U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB/A
AMENDMENT NO. 1
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
UNDER SECTION 12(B) OR (G) OF THE SECURITIES EXCHANGE ACT OF 1934
INTERACTIVE PROCESSING, INC.
(Name of Small Business Issuer in its charter)
NEVADA 88-0355407
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
#1738 - 609 GRANVILLE STREET, VANCOUVER, BRITISH COLUMBIA V7Y 1G5 CANADA
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (604) 689-4060
Securities to be registered under Section 12(b) of the Act: NONE
Securities to be registered under Section 12(g) of the Act:
COMMON STOCK, $.001 PAR VALUE
(Title of class)
Exhibit index on page 22 Page 1 of 49 pages
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
Interactive Processing, Inc. (the "Company") was incorporated under the
laws of the State of Nevada on September 15, 1995, for the purposes of engaging
in sales of consumer electronic products.
On April 17, 1996, the Company entered into a Patent and Trademark
License Agreement with Amoeba Corporation ("Amoeba") to obtain the exclusive
license to develop, manufacture, market, distribute, and sell products in the
United States, Canada, and Mexico based upon an invention and patents owned by
Ameoba. Amoeba was issued United States Patent number 5,253,068 and Canadian
Patent number 2,107,736. The invention, known as the TV Terminator ("TVT") is,
generally, an interactive universal remote control device, invented and patented
by Amoeba, that is believed by management of the Company to be the first remote
control with sound effects and a trigger-operated channel changer. As
consideration for the license, the Company issued 2,900,000 shares of its Common
Stock to Amoeba and agreed to pay a royalty of $1.50 per unit sold by the
Company. The agreement has no specified term.
Also on April 17, 1996, the Company entered into Patent and Trademark
Sublicense agreements with three licensees of Amoeba to obtain the exclusive
rights to the TV Terminator in other territories. All of the agreements are
similar to the agreement with Amoeba and differ only with respect to the
territory and the number of shares issued to the sublicensor. The agreements are
summarized below.
<TABLE>
<CAPTION>
NUMBER OF
SHARES
LICENSOR/SUBLICENSOR TERRITORY ISSUED
<S> <C> <C>
Amoeba Corporation United States; Canada; and Mexico 2,900,000
But Sup But International Inc. Asia, excluding Russia and all republics which 900,000
were part of the former Soviet Union; India;
Australia; and New Zealand
Aurora Marketing Inc. All of Europe, including the United Kingdom; 900,000
Russia; and all republics which were part of the
former Soviet Union
Measca Corporation Western hemisphere, excluding the United 900,000
States, Canada, and Mexico; Africa; and the
Middle East
</TABLE>
The TV Terminator is a gold colored, gun shaped remote control, which
produces four sound effects: gunshot, machine gun, boos, and cheers. In addition
to the TVT, the Company plans to produce other products based on the TVT
technology and patents (collectively referred to as the "TVT Products"). See
Football Sport Remote and Bundy Sport Remote, described below. Pursuant to the
terms of the License and Sublicense agreements the rights to any TVT Products
developed by the Company belong to Amoeba. The TVT Products work with
Televisions, Video Cassette Recorders, and Cable Boxes, and have an operating
range of over fifty (50) feet.
The TVT was demonstrated by Amoeba at the Consumer Electronics Show in
Las Vegas, Nevada, in January 1996. Prior to the Comany's acquisition of the
distirbution rights, other distributors of the TVT had sold small quantities of
the product through catalogs and as a result of newspaper
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<PAGE>
articles and radio announcements. One of these distributors was Golden Treasures
Dist. Ltd. ("Golden Treasures") a company owned and controlled by Mr. Silverman.
