UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
FIRST PRIORITY GROUP, INC.
--------------------------
(Name of Issuer)
COMMON STOCK, $.015 PAR VALUE PER SHARE
---------------------------------------
(Title of Class of Securities)
335914206
---------------------
(CUSIP Number)
Michael D. London
General Partner
The Golddonet Group
221 Main Street, Suite 250
San Francisco, CA 94105
(415) 836-6800
---------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
DECEMBER 2, 1998
-------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this Schedule because of Rule 13d-
1(b)(3) or (4), check the following box [X].
Note: Six copies of this statement, including all exhibits,
should be filed with the Commission. See Rule 13d-1(a) for other
parties to whom copies are to be sent.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
of the Securities Exchange Act of 1934, as amended (the "Act") or
otherwise subject to the liabilities of that section of the Act
but shall be subject to all provisions of the Act (however, see
the Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO. 335914206 PAGE 2 OF PAGES
------------ --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES
ONLY)
The Golddonet Group (IRS No. Pending)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
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3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
WC
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) or 2(E) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
California
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
1,695,000 shares (including 1,445,000 shares
SHARES underlying options)
-----------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
-----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 1,695,000 shares (including 1,445,000 shares
underlying options)
PERSON WITH -----------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,695,000 shares (including 1,445,000 shares underlying
options)
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.88%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
PN
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<PAGE>
SCHEDULE 13D
CUSIP NO. 335914206 PAGE 3 OF PAGES
------------ --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Michael D. London
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) or 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
-0-
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
1,695,000 shares (including 1,445,000 shares
OWNED BY underlying options)
-----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING -0-
-----------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
1,695,000 shares (including 1,445,000 shares
underlying options)
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,695,000 shares (including 1,445,000 shares underlying
options)
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.88%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 335914206 PAGE 4 OF PAGES
------------ --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES
ONLY)
Sheldon L. Goldman
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) or 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
1,695,000 shares (including 1,445,000 shares
OWNED BY underlying options)
-----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
-----------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
1,695,000 shares (including 1,445,000 shares
underlying options)
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,695,000 shares (including 1,445,000 shares underlying
options)
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.88%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------
<PAGE>
SCHEDULE 13D
CUSIP NO. 335914206 PAGE 5 OF PAGES
------------- --- ----
-------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES
ONLY)
Ronald H. Colnett
-------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [X]
-------------------------------------------------------------------
3 SEC USE ONLY
-------------------------------------------------------------------
4 SOURCE OF FUNDS
PF
-------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(D) or 2(E) [ ]
-------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
U.S.
-------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
-0-
SHARES -----------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
1,695,000 shares (including 1,445,000 shares
OWNED BY underlying options)
-----------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING -0-
-----------------------------------------------------
PERSON WITH 10 SHARED DISPOSITIVE POWER
1,695,000 shares (including 1,445,000 shares
underlying options)
-------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,695,000 shares (including 1,445,000 shares underlying
options)
-------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
-------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.88%
-------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
IN
-------------------------------------------------------------------
<PAGE>
ITEM 1. SECURITY AND ISSUER.
This statement relates to the Common Stock, $.015 par value
per share ("Common Stock"), of First Priority Group, Inc., a New
York corporation (the "Company"). The principal executive
offices of the Company are located at 51 East Bethpage Road,
Plainview, New York 11803.
ITEM 2. IDENTITY AND BACKGROUND.
The person filing this statement is The Golddonet Group, a
California general partnership ("TGG"). TGG was formed to enter
into the subject investment in the Company. Its address is 221
Main Street, San Francisco, California 94105.
During the last five years, TGG has neither been convicted
in a criminal proceeding nor been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction
which resulted in being subject to a judgment, decree or final
order enjoining future violations of, or prohibiting or mandating
activities subject to federal or state securities laws or finding
any violation with respect to such laws.
The general partnership interests in TGG are held as
follows: Michael D. London, as trustee for the London Family
Trust (51%), Sheldon L. Goldman, as trustee for the Goldman
Family Trust (24.5%), and Ronald H. Colnett, as trustee for the
Ronald H. and Linda S. Colnett Trust (24.5%). Messrs. London,
Goldman and Colnett are referred to herein as the "Partners".
Mr. London's address is 221 Main Street, Suite 250, San
Francisco, CA 94105. He is the CEO of American Information
Company Inc. ("AIC"). AIC is engaged in the business of
providing information and services to automobile consumers and is
located at 221 Main Street, Suite 250, San Francisco, CA 94105.
Mr. Goldman's address is 108 Greenbank Drive, Lafayette, CA
94549. He is the President of Auto Insider Service Inc. ("Auto
Service") and Executive Vice President of AIC. Auto Service is
engaged in the business of providing information and services to
automobile consumers and is located at 221 Main Street, Suite
250, San Francisco, CA 94105. AIC's business and address are
noted above.
Mr. Colnett's address is 2965 Pacific Avenue, San Francisco,
CA 94115. He is a self-employed marketing and business
consultant.
During the last five years, none of Messrs. London, Goldman
or Colnett has been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors) or been a party to a
civil proceeding of a judicial or administrative body of
competent jurisdiction which resulted in being subject to a
judgment, decree or final order enjoining future violations of,
or prohibiting or mandating activities subject to federal or
state securities laws or finding any violation with respect to
such laws.
-6-
<PAGE>
Messrs. London, Goldman and Colnett each is a citizen of the
United States.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
TGG entered into two agreements, as more fully described
below, whereby TGG would acquire 200,000 shares of Common Stock
on January 4, 1999 at an aggregate purchase price of $200,000,
and would have a commitment to purchase an additional 50,000
shares and be granted options to purchase additional shares
thereafter, subject to satisfactory completion by TGG of a due
diligence review by December 18, 1998 (the "Due Diligence
Review"). The funds for the acquisition of the 200,000 shares of
Common Stock are to be allocated from the working capital of TGG,
which will be provided from the personal funds of the Partners.
It is presently contemplated that the source of funds required by
TGG to purchase any additional shares of Common Stock as
contemplated herein will come from the personal funds of the
Partners.
ITEM 4. PURPOSE OF TRANSACTION.
GENERAL
-------
TGG has sought to acquire the shares of Common Stock that
are the subject of this Schedule as the Partners have viewed the
Company as a potential attractive investment opportunity and were
interested in obtaining a major investment position therein in
order to attempt to influence Company management with respect to
the future direction of the Company, including the possibility of
an acquisition transaction between the Company and AIC. Mr.
London, on behalf of the Partners, has had discussions with large
investors of the Common Stock concerning the interest of TGG and
whether these investors might be supportive of TGG's efforts.
However, neither TGG nor any Partner has entered into any
agreement or understanding with any such holder for the purpose
of acquiring, holding, voting or disposing of shares of Common
Stock. nor should be considered as part of a "group" with any
other holders of the Company's Common Stock.
In furtherance of its efforts with respect to the Company,
TGG has entered into agreements with two major Company
stockholders providing for (i) TGG to purchase an aggregate of
250,000 shares subject to its Due Diligence Review, and (ii) TGG
to receive options to purchase an aggregate of 1,445,000 shares
together with irrevocable proxies to vote the option shares while
the options are exercisable.
