SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
February 18, 1997
(Date of Report)
Midland, Inc.
(Exact Name of Registrant as specified in its charter)
Colorado
(State or other jurisdiction of incorporation)
33-20492-D Applied For
(Commission File Number) (IRS Employer Identification Number)
10528 Kirkham Court, Nos. 6 & 7, Poway, California 92064
(Address of principal executive offices including zip code)
(619) 679-3290
(Registrant's telephone number including area code)
America's Coffee Cup, Inc.
(Former name or former address, if changed since last report)
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Item 1. Change in Control of Registrant.
See Item 2, below.
Item 2. Acquisition or Disposition of Assets.
On February 18, 1997 (the "Closing Date"), Registrant, Midland, Inc.,
f/k/a, America's Coffee Cup, Inc.,executed, delivered and closed under a
Plan and Agreement of Purchase (the "Purchase Agreement") with the
shareholders (the "Shareholders") of MILL-AGRO (HELLAS) SA, a Panamanian
company, and MEGAHEL NAUTICAL SA, a Greek company (both of which business
entities are collectively referred to herein as the "Subsidiaries"),
whereby Registrant acquired from the Shareholders all of the outstanding
proprietary interest of these entities, thereby making them wholly-owned
subsidiaries of Registrant. The Subsidiaries have now changed, or will
forthwith change, their names to Midland Steamship SA and Midland
Agricultural SA
Registrant issued and caused to be delivered to the Shareholders,
immediately subsequent to the Closing Date, 74,604 shares of its previously
authorized Series A Preferred Stock ("Series A Preferred Stock") and
149,259 shares of a Series B Preferred Stock ("Series B Preferred Stock"),
which was created immediately after the closing.
The Series A Preferred Stock consists of 360,000 shares, with each share
(i) to be automatically converted into 35 shares of Common Stock on October
1, 1998, but no sooner, (ii) being entitled to 35 votes on each matter
submitted to the shareholders of Registrant, with certain super-majority
provisions being applicable in certain instances, (iii) being entitled to
a liquidation preference of $21 per share and (iv) not being redeemable.
The Series A Preferred Stock will also be entitled to two separate annual
dividends consisting of one-tenth of one share of Series A Preferred Stock
and two warrants to purchase common stock of Registrant ("Common Stock")
at a price of $1.00 per share in the event that either certain financial
performance conditions are not met by Registrant or the Common Stock does
not trade at or above certain prices. Specifically, the first dividend
will be required to be declared and paid as of September 1, 1997, in the
event that (i) Registrant's pretax earnings for the twelve months ended
June 30, 1997, do not meet or exceed $300,000 in amount, excluding
extraordinary and nonrecurring items, or (ii) the lowest bid price for the
Common Stock is less than $2.50 per share during any ten consecutive
trading days between June 30, 1997, and August 15, 1997. A second dividend
will be required to be declared and paid as of September 1, 1998, in the
event that (i) Registrant's pretax earnings for the twelve months ended
June 30, 1998, do not meet or exceed $450,000 in amount, excluding
extraordinary and nonrecurring items, or (ii) the lowest bid price for the
Common Stock is less than $2.50 per share for any ten consecutive trading
days between August 14, 1997, and August 15, 1998. These dividends
are cumulative, and this series has certain non-dilution provisions
applicable to it in the event of stock dividends, stock splits and other
extraordinary corporate events. As a result of the purchase of the
Subsidiaries, there are now 162,100 shares of Series A Preferred Stock
outstanding.
The Series B Preferred Stock consists of 149,259 shares, with each share
(i) to be automatically converted into 150 shares of Common Stock on
October 1, 1998, or sooner at the election of the holder, (ii) being
entitled to 150 votes on each matter submitted to the shareholders of
Registrant, with certain super-majority provisions being applicable in
certain instances, (iii) not being entitled to a liquidation preference,
(iv) not being redeemable and (v) not being entitled to dividends. This
series has certain non-dilution provisions applicable to it in the event
of stock dividends, stock splits and other extraordinary corporate events.
As a result of the purchase of the Subsidiaries, there are now 149,259
shares of Series A Preferred Stock outstanding.
Immediately following the execution, delivery and consummation of the
Purchase Agreement, the Board of Directors was expanded to six in number
and, joining Messrs. Robert W. Marsik and Mark S. Pierce to fill the
empty seats on the board were, Messrs. Chris Traios, Charles Stidham, E.
Robert Barbee and Arthur Malcolm. All directors have been appointed to
serve until the next annual meeting of shareholders and until their
successor are duly elected and qualified, or until they earlier resign or
are dismissed. No director has any contractual rights to his position.
The newly constituted Board of Directors then appointed (i) Mr. Traios as
Chairman of the Board of Directors and as Chief Executive Officer and
President, (ii) Mr. Marsik as Executive Vice-President, Chief Financial
Officer and Treasurer, (iii) Mr. Stidham as Managing Director of North
American Shipping and Trading Operations, (iv) Mr. E. Robert Barbee as
Vice-President and (v) Mr. Mark S. Pierce as Secretary.
Registrant, immediately following closing, changed its name to Midland,
Inc. The Subsidiaries have now changed, or will forthwith change, their
names to Midland Steamship SA and Midland Agricultural SA. Registrant has
also formed, or will forthwith form, two additional subsidiaries, Midland
Liners SA and Midland Shipping SA, in order to provide for the anticipated
expansion of the business of Registrant into the container and shipping
business.
The Shareholders on the Closing Date delivered a Balance Sheet of the
Subsidiaries as of December 31, 1996, which had been reported on by
Republic Of Greece, Ministry of Commerce on February 14, 1997. The
Shareholders have undertaken to deliver audited financial statements in
accordance with applicable securities laws within 75 days of the Closing
Date. If the audited statements are not delivered or do not conform with
the audit of the Ministry Of Commerce within a minus 20%, the Board of
Directors in place prior to the Closing Date will be entitled to reverse
the closing the acquisition of the Subsidiaries.
The assets of the Subsidiaries, as of December 31, 1996, and as reported
on by the Republic of Greece, Ministry of Commerce on February 14, 1997,
aggregated $3,675,163 in amount and consisted of office, furniture and
various equipment, accounts receivable, freight advances, bank balances,
and fixed assets consisting of two hydrofoils, one hopper-barge, one
motor-tanker and one motor-bulk carrier, all of which are used in the
shipping business of the Subsidiaries. The liabilities of the
Subsidiaries, as of December 31, 1996, and as reported on by the Republic
of Greece, Ministry of Commerce on February 14, 1997, aggregated $1,545,435
in amount and consisted primarily of accounts payable. The result of the
foregoing was an equity amount of $2,129,728.
