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UNITED STATES FLIGHT SAFETY TECHNOLOGIES, INC. (Name of Issuer) (Title of Class of Securities) (CUSIP Number) (Name, Address and Telephone Number of Person (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o
The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). CUSIP NO. 3394T207 1. Names of Reporting Persons Cummins Family Limited Partnership 2. Check Box If Member of a Group (a) x
3. SEC Use Only 4. Source of Funds OO 5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
6. Citizenship or Place of Organization Idaho 7. Sole Voting Power 28,571,428 (3) Shared Voting Power 0 9. Sole Dispositive Power 28,571,428 (3) 10. Shared Dispositive Power 0 11. Aggregate Amount Beneficially Owned by Each Reporting Person 28,571,428 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
13. Percent of Class Represented by Amount in Row (11) 65.2% (4) 14. Type of Reporting Person (See Instructions) OO (3) Includes 28,571,428 shares of common stock issuable upon conversion of 20,000 shares of Series A Convertible Preferred Stock (par value $0.001) (the "Preferred Stock") of Flight Safety Technologies, Inc. (the "Issuer"), which shares of Preferred Stock are held by Cummins Family Limited Partnership. (4) Based on 43,802,206 shares of common stock, consisting of 8,945,063 shares of common stock outstanding on January 9, 2009 and 34,857,143 shares of common stock issuable upon conversion of 24,400 shares of Preferred Stock issued on January 14, 2009, all as described on the Issuer's Quarterly Report on Form 10-Q for the quarter ended November 30, 2008 filed with the Securities and Exchange Commission on January 16, 2009. CUSIP NO. 3394T207 1. Names of Reporting Persons Cummins Family Holdings, LLC 2. Check Box If Member of a Group (a) x
3. SEC Use Only 4. Source of Funds AF 5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
6. Citizenship or Place of Organization Idaho 7. Sole Voting Power 28,571,428 (3) 8. Shared Voting Power 0 9. Sole Dispositive Power 28,571,428 (3) 10. Shared Dispositive Power 0 11. Aggregate Amount Beneficially Owned by Each Reporting Person 28,571,428 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
13. Percent of Class Represented by Amount in Row (11) 65.2% (4) 14. Type of Reporting Person (See Instructions) OO (3) Includes 28,571,428 shares of common stock issuable upon conversion of 20,000 shares of Series A Convertible Preferred Stock (par value $0.001) (the "Preferred Stock") of Flight Safety Technologies, Inc. (the "Issuer"), which shares of Preferred Stock are held by Cummins Family Limited Partnership. (4) Based on 43,802,206 shares of common stock, consisting of 8,945,063 shares of common stock outstanding on January 9, 2009 and 34,857,143 shares of common stock issuable upon conversion of 24,400 shares of Preferred Stock issued on January 14, 2009, all as described on the Issuer's Quarterly Report on Form 10-Q for the quarter ended November 30, 2008 filed with the Securities and Exchange Commission on January 16, 2009. CUSIP NO. 3394T207 1. Names of Reporting Persons Wesley 2. Check Box If Member of a Group (a) x
3. SEC Use Only 4. Source of Funds AF 5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
6. Citizenship or Place of Organization United States 7. Sole Voting Power 278,900 (1) 8. Shared Voting Power 28,701,928 (2)(3) 9. Sole Dispositive Power 278,900 (1) 10. Shared Dispositive Power 28,701,928 (2)(3) 11. Aggregate Amount Beneficially Owned by Each Reporting Person 28,980,828 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
13. Percent of Class Represented by Amount in Row (11) 66.2% (4) 14. Type of Reporting Person (See Instructions) IN (1) Includes 203,900 shares of common stock held by Wesley Cummins and 75,000 shares of common stock issuable upon exercise of options held by Wesley Cummins that are exercisable within 60 days of the date of this filing. (2) Includes 130,500 shares of common stock held by Southern Slope, Inc., an Idaho corporation of which Wesley Cummins and Lance Cummins are shareholders, directors and officers. (3) Includes 28,571,428 shares of common stock issuable upon conversion of 20,000 shares of Series A Convertible Preferred Stock (par value $0.001) (the "Preferred Stock") of Flight Safety Technologies, Inc. (the "Issuer"), which shares of Preferred Stock are held by Cummins Family Limited Partnership. (4) Based on 43,802,206 shares of common stock, consisting of 8,945,063 shares of common stock outstanding on January 9, 2009 and 34,857,143 shares of common stock issuable upon conversion of 24,400 shares of Preferred Stock issued on January 14, 2009, all as described on the Issuer's Quarterly Report on Form 10-Q for the quarter ended November 30, 2008 filed with the Securities and Exchange Commission on January 16, 2009. CUSIP NO. 3394T207 1. Names of Reporting Persons Lance 2. Check Box If Member of a Group (a) x
3. SEC Use Only 4. Source of Funds AF 5. Check if disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o
6. Citizenship or Place of Organization United States 7. Sole Voting Power 21,700 8. Shared Voting Power 28,701,928 (2)(3) 9. Sole Dispositive Power 21,700 10. Shared Dispositive Power 28,701,928 (2)(3) 11. Aggregate Amount Beneficially Owned by Each Reporting Person 28,723,628 12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o