Mr. London, together with other outside shareholders, has
held meetings with Barry Siegel, Chairman and Chief Executive
Officer of the Company, regarding the future direction of the
Company. As explained in greater detail below, these discussions
have resulted into the entry of a Letter of Interest between AIC
and the Company covering a possible reverse acquisition of the
Company by AIC and a proposed three member increase in the size
of the Board of Directors with the new directorships to be filled
by two designees of TGG and a designee of another investor group.
-7-
<PAGE>
PURCHASE AGREEMENTS
-------------------
On December 2, 1998, TGG entered into an agreement with
Leonard Giarraputo and Frances Giarraputo (the "Giarraputos"), as
amended on December 9, 1998 (collectively, the "Giarraputo
Agreement"), with respect to Giarraputos' shares of the Company's
Common Stock. TGG agreed to purchase from the Giarraputos
100,000 shares of Common Stock on January 4, 1999 at a purchase
price of $1.00 per share, subject to its Due Diligence Review.
The Giarraputos granted options to TGG to purchase 500,000 shares
(the "Giarraputo Option Shares") of Common Stock as follows:
150,000 shares at $1.00 per share expiring on April 1, 1999,
150,000 shares at $2.00 per share expiring on December 31, 2000,
150,000 shares at $3.00 per share expiring on December 31, 2000,
and 50,000 shares at $4.00 per share expiring on December 31,
2001, provided that the option is exercised as to all the
underlying shares at any price level. Upon TGG purchasing the
initial 100,000 shares, the Giarraputos are to grant an
irrevocable proxy to TGG to vote all Giarraputo Option Shares.
That proxy is to expire December 31, 2001; provided, however, the
proxy shall expire on April 1, 1999 if TGG does not exercise its
option to purchase the first option tranche of 150,000 shares of
Common Stock by that date as provided above, and thereafter the
proxy shall expire from as to each subsequent tranche of
Giarraputo Option Shares if TGG does not exercise each such
tranche prior to its respective expiration date.
On December 2, 1998, TGG also entered into an agreement with
Michael Karpoff and Patricia Rothbardt (the "Karpoff Sellers"),
as amended on December 9, 1998 (the "Karpoff Agreement"),
pursuant to which TGG agreed to purchase from the Karpoff Sellers
(i) 100,000 shares of Common Stock on January 4, 1999 at a
purchase price of $1.00 per share and (ii) 50,000 shares on
January 3, 2000 at a price equal to the greater of $1.75 per
share or 80% of the per share price of the last trade in the
Common Stock in the public market as of the immediately preceding
business day; provided, however, that if the purchase price of
the 50,000 shares is less than $1.75 per share, TGG shall have
the right to elect not to purchase such shares upon notice to the
Karpoff Sellers. TGG's obligation to proceed with the Karpoff
Agreement is subject to the TGG Due Diligence Review. The
Karpoff Sellers granted options to TGG to purchase 945,000 shares
(the "Karpoff Option Shares") of Common Stock as follows: 50,000
shares at $1.75 per share expiring on January 4, 1999, 200,000
shares at $1.00 per share expiring on April 1, 1999, 200,000
shares at $2.00 per share expiring on December 31, 2000, 200,000
shares at $3.00 per share expiring on December 31, 2000, 150,000
shares at $4.00 per share expiring on December 31, 2001, and
145,000 shares at $5.00 per share expiring on December 31, 2001.
The shares underlying the options for the 295,000 shares expiring
on December 31, 2001 are not presently outstanding, but are
subject to options held by the Karpoff Sellers. Upon the closing
of the initial 100,000 shares, the Karpoff Sellers are to grant
an irrevocable proxy to TGG for the Karpoff Option Shares similar
to the proxy that was granted by the Giarraputos for the
Giarraputo Option Shares.
For additional information regarding the Giarraputo
Agreement and the Karpoff Agreement (collectively, the "Purchase
Agreements"), reference is made to those Agreements which are
filed as Exhibits 2 and 3, respectively, to this Schedule.
-8-
<PAGE>
LETTER OF INTEREST
------------------
On December 7, 1998, AIC (d/b/a Consumers Car Club) entered
into a letter with the Company (the "Letter of Interest") which
expresses their preliminary indication of interest for a
combination of AIC and the Company. Messrs. London and Goldman
are principals of AIC. The proposal contemplates a tax-free
merger whereby the Company would issue 33,000,000 shares of
Common Stock for the outstanding Common Stock of AIC, subject
to entry into a definitive agreement after mutual due diligence
reviews and other closing conditions. The Letter of Interest
is filed herewith as Exhibit 4.
BOARD REPRESENTATION
--------------------
During the week of December 7, Mr. London, on behalf of TGG,
either together with other major investors in the Company or
separately, had discussions with Siegel and other Company
directors concerning the possibility of creating a vacancy on the
existing Board of Directors, increasing the size of the Board to
seven, and filling the three vacancies with two individuals
designated by TGG and a third person designated by Point West
Capital Corporation ("Point West"). The Company's Board of
Directors has not yet taken any action to implement this change
in the Board.
On December 16, 1998, TGG and its representatives are to
commence the Due Diligence Review. Representatives of Point West
will participate in such effort.
In addition to those plans noted above, it is possible that
TGG and or the Partners may develop or pursue plans and proposals
regarding: (i) extraordinary corporate transactions, such as
mergers, reorganizations or liquidations involving the Company or
any of its subsidiaries, (ii) one or more sales or transfers of a
material amount of assets of the Company or any of its
subsidiaries, (iii) one or more changes in the present
capitalization or dividend policy of the Company, (iv) one or
more changes in the Company's business or corporate structure,
(v) one or more changes in the Company's charter, bylaws or
instruments corresponding thereto or other actions which may
facilitate or impede the acquisition of control of the Company by
any other person, and (vi) one or more actions which may cause
the Common Stock to cease to be authorized to be quoted on Nasdaq
or the Company to become eligible for termination or registration
pursuant to Section 12(g)(4) of the Securities Exchange Act of
1934, as amended. Depending on future developments, including
the Due Diligence Review, the plans of TGG and the Partners may
change.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) TGG may be deemed the direct beneficial owner of an
aggregate of 1,695,000 shares of Common Stock consisting of (i)
250,000 shares which TGG has agreed to purchase pursuant to the
Purchase Agreements and (ii) 1,445,000 shares underlying options
granted to TGG pursuant to those Agreements, which represents
approximately 19.88% of the outstanding shares of Common Stock.
The outstanding shares is based upon 8,231,800 shares outstanding
as of November 13, 1998 (as reported in the Company's Quarterly
Report on Form 10-QSB for the quarter ended September 30, 1998)
and as adjusted to reflect the assumed issuance of 295,000 shares
underlying options expiring on December 31, 2001 under the
-9-
<PAGE>
Karpoff Agreement. The Purchase Agreements also grant to TGG
certain voting rights with respect to the Option Shares
thereunder. (See Item 4.)
Mr. London, as trustee of a trust which is a general partner
in TGG, may be deemed the indirect beneficial owner of 1,695,000
shares of Common Stock, or approximately 19.88 % of the
outstanding shares by virtue of his ownership interest in TGG.
Mr. Goldman, as trustee of a trust which is a general
partner in TGG, may be deemed the indirect beneficial owner of
1,695,000 shares of Common Stock, or approximately 19.88% of the
outstanding shares by virtue of his ownership interest in TGG.