As a result of the acquisition of the Subsidiaries, Registrant now has the
following outstanding securities: (i) 861,567 shares of Common Stock
outstanding in the hands of the public prior to the acquisition of the
Subsidiaries; (ii) "Bridge Loan Options" which, upon exercise, will require
the issuance of up to 1,809,955 shares of Common Stock and 2,585,650
warrants each allowing the acquisition of one additional share of Common
Stock; (iii) 54,000 shares of Series A Preferred Stock issued in a recent
public offering which, upon conversion and assuming no dividends, will
require the issuance of approximately 1,890,000 shares of Common
Stock, and 2,700,000 Series A warrants each allowing the acquisition of one
share of Common Stock; (iv) compensatory options to former management
which, upon exercise, allow the acquisition of up to 33,496 shares
of Series A Preferred Stock which, upon conversion and assuming no
dividends, will require the issuance of approximately 1,172,360 shares of
Common Stock; (v) compensatory options to former management which,
upon exercise, allow the acquisition of up to 552,640 shares of Common
Stock; (vi) 74,604 shares of Series A Preferred Stock issued in the
acquisition of the Subsidiaries which, upon conversion and assuming no
dividends, will require the issuance of approximately 2,611,140 shares of
Common Stock; and (vii) 149,259 shares of Series B Preferred Stock issued
in the acquisition of the Subsidiaries which, upon conversion, will
require the issuance of approximately 22,388,850 shares of Common Stock.
Registrant does not have a sufficiency authorized capitalization to provide
for the exercise and/or conversion of all of the foregoing securities, and
will, therefore, call and hold a shareholders' meeting for the purpose of
increasing its capitalization. If all shares of Common Stock underlying
the foregoing convertible securities were issued, the total number of
shares of Common Stock would approximate 36,000,000 in number. The Series
A and B Preferred Stock, given their terms and conditions, are considered
to be a part of the same class of securities as the Common Stock for
purposes of Section 16 of the Securities Exchange Act of 1934, as amended,
and Rule 144 thereunder; thus, as of the date of this report, there were
considered to be approximately 27,751,557 shares of Common Stock
outstanding.
Item 3. Bankruptcy or Receivership.
Not Applicable.
Item 4. Changes in Registrant's Certifying Accountant.
Not Applicable.
Item 5. Other Events.
None.
Item 6. Resignation of Registrant's Directors.
Not Applicable.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The financial statements required under this item will be filed within the
time frame set forth in Form 8-KSB.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
MIDLAND, INC.
(Registrant)
By: /s/ Chris Traios
Chris Traios, Chief
Executive Officer
DATE: March 4, 1997
<PAGE>
EXHIBITS
Exhibit 1. - Plan and Agreement of Purchase between registrant and the
shareholders of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA
Exhibit 2. - Series B Preferred Stock Provisions
<PAGE>
EXHIBIT 1. - PLAN AND AGREEMENT OF PURCHASE
<PAGE>
PLAN AND AGREEMENT OF PURCHASE
This Plan and Agreement of Purchase entered into in Denver, Colorado, this
18th day of February, 1997, between America's Coffee Cup, Inc., D.B.A.
Wayward Ventures, Inc., a Colorado corporation, sometimes referred to in
this Agreement as the "Purchaser," or "ACC" and the Shareholders of
MILL-AGRO (HELLAS) SA, a Panama Company, and MEGAHEL NAUTICAL SA, a Greek
company, sometimes referred to in this Agreement as the "Shareholders" and
listed on the signature page hereto by name, and MILL-AGRO (HELLAS) SA and
MEGAHEL NAUTICAL SA sometimes referred to in this Agreement as the
"Acquired Corporations."
The Purchaser will acquire from the Shareholders 100% (100 shares of
MILL-AGRO and 100 Shares of MEGAHEL) shares of the issued and outstanding
shares of capital stock of the Acquired Corporations, in exchange solely
for shares of voting stock of the Purchaser. Under this Plan, the Acquired
Corporations will become subsidiaries of the Purchaser.
ARTICLE I
EXCHANGE OF CAPITAL STOCK
Transfer of Acquired Corporation's Capital Stock
1.01 Subject to the terms and conditions of this Agreement, each
Shareholder of the Acquired Corporations will transfer and deliver to the
Purchaser on the Closing Date 100% of their certificates for shares of
Capital Stock of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA, duly
endorsed in blank.
Consideration for Transfer
1.02 In exchange for all shares transferred by the Shareholders pursuant
to Paragraph 1.01, the Purchaser will forthwith issue and cause to be
delivered to the Shareholders, at or immediately subsequent to the Closing
Date, 74,604 shares of Series A Preferred Stock and 149,259 shares of
Series B Preferred Stock. The shares of Series A Preferred Stock shall
each be convertible into 35 shares of Common Stock in accordance with the
terms and conditions therefor as filed with the Secretary of State for the
State of Colorado on August 24, 1996, and shall each be entitled to 35
votes on each matter to be submitted to the shareholders of Purchaser, all
in accordance with the aforesaid filing. The shares of Series B Preferred
Stock shall be convertible into 150 Shares of Common Stock for each share
of Preferred B stock at any time, at the option of the Holder, after the
Charter of ACC is amended to authorize the issuance of Fifty Million
(50,000,000) shares of Common Stock. Such amendment shall be filed as soon
as possible after this transaction closes. Until such time as the holders
of Preferred B convert they shall be allowed to vote said preferred at any
shareholders meeting as if it had been converted. (I.E. Each share of
Preferred B shall be entitled to a vote of 150 shares of Common at any and
all shareholders meetings)
Closing Date
1.03 Subject to the conditions precedent set forth in this Agreement, and
the other obligations of the parties set forth in the Agreement, the Plan
of Purchase shall be consummated at Denver Colorado on or before February
18th 1997, at 10:00 o'clock A.M. Consummation shall include the delivery
by the Shareholders of the Acquired Corporations, all of their shares of
Capital Stock of the Acquired Corporations, as provided in Paragraph 1.01
of this Agreement, and the delivery by the Purchaser of its shares of
Common Stock, as provided in Paragraph 1.02 of this Agreement. The date
of the consummation of this Agreement is referred to as the "Closing Date."
It is agreed that Chris Traios shall be appointed to the ACC Board and
shall be elected Chairman/CEO of ACC as soon as the transaction closes.
Robert Marsik shall remain as a Board Member and shall be appointed
Executive Vice President of ACC, Mark Pierce will remain as a member of the
Board of Directors and Charles Stidham will be appointed to the Board and
will be appointed Managing Director of North American Shipping and Trading
Operations, E. Robert Barbee shall be appointed a Director and shall be
named a Vice President of the Company and Arthur Malcolm shall be appointed
to the Board of Directors to make a total of six (6) current Directors with
a seventh Board Member to be nominated by Chris Traios at a later date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES ACQUIRED CORPORATION
Organization and Standing of Acquired Corporation
2.01 MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA are corporations duly
organized, validly existing, and in good standing under the laws of Panama
and Greece, with corporate power to own property and carry on their
business as it is now being conducted. Copies of the articles of
incorporation of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA, that have
been certified by the Secretary of The Company and delivered to the
Purchaser, are complete and accurate as of the date of this Agreement.
MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA, are qualified to transact
business as foreign corporations and are in good standing in all
jurisdictions in which their principal properties are located or are not
required to be qualified as a foreign corporation to transact business in
any other jurisdiction.
