SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 23, 2002
TRANSPORTATION LOGISTICS INT'L, INC.
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(Exact name of Registrant as Specified in its Charter)
Colorado 0-25319 84-1191355
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(State of Incorporation) (Commission File (IRS Employer
Number) Identification No.)
136 Freeway Drive, East Orange, NJ 07018
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(Address of principal executive offices)
(973) 266-7020
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Registrant's Telephone Number
Item 2. Acquisition of Xcalibur Xpress Inc.
On May 23, 2002 Transportation Logistics Int'l Inc. acquired all of the
capital stock of Xcalibur Xpress Inc. Xcalibur Xpress is based in Charleston,
South Carolina. It performs intermodal trucking and delivery, warehousing and
third party logistics for its clients.
The capital stock of Xcalibur Xpress was acquired by Transportation
Logistics in exchange for (1) its undertaking to provide financial services
to Xcalibur Xpress and (2) the agreement by Transportation Logistics to
forebear immediate collection of $200,000 owed by Xcalibur Xpress to
Transportation Logistics.
The shares of Xcalibur Xpress were acquired from Rickey L. Kelly. In
connection with the acquisition, Xcalibur Xpress entered into a five year
employment agreement with Mr. Kelly, who will serve as its President. The
employment agreement provides for an annual salary of $100,000. At the same
time, Mr. Kelly gave to Transportation Logistics a demand promissory note in
the amount of $200,000 to secure the obligation of Xcalibur Xpress to
Transportation Logistics in that amount.
EXHIBITS
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1. Purchase Agreement dated May 23, 2002 between Transportation Logistics
Int'l, Inc. and Rickey L. Kelly.
2. Executive Employment Agreement dated May 23, 2002 between Xcalibur Xpress
Inc. and Rickey L. Kelly.
3. Financial Statements of Xcalibur Xpress Inc. - to be filed by amendment.
4. Pro Forma Financial Statements - to be filed by amendment.
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRANSPORTATION LOGISTICS INT'L, INC.
Dated: August 19, 2002 By:/s/ Michael Margolies
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Michael Margolies
Chief Executive Officer
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Exhibit 1
PURCHASE AGREEMENT
THIS AGREEMENT, made and entered into this 23rd day of May, 2002, by and
between TRANSPORTATION LOGISTICS INT'L INC., a Colorado Corporation, located
at 136 Freeway Drive East, East Orange, NJ 07018-4000 ("TLI"), and RICKEY L.
KELLY located at 311 Johnnie Dodds Blvd., Suite 211, Mt. Pleasant, South
Carolina 29464 ("Kelly"), sometimes hereinafter jointly referred to as The
Parties.
W I T N E S S E T H:
WHEREAS, Kelly currently owns all of the issued and outstanding shares of
XCALIBUR XPRESS. INC. a South Carolina corporation ("Xcalibur"),
WHEREAS, TLI wishes to purchase 100% of the issued and outstanding shares
of Xcalibur, subject to the terms and conditions, set forth herein;
NOW, THEREFORE, based upon the above and foregoing premises and such other
and further consideration, the adequacy and receipt of which are duly
acknowledged,
IT IS AGREED as follows:
I. Purchase of Stock:
1.1 The Parties agree that in exchange for the providing of financial
services, including securing loans to Xcalibur (of which $200,000 has already
been loaned to and received by Xcalibur) and other good and valuable
consideration, Kelly will sell to TLI, 20,000 shares of Xcalibur Stock, fully
paid and non-assessable.
1.2 The Stock sold by Kelly, will represent a 100% interest in Xcalibur.
II. Representations, Warranties and Covenants
2.1 TLI warrants and represents:
(a) TLI is a Colorado corporation duly organized, validly existing
and in good standing in Colorado and has full power and authority to
carry on its business as currently conducted, and to own or lease and to
use at the places it is currently located, and qualified to transact
business in each jurisdiction in which it does business whereby the
nature of such business it is required to be qualified in such
jurisdiction to conduct its business.
