Section 4.05. Vacancy on Board......................................................................13
Section 4.06. Compensation of Directors.............................................................13
Section 4.07. Meetings..............................................................................13
Section 4.08. Action by Directors Without a Meeting.................................................13
Section 4.09. Notice of Meetings....................................................................14
Section 4.10. Waiver of Notice......................................................................14
Section 4.11. Quorum and Voting.....................................................................14
</TABLE>
2
<PAGE>
<TABLE>
<S> <C>
Section 4.12. Committees............................................................................14
Section 4.13. Loans to Officers, Directors, and Employees;
Guaranty of Obligations......................................................15
Section 4.14. Required Officers.....................................................................16
Section 4.15. Duties of Officers....................................................................16
Section 4.16. Resignation and Removal of Officers...................................................16
Section 4.17. Contract Rights of Officers...........................................................17
Section 4.18. General Standards for Directors.......................................................17
Section 4.19. Director Conflicts of Interest........................................................18
Section 4.20. Resignation of Directors..............................................................18
ARTICLE V........................................................................................................19
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES, AND AGENTS............................................................................................19
Section 5.01. Directors, Officers, Employees and Agents.............................................19
ARTICLE VI.......................................................................................................23
OFFICE AND AGENT.................................................................................................23
Section 6.01. Registered Office and Registered Agent................................................23
Section 6.02. Change of Registered Office or Registered Agent;
Resignation of Registered Agent..............................................24
ARTICLE VII......................................................................................................24
SHARES, OPTIONS, DIVIDENDS, AND DISTRIBUTIONS....................................................................24
Section 7.01. Authorized Shares.....................................................................24
Section 7.02. Terms of Class or Series Determined by Board of Directors.............................25
Section 7.03. Issued and Outstanding Shares.........................................................26
Section 7.04. Issuance of Shares....................................................................26
Section 7.05. Form and Content of Certificates......................................................27
Section 7.06. Shares Without Certificates...........................................................28
Section 7.07. Restriction on Transfer of Shares and Other Securities................................28
Section 7.08. Shareholder's Pre-emptive Rights......................................................28
Section 7.09. Corporation's Acquisition of its Own Shares...........................................28
Section 7.10. Share Options.........................................................................29
Section 7.11. Terms and Conditions of Stock Rights and Options......................................29
Section 7.12. Share Dividends.......................................................................29
Section 7.13. Distributions to Shareholders.........................................................30
ARTICLE VIII.....................................................................................................32
AMENDMENT TO ARTICLES AND BYLAWS.................................................................................32
Section 8.01. Authority to Amend the Articles of Incorporation......................................32
Section 8.02. Amendment by Board of Directors.......................................................32
Section 8.03. Amendment of Bylaws by Board of Directors.............................................33
</TABLE>
3
<PAGE>
<TABLE>
<S> <C>
Section 8.04. Bylaw Increasing Quorum or Voting Requirements
for Directors................................................................33
ARTICLE IX.......................................................................................................33
RECORDS AND REPORTS..............................................................................................33
Section 9.01. Corporate Records.....................................................................33
Section 9.02. Financial Statements for Shareholders.................................................34
Section 9.03. Other Reports to Shareholders.........................................................35
Section 9.04. Annual Report for Department of State.................................................36
ARTICLE X........................................................................................................36
MISCELLANEOUS....................................................................................................36
Section 10.01. Definition of the "Act"...............................................................36
Section 10.02. Application of Florida Law............................................................36
Section 10.03. Fiscal Year...........................................................................37
Section 10.04. Conflicts with Articles of Incorporation..............................................37
Section 10.05. Partial Invalidity....................................................................37
</TABLE>
<PAGE>
ARTICLE I
OFFICES
Section 1.01. Principal Office.
The principal office of the corporation in the State of Florida shall
be established at such places as the board of directors from time to time
determine.
Section 1.02. Registered Office.
The registered office of the corporation in the State of Florida shall
be at the office of its registered agent as stated in the articles of
incorporation or as the board of directors shall from time to time determine.
Section 1.03. Other Offices.
The corporation may have additional offices at such other places,
either within or without the State of Florida, as the board of directors may
from time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 2.01. Annual Meeting.
(1) The corporation shall hold a meeting of shareholders annually, for
the election of directors and for the transaction of any proper business, at a
time stated in or fixed in accordance with a resolution of the board of
directors.
(2) Annual shareholders' meeting may be held in or out of the State of
Florida at a place stated in or fixed in accordance with a resolution by the
board of directors or, when not inconsistent with the board of directors'
resolution stated in the notice of the annual meeting. If no place is stated in
or fixed in accordance with these bylaws, or stated in the notice of the annual
meeting, annual meetings shall be held at the corporation's principal office.
(3) The failure to hold the annual meeting at the time stated in or
fixed in accordance with these bylaws or pursuant to the Act does not affect the
validity of any corporate action and shall not work a forfeiture of or
dissolution of the corporation.
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Section 2.02. Special Meeting.
(1) The corporation shall hold a special meeting of shareholders:
(a) On call of its board of directors or the person or persons
authorized to do so by the board of directors; or
(b) If the holders of not less than 10% of all votes entitled
to be cast on any issue proposed to be considered at the proposed special
meeting sign, date and deliver to the corporation's secretary one or more
written demands for the meeting describing the purpose or purposes for which it
is to be held.
(2) Special shareholders' meetings may be held in or out of the State
of Florida at a place stated in or fixed in accordance with a resolution of the
board of directors, or, when not inconsistent with the board of directors'
resolution, in the notice of the special meeting. If no place is stated in or
fixed in accordance with these bylaws or in the notice of the special meeting,
special meetings shall be held at the corporation's principal office.
(3) Only business within the purpose or purposes described in the
special meeting notice may be conducted at a special shareholders' meeting.
Section 2.03. Shareholders' List for Meeting.
(1) After fixing a record date for a meeting, a corporation shall
prepare a list of the names of all its shareholders who are entitled to notice
of a shareholders' meeting, in accordance with the Florida Business Corporation
Act (the "Act"), or arranged by voting group, with the address of, and the
number and class and series, if any, of shares held by, each.
(2) The shareholders' list must be available for inspection by any
shareholder for a period of ten days prior to the meeting or such shorter time
as exists between the record date and the meeting and continuing through the
meeting at the corporation's principal office, at a place identified in the
meeting notice in the city where the meeting will be held, or at the office of
the corporation's transfer agent or registrar. A shareholder or his agent or
attorney is entitled on written demand to inspect the list (subject to the
requirements of Section 607.1602(3) of the Act), during regular business hours
and at his expense, during the period it is available for inspection.
(3) The corporation shall make the shareholders' list available at the
meeting, and any shareholder or his agent or attorney is entitled to inspect the
list at any time during the meeting or any adjournment.
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Section 2.04. Record Date.
(1) The board of directors may set a record date for purposes of
determining the shareholders entitled to notice of and to vote at a
shareholders' meeting; however, in no event may a record date fixed by the board
of directors be a date preceding the date upon which the resolution fixing the
record date is adopted.
(2) Unless otherwise fixed by the board of directors, the record date
for determining shareholders entitled to demand a special meeting is the date
the first shareholder delivers his demand to the corporation. In the event that
the board of directors sets the record date for a special meeting of
shareholders, it shall not be a date preceding the date upon which the
corporation receives the first demand from a shareholder requesting a special
meeting.
(3) If no prior action is required by the board of directors pursuant
to the Act, and, unless otherwise fixed by the board of directors, the record
date for determining shareholders entitled to take action without a meeting is
the date the first signed written consent is delivered to the corporation under
Section 607.0704 of the Act. If prior action is required by the board of
directors pursuant to the Act, the record date for determining shareholders
entitled to take action without a meeting is at the close of business on the day
on which the board of directors adopts the resolution taking such prior action.
(4) Unless otherwise fixed by the board of directors, the record date
for determining shareholders entitled to notice of and to vote at an annual or
special shareholders' meeting is the close of business on the day before the
first notice is delivered to shareholders.
(5) A record date may not be more than 70 days before the meeting or
action requiring a determination of shareholders.
(6) A determination of shareholders entitled to notice of or to vote at
a shareholders' meeting is effective for any adjournment of the meeting unless
the board of directors fixes a new record date, which it must do if the meeting
is adjourned to a date more than one 120 days after the date fixed for the
original meeting.
Section 2.05. Notice of Meetings and Adjournment.
(1) The corporation shall notify shareholders of the date, time and
place of each annual and special shareholders' meeting no fewer than 10 or more
than 60 days before the meeting date. Unless the Act requires otherwise, the
corporation is required to give notice only to shareholders entitled to vote at
the meeting. Notice shall be given in the manner provided in Section 607.0141 of
the Act, by or at the direction of the president, the secretary, of the officer
or persons calling the meeting. If the notice is mailed at least 30
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days before the date of the meeting, it may be done by a class of United States
mail other than first class. Notwithstanding Section 607.0141, if mailed, such
notice shall be deemed to be delivered when deposited in the United Statement
mail addressed to the shareholder at his address as it appears on the stock
transfer books of the corporation, with postage thereon prepaid.
(2) Unless the Act or the articles of incorporation requires otherwise,
notice of an annual meeting need not include a description of the purpose or
purposes for which the meeting is called.
(3) Notice of a special meeting must include a description of the
purpose or purposes for which the meeting is called.
(4) If an annual or special shareholders meeting is adjourned to a
different date, time, or place, notice need not be given of the new date, time,
or place if the new date, time or place is announced at the meeting before
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting. If
a new record date is or must be fixed under Section 607.0707 of the Act,
however, notice of the adjourned meeting must be given under this section to
persons who are shareholders as of the new record date who are entitled to
notice of the meeting.
(5) Notwithstanding the foregoing, no notice of a shareholders' meeting
need be given if: (a) an annual report and proxy statements for two consecutive
annual meetings of shareholders, or (b) all, and at least two checks in payment
of dividends or interest on securities during a 12-month period, have been sent
by first-class United States mail, addressed to the shareholder at his address
as it appears on the share transfer books of the corporation, and returned
undeliverable. The obligation of the corporation to give notice of a
shareholders' meeting to any such shareholder shall be reinstated once the
corporation has received a new address for such shareholder for entry on its
share transfer books.
Section 2.06. Waiver of Notice.
(1) A shareholder may waive any notice required by the Act, the
articles of incorporation, or bylaws before or after the date and time stated in
the notice. The waiver must be in writing, be signed by the shareholder entitled
to the notice, and be delivered to the corporation for inclusion in the minutes
or filing with the corporate records. Neither the business to be transacted at
nor the purpose of any regular or special meeting of the shareholders need be
specified in any written waiver of notice.
(2) A shareholder's attendance at a meeting: (a) Waives objection to
lack of notice or defective notice of the meeting, unless the shareholder at the
beginning of the
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meeting objects to holding the meeting or transacting business at the meeting;
or (b) waives objection to consideration of a particular matter at the meeting
that is not within the purpose or purposes described in the meeting notice,
unless the shareholder objects to considering the matter when it is presented.
ARTICLE III
SHAREHOLDER VOTING
Section 3.01. Voting Group Defined.
A "voting group" means all shares of one or more classes or series that
under the articles of incorporation or the Act are entitled to vote and be
counted together collectively on a matter at a meeting of shareholders. All
shares entitled by the articles of incorporation or the Act to vote generally on
the matter are for that purpose a single voting group.
Section 3.02. Quorum and Voting Requirements for Voting Groups.
(1) Shares entitled to vote as a separate voting group may take action
on a matter at a meeting only if a quorum of those shares exists with respect to
that matter. Unless the articles of incorporation or the Act provides otherwise,
a majority of the votes entitled to be cast on the matter by the voting group
constitutes a quorum of that voting group for action on that matter.
(2) Once a share is represented for any purpose at a meeting, it is
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
(3) If a quorum exists, action on a matter (other than the election of
directors) by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation or the Act requires a greater number of affirmative
votes.
Section 3.03. Action by Single and Multiple Voting Groups.
(1) If the articles of incorporation or the Act provides for voting by
a single voting group on a matter, action on that matter is taken when voted
upon by that voting group as provided in Section 3.02 of these bylaws.
(2) If the articles of incorporation or the Act provides for voting by
two or more voting groups on a matter, action on that matter is taken only when
voted upon by each of those voting groups counted separately as provided in
Section 3.02 of these bylaws.
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Action may be taken by one voting group on a matter even though no action is
taken by another voting group entitled to vote on the matter.
Section 3.04. Shareholder Quorum and Voting; Greater or
Lesser Voting Requirements.
(1) A majority of the shares entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of shareholders, but in no
event shall a quorum consist of less than one-third of the shares entitled to
vote. When a specified item of business is required to be voted on by a class or
series of stock, a majority of the shares of such class or series shall
constitute a quorum for the transaction of such item of business by that class
or series.
(2) An amendment to the articles of incorporation that adds, changes or
deletes a greater or lesser quorum or voting requirement must meet the same
quorum requirement and be adopted by the same vote and voting groups required to
take action under the quorum and voting requirements then in effect or proposed
to be adopted, whichever is greater.
(3) If a quorum exists, action on a matter, other than the election of
directors, is approved if the votes cast by the holders of the shares
represented at the meeting and entitled to vote on the subject matter favoring
the action exceed the votes cast opposing the action, unless a greater number of
affirmative votes or voting by classes is required by the Act or the articles of
incorporation.
(4) After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof.
(5) The articles of incorporation may provide for a greater voting
requirement or a greater or lesser quorum requirement for shareholders (or
voting groups of shareholders) than is provided by the Act, but in no event
shall a quorum consist of less than one-third of the shares entitled to vote.
Section 3.05. Voting for Directors; Cumulative Voting.
(1) Directors are elected by a plurality of the votes cast by the
shares entitled to vote in the election at a meeting at which a quorum is
present.
(2) Each shareholder who is entitled to vote at an election of
directors has the right to vote the number of shares owned by him for as many
persons as there are directors to be elected and for whose election he has a
right to vote. Shareholders do not
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have a right to cumulate their votes for directors unless the articles of
incorporation so provide.
Section 3.06. Voting Entitlement of Shares.
(1) Unless the articles of incorporation or the Act provides otherwise,
each outstanding share, regardless of class, is entitled to one vote on each
matter submitted to a vote at a meeting of shareholders. Only shares are
entitled to vote.
(2) The shares of the corporation are not entitled to vote if they are
owned, directly or indirectly, by a second corporation, domestic or foreign, and
the first corporation owns, directly or indirectly, a majority of shares
entitled to vote for directors of the second corporation.
(3) This section does not limit the power of the corporation to vote
any shares, including its own shares, held by it in a fiduciary capacity.
(4) Redeemable shares are not entitled to vote on any matter, and shall
not be deemed to be outstanding, after notice of redemption is mailed to the
holders thereof and a sum sufficient to redeem such shares has been deposited
with a bank, trust company, or other financial institution upon an irrevocable
obligation to pay the holders the redemption price upon surrender of the shares.
(5) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or proxy as the bylaws of the
corporate shareholder may prescribe or, in the absence of any applicable
provision, by such person as the board of directors of the corporate shareholder
may designate. In the absence of any such designation or in case of conflicting
designation by the corporate shareholder, the chairman of the board, the
president, any vice president, the secretary, and the treasurer of the corporate
shareholder, in that order, shall be presumed to be fully authorized to vote
such shares.
(6) Shares held by an administrator, executor, guardian, personal
representative, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy, but no
trustee shall be entitled to vote shares held by him without a transfer of such
shares into his name or the name of his nominee.
(7) Shares held by or under the control of a receiver, a trustee in
bankruptcy proceedings, or an assignee for the benefit of creditors may be voted
by him without the transfer thereof into his name.
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(8) If a share or shares stand of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety, or otherwise, or if two or more persons have
the same fiduciary relationship respecting the same shares, unless the secretary
of the corporation is given notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, then acts with respect to voting have the following effect:
(a) If only one votes, in person or in proxy, his act binds
all;
(b) If more than one vote, in person or by proxy, the act of
the majority so voting binds all;
(c) If more than one vote, in person or by proxy, but the vote
is evenly split on any particular matter, each faction is entitled to vote the
share or shares in question proportionally;
(d) If the instrument or order so filed shows that any such
tenancy is held in unequal interest, a majority or a vote evenly split for
purposes of this subsection shall be a majority or a vote evenly split in
interest;
(e) The principles of this subsection shall apply, insofar as
possible, to execution of proxies, waivers, consents, or objections and for the
purpose of ascertaining the presence of a quorum;
(f) Subject to Section 3.08 of these bylaws, nothing herein
contained shall prevent trustees or other fiduciaries holding shares registered
in the name of a nominee from causing such shares to be voted by such nominee as
the trustee or other fiduciary may direct. Such nominee may vote shares as
directed by a trustee or their fiduciary without the necessity of transferring
the shares to the name of the trustee or other fiduciary.
Section 3.07. Proxies.
(1) A shareholder, other person entitled to vote on behalf of a
shareholder pursuant to Section 3.06 of these bylaws, or attorney in fact may
vote the shareholder's shares in person or by proxy.
(2) A shareholder may appoint a proxy to vote or otherwise act for him
by signing an appointment form, either personally or by his attorney in fact. An
executed telegram or cablegram appearing to have been transmitted by such
person, or a photographic, photostatic, or equivalent reproduction of an
appointment form, is a sufficient appointment form.
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(3) An appointment of a proxy is effective when received by the
secretary or other officer or agent authorized to tabulate votes. An appointment
is valid for up to 11 months unless a longer period is expressly provided in the
appointment form.
(4) The death or incapacity of the shareholder appointing a proxy does
not affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other officer
or agent authorized to tabulate votes before the proxy exercises his authority
under the appointment.