Subsidiaries
2.02 MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA have no subsidiaries.
Capitalization
2.03 MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA have an authorized
capitalization of 100 and 100 shares, and as of the date of this Agreement
One Hundred (100 ) shares are issued and outstanding, fully paid, and non
assessable, in each Corporation. There are no outstanding subscriptions,
options, contracts, commitments, or demand relating to the authorize but
unissued stock of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA or other
agreements of any character under which MILL-AGRO (HELLAS) SA and MEGAHEL
NAUTICAL SA would be obligated to issue or purchase shares of its capital
stock.
Financial Statements
2.04 (a) A Balance Sheet as of December 31, 1996, is attached as Exhibit
"A", reported on by Republic Of Greece, Ministry of Commerce, dated
February 14, 1997. Certified Financial Statements will be provided by
the Auditor of the Companies, in accordance with GAAP and GAAS standards
within Seventy Five (75) days of the closing of this transaction. All the
Certified financial statements described in this Paragraph will be prepared
in conformity with generally accepted accounting principles, applied on a
consistent basis, and present fairly the financial position of MILL-AGRO
(HELLAS) SA and MEGAHEL NAUTICAL SA as of December 31, 1996, subject to
normal changes resulting from year-end audit of the financial statements
as of December 1997. The Financial Statements and opinions will conform
with the Requirements of Form 8-KSB.
(b) Other than changes in the usual and ordinary conduct of the business
since December 31, 1996, there have been and at the Closing Date there will
be, no materially adverse changes in such financial conditions of MILL-AGRO
(HELLAS) SA and MEGAHEL NAUTICAL SA.
(c) Subject to any changes as a result of the ordinary and usual course
of business, the assets of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA
at the Closing Date will be substantially those owned by it and shown on
its financial statements as of December 31, 1996.
(d) If the results of the Certified Audit does not conform with the audit
of the Ministry Of Commerce within (minus) - 20% then this transaction is
subject to recession by the prior Board of ACC. The prior Board shall have
the option of reversing the closing this transaction, where the Stock
issued by ACC shall be canceled and the stock of MILL-AGRO and MEGAHEL
shall be returned to its original owners, the intent of this paragraph is
to restore the parties to this agreement to their position as if the
transaction had not closed.
Operations Since Balance Sheet
2.05 Since its Balance Sheet date of December 31, 1996, MILL-AGRO (HELLAS)
SA and MEGAHEL NAUTICAL SA has not, and prior to the Closing Date will not
have:
(a) Issued or sold any stock, bond, or other corporate securities;
(b) Except for liabilities incurred and obligations entered into in the
ordinary course of business, incurred any obsolete or contingent
obligation, including long-term debt;
(c) Except for liabilities shown on the balance sheet and current
liabilities incurred since that date in the ordinary course of business,
discharged or satisfied any lien or encumbrance, or paid any obligation or
liability;
(d) Mortgage, pledged, or subjected to lien any of its assets except in
the ordinary course of business;
(e) Except in the ordinary course of business, sold or transferred any of
its tangible assets, or canceled any debts
or claims, or waived any rights of substantial value;
(f) Sold, assigned, or transferred any patents, formulas, trademarks,
trade names, copyrights, licenses, or other intangible assets;
(g) Incurred any materially adverse losses or damage, or become involved
in any strikes or other labor disputes;
(h) Entered into any transaction other than in the ordinary course of
business, except for the transaction that is the subject matter of this
Agreement;
Title to Assets
2.06 The Acquired Corporation has good and marketable title to all its
assets specified in the schedule described in Paragraph 2.07, and reflected
in the Balance Sheet dated December 31, 1996. All such assets are not
subject to any mortgage, pledge, lien, charge, security interest,
encumbrance, or restriction except those that:
(a) Are disclosed on the Balance Sheet as securing specified liabilities;
(b) Are disclosed in the Schedule of Assets listed in Paragraph 2.07; or
(c) Do not materially adversely affect the use of the asset. The buildings
and equipment of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA are in good
condition and repair, except for reasonable wear and tear.
Schedule of Assets
2.07 Prior to the Closing Date, the Acquired Corporation will have
delivered to the Purchaser a separate Schedule of Assets, specifically
referring to this paragraph, containing a true and complete:
(a) Legal description of all real property owned by MILL-AGRO (HELLAS) SA
and MEGAHEL NAUTICAL SA and any real property in which MILL-AGRO (HELLAS)
SA and MEGAHEL NAUTICAL SA has a leasehold interest;
(b) Aged list of accounts receivable as of the Closing Date;
(c) List of all capitalized machinery, tools, equipment, and rolling stock
owned by MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA that sets forth any
liens, claims, encumbrances, charges, restrictions, covenants, and
conditions concerning the listed items.
(d) Description of all machinery, tools, equipment, and rolling stock in
which MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA has a leasehold
interest, with a description of each interest;
(e) A true and complete list of all patents, patent licenses, trademarks,
trademark registrations, trade names, copyrights, and copyright
registrations owned by MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL
SA; and
(f) List of all fire and other casualty and liability policies of
MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA in effect at the time of
delivery of such schedule.
(g) All software products including source codes.
2.08 (a) Except as set forth in the Balance Sheet of MILL-AGRO (HELLAS)
SA and MEGAHEL NAUTICAL SA, dated December 31, 1996, described in Paragraph
2.05, MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA presently have no
outstanding indebtedness other than liabilities incurred in the ordinary
course of business or in connection with this transaction. MILL-AGRO
(HELLAS) SA and MEGAHEL NAUTICAL SA are not in default with respect to any
terms or conditions of any indebtedness.
(b) MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA have not made any
assignment for the benefit of creditors, nor has any involuntary or
voluntary petition in bankruptcy been filed by or against MILL-AGRO
(HELLAS) SA and MEGAHEL NAUTICAL SA
Litigation
2.09 (a) MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA are not a party to,
nor have they been threatened with, any litigation or governmental
proceeding that, if decided adversely to them, would have a material
adverse effect on the transaction contemplated by this Agreement, or on the
financial condition, net worth, prospects, or business of MILL-AGRO
(HELLAS) SA and MEGAHEL NAUTICAL SA. To the best of the Acquired
Corporations' knowledge, they are not aware of any facts that might result
in any action, suit, or other proceeding that would result in any material
adverse change in the business or financial condition of MILL-AGRO (HELLAS)
SA and MEGAHEL NAUTICAL SA.
(b) To the best of their knowledge, MILL-AGRO (HELLAS) SA and MEGAHEL
NAUTICAL SA are not infringing on or otherwise acting adversely to any
copyrights, trademark rights, patent rights, or licenses owned by any other
person, and there is not pending claim or threatened action with respect
to such rights. MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA are not
obligated to make any payments in the form of royalties, fees, or otherwise
to any owner or of any patent, trademark, trade name, or copyright.
Compliance With Law and Other Instruments
2.10 The business operation of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL
SA have been and is being conducted in accordance with all applicable laws,
rules, and regulations of all authorities. MILL-AGRO (HELLAS) SA and
MEGAHEL NAUTICAL SA are not in violation of, or in default under, any terms
or provision of its Articles of Incorporation, its Bylaws, or of any lien,
mortgage, lease, agreement, instrument, order, judgment, or decree, or any
other type of restriction that would prevent consummation of the exchange
of securities contemplated by this Agreement.