13. Percent of Class Represented by Amount in Row (11) 65.6% (4) 14. Type of Reporting Person (See Instructions) IN (2) Includes 130,500 shares of Common stock held by Southern Slope, Inc., an Idaho corporation of which Wesley Cummins and Lance Cummins are shareholders, directors and officers. (3) Includes 28,571,428 shares of common stock issuable upon conversion of 20,000 shares of Series A Convertible Preferred Stock (par value $0.001) (the "Preferred Stock") of Flight Safety Technologies, Inc. (the "Issuer"), which shares of Preferred Stock are held by Cummins Family Limited Partnership. (4) Based on 43,802,206 shares of common stock, consisting of 8,945,063 shares of common stock outstanding on January 9, 2009 and 34,857,143 shares of common stock issuable upon conversion of 24,400 shares of Preferred Stock issued on January 14, 2009, all as described on the Issuer's Quarterly Report on Form 10-Q for the quarter ended November 30, 2008 filed with the Securities and Exchange Commission on January 16, 2009. Introduction This Schedule 13D is filed with the U.S. Securities and Exchange Commission (the "SEC" or "Commission") on behalf of the following reporting persons ("Reporting Persons"): Cummins Family Limited Partnership Wesley Cummins and Lance Cummins are each members of Cummins Family Holdings, LLC, an Idaho limited liability company, which is the general partner and majority limited partner of Cummins Family Limited Partnership, an Idaho limited partnership. On January 14, 2009, Cummins Family Limited Partnership acquired 20,000 shares of Preferred Stock at a value of $100 per share of Preferred Stock. The consideration paid by Cummins Family Limited Partnership consisted of its transfer to Flight Safety Technologies, Inc. (the "Issuer") of all of the outstanding shares of stock of Cummins Family Produce, Inc., an Idaho corporation that carries on a potato produce packing operation. In connection with this transaction, the Issuer assumed a bank promissory note in the amount of approximately $211,000 incurred and owed by Wesley Cummins in connection with the operations of Cummins Family Produce, Inc. Under a performance based earn-out provision, the Issuer may be obligated to issue additional shares
of Preferred Stock to Cummins Family Limited Partnership, such that the total value received by Cummins Family Limited Partnership is equal to 4.25 times the yearly average EBITDA of Cummins Family Produce, Inc. calculated over the next two years, less the value of the bank promissory note assumed. Cummins Family Limited Partnership has the power and authority to convert the Preferred Stock into shares of common stock of the Issuer by dividing $0.07 into $100 per share of Preferred Stock. If all shares of the Preferred Stock held by Cummins Family Limited Partnership were so converted, the Reporting Persons would control the right to dispose of and exercise voting rights for 28,571,428 shares of common stock of the Issuer resulting from such conversion, which together with other shares of common stock and options to purchase common stock held by the Reporting Persons or their affiliates, would represent in excess of 65% of the outstanding common stock of the Issuer. In addition, the shares of the Preferred Stock are entitled to vote on an as-converted basis, and thus the Reporting Persons effectively control in excess of 65% of the shares of common stock of the Issuer, including the right to vote associated with such shares, as of January 14, 2009. The Issuer has described the foregoing transactions in more detail in Item 5 of its Quarterly Report on Form 10-Q for the period ending November 30, 2008, which it filed with the Commission on January 16, 2009. Item 1. Security and Issuer a) Title of Class of Equity Securities to which this Statement Relates: Item 2. Identity and Background Cummins Family Limited Partnership This Schedule 13D is filed on behalf of Cummins Family Limited Partnership, an Idaho limited partnership with a principal business of owning and holding investment property. The address of Cummins Family Limited Partnership is 2570 Eldridge Avenue, Twin Falls, Idaho 83301. During the last five years, Cummins Family Limited Partnership has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, Cummins Family Limited Partnership has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction where as a result of such proceeding Cummins Family Limited Partnership was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Cummins Family Holdings, LLC This Schedule 13D is filed on behalf of Cummins Family Holdings, LLC, an Idaho limited liability company with a principal business of owning and holding investment property. Cummins Family Holdings, LLC is the general partner and majority limited partner of Cummins Family Limited Partnership. The address of Cummins Family Holdings, LLC is 2570 Eldridge Avenue, Twin Falls, Idaho 83301. During the last five years, Cummins Family Holdings, LLC has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, Cummins Family Holdings, LLC has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction where as a result of such proceeding Cummins Family Holdings, LLC was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Wesley Cummins This Schedule 13D is filed on behalf of Wesley Cummins, an individual. Wesley Cummins is a member of Cummins Family Holdings, LLC. The business address of Wesley Cummins is 2570 Eldridge Avenue, Twin Falls, Idaho 83301. Wesley Cummins' principal occupation is as President of B. Riley & Co., Inc., a corporation engaged in the business of investment banking with an address of 11100 Santa Monica Blvd., Suite 800, Los Angeles, CA 90025. During the last five years, Wesley Cummins has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, Wesley Cummins has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction where as a result of such proceeding Wesley Cummins was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Wesley Cummins is an United States citizen. Lance Cummins This Schedule 13D is filed on behalf of Lance Cummins, an individual. Lance Cummins is a member of Cummins Family Holdings, LLC. The business address of Lance Cummins is 2570 Eldridge Avenue, Twin Falls, Idaho 83301. Lance Cummins' principal occupation