(5) An appointment of a proxy is revocable by the shareholder unless
the appointment form conspicuously states that it is irrevocable and the
appointment is coupled with an interest. Appointments coupled with an interest
include the appointment of: (a) a pledgee; (b) a person who purchased or agreed
to purchase the shares; (c) a creditor of the corporation who extended credit to
the corporation under terms requiring the appointment; (d) an employee of the
corporation whose employment contract requires the appointment; or (e) a party
to a voting agreement created in accordance with the Act.
(6) An appointment made irrevocable under this section becomes
revocable when the interest with which it is coupled is extinguished and, in a
case provided for in Subsection 5(c) or 5(d), the proxy becomes revocable three
years after the date of the proxy or at the end of the period, if any, specified
herein, whichever is less, unless the period of irrevocability is renewed from
time to time by the execution of a new irrevocable proxy as provided in this
section. This does not affect the duration of a proxy under subsection (3).
(7) A transferee for value of shares subject to an irrevocable
appointment may revoke the appointment if he did not know of its existence when
he acquired the shares and the existence of the irrevocable appointment was not
noted conspicuously on the certificate representing the shares or on the
information statement for shares without certificates.
(8) Subject to Section 3.09 of these bylaws and to any express
limitation on the proxy's authority appearing on the face of the appointment
form, a corporation is entitled to accept the proxy's vote or other action as
that of the shareholder making the appointment.
(9) If an appointment form expressly provides, any proxy holder may
appoint, in writing, a substitute to act in his place.
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Section 3.08. Shares Held by Nominees.
(1) The corporation may establish a procedure by which the beneficial
owner of shares that are registered in the name of a nominee is recognized by
the corporation as the shareholder. The extent of this recognition may be
determined in the procedure.
(2) The procedure may set forth (a) the types of nominees to which it
applies; (b) the rights or privileges that the corporation recognizes in a
beneficial owner; (c) the manner in which the procedure is selected by the
nominee; (d) the information that must be provided when the procedure is
selected; (e) the period for which selection of the procedure is effective; and
(f) other aspects of the rights and duties created.
Section 3.09. Corporation's Acceptance of Votes.
(1) If the name signed on a vote, consent, waiver, or proxy appointment
corresponds to the name of a shareholder, the corporation if acting in good
faith is entitled to accept the vote, consent waiver, or proxy appointment and
give it effect as the act of the shareholder.
(2) If the name signed on a vote, consent, waiver, or proxy appointment
does not correspond to the name of its shareholder, the corporation if acting in
good faith is nevertheless entitled to accept the vote, consent, waiver, or
proxy appointment and give it effect as the act of the shareholder if: (a) the
shareholder is an entity and the name signed purports to be that of an officer
or agent of the entity; (b) the name signed purports to be that of an
administrator, executor, guardian, personal representative, or conservator
representing the shareholder and, if the corporation requests, evidence of
fiduciary status acceptable to the corporation has been presented with respect
to the vote, consent, waiver, or proxy appointment; (c) the name signed purports
to be that of a receiver, trustee in bankruptcy, or assignee for the benefit of
creditors of the shareholder and, if the corporation requests, evidence of this
status acceptable to the corporation has been presented with respect to the
vote, consent, waiver, or proxy appointment; (d) the name signed purports to be
that of a pledgee, beneficial owner, or attorney in fact of the shareholder and,
if the corporation requests, evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder has been presented with
respect to the vote, consent, waiver, or proxy appointment; or (e) two or more
persons are the shareholder as covenants or fiduciaries and the name signed
purports to be the name of at least one of the co-owners and the person signing
appears to be acting on behalf of all the co-owners.
(3) The corporation is entitled to reject a vote, consent, waiver, or
proxy appointment if the secretary or other officer or agent authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
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(4) The corporation and its officer or agent who accepts or rejects a
vote, consent, waiver, or proxy appointment in good faith and in accordance with
the standards of this section are not liable in damages to the shareholder for
the consequences of the acceptance or rejection.
(5) Corporate action based on the acceptance or rejection of a vote,
consent, waiver, or proxy appointment under this section is valid unless a court
of competent jurisdiction determines otherwise.
Section 3.10. Action by Shareholders Without Meeting.
(1) Any action required or permitted by the Act to be taken at any
annual or special meeting of shareholders of the corporation may be taken
without a meeting, without prior notice and without a vote, if the action is
taken by the holders of outstanding stock of each voting group entitled to vote
thereon having not less than the minimum number of votes with respect to each
voting group that would be necessary to authorize or take such action at a
meeting at which all voting groups and shares entitled to vote thereon were
present and voted. In order to be effective, the action must by evidenced by one
or more written consents describing the action taken, dated and signed by
approving shareholders having the requisite number of votes of each voting group
entitled to vote thereon, and delivered to the corporation by delivery to its
principal office in this state, its principal place of business, the corporate
secretary, or another office or agent of the corporation having custody of the
book in which proceedings of meetings of shareholders are recorded. No written
consent shall be effective to take the corporate action referred to therein
unless, within 60 days of the date of the earliest dated consent is delivered in
the manner required by this section, written consent signed by the number of
holders required to take action is delivered to the corporation by delivery as
set forth in this section.
(2) Within 10 days after obtaining such authorization by written
consent, notice in accordance with Section 607.0704(3) of the Act must be given
to those shareholders who have not consented in writing.
ARTICLE IV
BOARD OF DIRECTORS AND OFFICERS
Section 4.01. Qualifications of Directors.
Directors must be natural persons who are 18 years of age or older but
need not be residents of the State of Florida or shareholders of the
corporation.
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Section 4.02. Number of Directors.
(1) The board of directors shall consist of not less than one nor more
than nine individuals.
(2) The number of directors may be increased or decreased from time to
time by amendment to these bylaws.
(3) Directors are elected at the first annual shareholders' meeting and
at each annual meeting thereafter unless their terms are staggered under Section
4.04 of these bylaws.
Section 4.03. Terms of Directors Generally.
(1) The terms of the initial directors of the corporation expire at the
first shareholders' meeting at which directors are elected.
(2) The terms of all other directors expire at the next annual
shareholders' meeting following their election unless their terms are staggered
under Section 4.04 of these bylaws.
(3) A decrease in the number of directors does not shorten an incumbent
director's term.
(4) The term of a director elected to fill a vacancy expires at the
next shareholders' meeting at which directors are elected.
(5) Despite the expiration of a director's term, he continues to serve
until his successor is elected and qualifies or until there is a decrease in the
number of directors.
Section 4.04. Staggered Terms for Directors.
The directors of any corporation organized under the Act may, by the
articles of incorporation, or by amendment to these bylaws adopted by a vote of
the shareholders, be divided into one, two or three classes with the number of
directors in each class being as nearly equal as possible; the term of office of
those of the first class to expire at the annual meeting next ensuing; of the
second class one year thereafter; at the third class two years thereafter; and
at each annual election held after such classification and election, directors
shall be chosen for a full term, as the case may be, to succeed those whose
terms expire. If the directors have staggered terms, then any increase or
decrease in the number of directors shall be so apportioned among the classes as
to make all classes as nearly equal in number as possible.
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Section 4.05. Vacancy on Board.
(1) Whenever a vacancy occurs on a board of directors, including a
vacancy resulting from an increase in the number of directors, it may be filled
by the affirmative vote of a majority of the remaining directors.
(2) A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date may be filled before the vacancy occurs
but the new director may not take office until the vacancy occurs.
Section 4.06. Compensation of Directors.
The board of directors may fix the compensation of directors.
Section 4.07. Meetings.
(1) The board of directors may hold regular or special meetings in or
out of the State of Florida.
(2) A majority of the directors present, whether or not a quorum
exists, may adjourn any meeting of the board of directors to another time and
place. Notice of any such adjourned meeting shall be given to the directors who
were not present at the time of the adjournment and, unless the time and place
of the adjourned meeting are announced at the time of the adjournment, to the
other directors.
(3) Meetings of the board of directors may be called by the chairman of
the board or by the president.
(4) The board of directors may permit any or all directors to
participate in a regular or special meeting by, or conduct the meeting through
the use of, any means of communication by which all directors participating may
simultaneously hear each other during the meeting. A director participating in a
meeting by this means is deemed to be present in person at the meeting.
Section 4.08. Action by Directors Without a Meeting.
(1) Action required or permitted by the Act to be taken at a board of
directors' meeting or committee meeting may be taken without a meeting if the
action is taken by all members of the board or of the committee. The action must
be evidenced by one or more written consents describing the action taken and
signed by each director or committee member.
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(2) Action taken under this section is effective when the last director
signs the consent, unless the consent specifies a different effective date.
(3) A consent signed under this section has the effect of a meeting
vote and may be described as such in any document.
Section 4.09. Notice of Meetings.
Regular and special meetings of the board of directors may be held
without notice of the date, time, place, or purpose of the meeting.
Section 4.10. Waiver of Notice.
Notice of a meeting of the board of directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and a waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting or promptly upon
arrival at the meeting, any objection to the transaction of business because the
meeting is not lawfully called or convened.
Section 4.11. Quorum and Voting.
(1) A quorum of a board of directors consists of a majority of the
number of directors prescribed by the articles of incorporation or these bylaws.
(2) If a quorum is present when a vote is taken, the affirmative vote
of a majority of directors present is the act of the board of directors.
(3) A director of a corporation who is present at a meeting of the
board of directors or a committee of the board of directors when corporate
action is taken is deemed to have assented to the action taken unless:
(a) He objects at the beginning of the meeting (or promptly
upon his arrival) to holding it or transacting specified business at the
meeting; or
(b) He votes against or abstains from the action taken.
Section 4.12. Committees.
(1) The board of directors, by resolution adopted by a majority of the
full board of directors, may designate from among its members an executive
committee and one or
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more other committees each of which, to the extent provided in such resolution,
shall have and may exercise all the authority of the board of directors, except
that no such committee shall have the authority to:
(a) Approve or recommend to shareholders actions or proposals
required by the Act to be approved by shareholders.
(b) Fill vacancies on the board of directors or any committee
thereof.
(c) Adopt, amend, or repeal these bylaws.
(d) Authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the board of directors.
(e) Authorize or approve the issuance or sale or contract for
the sale of shares, or determine the designation and relative rights,
preferences, and limitations of a voting group except that the board of
directors may authorize a committee (or a senior executive officer of the
corporation) to do so within limits specifically prescribed by the board of
directors.
(2) The sections of these bylaws which govern meetings, notice and
waiver of notice, and quorum and voting requirements of the board of directors
apply to committees and their members as well.
(3) Each committee must have two or more members who serve at the
pleasure of the board of directors. The board, by resolution adopted in
accordance herewith, may designate one or more directors as alternate members of
any such committee who may act in the place and stead of any absent member or
members at any meeting of such committee.
(4) Neither the designation of any such committee, the delegation
thereto of authority, nor action by such committee pursuant to such authority
shall alone constitute compliance by any member of the board of directors not a
member of the committee in question with his responsibility to act in good
faith, in a manner he reasonably believes to be in the best interests of the
corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.
Section 4.13. Loans to Officers, Directors, and Employees;
Guaranty of Obligations.
The corporation may lend money to, guaranty any obligation of, or
otherwise assist any officer, director, or employee of the corporation or of a
subsidiary, whenever, in the judgment of the board of directors, such loan,
guaranty, or assistance may reasonably be
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expected to benefit the corporation. The loan, guaranty, or other assistance may
be with or without interest and may be unsecured or secured in such manner as
the board of directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in this section shall be deemed to
deny, limit, or restrict the powers of guaranty or warranty of any corporation
at common law or under any statute. Loans, guaranties, or other types of
assistance are subject to section 4.19.
Section 4.14. Required Officers.
(1) The corporation shall have such officers as the board of directors
may appoint from time to time.
(2) A duly appointed officer may appoint one or more assistant
officers.
(3) The board of directors shall delegate to one of the officers
responsibility for preparing minutes of the directors' and shareholders'
meetings and for authenticating records of the corporation.
(4) The same individual may simultaneously hold more than one office in
the corporation.
Section 4.15. Duties of Officers.
Each officer has the authority and shall perform the duties set forth
in a resolution or resolutions of the board of directors or by direction of any
officer authorized by the board of directors to prescribe the duties of other
officers.
Section 4.16. Resignation and Removal of Officers.
(1) An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made effective at a
later date and the corporation accepts the future effective date, the board of
directors may fill the pending vacancy before the effective date if the board of
directors provides that the successor does not take office until the effective
date.
(2) The board of directors may remove any officer at any time with or
without cause. Any assistant officer, if appointed by another officer, may
likewise be removed by the board of directors or by the officer which appointed
him in accordance with these bylaws.
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Section 4.17. Contract Rights of Officers.
The appointment of an officer does not itself create contract rights.
Section 4.18. General Standards for Directors.
(1) A director shall discharge his duties as a director, including his
duties as a member of a committee:
(a) In good faith;
(b) With the care an ordinarily prudent person in a like
position would exercise under similar circumstances; and
(c) In a manner he reasonably believes to be in the best
interests of the corporation.
(2) In discharging his duties, a director is entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, if prepared or presented by:
(a) One or more officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to
matters the director reasonably believes are within the persons' professional or
expert competence; or
(c) A committee of the board of directors of which he is not a
member if the director reasonably believes the committee merits confidence.
(3) In discharging his duties, a director may consider such factors as
the director deems relevant, including the long-term prospects and interests of
the corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the corporation
or its subsidiaries, the communities and society in which the corporation or its
subsidiaries operate, and the economy of the state and the nation.
(4) A director is not acting in good faith if he has knowledge
concerning the matter in question that makes reliance otherwise permitted by
subsection (2) unwarranted.
(5) A director is not liable for any action taken as a director, or any
failure to take any action, if he performed the duties of his office in
compliance with this section.
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Section 4.19. Director Conflicts of Interest.
No contract or other transaction between a corporation and one or more
interested directors shall be either void or voidable because of such
relationship or interest, because such director or directors are present at the
meeting of the board of directors or a committee thereof which authorizes,
approves or ratifies such contract or transaction, or because his or their votes
are counted for such purpose, if:
(1) The fact of such relationship or interest is disclosed or known to
the board of directors or committee which authorizes, approves or ratifies the
contract or transactions by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors;
(2) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(3) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
Common or interested directors may be counted in determining the
presence of a quorum at the meeting of the board of directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
For the purpose of paragraph (2) above, a conflict of interest
transaction is authorized, approved or ratified if it receives the vote of a
majority of the shares entitled to be counted under this subsection. Shares
owned by or voted under the control of a director who has a relationship or
interest in the conflict of interest transaction may not be counted in a vote of
shareholders to determine whether to authorize, approve or ratify a conflict of
interest transaction under paragraph (2). The vote of those shares, however, is
counted in determining whether the transaction is approved under other sections
of the Act. A majority of the shares, whether or not present, that are entitled
to be counted in a vote on the transaction under this subsection constitutes a
quorum for the purpose of taking action under this section.
Section 4.20. Resignation of Directors.
A director may resign at any time by delivering written notice to the
board of directors or its chairman or to the corporation.
A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made effective at a
later date, the board of directors
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may fill the pending vacancy before the effective date if the board of directors
provides that the successor does not take office until the effective date.
ARTICLE V
INDEMNIFICATION OF DIRECTORS, OFFICERS,
EMPLOYEES, AND AGENTS
Section 5.01. Directors, Officers, Employees and Agents.
(1) The corporation shall have power to indemnify any person who was or
is a party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against liability
incurred in connection with such proceeding, including any appeal thereof, 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, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any proceeding by judgment, order, settlement,
or conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to, the best
interests of the corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(2) The corporation shall have power to indemnify any person, who was
or is a party to any proceeding by or in the right of the corporation to procure
a judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses and amounts paid in settlement not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if such person 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 indemnification shall be made under this
subsection in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable unless, and only to the extent that, the
court in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
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(3) To the extent that a director, officer, employee, or agent of the
corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsections (1) or (2), or in defense of any claim,
issue, or matter therein, he shall be indemnified against expenses actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under subsections (1) or (2), unless pursuant
to a determination by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsections (1) or (2).
Such determination shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable,
by majority vote of a committee duly designated by the board of directors (in
which directors who are parties may participate) consisting solely of two or
more directors not at the time parties to the proceeding;
(c) By independent legal counsel:
(i) Selected by the board of directors prescribed in
paragraph (a) or the committee prescribed in paragraph (b); or
(ii) If a quorum of the directors cannot be obtained
for paragraph (a) and the committee cannot be designed under paragraph (b),
selected by majority vote of the full board of directors (in which directors who
are parties may participate); or
(d) By the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to such proceeding or, if no
such quorum is obtainable, by a majority vote of shareholders who were not
parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of permissibility
is made by independent legal counsel, persons specified by paragraph (4)(c)
shall evaluate the reasonableness of expenses and may authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the
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corporation pursuant to this section. Expenses incurred by other employees and
agents may be paid in advance upon such terms or conditions that the board of
directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant
to this section are not exclusive, and the corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director,
officer, employee, or agent had reasonable cause to believe his conduct was
lawful or had no reasonable cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer, employee,
or agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of Section 607.0834 under the Act are applicable; or
(d) Willful misconduct or a conscious disregard for the best
interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in the
right of a shareholder.
(8) Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person, unless otherwise provided when authorized or ratified.
(9) Notwithstanding the failure of the corporation to provide
indemnification, and despite any contrary determination of the board or of the
shareholders in the specific case, a director, officer, employee, or agent of
the corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court conducting the
proceeding, to the circuit court, or to another court of competent jurisdiction.