(b) The execution and delivery of this Agreement and the performance
by TLI of its obligations hereunder will not result in any material
breach or violation of, or material default under any material agreement,
indenture, lease, license, mortgage, instrument, or understanding, nor
result in any violation of any law, rule regulation, statute, order or
decree of any kind to which TLI or any of its affiliates, is a party or
by which any of them or any of their property is or may be or become
subject.
2.2 Kelly Warrants and Represents:
(a) Xcalibur is a South Carolina corporation duly organized, validly
existing and in good standing in South Carolina and has full power and
authority to carry on its business as currently conducted, and to own or
lease and to use at the places it is currently located, and qualified to
transact business in each jurisdiction in which it does business whereby
the nature of such business it is required to be qualified in such
jurisdiction to conduct its business.
(b) There are no pending material lawsuits in which it is a party,
nor has it received any information of anyone's intention to commence any
material litigation except as disclosed in EXHIBIT A.
(c) Xcalibur has duly filed all tax returns and is not in default
with respect to the payment of any taxes, that it is not being audited by
the Internal Revenue Service (IRS) nor received any notice from the IRS
of intention to audit Xcalibur.
(d) The execution and delivery of this Agreement and the performance
by Kelly of his obligations hereunder will not result in any material
breach or violation of, or material default under any material agreement,
indenture, lease, license, mortgage, instrument, or understanding, nor
result in any violation of any law, rule regulation, statute, order or
decree of any kind to which Kelly is a party or by which he or his
property is or may be or become subject.
(e) The authorized capital stock of Xcalibur consists of 20,000 shares
of Common Stock pursuant to Articles of Amendment filed with the South
Carolina Secretary of State on April 5, 2001, of which all 20,000 shares
are issued and outstanding and no other shares of any other class or
series of capital stock are issued and outstanding. There are no
subscriptions, options, warrants, calls, rights, contracts, commitments,
understandings, restrictions or arrangements relating to the issuance,
sale, transfer or voting of any shares of common stock of Xcalibur
including any rights of conversion or exchange under any outstanding
securities or other instruments. All of the shares have been validly
issued and are fully paid, nonassessable and free of preemptive rights.
(f)(i) The consolidated balance sheets of Xcalibur dated as of
December 31, 2001 and the related consolidated profit and loss statements
for the fiscal year then ended, copies of which have heretofore been
delivered to TLI by Kelly, and all other statements and data submitted in
writing by Kelly to TLI in connection with Xcalibur's request for credit
are true and correct, and said balance sheet and profit and loss statement
accurately present the financial condition of Xcalibur as of the dates
thereof and the results of the operations of Xcalibur for the period
covered thereby, and have been prepared in accordance with GAAP, (ii)
since such dates, there have been no material adverse changes in the
financial condition of Xcalibur, and (iii) Kelly has no knowledge of any
liabilities, contingent or otherwise, which are not reflected in said
balance sheet, and Xcalibur has not entered into any special commitments
or substantial contracts which are not reflected in said balance sheet,
other than in the ordinary and normal course of its business, which may
have a Material Adverse Effect upon its financial condition, operations or
business as now conducted;
(g) That copies of titles to motor vehicles owned by Xcalibur
attached hereto as Exhibit B (1) represent all the titles to all the
motor vehicles owned by Xcalibur, (ii) accurately reflect all liens
against such motor vehicles, and (iii) that the originals of the titles
will be delivered to TLI simultaneously with the execution of this
agreement.
III. Notices:
3.1 All notices to be given to any of The Parties shall be in writing
sent by U.S. certified mail, return receipt, or by facsimile mail at the
addresses set forth below:
(a) TLI:
TRANSPORTATION LOGISTICS INT'L INC.