is as officer and farm manager of Southern Slope, Inc., an Idaho corporation engaged in the business of farming with an address of P.O. Box 239, Murtaugh, ID 83344. During the last five years, Lance Cummins has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). During the last five years, Lance Cummins has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction where as a result of such proceeding Lance Cummins was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Lance Cummins is a United States citizen. Item 3. Source and Amount of Funds or Other Consideration Cummins Family Limited Partnership transferred 1,000 shares of common stock it owned in Cummins Family Produce, Inc., an Idaho corporation, to the Issuer in consideration of the Issuer's issuance of 20,000 shares of Preferred Stock to Cummins Family Limited Partnership and the Issuer's assumption of a bank promissory note in the amount of approximately $211,000 incurred and owed by Wesley Cummins in connection with the operations of Cummins Family Produce, Inc. Under a performance based earn-out provision, the Issuer may be obligated to issue additional shares of Preferred Stock to Cummins Family Limited Partnership, such that the total value received by Cummins Family Limited Partnership is equal to 4.25 times the yearly average EBITDA of Cummins Family Produce, Inc. calculated over the next two years, less the value of the bank promissory note assumed. This was a privately negotiated transaction which is described in more detail in Item 5 of the Quarterly Report on Form 10-Q that t
he Issuer filed with the Commission on January 16, 2009. Item 4. Purpose of Transaction The general purpose of the transaction was to serve as an investment for the Reporting Persons and to raise working capital for the Issuer and as described in more detail in Item 5 of the Quarterly Report on Form 10-Q of the Issuer filed with the Commission on January 16, 2009. Each Reporting Person may, from time to time, acquire or cause others to acquire additional shares of Preferred Stock or common stock of the Issuer or dispose or cause to dispose some or all of such shares, engage in lending, short-selling or hedging or similar transactions with some or all of such shares, or may continue to hold such shares, depending on business and market conditions, their continuing evaluation of the business and prospects of the Issuer, general investment and trading policies of each Reporting Person, and other factors, including changing their intention with respect to any or all matters referred to in this Item 4. Pursuant to the rules of the SEC promulgated under the Exchange Act, each Reporting Person was deemed to have acquired beneficial ownership, for purposes of Section 13(d) of the Exchange Act, of all equity securities of the Issuer owned by the Cummins Family Limited Partnership. Cummins Family Holdings, LLC, as the general partner of Cummins Family Limited Partnership, and Wesley Cummins and Lance Cummins, as members of Cummins Family Holdings, LLC, have the power to vote the Preferred Stock held by Cummins Family Limited Partnership and the common stock issuable upon conversion thereof. The Reporting Persons currently have no understanding or agreement as to how to vote such shares on any matter and have no plans as of the date hereof to vote such shares so as to change the management of the Issuer. NEITHER THE AGREEMENT NOR THIS SCHEDULE 13D IS A SOLICITATION AND NO STOCKHOLDER OF THE ISSUER IS REQUESTED TO JOIN THE AGREEMENT. THE REPORTING PERSONS ARE NOT HEREBY SOLICITING, AND DO NOT INTEND TO SOLICIT, ANY STOCKHOLDER TO VOTE, WITHHOLD A VOTE, GRANT A PROXY WITH REGARD TO, OR IN ANY OTHER WAY TAKE ACTION WITH REGARD TO THE REMOVAL AND ELECTION OF DIRECTORS OR ANY OTHER MATTER. THE REPORTING PERSONS WILL NOT ACCEPT PROXIES FROM ANY STOCKHOLDER IN CONNECTION WITH THE ACTIONS CONTEMPLATED BY THE AGREEMENT. The Reporting Persons do not intend to make any public statements regarding these matters or respond to inquiries by other stockholders regarding these matters. The Reporting Persons believe that all Stockholders should make independent decisions regarding the election of Directors and any other matter to be voted upon at the Annual Meeting. Each Reporting Person provided only the information as to itself and its affiliates and did not independently verify the information contained in this Schedule 13D provided by the other Reporting Persons. Item 5. Interest in Securities of Issuer a) Aggregate number and percentage of class beneficially owned: Names of Reporting Persons Cummins Cummins Wesley Lance Aggregate Amount Beneficially Owned by Each Reporting Person 28,571,428 (3) 28,571,428 (3) 28,980,828 28,723,628 Percent of Class Beneficially Owned 65.2% (4) 65.2% (4) 66.2% (4) 65.6% (4)
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Common Stock
3394T207
Wesley Cummins
2570 Eldridge Ave.
Twin Falls, Idaho 83301
(208) 733-5371
Authorized to Receive Notices and Communications)
January 14, 2009
(b) o
(b) o
Cummins
(b) o
Cummins
(b) o
Cummins Family Holdings, LLC
Wesley Cummins
Lance Cummins
Common stock, par value $0.001 per share, and Series A Convertible Preferred Stock, par value $0.001 per share, of Flight Safety Technologies, Inc., a Nevada corporation. Only the common stock is registered under Section 12(g) of the Securities Exchange Act of 1934.
b) Name and Address of Issuer's Principal Executive Offices:
Flight Safety Technologies, Inc.
28 Cottrell Street
Mystic, Connecticut 06355
Family Limited
Partnership
Family
Holdings, LLC
Cummins
Cummins
(1)(2)(3)
(2)(3)(5)
(1) Includes 203,900 shares of common stock held by Wesley Cummins and 75,000 shares of common stock issuable upon exercise of options held by Wesley Cummins that are exercisable within 60 days of the date of this filing.
