<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 18, 1999.
REGISTRATION NO. FILE NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
PEACHTREE FIBEROPTICS, INC.
(Exact name of issuer as specified in its charter)
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<TABLE>
<S> <C> <C>
DELAWARE 58-1974423
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
701 BRICKELL AVENUE SUITE 200
MIAMI, FLORIDA 33131
(Address of principal executive (Zip Code)
offices)
</TABLE>
---------------------
CONSULTING AND ACQUISITION MANAGEMENT AGREEMENT
WITH STEPHEN KRAUSE AND TIMOTHY MAHONEY
(Full title of the plan)
---------------------
LEONARD J. SOKOLOW
701 BRICKELL AVENUE, SUITE 200
MIAMI, FLORIDA 33131
TELEPHONE NO.: (305) 374-0282
(Name and address of agent for service)
---------------------
COPY TO:
JAMES M. SCHNEIDER, ESQ.
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
200 EAST LAS OLAS BOULEVARD, SUITE 1900
FORT LAUDERDALE, FLORIDA 33301
TELEPHONE NO.: (954) 763-1200
CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER SHARE(1) OFFERING PRICE(1) FEE(1)
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<S> <C> <C> <C> <C>
Common Stock ($.01 par value).......... 80,000 shares $2.82 $225,600 $62.72
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</TABLE>
(1) The amount of the registration fee represents is being calculated based on
the average bid and price of Peachtree's common stock on the OTC Bulletin
Board on August 17, 1999.
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<PAGE> 2
PROSPECTUS
PEACHTREE FIBEROPTICS, INC.
80,000 SHARES OF COMMON STOCK
This prospectus is part of a registration statement which registers an
aggregate of 80,000 shares of common stock, of Peachtree Fiberoptics, Inc. which
are being issued to two of Peachtree's consultants pursuant to a written
consulting agreement dated August 16, 1999.
---------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
adequacy or accuracy of the prospectus. Any representation to the contrary is a
criminal offense.
---------------------
This prospectus does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such offer in such state.
THE DATE OF THIS PROSPECTUS IS AUGUST ____, 1999.
<PAGE> 3
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities Exchange
Act of 1934, and we file reports, proxy statements and other information with
the Securities and Exchange Commission. Reports, proxy statements and other
information filed with the Securities and Exchange Commission can be inspected
and copied at the public reference facilities of the Securities and Exchange
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of this
material can also be obtained from the Public Reference Section of the
Securities and Exchange Commission at its principal office at 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the Securities and Exchange Commission's
Regional Offices in New York (7 World Trade Center, 13th Floor, New York, New
York 10048) and Chicago (Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661).
We filed with the Securities and Exchange Commission a registration
statement on Form S-8 with respect to the resale of up to an aggregate of 80,000
shares of our common stock issued to Steven Krause and Timothy Mahoney. This
prospectus, which is Part I of the registration statement, omits additional
information contained in the registration statement. For further information
with respect to Peachtree and the 80,000 shares of common stock offered by this
prospectus, please refer to the registration statement and the exhibits to the
registration statement. Statements in this prospectus as to any document are not
necessarily complete, and any documents that are exhibits to this registration
statement or incorporated by reference in this registration statement are
qualified in all respects by the provisions of each exhibit or other document to
which we refer. A copy of the registration statement, with exhibits, may be
obtained from the Securities and Exchange Commission or examined as previously
described. Our filings with the Securities and Exchange Commission can also be
obtained from the Securities and Exchange Commission website at
http.//www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Peachtree with the Securities and Exchange
Commission are incorporated in this prospectus by reference are part of this
prospectus:
1. Peachtree's Annual Report on Form 10-KSB for the year ended
December 31, 1998.
2. Peachtree's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1999.
3. Peachtree's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1999.
4. All reports and documents we file pursuant to Section 13, 14 or
15(d) of the Securities Exchange Act of 1934, prior to the filing of a
post-effective amendment which indicates that all securities offered hereby
have been sold or which deregisters all securities then remaining unsold,
shall be deemed to be incorporated by reference in this registration
statement and prospectus and to be a part of this registration statement
and prospectus from the date documents are filed. Any statement
incorporated by reference in this registration statement and prospectus
shall be deemed to be modified or superseded for purposes of this
prospectus to the extent that a statement contained in this registration
statement prospectus or in any other subsequently filed document, which
also is or is deemed to be incorporated by reference in this registration
statement and prospectus, modifies or supersedes such statement. Any
statement modified or superseded shall not be deemed, except as so modified
or superseded, to constitute part of this prospectus.
