SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report: October 13, 1998
Commission file number 33-21239
TRAVEL DYNAMICS, INC.
(Formerly Greenway Environmental Systems, Inc.)
Nevada 87-0462569
------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7525 East Camelback Rd., Ste. 202
SCOTTSDALE, AZ 85251
-------------- -----
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code:
(602) 949-9500
Send copy of any responses to:
Attorney for Registrant - Julian D. Jensen: (801) 531-6600
Law Offices
Jensen, Duffin, Carman, Dibb & Jackson
311 South State Street, Ste. 380
Salt Lake City, UT 84111
<PAGE>
Item 1. Changes in Control of the Registrant.
---------------------------------------------
The company has recently completed a "Reverse Acquisition" which was
closed on September 29, 1998, in which control of the company was transferred
from its existing shareholders to a group of private shareholders of an acquired
company who owned all interest in the fully acquired subsidiary, Travel
Dynamics, Inc. The details of this Reverse Acquisition are more fully set-out in
the Reverse Acquisition Agreement which is being filed as an Exhibit to this 8-K
Report, as well as in a concurrently filed 10-KSB Report for the company. For
the purposes of this 8-K filing, the essential terms of the Reverse Acquisition
is outlined as follows:
1. As of the closing date on September 29, 1998, the previous
Greenway Environmental Systems, Inc., an inactive public
Nevada corporation, acquired all of the issued and outstanding
shares of a private Nevada corporation known as Travel
Dynamics, Inc. (TDI), (855,000 shares). In exchange for the
acquisition of all issued and outstanding shares of TDI from
its seven shareholders, Greenway issued out two million shares
(2,000,000/shares) constituting 62% of its reverse split
issued and outstanding shares. Thereby, the prior Travel
Dynamic shareholders became the controlling shareholders of
Greenway which has also changed its name to Travel Dynamics,
Inc. as part of the Reverse Acquisition. No other
consideration was involved in the acquisition.
2. Prior to and as a condition to the Reverse Acquisition,
Greenway reversed split its issued and outstanding shares on a
nineteen and one half to one ratio (19.5:1).
3. On or about October 1, 1998 and pursuant to the Reverse
Acquisition, Greenway Environmental Systems, Inc. changed its
name of record with the Nevada Secretary of State to Travel
Dynamics, Inc. as part of the reverse acquisition. The
subsidiary will change its name to Travel Dynamics Services,
Inc.
4. A new Board of Directors, as nominated by Travel Dynamics,
Inc., was appointed by majority shareholder consent to become
the new Board of Directors of TDI. The biographical
information of each of the following listed directors is more
fully and completely set-out in the concurrently filed 10-KSB
which has been incorporated by reference:
A. James Piccolo
B. Brian K. Service
C. Thomas (Tom) Dennis
D. Gary Davies
E. Thomas Vergith
5. The Reverse Acquisition also provided that all debts and
obligations of Greenway were paid and discharged as of the
closing date of the reorganization.
1
<PAGE>
6. New management will assume the responsibility for filing the
within report under the Securities and Exchange Act of 1934, a
concurrent comprehensive 10-KSB Report and all subsequent 1934
Act Filings.
7. The place of business of the company will be changed to the
principal business address at Scottsdale, Arizona of its sole
operating subsidiary, Travel Dynamics, Inc. which shall become
known as Travel Dynamics Services Corporation.
8. Management of TDI intends to seek a listing for public trading
of its shares upon the filing of the within Report and the
concurrently filed 10-KSB Report through one or more qualified
broker/dealers. It is anticipated that the stock would be
listed, if at all, on Electronic Bulletin Board or Pink Sheets
as it would not presently qualify for NASDAq listing.
The prior TDI shareholders acquiring control of the registrant are
identified as follows:
Beverly Kasbeer acquired 725,146 reverse split Shares in
exchange for 310,000 shares of the acquired company;
Randy Carder acquired 105,260 reverse split shares for 45,000
shares of the acquired company;
Eli Dafesh acquired 233,918 reverse split shares for 100,000
shares of the acquired company;
Bob Snyder acquired 233,918 reverse split shares for 100,000
shares of the acquired company;
Jim Sheidell acquired 233,918 reverse split shares for 100,000
shares of the acquired company;
Target Mail, LLC acquired 163,030 reverse split shares for
69,695 shares of the acquired company. Target Mail is owned by Beverly Kasbeer.
Esteem Corporation acquired 304,807 reverse split shares for
130,305 shares of the acquired company. This corporation is owned by Mrs. Mary
Pat Piccolo who is the mother of the President of the Company, Mr. James
Piccolo.
2
<PAGE>
Item 2. Acquisition or Disposition of Assets.
---------------------------------------------
As outlined in Item 1, as part of the Reverse Acquisition, Greenway
Environmental Systems, Inc. (now known as Travel Dynamics, Inc.) acquired all of
the issued and outstanding shares of the privately held Travel Dynamics, Inc. as
part of the reverse acquisition. These assets of Travel Dynamics, Inc. are more
fully set-out in the concurrently filed 10-KSB which is incorporated by this
reference, together with the financial statements appended thereto. In summary,
but not in limitation of that information, it is disclosed that Travel Dynamics,
Inc. assets are primarily intangible assets consisting of a proprietary database
of its travel vendor contacts and sales agents, together with various sales
information techniques and procedures supplied to independent sales contractors.
This proprietary database was valued at $368,588 dollars out of total acquired
net assets of $543,747 as more particularly set-out in the audited financial
statements for Travel Dynamics, Inc. The assets were deemed acquired as of the
date of the closing of the Reverse Acquisition on September 29, 1998 through the
share acquisition. As noted in the concurrently filed 10-KSB Report the prior
Greenway Environmental Systems, Inc had no assets or liabilities.
Item 3. Changes in Registrant's Certifying Accountant.
------------------------------------------------------
The historical independent auditors and accountants for Greenway
Environmental Systems, now known as Travel Dynamics, Inc., was a Salt Lake City
Firm of Hansen, Barnett and Maxwell. This firm will continue as the independent
auditors for the foreseeable future for the consolidated company based upon the
Reverse Acquisition. Please note the attached and incorporated June 30, 1998
audited financials prepared by that firm for Greenway Environmental Systems,
Inc. and the unaudited pro forma consolidated financials as required by Item 7.
Ms. Tess Ridgway, CPA of 5150 North 16th Street, Phoenix, Arizona is resigning
as the independent auditor for the acquired subsidiary, Travel Dynamics, Inc.,
to be known as Travel Dynamics Services, Inc. The most current audited
financials for Travel Dynamics, Inc. dated August 31, 1998 and forTravel
Dynamics LLC, as a predecessor entity, are also attached as an Exhibit to this
8-K filing.
Item 4. Other Events.
---------------------
The registrant believes that the outline of the significant items and
events incident to the Reverse Acquisition as set-out and outlined in item 1
constitute other significant events to be reported. Consequently, the items of
Item 1 are incorporated by this reference together with the more detailed
information in the concurrently filed 10-KSB and attached accounting. The
registrant knows of no other significant events, other than those outlined in
Item 1.
Item 5. Resignation of Registrant's Directors.
----------------------------------------------
As part of and as a condition to the closing of the reverse acquisition
on September 29, 1998, the prior Board of Directors, who also constitute the
3
<PAGE>
principal officers of the corporation, resigned. These officers were Mr. Damon
Madsen, President/Director; Mr. L. Kent Mackay, Vice President/Director; and Mr.
Gregory Stringham, Secretary-Treasurer/Director.
Also, part of the reverse acquisition and pursuant to a majority
shareholder consent resolution as attached hereto as an Exhibit, certain
nominees of the acquired entity were appointed and elected as directors and
subsequently appointed officers of the registrant as more particularly set-out
in the following table:
- --------------------------------------------------------------------------------
Name Position
- --------------------------------------------------------------------------------
James Piccolo Director/President
- --------------------------------------------------------------------------------
Brian K. Service Director
- --------------------------------------------------------------------------------
Thomas (Tom) Dennis Director
- --------------------------------------------------------------------------------
Gary Davies Director
- --------------------------------------------------------------------------------
Thomas Vergith Director
- --------------------------------------------------------------------------------
John P. Piccolo (Brother of President) Vice President
- --------------------------------------------------------------------------------
Melinda Fehringer Secretary/Treasurer
- --------------------------------------------------------------------------------
Various biographical information concerning each of the foregoing
directors and officers, as well as their sharehold interest and compensation,
are more fully set-out in the concurrently filed 10- KSB Report which is
incorporated by this reference.
Item 7. Financial Statements and Exhibits.
------------------------------------------
Attached to this 8-K Report and incorporated by this reference as
Exhibits are the following:
1. Audited financial statements for the prior Travel Dynamics,
Inc., now known as Travel Dynamics Services Inc., the acquired
subsidiary dated August 31, 1998; and its predecessor asset
transferor, Travel Dynamics, LLC, dated August 31, 1998;
2. Audited financials of June 30, 1998 for the Registrant;
3. Unaudited pro forma consolidated financials prepared incident
to this report reflecting the reverse acquisition accounting
as of August 31, 1988;
4. Reverse Acquisition Agreement.
4
<PAGE>
Item 8. Change in Fiscal Year.
------------------------------
The Registrant, as part of the reorganization process, changed its
fiscal reporting year from December 31st to June 30th as reflected in the
attached financials and more fully set-out in the concurrently filed 10-KSB
Report.
(Registrant has omitted inapplicable items)
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned President duly authorized.
TRAVEL DYNAMICS, INC.
(Formerly Greenway Environmental Systems, Inc.)
/s/ James Piccolo October 14, 1998
- -------------------------------- ----------------------------
By: James Piccolo, its President Date
5
<PAGE>
TRAVEL DYNAMICS, INC.
INDEX TO FINANCIAL STATEMENTS
Page
----
Travel Dynamics, Inc.
Independent Auditor's Report. . . . . . . . . . . . . . . . . . . F-7
Balance Sheet - August 31, 1998 . . . . . . . . . . . . . . . . . F-8
Statement of Income and Retained Earnings For the One Month Ended
August 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . F-9
Statement of Cash Flows For the One Month Ended August 31, 1998 . F-10
Schedule of Expenses For the One Month Ended August 31, 1998. . . F-11
Notes to Financial Statements F-12
Travel Dynamics, L.L.C.
Independent Auditor's Report. . . . . . . . . . . . . . . . . . . F-16
Balance Sheet - August 31, 1998 . . . . . . . . . . . . . . . . . F-17
Statement of Income and Members Equity For the Six Months Ended
August 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . F-18
Statement of Cash Flows For the Six Months Ended August 31, 1998. F-19
Schedule of Expenses For the Six Months Ended August 31, 1998 . . F-20
Notes to Financial Statements . . . . . . . . . . . . . . . . . . F-21
---------------
<PAGE>
TRAVEL DYNAMICS, INC.
(A NEVADA CORPORATION)
FINANCIAL STATEMENTS
(Audited)
For The Month Ended August 31, 1998
TESS L. RIDGWAY
CERTIFIED PUBLIC ACCOUNTANT
5151 N. 16TH STREET
PHOENIX, AZ. 85016
F-6
<PAGE>
TRAVEL DYNAMICS L.L.C
(A Nevada Corporation)
FINANCIAL STATEMENTS
(Audited)
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Travel Dynamics L.L.C.
7525 East Camelback, suite 212
Scottsdale, AZ 85251
I have audited the accompanying balance sheet of Travel dynamics, Inc. as of
August 31, 1998, and the related statements of income, retained earnings,
equity, cash flows and schedule of expenses for the month ended August 31,
1998. These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Travel Dynamic Inc. as of
August 31, 1998, and the results of its operations and its cash flows for the
month then ended in conformity with generally accepted accounting principles.
/s/ Tess L. Ridgway
-------------------
Tess L. Ridgway
Certified Public Accountant
September 18, 1998
F-7
<PAGE>
TRAVEL DYNAMICS, INC.