136 Freeway Drive East,
East Orange, NJ 07018-4000
(Fax): 973-266-7030
(b) Kelly:
RICKEY L. KELLY
311 Johnnie Dodds Blvd.
Suite 211
Mt. Pleasant, South Carolina 29464
(Fax): 843-216-5780
3.2 Notice shall be deemed given and delivered to the recipient, if by
mail, five (5) business days after the posting of the notice and, if by
facsimile, then one (1) business day after the sending of the facsimile.
3.3 Any of The Parties may change the address to which the notice is to
be sent in the same manner as stated above for the giving of notice.
IV. Miscellaneous:
4.1 This Agreement constitutes the entire agreement among The Parties and
supersedes all prior agreements, if any, written or oral, and all such prior
agreements shall have no force or effect.
4.2 TLI acknowledges that the stock has been received.
4.3 This Agreement may not be modified or changed unless in writing
signed by The Parties.
4.4 The captions of any of the paragraphs of this Agreement have been
inserted for the purposes of convenience and shall not be deemed to modify,
explain, enlarge or restrict any of the provisions of this Agreement.
4.5 This Agreement shall be binding upon and inure to the benefit of The
Parties successors, heirs and estate, as the same shall be applicable to the
respective Parties.
4.6 The validity and enforceability of this Agreement, the construction
of its terms, and the interpretation of the rights and duties of the parties
shall be governed by the laws of the State of New Jersey without reference to
any conflict of law principles that would tend to preclude application of the
substantive law of the state of New Jersey. Any and all actions filed by the
parties hereto arising out of this agreement must be brought exclusively in
any State or Federal court located in the state of New Jersey and the parties
waive any objection to venue or forum non conveniens of any action so filled.
IN WITNESS WHEREOF, The Parties have duly executed this Agreement.
TRANSPORTATION LOGISTICS INT'L INC.
By: ______________________
Attest:
_______________________
In the presence of:
___________________________ ________________________
Rickey L. Kelly Witness
__________________________
Witness
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Exhibit 2
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement made and entered into as of the 23rd day of May, 2002, by
and between XCALIBUR XPRESS, INC., a South Carolina Corporation located at
311 Johnnie Dodds Blvd., Suite 211, Mt. Pleasant, South Carolina 29464
("Company"), and RICKEY L. KELLY residing at 1152 Black Rush Circle, Mount
Pleasant, South Carolina 29466 ("Executive").
WHEREAS, the Company desires that Executive serve in a senior executive
capacity in the Company, and
WHEREAS, Executive is willing to be employed by Company, and Company is
willing to employ Executive, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual promises and covenants herein-
after set forth, the parties hereto, covenant and agree as follows:
1. AGREEMENT TO EMPLOY AND BE EMPLOYED
Company hereby employs Executive as President and CEO of the Company, and
Executive hereby accepts and agrees to such employment.
2. DESCRIPTION OF EXECUTIVE'S DUTIES
Subject to the supervision and pursuant to the orders, advice, and
direction of the Board of Directors of Company (the "Board"), Executive shall
perform such duties as are customarily performed by one holding such position
in other businesses or enterprises of the same or similar nature as that
engaged in by Company including but not limited to supervising the regular and
ordinary day-to-day management functions. Executive shall additionally render
such other and unrelated services and duties as may be assigned to him from
time to time by the Board.
3. MANNER OF PERFORMANCE OF EXECUTIVE'S DUTIES
Executive shall at all times faithfully, industriously, and to the best of
his ability, experience, and talent, perform all duties that may be required
of and from him pursuant to the express and implicit terms hereof, to the
reasonable satisfaction of Company. Such duties shall be rendered at the
abovementioned premises and at such other place or places as Company shall in
good faith require or as the interests, needs, business, and opportunities of
Company shall require or make advisable.
4. DURATION OF EMPLOYMENT
The term of employment shall be five years, commencing on May 20, 2002, and
terminating May 19, 2007, subject, however, to prior termination as otherwise
provided herein.