We will provide without charge to each person, including any beneficial
owner, to whom a copy of the prospectus is delivered, on the written or oral
request of any such person, a copy of any or all of the documents referred to
above which have been or may be incorporated by reference in this prospectus,
other than exhibits to such documents. Written requests for such copies should
be directed to Corporate Secretary, Peachtree Fiberoptics, Inc., 701 Brickell
Avenue, Suite 2000, Miami, Florida 33131.
We were advised by the consultants that they may sell all or a portion of
their shares of common stock from time to time in the over-the-counter market,
in negotiated transactions, directly or through brokers or otherwise, and that
such shares will be sold at market prices prevailing at the time of such sales
or at negotiated prices, and we will not receive any proceeds from those sales.
2
<PAGE> 4
No person has been authorized by us to give any information or to make any
representation other than as contained in this prospectus, and if given or made,
the information or representation must not be relied upon as having been
authorized by us. Neither the delivery of this prospectus nor any distribution
of the shares issuable under the terms of the consulting agreement shall, under
any circumstances, create any implication that there has been no change in our
affairs since the date of this prospectus.
3
<PAGE> 5
THE COMPANY
Peachtree is a development stage enterprise and was incorporated in the
State of Delaware in February 1992, primarily to engage in the production and
sale of plastic optical fiber. In connection with its formation, we acquired
from Peachtree Technologies, Inc. the rights to certain technology for a new
manufacturing process to produce plastic optical fiber. We also entered into an
agreement with Fiberoptic Machinery Company, Inc. to sell under our name certain
custom designed machinery produced by Fiberoptic Machinery Company, Inc. to
manufacture wire, cable and glass fiber. Fiberoptic Machinery Company, Inc. was
a small machinery company incorporated in the State of Georgia at the time the
Company was incorporated. Fiberoptic Machinery Company, Inc. acquired the
remaining assets and debt of Peachtree Technologies, Inc. and Fiberoptics
Machinery Company, Inc.'s continued survival was solely dependent on the success
of our efforts to sell custom machinery.
Our plastic optical fiber development efforts were primarily focused on
meeting specifications set forth by Rutgers University Fiberoptics Department
for "Illumination Plastic Optical Fiber". In the second quarter of 1993, we
believed our plastic optical fiber met these specifications and the Company's
illumination plastic optical fiber was evaluated and accepted by a sign
manufacturer. During the third quarter of 1993, the sign manufacturer informed
us that the plastic optical fiber previously accepted no longer met required
specifications. We then determined our plastic optical fiber was not comparable
to plastic optical fiber produced by other manufacturers. At that time, we did
not possess funding needed to enhance or modify our existing plastic optical
fiber production system to meet required specifications.
Due to inadequate capital resources, the inability to raise additional
capital, technical difficulties existing with our initial plastic optical fiber
production system, certain lawsuits filed against us, and certain claims
asserting that we were liable for the debts of Fiberoptics Machinery Company,
Inc., we, in October 1993, granted any officer of J.W. Charles Securities, Inc.
and Corporate Securities Group, Inc., our initial public offering managing
underwriters, a limited power-of-attorney to negotiate and execute an agreement
with Genesis Partners, Inc to act as the exclusive manager of all of our
business interests.
On October 27, 1993, we ceased all operations and subsequently sold certain
assets relating to our plastic optical fiber operations. On February 2, 1994, we
entered into an Asset Acquisition Agreement for the sale of our plastic optical
fiber production system, certain equipment and inventory for $200,000. In
connection with this sale, we licensed our proprietary technology.
We are now seeking additional capital from investors or acquisition or
merger opportunities, but we are encountering significant competition in our
efforts to locate capital and/or investors or to attract acquisition or merger
opportunities from other individuals and entities having similar objectives.
Some of the competing individuals and entities have management, investment
managers or advisors with significantly greater experience, resources and
managerial capabilities than we do and are therefore in a better position than
we are to obtain access to capital or investors or attractive acquisition or
merger opportunities. We engaged Steven Krause and Timothy Mahoney as a
consultants to help us meet our goals.