On receipt of an application, the court, after giving any notice that it
considers necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification or
advancement of expenses, if it determines that:
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(a) The director, officer, employee, or agent if entitled to
mandatory indemnification under subsection (3), in which case the court shall
also order the corporation to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the exercise
by the corporation of its power pursuant to subsection (7); or
(c) The director, officer, employee, or agent is fairly and
reasonably entitled to indemnification or advancement of expenses, or both, in
view of all the relevant circumstances, regardless of whether such person met
the standard of conduct set forth in subsection (1), subsection (2) or
subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise, is in the same position
under this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(11) For purposes of this section:
(a) The term "other enterprises" includes employee benefit
plans;
(b) The term "expenses" includes counsel fees, including those
for appeal;
(c) The term "liability" includes obligations to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to any employee benefit plan), and expenses actually and reasonably
incurred with respect to a proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit or other type of proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation"
includes any service as a director, officer, employee, or agent of the
corporation that imposes duties on such persons, including duties relating to an
employee benefit plan and its participants or beneficiaries; and
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(g) The term "not opposed to the best interest of the
corporation" describes the actions of a person who acts in good faith and in a
manner he reasonably believes to be in the best interests of the participants
and beneficiaries of an employee benefit plan.
(12) The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
ARTICLE VI
OFFICE AND AGENT
Section 6.01. Registered Office and Registered Agent.
(1) The corporation shall have and continuously maintain in the State
of Florida:
(a) A registered office which may be the same as its place of
business; and
(b) A registered agent, who, may be either:
(i) An individual who resides in the State of Florida
whose business office is identical with such registered office; or
(ii) Another corporation or not-for-profit
corporation as defined in Chapter 617 of the Act, authorized to transact
business or conduct its affairs in the State of Florida, having a business
office identical with the registered office; or
(iii) A foreign corporation or not-for-profit foreign
corporation authorized pursuant to chapter 607 or chapter 617 of the Act to
transact business or conduct its affairs in the State of Florida, having a
business office identical with the registered office.
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Section 6.02. Change of Registered Office or Registered Agent;
Resignation of Registered Agent.
(1) The corporation may change its registered office or its registered
agent upon filing with the Department of State of the State of Florida a
statement of change setting forth:
(a) The name of the corporation;
(b) The street address of its current registered office;
(c) If the current registered office is to be changed, the
street address of the new registered office;
(d) The name of its current registered agent;
(e) If its current registered agent is to be changed, the name
of the new registered agent and the new agent's written consent (either on the
statement or attached to it) to the appointment;
(f) That the street address of its registered office and the
street address of the business office of its registered agent, as changed, will
be identical;
(g) That such change was authorized by resolution duly adopted
by its board of directors or by an officer of the corporation so authorized by
the board of directors.
ARTICLE VII
SHARES, OPTIONS, DIVIDENDS, AND DISTRIBUTIONS
Section 7.01. Authorized Shares.
(1) The articles of incorporation prescribe the classes of shares and
the number of shares of each class that the corporation is authorized to issue,
as well as a distinguishing designation for each class, and prior to the
issuance of shares of a class the preferences, limitations, and relative rights
of that class must be described in the articles of incorporation.
(2) The articles of incorporation must authorize:
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(a) One or more classes of shares that together have unlimited
voting rights, and
(b) One or more classes of shares (which may be the same class
or classes as those with voting rights) that together are entitled to receive
the net assets of the corporation upon dissolution.
(3) The articles of incorporation may authorize one or more classes of
shares that have special, conditional, or limited voting rights, or no rights,
or no right to vote, except to the extent prohibited by the Act;
(a) Are redeemable or convertible as specified in the articles
of incorporation;
(b) Entitle the holders to distributions calculated in any
manner, including dividends that may be cumulative, non-cumulative, or partially
cumulative;
(c) Have preference over any other class of shares with
respect to distributions, including dividends and distributions upon the
dissolution of the corporation.
(4) Shares which are entitled to preference in the distribution of
dividends or assets shall not be designated as common shares. Shares which are
not entitled to preference in the distribution of dividends or assets shall be
common shares and shall not be designated as preferred shares.
Section 7.02. Terms of Class or Series Determined by Board of
Directors.
(1) If the articles of incorporation so provide, the board of directors
may determine, in whole or part, the preferences, limitations, and relative
rights (within the limits set forth in Section 7.01) of:
(a) Any class of shares before the issuance of any shares of
that class, or
(b) One or more series within a class before the issuance of
any shares of that series.
(2) Each series of a class must be given a distinguishing designation.
(3) All shares of a series must have preferences, limitations, and
relative rights identical with those of other shares of the same series and,
except to the extent otherwise provided in the description of the series, of
those of other series of the same class.
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(4) Before issuing any shares of a class or series created under this
section, the corporation must deliver to the Department of State of the State of
Florida for filing articles of amendment, which are effective without
shareholder action, in accordance with Section 607.0602 of the Act.
Section 7.03. Issued and Outstanding Shares.
(1) A corporation may issue the number of shares of each class or
series authorized by the articles of incorporation. Shares that are issued are
outstanding shares until they are reacquired, redeemed, converted, or canceled.
(2) The reacquisition, redemption, or conversion of outstanding shares
is subject to the limitations of subsection (3) and to Section 607.06401 of the
Act.
(3) At all times that shares of the corporation are outstanding, one or
more shares that together have unlimited voting rights and one or more shares
that together are entitled to receive the net assets of the corporation upon
dissolution must be outstanding.
Section 7.04. Issuance of Shares.
(1) The board of directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services performed, promises
to perform services evidenced by a written contract, or other securities of the
corporation.
(2) Before the corporation issues shares, the board of directors must
determine that the consideration received or to be received for shares to be
issued is adequate. That determination by the board of directors is conclusive
insofar as the adequacy of consideration for the issuance of shares relates to
whether the shares are validly issued, fully paid, and non-assessable. When it
cannot be determined that outstanding shares are fully paid and non-assessable,
there shall be a conclusive presumption that such shares are fully paid and
non-assessable if the board of directors makes a good faith determination that
there is no substantial evidence that the full consideration for such shares has
not been paid.
(3) When the corporation receives the consideration for which the board
of directors authorized the issuance of shares, the shares issued therefor are
fully paid and non-assessable. Consideration in the form of a promise to pay
money or a promise to perform services is received by the corporation at the
time of the making of the promise, unless the agreement specifically provides
otherwise.
(4) The corporation may place in escrow shares issued for a contract
for future services or benefits or a promissory note, or make other arrangements
to restrict the
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transfer of the shares, and may credit distributions in respect of the shares
against their purchase price, until the services are performed, the note is
paid, or the benefits received. If the services are not performed, the shares
escrowed or restricted and the distributions credited may be canceled in whole
or part.
Section 7.05. Form and Content of Certificates.
(1) Shares may but need not be represented by certificates. Unless the
Act or another statute expressly provides otherwise, the rights and obligations
of shareholders are identical whether or not their shares are represented by
certificates.
(2) At a minimum, each share certificate must state on its face:
(a) The name of the issuing corporation and that the
corporation is organized under the laws of the State of Florida;
(b) The name of the person to whom issued; and
(c) The number and class of shares and the designation of the
series, if any, the certificate represents.
(3) If the shares being issued are of different classes of shares or
different series within a class, the designations, relative rights, preferences,
and limitations applicable to each class and the variations in rights,
preferences, and limitations determined for each series (and the authority of
the board of directors to determine variations for future series) must be
summarized on the front or back of each certificate. Alternatively, each
certificate may state conspicuously on its front or back that the corporation
will furnish the shareholder a full statement of this information on request and
without charge.
(4) Each share certificate:
(a) Must be signed (either manually or in facsimile) by an
officer or officers designated by the board of directors, and
(b) May bear the corporate seal or its facsimile.
(5) If the person who signed (either manually or in facsimile) a share
certificate no longer holds office when the certificate is issued, the
certificate is nevertheless valid.
(6) Nothing in this section may be construed to invalidate any share
certificate validly issued and outstanding under the Act on July 1, 1990.
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Section 7.06. Shares Without Certificates.
(1) The board of directors of the corporation may authorize the issue
of some or all of the shares of any or all of its classes or series without
certificates. The authorization does not affect shares already represented by
certificates until they are surrendered to the corporation.
(2) Within a reasonable time after the issue or transfer of shares
without certificates, the corporation shall send the shareholder a written
statement of the information required on certificates by the Act.
Section 7.07. Restriction on Transfer of Shares and Other
Securities.
(1) The articles of incorporation, these bylaws, an agreement among
shareholders, or an agreement between shareholders and the corporation may
impose restrictions on the transfer or registration of transfer of shares of the
corporation. A restriction does not affect shares issued before the restriction
was adopted unless the holders of such shares are parties to the restriction
agreement or voted in favor of the restriction.
(2) A restriction on the transfer or registration of transfer of shares
is valid and enforceable against the holder or a transferee of the holder if the
restriction is authorized by this section, and effected in compliance with the
provisions of the Act, including having a proper purpose as referred to in the
Act.
Section 7.08. Shareholder's Pre-emptive Rights.
The shareholders of the corporation do not have a pre-emptive right to
acquire the corporation's unissued shares.
Section 7.09. Corporation's Acquisition of its Own Shares.
(1) The corporation may acquire its own shares, and, unless otherwise
provided in the articles of incorporation or except as provided in subsection
(4), shares so acquired constitute authorized but unissued shares of the same
class but undesignated as to series.
(2) If the articles of incorporation prohibit the reissue of acquired
shares, the number of authorized shares is reduced by the number of shares
acquired, effective upon amendment of the articles of incorporation.
(3) Articles of amendment may be adopted by the board of directors
without shareholder action, shall be delivered to the Department of State of the
State of Florida for filing, and shall set forth the information required by
Section 607.0631 of the Act.
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(4) Shares of the corporation in existence on June 30, 1990, which are
treasury shares under Section 607.004(18), Florida Statutes (1987), shall be
issued, but not outstanding, until canceled or disposed of by the corporation.
Section 7.10. Share Options.
(1) Unless the articles of incorporation provide otherwise, the
corporation may issue rights, options, or warrants for the purchase of shares of
the corporation. The board of directors shall determine the terms upon which the
rights, options, or warrants are issued, their form and content, and the
consideration for which the shares are to be issued.
(2) The terms and conditions of stock rights and options which are
created and issued by the corporation, or its successor, and which entitle the
holders thereof to purchase from the corporation shares of any class or classes,
whether authorized by unissued shares, treasury shares, or shares to be
purchased or acquired by the corporation, may include, without limitation,
restrictions, or conditions that preclude or limit the exercise, transfer,
receipt, or holding of such rights or options by any person or persons,
including any person or persons owning or offering to acquire a specified number
or percentage of the outstanding common shares or other securities of the
corporation, or any transferee or transferees of any such person or persons, or
that invalidate or void such rights or options held by any such person or
persons or any such transferee or transferees.
Section 7.11. Terms and Conditions of Stock Rights and Options.
The terms and conditions of the stock rights and options which are
created and issued by the corporation [or its successor], and which entitle the
holders thereof to purchase from the corporation shares of any class or classes,
whether authorized but unissued shares, treasury shares, or shares to be
purchased or acquired by the corporation, may include, without limitation,
restrictions or conditions that preclude or limit the exercise, transfer,
receipt or holding of such rights or options by any person or persons, including
any person or persons owning or offering to acquire a specified number or
percentage of the outstanding common shares or other securities of the
corporation, or any transferee or transferees of any such person or persons, or
that invalidate or void such rights or options held by any such person or
persons or any such transferee or transferees.
Section 7.12. Share Dividends.
(1) Shares may be issued pro rata and without consideration to the
corporation's shareholders or to the shareholders of one or more classes or
series. An issuance of shares under this subsection is a share dividend.
(2) Shares of one class or series may not be issued as a share dividend
in respect of shares of another class or series unless:
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(a) The articles of incorporation so authorize,
(b) A majority of the votes entitled to be cast by the class
or series to be issued approves the issue, or
(c) There are no outstanding shares of the class or series to
be issued.
(3) If the board of directors does not fix the record date for
determining shareholders entitled to a share dividend, it is the date of the
board of directors authorizes the share dividend.
Section 7.13. Distributions to Shareholders.
(1) The board of directors may authorize and the corporation may make
distributions to its shareholders subject to restriction by the articles of
incorporation and the limitations in subsection (3).
(2) If the board of directors does not fix the record date for
determining shareholders entitled to a distribution (other than one involving a
purchase, redemption, or other acquisition of the corporation's shares), it is
the date the board of directors authorizes the distribution.
(3) No distribution may be made if, after giving it effect:
(a) The corporation would not be able to pay its debts as they
become due in the usual course of business; or
(b) The corporation's total assets would be less than the sum
of its total liabilities plus (unless the articles of incorporation permit
otherwise) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution.
(4) The board of directors may base a determination that a distribution
is not prohibited under subsection (3) either on financial statements prepared
on the basis of accounting practices and principles that are reasonable in the
circumstances or on a fair valuation or other method that is reasonable in the
circumstances. In the case of any distribution based upon such a valuation, each
such distribution shall be identified as a distribution based upon a current
valuation of assets, and the amount per share paid on the basis of such
valuation shall be disclosed to the shareholders concurrent with their receipt
of the distribution.
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<PAGE>
(5) Except as provided in subsection (7), the effect of a distribution
under subsection (3) is measured;
(a) In the case of distribution by purchase, redemption, or
other acquisition of the corporation's shares, as of the earlier of:
(i) The date money or other property is transferred
or debt incurred by the corporation, or
(ii) The date the shareholder ceases to be a
shareholder with respect to the acquired shares;
(b) In the case of any other distribution of indebtedness, as
of the date the indebtedness is distributed;
(c) In all other cases, as of:
(i) The date the distribution is authorized if the
payment occurs within 120 days after the date of authorization, or
(ii) The date the payment is made if it occurs more
than 120 days after the date of authorization.
(6) A corporation's indebtedness to a shareholder incurred by reason of
a distribution made in accordance with this section is at parity with the
corporation's indebtedness to its general, unsecured creditors except to the
extent subordinated by agreement.
(7) Indebtedness of the corporation, including indebtedness issued as a
distribution, is not considered a liability for purposes of determinations under
subsection (3) if its terms provide that payment of principal and interest are
made only if and to the extent that payment of a distribution to shareholders
could then be made under this section. If the indebtedness is issued as a
distribution, each payment of principal or interest is treated as a
distribution, the effect of which is measured on the date the payment is
actually made.
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<PAGE>
ARTICLE VIII
AMENDMENT TO ARTICLES AND BYLAWS
Section 8.01. Authority to Amend the Articles of Incorporation.
(1) The corporation may amend its articles of incorporation at any time
to add or change a provision that is required or permitted in the articles of
incorporation or to delete a provision not required in the articles of
incorporation. Whether a provision is required or permitted in the articles of
incorporation is determined as of the effective date of the amendment.
(2) A shareholder of the corporation does not have a vested property
right resulting from any provision in the articles of incorporation, including
provisions relating to management, control, capital structure, dividend
entitlement, or purpose or duration of the corporation.
Section 8.02. Amendment by Board of Directors.
The corporation's board of directors may adopt one or more amendments
to the corporation's articles of incorporation without shareholder action:
(1) To extend the duration of the corporation if it was incorporated at
a time when limited duration was required by law;
(2) To delete the names and addresses of the initial directors;
(3) To delete the name and address of the initial registered agent or
registered office, if a statement of change is on file with the Department of
State of the State of Florida;
(4) To delete any other information contained in the articles of
incorporation that is solely of historical interest;
(5) To change each issued and unissued authorized share of an
outstanding class into a greater number of whole shares if the corporation has
only shares of that class outstanding;
(6) To delete the authorization for a class or series of shares
authorized pursuant to Section 607.0602 of the Act, if no shares of such class
or series have been issued;
(7) To change the corporate name by substituting the word
"corporation," "incorporated," or "company," or the abbreviation "corp.," Inc.,"
or Co.," for a similar word
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<PAGE>
or abbreviation in the name, or by adding, deleting, or changing a geographical
attribution for the name; or
(8) To make any other change expressly permitted by the Act to be made
without shareholder action.
Section 8.03. Amendment of Bylaws by Board of Directors.
The corporation's board of directors may amend or repeal the
corporation's bylaws unless the Act reserves the power to amend a particular
bylaw provision exclusively to the shareholders.
Section 8.04. Bylaw Increasing Quorum or Voting Requirements
for Directors.
(1) A bylaw that fixes a greater quorum or voting requirement for the
board of directors may be amended or repealed:
(a) If originally adopted by the shareholders, only by the
shareholders;
(b) If originally adopted by the board of directors, either by
the shareholders or by the board of directors.
(2) A bylaw adopted or amended by the shareholders that fixes a greater
quorum or voting requirement for the board of directors may provide that it may
be amended or repealed only by a specified vote of either the shareholders or
the board of directors.
(3) Action by the board of directors under paragraph (1)(b) to adopt or
amend a bylaw that changes the quorum or voting requirement for the board of
directors must meet the same quorum requirement and be adopted by the same vote
required to take action under the quorum and voting requirement then in effect
or proposed to be adopted, whichever is greater.
ARTICLE IX
RECORDS AND REPORTS
Section 9.01. Corporate Records.
(1) The corporation shall keep as permanent records minutes of al
meetings of its shareholders and board of directors, a record of all actions
taken by the shareholders
33
<PAGE>
or board of directors without a meeting, and a record of all actions taken by a
committee of the board of directors in place of the board of directors on behalf
of the corporation.
(2) The corporation shall maintain accurate accounting records.
(3) The corporation or its agent shall maintain a record of its
shareholders in a form that permits preparation of a list of the names and
addresses of all shareholders in alphabetical order by class of shares showing
the number and series of shares held by each.
(4) The corporation shall maintain its records in written form or in
another form capable of conversion into written form within a reasonable time.