Mr. Colnett, as trustee of a trust which is a general
partner in TGG, may be deemed the indirect beneficial owner of
1,695,000 shares of Common Stock, or approximately 19.88% of the
outstanding shares by virtue of his ownership interest in TGG.
Each of the Partners disclaims any beneficial ownership in
any shares of the Company's Common Stock which may be attributed
to him other than through his participation in TGG.
(b) Pursuant to the irrevocable proxies granted under the
Purchase Agreements, TGG shall have certain powers to vote and
direct the disposition of the shares of Common Stock deemed
beneficially owned by it. By virtue of the relationships
described in Item 2 of this Schedule, each of the Partners may be
deemed to share indirect power to vote and direct the disposition
of the shares of Common Stock held by TGG.
(c) On December 2, 1998, TGG entered into the Purchase
Agreements, each as amended December 9, 1998, to purchase up to
1,695,000 shares of Common Stock, as more fully described in Item
4 of this Schedule.
On December 10, 1998, Mr. Goldman sold 1,000 shares of
Common Stock in a brokerage transaction at a price of $1.60 per
share.
(d) Not applicable.
(e) Not applicable.
-10-
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR
RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER.
On December 2, 1998, TGG entered into an agreement with
Kirlin Securities Inc. ("Kirlin") which provides that if TGG
exercises the options under the Karpoff Agreement which expire on
or before December 31, 2000 and also exercises all of the options
under the Giarraputo Agreement which expire on or before the same
date, TGG shall pay Kirlin a $50,000 fee. In addition, if the
Company is merged with AIC, TGG will use its reasonable efforts
to have the merged company pay to Kirlin a customary finder's fee
in warrants to purchase common stock of the merged entity. This
agreement is filed herewith as Exhibit 4.
The only contracts, arrangements, understandings and
relationships among the persons identified in Item 2 and between
such persons and any person with respect to any security of the
Company, there are i) the Giarraputo Agreement, ii) the Karpoff
Agreement, iii) the Agreement between TGG and Kirlin Securities,
and iv) the Letter of Interest, each as more fully described
above and each of which is filed as an Exhibit hereto and the
understandings mentioned in this Schedule.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
1. Joint Filing Agreement and Power of Attorney, dated
December 11, 1998, by the Reporting Persons.
2. Agreement among TGG, Leonard Giarraputo and Frances
Giarraputo, dated December 2, 1998, as amended December 9, 1998.
3. Agreement among TGG, Michael Karpoff and Patricia
Rothbardt, dated December 2, 1998, as amended December 9, 1998.
4. Letter of Interest between the Company and AIC, dated
December 7, 1998.
5. Agreement between TGG and Kirlin, dated December 2,
1998.
-11-
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in the statement
is true, complete and correct.
Date: December 15, 1998 THE GOLDDONET GROUP
By: /s/Michael D. London
--------------------------------
Michael D. London, General
Partner
LONDON FAMILY TRUST
By: /s/ Michael D. London
-------------------------------
Michael D. London, Trustee
GOLDMAN FAMILY TRUST
By: /s/Sheldon L. Goldman
-------------------------------
Sheldon L. Goldman, Trustee
RONALD H. AND LINDA S. COLNETT
TRUST
By: /s/Ronald H. Colnett
------------------------------
Ronald H. Colnett, Trustee
-12-
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
1. Joint Filing Agreement and Power of Attorney,
dated December 11, 1998, by the Reporting Persons.
2. Agreement among TGG, Leonard Giarraputo and
Frances Giarraputo, dated December 2, 1998,
as amended December 9, 1998.
3. Agreement among TGG, Michael Karpoff and Patricia
Rothbardt, dated December 2, 1998, as amended
December 9, 1998.
4. Letter of Interest between the Company and AIC,
dated December 7, 1998.
5. Agreement between TGG and Kirlin, dated
December 2, 1998.
JOINT FILING AGREEMENT Exhibit 1
AND POWER OF ATTORNEY
-----------------------
In accordance with Rule 13d-1(f) under the Securities
Exchange Act of 1934, as amended, the undersigned hereby agree to
the joint filing on behalf of each of them of a Statement on
Schedule 13D (including exhibits and thereto) with respect to the
acquisition of, or the right to acquire, the Common Stock of
First Priority Group, Inc., a Delaware corporation. This
Agreement shall be included as an Exhibit to such joint filing.
In evidence thereof, each of the undersigned, being duly
authorized, hereby executes this Agreement as of the 15th day of
December, 1998.
Each person whose signature appears below hereby constitutes
and appoints Michael D. London as his or its true and lawful
attorney-in-act and agent, with full power and authority,
including power of substitution and resubstitution, and in his or
its name, place and stead in any and all capacities, to execute
in the name of each such person, and to file, with all exhibits
thereto and other documents in connection therewith, with the
Securities and Exchange Commission, any and all amendments to
this Statement on Schedule 13D as such attorney-in-fact and
agent, or its substitutes, executing such amendments deem
necessary or advisable to enable each person whose signature
appears below to comply with the Securities Exchange Act of 1934,
as amended, and any rules, regulations and requirements of the
Securities and Exchange Commission in respect thereof, granting
to said attorney-in-fact, agents and substitutes full power and
authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as
fully to all intends and purposes as they might or cold do in
person, and does hereby ratify and confirm all that such
attorney-in-fact, agents or substitutes, or any of the
separately, may lawfully do os cause to b done by virtue thereof.
THE GOLDDONET GROUP
By: /s/Michael D. London
--------------------------------
Michael D. London, General
Partner
LONDON FAMILY TRUST
By: /s/Michael D. London
--------------------------------
Michael D. London,
Trustee
GOLDMAN FAMILY TRUST
By: /s/Sheldon L. Goldman
--------------------------------
Sheldon L. Goldman,
Trustee
RONALD H. AND LINDA S. COLNETT
TRUST
By: /s/Ronald H. Colnett
--------------------------------
Ronald H. Colnett, Trustee
December 2, 1998
Mr. Leonard Giarraputo
Mrs. Frances Giarraputo
c/o Anthony J. Kirincic
Kirlin Securities, Inc.
6901 Jericho Turnpike
Syosset, New York 11791
Re: First Priority Group
--------------------
Dear Mr. and Mrs. Giarraputo:
This letter sets forth the terms of our agreement
regarding the sale of your shares of common stock of First
Priority Group, Inc. (the "Company") to The Golddonet Group or
its assigns ("TGG"). We agree as follows:
1. Purchase Sale of Shares.
-----------------------
(a) Purchase and Sale. You agree to sell to TGG,
-----------------
and TGG agrees to purchase from you, 100,000 shares of the common
stock of the company (the "Shares") on January 4, 1999, at a
price of $1.00 per share.
(b) Condition Precedent. TGG shall have the
-------------------
right to undertake such due diligence as it deems appropriate
with respect to this transaction prior to December 10, 1998. In
the event that TGG is not satisfied in its sole discretion with
the results of its due diligence, TGG may notify you in writing
on or before December 10, 1998 of its election not to proceed.
If TGG gives you such notice, this agreement shall terminate and
we shall have no further obligations to each other hereunder.