Contractual Obligations
2.11 MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA are not a party to or
bound by any written or oral:
(a) Contract not made in the ordinary course of business;
(b) Contract with any labor union other than in the ordinary course of
business;
(c) Bonus, pension, profit sharing, retirement, stock option,
hospitalization, group insurance, or similar plan providing employee
benefits other than in the ordinary course of business;
(d) Any real or personal property lease or lessor other than in the
ordinary course of business;
(e) Advertising contract or contract for public relations services other
than in the ordinary course of business;
(f) Purchase, supply, or service contracts in excess of $10,000 each, or
in the aggregate of $100,000 for all such contracts other than in the
ordinary course of business;
(g) Deed of trust, mortgage, conditional sales contract, security
agreement, pledge agreement, trust receipt, or any other agreement
subjecting any of assets or properties of MILL-AGRO (HELLAS) SA and MEGAHEL
NAUTICAL SA to a lien, encumbrance, or other restriction other than in the
ordinary course of business;
(h) Term contract continuing for a period of more than 1 years that is not
terminable without liability to MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL
SA or their successors other than in the ordinary course of business; or
(i) Contract that
(i) Contains a predetermination of price or similar type of
provision; or
(ii) Provides for a fixed price for goods or services sold.
MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA has performed all obligations
required to be performed by them to date and is not in material default
under any of the contracts, leases, or other arrangements by which it is
bound. None of the parties with whom MILL-AGRO (HELLAS) SA and MEGAHEL
NAUTICAL SA has contractual arrangements are in default of their
obligations.
Changes in Compensation
2.12 Since the Balance Sheet date of December 31, 1996, MILL-AGRO (HELLAS)
SA and MEGAHEL NAUTICAL SA have not granted any general pay increase to
employees or changed the rate of compensation, commission, or bonus payable
to any officer, employee, director, agent, or stockholder other than in the
normal course of business.
Inventories
2.13 Since the Balance Sheet date of December 31, 1996, MILL-AGRO (HELLAS)
SA and MEGAHEL NAUTICAL SA have continued to replenish their inventories
in the customary manner of entities engaged in the business MILL-AGRO
(HELLAS) SA and MEGAHEL NAUTICAL SA conducts, and will continue to do so
until the Closing Date.
Records
2.14 All of the account books, minute books, stock certificate books, and
stock transfer ledgers of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA are
complete and accurate.
No Brokers or Finders
2.15 All negotiations on the part of the Shareholders related to this
Agreement have been accomplished solely by the Shareholders without the
assistance of any person employed as a broker or finder. The Shareholders
have done nothing to give rise to any valid claims against MILL-AGRO
(HELLAS) SA and MEGAHEL NAUTICAL SA for a brokers commission, finder's fee,
or any similar charge.
Taxes
2.16 (a) MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA have filed all
income tax returns and, in each jurisdiction where qualified or
incorporated, all income tax and franchise tax returns that are required
to be filed. MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA have paid all
taxes as shown on the returns as have become due, and have paid all
assessments received that have become due.
Full Disclosure
2.17 As of the Closing Date the Acquired Corporations will have disclosed
all events, conditions, and facts materially affecting the business and
prospects of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA The Acquired
Corporations have not withheld knowledge of any events, conditions, and
facts that they have reasonable ground to know may materially affect the
business and prospects of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA
None of the representations and warranties made by the Acquired
Corporations in this Agreement or set forth in any other instrument
furnished to Purchaser contained any untrue statement of a material fact,
or fails to state a material fact.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Organization and Standing of Purchaser
3.01 America's Coffee Cup, Inc., DBA Wayward Ventures, Inc. is a
corporation duly organized, validly existing, and in good standing under
the laws of the State of Colorado, with corporate power to own property and
carry on its business as it is now being conducted. Copies of the articles
of incorporation of America's Coffee Cup, Inc., DBA Wayward Ventures,
Inc., that have been certified by the Secretary of State of Colorado and
will be delivered to the Acquired Corporation, are complete and accurate
as of the date of this Agreement. America's Coffee Cup, Inc., DBA Wayward
Ventures, Inc., is qualified as a foreign corporation to transact business
in other jurisdictions.
Subsidiaries
3.02 America's Coffee Cup, Inc., Wayward Ventures, Inc.,has one
subsidiary, also known as Americas's Coffee Cup, Inc., which is a
Colorado Corporation.
Capitalization
3.03 ACC has an authorized capitalization of 10,000,000 shares of common
stock of the par value of $0.40 per share, of which 861,000 shares will
be validly issued, outstanding, and fully paid as of the Closing Date. ACC
will amend its charter to increase the authorized to 50,000,000 as soon as
possible after the closing of this transaction. There will be at the
Closing Date no outstanding options, contracts, calls, commitments, or
demands relating to the authorized but unissued stock of ACC except as
follows:
(1) 861,567 shares of common stock issued and outstanding in the hands of
the public, including the two existing members of the board governing
Purchaser;
(2) 1,809,955 shares of common stock of the Purchaser underlying certain
"Bridge Loan Options" issued in connection with Purchaser's recently
completed public offering, as well as 2,585,650 warrants underlying said
option, each of which allow the acquisition of one share of Purchaser's
common stock;
(3) 1,890,000 shares of common stock underlying the shares of Series A
Preferred Stock issued to the persons purchasing said shares in Purchaser's
recently completed public offering, as well as 2,700,000 warrants
underlying said preferred shares, each of which allow the acquisition of
one share of Purchaser's common stock;
(4) 1,172,360 shares of common stock underlying the 33,496 shares of
Series A Preferred Stock subject to an option of the board governing the
Purchaser at the Closing Date; and
(5) 552,640 shares of common stock underlying options granted pursuant to
the existing stock option plan of the Purchaser.
ACC has 1,000,000 shares of preferred stock authorized, of which 54,000
shares were issued to the public and 33,496 are subject to option by
members of the current board governing ACC. Other than as set forth above,
there are no other outstanding options, calls, contracts or commitments
relating to authorized but unissued Common or Preferred Stock, except the
shares of Series "B" preferred to be issued herein.
Financial Statements
3.04 ACC has delivered to the Acquired Corporation;
(a) The balance sheet of ACC of September 30, 1996 and the related
statements of income and retained earnings of ACC for the period ended
September 30, 1996 are true as of the signing of this agreement. The
December 31, 1995 10K and the Prospectus dated August 14, 1996 have also
been delivered to the selling Shareholders.
All the financial statements listed in this Paragraph present fairly the
financial condition of ACC at the specified dates and the results of its
operations for the period specified. The statements were prepared in
accordance with generally accepted accounting principles applied in a
manner consistent with prior accounting periods.
Financial Condition Since Balance Sheet Date
3.05 Since the Balance Sheet date of September 30, 1996, there are
changes, events, and conditions that have occurred that materially and
adversely affect the financial condition, assets, business, or prospects
of ACC, and said conditions have been disclosed.
Title to Assets
3.07 All book assets of ACC are in existence in its possession, are in
good condition and repair, and conform to all applicable zoning and
building laws and ordinances. ACC has good and marketable title to all of
its assets and, except as shown on its financial statements as of
September 30, 1996 holds such assets subject to no mortgage, lien, or
encumbrance.