(2) Includes 130,500 shares of common stock held by Southern Slope, Inc., an Idaho corporation of which Wesley Cummins and Lance Cummins are shareholders, directors and officers.
(3) Includes 28,571,428 shares of common stock issuable upon conversion of 20,000 shares of Preferred Stock, which shares of Preferred Stock are held by Cummins Family Limited Partnership.
(4) Based on 43,802,206 shares of common stock, consisting of 8,945,063 shares of common stock outstanding on January 9, 2009 and 34,857,143 shares of common stock issuable upon conversion of 24,400 shares of Preferred Stock issued on January 14, 2009, all as described on the Issuer's Quarterly Report on Form 10-Q for the quarter ended November 30, 2008 filed with the Securities and Exchange Commission on January 16, 2009.
(5) Includes 21,700 shares of common stock held by Lance Cummins.
b) Number of Shares as to which such person has:
Names of Reporting Persons |
Cummins |
Cummins Family Holdings, LLC |
Wesley |
Lance |
Sole Voting Power |
28,571,428 (3) |
28,571,428 (3) |
278,900 (1) |
21,700 |
Shared Voting Power |
0 |
0 |
28,701,928 |
28,701,928 |
Sole Dispositive Power |
28,571,428 (3) |
28,571,428 (3) |
278,900 (1) |
21,700 |
Shared Dispositive Power |
0 |
0 |
28,701,928 |
28,701,928 |
(1) Includes 203,900 shares of common stock held by Wesley Cummins and 75,000 shares of common stock issuable upon exercise of options held by Wesley Cummins that are exercisable within 60 days of the date of this filing.
(2) Includes 130,500 shares of common stock held by Southern Slope, Inc., an Idaho corporation of which Wesley Cummins and Lance Cummins are shareholders, directors and officers.
(3) Includes 28,571,428 shares of common stock issuable upon conversion of 20,000 shares of Preferred Stock, which shares of Preferred Stock are held by Cummins Family Limited Partnership.
c) Description of transactions in the Shares that were effected during the past sixty days by the persons named in response to paragraph (a):
None, except as reported herein.
d) N/A
e) N/A
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
See Item 4 and Item 5.
Pursuant to Rule 13D-1(k) promulgated under the Exchange Act, the Reporting Persons have entered into a Joint Filing Agreement, a copy of which is filed with this Schedule 13D as Exhibit 99.1 with respect to the joint filing of this Schedule 13D and any amendment or amendments thereto.
Item 7. Material to Be Filed as Exhibits
The following are filed as exhibits to this Schedule 13D:
Exhibit 99.1 |
Joint Filing Agreement dated January 26, 2009 by and among the Reporting Persons. |
Exhibit 99.2 |
Purchase Agreement dated as of January 13, 2009 by and between Cummins Family Limited Partnership and the Issuer. |
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete.
Date: January 26, 2009
CUMMINS FAMILY LIMITED PARTNERSHIP
By: Cummins Family Holdings, LLC
Its General Partner
By: /s/ Wesley Cummins
Wesley Cummins, Member
By: /s/ Lance Cummins
Lance Cummins, Member
CUMMINS FAMILY HOLDINGS, LLC
By: /s/ Wesley Cummins
Wesley Cummins, Member
By: /s/ Lance Cummins
Lance Cummins, Member
/s/ Wesley Cummins
Wesley Cummins
/s/ Lance Cummins
Lance Cummins
EXHIBIT 99.1
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D with respect to the stock of Flight Safety Technologies, Inc. dated as of January 26, 2009 is, and any amendments thereto signed by each of the undersigned shall be, filed on behalf of each of us pursuant to and in accordance with the provisions of Rule 13d-1(k) under the Securities Exchange Act of 1934, as amended.
Date: January 26, 2009
CUMMINS FAMILY LIMITED PARTNERSHIP
By: Cummins Family Holdings, LLC
Its General Partner
By: /s/ Wesley Cummins
Wesley Cummins, Member
By: /s/ Lance Cummins
Lance Cummins, Member
CUMMINS FAMILY HOLDINGS, LLC
By: /s/ Wesley Cummins
Wesley Cummins, Member
By: /s/ Lance Cummins
Lance Cummins, Member
/s/ Wesley Cummins
Wesley Cummins
/s/ Lance Cummins
Lance Cummins
PURCHASE AGREEMENT
Purchase Agreement ("Agreement") dated as of January 13, 2009 between Flight Safety Technologies, Inc., a Nevada corporation (the "Company") and Cummins Family Limited Partnership, an Idaho limited partnership (the "Purchaser").
I T N E S S E T H:Whereas, the Company desires to sell and issue to Purchaser, and Purchaser wishes to purchase from the Company: (i) an aggregate of 20,000 shares of the Company's Series A Convertible Preferred Stock, par value $.001 per share ("Preferred Shares") on the Closing Date (as such term is defined below) and (ii) such number of additional Preferred Shares on the Earn-out Closing Date (as such term is defined below) determined in accordance with Section 1.1(a)(ii) hereof; and
Whereas, the Preferred Shares shall have the rights, designations and preferences set forth in the Certificate of Designations (the "Certificate") in the form of Exhibit 1.1A attached hereto, and shall be convertible into shares ("Common Shares"), of the Company's common stock, par value $.001 par share ("Common Stock);
Now, Therefore, in consideration of the foregoing premises and the covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
For purpose of this Agreement, the following terms shall have the meanings indicated:
"Average Monthly Cummins Family Produce EBITDA" shall equal the average of the Monthly Cummins Family Produce EBITDA during the preceding twenty-four (24) month period, as calculated one (1) month prior to the Earn-out Closing Date.