(c) Closing. The closing for the purchase and
-------
sale of the Shares (the "Closing") shall take place at 6901
Jericho turnpike, Syosset, New York 11791. At the Closing, TGG
will deliver to you the purchase price for the Shares being
purchased at the Closing by check or wire transfer. You will
deliver to TGG: (i) the share certificate representing the
Shares being purchased at the Closing duly endorsed in favor of
TGG; (ii) a certificate stating that the representations and
warranties set forth in paragraph 3 below are true and correct as
of the date thereof; and (iii) an irrevocable proxy in form
acceptable to TGG by which you grant TGG the right to vote, and
otherwise act on your behalf with respect to, all of the shares
of common stock of the Company you own now or while the proxy is
in effect. Said proxy shall provide that it expires on
December 31, 2001; provided, however, that the proxy shall expire
on April 1, 1999 in the event that TGG does not exercise its
option to purchase 150,000 shares of your common stock of the
Company at a price of $1.00 per share by said date as provided in
paragraph 2 below. In addition, the proxy shall expire from time
to time, in the event that TGG does not exercise any of the
options granted in paragraph 2, with respect to any shares that
you own in excess of the total number of Shares and TGG Option
Shares subject to TGG's option.
2. Option to Purchase Shares.
-------------------------
(a) Grant of Option. You hereby grant TGG an
---------------
option to purchase 600,000 shares of common stock of the Company
(the "TGG Option Shares") at the price set forth below prior to
the stated expiration date:
MAXIMUM PRICE EXPIRATION
NUMBER OF SHARES PER SHARE DATE
---------------- --------- ----------
150,000 $ 1.00 April 1, 1999
150,000 $ 2.00 December 31, 2000
150,000 $ 3.00 December 31, 2000
100,000 $ 4.00 December 31, 2001
50,000 $10.00 December 31, 2001
(b) Exercise of Option. TGG may exercise an
------------------
option by giving you at the address set forth below written
notice of its election to exercise its option at any time prior
to the expiration date and stating the number of TGG Option
Shares that it is electing to purchase. TGG may exercise its
option with respect to those Option Shares exercisable at a
particular price only if TGG exercises its option with respect to
all of the Option Shares available at such price. However, the
failure to exercise an option with respect to certain of the TGG
Option Shares at one price shall not affect its right to exercise
an option to purchase other of the TGG Option Shares at a
different price concurrently or at a later date.
(c) Closings. Within fifteen days of your
--------
receipt of the notice from TGG of its election to exercise an
option, you will sell to TGG, and TGG will purchase from you, the
TGG Option Shares designated in the notice. The purchase and
sale will take place at a closing to be held at 6901 Jericho
Turnpike, Syosset, New York 11791. At the Closing, TGG will
deliver to you the purchase price for the TGG Option Shares being
purchased by check or wire transfer. You will deliver to TGG:
(i) the share certificate representing the TGG Option shares
being purchased at the Closing duly endorsed in favor of TGG; and
(ii) a certificate stating that the representations and
warranties set forth in paragraph 3 below are true and correct as
of the date thereof.
3. Representations and Warranties. You hereby
------------------------------
represent and warrant to TGG as of the date hereof and as of each
of the closings as follows:
(a) Authority and Capacity. You have all
----------------------
requisite power, authority and capacity to enter into this
agreement; to perform your obligations hereunder and to
consummate the transactions contemplated hereby, including,
without limitation, the granting of the proxy as provided in
paragraph 1(c).
(b) Non-Contravention. The execution, delivery
-----------------
and performance of this agreement does not, and the consummation
of the transactions contemplated hereby will not, (a) result in a
breach of or default under any agreement to which you are bound,
or (b) violate any law or regulation applicable to you, or any
permit, license, authorization, franchise, approval, judgment,
order, injunction, decree or award of any court, arbitrator,
administrative agency or governmental body applicable to or
binding upon you.
(c) Binding Agreement. No authorization or
-----------------
approval is required for your to execute and deliver this
agreement and to perform your obligations hereunder. This
agreement has been duly and validly executed and delivered by you
and constitutes your valid and binding agreement, enforceable
against you in accordance with and subject to its terms.
(d) Title to Shares. You are the lawful, record
---------------
and beneficial owner of all of the shares and the TGG Option
Shares, free and clear of any liens, claims, agreements, charges,
security interests and encumbrances whatsoever. As of a Closing,
you have the full right, power and authority to sell, convey,
assign, transfer and deliver to TGG the Shares and TGG Option
Shares being transferred to TGG at such Closing pursuant to the
terms of this agreement. As of a Closing, the certificates
representing the Shares and TGG Option Shares being transferred
to TGG at such Closing are valid and genuine. The sale,
conveyance, assignment, transfer and delivery of the certificates
representing the Shares and TGG Option Shares in accordance with
the terms of this agreement will transfer to TGG legal and valid
title to the Shares and TGG Option Shares, free and clear of all
liens, security interests, hypothecations or pledges. Except for
this agreement, there are no outstanding subscriptions, options,
rights (preemptive or otherwise), warrants, calls, convertible
securities or other agreements or commitments of any character
relating to the Shares, the TGG Option Shares or the Giarraputo
Options.
(e) Approvals. No consent, approval, order or
---------
authorization of, or any registration, declaration or filing
with, any in connection with the valid execution, delivery,
consummation and performance of this agreement by you.
(f) Transferability. The Shares and the TGG
---------------
Option shares are freely transferable and not subject to any
restrictions of any nature.
The foregoing representations and warranties shall
survive the Closings and shall not be affected by any information
furnished to, or investigation made by, TGG. You will indemnify,
defend, protect and hold TGG harmless from and against any and
all losses, claims, damages, costs or expenses (including,
without limitation, attorneys' fees) asserted against, sustained
or incurred by TGG as a result of or in connection with any
misrepresentation or breach of warranty by you.
4. TGG Representations and Warranties. TGG hereby
----------------------------------
represents and warrants to you as of the date hereof and as of
each of the closings as follows:
(a) Authority and Capacity. TGG has all
----------------------
requisite power, authority and capacity to enter into this
agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby.
(b) Non-Contravention. The execution, delivery
-----------------
and performance of this agreement does not, and the consummation
of the transactions contemplated hereby will not, (a) result in a
breach of or default under any agreement to which TGG is bound,
or (b) violate any law or regulation applicable to TGG, or any
permit, license, authorization, franchise, approval, judgment,
order, injunction, decree or award of any court, arbitrator,
administrative agency or governmental body applicable to or
binding upon TGG.
(c) Binding Agreement. No authorization or
-----------------
approval is required for TGG to execute and deliver this
agreement and to perform its obligations hereunder. This
agreement has been duly and validly executed and delivered by TGG
and constitutes its valid and binding agreement, enforceable
against it in accordance with an subject to its terms.
(d) Approvals. No consent, approval, order or
---------
authorization of, or any registration, declaration or filing
with, any court, agency, governmental authority or any third
party is required in connection with the valid execution,
delivery, consummation and performance of this agreement by TGG
other than any filings required by the Securities Exchange Act of
1934.
The foregoing representations and warranties shall
survive the Closing and shall not be affected by any information
furnished to, or investigation made by, you. TGG will indemnify
defend, protect and hold TGG harmless from and against any and
all losses, claims, damages, costs or expenses (including,
without limitation, attorneys' fees) asserted against, sustained
or incurred by you as a result of or in connection with any
misrepresentation or breach of warranty by TGG.