(5) The corporation shall keep a copy of the following records:
(a) Its articles or restated articles of incorporation and all
amendments to them currently in effect;
(b) Its bylaws or restated bylaws and all amendments to them
currently in effect;
(c) Resolutions adopted by the board of directors creating one
or more classes or series of shares and finding their relative rights,
preferences, and limitations, if shares issued pursuant to those resolutions are
outstanding;
(d) The minutes of all shareholders' meetings and records of
all action taken by shareholders without a meeting for the past three years;
(e) Written communications to all shareholders generally or
all shareholders of a class or series within the past three years, including the
financial statements furnished for the past three years;
(f) A list of the names and business street addresses of its
current directors and officers; and
(g) Its most recent annual report delivered to the Department
of State of the State of Florida.
Section 9.02. Financial Statements for Shareholders.
(1) Unless modified by resolution of the shareholders within 120 days
of the close of each fiscal year, the corporation shall furnish its shareholders
annual financial statements which may be consolidated or combined statements of
the corporation and one
34
<PAGE>
or more of its subsidiaries, as appropriate, that include a balance sheet as of
the end of the fiscal year, an income statement for that year, and a statement
of cash flows for that year. If financial statements are prepared for the
corporation on the basis of generally-accepted accounting principles, the annual
financial statements must also be prepared on that basis.
(2) If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the president or the person responsible for the
corporation's accounting records:
(a) Stating his reasonable belief whether the statements were
prepared on the basis of generally-accepted accounting principles and, if not,
describing the basis of preparation; and
(b) Describing any respects in which the statements were not
prepared on a basis of accounting consistent with the statements prepared for
the preceding year.
(3) The corporation shall mail the annual financial statements to each
shareholder within 120 days after the close of each fiscal year or within such
additional time thereafter as is reasonably necessary to enable the corporation
to prepare its financial statements, if for reasons beyond the corporation's
control, it is unable to prepare its financial statements within the prescribed
period. Thereafter, on written request from a shareholder who was not mailed the
statements, the corporation shall mail him the latest annual financial
statements.
Section 9.03. Other Reports to Shareholders.
(1) If the corporation indemnifies or advances expenses to any
director, officer, employee or agent otherwise than by court order or action by
the shareholders or by an insurance carrier pursuant to insurance maintained by
the corporation, the corporation shall report the indemnification or advance in
writing to the shareholders with or before the notice of the next shareholders'
meeting, or prior to such meeting if the indemnification or advance occurs after
the giving of such notice but prior to the time such meeting is held, which
report shall include a statement specifying the persons paid, the amounts paid,
and the nature and status at the time of such payment of the litigation or
threatened litigation.
(2) If the corporation issues or authorizes the issuance of shares for
promises to render services in the future, the corporation shall report in
writing to the shareholders the number of shares authorized or issued, and the
consideration received by the corporation, with or before the notice of the next
shareholders' meeting.
35
<PAGE>
Section 9.04. Annual Report for Department of State.
(1) The corporation shall deliver to the Department of State of the
State of Florida for filing a sworn annual report on such forms as the
Department of State of the State of Florida prescribes that sets forth the
information prescribed by Section 607.1622 of the Act.
(2) Proof to the satisfaction of the Department of State of the State
of Florida on or before July 1 of each calendar year that such report was
deposited in the United States mail in a sealed envelope, properly addressed
with postage prepaid, shall be deemed in compliance with this requirement.
(3) Each report shall be executed by the corporation by an officer or
director or, if the corporation is in the hands of a receiver or trustee, shall
be executed on behalf of the corporation by such receiver or trustee, and the
signing thereof shall have the same legal effect as if made under oath, without
the necessity of appending such oath thereto.
(4) Information in the annual report must be current as of the date the
annual report is executed on behalf of the corporation.
(5) Any corporation failing to file an annual report which complies
with the requirements of this section shall not be permitted to maintain or
defend any action in any court of this state until such report is filed and all
fees and taxes due under the Act are paid and shall be subject to dissolution or
cancellation of its certificate of authority to do business as provided in the
Act.
ARTICLE X
MISCELLANEOUS
Section 10.01. Definition of the "Act".
All references contained herein to the "Act" or to sections of the
"Act" shall be deemed to be in reference to the Florida Business Corporation
Act.
Section 10.02. Application of Florida Law.
Whenever any provision of these bylaws is inconsistent with any
provision of the Florida Business Corporation Act, Statutes 607, as they may be
amended from time to time, then in such instance Florida law shall prevail.
36
<PAGE>
Section 10.03. Fiscal Year.
The fiscal year of the corporation shall be determined by resolution of
the board of directors.
Section 10.04. Conflicts with Articles of Incorporation.
In the event that any provision contained in these bylaws conflicts
with any provision of the corporation's articles of incorporation, as amended
from time to time, the provisions of the articles of incorporation shall prevail
and be given full force and effect, to the full extent permissible under the
Act.
Section 10.05. Partial Invalidity.
If any provision of these bylaws shall, for any reason, be held by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, such invalidity, illegality or unenforceability shall not affect any
other provision of these bylaws, and these bylaws shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
37
Exhibit 9.1
VOTING TRUST AGREEMENT
FIRST AID SELECT, INC.
THIS VOTING TRUST AGREEMENT (the "Agreement") is made this
16th day of December, 1999, by and among MARTHA SIEGEL, SCOTT SIEGEL, Custodian
for Joshua Siegel under the Florida Uniform Gifts to Minors Act, SCOTT SIEGEL,
Custodian for Jordan Siegel under the Florida Uniform Gifts to Minors Act,
ROBERT I. SUSSMAN and VAN DYNE-CROTTY, INC., an Ohio corporation (each
individually a "Shareholder" and collectively the "Shareholders") and DANIEL W.
CROTTY, as voting trustee (the "Voting Trustee").
RECITALS
A. The Shareholders currently own shares of the common capital
stock of FIRST AID SELECT, INC., a Florida corporation ("FASI").
B. The Shareholders desire to establish a voting trust with
respect to such shares of FASI.
AGREEMENT
NOW, THEREFORE, the parties agree as follows:
Section 1. Deposit of Common Shares. Upon execution of this
Agreement the Shareholders shall deposit with the Voting Trustee a certificate
or certificates representing those shares of the voting common capital stock of
FASI set forth on Schedule A attached to this Agreement and made a part hereof,
along with respective stock powers duly executed in blank.
Section 2. Additional Beneficiaries. Any future owner of
shares of fully paid voting common capital stock of FASI or other voting
securities of FASI may at any time become a party to this Agreement as a
Shareholder with the same force and effect as though such person had originally
been a party to this Agreement. Each such person shall respectively become a
Shareholder by depositing with the Voting Trustee certificates for the voting
shares or other securities held by such person, accompanied by a stock power
duly executed in blank. All voting shares or other securities of FASI which may
be deposited pursuant to this Agreement are hereinafter referred to as the
"Shares."
Section 3. Reissuance of Certificates in Name of Voting
Trustee. The Voting Trustee may at any time in the Voting Trustee's discretion
cause the certificates for Shares deposited pursuant to this Agreement to be
surrendered in exchange for a certificate or certificates for a like number of
Shares issued in the
<PAGE>
name of the Voting Trustee. As holder of record of the Shares so issued, the
Voting Trustee assumes no liability as a shareholder of FASI; the Voting
Trustee's interest in the Shares is that of a trustee only.
Section 4. Trust Certificates. The Voting Trustee shall issue
to each Shareholder with respect to the certificate or certificates for Shares
deposited with the Voting Trustee pursuant to this Agreement trust certificates
in substantially the form attached hereto as Exhibit A ("Trust Certificates").
Section 5. Transfer of Trust Certificates. The Trust
Certificates shall be transferable upon the books maintained by the Voting
Trustee upon surrender thereof by the registered holder in person or by attorney
duly authorized, in accordance with rules established for that purpose by the
Voting Trustee. Until so transferred, the Voting Trustee may treat the
registered holder as the owner of the Trust Certificates for all purposes. Every
transferee of a Trust Certificate issued shall, by the acceptance of such Trust
Certificate, become a party to this Agreement as a Shareholder with the same
effect as though such person had originally been a party to this Agreement. In
connection with, and as a condition of, making or permitting any transfer or
delivery of Share certificates or Trust Certificates under any provision of this
Agreement, the Voting Trustee may require the payment of a sum sufficient for
payment or reimbursement for any stamp tax or other governmental charge in
connection therewith.
Section 6. Delivery of Certificates for Shares. Upon
termination of this Agreement in accordance with Section 14, the Voting Trustee
shall deliver certificates for Shares in the amounts called for by the
respective Trust Certificates held by a Shareholder so as to exchange such Trust
Certificates for certificates for Shares. When the Voting Trustee has delivered
certificates for Shares to the Shareholders in exchange for Trust Certificates
pursuant to this Section, all further obligations or duties of the Voting
Trustee under this Agreement to the holder of Trust Certificates shall
terminate.
Section 7. Rights and Powers of Trustee. The Voting Trustee
shall possess and be entitled, subject to the provisions of this Agreement, in
the Voting Trustee's absolute discretion, to exclusively exercise all the rights
and powers of an absolute owner of the Shares, including, but not limited to,
the right to (i) receive dividends on the Shares, (ii) vote the Shares and (iii)
take part in meetings of the shareholders of FASI; provided, however, that the
Voting Trustee shall have no right to sell or otherwise dispose of the Shares.
The Voting Trustee may in the Voting Trustee's absolute discretion vote for or
against any merger, sale of substantially all of the assets of FASI or other
similar transaction. It is expressly stipulated and agreed that the Shareholders
shall have no such rights with respect to the Shares during the term of this
Agreement.
Section 8. Dividends on Shares. While Shares are held in trust
under this Agreement, a Shareholder shall be entitled to promptly receive a cash
payment
<PAGE>
from the Voting Trustee in an amount equal to any cash dividend or
distribution received by the Voting Trustee with respect to the Shares held
pursuant to this Agreement for such Shareholder. In the case of any dividend or
distribution paid other than in cash, the Voting Trustee shall deliver to a
Shareholder in kind of any such dividend or distribution received by the Voting
Trustee; provided, however, that if any such dividend or distribution shall be
paid to and received by the Voting Trustee in fully paid voting shares of the
capital stock of FASI, the Voting Trustee shall hold, subject to the terms of
this Agreement, the certificates for such additional shares, which for purposes
of this Agreement shall also be Shares.
Section 9. Purchase of New Securities. In the event that the
Voting Trustee is offered or has the right to subscribe for any additional
shares or other securities of FASI, then the Voting Trustee shall promptly
notify such Shareholder in writing of such subscription rights; provided,
however, such notice shall be given not less than 10 business days prior to the
Trustee taking any action on such subscription. If the Voting Trustee receives
from such Shareholder, at least 10 business days prior to the time fixed for the
expiration of such subscription rights, a written direction to the Voting
Trustee to exercise the subscription rights allocable to the Shares beneficially
owned by such Shareholder, accompanied by sufficient funds to pay for the
exercise of such subscription rights, then upon full and complete compliance by
a Shareholder with all other terms and conditions of such subscription, the
Voting Trustee shall make such purchase and payment for such shares or other
securities. The Voting Trustee shall deliver such shares or securities to such
Shareholder unless such shares or other securities are voting shares or
securities, in which case the Voting Trustee shall hold, subject to the terms of
this Agreement, the certificates for such shares or securities, which for
purposes of this Agreement shall also be Shares.
In the event a Shareholder has the right to purchase any
additional voting shares or securities of FASI under stock options, stock
warrants or otherwise, and the Shareholder desires to exercise such option, then
the Shareholder shall notify the Voting Trustee in writing of the exercise of
such at least ten days prior to such exercise. Upon the exercise of such option,
the Shareholders shall deliver to the Voting Trustee such voting shares or
securities, in which case the Voting Trustee shall hold, subject to the terms of
this Agreement, the certificates for such shares or securities, which for
purposes of this Agreement shall also be Shares.
Section 10. Successor Voting Trustee; Resignation of Voting
Trustee.
A. Successor Voting Trustee. If DANIEL W. CROTTY shall resign
or for any other reason cease or be unable to serve as the Voting
Trustee, and no successor is appointed as provided below, then KEVIN M.
CROTTY shall, upon acceptance of the trust, serve as the Voting
Trustee.
B. Special Power to Appoint Voting Trustee. The Voting Trustee
shall have the right from time to time to appoint one or more
individuals as successor Voting
<PAGE>
Trustee. Each such appointment shall be made by delivering to the
Shareholders (i) a written notice of such appointment and (ii) a
written acceptance thereof signed by the appointee.
If the last named Voting Trustee as provided above shall
resign or for any other reason cease or be unable to serve as the
Voting Trustee, then the Board of Directors of Van Dyne-Crotty, Inc.
may appoint one or more individuals, financial institutions or trust
companies as successor Voting Trustee, or failing such appointment, the
then senior Judge of the Probate Court of Montgomery County, Ohio shall
appoint such one or more individuals, financial institutions or trust
companies as successor Voting Trustee. Such successor shall, upon
acceptance of the trust, serve as the Voting Trustee. The Judge
appointing such successor Voting Trustee shall be acting as an
individual and not in a judicial capacity.
C. Resignation. Any Voting Trustee may resign at any time by
delivering a written notice of such resignation prior to the effective
date thereof to the Shareholders and to the Board of Directors of Van
Dyne-Crotty, Inc.
Section 11. Restriction on Shares.
A. Definitions. For purposes of this Section, the following
terms shall have the following meanings:
(1) "Permitted Transferee" means (i) a trust of which
a Shareholder is the grantor and the owner of the entire trust
corpus thereof by virtue of the application of Sections 676
and 677 of the Internal Revenue Code of 1986, as amended
("Code"), or (ii) a member of the Shareholders family (as
defined in Section 318(a)(1) of the Code), or a trust for
their benefit; provided such transferee agrees to be subject
to and bound by all of the terms of this Agreement as if such
transferee were an original Shareholder.
(2) "Personal Representative" means the personal
representative, executor, administrator or other legal
representative of a Shareholder's estate.
(3) "Transfer" means the gift, bequest, sale,
assignment, exchange, transfer, pledge of or otherwise
encumbrance, whether voluntarily or by operation of law, of
any Shares or Trust Certificates.
(4) "Transfer Notice" means a written notice to VDC
at least 60 days prior to such Transferring Shareholder's
intent to Transfer, designating the number of Shares or Trust
Certificates involved, all of the terms and conditions of the
proposed Transfer and the name and address of each prospective
transferee or encumbrancee.
(5) "Transferring Shareholder" means a Shareholder or
a Personal Representative of a Shareholder desiring to
Transfer any of such Shareholder's Shares or Trust
Certificates.
(6) "VDC" means Van Dyne-Crotty, Inc.
<PAGE>
B. Five Year Restriction. Anything in this Agreement to the
contrary notwithstanding, during the five year period after the date of
this Agreement, no Shareholder other than VDC or a Shareholder's
Personal Representative may sell, assign, exchange, transfer, pledge or
otherwise encumber, whether voluntarily or by operation of law, any
Shares.
C. Restrictions on Transfer. During the term of this
Agreement, other than VDC, no Shareholder or a Shareholder's Personal
Representative shall Transfer any of such Shareholder's Shares or the
Trust Certificates for such Shares to anyone other than VDC or a
Permitted Transferee without the written consent of VDC or, in the
absence of such written consent, without first providing VDC with a
Transfer Notice.
D. Written Notice of Transfer Without Consent and Meeting. If
VDC fails to provide the Transferring Shareholder the written consent
required in paragraph C above within 30 days of the written request for
such, then the Transferring Shareholder shall provide VDC a Transfer
Notice. Within the 60 days of the Transfer Notice, a meeting of the
Transferring Shareholder and VDC shall be called by VDC upon not less
than 7 days' nor more than 30 days' prior written notice. Such meeting
shall be held at the principal office of FASI or such other location in
the State of Florida set forth in such notice.
E. Option to VDC. At the meeting ("Closing"), all (and not
less than all) of the Transferring Shareholder's Shares or rights
therein shall be offered for sale and shall be subject to an option to
purchase on the part of VDC, which option shall be exercised, if at
all, at the Closing.
F. Purchase Price. The purchase price for each Share purchased
pursuant to this Section shall be at the price which is the per Share
price, if any, stated in the Transfer Notice.
G. Payment of Price. Upon the purchase of Shares by VDC
pursuant to the provisions of this Section, the purchase price for such
Shares shall be paid at the election of the purchaser:
(i) If the purchase price is the price stated in the
Transfer Notice, pursuant to the terms, if any, stated in the
Transfer Notice, or
(ii) In cash at the Closing.
H. Release from Restrictions. If any of the Shares of the
Transferring Shareholder are not purchased by VDC in accordance with
the provisions of this Section, then the Transferring Shareholder may
make a bona fide transfer or encumbrance of such Shares to the party
named in the Transfer Notice, with the Transfer to be made only in
strict accordance with the
<PAGE>
terms and conditions stated in the Transfer Notice; provided, however,
that such Transfer may be made free from the restrictions of this
Section only within a period of 30 days following the date of the
meeting called pursuant to paragraph D above, and if not made within
that time, such Shares shall thereafter be subject to all of the
restrictions imposed by this Section.
Further, the Shares shall no longer be subject to the
restrictions of this Section 12 if VDC no longer owns at least 800,000
of the Shares purchased from Scott Siegel, Robert L. Sussman and David
L. Hoggan effective December 20,1999.
Section 12. Liability of Voting Trustee; Accounting. In voting
or otherwise acting under this Agreement with respect to the Shares, the Voting
Trustee shall exercise the Voting Trustee's best judgment, but except for the
Voting Trustee's own individual willful misconduct, the Voting Trustee shall not
incur any responsibility or liability by reason of any action, error of law or
of anything else done or omitted to be done as the Voting Trustee. The Voting
Trustee shall not be required to give any bond or other security for the
discharge of the Voting Trustee's duties under this Agreement.