"Cummins Family Produce" means Cummins Family Produce, Inc., an Idaho corporation.
"Cummins Family Produce Value" shall equal the product of (A) 4.25 multiplied by (B) 12 multiplied by (C) the Average Monthly Cummins Family Produce EBITDA (as such term is defined above).
"GAAP" means generally accepted accounting principles as from time to time in effect, including the statements and interpretations of the United States Financial Accounting Standards Board.
"Initial Closing Consideration Value" shall mean the sum of (A) the Preferred Share Value plus (B) the Stearns Note Value.
"Monthly Cummins Family Produce EBITDA" means, for each month, (A) the net income (or loss) of Cummins Family Produce determined in accordance with GAAP plus (B) all amounts deducting in computing such net income in respect of (x) depreciation, amortization and other noncash charges, (y) interest expense, and (z) income tax expense.
"Original Issue Price" means One Hundred and No/100ths Dollars ($100.00).
"Preferred Share Value" means Two Million and No/100ths Dollars ($2,000,000.00).
"Stearns Note" means the promissory note of Wesley Cummins to Stearns Bank National Association dated May 15, 2008 in the original principal amount of Two Hundred Fifty Thousand and No/100ths Dollars ($250,000.00).
"Stearns Note Value" means the principal amount outstanding under the Stearns Note as of the Closing Date.
The calculations set forth in this Section 1.1(a)(ii) shall be performed by an accounting firm mutually acceptable to the Company and Purchaser. In the event they are unable to agree upon such an accounting firm at least ninety (90) days prior to the Earn-out Closing Date, the accounting firm will be selected by an arbitrator located in New York, New York selected by the American Arbitration Association (or if such organization ceases to exist, the arbitrator shall be chosen by a court of competent jurisdiction). The arbitrator shall select the accounting firm (within 10 days of his appointment) from a list, jointly prepared by the Purchaser and the Company, of not more than four accounting firms in the United States, of which no more than two may be named by the Company and no more than two may be named by the Purchaser. The arbitrator may consider, within the ten-day period allotted, arguments from the parties regarding which accounting firm to choose, but the selection by the arbitrator shall be m ade in its sole discretion from the list of four.
The Company and the Purchaser shall submit their respective calculations and other relevant data to the accounting firm, and the accounting firm shall as soon as practicable thereafter make its own determination of the calculations set forth herein. The determination of the final calculations by such accounting firm shall be final and binding upon the parties. The Company shall pay the fees and expenses of the accounting firm and arbitrator (if any). If required by any such accounting firm or arbitrator, the Company shall execute a retainer and engagement letter containing reasonable terms and conditions, including, without limitation, customary provisions concerning the rights of indemnification and contribution by the Company in favor of such accounting firm or arbitrator and its officers, directors, partners, employees, agents and affiliates.
The issuance of the Preferred Shares and Common Shares to Purchaser will not be integrated with any other issuance of the Company's securities (past, current or future) which requires stockholder approval (except where such approval is obtained).
The term "MFN Transaction" shall mean a transaction in which the Company issues or sells any securities in a capital raising transaction or series of related capital raising transactions (the "MFN Offering") which grants to a purchaser (the "MFN Purchaser") the right to receive additional shares (including without limitation as a result of a lower conversion, exchange or exercise price but excluding customary antidilution protections) based upon subsequent transactions of the Company on terms more favorable than those granted to such MFN Purchaser in such MFN Offering. As used herein, term "Variable Rate Transaction" shall mean a transaction in which the Company issues or sells (i) any debt or equity securities that are convertible into, exchangeable or exercisable for, or include (pursuant to the terms of the securities or the transaction documents pursuant to which such securities were issued) the right to receive additional shares of, C ommon Stock either (x) at a conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for the Common Stock at any time after the initial issuance of such debt or equity securities, or (y) with a fixed conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock (but excluding standard stock split anti-dilution provisions), or (ii) any securities of the Company pursuant to an "equity line" structure which provides for the sale, from time to time, of securities of the Company which are registered for resale under the Act.
To the Purchaser's knowledge, the CFP Equipment (i) is structurally sound, in good operating condition and repair, and adequate for the uses to which it is being put; (ii) none of such equipment is in need of maintenance or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost; and (iii) such equipment is sufficient for the continued conduct of Cummins Family Produce's business after the Closing in substantially the same manner as conducted prior to the Closing.
To the knowledge of the Purchaser, all of the Contracts are in full force and effect and are valid and enforceable in accordance with their terms. To the knowledge of the Purchaser, Cummins Family Produce is in material compliance with all terms and requirements of each Contract and each other Person that is party to a Contract is in material compliance with the terms and requirements of such Contract. To the knowledge of the Purchaser, no event has occurred or circumstance exist that (with or without notice or lapse of time) may contravene, conflict with or result in a material violation or material breach of, or give Cummins Family Produce or any other Person the right to declare a default or exercise any remedy under, or to accelerate the maturity or performance of, or to cancel, terminate or modify any Contract. There are no renegotiations, attempts to renegotiate or outstanding rights to negotiate any material amount to be paid or payable to or by Cummins Family Produce under any Contract and no P erson has made a written demand for such renegotiation. To the knowledge of the Purchaser, Cummins Family Produce is not subject to any legal obligation to renegotiate or of a claim for a legal right to renegotiate, any Contract. To the knowledge of the Purchaser, Cummins Family Produce has not released or waived any of its material rights under any Contract. Cummins Family Produce does not have any unsatisfied community or charitable pledges, contributions or commitments. Cummins Family Produce is not subject to any liability, or claim therefore, for or with respect to price adjustment under any contract with the U.S. Government or any agency thereof, including any liability for defective pricing.