5. Covenants.
---------
(a) No Transfer. You will not sell, transfer or
-----------
assign the Shares or any interest therein except as provided in
this agreement. You will not sell, transfer or assign the TGG
Option Shares or any interest therein, except as provided in this
agreement; provided, however, that you may transfer TGG Option
Shares once said Shares are no longer subject to TGG's option to
purchase in paragraph 2.
(b) Exercise of Options. You will timely
-------------------
exercise the Giarraputo Options and purchase the shares as
provided therein such that you own the requisite number of Shares
of common stock of the Company sufficient to enable you to
perform hereunder.
6. Miscellaneous.
-------------
(a) Entire Agreement. This agreement constitutes
----------------
our entire understanding and agreement relating to the subject
matter hereof and supersedes any and all prior understandings,
agreements, negotiations and discussions, both written and oral,
between us with respect to the subject matter hereof.
(b) Waiver. No waiver of any of the provisions
------
of this agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall
any such waiver constitute a continuing waiver unless otherwise
expressly so provided.
(c) Amendments. No changes in, modifications of,
----------
or amendments to, this agreement shall be valid unless the same
shall be in writing and signed by both of us.
(d) Governing Law. This agreement shall be
-------------
construed, interpreted and enforced in accordance with, and shall
be governed by the laws of the State of New York without
reference to, and regardless of, any applicable choice or
conflicts of laws principles. Any action or proceeding seeking
to enforce any provision of, or based on any rights arising out
of, this Agreement shall be brought in the courts of the State of
New York and TGG consents to jurisdiction in the State of New
York for any action or proceeding arising under this Agreement.
(e) Counterparts. This agreement may be executed
------------
in counterparts, each of which shall be deemed to be an original,
and all of which together shall constitute one and the same
agreement.
(f) Severability. If any provision of this
------------
agreement or the application of any such provision to any person
or circumstance, shall be held invalid by any court of competent
jurisdiction, the remainder of this agreement, or the application
of such provision to persons or circumstances other than those as
to which it is held invalid, shall not be affected thereby.
(g) Construction. This agreement shall be
------------
construed and interpreted without regard to any rule or
presumption requiring that it be construed or interpreted against
the part causing it to be drafted.
(h) Successors. This agreement shall be binding
----------
upon and shall inure to our benefit and the benefit of our
respective successors and assigns; provided, however, that TGG
shall notify you prior to any assignment of this Agreement.
(i) Further Assurances. Each of us shall from
------------------
time to time at the request of the other, and without further
consideration, executive and deliver such further instruments of
assignment, transfer, conveyance and confirmation and take such
other action as may be reasonably requested in order to more
effectively fulfill the purpose of this agreement.
(j) Adjustment. In the event of any stock split,
----------
stock dividends or recapitalization of the common stock of the
Company (including, without limitation, in connection with a
merger), the provisions of paragraphs 1 and 2 above shall apply
with respect to any new shares issued with respect to the Shares
and the TGG Option Shares and the purchase price and number of
shares shall be appropriately adjusted.
If this letter correctly states our agreement, please
sign below.
Very truly yours,
THE GOLDDONET GROUP
By: /s/ Ronald H. Colnett
--------------------------------
December 2, 1998
/s/ Leonard Giarraputo /s/ Frances Giarraputo
------------------------------ ------------------------------
Leonard Giarraputo Frances Giarraputo
Date: December 2, 1998 Date: December 2, 1998
Address: 6 Fox Hunt Ct. Address: 6 Fox Hunt Ct.
Huntington, NY 11743 Huntington, NY 11743
<PAGE>
Mr. Leonard Giarraputo December 9, 1998
Mrs. Frances Giarraputo
c/o Mr. Anthony J. Kirincic
Kirlin Securities, Inc.
6901 Jericho Turnpike
Syosset, New York 11791
RE: First Priority Group
--------------------
Dear Mr. and Mrs. Giarraputo:
We agree to amend our agreement dated December 2, 1998
(the "Agreement") as follows:
1. The date for the satisfaction of the condition
precedent set forth in paragraph 1(b) of the Agreement is hereby
extended to December 18, 1998.
2. The number of TGG Option Shares is hereby reduced
to 500,000 shares and the following shares are hereby deleted as
TGG Option Shares: (a) 50,000 shares exercisable at $4.00 per
share expiring December 31, 2001; and (b) 50,000 shares
exercisable at $10.00 per share expiring December 31, 2001.
3. The proxy to be delivered by you at the Closing
will apply only to 500,000 shares of your stock of the Company.
4. You will not sell, transfer or assign any of the
common stock of the Company owned by both or either of you, or
any of the options to acquire common stock of the Company owned
by both or either of you, prior to December 31, 2001 except
pursuant to the Agreement.
This letter constitutes an amendment of the Agreement.
Except as otherwise provided, capitalized terms used herein shall
have the same meaning as in the Agreement. The Agreement remains
in full force and effect as amended hereby.
Please sign below if this letter correctly states our
agreement.
Very truly yours,
THE GOLDONET GROUP
By:
---------------------------
AGREED:
------------------------ ------------------------------
Leonard Giarraputo Frances Giarraputo
Date: December , 1998 Date: December , 1998
-- --
(212) 603-2284
December 2, 1998
Mr. Michael Karpoff
Ms. Patricia Rothbardt
c/o Anthony J. Kirincic
Kirlin Securities, Inc.
6901 Jericho Turnpike
Syosset, New York 11791
Re: First Priority Group
--------------------
Dear Mr. Karpoff and Ms. Rothbardt:
This Letter sets forth the terms of our agreement
regarding the sale of your shares of common stock of First
Priority Group, Inc. (the "Company") to The Golddonet Group or
its assigns ("TGG"). We agree as follows:
1. Purchase and Sale of Shares.
---------------------------
(a) Purchase and Sale. You agree to sell to TGG,
-----------------
and TGG agrees to purchase from you, 150,000 shares of the common
stock of the Company (the "Shares") as follows: (i) 100,000
shares on January 4, 1999 at a price of $1.00 per share; and (ii)
50,000 shares on January 3, 2000 at a price equal to the greater
of $1.75 per share or 80% of the per share price in the last
trade for the common stock of the Company on the public market as
of the immediately preceding business day. In the event that the
purchase price for the 50,000 shares is less than $1.75 per
share, TGG shall have the right to elect not to purchase said
shares by so notifying you.
(b) Condition Precedent. TGG shall have the
-------------------
right to undertake such due diligence as it deems appropriate
with respect to this transaction prior to December 10, 1998. In
the event that TGG is not satisfied in its sole discretion with
the results of its due diligence, TGG may notify you in writing
on or before December 10, 1998 of its election to proceed. If
TGG gives you such notice, this agreement shall terminate and we
shall have no further obligations to each other hereunder.