The Voting Trustee shall not be required to make any returns
or render any accounting to any court while acting under this Agreement, nor to
secure any orders therefrom or file any appraisals or inventories therewith, but
shall, as the Voting Trustee may deem advisable, render an accounting with
respect to such trust (covering the period from the date of the next preceding
accounting) to the Shareholders (or to the legal guardian or other legal
representative of a Shareholder if incompetent).
Section 13. Compensation of the Voting Trustee. The Voting
Trustee shall not be compensated for the Voting Trustee's services under this
Agreement. The Voting Trustee may employ legal counsel and such other assistance
as the Voting Trustee may deem necessary or advisable in the performance of the
Voting Trustee's duties under this Agreement. The Shareholders shall reimburse
the Voting Trustee and indemnify, defend and hold the Voting Trustee harmless
for and against any and all claims, expenses and liabilities incurred by or
asserted against the Voting Trustee with respect to this Agreement. If any such
claims, expenses or liabilities are not voluntary paid by the Shareholders, they
may be deducted from dividends or other distributions to the Shareholders or may
be made a charge payable as a condition to the delivery of Shares to the
Shareholders upon termination of this Agreement; the Voting Trustee shall
accordingly be entitled to a lien therefor upon the Shares, funds or other
property in the Voting Trustee's possession.
Section 14. Termination of this Agreement; Amendment. This
Agreement and all the rights and obligations under this Agreement shall
terminate ten years from the date of this Agreement. Upon such termination, the
Voting Trustee shall deliver to each Shareholder a certificate or certificates
representing the Shares deposited by such Shareholder as provided in Section 6,
but subject to the provisions of Section 13. This Agreement may be amended at
any time by a writing which refers to this Agreement and is executed by the
Shareholders and the Voting Trustee.
<PAGE>
Section 15. Notice. All notices, demands and other
communications required or permitted to be given under this Agreement shall be
in writing and shall be deemed to have been given (i) when delivered personally,
(ii) on the third business day after being deposited in the U.S. mail,
certified, postage prepaid, return receipt requested, or (iii) on the first
business day after being sent by a nationally recognized overnight express
courier service, to a party addressed as follows:
If to a Shareholder: Martha Siegel
443 NW 115th Terrace
Coral Springs, Florida 33071
Scott Siegel, Custodian for
Joshua Siegel
443 NW 115th Terrace
Coral Springs, Florida 33071
Scott Siegel, Custodian for
Jordan Siegel
443 NW 115th Terrace
Coral Springs, Florida 33071
Robert I. Sussman
10120 Vestal Court
Coral Springs, Florida 33071
Daniel W. Crotty, President
Van Dyne-Crotty, Inc.
3233 Newmark Drive
Miamisburg, Ohio 45342
If to the Voting Trustee: Daniel W. Crotty
c/o Van Dyne-Crotty, Inc.
3233 Newmark Drive
Miamisburg, Ohio 45342
<PAGE>
Any party may change the names and addresses to which such
communications are to be directed by giving notice to the other party of such
change in the manner provided above.
Section 16. Severability. Each Section, subsection and lesser
provision of this Agreement constitutes a separate and distinct undertaking and
covenant. In the event that any provision of this Agreement shall finally be
determined to be unlawful, such provision shall be limited by construction in
scope and effect to the minimum extent necessary to render the same lawful and
if such a limiting construction is not possible, such provision shall be deemed
severed from this Agreement, but in any event every other provision of this
Agreement shall remain in full force and effect.
Section 17. Specific Performance. The parties agree that
damages would be an adequate remedy for a breach of the provisions of this
Agreement and that this Agreement may be enforced by injunctive or other
equitable relief.
Section 18. Successors. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by and against, the successors,
assigns and legal representatives of the parties, including, without limitation,
any assignee of the interest of a Shareholder in Shares.
Section 19. Complete Agreement. This Agreement sets forth the
entire understanding of the parties concerning the subject matter of this
Agreement and supersedes all prior contracts, arrangements, communications,
discussions, representations and warranties, whether oral or written, between
the parties relating to the subject matter of this Agreement.
Section 20. Captions. The captions in this Agreement are
intended solely for convenience of reference and shall not be given any effect
in the construction or interpretation of this Agreement.
Section 21. Governing Law. This Agreement shall be construed
in accordance with, and the legal relations between the parties shall be
governed by, the laws of the State of Ohio as applicable to agreements executed
and fully performed in the State of Ohio.
IN WITNESS WHEREOF, the Shareholders and the Voting Trustee
have executed this Agreement as of the day and year first above written.
<PAGE>
"Shareholders" "Voting Trustee"
- ------------------------------- ------------------------------
Martha Siegel Daniel W. Crotty
- -------------------------------
Scott Siegel, Custodian for
Joshua Siegel under the Florida
Uniform Gifts to Minors Act
- -------------------------------
Scott Siegel, Custodian for
Jordon Siegel under the Florida
Uniform Gifts to Minors Act
- -------------------------------
Robert I. Sussman
VAN DYNE-CROTTY, INC.
By ____________________________
Daniel W. Crotty, President
<PAGE>
EXHIBIT A
TRUST CERTIFICATE
No. _______ _________ Shares
The undersigned, the Voting Trustee under a Voting Trust Agreement
dated _______________, 1999 (the "Agreement"), having received ______________
(____) shares of the voting common stock of FIRST AID SELECT, INC., a Florida
corporation ("FASI"), hereby certifies that _______________________________
("Holder") will be entitled to receive a certificate for such number of shares
of FASI upon the termination of the Agreement, and in the interval shall,
subject to the terms of the Agreement, be entitled to receive payments equal to
the cash dividends or distributions, if any, that may be received by the Voting
Trustee upon such number of shares held by the Voting Trustee under the
Agreement.
This certificate is transferable only upon the books of the Voting
Trustee by the Holder or his or her duly authorized attorney, and the Holder, by
accepting this certificate, agrees that the undersigned Voting Trustee may treat
the Holder as the true owner for all purposes, except the delivery of share
certificates, which delivery will be made only upon the surrender in accordance
with the terms of the Agreement.
Every transferee of this certificate (other than FASI), by acceptance
of this certificate, shall become a party to such Agreement as a Shareholder
with like effect as though an original party the Agreement.
The securities represented by this certificate have not been registered
under the Securities Act of 1933 or the securities laws of any state, and may
not be sold, hypothecated, assigned or otherwise transferred other than pursuant
to an appropriate and effective registration statement, unless the Voting
Trustee has received an opinion of counsel reasonably satisfactory to the Voting
Trustee that such sale or other disposition may be effected without such
registration.
IN WITNESS WHEREOF, the Voting Trustee has executed this certificate,
this ____ day of _______________, 1999.
-------------------------------
Voting Trustee
Exhibit 10.1
EMPLOYMENT CONTRACT
THIS EMPLOYMENT CONTRACT ("Contract") is made effective the
20th day of December, 1999 ("Effective Date"), by and between FIRST AID SELECT,
INC., a Florida corporation ("Employer") and ROBERT I.
SUSSMAN ("Employee").
1. Employment. The Employer employs the Employee as the Chief Executive
Officer of Employer and the Employee accepts such employment, upon the terms and
conditions set forth in this Contract.
2. Term. The Employee's employment with the Employer shall commence the
day after the closing of the Share Purchase Agreement between Van Dyne-Crotty,
Inc., Employee and Scott Siegel (the "Share Agreement"), and shall continue for
a period of 60 months or until otherwise terminated as provided in this Contract
("Term").
3. Compensation. The Employer shall pay the Employee an annualized Base
Compensation of $100,000, commencing January 1, 2000. The Employee shall be
eligible for a one time $25,000 increase in his Base Compensation as of January
1 of the year subsequent to which the Employer's net income after tax exceeds
$250,000.
In addition to Employer's Base Compensation, the Employer shall pay to
Employee (i) an annual bonus of $25,000, payable on December 31 of each year in
which Employee's Base Compensation is less than $125,000; and (ii) an annual
bonus equal to 50% of Employee's Base Compensation for the prior year, payable
30 days after submission of the financial statements to the Employer's Board of
Directors, provided that the Employer meets or exceeds all goals for the prior
year set forth in such business plan, as attached hereto as Exhibit A, and which
may be amended from time to time by the Employer's Board of Directors .
4. Duties and Responsibilities. The Employee shall faithfully discharge
the duties that may be reasonably assigned to him by the Employer and which are
generally commensurate with those of a chief executive officer. The Employee
shall devote all of the Employee's business time and attention to the discharge
of his assigned duties and shall use his best efforts for the success of the
Employer's business.
The Employee shall not, during the Term, except with the written
consent of the Employer, engage in any activities, whether alone, or as an
agent, consultant, partner, member, share holder, owner, employee, officer,
director, manager, contractor or otherwise, if such activities (i) materially
interfere with the Employee's performance of his assigned duties, or (ii)
involve any activity competitive with and adverse to Employer's business.
<PAGE>
5. Fringe Benefits. The Employee shall be entitled to participate
during the Term in any plans or agreements maintained by the Employer, or
affiliated entities to the extent the Employee is entitled to participate in
such, relating to retirement, health and life insurance and other related
benefits for its employees, all in accordance with their terms and conditions
and subject to Employee's insurability at standard rates.
In addition, Employer shall pay to or reimburse the Employee up to $500
for an automobile allowance.
6. Stock Options.
6.1 Definitions. Unless the context otherwise requires, the
following terms shall have the following meanings in this Section 6:
A. "Cause" means (i) the conviction of any crime, (ii)
significant intentional destructive act committed by
the Employee against the Employer or its employees,
(iii) an act of moral turpitude or condition by the
Employee while an employee of the Employer which has
a significant detrimental effect on the business or
reputation of the Employer, or (iv) a consistent
failure of the Employee to perform his reasonably
assigned duties as an employee of the Employer which
has a detrimental effect on the business or
reputation of the Employer. A determination of Cause
shall be made by the Board in good faith after
written notice by the Employer to the Employee
stating the current problems with the Employee and
giving the Employee a reasonable period of time to
correct such if, in the Board's opinion, such is
correctable.
B. "Change of Control" means the (i) transfer or other
act or action in which a majority of the Shares are
transferred to a new owner or owners in a single
transaction or a series of transactions occurring
within any 12 month period or (ii) the merger or
consolidation of the Employer with any other entity,
or (iii) the sale of substantially all of the assets
of the Employer.
C. "Date of Grant" means January 1, 2000.
D. "Option Expiration Date" means January 1, 2010.
E. "Option Exercise Period" means the period, up to the
Option Expiration Date, during which the option
granted hereby is exercisable.
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<PAGE>
F. "Shares" means the shares of the common capital stock
of the Employer.
6.2 Grant of Option. The Employer hereby grants to the
Employee, effective as the Date of Grant, an option (the "Option") to purchase
150,000 Shares pursuant to the terms of this Agreement.
In the event of a change in outstanding Shares by reason of a
Share dividend, recapitalization, stock split, combination or exchange of
shares, or the like, the maximum number of Shares subject to Option shall be
appropriately adjusted by the Employer (disregarding any fractional Shares
resulting therefrom).
6.3 Option Price. The exercise price of the Option shall be
$1.50 for each Share issued pursuant to the Option.
6.4 Duration. Subject to the limitations set forth below, the
Option shall expire on the Option Expiration Date. The Option shall in no event
be exercisable after the Option Expiration Date.
6.5 Limitations on Exercise. The Option may be exercised
during the Option Exercise Period only as follows:
Cumulative Number
of Shares Available
From and After (Date of Grant) For Purchase
------------------------------ ------------
(Date of Grant) 0%
December 31, 2000 10%
December 31, 2001 30%
December 31, 2002 50%
December 31, 2003 75%
December 31, 2004 100%
Notwithstanding the above Schedule, the cumulative number of
Shares available for purchase by the Employee upon a Change of
Control shall be 100%
Employee may purchase all or any part of the Shares available for purchase at
any time on or after the date on which such Shares become available for purchase
and on or before the Option Expiration Date.
6.6 Termination of Employment.
A. In the event the Employee ceases to be employed by the
Employer, the Option shall terminate as follows:
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<PAGE>
1. If Employee's termination of employment is due to his
death or disability, the Option (to the extent
exercisable at the time of Employee's termination of
employment) shall be exercisable for a period of one
year following such termination of employment, but
thereafter shall terminate and shall be canceled.
2. If Employee's termination of employment is for any
reason other than death, disability or Cause, the
Option (to the extent exercisable at the time of
Employee's termination of employment) shall be
exercisable for a period of three months following
such termination of employment, but thereafter shall
terminate and shall be canceled.
3. If Employee's termination of employment is for Cause,
the unvested portion of the Option, whether
exercisable or not, shall terminate and be canceled
upon such termination of employment.
B. If Employee dies following termination of Employee's
employment but during the period in which the Option continues
to be exercisable in accordance with this Section, the Option
shall continue to be exercisable (to the extent exercisable by
Employee at the time of death) by Employee's estate or by the
person who acquires the right to exercise the Option by
bequest or inheritance, for a period of one year following the
date of Employee's death (but in no event after the Option
Expiration Date).
6.7 Non-Transferability. The Option may not be transferred by
Employee other than by will or the laws of descent and distribution. The Option
shall be exercisable during the lifetime of Employee only by him or his legal
representative.
6.8 Withholding of Taxes. The Employer shall have the right to
deduct from any payment of cash to Employee an amount equal to the federal,
state and local income taxes and other amounts required by law to be withheld
with respect to any Option. In addition, if Employee is entitled to receive
Shares upon exercise of the Option, the Employer shall have the right to require
Employee, prior to the delivery of the Shares, to pay to the Employer the amount
of any federal, state or local income taxes or other amounts which the Employer
is required by law to withhold.
6.9 Voting Trust Agreement. Employee's shares acquired
pursuant to exercise of the Option shall be subject to the Voting Trust
Agreement between Employee, Van Dyne-Crotty, Inc., and other shareholders, dated
as of the date hereof, as such agreement may be amended from time to time.
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<PAGE>
6.10 Compliance with Florida Securities Laws. The Option may
not be exercised unless, at the time of such exercise, the Shares to which the
exercise relates (i) are exempt securities under the Florida securities laws, or
(ii) are the subject matter of an exempt transaction under such laws, or (iii)
are registered by description, by coordination, or by qualification under such
laws, or (iv) are the subject matter of a transaction which has been registered
by description under such laws. The Employer shall use reasonable efforts to
satisfy the foregoing condition.
6.11. Non-Alienation of Benefits. No benefit payable under
this Contract may be anticipated, alienated, sold, transferred, assigned,
pledged, garnished or encumbered by the Employee, and any attempt to do so will
be void.
6.12 No Guarantee of Employment. The Employee expressly
acknowledges that neither the grant of the Option nor the exercise thereof nor
any other provisions of this Contract constitutes a guarantee of employment by
the Employer.
7. Vacation. The Employee shall be entitled to three weeks for time off
for vacation, to be taken in accordance with the Employer's policies in effect
from time to time.
8. Expenses. The Employee may be reimbursed for the Employee's
reasonable business expenses for the benefit of the Employer in accordance with
the general policies of the Employer as adopted from time to time. The Employee
shall provide the Employer with any documentation for such expenses as the
Employer may require for federal income tax deduction purposes.
9. Termination. This Contract shall be terminated upon the happening of
any of the following events:
A. Whenever the Employer and the Employee shall mutually agree in
writing to a termination;
B. Upon the death of the Employee;
C. Immediately upon notice by the Employee to the Employer upon
the Employer's breach of any of the material terms or
provisions of this Contract or by the Employer for Cause; or
D. Notwithstanding any of the above provisions, immediately upon
written notice by the Employer to the Employee of his
termination of employment without cause. In such event, within
30 days of termination, the Employer shall pay the Employee a
severance amount equal to one-half of the Employee's then
current annualized Base Compensation.
-5-
<PAGE>
10. Files. All records contained in the Employer's files are the
property of the Employer, and the Employee shall not remove or copy such records
upon the termination of the Employee's employment.
11. Governing Law. This Contract shall be governed by the laws of the
State of Florida and shall be construed in accordance therewith without
reference to its conflict of law provision. The parties intend to and hereby
confer jurisdiction to enforce this Agreement upon the courts of and for
Florida.
12. Severability. In the event that any word, phrase, clause, sentence
or other provision in this Contract shall violate any applicable statute,
ordinance or rule of law in any jurisdiction which governs this Contract, such
provisions shall be ineffective to the extent of such violation without
invalidating any other provision in this Contract.
13. Notice. All notices, requests, demands and other communications
required or permitted to be given under this Contract shall be in writing and
shall be deemed to have been given (a) when delivered personally, (b) the third
business day after being deposited in the U.S. mail, certified, postage prepaid,
return receipt requested, or (c) on the first business day after being sent by a
nationally recognized overnight express courier service, to a party addressed as
follows:
If to Employee:
---------------
Robert I. Sussman
10120 Vestal Court
Coral Springs, Florida 33071
If to Employer:
---------------
President
First Aid Select, Inc.
10211 NW 53rd Street
Sunrise, Florida 33351-0824
14. Amendments, No Waiver. This Contract may not be amended, altered,
modified or extended except by written agreement signed by each of the parties.
No provision may be waived except by an agreement in writing signed by the
waiving party. A waiver of any term or provision shall not be construed as a
waiver of any other term or provision.
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<PAGE>
IN WITNESS WHEREOF, the parties have signed this Contract as of the day
and year first above written.
EMPLOYER
FIRST AID SELECT, INC.
By ___________________________________
Scott Siegel, Chairman
EMPLOYEE
______________________________________
Robert I. Sussman
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Exhibit 10.2
SHARE PURCHASE AGREEMENT
AMONG
VAN DYNE-CROTTY INC., SCOTT SIEGEL
AND ROBERT I. SUSSMAN
SHARE PURCHASE AGREEMENT (the "Agreement") is made this 16th day of
December, 1999, by and among VAN DYNE-CROTTY, INC., a corporation organized and
existing under the laws of the State of Ohio (hereinafter referred to as "VDC"),
and SCOTT SIEGEL, an individual ("Siegel"), and ROBERT I. SUSSMAN, an individual
("Sussman", collectively with Siegel referred to as "Sellers").