Using the TVT technology, the Company developed a football shaped
product named the Football Sport Remote (the "FSP"). On July 16, 1996, the
Company entered into a Merchandising License Agreement with ELP Communications
for the exclusive license in the United States and Canada to use the trademarks
of the "Married With Children" television series to promote the Company's Bundy
Sport Remote product, which is the FSP sold in different packaging (the Bundy
Sport Remote and the Football Sport Remote are collectively referred to as the
"Football Remotes"). As consideration for the license, the Company agreed to pay
a royalty equal to 10% of Net Sales (12% of Net Sales for sales made on an
F.O.B. basis), and paid an advance of $25,000 to the licensor upon execution of
the agreement. The initial term of the agreement commenced on April 11, 1996 and
will expire on June 30, 1998, unless sooner terminated pursuant to the terms of
the agreement. So long as the Company has paid the licensor minimum royalties of
$75,000 during this initial term and notified the licensor of its intention to
extend the term of the agreement by May 1, 1998, the Company shall have an
option to extend the agreement for an additional period ending June 30, 2000. In
addition, subject to the Company performing fully under the terms of the
agreement, the Company has the option of extending the territory to encompass
worldwide rights by so notifying the licensor by May 12, 1997 and paying an
option fee of $25,000 by July 12, 1997.
As of March 10, 1997, the Football Remote prototypes have been made
along with pre- packaging. Tooling designs, to be used in the production of the
Football Remotes, have been completed, and the Company is awaiting confirmation
on the tooling schedule. Management estimates that eighty-five percent (85%) of
the software to be used in the Football Remotes is completed. While the Bundy
Sport Remote and the FSP are identical except for the packaging, the Company's
cost on the Bundy Sport Remote is at least one dollar higher per unit, than the
FSP, due to the licensing fee.
Management anticipates that the development of the Football Sport
Remote and the Bundy Sport Remote will be completed in May or June of 1997.
MARKETING AND DISTRIBUTION
The Company has been marketing the TVT to consumers and retailers for a
suggested retail price of $39.95. Management believes the Football Remotes will
be marketed at a similar price. Sales of the TVT Products will be made through
home television shopping channels, catalogs, and clubs, utilizing an 800 number
ordering system. Also, the Company has entered into a joint venture agreement
with Cable/Print Network Marketing, Inc. ("CPNM") to distribute and market the
TVT, FSP, and the Bundy Sport Remote. CPNM's expertise lies in marketing
products through television, home shopping networks, catalogs, and infomercials.
According to the CPNM agreement, the joint venture will be formed through a
Delaware corporation, and the Company will assist in the financing the initial
marketing. As of March 10, 1997, the Delaware corporation had not been formed,
and the initial contribution had not been raised.
As of March 7, 1997, the TVT had been advertised on the Down Home
Shopping Network, and the Company is awaiting approval from the HSN Home
Shopping Network. Management anticipates that the FSP and Bundy Sport Remote
will also be advertised on home shopping networks once these products are
completed. The Company also intends to advertise the TVT Products on the
Internet.
The Company receives the TVT Products from a manufacturer located
overseas (See Part I, Description of Business. Manufacturing) and warehouses the
units in Las Vegas, with Golden Gems Nevada, Ltd. ("Golden Gems"), until they
are shipped to the purchaser (e.g., home shopping networks, catalog sales
companies, distributors, home purchasers, etc.). Golden Gems is a company owned
by Mr. Silverman's parents. The Company has entered into a one year fulfillment
contract with Golden
3
<PAGE>
Gems, dated June 1, 1996, pursuant to which Golden Gems will receive from the
Company a fee of $5 per unit shipped to individual customers and $.50 on each
unit per fifty (50) piece bulk box of TVT's sent shipped to catalog companies
and home shopping networks and all bulk shipments sent F.O.B. The Company also
pays for any extra costs, such as envelopes, long distance faxing, special
mailings authorized by the Company and any other reasonable costs. In addition,
Golden Gems charges individual customers a $5.95 shipping and handling fee at
the time of shipment. Payment to Golden Gems is made at the end of the month,
based upon total orders for the month.