(c) Closings. The closings for the purchase and
--------
sale of the Shares (each a "Closing") shall take place at 6901
Jericho Turnpike, Syosset, New York 11791. At each Closing, TGG
will deliver to you the purchase price for the Shares being
purchased at the Closing by check or wire transfer. You will
deliver to TGG: (iii) the shares certificate representing the
Shares being purchased at the Closing duly endorsed in favor of
TGG; and (iv) a certificate stating that the representations and
warranties set forth in paragraph 3 below are true and correct as
of the date thereof. In addition, at the Closing on January 4,
1999; you will deliver to TGG an irrevocable proxy in form
acceptable to TGG by which you grant TGG the right to vote, and
otherwise act on your behalf with respect to, all of the shares
of common stock of the Company you own now or while the proxy is
in effect. Said proxy shall provide that it expires on December
31, 2001; provided, however, that the proxy shall expire on April
1, 1999 in the event that TGG does not exercise its option to
purchase 200,000 shares of your common stock of the Company at a
price of $1.00 per share by said dates as provided in paragraph 2
below. In addition the proxy shall expire from time to time, in
the event that TGG does not exercise any of the options granted
in paragraph 2, with respect to any shares that you own in excess
of the total number of Shares and Option Shares subject to TGG's
Option.
2. Option to Purchase Shares.
-------------------------
(a) Grant of Option. You hereby grant TGG an
---------------
option to purchase 1,145,000 shares of common stock of the
Company (the "TGG Option Shares") at the price set forth below
prior to the stated expiration date:
Maximum Prices Expiration
Number of Shares Per Share Date
---------------- -------------- --------------------
50,000 $ 1.75 January 4, 1999
300,000 $ 1.00 April 1, 1999
200,000 $ 2.00 December 31, 2000
200,000 $ 3.00 December 31, 2000
150,000 $ 4.00 December 31, 2001
250,000 $ 5.00 December 31, 2001
95,000 $10.00 December 31, 2001
We acknowledge that the Option Shares subject to
the options expiring December 31, 2001 may be acquired by you
pursuant to a cashless exercise of your options to acquire shares
of the Company. In such event, the maximum number of shares
subject to TGG's options expiring December 31, 2001 shall be
reduced by an amount equal to the reduction in the number of
shares you receive as a result of the cashless exercise of your
options. The reduction shall be applied first to the Option
Shares having a $10.00 per share price and then the Option Shares
having $5.00 per share price.
(b) Exercise of Option. TGG may exercise an
------------------
option giving you at the address set forth below written notice
of its election to exercise its option at any time prior to this
expiration date and stating the number of TGG Option Shares that
it is electing to purchase. TGG may exercise its option with
respect to those Option Shares exercisable at a particular price
only if TGG exercises its option with respect to all of the
Option Shares available at such price. However, the failure to
exercise an option with respect to certain of the TGG Option
Shares at one price shall not affect its right to exercise an
option to purchase other of the TGG Option Share at a different
price concurrently or at a later date.
(c) Closings. Within fifteen days of your
--------
receipt of the notice from TGG of its election to exercise an
option, you will sell to TGG, and TGG will purchase from you, the
TGG Option Shares designated in the notice. The purchase and
sale will take place at a Closing to be held at 6901 Jericho
Turnpike, Syosset, New York 11791. At the Closing, TGG will
deliver to you the purchase price for the Option Shares being
purchased by check or wire transfer. You will deliver to TGG (v)
the shares certificate representing the TGG Option Shares being
purchased at the Closing duly endorsed in favor of TGG; and (vi)
a certificate stating that the representations and warranties set
forth in paragraph 3 below are true and correct as of the date
thereof.
3. Representations and Warranties. You hereby
------------------------------
represent and warrant to TGG as of the date hereto and as of each
of the closings as follows:
(a) Authority and Capacity. You have all
----------------------
requisite power, authority and capacity to enter into this
agreement, to perform your obligations hereunder and to
consummate the transactions contemplated hereby, including,
without limitation, the granting of the proxy as provided in
paragraph 1(c).
(b) Non-Contravention. The execution, delivery
-----------------
and performance of this agreement doe snot, and the consummation
of the transactions contemplated hereby will not, (a) result in a
breach of or default under any agreement to which you are bound
(provided that TGG complies with paragraph 9(f) of that certain
Severance Agreement (the "Severance Agreement") dated August 17,
1998 between First Priority Group, Inc. and Michael Karpoff), or
(b) violate any law or regulation applicable to you, or any
permit, license, authorization, franchise, approval, judgment,
order, injunction, decree or award of any court, arbitrator,
administrative agency or governmental body applicable to or
binding upon you.
(c) Binding Agreement. No authorization or
-----------------
approval is required for you to execute and deliver this
agreement and to perform your obligations hereunder. This
agreement has been duly and validly executed and delivered by you
and constitutes your valid and binding agreement, enforceable
against you in accordance with an subject to its terms.
(d) Title to Share. You are the lawful, record
--------------
and beneficial owner of all of the Shares and 745,000 of the TGG
Option Shares, free and clear of any liens, claims, agreements,
charges, security interests and encumbrances whatsoever. Michael
Karpoff is the lawful record and beneficial owner of options to
acquire at least 400,000 shares of common stock of the Company
(the "Karpoff Options"). Subject to the vesting provisions of
Karpoff Options, the Karpoff Options are in full force and
effect, free and clear of any liens, claims, agreements, charges,
security interests and encumbrances whatsoever. As of a Closing,
you have the full right, power and authority to sell, convey,
assign, transfer and deliver to TGG the Shares and TGG Option
Shares being transferred to TGG at such Closing pursuant to the
terms of this agreement. As of a Closing, the certificates
representing the Shares and TGG Option Shares being transfers to
TGG at such Closing are valid and genuine. The sale, conveyance,
assignment, transferor and delivery of the Certificates
representing the Shares and TGG Option Shares in accordance with
the terms of this agreement will transfer to TGG legal and valid
title to the Shares and the TGG Option Shares, free and clear of
all liens, security interest, hypothecations or pledges. Except
for this agreement and paragraph 8(f) of the Severance Agreement,
there are no outstanding subscriptions, options, rights
(preemptive or otherwise), warrants, calls, convertible
securities or other agreements or commitments of any character
relating to the Shares, the TGG Option Shares or the Karpoff
Options. The Shares, TGG Option Shares and Karpoff Options
constitute all of the securities of the Company owned by you
(including, without limitation, warranties or options of any
nature) except options owner by Michael Karpoff to purchase
100,000 shares of common stock of the Company at a price of $5.00
per share which were issued to Mr. Karpoff September 7, 1997 and
which expire December 31, 2002.
(e) Approvals. No consent, approval, order or
---------
authorization of, or any registration, declaration or filing
with, any court, agency, governmental authority or any third
party is required in connection with the valid execution,
delivery, consummation and performance of this agreement by you.
(f) Transferability. The Shares and the TGG
---------------
Option Shares are freely transferable and not subject to any
restrictions of any nature other than the restrictions set forth
in paragraph 8(f) of the Severance Agreement and any restrictions
imposed by Rule 144.
The foregoing representations and warranties shall
survive the Closings and shall not be affected by any information
furnished to, or investigation made by, TGG. You will indemnify,
defend, protect and hold TGG harmless from and against any and
all losses, claims, damages, costs or expenses (including,
without limitation, attorney's fees) asserted against, sustained
or incurred by TGG as a result of or in connection with any
misrepresentation or breach of warranty by you.
4. TGG Representations and Warranties. TGG hereby
----------------------------------
represents and warrants to you as of the date hereof and as of
each of the closings as follows:
(a) Authority and Capacity. TGG has all
----------------------
requisite power, authority and capacity to enter into this
agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby.