Covenants
The Company will issue one or more certificates representing the Preferred Shares in the name of the Purchaser and in such denominations to be specified by the Purchaser prior to (or from time to time subsequent to) Closing. Each certificate representing the Preferred Shares shall be stamped or otherwise imprinted with a legend substantially in the following form:
These securities have not been registered under the Securities Act of 1933 or any state securities laws. They may not be Transferred, Assigned, sold or offered for sale except pursuant to an effective registration statement under said Act and any applicable state securities law or an opinion of counsel, in form and substance reasonably acceptable to the company, that registration is not required because of an applicable exemption from such registration requirements.
Nothing herein shall limit the right of any holder to pledge these securities pursuant to a bona fide margin account or lending arrangement.
Flight Safety Technologies, Inc.
18 Brookside Drive
Warren, NJ 07059
Attention: President and CEO
and
Flight Safety Technologies, Inc.
c/o Richard Rosenfeld
105 Stonebridge Road
Montclair, NJ 07042
Attention: CFO
Tobin, Carberry, O'Malley, Riley &
Selinger, P.C.
43 Broad Street
New London, CT 06320-0058
Attention: Joseph J. Selinger, Jr.
Cummins Family Limited Partnership
2570 Eldridge Ave.
Twin Falls, ID 83301
Attention: Wesley Cummins
Wright Brothers Law Office, PLLC
1166 Eastland Ave., Suite A
Twin Falls, ID 83301
Phone: 208-733-3107
Facsimile: 208-733-1669
Attention: Charles F. Wright
Any party hereto may from time to time change its address for notices by giving at least 10 days' written notice of such changed address to the other parties hereto.
The Company shall be liable under this Section 7.5(a) in respect of Purchaser Indemnified Liabilities only to the extent the aggregate of such Purchaser Indemnified Liabilities exceed $10,000, in which case the Company shall be liable under this Section 7.5(a) for all Purchaser Indemnified Liabilities up to a maximum aggregate amount equal to the greater of (i) the Cummins Family Produce Value or (ii) the Initial Closing Consideration Value.
To the extent permitted by law, the parties acknowledge and agree that the indemnification set forth in this Section 7.5(a) shall be the exclusive remedy of the Purchaser Indemnitees against the Company for any Purchaser Indemnified Liabilities.
To the extent that the undertaking by the Company in this Section 7.5(a) may be unenforceable for any reason, and subject to the limitations set forth above, the Company shall make the maximum contribution to the payment and satisfaction of each of the Purchaser Indemnified Liabilities which is permissible under applicable law.
The Purchaser shall be liable under this Section 7.5(b) in respect of Company Indemnified Liabilities only to the extent the aggregate of such Company Indemnified Liabilities exceed $10,000, in which case the Purchaser shall be liable under this Section 7.5(b) for all Company Indemnified Liabilities up to a maximum aggregate amount equal to the greater of (i) the Cummins Family Produce Value or (ii) the Initial Closing Consideration Value.
At the Purchaser's election, amounts payable under this Section 7.5(b) may be paid with Preferred Shares, which Preferred Shares shall be valued for such purposes at the Original Issue Price.
To the extent that the undertaking by the Purchaser in this Section 7.5(b) may be unenforceable for any reason, and subject to the limitations set forth above, the Purchaser shall make the maximum contribution to the payment and satisfaction of each of the Company Indemnified Liabilities which is permissible under applicable law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.
COMPANY: |
|
Name: Richard S. Rosenfeld |
|
PURCHASER: |
|
Name: Wesley Cummins |
Signature page to Purchase Agreement
Exhibit 1.1A |
Certificate |
Schedule 2.1(a) |
List of Subsidiaries |
Schedule 2.1(b) |
List of Subsidiaries Not Qualified To Do Business |
Schedule 2.1(c) |
Capitalization |
Schedule 2.1(c)(i) |
Capitalization |
Exhibit 2.1(c)(ii) |
Articles of Incorporation of the Company |
Exhibit 2.1(c)(iii) |
By-Laws of the Company |
Exhibit 2.1(c)(iv) |
Articles of Incorporation of the Subsidiary |
Exhibit 2.1(c)(v) |
By-Laws of the Subsidiary |
Schedule 2.1(e) |
No Conflicts |
Schedule 2.1(i) |
No Material Adverse Change |
Schedule 2.1(p) |
No Litigation |
Schedule 2.1(q) |
Brokers |
Schedule 2.1 (r)(i) |
Outstanding Securities Entitled to Registration Rights |
Schedule 2.1 (r)(ii) |
Outstanding Securities Affected by the Issuance of Preferred Shares, etc. |
Schedule 2.1(s) |
Certain Transactions |
Schedule 2.1(w) |
MFN and Variable Rate Transactions |
Schedule 2.1(aa) |
Indebtedness |
Exhibit 2.2(d)(ii) |
Articles of Incorporation of Cummins Family Produce |
Exhibit 2.2(d)(iii) |
By-Laws of Cummins Family Produce |
Schedule 2.2(d)(xiii) |
CFP Equipment |
Schedule 2.2(d)(xv) |
Contracts |
Schedule 2.2(d)(xx) |
Leased Real Property |
Exhibit 4.1(e) |
Form of Cummins Family Produce Share Certificate |
Exhibit 4.2(i) |
Form of Preferred Share Certificate |
Certificate of Designations of Series A Convertible Preferred Stock
Schedule 2.1(a)
List of Subsidiaries
Advanced Plasma Products, Inc., a Nevada Corporation
Schedule 2.1(b)
List of Subsidiaries Not Qualified To Do Business
NONE
Schedule 2.1(c)
Capitalization
NONE
Schedule 2.1(c)(i)
Capitalization
260,417 common shares in Flight Safety Technologies, Inc. issuable to the University of Tennessee Research Foundation pursuant to a licensing agreement.