As of March 10, 1997, the Company had shipped approximately 2,000 units
of the TVT. The Company has an additional inventory of TVT 2,200 units available
for shipment. Depending upon consumer acceptance of the TVT, the Company may
have repeat orders and/or agreements for distribution of the product.
The Company is in negotiations with AIFA Technology Corp., a Taiwanese
company ("AIFA"), to expand the Company's line of remotes. As of March 7, 1997,
the Company's negotiations with AIFA have focused on the Company acquiring the
exclusive marketing rights in the United States and Canada for AIFA's EZ 5-in-1
and URC5 remotes. The Company is also negotiating with AIFA for an option on the
marketing rights in South America and Europe. As of March 7, 1997, no definitive
agreement has been entered into with AIFA.
MANUFACTURING
The Company currently has its products manufactured overseas by Kimex
Electronic Co. of Seoul, Korea ("Kimex"), a non-affiliated company, and pays for
orders in advance. Microchips used in the TVT Products are purchased from Zilog,
which has offices in California and Asia. The Company experienced quality
control problems with the initial TVT orders from Kimex. A spring located inside
the TVT was not aligned properly, which caused problems with the TVT. These
problems have been corrected, and the Company has not experienced this problem
with subsequent TVT orders.
No formal manufacturing contracts will be entered into until the
Company has larger orders. The Company does not anticipate any difficulties in
obtaining raw materials or arranging for the manufacture of its products.
COMPETITION
There are many companies which manufacture universal remote controls.
However, management believes that the TVT Products have a niche in the remote
control market, due to their ease of use, sound effects and unusual shapes. As
discussed above, the TVT Products have four sound effects, and are available in
the shape of a gun, or in the case of both the Football Remotes in the shape of
a football. Management believes these shapes and sounds provide an interactive
experience for the user, which is unavailable with a standard universal remote
control.
GOVERNMENTAL REGULATION
The Company's products are not regulated by the Federal Communications
Commission or any other government agency. The Company is subject to laws and
regulations pertaining to the import of goods manufactured overseas. Compliance
with governmental regulations is not expected to have a material adverse effect
on the Company.
EMPLOYEES
As of March 10, 1997, the Company had 4 employees, 3 of whom were
full-time. The names and responsibilities of each employee are set forth below:
4
<PAGE>
Sheldon Silverman - President
Mr. Silverman is a full-time employee and is responsible for running
the day-to-day operations of the Company. Mr. Silverman is in charge of the
Company's marketing and product development, along with discussing the Company's
operations with investors. Mr. Silverman is also the Secretary of Golden
Treasures.
Keith Balderson - Vice President
Mr. Balderson, a part-time employee, is responsible for the management
of the Company, and makes recommendations regarding the Company's marketing,
financing, and contracting activities. Mr. Balderson also conducts investor
relations activities, which includes answering questions from investors and
preparing news releases. Mr. Balderson spends approximately five hours a week on
the business affairs of the Company.
Juliette Henry
Ms. Henry is a full time employee, and provides secretarial services to
the Company, including data entry and some accounting. Ms. Henry also provides
Internet experience.
Dave Jeffery
Mr. Jeffery is a full time employee who's primary responsibility is
providing investor relations activities. Mr. Jeffery also handles some of the
Company's sales calls.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATION
Management had planned to add two or three employees in the Company's
Vancouver offices, and staff a full-time office in Las Vegas, during the 1997
fiscal year, which ends April 31, 1997. However, due to a lack of funding,
management has decided to postpone these plans indefinitely. The Company also
plans to continue its research and development efforts on the TVT Products. As
of March 6, 1997, management estimates that the Company has sufficient cash to
satisfy its needs until May 1, 1997.
In August 1996, the Company completed a $170,000 private placement of
its Common Stock, pursuant to Rule 504 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "Act") . From August 1996 to January 24,
1997, the Company made a $0.36 per share offering under Rule 504 of Regulation
D; however, no shares were sold as a result of this offering. The Company
proposes to conduct a $0.20 per share offering, under Rule 506 of Regulation D
promulgated under the Act. As of March 10, 1997, the Company had not sold any
shares in this offering.