(b) Non-Contravention. The execution, delivery
-----------------
and performance of this agreement does not, and the consummation
of the transactions contemplated hereby will not, (a) result in a
breach of or default under any agreement to which TGG is bound,
or (b) violate any law or regulation applicable to TGG, or any
permit, license, authorization, franchise, approval, judgment,
order, injunction, decree or award of any court, arbitrator,
administrative agency or governmental body applicable to or
binding upon TGG.
(c) Binding Agreement. No authorization or
-----------------
approval is required for TGG to execute to execute and deliver
this agreement and to perform its obligations hereunder. This
agreement has been duly and validly executed and delivered by TGG
and constitutes its valid and binding agreement, enforceable
against it in accordance with and sub object to its terms.
(d) Approvals. No consent, approval, order or
---------
authorization of, or any registration, declaration or filing
with, any court, agency, governmental authority or any third
party is required in connection with the valid execution,
delivery, consummation and performance of this agreement by TGG
other than any filings required by the Securities Exchange Act of
1934.
The foregoing representations and warranties shall
survive the Closings and shall not be affected by any information
furnished to, or investigation made by, you. TGG will indemnify,
defend, protect and hold you harmless from and against any and
all losses, claims, damages, costs or expenses (including,
without limitation, attorneys' fees) asserted against, sustained
or incurred by you as a result of or in connection with any
misrepresentation or breach of warranty by TGG.
5. Continued Employment. TGG acknowledges that you
--------------------
must remain an employee of the Company until December 31, 2002 in
order to fully vest your employee stock options. TGG shall use
its reasonable efforts as a shareholder of the Company to cause
the Company to continue your employment with a salary of $5,000
per annum until such time as your options become vested.
Notwithstanding the above, TGG or its assigns will comply with
the terms of the Severance Agreement.
6. Covenants.
---------
(a) No Transfer. You will not sell, transfer or
-----------
assign the Shares or any interest therein except as provided in
this agreement. You will not sell, transfer or assign the TGG
Option Shares or any interest therein, except as provided in this
Agreement provided; however, that you may transfer TGG Option
Shares once said Shares are no longer subject to TGG's option to
purchase in paragraph 2.
(b) Exercise of Options. You will timely
-------------------
exercise the Karpoff Options and purchases the shares as provided
therein such that you own the requisite number of Shares of
common stock of the Company sufficient to enable you to perform
hereunder.
7. Miscellaneous.
-------------
(a) Entire Agreement. This agreement constitutes
----------------
one entire understanding and agreement relating to the subject
matter hereof and supersedes any and all prior understandings,
agreements, negotiations and discussions, both written and oral,
between us with respect to the subject matter hereof.
(b) Waiver. No Waiver or any of the provisions
------
of this agreement shall be deemed or shall constitute a waiver of
any other provision hereof (whether or not similar), nor shall
any such waiver constitute a continuing waiver unless otherwise
expressly so provided.
(c) Amendments. No changes in, modifications of,
----------
or amendments to, this agreement shall be valid unless the same
shall be in writing and signed by both of us.
(d) Governing Law. This agreement shall be
-------------
construed, interpreted and enforced in accordance with, and shall
be governed by the laws of the State of New York without
reference to, and regardless of, any applicable choice or
conflicts of laws principles. Any action or proceeding seeking
to enforce any provisions of, or based on any right arising out
of, this Agreement shall be brought in the courts the State of
New York for any action or proceeding arising under this
Agreement.
(e) Counterparts. This agreement may be executed
------------
in counterparts, each of which shall be deemed to be an original,
and all of which together shall constitute one and the same
agreement.
(f) Severability. If any provisions of this
------------
agreement or the application of any such provision to any person
or circumstances, shall be held invalid by any court of competent
jurisdiction the remainder of this agreement, or the application
of such provision to persons or circumstances other than those as
to which it is held invalid, shall not be affected thereby.
(g) Construction. This agreement shall be
------------
construed and intepretered without regard to any rule or
presumption requiring that it be construed or interpreted against
the party causing it to be drafted.
(h) Successors. This agreement shall be binding
----------
upon and shall inure to our benefit and the benefit of our
respective successors and assigns; provided, however, that TGG
shall notify you prior to any assignment of this Agreement.
(i) Further Assurances. Each of us shall from
------------------
time to time at the request of the other, and without further
consideration, execute and deliver such further instruments of
assignment, transfer, conveyance and confirmation and take such
other action as may be reasonably requested in order to more
effectively fulfill the purpose of this agreement.
(j) Adjustment. In the event of any stock split,
----------
stock dividends or recapitalization of the common stock of the
Company (including, without limitation, in connection with a
merger), the provisions of paragraphs 1 and 2 above shall apply
with respect to any new shares issued with respect to the Shares
and the TGG Option Shares and the purchase price and number of
shares shall be appropriately adjusted.
If this letter correctly states our agreement, please
sign below.
Very truly yours,
THE GOLDDONET GROUP
By: /s/ Ronald H. Colnett
--------------------------------
12/2/98
AGREED:
/s/ Michael Karpoff /s/ Patricia Rothbardt
--------------------------- -----------------------------------
Michael Karpoff Patricia Rothbardt
Date: December , 1998 Date: December , 1998
-- --
Address: 32 Gramercy Park S. Address: 32 Gramercy Park So.
------------------- --------------------
NY, NY 10003 NY, NY 10003 Apt 14B
------------------- --------------------
<PAGE>
December 9, 1998
Mr. Michael Karpoff
Ms. Patricia Rothbardt
c/o Mr. Anthony J. Kirincic
Kirlin Securities, Inc.
6901 Jericho Turnpike
Syosset, New York 11791
RE: First Priority Group
--------------------
Dear Mr. Karpoff and Ms. Rothbardt:
We agree to amend our agreement dated December 2, 1998
(the "Agreement") as follows:
1. The date for the satisfaction of the condition
precedent set forth in paragraph 1(b) of the Agreement is hereby
extended to December 18, 1998.
2. The number of TGG Option Shares is hereby reduced
to 945,000 shares and the following shares are hereby deleted as
TGG Option Shares: (a) 105,000 shares exercisable at $5.00 per
share expiring December 31, 2001; and (b) 95,000 shares
exercisable at $10.00 per share expiring December 31, 2001.
3. The proxy to be delivered by you at the Closing
will apply only to 945,000 shares of your stock of the Company.
4. You will not sell, transfer or assign any of the
common stock of the Company owned by both or either of you, or
any of the options to acquire common stock of the Company owned
by both or either of you, prior to December 31, 2001 except
pursuant to the Agreement.
This letter constitute an amendment of the Agreement.
Except as otherwise provided, capitalized terms used herein shall
have the same meaning as in the Agreement. The Agreement remains
in full force and effect as amended hereby.
Please sign below if this letter correctly states our
agreement.