BALANCE SHEET
AUGUST 31, 1998
ASSETS
CURRENT ASSETS
Cash on Hand and in Banks (Note 2) $ 78,872
Inventory (Note 1) 28,035
Short Term Note Receivable (Note 4) 3,500
Prepaid Rent 7,600
Deposits and Retainers 12,250
----------
Total Current Assets 130,257
----------
PROPERTY AND EQUIPMENT (NOTE 1)
Furniture and Fixtures 14,818
Computer Equipment 26,459
Less Accumulated Depreciation (375)
----------
Total Property and Equipment 40,902
----------
OTHER ASSETS
Club Membership (Note 6) 4,000
Intangibles - Net (Note 1) 325,039
----------
Total Other Assets 329,039
----------
TOTAL ASSETS $ 500,198
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 92,986
Short Term Note Payable (Note 6) 1,000
Accrued Liabilities 244
Deferred Revenue (Note 1) 114,615
----------
Total Current Liabilities 208,845
----------
LONG TERM LIABILITIES 0
----------
Total Liabilities 208,845
----------
SHAREHOLDERS' EQUITY
Capital Stock - Authorized 1,000,000 Shares at $.001 Par
Issued and Outstanding 855,000 Shares (Note 8) 855
Paid in Capital (Note 8) 344,160
Retained Earnings (Deficit) (53,662)
----------
Total Shareholders' Equity 291,353
----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 500,198
==========
The accompanying notes are an integral part of the financial statements.
F8
<PAGE>
TRAVEL DYNAMICS, INC.
STATEMENTS OF INCOME AND RETAINED EARNINGS
FOR THE MONTH ENDED AUGUST 31, 1998
AMOUNT % TO SALES
SALES --------- ----------
Membership Processing Fees $ 9,718 10.3%
Product and Certified Sales 84,455 86.6
Freight In 3,382 3.1
--------- ---------
Total Sales 97,555 100.0
--------- ---------
COST OF SALES
Purchases and Certificates 48,315 49.5
Freight Out 1,562 1.6
--------- ---------
Total Cost of Sales 49,877 51.1
--------- ---------
Gross Profit 47,678 48.9
--------- ---------
Selling Expenses - See Schedule 18,433 18.9
Administrative Expenses - See Schedule 39,968 41.0
--------- ---------
Total Operating Expenses 58,401 59.9
--------- ---------
Net Loss From Operations (10,723) (11.0)
Other Income 660 0.7
--------- ---------
Net Loss Before Income Tax (10,063) (10.4)
Income Taxes (Note 1) 50 0.1
--------- ---------
Net Loss (10,113) (10.5)%
=========
Retained Earnings at the Beginning 0
Acquisition of Accumulated Deficit(Note 6) (42,549)
Distribution to shareholders (1,000)
---------
Retained Earnings (Deficit) at the End $ (53,662)
=========
The accompanying notes are an integral part of these financial statements.
F-9
<PAGE>
TRAVEL DYNAMICS, INC.
STATEMENT OF CASH FLOWS
FOR THE MONTH ENDED AUGUST 31, 1998
OPERATING ACTIVITIES:
Net Loss from Operations $ (10,113)
Adjustment to Reconcile Net Loss to Net Cash Provided
by Operations:
Depreciation 375
Changes in Operating Assets and Liabilities, Net of
Effects from Transfer of Assets and Liabilities of
Travel Dynamics, L.L.C.:
Increase in Inventory (28,035)
Increase in Deposits (2,250)
Increase in Accounts Payables 92,986
Increase in Accrued Expenses 244
Increase in Customer Deposits(Deferred Revenue) 31,500
---------
Net Cash Provided by Operating Activities 84,707
---------
INVESTING ACTIVITIES:
Purchase of Furniture and Equipment (29,790)
Increase in Short Term Notes Receivable (3,000)
Transfer of Cash from Travel Dynamics L.L.C. (Note 6) 26,300
---------
Net Cash Used In Investing Activities (6,490)
---------
FINANCING ACTIVITIES:
Proceeds from Issuance of Common Stock 655
---------
Net Increase in Cash 78,872
Cash Balance, Beginning of Period 0
---------
Cash Balance, End of Period $ 78,872
=========
Supplemental Schedule of Noncash Investing and Financing Activities:
The Company issued 200,000 shares of common stock upon conversion of notes
payable in the amount of $344,360. Assets of $235,566 and liabilities of
$278,115 were transferred to the Company from Travel Dynamics, L.L.C., as
detailed in Note 6. A $1,000 short term note payable was issued as an
equity distribution to the former owners of Travel Dynamics, L.L.C.
The accompanying notes are an integral part of these financial statements.
F-10
<PAGE>
TRAVEL DYNAMICS, INC.
SCHEDULE OF EXPENSES
FOR THE MONTH ENDED AUGUST 31, 1998
AMOUNT % TO SALES
--------- ----------
SELLING EXPENSES
Training Conferences $ 6,753 6.9
Recruiting 195 0.2
Travel 8,793 9
Meals and Entertainment 2,692 2.8
---------
18,433 18.9
=========
ADMINISTRATIVE EXPENSES
Advertising 2,175 2.3
Bad Debts 985 1.0
Office and Postage 2,710 2.8
Consulting and Professional Fees 10,000 10.3
Bonuses 500 0.5
Legal and Accounting Fees 11,046 11.4
Health Insurance 679 0.6
Depreciation 375 0.3
Taxes and Licenses 461 0.4
Telephone 5,005 5.2
Salaries and Wages 6,032 6.2
---------
$ 39,968 41.0
=========
The accompanying notes are an integral part of these financial statements.
F-11
<PAGE>
TRAVEL DYNAMICS, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
NATURE OF BUSINESS:
-------------------
The Company is a marketing firm which sells vacation discount packages
and provides marketing seminars for associated salespeople. The Company
was incorporated in Nevada and began operation in August 1998.
BASIS OF ACCOUNTING:
--------------------
The financial statements of Travel Dynamics, Inc. are prepared using the
accrual basis of accounting where revenues are recognized when earned
and expenses are recognized when incurred. This basis of accounting
conforms to generally accepted accounting principles.
USE OF ESTIMATES:
-----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those
estimates.
PROPERTY & EQUIPMENT:
---------------------
All property and equipment is recorded at cost and depreciated over
their estimated useful lives, using the straight-line method.
Depreciation for the period ended August 31, 1998 was $375.
INTANGIBLES:
------------
Intangibles are capitalized and amortized on a straight-line basis.
There is no current amortization expense. As of August 31, 1998,
intangible assets consisted of the following:
Master Data Base, net of amortization $ 117,657
Net Properating costs acquired 58,022
Organization Costs (See Note 7) 149,360
------------
$ 325,039
============
The above assets, except for the organization costs of the
company, were acquired based on August 31, 1998 net amounts. See
Note 6.
ADVERTISING:
------------
Advertising costs are expensed as incurred. Advertising expense was
$2175 for the month ended August 31, 1998.
REVENUE RECOGNITION:
--------------------
Revenue includes the cash sale of travel discount packages and receipt
F-12
<PAGE>
of membership fees in the current period. The Company recognizes
revenues for training seminars at the date the customer participates
in a seminar. Deferred revenues (seminar deposits) represent amounts
billed in advance of such participation
INVENTORY
---------
Inventories include vacation travel discount packages and cruise
certificates. All inventory items are stated at the lower of
cost(first-in, first-out) or market value.
INCOME TAXES:
-------------
Other than the minimum tax due the State of Arizona, no income tax
accruals have been made since the Company has a current net operating
loss of $9,597 for Federal purposes and $9,517 for Arizona purposes.
NOTE 2. CASH ON HAND AND IN BANK:
-------------------------
Checking Account, Wells Fargo Bank $ 72,912
Undeposited Funds 5,960
------------
$ 78,872
============
NOTE 3. LEASE COMMITMENTS:
------------------
In August the Company took over a prepaid lease of its current office
space. The lease term is August through December, 1998 at a total
cost to the Company of $7600. The Company does not intend to renew
its lease.
NOTE 4. RELATED PARTY TRANSACTIONS:
---------------------------
The Company has identified the following related party transactions:
1. A Short Term Note Receivable of $3500 from the Company's
President, James Piccolo. It is a demand loan with no
interest.
2. On July 31,1998, the Company agreed to purchase the assets and
Liabilities of Travel dynamics, L.L.C. a 50% member of the
L.L.C. also owns 36.25% of the outstanding stock of the
Company.
3. The Company shares personnel and administrative services and
common office space with Target Mail Systems, L. L.C. a
shareholder of the Company.
NOTE 5. CONTINGENCIES:
--------------
On September 1,1998, the Company accepted a Letter of Intent from
Greenway Environmental Systems, Inc., regarding an acquisition by
this Purchaser of the Company's net assets or outstanding stock.
F-13
<PAGE>
NOTE 6. ACQUISITION OF TRAVEL DYNAMICS L.L.C.:
-----------------------------------------
On July 31, 1998, the Company purchased the assets and liabilities of
Travel Dynamics, L.L.C. (the L.L.C) (a related party), based on the
L.L.C.'s audited financial statement for the six month period ending
August 31, 1998 (the L.L.C. had commenced business in March 1998).
The historical cost of the assets and liabilities transferred was as
follows:
Cash in Bank $ 26,300
Short Term Note Receivable 500
Property & Equipment 11,487
Master Data Base net of amortization 117,657
Preoperating costs, net of amortization 58,022
Prepaid Rent 7,600
Country Club Membership 4,000
Attorney Retainer Deposit 10,000
Short Term Notes Payable (195,000)
Deferred Revenue (seminar deposits) (83,115)
-----------
Net Liabilities Assumed $ (42,549)
===========
The assets and liabilities transferred are accounted for at historical cost in
a manner similar to that of pooling of interests.
NOTE 7. ORGANIZATION COSTS:
-------------------
The Company has chosen to amortize its preoperating and organization
costs. In future years, the Company will adjust its assets and retained
earnings deficit to be in agreement with generally accepted accounting
principles, which will be required as of the Company's fiscal year
ending December 31, 1999.
NOTE 8. COMMON STOCK TRANSACTION:
-------------------------
During August 1998, the Company issued 655,000 shares of common stock at
$.001 per share. On August 31, 1998, after the acquisition of the assets
and assumption of the liabilities of Travel Dynamic L.L.C., the Company
issued 130,305 shares of common stock in payment of two notes owed to
Esteem Corporation (a related party). The balance of the Notes payable
were $224,360 prior to the exchange. The Company issued 69,695 shares to
Target Mail Systems L.L.C. as payment for a Note Payable with a balance
of $120,000 prior to the exchange. The share were exchanged at a $.001
per share plus additional paid in capital of $344,160. The change in
Stockholders' Equity for the month of August is as follows:
Additional
Common Stock Paid-in Retained
Shares Amount Capital Earnings
------ -------- ----------- ---------
Balance July 31, 1998 - $ - $ - $ -
Stock issued for Cash through
August 1998 655,000 655 - -
Shares issued for Debt
Payment 200,000 200 344,160 -
Transfer of Accumulated Deficit (42,549)
Distribution to shareholders - - - (1,000)
Net Loss, August 1998 - - - (10,113)
------- -------- ---------- --------
Balance August 31, 1998 855,000 $ 855 $ 344,160 $(53,662)
======== ========= =========== ========
F-14
<PAGE>
TRAVEL DYNAMICS L.L.C.
(An Arizona Limited Liabilities Company)
FINANCIAL STATEMENTS
(Audited)
For the Six Months Ended August 31, 1998
TESS L. RIDGWAY
CERTIFIED PUBLIC ACCOUNTANT
5151 N. 16TH STREET
PHOENIX, AZ. 85016
F-15
<PAGE>
TRAVEL DYNAMICS L.L.C
(An Arizona Limited Liability Company)
FINANCIAL STATEMENTS
(Audited)
INDEPENDENT AUDITOR'S REPORT
Managing Members
Travel Dynamics L.L.C.
7525 East Camelback, Suite 212
Scottsdale, AZ 85251
I have audited the accompanying balance sheet of Travel dynamics, L.L.C. as of
August 31, 1998, and the related statements of income, members equity, cash
flows and schedule of expenses for the six months ended August 31, 1998. These
financial statements are the responsibility of the Company's management. My
responsibility is to express an opinion on these financial statements based on
my audit.
I conducted my audit in accordance with generally accepted auditing standards.
Those standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis
for my opinion.