RECITALS
A. Siegel and Sussman are shareholders in First Aid Select, Inc., a
corporation duly organized under the laws of the State of Florida ("FASI").
B. VDC and each Seller have executed a letter of intent providing for
the purchase by VDC of shares in FASI from such Seller.
C. VDC desires to acquire from Sellers 1,400,000 shares in FASI owned
by them directly or indirectly, as of the date of this Agreement, in accordance
with the terms hereof.
AGREEMENT
NOW, THEREFORE, VDC and Sellers hereby agree as follows:
ARTICLE I
DEFINITIONS
For all purposes of this Agreement, the following defined terms shall
have the meanings set forth in this Article I:
1.1 "Asset Purchase Agreement" means the Asset Purchase Agreement between
VDC and FASI, executed as of the same date hereof.
1.2 "Business" means (i) FASI's retail van delivery first aid and safety
supply business conducted by FASI prior to consummation of the Asset
Purchase Agreement, (ii) the wholesale first aid and safety supply
business of FASI, and (iii) the retail uniform delivery business of VDC
as of the Closing Date.
1.3 "Closing" means the actions taken as provided in Article V in
connection with the consummation of the transactions contemplated by
this Agreement.
<PAGE>
1.4 "Closing Date" means the time and date when the Closing of the
transactions contemplated by this Agreement shall be effective, which
shall be December 16, 1999.
1.5 "Employment Agreements" means the Siegel Employment Agreement and the
Sussman Employment Agreement, collectively.
1.6 "Encumbrance" means any adverse claim, security interest, lien,
mortgage, pledge, claim, charge, encumbrance, option, lease,
restriction or restraint on transfer.
1.7 "Financial Statements" means the drafts of the independently audited
balance sheet of FASI as of December 31, 1998 and independently
reviewed balance of sheet of FASI as of September 30, 1999 and the
statements of net income, retained earnings and source and application
of funds for the periods then ended.
1.8 "Hoggan Agreement" means the Share Purchase Agreement between VDC and
David L. Hoggan.
1.9 "Litigation" means any lawsuit, action, claim, investigation, inquiry,
proceeding, including arbitration proceeding, or controversy before any
court or administrative agency, nor any outstanding order, writ,
injunction or decree of any court, administrative agency, governmental
body or arbitration tribunal.
1.10 "Purchase Price" means the sum of $2,100,000, which shall be paid as
set forth in Section 2.3.
1.11 "Shares" means the Siegel Shares and the Sussman Shares, collectively.
1.12 "Siegel Employment Agreement" means the Employment Agreement between
VDC and Siegel, dated as of the date hereof.
1.13 "Siegel Shares" means the 1,000,000 common shares of FASI owned by
Siegel and his family and to be purchased by VDC in accordance with
this Agreement.
1.14 "Supply Agreement" means the Supply Agreement between VDC and FASI
dated as of the date hereof.
1.15 "Sussman Employment Agreement" means the Employment Agreement between
FASI and Sussman, dated as of the date hereof.
-2-
<PAGE>
1.16 "Sussman Shares" means the 400,000 common shares of FASI owned by
Sussman and to be purchased by VDC in accordance with this Agreement.
1.17 "Taxes" means corporate taxes, franchise taxes, sales taxes, use taxes,
real property taxes, personal property taxes, state business taxes,
federal, state and local income taxes, other payroll taxes and all
related assessments, charges, duties, deficiencies, penalties, interest
and fines.
1.18 "Voting Trust" means that certain Voting Trust Agreement by and among
VDC, Sellers and members of Siegel's family holding shares in FASI as
of the Closing, dated as of the date hereof.
ARTICLE II
THE SALE AND PURCHASE OF SHARES
2.1 Sale and Purchase: As of the Closing Date, upon the terms, subject to
the conditions, and for the consideration hereinafter set forth, each
Seller shall sell, convey, assign, transfer and deliver all of the
Shares to VDC as follows, together with such appropriate instruments of
transfer as may be reasonably requested by VDC :
A. Sussman's Delivery of FASI Shares: Sussman shall deliver to
VDC the Sussman Shares.
B. Siegel's Delivery of FASI Shares: Siegel shall deliver to VDC
the Siegel Shares.
2.2 Purchase Price. VDC shall pay to the Sellers the Purchase Price for the
Shares, as allocated in Section 2.3.
2.3 Allocation of Purchase Price. The Purchase Price shall be allocated as
follows:
Siegel $1,500,000
Sussman $ 600,000
2.4 Payment of Purchase Price. VDC shall pay each Seller his portion of the
Purchase Price on the first business day of January, 2000, by wire
transfer of immediately available funds to such bank account as each
Seller may specify in writing to VDC at the Closing.
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<PAGE>
ARTICLE III
SELLERS' REPRESENTATIONS AND WARRANTIES
Sellers severally represent, warrant and covenant that:
3.1 Incorporation, Corporate Powers, Etc.: FASI is a corporation duly
organized and existing and in good standing under the laws of the State
of Florida has full corporate power and authority to carry on its
business and to own and operate its assets, business and properties as
and in the places where such properties are owned, leased, or operated
or such business is now conducted.
3.2 Qualification: FASI is duly qualified to do business and is in good
standing in each state and jurisdiction in which the failure to be so
qualified would have a materially adverse effect on its business.
3.3 Capital Shares: The authorized capital of FASI consists of 50,000,000
common shares, $.001 par value, of which 3,905,000 common shares have
been validly issued, are now outstanding and are fully paid and
non-assessable.
3.4 Subsidiaries: FASI has no subsidiaries.
3.5 Financials: Sellers have delivered to VDC true and complete copies of
the Financial Statements. The Financial Statements have been prepared
by independent auditors in conformity with general accepted accounting
principles consistently applied and are a fair, accurate and complete
representation of the financial position of FASI, the results of FASI's
operations, and the related changes in its financial position as of the
respective dates thereof and for the periods then ended. The Financial
Statements are substantially in accordance with the books and records
of FASI.
3.6 Litigation.
A. There is no Litigation pending or, to the best of Seller's
knowledge, threatened against, or affecting, FASI or the
Shares, by any person or entity, including, but not limited
to, any administrative agency, arbitrator or governmental
body; and
B. There is no outstanding order, writ, injunction or decree of
any court, administrative agency, governmental body or
arbitration tribunal against or affecting FASI or the Shares.
3.7 Compliance with Laws: FASI and each Seller are in compliance in all
material respects with all material laws, regulations and orders
applicable to FASI, its business, or either Seller (including laws,
regulations and orders relating to the
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<PAGE>
environment or the handling or storage of hazardous materials), the
failure to comply with which would have a materially adverse effect on
FASI, its business or the Shares; and the present uses by FASI of its
properties and the present ownership of the Shares by the Sellers do
not violate any such laws, regulations, orders or requirements.
3.8 No Stock Options: Except as listed in Exhibit 3.7, annexed hereto,
there do not exist any options, warrants, or rights to anyone to
purchase or acquire any shares of FASI (common or other).
3.9 No Defaults: The execution and delivery of this Agreement will not
conflict with or result in any material breach of, or material default
under the terms, conditions or provisions of, any agreement or
instrument to which either Seller of FASI is a party or result in the
creation or imposition of any lien, charge or encumbrance of any nature
whatsoever on the property of FASI or the Shares. No consent or
approval of any other shareholder of FASI, third party, governmental
authority or creditor shall be required in connection with either
Seller's consummation of the Agreement, including approval pursuant to
Section 607.0902 of the Florida Statutes.
3.10 Changes: Since December 31, 1998, there has been no material adverse
change in the Business or financial condition of FASI, taken as a
whole, and FASI has not (i.) incurred any material obligation or
liability (absolute or contingent) relating to its business except
liabilities and obligations under contracts entered into in the
ordinary course of business, (ii.) discharged or satisfied any lien or
encumbrance or paid any obligation or liability (absolute or
contingent) relating to its business other than current liabilities,
and commitments under leases, shown on its Financial Statements, and
current liabilities, and commitments under leases, incurred since that
date in the ordinary course of business, (iii.) mortgaged, pledged or
subjected to lien or any other encumbrances, any of its assets other
than in the ordinary course of business, (iv.) sold or transferred any
tangible assets or canceled any debts or claims except in each case in
the ordinary course of business, (v.) sold, assigned, or transferred
any patents, trademarks, trade names, copyrights or other intangible
assets except in the ordinary course of operations, (vi.) increased the
compensation payable to or become payable by it to any of its officers,
employees or agents, other than in the ordinary course of business,
(vii.) suffered any damage, destruction or loss (whether or not covered
by insurance) materially adversely affecting its operations or business
prospects, (viii.) waived any rights of substantial value without
consideration deemed adequate by it, or (ix.) experienced any work
stoppage authorized by any labor organization. FASI has not issued,
sold, purchased or redeemed any of its common shares, or declared or
made any payment or distribution to its shareholders.
-5-
<PAGE>
3.11 Brokers: There is no broker or finder or other person who would have
any valid claim against either Seller for a commission or brokerage in
connection with this Agreement or the transactions contemplated by this
Agreement and neither Seller nor FASI has retained or employed any such
broker, finder or person as such, nor taken any action which would give
any person (except as above named) any valid claim against any party to
this Agreement for such a commission or brokerage.
3.12 Authority: Each Seller has all authority necessary to execute, deliver
and perform this Agreement. This Agreement has been duly and validly
executed and delivered by each Seller and constitutes a valid and
legally binding agreement of each Seller (subject to the fulfillment of
certain conditions provided for herein) enforceable in accordance with
its terms. The execution and performance of this Agreement shall not
violate ss.607.0902 of the Florida Statutes.
3.13 Corporate Documents: Sellers will provide before or at Closing copies
of FASI's Articles of Incorporation certified by the Secretary of State
of Florida and all amendments thereto and its By-laws and all
amendments thereto certified by an officer of FASI. The Sellers have
also made FASI's minute books and its stock transfer books available to
VDC and warrant that they are complete in all material aspects and
accurately reflect in all material aspects all significant transactions
of FASI requiring the approval of its board of directors or
shareholders.
ARTICLE IV
VDC'S REPRESENTATIONS AND WARRANTIES
VDC represents, warrants and covenants that:
4.1 Incorporation, Corporate Powers, Etc.: VDC is a corporation duly
organized and existing and in good standing under the laws of the State
of Ohio, has full corporate power and authority to carry on its
business as it is now being conducted and to own the Shares.
4.2 No Defaults: The execution and delivery of this Agreement will not
conflict with or result in any material breach of, or material default
under the terms, conditions or provisions of, any agreement or
instrument to which VDC is a party or by which it is bound or result in
the creation or imposition of any lien, charge or encumbrance of any
nature whatsoever on the property of VDC.
4.3 Brokers: There is no broker or finder or other person who would have
any valid
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<PAGE>
claim against VDC and its subsidiaries for a commission or brokerage in
connection with this Agreement or the transactions contemplated by this
Agreement and VDC has not retained or employed any such broker, finder
or person as such, nor taken any action which would give any person
(except as above named) any valid claim against any party to this
Agreement for such a commission or brokerage.
4.4 Corporate Action: The Board of Directors of VDC has duly approved this
Agreement and the transactions contemplated thereby and has authorized
the execution and delivery thereof. This Agreement has been duly and
validly executed and delivered by VDC and constitute the valid and
legally binding agreements of VDC enforceable in accordance with their
respective terms.
4.5 Purchase for Investment. VDC represents that it is purchasing the
Shares (a) for VDC's own account, (b) for investment purposes only, and
(c) without any present plan to distribute or otherwise dispose of the
Shares.
4.6 Purchaser's Acknowledgment. Purchaser acknowledges that it has no basis
to believe there is any breach of any representation or warranty by the
Sellers.
ARTICLE V
CLOSING
5.1 Time and Place. The Closing of the transactions contemplated by this
Agreement will take place at the offices of Atlas, Pearlman, Trop &
Borkson, P.A., on December 16, 1999, or such other place and time as
the parties may agree, and shall be effective as of the Closing Date.
5.2 Deliveries by Sellers. At the Closing, each Seller will, subject to the
satisfaction of the conditions set forth in Article VIII, deliver to
VDC:
A. Siegel Certificates: Certificates owned by Siegel representing
1,000,000 common shares of FASI, endorsed in blank with all
transfer stamps required by governmental authorities attached
thereto.
B. Sussman Certificates: Certificates owned by Sussman
representing 400,000 common shares of FASI, endorsed in blank
with all transfer stamps required by governmental authorities
attached thereto.
C. Financials: The Financial Statements.
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<PAGE>
D. Corporate Documents: Copies of FASI's Articles of Organization
and all amendments thereto as certified by the Florida
Secretary of State, its By-laws and all amendments as
certified by FASI's officers as required in Section 3.13.
E. Miscellaneous: Any and all other instruments and documents
which will be necessary to effectuate the obligations of each
Seller under this Agreement.
5.3 Deliveries by VDC. At the Closing, VDC will, subject to the
satisfaction of the conditions set forth in Article VII, deliver to
Sellers any and all other instruments and documents which will be
necessary to effectuate the obligations of VDC under this Agreement.
5.4 Other Agreements. The Employment Agreements, the Supply Agreement and
the Voting Trust Agreement shall have been duly authorized, executed
and delivered and shall be the valid and binding obligations of the
parties thereto enforceable in accordance with their terms, and the
Hoggan Agreement, and the Asset Purchase Agreement shall have been
executed and closed.
ARTICLE VI
COVENANTS OF THE PARTIES
6.1 Noncompetition Agreement .
A. During the period of five years after termination of a
Seller's Employment Agreement, such Seller shall not, directly
or indirectly (as an agent, contractor, consultant, partner,
member, shareholder, owner or otherwise):
(i) Own any interest (other than the ownership of less
than 1% of the outstanding stock of a publicly traded
company) in, engage in, render any service to or
otherwise participate in, whether for compensation or
not, any business that is involved in the Business;
(ii) Request or advise any customer of the Business as
conducted by VDC to terminate or alter its business
relationship with the VDC, or otherwise interfere
with the business operations of the Business; or
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<PAGE>
(iii) Induce or attempt to induce or influence any employee
of VDC to terminate employment with VDC.
B. It is the intent of the parties that the provisions of this
Section 6.1 shall be enforced to the fullest extent
permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, to
the extent that the noncompetition restrictions under this
Agreement shall be adjudicated to be invalid or unenforceable
in any such jurisdiction, the court making such determination
shall have the power to limit, construe or reduce the
duration, scope, activity and/or area of such provision,
and/or delete specific words or phrases to the extent
necessary to render such provision enforceable to the maximum
reasonable extent permitted by applicable law, such limited
form to apply only with respect to the operation of this
Section in the particular jurisdiction in which such
adjudication is made.
C. Each Seller acknowledges that his adherence to the terms of
the covenants set forth in Section 6.1 is necessary to protect
the value of the Shares to VDC, that a continuing breach of
such covenants will result in irreparable and continuing
damage to the value of the Shares, and that money damages
would not adequately compensate VDC for any such breach and,
therefore, that VDC would not have an adequate remedy at law.
In the event any action or proceeding shall be instituted by
VDC to enforce any provision of Section 6.1, both Sellers
shall waive the claim or defenses in such action that (i)
money damages are adequate to compensate VDC for such breach
and (ii) there is an adequate remedy at law available to VDC,
and shall not urge in any such action or proceeding the claim
or defense that such remedy at law exists. VDC shall have, in
addition to any and all remedies at law, the right, without
posting of bond or other security, to an injunction, both
temporary and permanent, specific performance and/or other
equitable relief to prevent the violation of any obligation
under Section 6.1. The parties agree that the remedies of VDC
for breach of Section 6.1 by either Seller shall be
cumulative, and seeking or obtaining injunctive or other
equitable relief shall not preclude the making of a claim for
damages or other relief. The Sellers also agree that VDC shall
be entitled to such damages as it can show it has sustained by
reason of such breach and shall not be limited in its damages
by any provision of, or to the consideration received by the
Sellers pursuant to, this Agreement. In any action brought to
enforce the covenants set forth in Section 6.1, or to recover
damages for breach thereof, the prevailing party shall be
entitled to recover reasonable attorneys' fees and other
expenses of litigation, together with such other and further
relief as may be proper.
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<PAGE>
D. The parties intend to and do hereby confer jurisdiction to
enforce this Section 6.1 upon the courts of any state within
the geographical scope of the covenants contained in this
Agreement. If the courts of any one or more of such states or
jurisdictions shall hold such covenant wholly unenforceable by
reason of the breadth of such scope or otherwise, it is the
intention of the parties that such determination shall not bar
or in any way affect the right of VDC to the relief provided
above in the courts of any other state or jurisdiction within
the geographical scope of such covenant, as to breaches of
such covenants in such other respective states or
jurisdictions; the above covenants as they relate to each
state or jurisdiction being, for this purpose, severable into
diverse and independent covenants.
ARTICLE VII
CONDITIONS PRECEDENT TO CLOSING BY VDC
Subject to waiver by VDC, each of the agreements of VDC to be performed
by it at the Closing pursuant to this Agreement shall be subject to the
fulfillment of each of the following conditions precedent:
7.1 Representations and Warranties. Each of the representations and
warranties of the Sellers set forth in this Agreement shall be true,
correct and complete in all material respects on the date of this
Agreement and on the Closing Date, as if made at that time.
7.2 Agreements. Sellers shall have performed and complied with all
agreements, undertakings, obligations and covenants which are required
to be performed or complied with by them at or prior to the Closing
Date.