5. COMPENSATION
For the services to be rendered by Executive, Company shall pay Executive
an annual base salary of One Hundred Thousand Dollars, subject to income tax
withholdings and other payroll deductions. Paid in installments throughout
the year as customary in respect of Company's salaried employees in general.
6. MEDICAL AND DENTAL INSURANCE
During the term of this Agreement, Company shall furnish and pay for
Executive's full family coverage medical and dental insurance.
7. EXPENSES
Company will pay or reimburse Executive for such authorized reasonable
travel, entertainment, or other expenses he may incur at the request of
Company during the term of this Agreement in connection with the performance
of his duties hereunder. Executive shall furnish Company with such evidence
that such expenses were incurred as Company may from time to time require or
request.
8. AUTOMOBILE
Company shall provide Executive with an automobile and pay all maintenance
and operating expenses, including but not limited to, fuel, repairs and
insurance.
9. EXECUTIVE'S LOYALTY TO COMPANY'S INTERESTS
Executive shall devote all of his time, attention, knowledge, and skill
solely and exclusively to the business and interests of Company, and Company
shall be entitled to all benefits, emoluments, profits, or other issues
arising from or incident to any and all work, services, and advice of
Executive. Executive expressly agrees that during the term hereof he will
not be interested, directly or indirectly, in any form, fashion, or manner,
as partner, officer, director, stockholder, advisor, executive, or in any
other form or capacity, in any other business similar to Company's business
or any allied trade, except that nothing herein contained shall be deemed to
prevent or limit the right of Executive to invest any of his surplus funds in
the capital stock or other securities of any corporation whose stock or
securities are publicly owned or are regularly traded on any public exchange
or listed on the National Association of Securities Dealers Automated
Quotation System if the Executive is not a controlling person of, or a member
of a group which controls, such corporation and the Executive does not,
directly or indirectly, own 1% or more of any class of equity securities, or
securities convertible into or exercisable or exchangeable for 1% or more of
any class of equity securities, of such corporation., nor shall anything
herein contained by deemed to prevent Executive from investing or limit
Executive's right to invest his surplus funds in real estate.
10. RESTRICTIVE COVENANTS: NON-COMPETITION; NON-DISCLOSURE; NON-SOLICITATION
10.1.1 Covenant Not to Compete. Executive shall not engage in any activity
directly or indirectly (on his own behalf or as agent, employee, officer,
director, partner, shareholder or other owner), loan money or credit to, own
any interest in, engage in, or otherwise participate in a business competitive
with the Company's present operations and business within a 75-mile radius of
any Company operation for a period of two (2) years following the termination
of his employment. Executive acknowledges that his covenant not to compete
is essential to this Agreement, that the Company would not have entered into
this Agreement without this section being included in it, and this section is
reasonable and does not place any undue hardship on Executive, and that
Executive has been amply and generously compensated for agreeing to the terms
of this Covenant. Executive acknowledges and agrees that the Company's remedy
at law for any breach of his obligations under this section would be
inadequate, and agrees and consents that temporary and permanent injunctive
relief may be granted in any proceeding which may be brought to enforce any
provisions of this section without the necessity of proof of actual damages.
With respect to any such provisions finally determined by a court of competent
jurisdiction to be unenforceable, such court shall have jurisdiction to reform
this Agreement and such provision so that it is enforceable to the maximum
extent permitted by law, and the parties shall abide by such court's
determination. If such unenforceable provision cannot be reformed, such
provision shall be deemed to be severed from this Agreement, but every other
provision of this Agreement shall remain in full force and effect.
10.1.2 Disclosure Of Information. The Executive recognizes and
acknowledges that he will have access to certain confidential proprietary
information of the Company that is a valuable, special and unique asset of
the business of the Company and its subsidiaries and affiliates. He therefore
covenants and agrees, which covenant and agreement is of the essence of this
Agreement, that during or after the term of his employment, he will not reveal
to anyone not an employee, officer, agent or consultant of the Company and its
subsidiaries and affiliates at any time the business methods or secrets of the
Company and their affiliates, and that upon termination of his employment, he
will return to the Company all records and documents (and all copies thereof)
and all other property belonging to the Company or relating to its business.