In my opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Travel Dynamics L.L.C. as of
August 31, 1998, and the results of its operations and its cash flows for the
six months then ended in conformity with generally accepted accounting
principles.
/s/ Tess L. Ridgway
-------------------
Tess L. Ridgway
Certified Public Accountant
September 18, 1998
F-16
<PAGE>
TRAVEL DYNAMICS L.L.C.
BALANCE SHEET
AUGUST 31, 1998
ASSETS
CURRENT ASSETS
Cash on Hand and in Banks (Note 2) $ 26,301
Prepaid Rent (Note 3) 7,600
Short Term Note Receivable (Note 4) 500
Refundable Deposits 10,000
---------
Total Current Assets 44,401
---------
PROPERTY AND EQUIPMENT (NOTE 1)
Furniture and Fixtures 3,719
Computer Equipment 9,045
Less Accumulated Depreciation (1,277)
---------
Total Property and Equipment 11,487
---------
OTHER ASSETS
Club Membership 4,000
Intangibles - Net (Note 1) 175,678
---------
Total Other Assets 179,678
---------
TOTAL ASSETS $ 235,566
=========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Short Term Note Payable (Note 4) $ 195,000
Deferred Revenue (Note 1) 83,115
---------
Total Current Liabilities 278,115
---------
LONG TERM LIABILITIES -
---------
Total Liabilities 278,115
Member's Deficit (42,549)
---------
TOTAL $ 235,566
=========
The accompanying notes are an integral part of the financial statements.
F-17
<PAGE>
TRAVEL DYNAMICS L.L.C.
STATEMENT OF INCOME AND MEMBERS' EQUITY
FOR THE SIX MONTHS ENDED AUGUST 31, 1998
AMOUNT % TO SALES
SALES --------- ----------
Membership Processing Fees $ 21,622 9.1
Product and Certificate Sales 212,550 88.6
Freight In 5,743 2.3
--------- ----------
Total Sales 239,915 100
--------- ----------
COST OF SALES
Purchases and Certificates 146,072 60.9
Freight Out 22,505 9.4
--------- ----------
Total Cost of Sales 168,577 70.3
---------
Gross Profit 71,338 29.8
---------
Selling Expenses - See Schedule 50,429 21.1
Administrative Expenses - See Schedule 63,558 26.5
--------- ----------
Total Operating Expenses 113,987 47.6
Net Loss (42,649) 17.8
Members' Contribution 100
---------
Members' Deficit $ (42,549)
=========
The accompanying notes are an integral part of these financial statements.
F-18
<PAGE>
TRAVEL DYNAMICS L.L.C.
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED AUGUST 31, 1998
OPERATING ACTIVITIES
Net Loss from Operations $ (42,649)
Adjustment to Reconcile Net Income
to Net Cash Provided by Operations
Activities:
Depreciation and Amortization 9,975
Changes in Operating Assets and Liabilities
Increase in Short Term Note Receivable (500)
Increase in Prepaid Rent and Deposit (17,600)
Increase in Customer Deposits 83,115
---------
Net Cash Used by Operating Activities $ 32,341
=========
INVESTING ACTIVITIES
Organization Costs (64,376)
Purchase of Furniture and Equipment (12,764)
Purchase of Master Data Base (120,000)
Country Club Membership (4,000)
---------
Net Cash Used by Investing Activities
(201,140)
---------
FINANCING ACTIVITIES
Members' Contributions 100
Notes Receivable 195,100
---------
Net Cash Provided by Financial Activities 195,000
---------
Increase in Cash 26,301
Cash at Beginning of Period 0
---------
Cash at End of Year $ 26,301
=========
The accompanying notes are an integral part of these financial statements.
F-19
<PAGE>
TRAVEL DYNAMICS L.L.C.
SCHEDULE OF EXPENSES
FOR THE SIX MONTHS ENDED AUGUST 31, 1998
AMOUNT % TO SALES
-------- ----------
SELLING EXPENSES
Training Conferences $ 18,546 7.5
Commissions 7,200 3.0
Recruiting 613 0.3
Travel 13,235 5.7
Meals and Entertainment 10,835 4.6
--------
Total Selling Expenses 50,429 21.1
========
ADMINISTRATIVE EXPENSES
Advertising 4,524 1.9
Auto Expenses 1,091 0.5
Office and Postage 6,207 2.6
Consulting and Professional Fees 9,780 4.1
Legal and Accounting Fees 21,531 9
Donations 2,087 0.9
Dues, Membership, Licenses 1,266 0.6
Rent 1,900 0.8
Telephone 5,197 2.2
Depreciation and Amortization 9,975 3.9
--------
$ 63,558 26.5
========
The accompanying notes are an integral part of these financial statements.
F-20
<PAGE>
TRAVEL DYNAMICS L.L.C.
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NATURE OF BUSINESS:
The Company is a marketing firm which sells vacation discount packages and
provides marketing seminars for associated salespeople. The Company was
organized in Arizona and began operation in March 1998. On July 31, 1998,
the Company's Assets and Liabilities were purchased by Travel Dynamics,
Inc., a related party (see Note 4). As of September 1, 1998, the Company is
no longer an active business entity.
BASIS OF ACCOUNTING:
The financial statements of Travel Dynamics L.L.C. are prepared using the
accrual basis of accounting where revenues are recognized when earned and
expenses are recognized when incurred. This basis of accounting conforms to
generally accepted accounting principles.
USE OF ESTIMATES:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reported period. Actual results could differ from those
estimates.
PROPERTY EQUIPMENT:
All property and equipment is recorded at cost and depreciated over their
estimated useful lives, using the straight-line method. Depreciation for
the period ended August 31, 1998 was $1277.
INTANGIBLES:
The Company purchased a Master Data Base at a cost of $120,000, which is
being amortized over 15 years using the straight-line method. Preoperating
expenses of $64,376 comprised primarily of legal fees, were incurred prior
to March 1998 and is being amortized over 5 years using the straight-line
method. Amortization expense for the period ended August 31, 1998 was
$8698.
ADVERTISING
Advertising costs, which are included in Sales expenses, are expensed as
incurred. Advertising expenses was $4524 for the six months ended August
31, 1998.
REVENUE RECOGNITION:
Revenue includes the cash sale of travel discount packages and receipt of
membership fees in the current period. The Company recognizes revenues for
training seminars at the date the customer participates in a seminar.
Deferred revenues (seminar deposits) represent amounts billed in advance of
such participation.
INCOME TAXES:
The Company is treated as a partnership for federal income tax purposes and
does not incur income taxes. Instead, its earnings and losses are included
in the personal returns of the members and taxed depending on their
personal tax situation. The financial statements do not reflect a provision
for income taxes.
F-21
<PAGE>
NOTE 2. CASH ON HAND AND IN BANK:
Checking Account, Wells Fargo Bank. $26,301
NOTE 3. LEASE COMMITMENTS:
In August the Company prepaid to sublease its current office space. The
sublease term is August through December 1998 at a total cost of $9500.
The Company does not intend to renew its lease.
NOTE 4. RELATED PARTY TRANSACTIONS
The Company has identified the following related party transaction:
1. A short Term Note Receivable of $500 is with a member of the
immediate family of one of the members. It is a demand loan and no
interest is charged or expected to be received.
2. The Short Term Note Payable includes a note for $75,000 for Esteem
Corporation, owned by the mother of one of the members. This note was
converted to equity in Travel Dynamics, Inc., after the purchase of
the Company's assets and liabilities (See Note 1).
3. One of the 50% members of the Company owns 36.25% of the outstanding
shares of Travel Dynamics, Inc.
F-22
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS, INC.
(A Development Stage Enterprise)
TABLE OF CONTENTS
Page
Report of Independent Certified Public Accountants 1
Financial Statements:
Balance Sheet - June 30, 1998 2
Statements of Operations for the Years Ended June 30,
1998 and 1997 and for the Cumulative Period from January
26, 1989 (Date of Inception) through June 30, 1998 3
Statements of Stockholders' Equity for the Cumulative
Period from January 26, 1989 (Date of Inception) through
September 30, 1990, for the Cumulative Period from September
30, 1990 through June 30, 1996 and for the years ended
June 30, 1997 and 1998 4
Statements of Cash Flows for the Years Ended June 30, 1998
and 1997 and for the Cumulative Period from January 26,
1989 (Date of Inception) through June 30, 1998 5
Notes to Financial Statements 6
---------------
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS, INC.
(A Development Stage Enterprise)
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUTANTS
AND
FINANCIAL STATEMENTS
June 30, 1998 and 1997
and for the Cumulative Period from
Inception (January 26,1989) Through June 30, 1998
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East Broadway, Suite 200
Member of Summit International Associates Salt Lake City, Utah 84111-2693
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Stockholders
Greenway Environmental Systems, Inc.
We have audited the accompanying balance sheet of Greenway Environmental
Systems, Inc. (a development stage enterprise) as of June 30, 1998 and the
related statements of operations, stockholders' equity (deficit), and cash flows
for the years ended June 30, 1998 and 1997 and for the cumulative period from
January 26, 1989 (date of inception) through June 30, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits. The financial statements of the Company from January 26, 1989
through September 30, 1990 were audited by another auditor whose report dated
March 1, 1991 contained an explanatory paragraph relating to the Company's
ability to continue as a going concern, as discussed in Note 5. Our opinion, in
so far as it relates to the period from January 26, 1989 through September 30,
1990, is based solely on the report of the other auditor.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the report of the other auditor provide a
reasonable basis for our opinion.
In our opinion, based on our audits and the report of the other auditor, the
financial statements referred to above present fairly, in all material respects,
the financial position of Greenway Environmental Systems, Inc. as of June 30,
1998 and the results of its operations and its cash flows for the years ended
June 30, 1998 and 1997 and for the cumulative period from January 26, 1989 (date
of inception) through June 30, 1998, in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 5 to the
financial statements, the Company's significant losses raise substantial doubt
about its ability to continue as a going concern. Management's plans regarding
those matters are also described in Note 5. The financial statements do not
include any adjustments that might result from the outcome of this uncertainty.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
September 29, 1998
1
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS, INC.
(A Development Stage Enterprises)
BALANCE SHEET
JUNE 30, 1998
ASSETS
Current Assets
Cash $ 10
Receivable from shareholder 10,000
---------
Total Assets $ 10,010
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ -
---------
Stockholders' Equity
Common stock - $0.001 par value; 50,000,000 shares
authorized; 1,238,969 shares issued and outstanding 1,239
Additional paid-in capital 173,158
Deficit accumulated during the development stage (164,387)
---------
Total Stockholders' Equity 10,010
---------
Total Liabilities and Stockholders' Equity $ 10,010
=========
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
Cumulative From
January 26,
1989 (Date
For the Years of Inception)
Ended June 30, through
--------------------- June 30,
1998 1997 1998
--------- --------- ----------
Revenue $ - $ - $ -
General and administrative expenses 89,990 - 164,387
--------- --------- ----------
Net Loss $ (89,990) $ - $ (164,387)
========= ========= ==========
Basis Loss Per Share $ (0.00) $ (0.00) $ (0.97)
========= ========= ===========
Weighted Average Number of Shares
Outstanding 1,228,969 49,327 168,934
========= ========= ===========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS, INC.
(A Development Stage Enterprise)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
Deficit
Accumulated Total
Common Stock Additional During the Stockholders'
---------------------- Paid-In Development Equity
Shares Amount Capital Stage (Deficit)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Shares issued to acquire Jewel Management
Company, January 26, 1989, $0.29 per share 49,327 $ 49 $ 14,348 $ - $ 14,397
Net loss for the cumulative period January
26, 1989 through September 30, 1990 - - - (24,199) (24,199)
---------- ---------- ---------- ---------- ----------
Balance - September 30, 1990 49,327 49 14,348 (24,199) (9,802)
Net loss for the cumulative period from
October 1,1990 through June 30, 1990 - - - (50,198) (50,198)
---------- ---------- ---------- ---------- ----------
Balance - June 30, 1996 49,327 49 14,348 (74,397) (60,000)
Net loss for the year ended June 30, 1997 - - - - -
---------- ---------- ---------- ---------- ----------
Balance - June 30, 1997 49,327 49 14,348 (74,397) (60,000)
Shares issued for cash and $10,000 receivable
from a shareholder, August 4, 1997 through
February 28, 1998, $0.09 per share 314,744 315 26,710 - 27,025
Shares issued for services, July 1, 1997
through June 30, 1998, $0.09 per share 675,200 675 57,300 - 57,975
Shares issued upon conversion of accounts
payable, July 1, 1997, $0.09 per share 174,697 175 14,825 - 15,000
Shares issued to officers for services July
1, 1997, $1.00 per share 15,000 15 14,985 - 15,000
Shares issued upon conversion of accounts
payable, June 30, 1998, $4.50 per share 10,000 10 44,990 - 45,000
Net loss for the year ended June 30, 1998 - - - (89,990) (89,990)
---------- ---------- ---------- ---------- ----------
Balance - June 30, 1998 1,238,969 $ 1,239 $ 173,158 $ (164,387) $ 10,010
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS, INC.