Very truly yours,
THE GOLDONET GROUP
By:
---------------------------
AGREED:
-------------------------- ------------------------------
Michael Karpoff Patricia Rothbardt
Date: December , 1998 Date: December , 1998
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December 7, 1998
CONFIDENTIAL
Mr. Barry Siegel
Chairman & CEO
51 East Bethpage Road
Plainview, NY 11803-4224
Dear Barry:
On behalf of American Information Co. Inc d/b/a Consumer Car
Club, I am pleased to submit the following preliminary indication
of interest ("Proposal") for a combination of American
Information Co. Inc., "CCC", and First Priority Group, "FPG". We
are extremely excited about this Proposal and are convinced that
the proposed combination would bring great rewards to both
institutions and all the important constituencies, including
shareholders, employees, customers and the communities we serve.
There are tremendous synergies to be realized by combining these
two firms to create an unparalleled service provider. This
combination would create a powerful consumer car club and
commercial fleet business unrivaled in the U.S.
Purchase Price and Form of Consideration
----------------------------------------
Under the terms of this Proposal, the CCC shareholder would
receive approximately 33MM newly issued shares of FPG common
stock in exchange for CCC stock in a tax-free transaction. We
believe that with CCC, FPG stock will represent a much more
attractive investment for your shareholders. By acquiring CCC
stock for First Priority Group shares, your shareholders would be
receiving stock in a quality partner with strong momentum and
entry into a dynamic, high value business - the Internet. In our
view, a well as many Wall Street analysts, FPG at current levels
is undervalued. This offer contemplates a value of $1.95 per
fully diluted share for FPG, which is 16% higher than the current
market price. This offer also contemplates a value of $0.40 per
current CCC fully diluted share. Moreover, CCC has recently been
valued in excess $0.50 per share by CCC's investment banker and
the most recent investor valued CCC at $0.40 per share. As you
are aware, the valuations for dynamic businesses that have
leadership in Internet commerce, like our combined company, offer
our shareholders ample opportunity to realize appreciation in
value.
Due Diligence Request
---------------------
A "Due Diligence Data Request" is enclosed with this letter.
Both parties will not be expected to reproduce any information
requested which has already been provided.
Conditions or Contingencies
---------------------------
This Proposal is subject to satisfactory completion of a full due
diligence review by both parties, CCC's and FPG's Board approval
and CCC's and FPG's shareholders approval, and the execution of a
mutually agreeable definitive merger agreement.
Other Considerations
--------------------
We have long regarded First Priority Group to be an attractive
partner inasmuch as our two companies shares a strong commitment
to providing innovative services, outstanding customer service
and recognition of the contribution of our employees to our
success.
We are planning to merge the matching operations of CCC with
those of FPG and look forward to utilizing the expertise of FPG's
officers and employees to enhance the operations of the combined
entity.
Public Disclosure
-----------------
No public disclosure should be made of this Proposal and/or that
there are ongoing discussions between the parties without the
mutual written consent of both parties, or as required by law.
Survival
--------
the terms set forth in this Proposal shall be non-binding upon
the parties herein, except for this section and the one entitled
"Public Disclosure", which shall be binding upon the parties and
shall survive the termination or expiration of this Proposal.
We have the highest regard for you and your management team. We
believe that their involvement in the combined company is
critical to the future success and enhances our ability to
maximize the benefits of this merger. We contemplate that some
key members of FPG's management team would be offered important
positions in the combined company. In addition, these
individuals would be offered meaningful stock-based incentives as
part of a complete compensation package, as appropriate.
Our management team is excited about the proposed transaction and
believes the combined company will be ideally positioned for
continued strong growth in an ever-changing business environment.
<PAGE>
Kindly acknowledge your agreement by signing below.
Sincerely,
/s/ Michael D. London
Michael D. London
President & CEO
Enclosures
Acknowledged and agreed to this
12-8 day of 1998.
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/s/ Barry Siegel
---------------------------------
Barry Siegel
Chairman & CEO
First Priority Group
November 24, 1998
Kirlin Securities, Inc.
6801 Jericho Turnpike
Syosset, New York 11791
Re: First Priority Group
--------------------
Gentlemen:
This letter will confirm the terms of our agreement
regarding the purchase by The Golddonet Group or its assigns
("TGG") of certain shares of common stock of First Priority Group
(the "Company") from Michael Karpoff and Leonard Giarputto. We
agree as follows:
1. TGG is entering into an agreement with Michael
Karpoff, a copy of which is attached as Exhibit A (the "Karpoff
---------
Agreement"), by which TGG has the right to purchase from Mr.
Karpoff 150,000 shares of the common stock of the Company
pursuant to paragraph 1 of the Karpoff Agreement. If TGG elects
to proceed with the purchase and sale contemplated by the Karpoff
Agreement, you will purchase from Mr. Karpoff on the terms and
conditions set forth in the Karpoff Agreement that number of the
Shares designated by TGG; provided, however, that TGG shall
purchase the entire 100,000 Shares on January 4, 1999. You shall
not be obligated to purchase any of the Option Shares. Except
where note, capitalized terms in this paragraph shall have the
meanings set forth in the Karpoff Agreement.
2. TGG is entering into an agreement with Leonard
Giarputto, a copy of which is attached as Exhibit B (the
---------
"Giarputto Agreement") by which TGG has the right to purchase
from Mr. Giarputto 100,000 Shares of the common stock of the
Company pursuant to paragraph 1 of the Giarputto Agreement. If
TGG elects to proceed with the purchase and sale contemplated by
the Giarputto Agreement, you will purchase from Mr. Giarputto on
the terms and conditions set forth in the Giarputto Agreement
that number of the Shares designated by TGG, which may be the
entire 100,000 Shares. You will in any case be entitled to
purchase 50,000 of these shares. Except where note, capitalized
terms in this paragraph shall have the meanings set forth in the
Giarputto Agreement.
3. In the event that TGG exercises its options to
purchase, and purchases all of the TGG Option Shares under the
Karpoff Agreement having an expiration date on or prior to
December 31, 2000 and all of the TGG Option Shares under the
Giarputto Agreement having an expiration date on or before
December 31, 2000, TGG will pay you a $50,000 fee. Said fee will
be payable upon the closing of the purchase of the TGG Option
Shares pursuant to the exercise of the options expiring December
31, 2000.
4. In the event that the Company is merged with
American Information Company, Inc., and subject to the approval
of the Board of Directors of the respective companies, TGG will
use its reasonable efforts to cause the company created by the
merger to pay you a customary finders fee in warrants to acquire
common stock of the new company; provided, however, that you
shall not receive warrants to acquire more than 2.5% of the
outstanding common stock of the new company as of the date of the
merger. The warrants shall be exercisable at the price per share
equal to the market value of the new company as of the date of
the merger divided by the fully diluted number of shares of stock
of the new company as of the date of the merger.
5. This agreement constitutes our entire agreement
with respect to the subject matter hereof and supercedes all
prior understandings, agreement, negotiations and discussions.
No changes in, or modifications of, this agreement shall be valid
unless in writing and signed by both of us. This agreement shall
be governed by California law without regard to the applicable
conflicts of laws principles. You represent and warrant that the
execution, delivery and performance of this agreement by the
person signing below on your behalf has been duly authorized by
all necessary corporate action and that this agreement is your
valid and binding obligation.
If this letter correctly states our agreement, please
sign below.
Very truly yours,
THE GOLDONNET GROUP
By: /s/ Ronald H. Colnett
---------------------------
AGREED: 12/2/98
KIRLIN SECURITIES, INC.
By: /s/ Signature - President
--------------------------------
Date: November , 1998
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December 2, 1998