10.1.3 Solicitation And Enticement Of Employees. The Executive agrees
that during the term of his employment by the Company and for a period of two
(2) years after termination of his employment with the Company, he will not
solicit or entice any other employee of the Company to leave the Company to
go to work for any other business or organization which is in direct or
indirect competition with the Company.
10.1.4 Customers Of The Company. The Executive agrees that during the
term of his employment by the Company and for a period of two (2) years after
termination of his employment with the Company, the Executive shall not,
directly or indirectly, request or advise a customer of the Company or its
subsidiaries to curtail or cancel such customer's business relationship with
the Company, or during and for a period of two (2) years following the
termination of his employment by the Company, solicit business from any
customer of the Company in favor of any business which competes with the
business conducted by the Company.
10.2 Rights and Remedies Upon Breach
If the Executive breaches, or threatens to commit a breach of, any of the
provisions contained in Section 10 of this Agreement (the "Restrictive
Covenants"), the Company shall have the following rights and remedies, each
of which rights and remedies shall be independent of the others and severally
enforceable, and each of which is in addition to, and not in lieu of, any
other rights and remedies available to the Company under law or in equity:
10.2.1 Specific Performance. The right and remedy to have the Restrictive
Covenants specifically enforced by any court of competent jurisdiction, it
being agreed that any breach or threatened breach of the Restrictive Covenants
would cause irreparable injury to the Company and that money damages would not
provide an adequate remedy to the Company.
10.2.2 Injunctive relief. Executive acknowledges and agrees that the
Company's remedy at law for any breach of his obligations under this section
would be inadequate, and agrees and consents that temporary and permanent
injunctive relief may be granted in any proceeding which may be brought to
enforce any provisions of this section without the necessity of proof of
actual damages.
10.2.3 Blue pencil. With respect to any such provisions finally determined
by a court of competent jurisdiction to be unenforceable, such court shall
have jurisdiction to reform this Agreement and such provision so that it is
enforceable to the maximum extent permitted by law, and the parties shall
abide by such court's determination. If such unenforceable provision cannot
be reformed, such provision shall be deemed to be severed from this Agreement,
but every other provision of this Agreement shall remain in full force and
effect.
10.2.4 Accounting. The right and remedy to require the Executive to
account for and pay over to the Company all compensation, profits, monies,
accruals, increments or other benefits derived or received by the Executive
as the result of any action constituting a breach of the Restrictive
Covenants.
10.2.5 Enforceability In Jurisdictions. The provisions of Section 14
notwithstanding, the Company and the Executive intend to, and hereby do,
confer jurisdiction to enforce the Restrictive Covenants upon the courts of
any jurisdiction within the geographical scope of such Restrictive Covenants.
If the courts of any one or more of such jurisdictions hold the Restrictive
Covenants unenforceable by reason of the breadth of such scope or otherwise,
it is the intention of the Company that such determination not bar or in any
way affect the right of the Company to the relief provided above in the courts
of any other jurisdiction within the geographical scope of such Restrictive
Covenants, as to breaches of such Restrictive Covenants in such other
respective jurisdictions, such Restrictive Covenants as they relate to each
jurisdiction being, for this purpose, severable into diverse and independent
covenants.
11. TERMINATION OF EMPLOYMENT
11.1 Termination for Cause
Not withstanding anything in this Agreement to the contrary, Company may
terminate this Agreement without liability, for "Cause" (as defined below) by
Company giving written notice of termination to Executive by registered mail,
addressed to him in care of Company at the above stated address (or at such
other address as Executive shall designate in writing) setting forth the
reasons for such termination. As used herein, the term "Cause" shall include
the following: (i) material and willful or gross misconduct by Executive in
the performance of his duties hereunder, the consequences of which are
materially adverse to the Company, monetarily or otherwise; (ii) the willful
failure by Executive to perform or observe any substantial lawful obligation
of such employment that is not remedied within five (5) days after receipt of
written notice thereof from the Board of Directors; (iii) the Executive shall
become disabled, as the term "disabled" is hereinafter fixed and defined.