(A Development Stage Enterprise)
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Cumulative From
January 26, 1989
For the Years (Date of Inception)
Ended June 30, through
--------------------- June 30,
1998 1997 1998
--------- --------- ----------
<S> <C> <C> <C>
Cash Flows from Operating Activities
Net loss $ (89,990) $ - $ (164,387)
Depreciation and amortization - - 948
Compensation expense satisfied with stock 57,975 - 57,975
Stock issued for services 15,000 - 15,000
Legal expense satisfied with stock - - 20,000
Changes in accounts payable - - (9,139)
Changes in accounts receivable 10,000 - 10,000
--------- --------- ----------
Net Cash Provided by Operating Activities (7,015) - (69,603)
--------- --------- ----------
Cash Flows From Investing Activities
Net cash acquired in acquisitions - - 22,588
--------- --------- ----------
Net Cash Provided by Investing Activities - - 22,588
--------- --------- ----------
Cash Flows From Financing Activities
Proceeds from issuance of common stock 17,025 - 17,025
Proceeds from issuance of notes payable - - 40,000
--------- --------- ----------
Net Cash Provided by Financing Activities 17,025 - 57,025
--------- --------- ----------
Net Increase in Cash and Cash Equivalents 10,010 - 10,010
Cash and Cash Equivalents at Beginning of Year - - -
--------- --------- ----------
Cash and Cash Equivalents at End of Year $ 10,010 $ - $ 10,010
========= ========= ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS
(A Development Stage Enterprises)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization - Jewel Management Company, a privately held Utah corporation,
and Southern Cross Ventures, a Nevada publically held corporation, were
consolidated into Centra Corp., a Nevada Corporation, on January 26, 1989.
This legal consolidation resulted in the issuance of 49,327 (post-split)
shares of Centra Corp.'s common stock. In connection with the legal
consolidation, the stockholders approved a quasi-reorganization and $2,180,573
of accumulated deficit were reclassified to additional paid-in capital. The
assets and liabilities of Jewel Management Company were recorded in the
purchase business combination at historical cost in a manner similar to a
pooling of interests.
On June 24, 1991, Centra Corp. was merged into Greenway Environmental Systems,
Inc., a newly-formed Nevada corporation, and all of the outstanding Centra
Corp. common stock was exchanged for 49,327 (post-split) common shares of
Greenway Environmental Systems, Inc. This transaction was accounted for as the
reorganization of Centra Corp. into Greenway Environmental Systems, Inc. at
the historical cost of Centra Corp.
The accompanying financial statements include the operations of Centra Corp.
from January 26, 1989 and the operations of Greenway Environmental Systems,
Inc. from June 24, 1991. The Company is considered a development stage
enterprise which has been seeking a merger or acquisition.
In June 1998, the Board of Directors approved a 1-for-19.5 reverse stock
spilt. The financial statements have been restated to reflect the stock spilt
for all periods presented.
Earnings (Loss) per Share - In the fourth quarter of 1997, the Company adopted
Statement of Financial Accounting Standards (SFAS) No . 128 Earnings per
Share. Under SFAS 128, loss per common share is computed by dividing net loss
available to common shareholders by the weighted average number of common
shares outstanding during the period.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect certain reported amounts and disclosures
NOTE 2 -- INCOME TAXES
The components of the net deferred tax asset as of June 30, 1998 are as
follows:
Tax Net Operating Loss Carryforward $ 61,316
Valuation Allowance (61,316)
----------
Net Deferred Tax Asset $ -
==========
6
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS
(A Development Stage Enterprises)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
During the years ended June 30, 1998 and 1997 the valuation allowance
increased $33,567 and none, respectively.
As of June 30, 1998 the Company had net operating loss carry forwards for
federal income tax reporting purposes of 164,387 which will expire , beginning
in 2004.
The following is a reconciliation of the income tax at the federal statutory
tax rate with the provision of income taxes for the years ended June 30:
1998 1997
--------- ---------
Income tax benefit at statutory rate (34%) $ (30,597) $ -
Change in valuation allowance 33,367 -
State benefit net of federal tax (2,970) -
--------- ---------
Provision for Income Taxes $ - $ -
========== =========
NOTE 3 -- COMPENSATION
On July 1, 1997, members of the Board of Directors were issued 15,000 shares
of common stock valued at $15,000, or $1.00 per share, for their services to
the Company. In July 1997 the Company entered into an agreement with a
individual for his services in finding and completing a merger or acquisition
of an operating company. The conditions required for issuance 989,944 shares
of common stock were considered met beginning in July 1997. Consideration
received by the Company for the issuance of the common stock was $27,025 paid
during the year ended June 30, 1998 and in September 1998 and the services of
the individual valued at $57,975 based upon the fair value of the common stock
on the date the agreement was established.
NOTE 4--RECEIVABLE FROM SHAREHOLDER
During the year ended June 30, 1998, the Company issued 314,744 shares of
common stock for $17,025 paid in cash and $10,000 receivable from the
shareholder. The receivable was collected in September 1998.
NOTE 5 -- GOING CONCERN
The Company has accumulated losses since inception of the development stage of
$164,387. This situation raises substantial doubt about its ability to
continue as a going concern. Management plans to complete the reverse
acquisition agreement with Travel Dynamics as discussed in Note 8.
7
<PAGE>
GREENWAY ENVIRONMENTAL SYSTEMS
(A Development Stage Enterprises)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998
NOTE 6 -- SUPPLEMENTAL CASH FLOW INFORMATION
On January 26, 1989, the Company acquired all of the net assets of Jewel
Management Company. In conjunction with the acquisition, net liabilities were
assumed as follows:
Fair value of assets acquired including cash $ 23,536
Fair value of common stock issued (14,397)
---------
Net Liabilities Assumed $ 9,139
=========
During the year ended June 30,1998, the Company issued 675,200 shares of
common stock valued at $57,975 to a consultant for his services in finding
Travel Dynamics, Inc., as disclosed in Note 8. The Company issued 174,697
common shares upon the conversion of accounts payable in the amount of $60,000
and issued 15,000 common shares for services valued at $15,000 to three
members of the Board of Directors.
NOTE 7 -- CONTINGENCIES
In 1991, the Company issued 265,002 shares of common stock to acquire the
assets of a Texas corporation also known as Greenway Environmental. This
acquisition was aborted and the 265,002 shares were canceled except 39,750
shares have not been returned. While the Company considers the shares
canceled, it is possible that a holder in due course may be able to assert a
future claim as to the validity of these shares.
NOTE 8 -- SUBSEQUENT EVENTS
Pursuant to a reverse acquisition agreement dated September 30, 1998, with
Travel Dynamics, Inc., a Nevada Corporation, the Company exchanged
approximately 2,000,000 shares of its common stock for all of the outstanding
shares of Travel Dynamics. The Company changed its name to Travel Dynamics
Inc. and elected a new board of directors.
8
<PAGE>
TRAVEL DYNAMICS, INC.
INDEX TO FINANCIAL STATEMENTS
Page
----
Unaudited Pro Forma Condensed Consolidated Financial Statements. . . F-2
Unaudited Condensed Pro Forma Consolidated Balance Sheet -
August 31, 1998 F-3
Unaudited condensed Pro Forma Consolidated Statements of Operations
for the Six Months Ended August 31, 1998. . . . . . . . . . . . .F-4
Notes to the Pro Forma Condensed Consolidated Financial Statements F-5
---------------
<PAGE>
TRAVEL DYNAMICS, INC.
UNAUDITED PRO FORMA CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
On September 30, 1998, Travel Dynamics, Inc. ("Travel Dynamics") entered into
and completed an agreement with Greenway Environmental Systems, Inc.
("Greenway") pursuant to which Greenway issued 2,000,000 shares of its common
stock in exchange for 100% of the issued and outstanding common stock of Travel
Dynamics. In addition, Greenway changed its name to Travel Dynamics, Inc. in
connection with the agreement. The agreement has been accounted for as the
reorganization of Travel Dynamics and the acquisition of Greenway at historical
cost. The following unaudited pro forma condensed consolidated balance sheet has
been prepared to present the consolidated financial position of Travel Dynamics
as though the agreement had been consummated on August 31, 1998. On July 31,
1998, the assets and liabilities of Travel Dynamic L.L.C. were transferred to
Travel Dynamics. Travel Dynamics L.L.C. was formed and began doing business on
March 1, 1998. The following unaudited pro forma condensed consolidated
statement of operations has been prepared to present the operations of the
consolidated companies for the six months ended August 31, 1998 assuming the
agreement had been completed on March 1, 1998.
The following financial information was derived from, and should be read in
conjunction with the separate historical financial statements of Greenway
included in its annual report to shareholders on Form 10-KSB for the year ended
June 30, 1998, and the financial statements of Travel Dynamics and Travel
Dynamics, L.L.C. and the related notes to those financial statements which are
included elsewhere herein. The unaudited condensed pro forma consolidated
balance sheet and statement of operations have been included herein for
comparative purposes only and do not purport to be indicative of the results of
operations which actually would have been obtained had the agreement been
completed on August 31, 1998 or March 1, 1998, or the results of operations
which may be obtained in the future. In addition, further results may vary
significantly from the results reflected in these pro forma financial
statements.
F-2
<PAGE>
TRAVEL DYNAMICS, INC.
UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
BALANCE SHEET
AUGUST 31, 1998
Greenway
Enviorn-
Travel mental Pro
Dynamics System Forma Pro
Inc. Inc. Adjustments Forma
--------- ----------- ------------- ---------------
ASSETS
Current assets
Cash $ 78,872 $ 10 $ - $ 78,882
Inventory 28,035 - - 28,035
Related party
receivable 3,500 10,000 - 13,500
Prepaid rent 7,600 - - 7,600
Deposits and retainers 12,250 - - 12,250
--------- ------------ ----------- ---------------
Total Current
Assets 130,257 10,010 - 140,267
--------- ------------ ----------- ---------------
Property and Equipment 41,277 - - 41,277
Less accumulated
depreciation (375) - - (375)
--------- ------------ ----------- ---------------
Net Property and
Equipment 40,902 - - 40,902
--------- ----------- ----------- ---------------
Intangible Assets 329,039 - (B) (207,382) 121,657
--------- ------------ ----------- ---------------
Total Assets $ 500,198 $ - $ (207,382) $ 302,826
========= ============ =========== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 92,986 $ - $ - $ 92,986
Note payable 1,000 - - 1,000
Accrued liabilities 244 - - 244
Deferred revenue 114,615 - - 144,615
--------- ------------ ----------- ---------------
Total Current
Liabilities 208,845 - - 208,845
--------- ------------ ----------- ---------------
Stockholders' Equity
Common stock 855 1,239 (A) 1,145 3,239
Additional
paid-in-capital 344,160 173,158 (A) (165,532) 351,786
Accumulated deficit (53,662) (164,387)(A) 164,387
(B) (207,382) (261,044)
--------- ------------ ----------- ---------------
Total Stockholders'
Equity 291,353 10,010 (207,382) 93,981
--------- ------------ ----------- ---------------
Total Liabilities and
Stockholders' Equity $ 500,198 $ 410,010 $ (207,382) $ 302,826
========= ============ =========== ===============
Notes to the Unaudited Condensed Pro Forma Consolidated Statements are
Presented on page F-5
F-3
<PAGE>
TRAVEL DYNAMICS, INC.