Status of Transferred Shares
3.08 The shares of stock of ACC that are to be issued and delivered to
shareholders of Acquired Corporation pursuant to the terms of this
agreement will be validly authorized and issued, and will be fully paid and
non assessable. No shareholder of ACC will have any preemptive right of
subscription or purchase with respect to the shares to be transferred.
Indebtedness
3.09 Except as set forth in the balance sheet of ACC of September 30,
1996, there is not outstanding indebtedness other than liabilities incurred
in the ordinarily course of business or in connection with this
transaction. ACC is in default with respect to terms and conditions of
indebtedness related to Brothers Coffee and Ralph's Supermarkets on rent
and the judgment in favor of Brothers, Restaurant Blend and Daymar.
Litigation
3.10 ACC is not a party to, nor had it been threatened with any litigation
or governmental proceeding that could have a material, adverse effect on
the transaction contemplated by this Agreement or on the financial
condition of ACC other than Matossin, Abraham and Christensen and
Restaurant Blend and Daymar Corporation.
Purchaser's Authority
3.11 The execution and performance of this Agreement have been duly
authorized by all requisite corporate action to allow the B Preferred to
be issued, including the voting and conversion rights and subject to
shareholder approval shall increase the authorized Common Stock to
50,000,000 and change the name of ACC to Midland, Inc. This Agreement
constitutes a valid and binding obligation of America's Coffee Cup, Inc.,
Wayward Ventures, Inc. in accordance with its terms. No provision of the
Articles of Incorporation, Bylaws, minutes, share certificates, or
contracts prevents America's Coffee Cup, Inc., Wayward Ventures, Inc. from
delivering good title to its shares of ACC capital stock in the manner
contemplated by this Agreement.
Brokers
3.12 America's Coffee Cup, Inc., Wayward Ventures, Inc. has not retained
nor otherwise utilized the services of any broker or finder in connection
with the transaction contemplated by this Agreement. America's Coffee
Cup, Inc., Wayward Ventures, Inc. has done nothing to give rise to any
valid claims against the Acquired Corporation for a brokerage commission,
finder's fee, or any similar charge.
ARTICLE IV
SURVIVAL OF WARRANTIES AND LIABILITIES
Nature and Survival of Representations and Warranties
4.01 All statements of fact contained in this Agreement, or in any
memorandum, certificate, letter, document, or other instrument delivered
by or on behalf of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA and
America's Coffee Cup, Inc., Wayward Ventures, Inc. pursuant to this
agreement shall be deemed representations and warranties made by any such
party, respectively, to each other party under this agreement. The
covenants, representations, and warranties of the parties and the
shareholders shall survive the Closing Date, and all inspections,
examinations, or audits on behalf of the parties and the shareholder for
a period of one (1) year following the Closing Date.
Indemnification; Expenses
4.02 The Acquired Corporation shall pay its own expenses incurred by them
arising out of this Agreement and the transactions contemplated in this
Agreement, including but not limited to all fees and expenses of their
counsel and accountants. Whether or not this Agreement is terminated, each
of the parties shall bear all expenses incurred by it in connection with
this Agreement and in the consummation of the transactions contemplated by
and in preparation for the Agreement.
Minority Shareholders
4.03 All shareholders of the Acquired Corporations shall have no liability
under this Agreement for any breach of the representations or warranties
made by MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA under this Agreement.
ARTICLES V
COMPLIANCE WITH SECURITIES LAWS
Unregistered Stock Under Federal Securities Act
5.01 (a) Each shareholder of the Acquired Corporations acknowledges that
the shares of the Purchaser's Stock to be delivered to the Shareholder
pursuant to this Agreement have not been registered under the Federal
Securities Act of 1934, as amended, referred to in this Agreement as the
"1934 Act," and that therefore the stock is not fully transferable except
as permitted under various exemptions contained in the 1934 Act and the
rules of the Securities and Exchange Commission interpreting the Act. The
provisions contained in the Paragraph 9.01 are intended to ensure
compliance with the 1933 Act.
No Distribution of Stock to Public
(b) Each shareholder of the Acquired Corporation represents and warrants
to the Purchaser that the shareholder is acquiring the shares of the
Purchaser's Common Stock under this Agreement for the shareholder's own
account for investment, and not for the purpose of resale or any other
distribution of the shares. Each shareholder also represents and warrants
that the shareholder has no present intention of disposing of all or any
part of such shares at any particular time, for any particular price, or
on the happening of any particular circumstances. Each shareholder
acknowledges that the Purchaser is relying on the truth and accuracy of the
warranties and representations set forth in this Paragraph in issuing the
shares without first registering the shares under the 1934 Act.
No Transfers in Violation of the 1934 Act
(c) Each shareholder of the Acquired Corporation covenants and represents
that none of the shares of America's Coffee Cup, Inc., Wayward Ventures,
Inc. Capital Stock that will be issued to the shareholder pursuant to this
Agreement, will be offered, sold, assigned, pledged, transferred, or
otherwise disposed of except after full compliance with all of the
applicable provisions of the 1934 Act and the rules and regulations of the
Securities and Exchange Commission under the 1934 Act. Therefore, each
shareholder agrees not to sell or otherwise dispose of any of the shares
of the Purchaser's Common Stock received pursuant to this Agreement unless
the shareholder:
(i) Has delivered to the Purchaser a written legal opinion in form
and substance satisfactory to counsel for the Purchaser to the effect that
the disposition is permissible under the terms of the 1934 Act and
regulations interpreting the Act;
(ii) Has complied with the registration and prospectus requirements
of the 1934 Act relating to such a disposition; or
(iii) Has presented the Purchaser satisfactory evidence that such a
disposition is exempt from registration under Section 4(1) of the Act.
The Purchaser shall place a stop transfer order against transfer of the
shares until one of the conditions set forth in this subparagraph has been
met.
Investment Legend on Certificate
(d) Each shareholder of the Acquired Corporation agrees that the
certificates evidencing the shares the shareholder will receive under this
Agreement will contain the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1934 AND HAVE BEEN TAKEN FOR INVESTMENT. THE
SECURITIES MAY NOT BE SOLD OR OFFERED FOR SALE UNLESS A REGISTRATION
STATEMENT UNDER THE FEDERAL SECURITIES ACT OF 1934, AS AMENDED, IS IN
EFFECT FOR THE SECURITIES, OR ANY EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF SUCH ACT IS IN FACT APPLICABLE TO SUCH OFFER OR SALE.
Indemnification by Shareholders
(e) If any time in the future any of the shareholders of the Acquired
Corporations sell or otherwise dispose of any of such shares of Common
Stock received from the purchaser without registration under the 1934 Act
or any similar federal statute that may then be in effect, such shareholder
agrees to indemnify and hold harmless the Purchaser against any claim,
liabilities, penalties, costs, and expenses that may be asserted against
or suffered by the Purchaser as a result of the such disposition.