CONSULTING AGREEMENT
GENERAL
On August 16, 1999, we entered into a consulting agreement with Stephen
Krause and Timothy Mahoney pursuant to which we agreed to issue an aggregate of
80,000 shares of our common stock in consideration for consulting services to be
provided to Peachtree over an anticipated one year period commencing as of the
date of the agreement. Specifically, the consulting services include the
identification and evaluation of business acquisitions involving Peachtree,
whether in the form of asset purchases, stock purchases, mergers,
consolidations, joint ventures, strategic alliances or otherwise.
4
<PAGE> 6
In addition, for a period of one (1) year beginning on the date of the
agreement the consultants will be paid in accordance with the following formula
if Peachtree consummates a transaction with a company introduced by the
consultants.
5% of the first one million dollars in gross transaction value;
4% of the next million dollars in gross transaction value;
3% of the next million dollars in gross transaction value;
2% of the next million dollars in gross transaction value; and
1% of the balance in gross transaction value over the first four
million dollars.
The choice of payment in cash versus Peachtree's restricted common stock
will be determined by Peachtree, in writing, at the time Peachtree enters into a
letter of intent for each proposed transaction.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of any shares of our common stock received must be made in
compliance with federal and state securities laws. Officers, directors and 10%
or greater stockholders of Peachtree, as well as certain other persons or
parties who may be deemed to be "affiliates" of Peachtree under the federal
securities laws, should be aware that resales by affiliates can only be made
pursuant to an effective registration statement, Rule 144 or any other
applicable exemption. Officers, directors and 10% and greater stockholders are
also subject to the "short swing" profit rule of Section 16(b) of the Securities
Exchange Act of 1934. Section 16(b) of the Securities Exchange Act generally
provides that if an officer, director or 10% and greater stockholder sold any of
our common stock they would generally be required to pay us any "profits"
resulting from the sale of the stock.
SALES BY SELLING SECURITY HOLDERS
The following table sets forth the amount of shares of our common stock
held directly or indirectly by the consultants, the amount of our common stock
to be owned by each following sale of such shares of common stock and the
percentage of shares of common stock to be owned by each consultant following
completion of offering. As of August 6, 1999, there were 366,274 shares of our
common stock outstanding giving effect to a 197.44092 reverse stock split on
April 28, 1999.
<TABLE>
<CAPTION>
SHARES TO BE PERCENTAGE TO
NAME OF SELLING NUMBER OF SHARES TO OWNED AFTER BE OWNED
SECURITY HOLDER SHARES OWNED BE OFFERED OFFERING AFTER OFFERING
--------------- ------------ ---------- -------------- --------------
<S> <C> <C> <C> <C>
Stephen Krause................. 40,000 40,000 -0- -0-
Timothy Mahoney................ 40,000 40,000 -0- -0-
</TABLE>
DESCRIPTION OF SECURITIES
We are currently authorized to issue up to 20,000,000 shares of common
stock, $.01 par value per share, of which 416,334 shares were outstanding as of
August 16, 1999. On April 28, 1999, we implemented a l:197.44092 reverse stock
split of our outstanding common stock.
COMMON STOCK
Subject to the dividend rights of the holders of our preferred stock if
any, holders of shares of our common stock are entitled to share, on a ratable
basis, such dividends as may be declared by the Board of Directors out of funds
legally available therefor. Upon liquidation, dissolution or winding up and
after payment to creditors and holders of preferred stock that may be
outstanding, our assets will be divided pro rata on a per share basis among the
holders of our common stock.
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<PAGE> 7
Each share of our common stock entitles the holders thereof to one vote.
Holders of our common stock do not have cumulative voting rights which means
that the holders of more than 50% of the shares voting for the election of
directors can elect all of directors if they choose to do so, and, in such
event, the holders of the remaining shares will not be able to elect any
directors. Our by-laws require that only a majority of the issued and
outstanding shares of our common stock need be represented to constitute a
quorum and to transact business at a stockholders' meeting. Our common stock has
no preemptive, subscription or conversion rights and is not redeemable.
OVER-THE-COUNTER MARKET
Peachtree's common stock is traded on the OTC Bulletin Board of the
National Association of Securities Dealers, Inc. under the symbol "PFII."