UNAUDITED CONDENSED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED AUGUST 31, 1998
Greenway
Travel Travel Environ- Pro
Dynamics Dynamics mental Pro Forma Forma
L.L.C. Inc. Systems Adjustments Results
--------- --------- ---------- --------- ----------
Sales $ 239,915 $ 97,555 $ - $ - $ 337,470
Cost of sales 168,577 49,877 - - 218,454
---------- --------- ---------- --------- ----------
Gross profit 71,338 47,678 - - 119,016
Selling expense 50,429 18,433 - - 68,862
Administrative
expense 63,558 39,968 89,990 (B) 58,022
(C) (73,975) 177,563
---------- --------- ---------- --------- ----------
Loss from operations (42,649) (10,723) (89,990) 15,953 (127,409)
Other income - 660 - - 660
---------- --------- ---------- --------- ----------
Net loss before
income tax (42,649) (10,063) (89,990) 15,953 (126,749)
Income taxes - 50 - (C) (50) -
---------- --------- ---------- --------- ----------
Net Loss $ (42,649) $ (10,113) $ (89,990) $ 16,003 $ (126,749)
========== ========= ========== ========== ==========
Basic Loss per Common Share $ (0.04)
==========
Weighted average number of
common shares used in per
share calculation 3,238,969
==========
Notes to the Unaudited Condensed Pro Forma Consolidated Statements are
presented on page F-5
F-4
<PAGE>
TRAVEL DYNAMICS, INC.
NOTES TO PRO FORMA FINANCIAL STATEMENTS
A - On June 30, 1998, Greenway had 1,238,969 common shares outstanding.
Travel Dynamics had common shares outstanding of 855,000. As part of the
agreement, Greenway exchanged 2,000,000 shares of its common stock for
all of the outstanding common shares of Travel Dynamics and changed its
name to Travel Dynamics, Inc. As a result of the agreement, Travel
Dynamics, Inc. had 3,238,969 common shares outstanding. The agreement
has been accounted for as the reorganization of Travel Dynamics and the
acquisition of Greenway using the purchase method of accounting.
Greenway did not have any operations and had only nominal assets at the
date of the agreement. Accordingly, the acquisition of the assets of
Greenway were recorded at their historical costs. The results of the
operations for Travel Dynamics, L.L.C. and for Travel Dynamics, Inc. are
for the six months and the one month ended August 31, 1998,
respectively.
B - The assets and liabilities of Travel Dynamics, L.L.C. were transferred
to Travel Dynamics, Inc. on July 31, 1998 at their historical costs.
Travel Dynamics L.L.C. had capitalized and transferred preoperating
expenses of $58,022 net of accumulated amortization of $6,354 to Travel
Dynamics, Inc. In addition, Travel Dynamics, Inc. had capitalized
$149,360 of expenses associated with the agreement with Greenway. These
capitalized costs were charged to operations at the date of the
reorganization. However, the $149,360 expenses associated with the
agreement with Greenway were non-recurring expenses directly attributed
to the agreement and are therefore excluded from the pro forma statement
of operations.
C - The historical operations of Greenway are for the year ended June 30,
1998. Expenses of $57,975 were incurred for services in finding and
completing the reorganization with Travel Dynamics, were non-recurring
and have been eliminated from the pro forma results of operations. In
addition, approximately $16,000 of Greenway's expenses which related to
the six months ended December 31, 1997 and $50 of income taxes of Travel
Dynamics, Inc. have also been eliminated from the pro forma results of
operations. There were no material expenses incurred by Greenway during
the two months ended August 31, 1998 which were excluded due to Greenway
reporting its operations through June 30, 1998.
F-5
REVERSE ACQUISITION AGREEMENT
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement")
is entered into on September 29th, 1998 by and among Greenway Environmental
Systems, Inc., a Nevada corporation ("Greenway"), Travel Dynamics, Inc., a
Nevada corporation ("TDI"), and each of the persons whose signatures are set
forth at the end of this Agreement (collectively referred to herein as the
"Owners"). Dennis G. Madsen is a party to this Agreement for purposes of Article
III. When all of the foregoing parties are collectively referenced in this
Agreement they shall sometimes be designated as the "Parties".
R E C I T A L S :
A. The Owners own all of the issued and outstanding shares of
capital stock of TDI, with the Owners owning the number of shares of common
stock of TDI set forth opposite their respective names on Exhibit A hereto.
B. Greenway, TDI and the Owners have determined that it is in
their respective best interests to effect a Reverse Acquisition of TDI by
Greenway in which all issued and outstanding shares of TDI will be acquired by
Greenway as its wholly owned and sole operating subsidiary, with Greenway
changing its name to TDI, assuming TDI's business and place of business as it
operations, with the election of a Board of Directors nominated herein by TDI,
and with Greenway issuing not less than sixty-two per cent (62%) of its to be
issued and outstanding shares to the Owners, ("The Reverse Acquisition").
C. The parties hereto intend that the Reverse Acquisition
shall qualify as a tax free reorganization within the meaning of the IRS Code.
D. Both Greenway and TDI represent that this Agreement, and
all provisions thereof, are presently subject to majority shareholder approval
of both Greenway and TDI. Both parties further believe that such approval can be
obtained by majority shareholder consent, without the requirement of a formal
meeting, prior notice or proxy under Nevada law.
NOW, THEREFORE, in consideration of the promises and the
mutual agreements contained herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. As used in this Agreement, unless
otherwise defined herein or unless the context otherwise requires, the following
terms shall have the following meanings:
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"Agreement" means this Agreement and all Exhibits hereto and
all amendments, modifications, and supplements hereto.
"Authorized Capital Stock" has the meaning specified in
Section 3.04 hereof.
"Balance Sheet Date" is June 30, 1998
"Board of Directors" shall mean the governing body of the
corporation under Nevada law, sometimes herein simply designated as the "Board"
or the "Directors," until the closing of this Agreement, the existing Board of
the Company shall continue in office, upon closing those persons designated in
Section 2.04(d) shall become the Board.
"Balance Sheet" is the audited balance sheet of Greenway dated
June 30, 1998.
"Closing" has the meaning specified in Section 2.03 hereof.
"Closing Date" has the meaning specified in Section 2.03
hereof.
"Common Stock" means the common stock, $0.001 par value, of
Greenway.
"Company" shall mean Greenway Environmental Systems, Inc.
("Greenway" as designated prior to Closing and "Travel Dynamics, Inc" as
designated after the date of Closing of the within Reverse Acquisition.
"Effective Time" has the meaning specified in Section 2.02
hereof.
"GAAP" has the meaning specified in Section 3.12(b) hereof.
"IRS" means the Internal Revenue Service.
"Owners" means the shareholders of TDI.
"Parent Corporation" shall mean the Greenway entity both
before and after its name change to Travel Dynamics, Inc.
"Reverse Acquisition" has the meaning specified in Recital B
hereof.
"SEC" means the United States Securities and Exchange
Commission.
"Securities Act" has the meaning specified in Section 4.03
hereof.
"Shares" has the meaning specified in Section 3.04 hereof.
"Subsidiary Corporation" has the meaning specified in Section
2.01 hereof.
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"Taxable Period" means any taxable year or any other period
that is treated as a taxable year with respect to which any Tax may be imposed
under any applicable statute, rule, or regulation.
"Tax Return" means any report, return, or other information
required to be supplied to a taxing authority in connection with Taxes.
"Taxes" means all taxes, charges, fees, levies, or other
assessments, including, without limitation, income, gross receipts, excise, real
and personal property, sales, use, stamp, transfer, license, payroll, franchise,
Social Security, unemployment and withholding taxes imposed or required to be
withheld by the United States or any state, local, or foreign government or
subdivision or agency thereof, and such term shall include any interest,
penalties or additions to tax.
Section 1.02. Accounting Terms. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP.
ARTICLE II
THE REVERSE ACQUISITION
Section 2.01. The Reverse Acquisition. Upon the terms and
subject to the conditions of this Agreement, and in accordance with the
Corporation Law of the State of Nevada (the "Nevada Act"), at the Effective Time
(as defined below), the parties hereto shall effect the acquisition of TDI's
shares by Greenway. As a result of the acquisition of all issued and outstanding
shares of TDI by Greenway as of the effective time, as defined herein, of this
Agreement, TDI will become a wholly owned subsidiary of Greenway and its sole
operating business, ("The Subsidiary"). As part of and as a necessary term and
condition of this Reverse Acquisition, Greenway shall effect a Nineteen and
One-half to One (19.5:1) reverse split of its presently issued and outstanding
shares prior to the closing of the Reverse Acquisition. TDI will have appointed,
effective at Closing, as defined herein, a new slate of three directors for
Greenway which will have been elected by the shareholders of Greenway prior to
Closing and who will assume office at the time of and in the event of Closing.
Greenway will further have obtained majority shareholder consent to the change
of its name from Greenway to TDI and will operate the TDI subsidiary as its sole
operating business and enterprise, until otherwise determined by the Board.
Greenway will also change its principal business location and operations to the
facilities presently employed by TDI, or as otherwise designated by the Board.
Finally, as a condition to the Closing of the Reverse Acquisition, Greenway
shall have issued to the Owners two million shares of its reverse split stock
(2,000,000 shares) being not less than Sixty-Two per cent (62%) of its entire
issued and outstanding stock subsequent to the reverse split and at the time of
Closing.
Section 2.02. Effective Time. As promptly as practicable after
the satisfaction or, if permissible, waiver, of the conditions set forth in
Articles VII and VIII hereof, the parties hereto shall cause the Reverse
Acquisition to be consummated and will evidence such Closing by filing a
Certificate of Amendment (the "Certificate of Amendment") in such form as
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required by, and executed in accordance with, the relevant provisions of the
Nevada Act and take all such further actions as may be required by law to make
the Reverse Acquisition effective upon the issuance of a Certificate of
Amendment by the Nevada Secretary of State (the date and time of such issuance
being the "Effective Time").
Section 2.03. The Closing. The closing of the Reverse
Acquisition contemplated in this Agreement (the "Closing") shall take place at
the offices of Julian D. Jensen, attorney at law at 311 S. State Street Suite
380, Salt Lake City, UT 84111 at 2:00 p.m. (local time) on the date that the
Effective Time occurs (which the parties hereto intend to occur on September 29,
1998, but in all events not later than October 1, 1998), or at such other place
or at such other time or on such other date as the parties hereto may mutually
agree (the "Closing Date").
Section 2.04. Effect of Reverse Acquisition. When the Reverse
Acquisition has been effected at the Effective Time:
(a) TDI will be a wholly owned operating subsidiary of
Greenway to the extent provided in Section 2.04(f) hereof.
(b) The Certificate of Incorporation of Greenway shall be
amended to provide that Article I of the Certificate of Incorporation shall read
in its entirety as follows: "The name of the corporation is Travel Dynamics,
Inc." The Certificate of Incorporation of TDI will be amended to reflect a name
change to Travel Dynamics Operating Company, or some reasonable derivation to
distinguish the parent and subsidiary.
(c) The Bylaws of Greenway, as in effect immediately prior to
the Effective Time, shall be the Bylaws of the Surviving Corporation.
(d) The persons nominated below shall have been elected by the
existing shareholders of Greenway as a new Board of Directors effective upon the
Closing. The Directors named below shall immediately upon appointment hold an
organizational meeting of the Board to, inter alia, appoint new officers for the
Company:
1. James Piccolo 4. Gary Davies
2. Brian K. Service 5. Thomas Vergith
3. Thomas (Tom) Dennis
(e) The officers of Greenway immediately after the Effective
Time shall be appointed by the newly elected board of directors set forth in
2.04(d) above.
(f) The Board of Directors of the Company will promptly after
Closing consider the change of name of the TDI operating subsidiary to "Travel
Dynamics Operating Company", or some reasonable derivation of such name, to
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distinguish it from the parent Company. The Company will relocate all operations
to the business facilities currently operated by TDI and the Company will assume
those business operations as its current business and purpose.
Section 2.05. Effect on Capital Stock and Options.
------------- ------------------------------------
(a) Reverse Split. By virtue of the Reverse Acquisition,
automatically and without any action on the part of the holder thereof: (i) each
nineteen and one-half shares of Common Stock of Greenway issued and outstanding
immediately prior to the Effective Time shall become and be converted into one
share of common stock, (19.5:1) $0.001 par value, of Greenway Stock ("The
Reverse Split Stock") prior to Closing.
