Wow! Pretty good stuff from Rich Cantwell over on RB. What kind of a twist can the longs place on this information? With this overhanging TIGI, who possibly would want to invest? No wonder they want to change their name!
By: DlXIE777 $$$
Reply To: 31731 by Delta_Rocket $$$$
Sunday, 7 Jan 2001 at 10:11 AM EST
Post # of 31744
I have to make a golf date in Naples this am. However, with that said, just possibly some
of the below will make for good reading. I have taken the liberty of emphasizing various
excerpts for those that either continue to be reading challenged or for one reason
or another, like all too many here, dislike getting into the ugly part of investing in OTC
BB’s; ...reading at all!
A quote from the post to which I’m responding needs to be answered; At least we will
look gracious as Scott Rois is NOT going anywhere in 2-3 month's time. -- D_R
Delta I wouldn’t count on that!! And pulllease ....remember that Scott Roix, the past CEO
of Affinity is in the position to protect against and/or to make most of the triggering
decisions represented below as reasons to rescind. Duhhhh!!
One thing; if a company pays 35,000,000 shares to another company for either an
acquisition or reverse merger, and the new CEO, who will have access to $700,000
compensation, in addition skims percentages substantially higher than what could be
described to be GENEROUS after-tax profit margins, but skims them BEFORE even
the overhead is deducted, why then is the same CEO et al allowed to unwind the entire
deal for up to almost 2 years after the closing of the deal?
As someone might say; …”What do he know and when do he know it?”
Have a nice day,
Rich
ps. It'll be interesting to see how the apologists apologize for this one.
In accordance with the Reorganization Agreement, the Registrant entered into a Stock
Pledge Agreement with the former Affinity shareholders and executed a UCC-1
financing statement evidencing the security interest. Pursuant to the Reorganization
Agreement, the former shareholders may rescind the Reorganization Agreement,
return the Exchange Shares and reacquire the Affinity stock if:
(i)within 90 days of the completion of financial statements of Affinity meeting the
requirements of Regulation S-X of the Securities Act and the Securities Exchange Act,
a registration statement including the Exchange Shares is not filed and accepted by
the Securities and Exchange Commission; or
(ii) a registration statement including the Exchange Shares is timely filed, but the
registration statement is not declared effective within 180 days following the completion
of financial statements of Affinity meeting the requirements of Regulation S-X of the
Securities Act and the Securities Exchange Act.
The former Affinity shareholders may return the Exchange Shares and "buy-back" the
Affinity shares if, prior to June 1, 2002:
(i) the Registrant shall cease to be a publicly traded company or shall cease to trade
on the OTC-BB (unless it begins trading on the NASDAQ, AMEX or the New York
Stock Exchange within 10 trading days after it ceases to be listed on the OTC-BB) or
trading in shares of the Exchange Shares shall be suspended for more than 10
consecutive trading days;
(ii) a receiver shall be appointed to take possession of all or substantially all of the
assets of the Registrant, or the Registrant executes and delivers a general assignment
for the benefit of creditors, or any action is taken or suffered by the Registrant,
voluntarily or involuntarily, under any insolvency or bankruptcy or reorganization act or
law, except a proceeding filed by a creditor that is dismissed within sixty days of filing,
or the Registrant is insolvent or otherwise unable to pay its debts as they become due;
(iii) the Registrant enters into any negotiations, letter of intent or agreement to sell or
divest itself of the assets or stock of Affinity;
(iv) the Registrant takes any steps to encumber, distribute or liquidate the assets or
stock of Affinity;
(v) the Registrant attempts in any manner to enter into any transaction of any kind that
will create a material obligation or debt of Affinity unless the same is approved by Mr.
Roix or his successor from Affinity's Key Employees (as defined in the Reorganization
Agreement) if Mr. Roix should die, resign or become totally disabled;
(vi) except for cause in accordance with the employment agreements, the Registrant
attempts to terminate one or more of the Affinity's Key Employees without the consent
of a majority of Mr. Roix, Vance L. Vogel and Noyan Nihat;
(vii) the Registrant fails to timely file any of the reports required under the Securities
Exchange Act; or
(viii) any representation or warranty of the Registrant or TSIG Newco contained in the
Reorganization Agreement or any covenant of the Registrant or TSIG Newco contained
in the Reorganization Agreement shall be materially breached or materially untrue.