Currently, orders placed with Kimex are paid for in advance of
shipment. In the future, the Company would like establish a line of credit with
Kimex for the financing of inventory purchases.
Interest of 10% per annum would be charged on such financing.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES. Since the Company's inception in
September 1995, the Company has been engaged primarily in raising its initial
capitalization and obtaining license agreements critical to its business plan.
Through April 30, 1996, gross proceeds of $225,700 were obtained through the
sale of the Company's Common Stock. In August 1996, an additional $170,000 in
gross
5
<PAGE>
proceeds were obtained through the sale of the Company's Common Stock, pursuant
to Rule 504 of Regulation D promulgated under the Act. See Part II, Item 4.
Recent Sales of Unregistered Securities.
The Company's working capital was $19,663 at April 30, 1996, and
increased to $32,372 at October 31, 1996. The increase was due primarily to the
receipt of the offering proceeds described above.
RESULTS OF OPERATIONS. The Company has not yet generated significant
revenues. Since inception revenues of only $7,504 have been generated. Expenses
incurred since inception through October 31, 1996 of $360,301 were primarily for
marketing and product development, including tooling designs and the production
of prototypes and premarketing materials. The research and development on the TV
Terminator has been completed. Management believes the development costs on the
Football Sport Remote and the Bundy Sport Remote should be minimal due to the
similarity of the software between the TVT and the Football Remotes; however,
the Company will continue to incur marketing costs. If the negotiations with
AIFA are successful, the Company may incur development and marketing cost on
these products in the near future.
Expenses for the six months ended October 31, 1996 in the amount of
$186,684 were incurred primarily for consulting fees ($45,957), investor
relations ($24,569), legal ($18,972), office ($18,717), and marketing and
product development ($46,598). Consulting services were provided to the Company
by S.A. Alden Holdings, Inc. ("S.A. Alden"), a company owned by Mr. Balderson's
wife. S.A. Alden provides the Company with management and contract negotiations
expertise. The Company also received consulting services relating to
distribution of the Company's products, from Golden Treasures, a company owned
and controlled by Sheldon Silverman. During the six months ended October 31,
1996, the Company had paid $22,500 to Golden Treasures and $10,858 to S.A.
Alden. The Company's investor relations fees includes the costs of providing
answers to investors' questions, including the associated costs for telephone,
mail, fax, and electronic mail.
GOING CONCERN. As a result of its operations through October 31, 1996,
the Company has an accumulated deficit as of October 31, 1996 of $361,759. Note
1 of the Notes to Financial Statements included herein states that substantial
doubt has been raised about the Company's ability to continue as a going
concern. The ability of the Company to continue as a going concern is dependent
on its ability to generate profitable operations in the future and obtain
additional financing. Management plans to raise the funds, through the issuance
of additional shares of stock (See Part I, Item 2. Plan of Operation), necessary
to finance ongoing operations and commitments until sufficient cash flow from
operations is generated; however, there can be no assurance that the Company
will be able to do so.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company's leases approximately 600 square feet of office space at a
cost of $750 per month, at #1738 - 609 Granville Street, Vancouver, British
Columbia. See Part I, Item 7. Certain Relationships and Related Transactions.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table provides certain information as to the officers and
directors individually and as a group, and the holders of more than 5% of the
Common Stock of the Company, as of August 21, 1996:
6
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS OF OWNER NUMBER OF SHARES PERCENT OF