TRANSFER AGENT
The Transfer Agent for our common stock is North American Transfer Co., 147
West Merrick Road, Freeport, New York 11520.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson,
P.A., Special Counsel for the Company, Fort Lauderdale, Florida. Members of the
firm of Atlas, Pearlman, Trop & Borkson, P.A. own an aggregate of 50,000 shares
of our common stock.
INDEMNIFICATION
Section 145 of the General Corporation Law of Delaware, the jurisdiction
where Peachtree is incorporated, empowers a corporation to indemnify any person
who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of a corporation as a director, officer, employee or agent of
another corporation or enterprise. Peachtree may indemnify against expenses
(including attorneys' fees) and, other than in respect of an action by or in the
right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person indemnified acted in good faith and in the manner he
or she reasonably believed to be in or non-opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or in the right of Peachtree, no indemnification of expenses may be
paid in respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Delaware court of chancery or the court in which the action was brought
shall determine that, despite the adjudication of liability, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper. Section 145 of the General Corporation Law of Delaware
further provides that to the extent a director, officer, employee or agent of
the corporation has been successful in the defense of any action, suit or
proceeding referred to above or in the defense of any claim, issue or matter
therein, he or she shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him or her.
6
<PAGE> 8
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
The documents listed in (a) through (e) below are incorporated by reference
in this registration statement. All documents subsequently filed by Peachtree
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended, prior to the filing of a post-effective amendment which
indicates that all securities offered have been sold or which deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in the registration statement and to be part thereof from the date of
filing of such documents.
(a) Peachtree's Annual Report on Form 10-KSB for the year ended
December 31, 1998.
(b)Peachtree's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1999.
(c) Peachtree's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1999.
(d) All reports and documents filed by Peachtree pursuant to Section
13, 14 or 15(d) of the Securities and Exchange Act, prior to the filing of
a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference herein and to be a
part hereof from the respective date of filing of such documents. Any
statement incorporated by reference herein shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a
statement contained herein or in any other subsequently filed document,
which also is or is deemed to be incorporated by reference herein, modifies
or supersedes such statement. Any statement modified or superseded shall
not be deemed, except as so modified or superseded, to constitute part of
this prospectus.
ITEM 4. DESCRIPTION OF SECURITIES
Our common stock is registered under Section 12(g) of the Securities
Exchange Act of 1934, as amended. A description of our common stock is set forth
in the prospectus incorporated as a part of this registration statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
Not Applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware, the jurisdiction
where Peachtree is incorporated, empowers a corporation to indemnify any person
who was or is a party, or is threatened to be made a party, to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation or is or was serving at
the request of a corporation as a director, officer, employee or agent of
another corporation or enterprise. Peachtree may indemnify against expenses
(including attorneys' fees) and, other than in respect of an action by or in the
right of the corporation, against judgments, fines and amounts paid in
settlement actually and reasonably incurred in connection with such action, suit
or proceeding if the person indemnified acted in good faith and in the manner he
or she reasonably believed to be in or non-opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. In the case of an
action by or in the right of Peachtree, no indemnification of expenses may be
paid in respect to any claim, issue or matter as to which such person shall have
been adjudged to be liable to the corporation unless and only to the extent that
the Delaware court of chancery or the court in which the action was brought
shall determine that, despite the adjudication of liability, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper. Section 145 of the General Corporation Law of Delaware
further provides that to the
II-1
<PAGE> 9
extent a director, officer, employee or agent of the corporation has been
successful in the defense of any action, suit or proceeding referred to above or
in the defense of any claim, issue or matter therein, he or she shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him or her.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
Inasmuch as the consultants who received the 80,000 shares of our common
stock were knowledgeable, sophisticated and had access to comprehensive
information about Peachtree, the issuance of the shares to the consultants was
undertaken in reliance on the exemption from registration provided by Section
4(2) of the Securities Act of 1933, as amended. Before we issued the shares to
the consultants, each consultant was required to express an investment intent
and consent to the imprinting of a restrictive legend on each stock certificate
to be received from Peachtree except upon sale of the shares of common stock
pursuant to a registration statement.