The Registrant thirty days to remedy any violation after receiving written notice from
Affinity or a Affinity shareholder.
In the event of the exercise of the buy-back option, the repurchase price of all of the
Affinity shares shall be determined as follows:
(i) All unsold Exchange Shares will be returned to the Registrant;
(ii) net cash proceeds from Exchange Shares sold, less taxes paid on same, shall be
paid to the Registrant in consecutive equal monthly installments, amortized over 60
months with simple annual interest at the New York prime rate in effect on the closing
of the buy-back option;
(iii) all assets held by Affinity at the effective time of the acquisition of Affinity by the
Registrant shall be held by Affinity when returned to the Affinity shareholders upon the
closing of the buy-back option;
(iv) new assets acquired by Affinity after the effective time of the acquisition of Affinity
by the Registrant and held by Affinity on the closing of the buy-back option, to the
extent not offset by new liabilities of Affinity on the closing of the buy-back option, shall
be equitably divided between the Registrant and Affinity, and to the extent that the
parties cannot agree upon an equitable division, such new assets shall be sold and the
net proceeds of sale shall be evenly divided between the Registrant and Affinity;
(v) the foregoing notwithstanding, the buy-back option shall become null and void
if and when the Affinity shareholders shall receive $25 million in cash from the
sale of the Exchange Shares.
As part of the Reorganization, Scott G. Roix was elected as the Registrant's Chairman
of the Board of Directors and as Chief Executive Officer. Mr. Roix replaces Robert P.
Gordon, who resigned as an officer and director of TSIG, as described in Item 5, below.
As part of the Reorganization Agreement, the Registrant agreed to claim no right to a
$820,000 cash reserve created by Affinity prior to the Reorganization, known as the
EPX Reserve. Messrs. Roix and Vogel are entitled to withdraw up to $820,000 from the
account, beginning on December 27, 2000, based on daily credit card receipts
credited to the account.
Pursuant to the three-year Employment Agreement dated December 6, 2000 between
Mr. Roix and the Registrant, the Registrant agreed to pay Mr. Roix a base salary of
$350,000 per annum. Mr. Roix is eligible to earn an annual cash bonus of up to 100%
of his base salary if the Registrant meets certain earnings targets. In addition, Mr. Roix
is eligible to receive, on a weekly basis, sales bonuses in the amount of:
(i) 9% of Affinity's net collections on sales of mini-vacation packages;
(ii) 8.1% of the net amount paid to independent brokers on sales of membership
vacation packages and of products and services to members of certain buyers' clubs;
and
(iii) 17.388% of Affinity's net collections on all sales of Affinity's programs with
department stores and discount stores.
The Registrant granted Mr. Roix options to purchase up to 4,000,000 shares of the
Registrant's common stock at an exercise price of $0.75 per share, 2,000,000 of which
are fully vested, 1,000,000 vest on September 1, 2001 and the balance vest on
September 2, 2002. The options are exercisable for a five year period on a cashless
basis. The Registrant also granted Mr. Roix options to purchase up to 300,000 shares
of the Registrant's common stock, vesting over a three year period, at an exercise price
of $1.00 per share, and exercisable for a five year period on a cashless basis.
The Registrant also executed employment agreements with six other former Affinity
shareholders, and a consulting agreement with a former Affinity consultant.
In connection with options granted pursuant to the above-referenced employment and
consulting agreements, the Registrant established a plan of stock-based
compensation incentives known as the TSIG.com-Affinity Group Stock Plan, dated
December 4, 2000, which covers up to 8,777,456 shares of common stock of the
Registrant.
In accordance with the Reorganization Agreement, the Registrant entered into a
Personal Guaranty Indemnity Agreement with Mr. Roix and Vance L. Vogel, in which
the Registrant agreed to indemnify Messrs. Roix and Vogel from any claims which
may arise against Messrs. Roix and Vogel related to personal guaranties made in the
course of Affinity's business prior to the Reorganization.
Pursuant to the Reorganization Agreement, the Registrant issued warrants to five
persons to purchase a total of 535,000 shares of common stock of the Registrant. The
warrants are exercisable beginning March 1, 2001 at $1.00 per share, on a cashless
basis, for a period of five years. The Registrant agreed to file a registration statement
registering the shares underlying the warrants within 90 days of completion of Affinity
financial statements. |