7.3 Closing Deliveries. VDC shall have received the items to be delivered
to it at Closing as described in Section 5.2, and all agreements listed
in Section 5.4 shall have been executed and consummated as described in
such Section.
7.4 Litigation. No notice shall have been received as to Litigation being
commenced or threatened against VDC, FASI or either Seller by any
governmental authority or any other person or entity with regard to
this Agreement or the transactions contemplated by this Agreement.
7.5 Release of Encumbrances. Except for any securities law restrictions
contained on the Shares, all Encumbrances on any of the Shares shall
have been fully released.
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<PAGE>
7.6 Satisfaction with Legal Matters. All legal matters in connection with
this Agreement and the transactions contemplated by this Agreement, and
the form and substance of all legal proceedings and papers, instruments
and documents used or delivered herewith or incident to this Agreement
shall be reasonably satisfactory to counsel for VDC.
ARTICLE VIII
CONDITIONS PRECEDENT TO CLOSING BY SELLERS
Subject to waiver by Sellers, each of the agreements of Sellers to be
performed by it at the Closing pursuant to this Agreement shall be subject to
the fulfillment of each of the following conditions precedent:
8.1 Representations and Warranties. Each of the representations and
warranties of VDC set forth in this Agreement shall be true, correct
and complete in all material respects on the date hereof and on the
Closing Date, as if made at that time.
8.2 Agreements. VDC shall have performed and complied with all agreements,
undertakings, obligations and covenants which are required to be
performed or complied with by it at or prior to the Closing Date.
8.3 Closing Deliveries. Sellers shall have received the items to be
delivered to it at Closing as described in Section 5.3.
8.4 Litigation. No notice shall have been received as to Litigation being
commenced or threatened against VDC or either Seller by any
governmental authority or any other person or entity with regard to
this Agreement or the transactions contemplated by this Agreement.
8.5 Satisfaction with Legal Matters. All legal matters in connection with
this Agreement and the transactions contemplated by it, and the form
and substance of all legal proceedings and papers, instruments and
documents used or delivered herewith or incident hereto shall be
reasonably satisfactory to counsel for Sellers.
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<PAGE>
ARTICLE IX
INDEMNIFICATION
9.1 Survival. All representations, warranties, covenants, obligations and
undertakings made or contained in this Agreement shall survive the
Closing and shall survive any inspection, investigation or acceptance
of possession or delivery of the Shares made or done at any time by VDC
but only for a period of two years after the Closing Date.
9.2 Sellers' Indemnification. Each Seller shall defend, indemnify and hold
harmless VDC from and against (i) any and all obligations, costs,
expenses, liabilities, claims, debts, losses or damages which are
incurred by VDC resulting from any breach of any agreement or covenant
made by either Seller in or pursuant to this Agreement, or breach of
any representation or warranty, which representation or warranty was
false or inaccurate at the time made; and (ii) any and all actions,
suits, proceedings, claims, demands, judgments, costs and expenses
(including reasonable attorneys' fees) incident to the foregoing.
9.3 Maximum Aggregate Liability of the Parties. The maximum aggregate
indemnification liability of each of the Sellers under Section 9.2
shall not exceed the respective part of the Purchase Price paid to each
of them.
9.4 Threshold. VDC shall not be entitled to indemnification under Section
9.2 unless the aggregate amount incurred by it for which it is
indemnified exceeds $7,000 with respect to Siegel and $3,000 with
respect to Sussman.
9.5 Sole Remedy. Except for the breach of Section 6.1, VDC's sole remedies
for the breach of the terms of this Agreement shall be pursuant to this
Article IX.
ARTICLE X
MISCELLANEOUS
10.1 Assignment. This Agreement shall be binding upon and inure to the
benefit of the successors and assigns of each party to this Agreement,
but no rights, obligations or liabilities under this Agreement shall be
assignable by any party without the prior written consent of the other
parties.
10.2 Third Parties. Nothing expressed or implied in this Agreement is
intended, or shall be construed, to confer upon or give any other
person or entity other than
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<PAGE>
the parties to this Agreement any rights or remedies under or by reason
of this Agreement.
10.3 Complete Agreement. Except as expressly set forth in this Agreement or
in an instrument in writing signed by the party to be bound thereby
which makes specific reference to this Agreement, this Agreement sets
forth the entire understanding of the parties concerning the subject
matter of this Agreement and supersedes all prior contracts,
arrangements, communications, discussions, representations and
warranties, whether oral or written, between the parties relating to
the subject matter of this Agreement.
10.4 Expenses. Each of the parties to this Agreement shall pay all costs and
expenses incurred or to be incurred by it in negotiating and preparing
this Agreement, and in closing and carrying out the transactions
contemplated in this Agreement.
10.5 Amendment. This Agreement may be amended at any time by a writing which
refers to this Agreement and is executed by VDC and Sellers.
10.6 Further Assurances. Sellers shall from time to time after the Closing
upon the reasonable request of VDC , execute, acknowledge and deliver
all such further acts, deeds, assignments, transfers, conveyances and
assurances as may be reasonably required to transfer to and to vest in
VDC all good, valid, marketable and indefeasible right, title and
interest of the Sellers to the Shares, and to protect the right, title
and interest of VDC in and to all of the Shares.
10.7 Taxes. Sellers shall pay all sales and use taxes and transfer taxes, if
any, applicable to the transactions contemplated by this Agreement.
10.8 Notices. All notices, requests, demands and other communications
required or permitted to be given under this Agreement shall be in
writing and shall be deemed to have been given (a) when delivered
personally, (b) on the third business day after being deposited in the
U.S. mail, certified, postage prepaid, return receipt requested, or (c)
on the first business day after being sent by a nationally recognized
overnight express courier service, to a party addressed as follows:
If to Sussman:
Robert I. Sussman
10120 Vestal Court
Coral Springs, Florida 33071
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<PAGE>
If to Siegel:
Scott Siegel
443 NW 115th Terrace
Coral Springs, Florida 33071
If to VDC: With Copy to:
Daniel Crotty, President Richard F. Carlile, Esq.
Van Dyne-Crotty, Inc. Thompson Hine & Flory LLP
3233 Newmark Drive 2000 Courthouse Plaza, NE
Miamisburg, Ohio 45342 Dayton, Ohio 45401
Any party may change the names and addresses to which such
communications are to be directed by giving notice to the other party
of such change in the manner provided above.
10.9 Severability. Each Article, section, subsection and lesser section of
this Agreement constitutes a separate and distinct undertaking and
covenant. In the event that any provision of this Agreement shall
finally be determined to be unlawful, such provision shall be limited
by construction in scope and effect to the minimum extent necessary to
render the same lawful and if such a limiting construction is not
possible, such provision shall be deemed severed from this Agreement,
but in any event every other provision of this Agreement shall remain
in full force and effect.
10.10 Waivers. Any waiver by any party of any violation of, breach of or
default under any provision of this Agreement by the other party shall
not be construed as or constitute a continuing waiver of such
provision, or a waiver of any other violation of, breach of or default
under any other provision of this Agreement.
10.11 Exhibits. The Exhibits and Schedules attached to this Agreement and/or
referred to in this Agreement are part of this Agreement for all
purposes.
10.12 Captions. The captions in this Agreement are intended solely for
convenience of reference and shall not be given any effect in the
construction or interpretation of this Agreement.
10.13 Governing Law. This Agreement shall be exclusively governed by and
construed in accordance with the laws of the State of Ohio, without
reference to its conflicts of law provisions.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
the day and year first above written.
Van Dyne-Crotty, Inc.
By:_______________________________
David S. Senseman
Vice President and Chief
Financial Officer
----------------------------------
Robert I. Sussman
----------------------------------
Scott Siegel
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Exhibit 10.3
SUPPLY AGREEMENT
BETWEEN VAN DYNE CROTTY, INC. AND
FIRST AID SELECT, INC.
THIS SUPPLY AGREEMENT (the "Agreement") is made effective the 20th day
of December, 1999, between VAN DYNE-CROTTY, INC., First Aid Direct Division, an
Ohio corporation ("Buyer") and FIRST AID SELECT, INC., a Florida corporation
("Seller", and collectively with Buyer, "Parties," or individually, "Party").
RECITALS
A. Buyer intends to purchase certain assets and retail delivery routes
from Seller (the "Business") pursuant to an Asset Purchase Agreement, dated
December 16, 1999 ("Asset Purchase Agreement");
B. On and after the Closing Date (as defined in the Asset Purchase
Agreement), Seller intends to continue to operate a wholesale business which
supplies items for the Business; and
C. After the closing of the Asset Purchase Agreement, Buyer desires to
buy all of its requirements of those items listed on Exhibit A (collectively,
the "Items" and individually an "Item") from Seller, and Seller desires to sell
to Buyer the Items, in the volumes required by Buyer, in accordance with the
terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, the Parties, for good and valuable consideration, agree
as follows:
1. Sale of Buyer's Total Requirements. Subject to and commencing after the
closing of the Asset Purchase Agreement, Seller shall sell to Buyer,
and Buyer shall purchase from Seller, Buyer's total requirements of the
Items during the Term (as defined below), provided that Seller's prices
for the Items are competitive, and the quality and type of the Items
are competitive. Buyer and Seller may amend the list of Items set forth
on Exhibit A by mutual written agreement. Buyer shall order such Items
in writing in a form satisfactory to Buyer and Seller.
2. Prices and Payment. Seller shall supply each Item at the price set
forth on Exhibit A, which shall be no higher than the lowest of the
prevailing market price for the best grade for such type of Item for
immediate delivery, and shall be FOB Seller's facility in Sunrise,
Florida. Notwithstanding any provision of this Agreement to the
contrary, Seller may change the price of any Item or Items set forth on
Exhibit A upon 15 days written notice to Buyer. Buyer shall pay for the
<PAGE>
Items within 30 days of the later of (i) receipt of an invoice for the
Items ordered or (ii) receipt of the Items ordered.
3. Conditions on Continued Purchases. Buyer may cease purchasing its total
requirements of any Item upon written notice to Seller in the event
that Seller's price for such Item is not competitive or the quality of
the Item is not competitive with similar types of products distributed
by companies that compete with the Business. Notwithstanding the above,
before Buyer may cease to purchase its total requirements of any Item,
Buyer shall give Seller at least 30 days prior written notice of its
intent to cease such purchase. Within such 30 day period, Seller shall
have the right to match the price or quality of any Item which is not
competitive. If Seller makes such match, then this Agreement shall
remain in full force and effect with respect to such Item.
4. Volume; Inability to Meet Requirements. Buyer shall not be required to
purchase any specific quantities of the Items during the Term. In the
event that Seller is unable to fulfill Buyer's reasonable requirements,
it shall be Seller's duty at once to so advise Buyer in writing. On
receipt of such notice, Buyer, in its sole discretion, may elect to:
(i) agree with the Seller to an extension of the delivery time for the
Items so ordered; (ii) purchase the unavailable quantities of the Items
from another supplier; or (iii) cancel the Agreement as to that Item.
5. Term and Termination.
5.1 The Agreement shall commence once Buyer and Seller have
closed the Asset Purchase Agreement in accordance with its terms, and
the duration of this Agreement ("Term") shall be for a period of five
years from the closing of the Asset Purchase Agreement, unless earlier
terminated in accordance with Sections 5.2 hereof. In the event that
the Asset Purchase Agreement is not closed, this Agreement shall be
null and void.
5.2 Buyer may terminate the Agreement, in its sole discretion,
in the event that a significant portion of FASI's shares are sold to a
competitor of VDC in either the uniform delivery or the Business.
5.3 In the event of termination of this Agreement prior to the
end of the Term, VDC shall retain the right to continue use of the
"First Aid Direct" trademark on a non-exclusive basis, in accordance
with the Asset Purchase Agreement.
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<PAGE>
6. Miscellaneous.
6.1 Entire Agreement. Except as expressly set forth in this
Agreement or in an instrument in writing signed by the party to be
bound thereby which makes specific reference to this Agreement, this
Agreement sets forth the entire understanding of the parties concerning
the subject matter of this Agreement and supersedes all prior
contracts, arrangements, communications, discussions, representations
and warranties, whether oral or written, between the parties relating
to the subject matter of this Agreement. Any terms or conditions listed
on a purchase order or invoice that conflict with this Agreement shall
be superseded by the terms or conditions of this Agreement.
6.2 Amendment. This Agreement may be amended at any time by a
writing which refers to this Agreement and is signed by the parties.
6.3 Notices. All notices, requests, demands and other
communications required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been given (i) when
delivered personally, (ii) on the third business day after being
deposited in the U.S. mail, certified, postage prepaid, return receipt
requested, or (iii) on the first business day after being sent by a
nationally recognized overnight express courier service, to a party
addressed as follows:
If to the Seller:
Robert I. Sussman, President
First Aid Select, Inc.
10211 NW 53rd St.
Sunrise, FL 33351-8024
If to the Buyer:
Daniel W. Crotty, President
Van Dyne Crotty, Inc.
3233 Newmark Drive
Miamisburg, OH 45342
Either party may change its address for purposes of this
paragraph by giving the other party written notice of the new address
in the manner set forth above.
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<PAGE>
6.4 Successors; Assignment. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of each
party to this Agreement, but no rights, duties, obligations or
liabilities under this Agreement shall be assignable by any party
without the prior written consent of the other party.
6.5 Severability. Each section, subsection lesser section or
paragraph of this Agreement constitutes a separate and distinct
undertaking, covenant or provision. In the event that any provision of
this Agreement shall finally be determined to be unlawful, such
provision shall be limited by construction in scope and effect to the
minimum extent necessary to render the same lawful and if such a
limiting construction is not possible, such provision shall be deemed
severed from this Agreement, but in any event every other provision of
this Agreement shall remain in full force and effect.
6.6 Waivers. Any waiver by either party of any violation of,
breach of or default under any provision of this Agreement by either
party shall not be construed as or constitute a continuing waiver of
such provision, or a waiver of any other violation of, breach of or
default under any other provision of this Agreement.
6.7 Headings. The headings contained in this Agreement are for
convenience of reference only and shall not affect the meaning,
construction or interpretation of this Agreement.
6.8 Third Party Beneficiaries. Nothing expressed or implied in
this Agreement is intended, or shall be construed, to confer upon or
give any other person or entity other than Buyer, Seller any rights or
remedies under or by reason of this Agreement.
6.9 Governing Law. This Agreement shall be construed according
to, and the legal relations between the parties shall be governed in
accordance with, the laws of the State of Ohio as applicable to
agreements executed and fully performed in the State of Ohio, including
the terms of the Uniform Commercial Code in effect in such state.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
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<PAGE>
VAN DYNE-CROTTY, INC.
By:_________________________________
David S. Senseman
Vice President and Chief
Financial Officer
FIRST AID SELECT, INC.
By:_________________________________
Robert I. Sussman
Chief Executive Officer
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<PAGE>
EXHIBIT A
ITEMS AND PRICES
[To be attached]
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Exhibit 10.4
LEASE
THIS AGREEMENT, entered into this ___ day of _________, 1999, between
LESSOR: Robert & Ellen Sussman
10120 Vestal Court
Coral Springs, FL 33071
LESSEE: First Aid Select, Inc.
Scott Siegel
10211 N.W. 53rd Street
WITNESSES, the above lessor does this day lease unto the above lessee, and
the above lessee does hereby hire and take as tenant under the above lessor the
following described premises:
Sawgrass Business Center
10211,10213,10215,10235,10237,10239 N.W. 53rd Street
Sunrise, Florida 33351
This lease is for a term of five year(s), beginning the 1st day of August,
1999 and ending the July 31, 2004 at the agreed annual base rental of 4,242.00,
plus applicable Florida Sales Tax, such rent to be payable at the address shown
above for lessor or at such other place as the lessor may from time to time
designate in writing and such rent to be payable as follows:
Payable in monthly installments of 4,242.00 plus sales tax (currently 254.52 )
due on the first day of each and every month. The first monthly payment after
advance payment is due September 1, 1999, and on the first day of each month
thereafter until contract is completed. An additional charge of 10% of rent due
will be assessed if rent is not received in the office of the lessor by the 5th
of the month due.
There is to be an annual adjustment of the base rent based on the cost of living
index, the "U.S. Dept. of Labor, Consumer Price Index for All Urban Consumers,
U.S. City Average (1967 = 100) All Items", called the "CPI", will be used to
determine the cost of living increase at the end of each year of the lease, The
increase will be computed using the "CPI" for that period of time closest to the
first month of the lease as the base and the "CPI" for that period of time
closest to the last month of the year of the lease as the determinator of the
increase. In any case, this increase shall not be less then 3.00%.
There is to be one lease option of two year duration, with terms and conditions
to remain the same, provided, however, the lessee notifies lessor in writing at
least 60 days prior to expiration of this lease of intent to so renew.
The real estate taxes for the year 1999 will be the base year and any increase
in real estate taxes thereafter will be paid by the lessee (prorata share of its
square footage occupied).
The following express stipulations and conditions are made a part of this lease
and are hereby agreed to by the lessee:
1. The lease premises are to be used and occupied by lessee as office and
warehouse for a wholesale, retail sales and service of fist aid and safety
products and for no other purposes or uses whatsoever.
2. The lessee shall not assign this lease, nor sub-let the premises or any
part thereof nor use the same, or any part thereof, nor permit the same, or any
part thereof, to be used for any other purpose than as above stipulated nor to
make any alterations therein, and all additions thereto, without the written
consent of the lessor, and all additions, fixtures or improvements which may be
made by lessee, except for movable office furniture, Lessee further agrees to
restore premises in original condition upon removal of same. In the event Lessee
shall not remove any fixtures or improvements at the termination of the lease
they shall become the property of the lessor and remain upon the premises as a
part thereof, and be surrendered with the premises at the termination of this
lease. Lessor may not unreasonably withhold such consent on assignment.