(b) Adjustments to Greenway Stock. The number of shares of
Greenway Stock to be issued subsequent to subsection (a) above shall be adjusted
to reflect the effect of any stock split, reverse stock split, dividend,
reorganization, recapitalization, or like change with respect to Greenway Stock
occurring after the date hereof and prior to the Effective Time. No such
adjustment is contemplated by the Parties.
(c) Fractional Shares. No fractional shares of Greenway Stock
shall be issued pursuant hereto. In lieu of the issuance of any fractional share
of Greenway Stock pursuant to Section 2.05(a) hereof, each Owner who would
otherwise be entitled to a fraction of a share of Greenway Stock shall receive
from Greenway an additional whole share of Greenway Stock.
Section 2.06. Closing Procedures. Subject to the terms and
conditions of this Agreement:
(a) At the Closing on the Closing Date, the Owners shall
deliver to Greenway share certificates in negotiable form representing all of
the TDI Shares duly endorsed in blank or accompanied by duly executed stock
powers (in blank).
(b) At the Closing on the Closing Date, TDI and the Owners
shall deliver to Greenway the certificates, and other documents and instruments
to be delivered under Article VII hereof.
(c) At the Closing on the Closing Date, Greenway shall deliver
to the Owners share certificates representing the reverse split Greenway Stock
in negotiable form which the Owners have the right to receive in respect of the
surrendered Shares pursuant to Section 2.05(a) issued in the names of the
respective Owners.
(d) At the Closing on the Closing Date, Greenway shall deliver
to TDI and the Owners the opinion, certificates, and other documents and
instruments to be delivered under Article VIII hereof.
(e) All shares to be delivered pursuant to this section shall
be "restricted securities" and may bear a customary restricted security legend.
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Section 2.07. Taking Necessary Action; Further Action. TDI and
Greenway, respectively, each shall use its reasonable efforts to take all such
action as may be necessary or appropriate to effectuate the Reverse Acquisition
under the Nevada Act at the time specified in Section 2.02 hereof. If, at any
time after the Effective Time, any further action is necessary or desirable to
carry out the purposes of this Agreement and to vest the Parent Corporation with
full right, title and possession to all sharehold interest in TDI, the officers
of the Parent Corporation are fully authorized in the name of TDI and Greenway,
or otherwise, to take, and shall take, all such lawful and necessary action.
Section 2.08. Expenses. Greenway, TDI and the Owners shall
each pay their respective expenses incurred in connection with the negotiation,
execution, closing, and performance of this Agreement and all other agreements
contemplated hereby, in each case regardless of whether the Closing occurs.
Without limitation of the foregoing, all stock transfer taxes payable in
connection with the Reverse Acquisition shall be the responsibility of, and
shall be paid by, the Owners.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF GREENWAY
Each of Greenway and Dennis G. Madsen, as its reorganization
agent, represents, warrants, and agrees as follows:
Section 3.01. Corporate Organization. Greenway is a
corporation duly organized, validly existing, and in good standing under the
laws of Nevada and has the corporate power and authority to acquire all material
governmental licenses, authorizations, permits, consents and approvals required
to own, license or lease and operate properties or to conduct business. Greenway
presently has no business.
Section 3.02. Due Qualification. Greenway is duly qualified to
do business and is in good standing under the laws of each jurisdiction in which
the nature of its business or of the properties owned or leased by it makes such
qualification necessary, except where the failure to be so qualified would not
have, either alone or together with all such failures, a material adverse effect
on the assets, business, results of operations or financial condition of
Greenway. It being further understood by the Parties that Greenway does not have
any current business, nor is it subject to registration in any jurisdiction
other than Nevada.
Section 3.03. Corporate Documentation. (a) Copies of the
articles of incorporation and by-laws (or applicable organizational documents)
and all amendments thereto, of Greenway heretofore delivered to TDI, as
existing, are complete and correct, it being understood, however, that Greenway
has only partial historical Board and Shareholder Minutes dating back to 1991;
(b) the existing minute books of Greenway are complete and reflect all
proceedings (including actions taken by written consent) of the stockholders,
partners and directors and all committees thereof of Greenway in all material
respects, subject to the limitations set-out above; and (c) the transfer records
with respect to capital stock and other equity or ownership interests are
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complete and accurately reflect all transactions in the shares of capital stock
and other equity or ownership interests of Greenway. A complete and correct copy
of resolutions to be duly adopted by the stockholders of Greenway at a meeting,
or by Majority Consent, will be provided to and approved by TDI, which
resolutions shall approve and adopt this Agreement, and approve the Reverse
Acquisition, in accordance with the provisions of the Nevada Act. Following
adoption by the stockholders of Greenway, such resolutions will not be amended,
modified, rescinded or superseded and will remain in full force and effect after
their adoption through the consummation of the transactions contemplated hereby.
Section 3.04. Capitalization of Greenway.
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(a) The entire authorized capital stock of Greenway consists
of Fifty Million Authorized Voting Common Stock, par value $0.001 (the
"Authorized Capital Stock"). Of the Authorized Capital Stock, approximately
23,400,000 pre-reverse split shares are presently validly issued and outstanding
or subscribed (the "Shares"). At the time of Closing and after giving effect to
the reverse split, but before issuance of shares to the Owners, or the 10,000
reorganization shares, Greenway will have issued and outstanding approximately
One Million Two Hundred Twenty Thousand (1,220,000) shares. No options, warrants
or other rights to redeem, acquire, sell, or issue shares of capital stock of
Greenway are outstanding, and between the date hereof and the Closing Date, no
shares of capital stock of Greenway and no such options, warrants or rights will
be issued.
(b) The Shares contemplated by this Section have been or will
be duly authorized and validly issued, are fully paid, and nonassessable, have
not been issued in violation of any preemptive rights.
Section 3.05. Authority; Binding Effect. Greenway has the
right, power, authority, and capacity to execute and deliver this Agreement and
all other agreements contemplated hereby, to perform the obligations hereunder
and thereunder on its part to be performed and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by Greenway of this
Agreement and all other agreements and documents contemplated hereby and the
performance by Greenway of all obligations on its part to be performed hereunder
and thereunder have been duly approved by all necessary corporate and other
action by Greenway. This Agreement constitutes, and when duly executed and
delivered, all other agreements contemplated hereby will constitute, the legal,
valid, and binding obligation of Greenway, enforceable against Greenway in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium, or other similar laws relating to or
affecting creditors' rights generally and to general equity principles (whether
such enforceability is considered in a proceeding at law or in equity).
Section 3.06. No Creation of Violation, Default, Breach or
Encumbrance. The execution, delivery and performance of this Agreement by
Greenway and the consummation by Greenway of the transactions contemplated
hereby will not: (a) violate (1) any statute, rule or regulation to which
Greenway is subject, or (2) any order, writ, injunction, decree, judgment or
ruling of any court, administrative agency or governmental body to which is
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subject, (b) conflict with or violate any provision of the articles of
incorporation or by-laws of Greenway, or (c) require the consent of any party or
constitute a default under, violate, conflict with, breach or give rise to any
right of termination, cancellation or acceleration of, or to a loss of benefit
to which Greenway is entitled, under (1) any mortgage, indenture, note or other
instrument or obligation for the payment of money or any contract, agreement,
lease or license to which Greenway is a party, or (2) any governmental licenses,
authorizations, permits, consents or approvals required for Greenway to own,
license or lease and operate its properties or to conduct its business as
presently conducted by it.
Section 3.07. No Present Default. All contracts, agreements,
leases and licenses to which Greenway is a party are valid and in full force and
effect and constitute legal, valid and binding obligations of Greenway. Greenway
has disclosed, and TDI accepts, that Greenway has no license or contract rights
or obligations, or any asset or interest of value.
Section 3.08. Compliance With Law. To the best knowledge and
belief of Greenway, its officers, directors, and agents, Greenway is not in
violation of, or since September 1, 1995 has violated, any applicable domestic
or foreign law, rule or regulation (excluding violations of traffic laws), or
any order, writ, injunction or decree of any domestic or foreign court,
administrative agency, governmental body or arbitration tribunal, to which it or
any of its properties or assets is subject.
Section 3.09. Governmental Approvals and Filings. No consent,
approval or authorization of, or notice to, declaration, filing or registration
with, any domestic or foreign governmental or regulatory authority on the part
of Greenway is required in connection with the execution, delivery and
performance of this Agreement.
Section 3.10. Real Property. Greenway owns no real property.
Section 3.11. Personal Property. Greenway is in possession of
and has good and valid title to all personal property and assets reflected on
the Balance Sheet or acquired after the Balance Sheet Date, subject to no
adverse claims or restrictions on transfer. There are no outstanding options or
rights granted by Greenway to any third person to acquire any such personal
property or any interest in them and, there are no outstanding options or rights
granted by any third party to acquire any such personal property or any interest
in them. Greenway has represented, and TDI accepts, that Greenway has no
personal property or other tangible or intangible assets or interests.
Section 3.12. Financial Statements.
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(a) Greenway will deliver to TDI, prior to closing and as a
condition to closing, the audited balance sheets of Greenway as of June 30, 1998
and the related audited statements of operations, stockholders' equity and cash
flows for the fiscal years then ended, and the notes thereto, together with the
report of Hansen, Barnett & Maxwell, independent certified public accountants,
thereon.
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(b) The financial statements referred to in Section 3.12(a)
above fairly and accurately present in all material respects the consolidated
financial position, results of operations, stockholders' equity and cash flows
of Greenway as of the relevant date thereof and for the period covered thereby
in accordance with generally accepted accounting principles ("GAAP"). It is
understood by the Parties, Greenway has not maintained any financial accounting
or statements for the periods from 1991 to the above Financial Statements.
(c) Except as set forth in the Balance Sheet, or in the
Schedules hereto, Greenway has no liabilities or obligations, direct or
contingent, accrued or otherwise, of a nature customarily reflected in financial
statements in accordance with GAAP.
Section 3.13. Patents, Trademarks. Service Marks. Trade Names.
Copyrights. Greenway does not own any registered patents, trademarks, service
marks, trade names or copyrights.
Section 3.14. Contracts, Agreements and Obligations. Greenway
is not a party to or is in any way obligated under or subject to:
(a) Any contract or agreement, whether written or oral, with
any officer or employee of Greenway;
(b) Any license, franchise or similar agreement, whether
written or oral;
(c) Any collective bargaining or other labor or union contract
or agreement, whether written or oral;
(d) Any note, bond, indenture or agreement, whether written or
oral, to borrow money or any agreement of guarantee or indemnification, whether
written or oral;
(e) Any agreement or outstanding purchase order, whether
written or oral, relating to capital expenditures involving total payments of
more than $1,000.00;
(f) Any agreement, whether written or oral, relating to the
sales, disposition or acquisition of materials, supplies, goods, services,
equipment or other assets;
Section 3.l5. Insurance. Greenway does not maintain any
insurance policies.
Section 3.16. Absence of Certain Changes. Since the Balance
Sheet Date, there has not been: (a) any physical damage, destruction or loss in
excess of $1,000 to any asset or property of Greenway, ordinary wear and tear
excepted; (b) any declaration, setting aside or payment of any dividend, or any
distribution, in respect of shares of capital stock or other equity or ownership
interests of Greenway, or any redemption, purchase or other acquisition of any
of such shares of capital stock or other securities of, or other equity or
ownership interests in Greenway; (c) any increase in the compensation payable or
to become payable by Greenway to any of its respective directors, officers or
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employees; (d) any change in the authorized and unissued capital stock or other
equity or ownership interest of Greenway or any grant of options, warrants or
other rights or convertible or exchangeable securities calling for the issuance
thereof; (e) any payment by Greenway direct or indirect, of any material
liability before the same becomes due in accordance with its terms or otherwise
than in the ordinary course of its business; (f) any sale or transfer of, or
agreement to sell or transfer, any assets of Greenway; (g) any change in any
accounting principle or practice of Greenway or any change in the Greenway's
business practices; (h) any event, occurrence, development, state of facts or
change in the business which has had, either alone or together with all such
events, occurrences, developments, states of facts or changes, a material
adverse effect on the assets, business, results of operations, affairs,
prospects or financial condition of Greenway; (i) any liability or obligation
incurred or created on the part of Greenway or any creation or assumption by of
Greenway any lien, claim or encumbrance on any asset of Greenway.