OWNED CLASS (1) <F1>
<S> <C> <C> <C>
Amoeba Corporation Contact/Director: 2,900,000 30.8%
21 East Drive Garston Isaac Collie
Watford, Herts
England WD2 6AH
Philadep & Co. 1,832,500 19.5%
1900 Market St. 2nd Floor
Philadelphia, PA 19103
But Sup But International Inc. Contact/Director: 900,000 9.6%
Flat 1906, Blk Q Janine Curtis
Luk Yeung Sun Chuen
Twuen Wan
N.T. Hong Kong
Aurora Marketing Inc. Contact/Director: 900,000 9.6%
21 Godolphin House Shaniqua McPhee
76 Fellows Road
London, England
NW3 3LG
Measca Corporation Contact/Director: 900,000 9.6%
P.O. Box N. 7521 Shelly Johnson
94 Dowdeswell St.
Nassau, Bahamas
CT Securities Services Inc. 822,500 8.7%
70 York St. 8th Floor
Toronto, Ontario
Canada M5J 1S9
Sheldon Silverman 300,000 (2)<F2> 3.1%
Keith Balderson 200,000 (3)<F3> 2.1%
Officers and Directors as a group 500,000 5.0%
(2 persons)
*Less than 0.1%
<FN>
<F1>
(1) Based on 9,419,000 shares of Common Stock outstanding on August 21,
1996. Where the persons listed on this table have the right to obtain
additional shares of common stock within 60 days from August 21, 1996,
these additional shares are deemed to be outstanding for the purpose of
computing the percentage of class owned by such persons, but are not
deemed to be outstanding for the purpose of computing the percentage of
any other person.
<F2>
(2) Includes 300,000 shares of Common Stock issuable upon exercise of
certain options. See "Executive Compensation."
<F3>
(3) Includes 200,000 shares of Common Stock issuable upon exercise of
certain options. See "Executive Compensation."
</FN>
</TABLE>
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<PAGE>
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
OFFICERS AND DIRECTORS
The officers and directors of the Company are as follows:
NAME AGE POSITION
Sheldon Silverman 35 President, Chief Executive
Officer and Director
Keith Balderson 52 Vice President, Secretary,
Treasurer and Director
The term of office of each director of the Company ends at the next
annual meeting of the Company's stockholders or when such director's successor
is elected and qualifies. No date for the next annual meeting of stockholders is
specified in the Company's Bylaws or has been fixed by the Board of Directors.
The term of office of each officer of the Company ends at the next annual
meeting of the Company's Board of Directors, expected to take place immediately
after the next annual meeting of stockholders, or when such officer's successor
is elected and qualifies.
SHELDON SILVERMAN is a full-time employee and has been the President,
Chief Executive Officer, and a director of the Company since May 1996. He
managed a jewelry store in Vancouver, British Columbia, from 1982 to 1984. In
1986, Mr. Silverman received a real estate license and worked at Re/Max Realty
in Vancouver, from 1986 to 1994, specializing in land development, as well as
residential and commercial real estate. He received awards as a real estate
broker. From 1991 to 1996, he was the president of Golden Treasures Dist. Ltd.,
a distributor of consumer electronic products. Mr. Silverman assisted in the
development of the Company's TVT Products and in locating software engineers,
product manufacturers, and microchip designers. Mr. Silverman's parents are the
owners of Golden Gems.
KEITH BALDERSON has been a director of the Company since its inception
and has served, on a part-time basis, as Vice President since May 1996 and
Secretary and Treasurer since July 1996. He served as the President of the
Company from its inception to May 1996. Mr. Balderson is employed by S.A. Alden,
which is located in Vancouver, British Columbia. S.A. Alden is owned by Mr.
Balderson's wife, who is also the President of S.A. Alden. Mr. Balderson
attended sales and marketing courses at the University of British Columbia from
1963 to 1965. From 1965 to 1982, he was a director of Margetson-Lee, Ltd., a
private retail clothing company in Vancouver, British Columbia. He was the
president of Silk Fashion Canada, Ltd., Toronto, Ontario, a company which
imported Jack Mulgreen dresses and blouses, from 1980 to 1984. From 1984 to
1988, he was the marketing director for Louis Feraud Paris, a private fashion
import company in New York. He was the vice president for Quadra Lodgic
Technologies, Inc., a medical research and biotechnology company in Vancouver,
British Columbia, from 1988 to 1992. From 1992 to 1996, Mr. Balderson was the
president of Cryocon Containers Inc., a publicly-held company in Vancouver,
British Columbia, engaged in refrigeration technology.