ITEM 8. EXHIBITS
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EXHIBIT DESCRIPTION
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<S> <C>
(4)(a) Consulting Agreement with Stephen Krause and Timothy Mahoney
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to
the issuance of shares of pursuant to the consulting
agreement
(23.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. included in
the opinion filed as exhibit (5) hereto
(23.2) Consent of independent certified public accountants
</TABLE>
ITEM 9. UNDERTAKINGS
(1) The undersigned Registrant hereby undertakes:
(a) To file, during any period in which offerings or sales are being
made, a post-effective amendment to this Registration Statement to include any
material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(b) That, for the purposes of determining any liability under the
Securities Act of 1933, as amended (the "Act"), each such post-effective
amendment shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; and
(c) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Act may be
permitted to Directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
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<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Miami and the State of Florida, on the 16th day of
August, 1999.
PEACHTREE FIBEROPTICS, INC.
By: /s/ Leonard J. Sokolow
------------------------------------
Name: Leonard Sokolow
Its: Managing Agent
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
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<C> <S> <C>
/s/ Leonard J. Sokolow Managing Agent and Principal August 17, 1999
- ------------------------------------------ Executive and Financial Officer
Leonard J. Sokolow
/s/ Sidney Levine Director August 17, 1999
- ------------------------------------------
Sidney Levine
</TABLE>
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<PAGE> 1
EXHIBIT (4)(a)
Consulting Agreement
with Stephen Krause and Timothy Mahoney
CONSULTING AGREEMENT
Consulting Agreement ("Agreement") made this 16th day of August, 1999
by and between PEACHTREE FIBEROPTICS, INC., a Delaware corporation ("Peachtree"
or the "Company"), and STEPHEN KRAUSE ("Krause") and TIMOTHY MAHONEY
("Mahoney"), (collectively the "Consultants").
W I T N E S S E T H:
A. Peachtree desires to engage the services of Consultants to assist
the Company in identifying viable candidates with which the company may merger
and acquisition candidates (hereinafter collectively referred to as
"Acquisitions") and, at the request of Peachtree to assist in the management of
any such Acquisitions; and
B. Consultants are desirous of performing such services on behalf of
Peachtree.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained in this Agreement, the parties hereto agree as follows:
1. CONSULTING SERVICES.
1.1 Upon the terms and subject to the conditions contained in
this Agreement, Consultants hereby agree that they shall, during the term of
this Agreement, devote sufficient time and effort on behalf of Peachtree (and
whether or not Peachtree is the survivor thereof) (i) in the identification and
evaluation, of Acquisitions (whether in the form of asset purchases, stock
purchases, mergers, consolidations, joint ventures, strategic alliances or
otherwise) for the account of Peachtree upon such terms and conditions as are
acceptable to Peachtree and (ii) if requested by Peachtree, assist in managing
each such consummated Acquisition. Notwithstanding anything to the contrary in
the preceding sentence, Peachtree shall not be required to consummate an
Acquisition with any company identified by Consultants and each Acquisition
proposed by Consultants to be made by Peachtree shall be subject to the approval
of Peachtree which approval may be withheld or delayed for any reason in
Peachtree's sole and absolute discretion.
1.2 Following any consummated Acquisition of a Target Company
(as hereinafter defined) by Peachtree or an Affiliate (as hereinafter defined),
at the written request of
<PAGE> 2
Peachtree, Consultants shall assist, subject to the direction of Peachtree's
Board of Directors, with the management and day-to-day operations of such
Acquisition.
1.3 Consultants shall submit an acquisition proposal to
Peachtree with regard to each Acquisition which is introduced or identified by
Consultants, excluding vFinance.com or Union Atlantic LC (a "Target Company").
Each such analysis shall include the business and marketing plan and financial
pro-formas with respect to such proposed Acquisition. If any Target Company is
acquired by Peachtree during the term of this Agreement or for one (1) year
hereafter, Consultants shall be entitled to the fees set forth in subparagraph
3.2 hereof. During the term of this Agreement, Consultants shall, at least
quarter-annually, report to Peachtree on its activities regarding the targeting
of Acquisitions, the status of Acquisitions in progress and a summary of the
activities and financial results of Acquisitions made.
2. TERM. The Agreement shall be for a term of one (1) year from the
date hereof.