Future Registration
(f) If within three (3) years after the initial registration, the
Purchaser decides to file a registration statement under the 1934 Act,
covering a sale by the Purchaser or a shareholder of the Purchaser of
shares of the Purchaser's Commons Stock for cash, the Purchaser will mail
to each shareholder written notice of its intent to file such a
registration statement. If a shareholder delivers a written request to the
Purchaser within twenty (20) days after the mailing of such notice setting
forth the number of shares of Commons Stock the shareholder intends to
dispose of, the purchaser agrees to use its best efforts to include such
shares of each shareholder in the registration statement. However, the
Purchaser shall not be so obligated to register the shares if in the
opinion of counsel for the Purchaser such shares may be disposed of without
compliance with the registration and prospectus requirements of the 1934
Act. If, in spite of the best efforts of the Purchaser, the inclusion of
all of the shares that each shareholder intends to sell is not acceptable
to the managing underwriter or underwriters of the offering, the Purchaser
may limit the number of shares of each shareholder to be sold to ten
percent (10% of the total number of shares being offered in the
registration statement. If the offering is not completed within
ninety (90) days after the effective date of the registration statement,
the Purchaser shall be entitled to de register
any unsold portion of such shares. The manner and conduct of any such
registration, including the contents of
such registration statement and of any related underwriting or other
agreements shall be entirely in the control
and discretion of the purchaser. Each shareholder agrees to cooperate with
the Purchaser in the preparation and
filing of any registration statement prepared and filed under this
Subparagraph. The Purchaser shall bear all out-of-pocket expenses except
for registration fees incurred in performing the obligations under this
Subparagraph
except that each shareholder shall make the customary agreements,
representations, warranties, and indemnification's to the underwriters in
any such offering with respect to any shares included at the shareholder's
request.
Securities Act
5.02 It is agreed that the consummation of this Agreement is not subject
to issuance by the Colorado Securities Commissioner of any permit and any
other requirements of Colorado law applying to the issuance and transfer
of the Purchaser's stock in exchange for shares of Capital Stock of
MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA
ARTICLE VI
MISCELLANEOUS
Amendment
6.01 This Agreement may be amended or modified at any time and in any
manner only by an instrument in writing executed by the President of
MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA and the President of
America's Coffee Cup, Inc., Wayward Ventures, Inc. provided it has been
approved by the Shareholders of each party.
Waiver
6.02 Either MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA or America's
Coffee Cup, Inc., Wayward Ventures, Inc. may, in writing:
Extension of Time
(a) Extend the time for the performance of any of the obligations of any
other party to the Agreement.
Waiving inaccuracies
(b) Waive any inaccuracies and misrepresentations contained in this
Agreement or any document delivered pursuant to the Agreement made by any
other party to the Agreement.
Waiving Compliance With Covenants
(c) Waive compliance with any of the covenants or performance of any
obligations contained in this Agreement by any other party to the
Agreement.
Waiving Satisfaction of Condition Precedent
(d) Waive the fulfillment of any condition precedent to the performance
by any other party to the Agreement.
Assignment
6.03 (a) Neither this entire Agreement nor any right created by the
Agreement shall be assign able by either the MILL-AGRO (HELLAS) SA and
MEGAHEL NAUTICAL SA or America's Coffee Cup, Inc., Wayward Ventures, Inc.
without the prior written consent of the other, except by the laws of
succession.
(b) Except as limited by the provisions of subparagraph (a), this
Agreement shall be binding on and inure to the benefit of the respective
successors and assigns of the parties, as well as the parties.
(c) Nothing in this Agreement, expressed or implied, is intended to confer
upon any person, other than the parties and their successors, any rights
or remedies under this Agreement.
Notices
6.04 Any notice or other communication required or permitted by this
Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
United States mails for transmittal by certified or registered mail,
postage prepaid, or when deposited with a public telegraph company for
transmittal, charges prepaid, provided that the communication is addressed:
(a) In the case of MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA, to:
MILL-AGRO (HELLAS) SA and MEGAHEL NAUTICAL SA 3 IRODOTOU STR PIRAEUS Greece
18538
With a copy to: Treasure Bay Tunica, Inc.,
R 2, Box 35Q
Rockwall, Texas 75087
or to such other person or address designated by MILL-AGRO (HELLAS) SA and
MEGAHEL NAUTICAL SA to receive notice.
(b) In the case of America's Coffee Cup, Inc., Wayward Ventures, Inc.,
to:
America's Coffee Cup, Inc.
12528 Kirkham Ct Suite 6
Poway, CA 92024
or to such other person or address designated by America's Coffee Cup,
Inc. to receive notice.
<PAGE>
Headings
6.05 Paragraph and other headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Entire Agreement
6.06 This instrument and the exhibits to this instrument contain the
entire, and supersedes any previous agreements, Agreement between the
parties with respect to the transaction contemplated by the Agreement. It
may be executed in any number of counterparts by the aggregate of the
counterparts together constitute only one and the same instrument.
Effect of Partial Invalidity
6.07 In the event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality, or
unenforceability enforceability shall not affect any other provisions of
this Agreement, but this Agreement shall be constructed as if it never
contained any such invalid, illegal, or unenforceable provisions.
Controlling Law
6.08 The validity, interpretation, and performance of this agreement shall
be controlled by and construed under the laws of the of Colorado, the State
in which this Agreement is being executed.
Attorney's Fees
6.09 If any action at law or in equity, including an action for
declaratory relief, is brought to enforce or interpret the provisions of
this Agreement, the prevailing party shall be entitled to recover
reasonable attorney's fees from the other party. The attorney's fees may
be ordered by the court in the trial of any action described in this
Paragraph or may be enforced in a separate action brought for determining
attorney's fees.
Specific Performance
6.10 The parties declare that it is impossible to measure in money the
damages that will accrue to a party or its successors as a result of the
other parties' failure to perform any of the obligations under this
Agreement. Therefore, if a party or its successor institutes any action
or proceeding to enforce the provisions of this Agreement, any party
opposing such action or proceeding agrees that specific performance may be
sought and obtained for any breach of this Agreement.
<PAGE>
Executed on 18th day of February, 1997, in Denver Colorado.
PURCHASER:
America's Coffee Cup, Inc. D.B.A. Wayward Ventures, Inc.
By:/s/ Robert W. Marsik
Its President
ACQUIRED CORPORATION:
MILL-AGRO (HELLAS) SA
By:_______________________________
Its: President
ACQUIRED CORPORATION
MEGAHEL NAUTICAL SA
By:________________________________
Its: President
By: Noble House SA__________________
Shareholder
BY:_______________________________
President
By: Treasure Bay Tunica, Inc.
Shareholder
By:__________________________
President
<PAGE>
EXHIBIT 2 - PREFERRED STOCK PROVISIONS
<PAGE>
SERIES B: VOTING, CONVERTIBLE PREFERRED STOCK
CERTIFICATE SETTING FORTH RESOLUTIONS
BY
THE BOARD OF DIRECTORS FOR
WAYWARD VENTURES, INC., f/k/a AMERICA'S COFFEE CUP, INC.
(Pursuant to the Colorado Corporation Code)
We, the undersigned, as the President and Secretary of Wayward Ventures,
Inc., f/k/a America's Coffee Cup, Inc., a Colorado corporation, the
Articles of Incorporation of which are on file in the office of the
Secretary of State for the State of Colorado DO EACH HEREBY CERTIFY AND
VERIFY: that the Board of Directors of Wayward Ventures, Inc., f/k/a
America's Coffee Cup, Inc., in accordance with said articles and pursuant
to the laws of the State of Colorado, duly adopted on February 17, 1997,
the preambles and resolutions attached hereto.