As of March 10, 1997, the Company has not entered into any consulting
agreements with Messrs. Silverman or Balderson. The Company has entered into
consulting agreements with S.A. Alden and Golden Treasures, companies owned by
Mr. Balderson's wife and Sheldon Silverman, respectively. These consulting
agreements are attached as exhibits to this document.
8
<PAGE>
ITEM 6. EXECUTIVE COMPENSATION.
The following table sets forth information for the Chief Executive
Officer ("CEO") of the Company, Keith Balderson, from inception (September 15,
1995) through April 30, 1996. No disclosure need be provided for any executive
officer, other than the CEO, whose total annual salary and bonus for the last
completed fiscal year did not exceed $100,000. Accordingly, no other executive
officers of the Company are included in the table.
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
ANNUAL COMPENSATION AWARDS PAYOUTS
OTHER RESTRICTED
NAME AND ANNUAL STOCK OP LTIP ALL OTHER
PRINCIPAL COMPEN AWARD(S) TIONS/SAR PAYOUTS COMPEN
POSITION YEAR SALARY BONUS SATION ($) ($) S ($) ($) SATION ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Keith 1996 $ 14,400 -0- -0- -0- -0- -0- -0-
Balderson,
President
</TABLE>
There are no employment agreements with any of the Company's executive
officers. The Company's current executive officers, Sheldon Silverman and Keith
Balderson, are paid through consulting fees paid to their respective companies.
The consulting fees are currently $4,000 and $1,200 per month for Messrs.
Silverman and Balderson, respectively. For period ended April 30, 1996,
consulting fees of $8,000 and $10,301 were paid to Messrs. Silverman and
Balderson through their companies. For the six months ended October 31, 1996,
consulting fees of $22,500 and $10,858 were paid to Messrs. Silverman and
Balderson through their companies. From May 1, 1996 through March 1, 1997,
management estimates that the Company had paid $27,500 and $ 13,500, to Messrs.
Silverman and Balderson through their companies, and they are owed $14,500 and
$3,000, respectively.
The Company does not pay non-officer directors for their services as
such nor does it pay any director's fees for attendance at meetings. Directors
are reimbursed for any expenses incurred by them in their performance as
directors.
STOCK OPTIONS
On July 26, 1996, the Company's Board of Directors adopted a 1996 Stock
Option Plan under which a total of 941,900 shares are available for grant to
provide incentive compensation to officers and key employees of the Company.
The Plan is administered by the Board of Directors. Options may be
granted for up to 10 years at not less than the fair market value at the time of
grant, except that the term may not exceed five years and the price must be 110%
of fair market value for any person who at the time of grant owns more than 10%
of the total voting power of the Company. Unless otherwise specified in an
optionee's agreement, options granted under the Plan to officers,
officer/directors, and employees will become vested with the optionee under the
following schedule: 50% upon the first anniversary of the option grant and 12.5%
upon each of the four three-month periods following the first anniversary. The
Plan will remain in effect until it is terminated by the Board of Directors,
except that no Incentive Stock Option (as defined in Section 422 of the Internal
Revenue Code) may be granted after July 26, 2006.
Options may be exercised by payment of the option price (i) in cash,
(ii) by tender of shares of Common Stock of the Company and which have a fair
market value equal to the option price, or (iii) by such other consideration as
the Board of Directors may approve at the time the option is granted.