Section 3.17. Certain Tax Matters. As of the date hereof, or
prior to closing and as a condition to closing, the most current Tax Return
required to be filed with respect to Greenway for the Taxable Period ending on
or before the date hereof has been or will be timely filed, and the independent
auditors for Greenway will have determined that only the most current returns
need be filed due to the inactivity of Greenway over the past several years or
will subsequently prepare and file delinquent returns as required. It is
understood by the Parties that unless concurrently prepared, no historical tax
returns were filed for Greenway for the period of 1991 to the present and any
returns prior to 1991 have not been located. All currently filed Tax Returns or
Return: (a) were prepared in the manner required by applicable law; (b) are
true, correct, and complete in all respects; and (c) reflect the liability for
Taxes of Greenway. All Taxes shown to be payable on such Tax Returns, and all
assessments of Tax made against Greenway with respect to such Tax Returns, have
been paid when due. No adjustment in such Tax Returns has been proposed formally
or informally by any taxing authority and no basis exists for any such
adjustment. Except for liens for real and personal property Taxes that are not
yet due and payable, there are no liens for any Tax upon any asset of the
Company or of any Material Subsidiary.
Section 3.18. No Litigation, Proceeding or Inquiry. To the
best knowledge and belief of Greenway, its officers, directors or agents, there
is no suit, action, claim or other legal, administrative or arbitration
proceeding pending or, threatened before any court or governmental commission,
bureau or other regulatory authority, and there is no investigation or inquiry
by any administrative agency or governmental body pending or threatened, nor are
there any existing judgments, orders or decrees: (a) against Greenway; or (b)
which challenges the validity or propriety of, or seeks to prevent, alter or
delay, the transactions contemplated by this Agreement.
Section 3.19. Employee Benefit Plans; Labor Matters. Greenway
has no employees and no employee benefit plans.
Section 3.20. Brokers and Finders. No broker or finder other
than Dennis Madsen has acted for Greenway in connection with this Agreement and
the transactions contemplated hereby; and no broker or finder except Mr. Madsen,
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who is entitled to receive 10,000 shares of the Surviving Corporation in such
capacity, is entitled to any brokerage or finder's fee or other commission in
respect thereof based in any way on any agreement, arrangement or understanding
made by Greenway.
Section 3.21. Information Supplied by and Greenway. Neither
this Agreement nor any document referenced herein, nor any certificate,
statement or memorandum furnished pursuant to this Agreement or in connection
herewith by or on behalf of Greenway contains any untrue statement of material
fact or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
Section 3.22. SEC Filings; Financial Statements. Greenway has
delivered or will deliver prior to closing and as a condition to closing to each
Owner, in the form filed with the SEC, its Annual Report on Form 10-K for the
newly adopted fiscal year ended June 30, 1998, (the "Greenway SEC Report") with
information and account brought current to such date for all historical periods
since the last filing in 1991. The Greenway SEC Report did not at the time it
was filed (or if amended or superseded by a filing prior to the date hereof,
then on the date of such filing) contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
All parties herewith agree Greenway and its present officers
and directors will use their best efforts to insure that Greenway is reinstated
as a Reporting Company under ss.15 (D) of the Securities and Exchange Act of
1934 by the filing of required delinquent reports. It is the understanding of
all parties that Greenway will file an "omnibus" 10-KSB report on the within
transactions and all material historical events since the last filing, along
with current audited Greenway financials to June 30, 1998 and the most current
audited financials supplied by Travel Dynamics. Both parties understand and
agree that the absence of formal objection or comment by the Securities and
Exchange Commission (SEC) will be deemed to constitutes acceptance of such
filing. In the event of any objection or adverse comment of the SEC, Greenway
will employ all reasonable efforts to comply with such additional requests to
include, as necessary, filing historical reports (10-QSB and 10-KSB), or filing
a new Form 10 to become a full Reporting Company. Other than such efforts,
Greenway cannot and does not make any warranty of its future reporting status.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE OWNERS
Each of the Owners severally, and not jointly, represents,
warrants, and agrees as follows:
Section 4.01. Authority; Binding Effect. Each Owner has the
right, power, authority, and capacity to execute and deliver this Agreement and
all other agreements contemplated hereby, to perform the obligations hereunder
and thereunder on its part to be performed and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each Owner of
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this Agreement and all other agreements and documents contemplated hereby and
the performance by each Owner of all obligations on its part to be performed
hereunder and thereunder have been duly approved by all necessary corporate and
other action by each Owner. This Agreement constitutes, and when duly executed
and delivered, all other agreements contemplated hereby to be executed and
delivered by each Owner will constitute, the legal, valid, and binding
obligation of such Owner, enforceable against such Owner in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or affecting
creditors' rights generally and to general equity principles (whether such
enforceability is considered in a proceeding at law or in equity).
Section 4.02. No Creation of Violation. The execution,
delivery and performance of this Agreement by each Owner does not, and the
consummation by each Owner of the transactions contemplated hereby will not: (a)
violate (1) any statute, rule or regulation to which any Owner is subject, or
(2) any order, writ, injunction, decree, judgment or ruling of any court,
administrative agency or governmental body to which any Owner is subject, or (b)
require the consent of any party.
Section 4.03. Offering Exemptions. The Owners each understand
that the shares of Greenway Stock to be acquired hereunder as a result of the
Reverse Acquisition are being issued by Greenway without registration under the
Securities Act of 1933, as amended (the "Securities Act") and without
qualification and/or registration under other applicable securities laws, and
that the shares of Greenway Stock are being issued pursuant to specific
exemptions from registration and/or qualification contained in the Securities
Act and in applicable state securities laws. The respective Owners each
understand that the foregoing exemptions depend upon, among other things, the
bona fide nature of each such Owner's intent as expressed herein and the
accuracy of each such Owner's representations. The respective Owners each
understand that the foregoing exemptions exempt only the issuance of the
Greenway Stock by Greenway to such Owners and not any sale or disposition of
Greenway Stock, or any interest in Greenway Stock, by any Owner. The respective
Owners each understand that the shares of Greenway Stock must be held
indefinitely unless subsequently registered and/or qualified under the
Securities Act and applicable state securities laws or unless exemptions from
such registration and/or qualification are available for a proposed disposition
of Greenway Stock by such Owner. Until that time, the respective Owners each
understand that each certificate evidencing shares of Greenway Stock to be
acquired as a result of the Reverse Acquisition shall bear a legend
substantially to the effect that the shares represented by the certificate have
not been registered under the Securities Act or any state securities laws and
may not be offered or sold except in compliance therewith.
Section 4.04. Acquisition for Investment. Each respective
Owner is acquiring the shares of Greenway Stock to be acquired hereunder for
investment for such respective Owner's own account and not with a view to or
with any present intention to offer or sell in connection with any distribution
or resale thereof.
Section 4.05. Information. Experience, and Ability to Bear
Risk. Each respective Owner acknowledges receipt of all the information
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requested from Greenway and considered by such respective Owner to be necessary
or appropriate for deciding whether to acquire the shares of Greenway Stock to
be acquired hereunder, including, without limitation, the Greenway SEC Reports.
Each respective Owner is an "accredited investor" within the meaning of Rule
501(a) under the Securities Act or, alone or together with a purchaser
representative, has such knowledge and experience in financial and business
matters to enable such Owner to be capable of evaluating the merits and risks
of, and such Owner is able to bear the economic risk of, such Owner's
acquisition of such shares of Greenway Stock pursuant to this Agreement. The
respective Owners have been afforded the opportunity to ask questions and
receive answers regarding the terms and conditions of the acquisition of such
shares of Greenway Stock.
Section 4.06. Brokers and Finders. No broker or finder has
acted for the respective Owner in connection with this Agreement and the
transactions contemplated hereby; and no broker or finder is entitled to any
brokerage or finder's fee or other commission in respect thereof based in any
way on any agreement, arrangement or understanding made by the respective Owner.
Section 4.07. Information Supplied by the Owners. Neither this
Agreement nor any document referenced herein, nor any certificate, statement or
memorandum furnished pursuant to this Agreement or in connection herewith by or
on behalf of the respective Owner contains any untrue statement of material fact
or omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF TDI
TDI hereby represents and warrants to Greenway as follows:
Section 5.01. Corporate Organization; Corporate Documentation.
TDI is a corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada, and has the corporate power and authority and
all material governmental licenses, authorizations, permits, consents and
approvals required to own, license or lease and operate its properties and to
conduct its business as presently conducted by it.
Section 5.02. Corporate Authority: Binding Effect. TDI has the
corporate power and authority to execute and deliver this Agreement and all
other agreements contemplated hereby, to perform its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and thereby.
The execution and delivery by TDI of this Agreement and all other agreements and
documents contemplated hereby and the performance by TDI of all obligations on
its part to be performed hereunder and thereunder have been duly approved by all
necessary corporate action by TDI. This Agreement constitutes, and when duly
executed and delivered by TDI all other agreements contemplated hereby will
constitute, the legal, valid and binding obligation of TDI, enforceable against
TDI, in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
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relating to or affecting creditors' rights generally and to general equity
principles (whether such enforceability is considered in a proceeding at law or
in equity).
Section 5.03. No Creation of Violation, Default, Breach or
Encumbrance. The execution and delivery by TDI of this Agreement do not, and the
consummation by TDI of the transactions contemplated hereby will not: (a)
conflict with or violate any provision of the certificate of incorporation or
by-laws of TDI; (b) result in the breach of or constitute a default under any
material contract, agreement, lease, license, mortgage, indenture, note or other
instrument or obligation to which TDI is a party, which could adversely affect
the ability of TDI to consummate the transactions contemplated by this
Agreement; or (c) violate (1) any statute, rule or regulation to which TDI is
subject, or (2) any order, writ, injunction, decree, judgment or ruling of any
court, administrative agency or governmental body to which TDI is subject.
Section 5.04. No Litigation, Proceeding or Inquiry. There is
no suit, action, claim or other legal, administrative or arbitration proceeding
pending or, to TDI's knowledge, threatened before any court or governmental
commission, bureau or other regulatory authority, and, to TDI's knowledge, there
is no investigation or inquiry by any administrative agency or governmental body
pending or threatened, nor are there any existing judgments, orders or decrees
which challenges the validity or propriety of, or seeks to prevent, alter or
delay, the transactions contemplated by this Agreement.
Section 5.05. Governmental Approvals and Filings. No consent,
approval or authorization of, or notice to, declaration, filing or registration
with, any governmental or regulatory authority on the part of TDI is required in
connection with the execution, delivery and performance of this Agreement.
ARTICLE VI
COVENANTS OF THE PARTIES
Section 6.01. Access to Properties and Records: Confidentiality.
------------- --------------------------------------------------
(a) Between the date of this Agreement and the Closing Date,
Greenway will provide TDI and its accountants, counsel and other authorized
representatives, full access, during reasonable business hours and under
reasonable circumstances, to any and all premises, properties, contracts,
commitments, books, records and other information (including Tax Returns filed
and those in preparation and any tax related agreements) of Greenway.
(b) The parties acknowledge that paragraph 8 of the Letter of
Intent between the parties, dated August 28, 1998 (the "Letter of Intent")
contains a provision regarding confidentiality and that all access and
investigations referred to above will be conducted in accordance with and will
be governed by the terms thereof.
Section 6.02. Press Releases and 8-K. The parties shall
cooperate in the preparation of a press release with respect to the execution
and delivery of this Agreement and the transactions contemplated hereby, which
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press release shall be released and made available to the public promptly
following the date hereof. Neither TDI or Greenway shall issue any other press
release or make any other public announcement with respect to the transactions
contemplated by this Agreement without the prior consent of each of the others,
except as may be required by law in the opinion of counsel (in which event each
of the other parties shall be timely notified of the opinion of counsel that a
press release or ether public announcement is so required by law). Counsel for
Greenway will promptly prepare and file with the SEC, after the execution of
this agreement, an 8-K Report reporting this transaction and agreement,
inclusive of the Financial Statements for both entities and intent to resume
filing SEC Reports.