IN WITNESS WHEREOF: We have set our hands and the corporate seal this 17th
day of February, 1997.
WAYWARD VENTURES, INC.
By:
Robert W. Marsik, President [SEAL]
Attest:
Mark S. Pierce, Secretary
<PAGE>
UNANIMOUS CONSENT IN LIEU OF SPECIAL MEETING
BOARD OF DIRECTORS
FOR
WAYWARD VENTURES, INC., f/k/a AMERICA'S COFFEE CUP, INC.
(February 17, 1997)
Pursuant to the provisions of the "Colorado Corporation Code"- which
provide that action required or permitted by said code to be taken at a
meeting of the board of directors of a corporation may be taken without a
meeting with the same force and effect as a unanimous vote of said board
if the action is (i) evidenced by one or more written consents describing
the action taken, (ii) signed by each director and (iii) delivered to the
secretary of the corporation for filing with the corporate records - the
undersigned, being the sole members of the board of directors of Wayward
Ventures, Inc., f/k/a America's Coffee Cup, Inc.(the "Board of Directors"
and the "Company," respectively), do hereby waive any and all notice which
may be required to be given with respect to a meeting of the Board of
Directors and do hereby take, ratify, confirm and approve the following
action this 17th day of February, 1997.
WHEREAS, the Company has been presented with an opportunity to acquire as
wholly-owned subsidiaries two separate business entities, those being
Megahel Nautical (Hellas) S.A., a Greek company, and of Mill-Agro (Hellas)
SA, a Panamanian company;
WHEREAS, the Company has been presented with a proposed Plan and Agreement
of Purchase (the "Hellas Agreement") by and between the Company and the
shareholders ("Shareholders") of Megahel Nautical (Hellas) S.A. and of
Mill-Agro (Hellas) SA;
WHEREAS, the Hellas Agreement requires the delivery to the Shareholders of
a series of preferred stock in order to consummate said agreement;
WHEREAS, the execution and delivery of, and performance under, the Hellas
Agreement is in the best interests of the Company; and
WHEREAS, the Articles of Incorporation governing the Company (the "Articles
of Incorporation") permit the issuance of preferred shares in series with
such designations, preferences and relative participating option or other
rights and qualifications, limitations and restrictions as may be fixed by
the Board of Directors, including, without limitation, the rate of
dividends and redemption and conversion prices, all of which are to be
determined after giving consideration to the financial and general
condition of the Company and to the condition of the securities' markets,
if any, existing at the time of issuance; and
WHEREAS, the directors deem it advisable to establish and issue a new
series of preferred stock at this time to accomplish the consummation of
the Hellas Agreement and have carefully investigated the financial and
general condition of the Company and the relation of the condition of the
Company to the condition of the securities markets, and have determined
that it is in the best interests of the Company to establish a new series
of preferred stock to be denominated "Series B: Voting, Convertible
Preferred Stock" with the attributes set forth in this resolution and to
forthwith deliver a certificate evidencing the same to the Shareholders:
NOW, THEREFORE, BE IT
RESOLVED, that the Board of Directors hereby authorizes the Company to
issue for the purpose of consummating the Hellas Agreement One Hundred
Forty-Nine Thousand Two Hundred and Fifty-Nine (149,259) shares of its
"Series B: Voting, Convertible Preferred Stock" at a price of $2,000 per
share, which series shall have the following features:
(a) Dividends - the record holders of the series shall not be entitled to
receive any dividends, whether out of the net earnings of the Company or
otherwise;
(b) Conversion - each share of the series shall be convertible at any time
and from time to time into one hundred fifty (150) common shares of the
Company ("Common Stock") at the election of the holders of record, and each
share of this series which has not been converted by October 1, 1998, shall
automatically convert into the aforesaid number of common shares;
(c) Redemption - neither the Company nor any one else shall have any right
to redeem the shares of this series at any time;
(d) Liquidation Preference - the holders of the series shall not be
entitled to any liquidation preference over any existing class or series
of outstanding stock of the Company or over any other class or series of
the Company which may be subsequently established;
(e) Sinking Fund - the holders of this series shall not be entitled to the
establishment of any sinking fund for the purpose or retiring the shares
of the series or for any other purpose;
(f) Voting Rights - each share of this series shall be entitled, for so
long as such share remains outstanding to vote on any and all matters which
the holders of Common Stock and Series A Preferred Stock are entitled to
vote. The Series B Preferred Stock shall vote as a class with the Common
Stock and the Series A Preferred Stock on all matters, other than as set
forth immediately below, and each outstanding share of Series B Preferred
Stock shall be entitled to One Hundred and Fifty (150) votes on each matter
submitted for approval. Further, and for so long as any share of Series
B Preferred Stock is outstanding, the Company shall not, without the
approval of the holders of no less than two-thirds (2/3) of the outstanding
Series B Preferred Stock:
<PAGE>
(a) amend or repeal any revision of, or add any provision to, the
articles of incorporation governing the Company, if such action would alter
or change the preferences, rights, privileges, or powers of, or the
restrictions provided for the benefit of, the Series B Preferred Stock;
(b) authorize, create or issue shares of any class of stock having
any preference or priority superior to any preference or priority of the
Series B Preferred Stock, or authorize, create, or issue shares of stock
of any class or any obligations convertible into or exchangeable for, or
having optional rights to purchase, any shares of stock of the Company
having any such preferences; or
(c) make any provision in the Bylaws governing the Company imposing
any restrictions upon the right to transfer or hypothecate the Series B
Preferred Stock, except provisions required by the laws of the State of
Colorado.
(g) Additional Provision - the series shall be issued, upon compliance with
the laws of the State of Colorado, in accordance with those terms set forth
on Exhibit A hereto, which is specifically incorporated herein by this
reference and adopted as the act of the Company.
RESOLVED FURTHER that the President and the Secretary are hereby authorized
and directed to cause to be filed under corporate seal such certificates
as shall be requisite to the end that the stock shall be issued and
delivered to the Shareholders as aforesaid; and
RESOLVED FINALLY that the President be, and he hereby is, authorized to (i)
effectuate, to the extent necessary and appropriate, those actions taken
hereby, (ii) issue a certificate or certificates for the shares, (iii)
prepare a form of certificate for the shares in accordance with the above
resolutions and (iv) provide for filing all necessary documentation with
the Secretary of State for the State of Colorado, applicable state
securities authorities and the United States Securities and Exchange
Commission.
IN WITNESS WHEREOF, the undersigned, being the sole member of the Board of
Directors, have hereunto set their hands effective as of the date first
specified above.
Robert W. Marsik, Director
Mark S. Pierce, Director
<PAGE>
EXHIBIT A
SERIES B: CONVERTIBLE, VOTING PREFERRED STOCK PROVISIONS
The Series B Convertible, Voting Preferred Stock (the "Preferred Stock or
the "Series B Preferred Stock") shall consist of one (1) series of One
Hundred Forty-Nine Thousand Two Hundred and Fifty-Nine (149,259) shares of
the preferred stock of America's Coffee Cup, Inc., d/b/a Wayward Ventures,
Inc. (the "Company"), with each share to be identical to every other in all
respects. The following sets forth the provisions of the Series B
Preferred Stock.