9
<PAGE>
On August 16, 1996, options to purchase 300,000 shares and 200,000
shares at $.656 per share were granted to Sheldon Silverman and Keith Balderson,
respectively.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
From time to time, the Company has engaged in transactions with Golden
Treasures, a distributor of consumer electronic products owned and controlled by
Sheldon Silverman, the President, Chief Executive Officer, and a director of the
Company. The Company, pursuant to the consulting agreement between Golden
Treasures, receives the following services from Golden Treasures:
1. Project management.
2. Recommendations regarding financing, marketing and promotion.
3. Monitoring and verification of work performed by contractors.
4. Report writing.
5. Liaison services between the Company and contractors.
The terms of the consulting agreement provide that Golden Treasures has complete
discretion in the amount of time, energy, and effort devoted to the Company and
performs its duties to the Company as it sees fit. In exchange for the services,
the Company pays Golden Treasures a fee of $4,000 per month and reimburses
Golden Treasures for reasonable expenses. During the period ended April 30,
1996, the Company also purchased 60 units of the TVT from Golden Treasures at
cost ($18 per unit). Also during this period, the Company incurred $57,095 in
marketing expenses paid to Golden Treasures. The marketing expenses were related
to the Company's involvement in the Consumer Electronics Show in Las Vegas in
January 1996, for exhibit space, advertising, and prototype samples. The Company
leases office space from Golden Treasures at the rate of $750 per month. During
the period ended April 30, 1996, rent of $3,500 was paid. At April 30, $7,933
was owed to Keith Balderson's company and $12,580 was owed to Golden Treasures
for marketing, public relations, investor relations, and office expenses. During
the six months ended October 31, 1996, rent of $700 was paid. At October 31,
1996 $12,580 was still owed to Golden Treasures; however, as of March 1, 1997,
management estimates that $14,500 was owed to Golden Treasures and $3,000 was
owed to S.A. Alden.
The Company has contracted for fulfillment services with Golden Gems, a
company owned and controlled by Sheldon Silverman's parents. See Part I, Item 1.
Marketing and Distribution.
ITEM 8. DESCRIPTION OF SECURITIES.
The authorized capital stock of the Company consists of 20,000,000
shares of Common Stock, $.001 par value per share, and 5,000,000 shares of
Preferred Stock, $.001 par value per share.
COMMON STOCK
Each share of Common Stock has one vote with respect to all matters
voted upon by the shareholders. The shares of Common Stock do not have
cumulative voting rights.
Holders of Common Stock are entitled to receive dividends, when and if
declared by the Board of Directors, out of funds of the Company legally
available therefor. The Company has never declared a dividend on its Common
Stock and has no present intention of declaring any dividends in the future.
Holders of Common Stock do not have any preemptive rights or other
rights to subscribe for additional shares, or any conversion rights. Upon a
liquidation, dissolution, or winding up of the affairs of the Company, holders
of the Common Stock will be entitled to share ratably in the assets available
for distribution to such stockholders after the payment of all liabilities.
10
<PAGE>
The outstanding shares of the Common Stock of the Company are fully
paid and non-assessable.
The registrar and transfer agent for the Company's Common Stock is
Silver State Transfer & Registrar, 8180 Clover Springs Lane, Salt Lake City,
Utah 84121.
PREFERRED STOCK
The Articles of Incorporation permit the Board of Directors, without
further shareholder authorization, to issue Preferred Stock in one or more
series and to fix the price and the terms and provisions of each series,
including dividend rights and preferences, conversion rights, voting rights,
redemption rights, and rights on liquidation, including preferences over the
Common Stock, all of which could adversely affect the rights of the holders of
the Common Stock.
The Board of Directors established a Series A Preferred Stock
consisting of 2,000,000 shares; however, it has withdrawn its plans to sell such
shares privately.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS.