Section 6.03. Further Assurances. Consistent with the terms
and conditions hereof, each party hereto will execute and deliver such other
instruments and take such other action as any other party hereto may reasonably
require in order to carry out this Agreement and the transactions contemplated
hereby.
Section 6.04. Conduct of Greenway's Business Prior to the
Closing Date. Greenway agrees that it shall not conduct any business, operations
or activities outside of the ordinary course of its business.
ARTICLE VII
CONDITIONS TO THE OBLIGATIONS OF TDI
The obligations of TDI under this Agreement to consummate the
Reverse Acquisition and take the other actions contemplated at the Closing shall
be subject to the satisfaction, on or prior to the Closing Date, of each of the
following conditions, each of which may be waived by TDI as provided herein
except as otherwise provided by law:
Section 7.01. Greenway's Certifications. The representations
and warranties of Greenway contained in this Agreement shall have been true and
correct as of the date hereof and shall be true and correct in all material
respects (except for such representations and warranties which are qualified by
their terms by reference to materiality, which representations and warranties as
so qualified shall be true and correct in all respects) as of the Closing Date
with the same effect as though made as of the Closing Date and each of the
agreements or obligations of Greenway to be performed on or before the Closing
Date pursuant to the terms hereof have been performed and complied with in all
material respects.
Section 7.02. Authorization of Transactions. All corporate
action necessary to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by
Greenway shall have been duly and validly taken in a manner reasonably
satisfactory to TDI and its counsel.
Section 7.03. No Injunctions, etc. Greenway shall not be
subject to any rule, regulation, order, decree or injunction of a court or
agency of competent jurisdiction which enjoins or prohibits the consummation of
the Reverse Acquisition, or the issuance of Greenway Stock.
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Section 7.04. No Litigation. No litigation or proceeding shall
have been instituted or, to the parties' knowledge, threatened after the date of
this Agreement by any governmental agency or other person or entity seeking to
restrain or prohibit the performance of, or to obtain damages or other relief in
conjunction with, this Agreement or any of the transactions contemplated hereby
that: (a) has a reasonable possibility of success on the merits; and (b) if
decided in favor of the agency, person or entity who instituted the same, would
have a material adverse effect on Greenway.
Section 7.05. Resignations. Greenway shall have delivered (or
caused to be delivered) written resignations to TDI, effective as of the
Closing, of all directors of Greenway from their directorships and of all
officers of Greenway from their respective as requested by TDI.
Section 7.06. Reverse Split and Cancelled Shares. Greenway
shall have completed a 19.5 to 1 reverse stock split, by Closing, such that
after the reverse split, and prior to the Reverse Acquisition shares issued to
the owners, or the 10,000 Reorganization shares, there shall be approximately
1,220,000 shares of Greenway stock outstanding. The Parties mutually stipulate
and agree that there are currently approximately 775,600 shares (39,750 reverse
split), issued pursuant to a prior cancelled reorganization in 1991 to a Mr.
Gregory Dean Cambron which have been cancelled of record, but not physically
returned. The Parties further stipulate and agree that the representations of
outstanding shares do not include these shares and that TDI agrees to accept all
rights, risks and liabilities which may arise as to such shares. It is further
undersood and agreed, as a condition to Closing, that an Escrow of 40,000
reverse split Greenway shares will be established in writing and funded to
secure an indemnity to TDI as to any adverse claim arising out of the "Cambron
Shares" described by this Section for a period of one year from the date of this
Agreement. A copy of the Escrow\Indemnity referenced by this Section will be
attached hereto and incorporated by this reference as Exhibit "B".
Section 7.07. Legal Opinion. TDI shall receive an opinion of
Greenway's counsel to the effect that he knows of no currently presented claims
or debts of Greenway, further does not believe such claims exist and that it
appears any historical claims which may exist, but which are not know, would
most likely be barred by an applicable statute of limitations or laches.
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF GREENWAY
The obligations of Greenway under this Agreement to consummate
the Reverse Acquisition and take the other actions contemplated at the Closing
shall be subject to the satisfaction, on or prior to the Closing Date, of each
of the following conditions, each of which may be waived by Greenway as provided
herein except as otherwise provided by law:
Section 8.01. Buyer's Certification. The representations and
warranties of TDI contained in this Agreement shall have been true and correct
as of the date hereof and shall be true and correct in all material respects
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(except for such representations and warranties which are qualified by their
terms by reference to materiality, which representations and warranties as so
qualified shall be true and correct in all respects) as of the Closing Date with
the same effect as though made as of the Closing Date and each of the agreements
or obligations of TDI to be performed on or before the Closing Date pursuant to
the terms hereof have been performed and complied with in all material respects.
Section 8.02. Authorization of Transactions. All corporate
action necessary to authorize the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby by TDI
shall have been duly and validly taken in a manner reasonably satisfactory to
Greenway and its counsel.
Section 8.03. No Injunctions. etc. TDI shall not be subject to
any rule, regulation, order, decree or injunction of a court or agency of
competent jurisdiction which enjoins or prohibits the consummation of the
Reverse Acquisition.
Section 8.04. No Litigation. No litigation or proceeding shall
have been instituted or, to the parties' knowledge, threatened after the date of
this Agreement by any governmental agency or other person or entity seeking to
restrain or prohibit the performance of, or to obtain damages or other relief in
conjunction with, this Agreement or any of the transactions contemplated hereby
that: (a) has a reasonable possibility of success on the merits; and (b) if
decided in favor of the agency, person or entity who instituted the same, would
have a material adverse effect on Greenway or TDI.
ARTICLE IX
TERMINATION AND ABANDONMENT OF THE REVERSE ACQUISITION
Section 9.01. Termination. This Agreement may be terminated at
any time prior to the Closing: (a) by mutual consent of Greenway and TDI; (b) by
TDI at any time if results of the investigations conducted disclose any adverse
effects related to which TDI, in its discretion, determines is material to the
assets, business, financial condition, or results of operations of Greenway; (c)
by TDI if there is a material breach by Greenway of any representation,
warranty, covenant or other agreement contained in this Agreement; (d) by
Greenway if there is a material breach by TDI of any representation, warranty,
covenant or other agreement contained in this Agreement; or (e) by either
Greenway or TDI if the Reverse Acquisition shall not have been consummated on or
before November 1, 1998, for reasons other than the failure of the terminating
party to perform its obligations hereunder.
Section 9.02. Effect of Termination. If this Agreement is
terminated pursuant to this Article IX by any party hereto for any reason other
than the breach of a warranty, representation, covenant or agreement contained
herein by the other, all further obligations of the parties hereunder will
terminate without further liability of the parties.
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ARTICLE X
MISCELLANEOUS
Section 10.01. Headings. The descriptive headings of the
Articles and Sections of this Agreement are inserted for convenience only and do
not constitute a part of this Agreement.
Section 10.02. Notices. Any notices or other communications
required or permitted hereunder shall be given in writing and shall be delivered
personally, sent by certified or registered mail, return receipt requested and
postage prepaid, or sent by nationally recognized overnight delivery service to
the address set forth below:
If to TDI or Jim Piccolo, President
the Owners: Travel Dynamics, Inc.
7525 E. Camelback, Suite 202
Scottsdale, AZ 85251
If to Greenway: Greenway Environmental Systems, Inc.
476 East South Temple, #205
Salt Lake City, UT 84111
Attention: Dennis Madsen
or such other address as shall be furnished in writing by such party, and any
such notice or communications shall be effective and be deemed to have been
given only upon its delivery in accordance with this Section 10.02.
Section 10.03. Assignment. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, heirs, legal representatives and
permitted assigns, but neither this Agreement nor any of the rights, interests,
or obligations hereunder shall be assigned by any of the parties hereto without
the prior written consent of the other parties.
Section 10.04. Complete Agreement. This Agreement and
paragraphs 8 and 9 of the Letter of Intent contain the entire understanding of
the parties with respect to the Reverse Acquisition and the related transactions
and supersede all prior arrangements or understandings with respect thereto, and
there are no restrictions, agreements, promises, representations, warranties,
covenants or undertakings other than those expressly set forth in this Agreement
paragraphs 8 and 9 of the Letter of Intent .
Section 10.05. Modifications' Amendments and Waivers. At any
time prior to the Closing Date: (a) the parties hereto may, by written
agreement, modify, amend or supplement any term or provision of this Agreement;
and (b) any term or provision of this Agreement may be waived by the party which
is entitled to the benefits thereof.
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Section 10.06. Counterparts and Facsimile Signatures. This
Agreement may be executed in two or more counterparts all of which shall be
considered one and the same agreement and each of which shall be deemed an
original. Facsimile signatures shall be deemed rebuttabley valid as to the
execution of this Agreement.
Section 10.07. No Third Party Beneficiary. The terms and
provisions of this Agreement are intended solely for the benefit of the parties
hereto and their respective successors or permitted assigns, and it is not the
intention of the parties to confer third-party beneficiary rights upon any other
person.
Section 10.08. Invalid Provisions. If any provision of this
Agreement is held to be illegal, invalid or unenforceable under any present or
future law, and if the rights or obligations of any party hereto under this
Agreement will not be materially and adversely affected thereby: (a) such
provision will be fully severable; (b) this Agreement will be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof; and (c) the remaining provisions of this Agreement will
remain in full force and effect and will not be affected by the illegal, invalid
or unenforceable provision or by its severance therefrom.
Section 10.09. Governing Law. This Agreement shall be governed
by the laws of the State of Nevada (regardless of the laws that might be
applicable under principles of conflicts of law) as to all matters, including
but not limited to matters of validity, construction, effect and performance.
Section 10.10. Designation of Agent. Each of the Owners hereby
designates and appoints Jim Piccolo (the "Agent") as his or her agent and
attorney-in-fact (with full power of substitution), with full power and
authority in behalf of such Owners to do anything necessary or appropriate to
carry out or enforce any obligations or rights of the Owners under this
Agreement. The Agent shall have all of the rights of the Owners hereunder and
any action taken by, or the failure to take action by, the Agent, shall be
deemed to be the action of, or the failure to take action by, each of the
Owners. Each of the Owners is hereby deemed to have constituted and appointed
the Agent as agent for such Owner for the purpose of receiving or accepting any
notice under this Agreement and any notice or process insofar as the same
relates to or arises from any dispute or difference hereunder, and the giving or
delivery of notice to, or service of process on, the Agent shall be deemed to be
notice or service on each of the Owners. Any notice or instructions given by the
Agent under this Agreement shall be deemed to be notice and instruction from,
and in behalf of, each of the Owners and any party receiving said notice or
instruction shall be entitled to rely conclusively thereon as if such notice or
instructions had been signed and delivered by each of the Owners. Agent shall
have no liability or responsibility to the Owners for any action or failure to
act pursuant to the provisions of this Section 10.10, provided such action or
failure to act is in good faith.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date first written above.
GREENWAY ENVIRONMENTAL
SYSTEMS, INC.
By:/s/ Damon Madsen
------------------------------
Damon Madsen
Its: President
TRAVEL DYNAMICS, INC.
By:/s/ Jim Piccolo
------------------------------
Jim Piccolo
Its: President
OWNERS:
/s/ Beverly Kasber /s/ Randy Carder
- ------------------------------ ------------------------------
Beverly Kasbeer Randy Carder
/s/ Eli Dafesh /s/ Bob Snyder
- ------------------------------ ------------------------------
Eli Dafesh Bob Snyder
/s/ Jim Sheidell /s/ Thomas Vergith
- ------------------------------ ------------------------------
Jim Sheidell Thomas Vergith
Target Mail, LLC Esteem Corporation
By:/s/ Mr. J. Piccolo By: Ms. Pat Piccolo
------------------------------ ------------------------------
Mr. J. Piccolo Ms. Pat Piccolo
Its Manager Its: President
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EXHIBIT A
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Stock Ownership of TDI
- --------------------------------------------------------------------------------
Name Number of Shares
- --------------------------------------------------------------------------------
Beverly Kasbeer 310,000
Randy Carder 45,000
Eli Dafesh 100,000
Bob Snyder 100,000
Jim Sheidell 100,000
Esteem Corp. 130,305
Target Mail, LLC 67,695
- --------------------------------------------------------------------------------
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