Part 1: Dividends
Dividend Obligation. The holders of the issued and outstanding Series B
Preferred Stock shall not be entitled to receive any dividends on their
shares of stock.
Part 2: Conversion
(2.01) Conversion Price and Automatic Conversion. Each share of
outstanding Series B Preferred Stock is convertible into One Hundred Fifty
(150) shares of the common stock of the Company (the "Conversion Amount"
and the "Company," respectively) at any time prior to October 1,1998, at
the sole option of the holder of each share of Series B Preferred Stock.
On October 1, 1998, the Series B Preferred Stock shall automatically
convert into One Hundred fifty (150) shares of Common Stock.
(2.02) Exercise Procedure. Any share of Series B Preferred Stock shall
be deemed to have been exercised when the Company shall have received the
certificate evidencing such shares appropriately endorsed to reflect
conversion thereof, whereupon the Company shall issue the shares of Common
Stock to which the exercising shareholder is entitled.
(2.03) Reservation of Shares. The Company shall at all times reserve
and keep available for the purpose of effecting the conversion of the
Series B Preferred Stock the full number of shares of Common Stock then
deliverable upon the conversion of all shares of the then outstanding
Series B Preferred Stock.
(2.04) Fractional Shares. No fractional share of Common Stock shall be
issued upon conversion of a Series B Preferred Stock share, but, instead
of any fraction of a share which would otherwise be issuable, the Company
shall pay to the holder an amount equal to the book value allocable to the
fractional share of Common Stock which would have otherwise been issued,
as determined using Generally Accepted Accounting Principles.
<PAGE>
(2.05) Payment of Taxes. The Company shall pay any and all taxes that
may be required in respect of the issuance or delivery of Common Stock on
conversion of a share of Series B Preferred Stock. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of Common Stock in a name
other than that in which the shares being converted were registered, and
no such issuance or delivery shall be made unless and until the person
requesting such has paid to the Company the amount of any such tax, or has
established to the satisfaction of the Company that such tax has been paid.
(2.06) Registration, Approval and Listing. If any shares of Common
Stock required to be issued upon conversion of Series B Preferred Stock
shall require registration with or approval by any governmental authority
under any federal or state law, or listing on any national securities
exchange before such shares may be issued, the Company shall, at its own
expense, cause the accomplishment of the same, and shall expeditiously work
towards accomplishment of the same; however, each holder of Series B
Preferred Stock shall be obligated to assist the Company to the fullest
extent possible in its endeavors.
(2.07) Delivery of New Certificates. Certificates for Common Stock
acquired upon conversion shall be delivered to the holder named therein
within 15 business days after exercise and delivery to the Company. Unless
all shares of Series B Preferred Stock are converted, the Company shall,
within the aforesaid period, prepare a new certificate, substantially
identical to that surrendered, representing the balance of the shares
previously represented which have not been converted.
(2.08) Converted Series B Preferred Stock to be Canceled or Returned to
Treasury. The Company, by resolution of its Board of Directors, may, in
its sole discretion, either cancel or return to treasury any shares of
Series B Preferred Stock converted or for any other reason acquired.
Part 3: Redemption
Optional and Mandatory Redemption. No one, including the Company, shall
be entitled to redeem the Series B Preferred Stock under any circumstances
at any time.
Part 4: Liquidation.
The Series B Preferred Stock shall not be entitled to preferential
liquidation rights over any other class or series of stock previously or
which may subsequently be issued by the Company.
Part 5: Sinking Fund
The Series B Preferred Stock shall not be entitled to the establishment of
any sinking fund for any purpose.
<PAGE>
Part 6: Voting Rights
(6.01) General Voting Right. The Series B Preferred Stock shall be
entitled to vote on any and all matters which the holders of Common Stock
and Series A Preferred Stock are entitled to vote. The Series B Preferred
Stock shall vote as a class with the Common Stock and the Series A
Preferred Stock on all matters, other than as set forth below in this Part
6, and each outstanding share of Series B Preferred Stock shall be entitled
to One Hundred and Fifty (150) votes on each matter submitted for approval.
(6.02) Separate Voting Approval of Series B Preferred Stock Required. As
long as any share of Series B Preferred Stock is outstanding, the Company
shall not, without the approval of the holders of no less than two-thirds
(2/3) of the outstanding Series B Preferred Stock:
(a) amend or repeal any revision of, or add any provision to, the articles
of incorporation governing the Company, if such action would alter or
change the preferences, rights, privileges, or powers of, or the
restrictions provided for the benefit of, the Series B Preferred Stock;
(b) authorize, create or issue shares of any class of stock having any
preference or priority superior to any preference or priority of the Series
B Preferred Stock, or authorize, create, or issue shares of stock of any
class or any obligations convertible into or exchangeable for, or having
optional rights to purchase, any shares of stock of the Company having any
such preferences; or
(c) make any provision in the Bylaws governing the Company imposing any
restrictions upon the right to transfer or hypothecate the Series B
Preferred Stock, except provisions required by the laws of the State of
Colorado.
Part 7: Adjustment of Conversion Amount.
The Conversion Amount shall be subject to adjustment as follows:
(7.01) If prior to the expiration of the conversion period by its terms the
Company shall issue any shares of Common Stock as a share dividend or shall
subdivide the number of outstanding shares of Common Stock into a greater
number of shares, the Conversion Amount shall be increased proportionately.
Conversely, if the Company shall reduce the number of shares of Common
Stock outstanding by combining such shares into a smaller number of shares,
the Conversion Amount shall be decreased proportionately.
(7.02) Notwithstanding the provisions of this Part 7, no adjustments of
the Conversion Amount shall be made whereby such amount is adjusted in an
amount by less than ten shares of Common Stock, or until the aggregate of
such adjustments shall equal or exceed ten shares of Common Stock.
(7.03) No adjustment of the Conversion Amount shall be made as a result
of or in connection with the issuance of Common Stock pursuant to (i)
options, warrants, and/or share purchase agreements outstanding or in
effect on the date hereof (ii) the establishment of additional option or
warrant plans of the Company, (iii) the modification, renewal or extension
of any plan now in effect or hereafter created, (iv) the issuance of Common
Stock on exercise of any options pursuant to such plans, (v) the issuance
of Common Stock in connection with an acquisition, consolidation,
recapitalization or merger of any type, (vi) compensation or similar
arrangements for officers, employees, contractors, consultants or agents
of the Company or any subsidiary or (vii) the issuance of Common Stock in
private or public offerings.
(7.04) Before taking any action which would cause an adjustment reducing
the Conversion Amount to less than the par value of the Common Stock
issuable upon conversion of the Series B Preferred Stock, the Company shall
take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully
paid and non-assessable shares of Common Stock at the adjusted Conversion
Amount.
Part 8: Additional Provisions.
The Series B Preferred Stock may be subordinated in any respect to the
terms and provisions of the Common Stock and to the terms and provisions
of any other series of the outstanding preferred stock of the Company which
may be issued and become outstanding subsequent to the Series B Preferred
Stock, unless specifically provided to the contrary above.