For purposes of this Agreement, Executive shall be deemed to have become
disabled if he cannot perform the duties assigned to him under this agreement
for forty-five (45) consecutive days or an aggregate of ninety (90) days
within any twelve month period, or a physician selected by the Company,
certifies that because of ill health, physical or mental disability, or for
other causes beyond his control, that he is unable or unwilling or has failed
to substantially perform his duties hereunder; (iv) a finding by a court of
competent jurisdiction that Executive is guilty of fraud or dishonesty; and
(v) Executive fails to perform the reasonable duties assigned to him under
this Agreement in a manner which is consistent with the standards and policies
established by the Company and/or the reputation of the Company in the
community. Upon delivery of such notice of termination, all obligations of
the Company hereunder shall cease.
11.2 Termination By Death
This Agreement shall terminate automatically upon the death of Executive
and all obligations of the Company, hereunder, other than those set forth in
Paragraph 11.3 below.
11.3 Upon Termination
Upon the termination of this Agreement, the Company shall immediately pay
the Executive (or his executors, personal representatives or heirs) all amounts
owed to executive through the date of termination.
12. EXECUTIVE'S COMMITMENTS BINDING ON COMPANY ONLY ON WRITTEN CONSENT
Executive shall not have the right to make any contracts or other written
commitments in excess of $5,000 for or on behalf of Company without the
written consent of the Board of Directors.
13. CONTRACT TERMS TO BE EXCLUSIVE
This written Agreement contains the sole and entire agreement between the
parties, and supersedes any and all other agreements between them. The parties
acknowledge and agree that neither of them has made any representation with
respect to the subject matter of this Agreement or any representations
inducing the execution and delivery hereof except such representations as are
specifically set forth herein, and each party acknowledges that he or it has
relied on his or its own judgment in entering into the Agreement. The parties
further acknowledge that any statements or representations that may have
heretofore been made by either of them to the other are void and of no effect
and that neither of them has relied thereon in connection with his or its
dealings with the other.
13. WAIVER OR MODIFICATION INEFFECTIVE UNLESS IN WRITING
The waiver by the Company or the Executive of a breach of the other of any
provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach. No waiver or modification of this Agreement or of any
covenant, condition, or limitation herein contained shall be valid unless in
writing and duly executed by the party to be charged therewith. Furthermore,
no evidence of any waiver or modification shall be offered or received in
evidence in any proceeding, arbitration, or litigation between the parties
arising out of or affecting this Agreement, or the rights or obligations of
any party hereunder, unless such waiver or modification is in writing, duly
executed as aforesaid. The provisions of this paragraph may not be waived
except as herein set forth.
14. CONTRACT GOVERNED BY LAW
This Agreement and performance hereunder shall be construed in accordance
with the laws of the State of New Jersey. Any and all actions filed by the
parties hereto arising out of this agreement must be brought exclusively in
any State or Federal court located in New Jersey and the parties waive any
objection to venue or forum non conveniens of any action so filled.
15. ASSIGNMENT
The Company and Executive acknowledge that the relationship established
hereby is unique and personal and that neither the Company nor Executive may
assign or delegate
[Remainder of page intentionally left blank]
any of their respective rights and/or obligations hereunder without the prior
written consent of the other party.
16. COUNTERPARTS
This Agreement may be executed in one or more counterparts each of which
shall be deemed to be an original.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
XCALIBUR XPRESS, INC.
By:____________________________
Name:
Title:
WITNESS: EXECUTIVE:
_______________ ___________________________________
Rickey L. Kelly