3. All personal property placed or moved in the premises above described
shall be at the risk of the lessee or owner thereof, and lessor shall not be
liable for any damage to said personal property, or to the lessee arising from
the bursting or leaking of water pipes, or from any act of negligence of any
co-tenant or occupants of the building or of any other person whomsoever.
4. The tenant shall promptly execute and comply with all statutes,
ordinances, rules, orders, regulations and requirements of the Federal, State
and City Government and of any and all their Departments and Bureaus applicable
to said premises, for the correction, prevention, and abatement of said
nuisances or other grievances, in, upon, or connected with said premises during
said term; and shall also promptly comply with and execute all rules, orders and
regulations of the Southeastern Underwriters Association for the prevention of
fires, at his own cost and expense.
5. The prompt payment of the rent for said premises upon the dates named,
and the faithful observance of the rules and regulations printed upon this
lease, and which are hereby made a part of this covenant, are the conditions
upon which the lease is made and accepted and any failure on the
<PAGE>
part of the lessee to comply with the terms of said lease, or any of said rules
and regulations now in existence, shall at the option of the lessor, work a
forfeiture of this contract, and all of the rights of the lessee hereunder, and
thereupon the lessor, his agents or attorneys, shall have the right to enter
said premises and remove all persons therefrom forcibly or otherwise, and the
lessee thereby expressly waives any and all legal proceedings to recover
possession of said premises, and expressly agrees that in the event of a
violation of any of the terms of this lease, or said rules and regulations, now
in existence, said lessor, his agent or attorneys, may immediately re-enter said
premises and dispossess lessee without legal notice or the institution of any
legal proceedings whatsoever.
6. In the event the premises shall be destroyed or so damaged or injured by
fire or other casualty during the life of this agreement, whereby the same shall
be rendered untenantable, then the lessor shall have the right to render
premises tenantable by repairs within ninety days therefrom. If said premises
are not rendered tenantable within said time, it shall be optional with either
party hereto to cancel this lease, and in the event of such cancellation the
rent shall be paid only to the date of such fire or casualty. The cancellation
herein mentioned shall be evidenced in writing. During period of repairing such
damage, rent shall abate in proportion to area rendered untenantable.
7. If the lessee shall abandon or vacate said premises before the end of
the term of this lease, or shall suffer the rent to be in arrears, the lessor
may, at his option, forthwith cancel this lease or he may enter said premises as
the agent of the lessee, by force or otherwise, without being liable in any way
therefore, and relet the premises otherwise with or without any furniture that
may be therein, as the agent of the lessee, at such price and upon such terms
and for such duration of time as the lessor may determine, and receive the rent
therefore, applying the same to the payment of the rent due by these presents,
and if the full rental herein provided shall not be realized lessor will pay
over to said lessee the excess of demand.
8. If lessee is in default as defined in paragraphs 6 and 7 of this lease,
then the lessor, in addition to all the rights and remedies granted under the
laws of the State of Florida, shall have the right to terminate the lease and
elect to declare this entire rent for the balance of the term due and payable
forthwith.
9. Lessee agrees to pay the cost of collection including a reasonable
attorney's fee on any part of said rental that may be collected by suit or by
attorney, after the same is past due.
10. The lessee agrees that he will pay all charges for rent and
electricity, and should said charges for rent and electricity at any time remain
due and unpaid for the space of five days after the same shall have become due,
the lessor may at its option consider the said lessee tenant at sufferance and
immediately re-enter upon said premises and the entire rent for the rental
period then next ensuing shall at once be due and payable and may forthwith be
collected by distress or otherwise.
11. Lessor shall maintain the exterior walls and roof of the premises and
the lessee shall maintain the doors ,windows, interior walls ,electric, plumbing
,etc. of said leased premises. The lessor agrees to provide for normal water and
sewage as provided in a general warehouse building. Lessee agrees to provide for
is own trash collection at his expense and agrees not to store material, trash
or debris outside the rental unit.
12. There will be a full utility and services stop, whereby lessee must pay
his prorata share (based upon square footage occupied) of any additional
increases in regular water, sewer, trash removal, insurance and exterior
maintenance charges upon any increase of these services and rates.
13. Lessee agrees that if at any time he shall cause locks to be changed on
this space, he shall first notify lessor and shall arrange for locksmith to
provide lock for lessor's master key and provide lessor with new keys, at
lessee's expense.
14. The said lessee hereby pledges and assigns to the lessor all the
furniture, fixtures, goods and chattels of said lessee, which shall or may be
brought or put on said premises as security for the payment of the rent herein
reserved, and the lessee agrees that the said lien may be enforced by distress
foreclosure or otherwise at the election of the said lessor, and does hereby
agree to pay reasonable attorney's fees, together with all costs and charges
therefore incurred or paid by the lessor.
15. The lessor, or any of his agents shall have the right to enter such
premises during all reasonable hours, to examine the same to make such repairs,
additions or alterations as may be deemed necessary for the safety, comfort, or
preservation thereof, or of said building, or to exhibit said premises. The
right of entry shall likewise exist for the purpose of removing placards, signs,
fixtures, alterations, or additions, which do not conform to this agreement, or
to the rules and regulations of the building.
16. Lessee hereby accepts the premises in the condition they are in at the
beginning of this lease and agrees to maintain said premises in the same
condition, order and repair as they are at the commencement of said term,
excepting only reasonable wear and tear arising from the use thereof under this
agreement, and to make good to said lessor immediately upon demand any damage to
water apparatus, or electric lights or any fixture, appliances or appurtenances
of said premises, or of the building, caused by any act or neglect of lessee, or
of any person or persons in the employ or under the control of the lessee.
17. It is expressly agreed and understood by and between the parties to
this agreement, that the landlord shall not be liable for any damage or injury
by water, which may be sustained by the said tenant or other person or for any
other damage or injury resulting from the carelessness, negligence, or improper
conduct on the part of any other tenant or agents, or employees, or by reason of
the breakage, leakage, or obstruction of the water sewer or soil pipes, or other
leakage in or about the said building.
18. If the lessee shall become insolvent or if bankruptcy proceedings shall
be begun by or against the lessee, before the end of said term the lessor is
hereby irrevocably authorized at its option, to forthwith cancel this lease, as
for a default. Lessor may elect to accept rent from such receiver, trustee, or
other judicial officer during the term of the occupancy in their fiduciary
capacity without effecting lessor's rights as contained in this
<PAGE>
contract, but no receiver, trustee or other judicial officer shall ever have any
right, title or interest in or to the above described property by virtue of this
contract.
19. This contract shall bind the lessor and it assigns or successors, and
the heirs, assigns, administrators, legal representatives, executors, or
successors as the case may be, of the lessee.
20. It is understood and agreed between the parties hereto that time is of
the essence of this contract and this applies to all terms and conditions
contained herein.
21. It is understood and agreed between the parties hereto that written
notice mailed or delivered to the premises leased hereunder shall constitute
sufficient notice to the lessee and written notice mailed or delivered to the
office of the lessor shall constitute sufficient notice to the lessor, to comply
with the terms of this contract.
22. The rights of the lessor under the foregoing shall be cumulative, and
failure on the part of the lessor to exercise proptly an rights given hereunder
shall not operate to forfeit any of the said rights.
23. It is further understood and agreed between the parties hereto that any
charges against the lessee by the lessor for services or for work done on the
premises by order of the lessee or otherwise accruing under this contract shall
be considered as rent due and shall be included in any lien for rent due and
unpaid.
24.(a) It is hereby understood and agreed that any signs or advertising to
be used, including awnings, in connection with the premises leased hereunder
shall be first submitted to the lessor for approval before installation of same.
The lessee shall not place any numbers, signs, advertisement or notices in or
upon any part of the building of which the leased premises are a part without
the consent of the lessor. The lessee shall not use any part of the building for
any purpose which may disturb other tenants, for any purpose which is unduly
hazardous on account of fire, or for any unlawful purpose, or for any purpose
reasonably objectionable to the lessor.
(b) In the event the Lessor desires to renovate the facade of the Leased
Premises, then Lessee agrees upon sixty (60) days notice from Lessor to remove
any existing exterior signs. Lessee agrees after completion of Lessor's
renovation to replace its sign or signs in conformity with the general decor of
the Premises as remodeled and as approved by Lessor.
Lessee further agrees to complete such work within sixty (60) days
after receipt of notice from Lessor, and such time shall be of the essence
hereof. All costs incurred in the removal of existing signs and the installation
of the new sign or signs shall be borne solely by Lessee.
25. Lessee covenants and agrees that it has no power to incur any
indebtedness giving a right to a lien of any kind or character upon the right,
title and interest of the lessor in the leased property, and that no person
shall ever be entitled to any lien, directly or indirectly, derived through or
under the lessee, or its agents or servants, or on account of any act or
remission of said lessee. All persons contracting with said lessee, or
furnishing materials or labor to said lessee, or to its agents or servants, as
well as all persons whomsoever, shall be bound by this provision of this lease.
Should any such lien be filed, the lessee shall discharge the same or cause the
same to be discharged within thirty days thereafter. The lessee shall not be
deemed to be the agent of the lessor so as to confer upon a laborer bestowing
labor upon the leased premises, or upon a material-man who furnishes material
incorporated into any improvements upon the leased premises, a mechanic's lien
upon the lessor's interest in the leased property. Nothing contained in this
lease shall be construed to require the lessee to construct any additional
improvements upon the leased premises.
26. Lessee hereby acknowledges and agrees that this Lease and all of
Lessee's rights hereunder are subject and subordinate to the lien of any
mortgage that is now or may hereafter be placed upon the Leased premises or
building, and to any and all advances to be made thereunder, and to the interest
thereof, and all renewals, replacements and extensions thereof, notwithstanding
whether this Lease is dated prior to or subsequent to the date of any such
mortgage, renewal, replacement or extension. Lessee agrees that, upon the
request of Lessor or the Mortgagee under any such Mortgage, Lessee will execute
and deliver whatever instruments may be required for the purposes of carrying
out the intent of this section.
27. The lessee hereby covenants and agrees to carry at its expense public
liability insurance, insuring both the lessor and the lessee as their respective
interests appear for a coverage of not less than $300,000.00 for one person and
not less than 300,000.00 for more than one person for a single occurrence, and
for $100,000.00 in property damage. Such policy or certificates thereof shall be
delivered to the lessor together with proof of payment of premium on same to
show such insurance coverage on all plate glass and metal frames located in this
occupancy.
28. Should occupancy of premises by lessee cause present fire and liability
insurance rates applicable thereto, or to any other unit to be increased, lessee
shall pay the difference on amount of fire and liability insurance now being
carried by lessor or any other lessee located on the premises, and said
difference shall be in addition to amount of rental specified herein and shall
be paid to lessor on demand.
29. The lessee shall indemnify and save harmless the lessor from and
against any and all claims, suits, actions, damages and causes of action arising
out of the negligence of the lessees, their agents or their invites, during the
term of this lease, for any personal injury, loss of life and damage to property
sustained in, or about, the demised premises, or to the buildings and
improvements placed thereon, or the appurtenances thereto, or fees, expenses and
liabilities incurred in and about any such claim, the investigation thereof, or
the defense of any action, or proceeding, brought thereon, and from and against
any orders, judgments and decrees, which may be entered therein.
30. Parking at the building is available on a first-come, first served
basis, subject to rules and regulations which lessor may now or herein after
make or amend.
<PAGE>
31. Lessee shall make arrangements directly with the telephone company for
telephone service in the leased premises desired by lessee. After the first
thirty (30) days of the occupancy, lessee shall pay all costs of maintenance of
light fixtures and replacement of lamps, bulbs, tubes, ballast's and starters in
the leased premises, but lessor shall do so during the first thirty (30) days of
occupancy.
32. Lessor shall provide the following services: (1) city water from the
regular building's outlets for drinking, lavatory and toilet purposes only.
33. Lessee shall keep and maintain one or more fire extinguishers suitable
to this type of occupancy. Such extinguishers shall be mounted at a central and
easily accessible location in the premises and shall be serviced at least once
each year, or after each use, by a licensed fire extinguisher service.
34. Lessee shall be responsible for extermination of rodents and pests,
including rats, mice, roaches, ants and bedbugs. No dogs or animals, birds or
pets shall be kept in or upon the leased premises without the lessor's written
consent; and consent so given may be revoked at any time.
35. In the event of default by Lessee, Lessee agrees that for the purposes
of service of process Scott Siegel shall be their agent for acceptance of such
service.
36. Neither the lessee nor his invitees, visitors or agents shall make or
suffer any unlawful, noisy or otherwise offensive use of the leased premises,
nor commit or permit any nuisance to exist thereon, nor cause damage to the
leased premises, nor create any substantial interference with the rights,
comfort, safety or enjoyment of the lessor or other occupants of the same or any
other suite.
37. This Lease shall not be recorded in the public records of Broward
County, Florida.
38. The Lessee agrees to comply with any and all environmental regulations
and laws imposed by the Federal gov't, State of Florida, Broward County, and or
any municipality or any other Governmental Regulatory Agency. In the event of
any notice of violation with requard to any environmental law or regulation the
lessee shall forthwith: (a). Cure or correct said violation (b). perform any
clean up to the demised premise and the surrounding premises that may be
required (c). do any acts or refrain from doing any acts reasonably required by
the Lessor or required by any governmental agency to prevent any further
violations of any environmental law or regulation.
39. If the whole of the Demised Premises shall be taken by any public or
quasi-public authority under the power of condemnation, eminent domain or
expropriation, or in the event of a conveyance in lieu thereof, the Lease Term
shall cease as of the date possession shall be taken by such authority.
In the event of any such taking or conveyance of any portion thereof,
Tenant shall pay Fixed Minimum Rent and additional rent to the day when
possession thereof shall be taken by such authority, with an appropriate refund
by Lessor or such rent as may have been paid in advance for a period subsequent
to such date. If this Lease shall continue in effect as to any portion of the
Demised Premises not so taken or conveyed, the Fixed Minimum Rent shall be
equitably reduced and the Tax Rent and other charges shall thereafter be
recomputed on the basis of the remaining Floor Space. If this Lease shall so
continue, Lessor shall, at its expense, but only to the extent of an equitable
proportion of the award or other compensation for the portion take or conveyed
of the building in which the Demised Premises are located, make all necessary
repairs or alterations so as to constitute the remaining Demised Premises a
complete architectural and tenantable unit.
If part of the parking facilities or land surrounding the building shall be
so taken or conveyed that a reasonable number of parking spaces necessary, in
Lessors judgment, for the continued operation of the building shall not be
available for use, then, and in such event, Lessor may, by notice in writing to
Tenant delivered on or before the day of surrendering possession to the
authority, terminate this Lease and Fixed Minimum Rent and additional rent shall
be paid or refunded as of the date of termination. All compensation awarded for
any such taking or conveyance, whether for the whole or part of the Demised
premises, the Lessee t hereby assigns to the Lessor all of Lessee right, title
and interest in and to any and all such compensation.
40. Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of radon that exceed federal and
state guidelines have been found in building in Florida. Additional information
regarding radon and radon testing may be obtained from your county public health
unit.
41. Surrender of the premises after holding over. Upon termination of this
lease, whether such termination occurs prior to or at the end of the term of
this lease, lessee agrees to deliver the premises to the lessor. If the lessee
remains in possession of the premises after expiration of the term hereof
without the written consent of lessor, lessee shall be a lessee holding over at
a rental equal to the rent in effect at the end of this lease plus 50% thereof
plus all other sums due under this lease and there shall be no renewal of this
lease by operation of law. In the event lessee holds over pursuant to the terms
of this paragraph, lessee shall relinquish all of it's right, title, interest
and possession, to and of the premises within ten (10) days after demand by
lessor.
<PAGE>
SECURITY DEPOSIT CLAUSE
Lessor hereby acknowledges receipt from the Lessee of the sum of
$4,242.00 the same to be held by the Lessor as a security deposit guaranteeing
the faithful performance of all terms and conditions of this Lease on the part
of the Lessee. In the event that the Lessee fails to timely cure any default in
said terms and conditions, Lessor may use so much of said deposit as is
necessary to correct same, including the repair of any damage of the leased
premises caused by the Lessee. In such event, Lessee agrees immediately
re-deposit with Lessor that amount of money used by Lessor from said deposit to
cure the default, it being the intention of the parties that the Lessor shall
hold continuously throughout the term of this Lease or any extensions thereof a
security deposit in the amount of $ 4,496.00
Upon the termination of the Lease and the return of possession of the
leased premises by the Lessee to the Lessor in a good state of repair as
required by this lease, the security deposit shall be returned by the lessor to
the Lessee, provided, however, that so much of the security deposit may be
retained by Lessor at such expiration of the lease term as is needed to repair
any damage to the leased premises.
IN WITNESS WHEREOF, the parties hereto have hereunto executed this instrument
for the purpose herein expressed, the day and year above written.
Signed, sealed and delivered in the presence of:
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Witness Lessor - Robert Sussman
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Witness Lessor - Ellen Sussman
- ------------------------------- -------------------------------
Witness Lessee - Scott Siegel
<PAGE>
COMPUTER FORM FOR INPUTTING/CHANGING TENANT DATA
Tenant:
Company Name Atlantic Express Moving & Storage
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Tenant Name (1) Helene Vaknin
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Home Address
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City State FL Zip
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SS#
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Phone Numbers:
Office 954 741-3660 Fax Beeper
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Home Other
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Billing:
Address 10279 N.W. 53rd Street
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City Sunrise State Florida Zip 33351
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Unit:
Prop # / Bldg # Sawgrass Business Center
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Bay # 10261 N.W. 53rd Street
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Lease:
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Base Rent 725.00 Sales Tax 43.50
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Term of Lease 1 Year
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Start Date September 1st 1999 End Date January 31, 2000 (with out
option)
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Renewal Option(years) 1 Year Renew By
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Tenant Since January 13th 1999
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