3. COMPENSATION. Peachtree shall pay the following compensation to
Consultants in consideration for the services to be rendered hereunder:
3.1 There shall be issued to Consultants an aggregate of
80,000 shares of Common Stock, $.01 par value (the "Options"), of Peachtree in
consideration for their services of which 40,000 shares are issuable to Krause
and 40,000 shares are issuable to Mahoney. It is intended that the shares of
Common Stock issued will be fully registered securities under the Securities Act
of 1933 as amended.
3.2 The Company and the Consultants shall be subject to a
non-exclusive ongoing merger and acquisitions agreement ("MGA"). The initial
term of the M&A agreement will be for one year. All compensation for completed
M&A work will be paid in the aggregate to Consultants and be split equally
between them. The Company shall only be obligated to pay to Consultants a fee
for M&A transactions involving a Target Company. The formula for compensation
shall be based on the Lehman Formula of:
5% of the first one million dollars in gross transaction value;
4% of the next million dollars in gross transaction value;
3% of the next million dollars in gross transaction value;
2% of the next million dollars in gross transaction value; and
1% of the balance in gross transaction value over the first
four million dollars.
Transaction value shall not include licensing, distribution
or joint marketing contracts. Fees under the M&A relationship will be paid in
cash or shares of Peachtree's restricted Common Stock, at Peachtree's sole
option.
3.3 Management fees payable pursuant to subparagraph 3.2
hereof shall be in lieu of any other compensation to which Consultants may
otherwise be entitled for acting as consultant or any like capacity in respect
of a consummated Acquisition.
<PAGE> 3
4. EXPENSES. Unless otherwise approved by Peachtree, Consultants shall
bear all expenses incurred by it prior to written acceptance by Peachtree of a
proposal by Consultants with respect to the Acquisition of a Target Company on
behalf of Peachtree. Thereafter, subject to Peachtree's prior written approval,
all out-of-pocket expenses of Consultants, legal, accounting and other fees to
third parties in connection with or in respect of such proposed Acquisition
shall be paid by Peachtree promptly when due.
5. BREACH OF CONTRACT. The sole remedy of Peachtree in respect of any
material breach of this Agreement by Consultants shall be to terminate this
Agreement upon the giving of thirty (30) days prior written notice, but no such
termination shall affect the fees payable pursuant to subparagraphs 3.1 hereof.
6. PURCHASE OF SHARES. The Shares shall be issued solely in exchange
for the contemplated services and appropriate investment restrictions shall be
noted against the Shares unless registered under the Securities Act of 1933 as
amended. Consultants agree to acquire the Shares for investment and will not
dispose of the Shares in the absence of registration thereof or applicable
exemption under the Securities Act of 1933 as amended.
7. REGISTRATION. The Company agrees to provide Consultants with
registration rights at the Company's cost and expense and include 80,000 of the
Shares in a registration statement to be filed by the Company with the
Securities and Exchange Commission within the proximate future.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement among
the parties with respect to the subject matter hereof and supersedes all prior
agreements, written or oral, with respect thereto.
9. WAIVERS AND AMENDMENTS. This Agreement may be amended, modified,
superseded, canceled, renewed or extended, and the terms and conditions hereof
may be waived, only by a written instrument signed by the parties or, in the
case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof, nor shall any waiver on the part of any party of any right,
power or privilege hereunder, nor any single or partial exercise of any right,
power or privilege hereunder, preclude any other or further exercise thereof or
the exercise of any other right, power or privilege hereunder. The rights and
remedies herein provided are cumulative and are not exclusive of any rights or
remedies which any party may otherwise have at law or in equity.
10. GOVERNING LAW. This Agreement shall be governed and construed in
accordance with the laws of the State of Florida applicable to agreements made
and to be performed entirely within such State.
<PAGE> 4
11. NO ASSIGNMENT. This Agreement is not assignable by Consultants
except to any entity in which a majority in interest is owned by Consultants,
but shall be assignable by Peachtree solely upon the consent of Consultants.
12. HEADINGS. The headings in this Agreement are for reference purpose
only and shall not in any way affect the meaning or interpretation of this
Agreement.
13. SEVERABILITY OF PROVISIONS. The invalidity or unenforceability of
any term, phrase, clause, paragraph, restriction, covenant, agreement or other
provision of this Agreement shall in no way affect the validity or enforcement
of any other provision or any part thereof.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed, shall constitute an original copy
hereof, but all of which together shall consider but one and the same document.