20,000 common shares in Flight Safety Technologies, Inc. issuable to David Cryer pursuant to a severance agreement.
Exhibit 2.1(c)(ii)
Articles of Incorporation of the Company
Exhibit 2.1(c)(iii)
Exhibit 2.1(c)(iv)
Articles of Incorporation of the Subsidiary
[See attached]
Exhibit 2.1(c)(v)
By-Laws of the Subsidiary
[See attached]
Schedule 2.1(e)
No Conflicts
NONE
Schedule 2.1(i)
No Material Adverse Change
NONE
Schedule 2.1(p)
No Litigation
Counsel for a former employee of the Company has written to the Company and threatened suit, claiming damages for wrongful termination of his employment agreement, which expired and required written notice from the Company to extend its term. No such extension was given. The Company has denied liability and is waiting to hear further from such employee's counsel.
Schedule 2.1(q)
Brokers
NONE
Schedule 2.1(r)(i)
Outstanding Securities Entitled to Registration Rights
NONE
Schedule 2.1(r)(ii)
Outstanding Securities Affected By the Issuance of Preferred Shares, Etc.
NONE
Schedule 2.1(s)
Certain Transactions
NONE
Schedule 2.1(w)
MFN and Variable Rate Transactions
NONE
Schedule 2.1(aa)
Indebtedness
NONE
Exhibit 2.2(d)(ii)
Articles of Incorporation of Cummins Family Produce
[See attached]
Exhibit 2.2(d)(iii)
By-Laws of Cummins Family Produce
[See attached]
Schedule 2.2(d)(xiii)
CFP Equipment
CLARIFIER |
N/A |
N/A |
STATIC SCREEN |
N/A |
N/A |
PUMPS |
N/A |
N/A |
CULL BINS |
N/A |
N/A |
UNLOADING SYSTEM |
N/A |
N/A |
WASHING & DRYING |
N/A |
N/A |
GRADING TABLES |
N/A |
N/A |
#2 TABLES |
N/A |
N/A |
EVEN FLO BINS |
N/A |
N/A |
POMONA PACKAGING |
85-2 |
220-029 |
85-1 |
118-115 |
|
WEIGHT INDICATOR |
N/A |
N/A |
SAMPLER |
N/A |
N/A |
INK PRINTER |
N/A |
N/A |
HYSTER |
A618633 |
GPH02A20PV |
HYSTER |
C831996 |
KCPH02A20 |
HYSTER |
C2-3-FW-475 |
25271 |
BAGGER & WEIGHTS |
140093-1 |
189-4030-1001 |
AUTOMATIC BAGGER MAGNUSON |
93068 |
189-93068-1001 |
AUTOMATIC BAGGER MAGNUSON |
93069 |
189-93069-1001 |
EXETER GRADER MACHINE |
N/A |
N/A |
FABRICATING EXETER UNIT |
N/A |
N/A |
EXETER ENGINEERING UNIT |
N/A |
N/A |
EXETER ENGINEERING UPGRADE |
N/A |
N/A |
TRACK SYSTEM FOR EXETER |
N/A |
N/A |
CAMERA FOR GRADING SYSTEM |
N/A |
N/A |
COLOR CAMERAS & DIGITAL DISPLAYER |
N/A |
N/A |
GRADER ACCESSORIES |
N/A |
N/A |
ELIMINATOR |
N/A |
N/A |
POTATO SCANNER |
Tatoscanner |
9240 |
GLUE MACHINE |
80-14 |
85-7-5 |
BOX FILLER |
N/A |
N/A |
QUICK LOK MACHINE |
N/A |
N/A |
BAG CLOSER |
N/A |
N/A |
DOBOY STITCH O'MATIC |
N/A |
N/A |
AIR COMPRESSOR CRANDAL |
N/A |
N/A |
KEEGAN BAG O'MATIC MACHINE |
N/A |
N/A |
KEEGAN BAG O'MATIC COLUMN |
N/A |
N/A |
KEEGAN BAG O'MATIC HARDWARE |
N/A |
N/A |
MATHEWS INKJET PRINTERS |
N/A |
N/A |
BOX ERECTOR |
ER1800 |
ER18-13 |
GEAR BOXES (100) |
N/A |
N/A |
ALL CONVEYOR LINES BUILT ON SITE |
N/A |
N/A |
Schedule 2.2(d)(xv)
Contracts
Lease Agreement dated on or about the date hereof by and between Cummins Family Produce, Inc. and Cummins Family Holdings, LLC.
Supply Agreement dated on or about the date hereof by and among Southern Slope, Inc., Black Rock Ag., Inc., Cummins Family Produce, Inc., and solely for limited purposes set forth therein, Wesley Cummins, Lance Cummins, Nicholas Cummins and Nathan Cummins.
Consulting Agreement dated effective as of September 1, 2008 by and between Cummins Family Produce, Inc. and Nicholas Cummins.
Schedule 2.2(d)(xx)
Leased Real Property
Parcel No. 1
Lots 1, 2 and 3, Block 3, TWIN FALLS CHAMBER OF COMMERCE INDUSTRIAL PARK SUBDIVISION NO. 3, Twin Falls County, according to the official plat thereof recorded in Book 13 of Plats, page 1, records of Twin Falls County, Idaho.
AND the East 30 feet of the following described parcel:
A 60-foot strip of land, being a portion of Doc Taylor Drive, located in the Twin Falls Chamber of Commerce Industrial Park Subdivision No. 3, in the SW1/4 of Section 23, Township 10 South, Range 17 East, Boise Meridian, Twin Falls County, Idaho, in accordance with the official plat recorded in the records of Twin Falls County, being that portion of Doc Taylor Drive lying between Lots 1, 2, and 3 in Block 2 and Lots 1, 2 and 3 in Block 3, in accordance with the official plat recorded in the records of Twin Falls County, more particularly described as follows:
COMMENCING at the Northeast corner of Lot 1, Block 3 of said subdivision;
THENCE running North 89 35'52" West along the Northerly boundary of said Lot 1 for 375.25 feet to the REAL POINT OF BEGINNING, said point being a point of curvature of a 20.00-foot radius curve left, the radius point to which lies South 0 24'08" West 20.00 feet;
THENCE along said curve for 31.56 feet;
THENCE South 0 01'04" East along the Westerly boundary of Lots 1, 2 and 3, Block 3, for 436.00 feet to the Southwest corner of Lot 3, Block 3;
THENCE South 89 58'56" West for 30.00 feet;
THENCE North 0 01'04" West for 9.28 feet;
THENCE South 89 58'56" West for 30.00 feet to the Southwest corner of Lot 3, Block 2;
THENCE North 0 01'04" West for 427.42 feet along the Easterly boundary of Lot 1, 2 and 3, Block 2, to a point of curvature of a 20.00-foot radius curve left, the radius point to which lies South 89 58'56" West 20.00 feet;
THENCE along said curve for 31.27 feet to a point on the Northerly boundary of Lot 1, Block 2;
THENCE South 89 35'52" East for 100.00 feet to the REAL POINT OF BEGINNING.
Parcel No. 2
Lots 2 and 3, Block 2, TWIN FALLS CHAMBER OF COMMERCE INDUSTRIAL PARK SUBDIVISION NO. 3, Twin Falls County, Idaho, according to the official plat thereof recorded in Book 13 of Plats, page 1, records of Twin Falls County, Idaho.
AND the West 30 feet of the following described parcel:
A 60-foot strip of land, being a portion of Doc Taylor Drive, located in the Twin Falls Chamber of Commerce Industrial Park Subdivision No. 3, in the SW1/4 of Section 23, Township 10 South, Range 17 records of Twin Falls County, being the portion of Doc Taylor Drive lying between Lots 1, 2 and 3 in Block 2 and Lots 1, 2 and 3 in Block 3, in accordance with the official plat recorded in the records of Twin Falls County, more particularly described as follows:
COMMENCING at the Northeast corner of Lot 1, Block 3 of said subdivision:
THENCE running North 89 35'52" West along the Northerly boundary of said Lot 1 for 375.24 feet to the REAL POINT OF BEGINNING, said point being a point of curvature of a 20.00-foot radius curve left, the radius point to which lies South 0 24'08" West 20.00 feet'
THENCE along said curve for 31.56 feet;
THENCE South 0 01'04" East along the Westerly boundary of lots 1, 2 and 3, Block 3, for 436.00 feet to the Southwest corner of Lot 3, Block 3;
THENCE South 89 58'56" West for 30.00 feet
THENCE North 0 01'04" West for 9.28 feet;
THENCE South 89 58'56" West for 30.00 feet to the Southwest corner of lot 3, Block 2;
THENCE North 0 01'04" West for 427.42 feet along the easterly boundary of Lot 1, 2 and 3, Block 2, to a point of curvature of a 20.00-foot radius curve left the radius point to which lies South 89 58'56" West 20.00 feet;
THENCE along said curve for 31.27 feet to a point on the Northerly boundary of Lot 1, Block 2;
THENCE South 89 35'52" East for 100.00 feet to the REAL POINT OF BEGINNING.
Parcel No. 3
Lots 6 and 7, Block 2, TWIN FALLS CHAMBER OF COMMERCE INDUSTRIAL PARK SUBDIVISION NO. 3, Twin Falls County, Idaho, according to the official plat thereof recorded in Book 13 of Plats, page 1, records of Twin Falls County, Idaho.
Exhibit 4.1(e)
Form of Cummins Family Produce Share Certificate
[See attached]
Form of Preferred Share Certificate
[See attached]