15. OTHER ACTIVITIES. Nothing contained herein shall prevent
Consultants from acquiring or participating in the acquisition of a Target
Company proposed by Consultants to be acquired by Peachtree where such proposal
is rejected by Peachtree or fails in its consummation for any reason (unless
such failure of consummation is caused by the bad faith of Consultants). The
foregoing shall be subject to such other activity not interfering with the
performance by Consultants of the services to be rendered to Peachtree under
this Agreement and that such Acquisition is acquired at a price and upon terms
and conditions no more favorable than those offered to Peachtree.
16. DISCLAIMER. Consultants acknowledge that they have made a full and
independent inquiry regarding Peachtree and have been afforded access to such
Peachtree materials as they requested and that, in entering into this Agreement,
they have not in any manner directly or indirectly relied on any warranty or
representation by Peachtree, its officers, directors, agents, legal counsel or
accountants concerning Peachtree and/or its stock as to matters past, present or
future.
17. NOTICES. All notices to be given hereunder shall be in writing,
with fax notices being an acceptable substitute for mail and/or and delivery to
the last address of record of the applicable parties unless changed by way of
written notice.
<PAGE> 5
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
PEACHTREE FIBEROPTICS, INC.
By:
----------------------------------
Leonard J. Sokolow, Managing Agent
----------------------------------
Steven Krause, Individually
----------------------------------
Timothy Mahoney, Individually
<PAGE> 1
EXHIBIT (5)
Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to the
relating to the issuance of shares
pursuant to the consulting agreement
August 18, 1999
VIA FACSIMILE AND U.S. MAIL
- ---------------------------
North American Transfer Co.
147 West Merrick Road
Freeport, NY 11520-9998
RE: PEACHTREE FIBEROPTICS, INC. (THE "COMPANY") -
ISSUANCE OF 80,000 SHARES - STEPHEN KRAUSE AND TIMOTHY MAHONEY
Dear Sir/Madam
We have been requested by the Company to render an opinion to you with
respect to the legality of the issuance of 80,000 shares of Common Stock, $0.01
par value (the "Shares"), 40,000 of which have been acquired by Stephen Krause
and 40,000 of which have been acquired by Timothy Mahoney (collectively known as
the "Consultants"). The Shares have been registered under the Securities Act of
1933 (the "Act") in the Company's Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on August 18, 1999.
In connection with the foregoing, we have examined copies of the
agreement between the Company and the Consultants and corresponding resolutions
of the Board of Directors of the Company for the issuance of the Shares to the
Consultants and such instruments and documents as we have deemed relevant or
necessary as a basis for the opinions hereinafter set forth. In making such
examination, we have assumed the genuineness of all signatures on all original
documents and the conformity to original documents of all copies submitted to us
as conformed, photostat or other copies. As to other matters of fact material to
such opinions, we have, when relevant facts were not independently established,
relied upon statements and certificates furnished to us.
Based upon the foregoing, we are of the opinion that:
(1) The issuance of the Shares has been duly authorized by all
necessary corporate action on the part of the Company, and the
Shares are duly issued and, assuming receipt by the Company of
the consideration described in the Option Agreement, are fully
paid and nonassessable.
<PAGE> 2
(2) The issuance of the Shares is exempt from registration under
the Securities Act of 1933.
Inasmuch as the Shares have been registered under the Securities Act of
1933 by the aforementioned Registration Statement, no legend need be affixed to
the certificate evidencing the Shares.
The opinions expressed herein are for the sole benefit of and may be
relied upon by North American Stock Transfer Co. and are not to be used,
circulated, quoted or otherwise referred to in connection with any transaction
other than those hereinabove described.
Very truly yours,
ATLAS, PEARLMAN, TROP & BORKSON, P.A.
RJB/dmp
cc:
<PAGE> 1
EXHIBIT (23.2)
Consent of independent certified public accountants
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Consulting and Acquisition Management Agreement with
Stephen Krause and Timothy Mahoney of our report dated February 26, 1999, except
for Note 9 as to which the date is March 18, 1999, with respect to the financial
statements of Peachtree fiberoptics, Inc. for the year ended December 31, 1998
included in its Annual Report (Form 10-K) filed with the Securities and Exchange
Commission.
/s/ Ernest & Young LLP
Atlanta, Georgia
August 11, 1999