The Company's Common Stock is not traded on a registered securities
exchange, or on NASDAQ; however, the Company's Common Stock has traded on the
OTC Bulletin Board under the symbol "IAPI" since April 29, 1996. The range of
high and low bid prices for each fiscal quarter for 1996, as reported by the OTC
Bulletin Board, is as follows:
<TABLE>
<CAPTION>
BID PRICES
1996 FISCAL YEAR HIGH LOW
<S> <C> <C>
Quarter Ending 07/31/96................................... $ 1.63 $ .343
Quarter Ending 10/31/96 .................................. $ 1.06 $ .250
</TABLE>
The last reported high and low bid price for the Company's Common Stock
was $.18 as of March 7, 1997, as reported by the OTC Bulletin Board.
The above quotations reflect inter-dealer prices, without retail
mark-up, mark-down, or commission and may not necessarily represent actual
transactions.
As of February 24, 1997 there were 38 record holders of the Company's
Common Stock.
Since the Company's inception, no cash dividends have been declared on
the Company's Common Stock.
ITEM 2. LEGAL PROCEEDINGS.
The Company is not a party to any pending legal proceedings and no such
proceedings are known to be contemplated.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
None.
11
<PAGE>
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES.
Since the Company's inception, it has sold shares of its Common Stock,
which sales were not registered under the Securities Act of 1933, as amended, as
follows:
From October 1, 1995 to December 5, 1995, a total of 3,124,000 shares
of Common Stock were sold for an aggregate of $156,200 in cash. From March 28,
1996 to May 6, 1996, a total of 695,000 shares of Common Stock were sold for an
aggregate of $69,500 in cash. No underwriting discounts or commissions were
paid. With respect to these sales of securities, the Company relied on the
provisions of Rule 504 of Regulation D promulgated under the Act. Aggregate
sales were less than $1,000,000.
On April 17, 1996, the Company issued a total of 5,600,000 shares of
Common Stock as consideration for various licenses to four parties. See Part I,
Item 1. Description of Business. With respect to the issuance of these shares,
the Company relied on the provisions of Section 4(2) of the Securities Act of
1933, as amended, in that such transactions did not involve any public offering.
On August 28, 1996, a total of 607,143 shares of Common Stock were sold
for an aggregate of $170,000 in cash. No underwriting discounts or commissions
were paid. With respect to these sales of securities, the Company relied on the
provisions of Rule 504 of Regulation D promulgated under the Act. Aggregate
sales were less than $1,000,000.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 78.751 of the General Corporation Law of Nevada and Article X
of the Company's Articles of Incorporation permit the Company to indemnify its
officers and directors and certain other persons against expenses in defense of
a suit to which they are parties by reason of such office, so long as the
persons conducted themselves in good faith and the persons reasonably believed
that their conduct was in the corporation's best interests or not opposed to the
corporation's best interests, and with respect to any criminal action or
proceeding, had no reasonable cause to believe their conduct was unlawful.
Indemnification is not permitted in connection with a proceeding by or in the
right of the corporation in which the officer or director was adjudged liable to
the corporation or in connection with any other proceeding charging that the
officer or director derived an improper personal benefit, whether or not
involving action in an official capacity.
12
<PAGE>
PART F/S
[financial statements to be inserted here]
13
<PAGE>
PART III
<TABLE>
<CAPTION>
ITEM 1. INDEX TO EXHIBITS.
REGULATION SEQUENTIAL
S-B NUMBER EXHIBIT PAGE NUMBER
<C> <C> <C>
3.1 Articles of Incorporation (1)<F1> N/A
3.2 Bylaws (1)<F1> N/A
10.1 Patent and Trademark License Agreement between Amoeba N/A
Corporation and Interactive Processing, Inc. dated April 17, 1996
(1)<F1>
10.2 Patent and Trademark Sublicense Agreement between But Sup N/A
But International, Inc. and Interactive Processing, Inc. dated April
17, 1996 (1) <F1>
10.3 Patent and Trademark Sublicense Agreement between Aurora N/A
Marketing Inc. and Interactive Processing, Inc. dated April 17,
1996 (1) <F1>
10.4 Patent and Trademark Sublicense Agreement between Measca N/A
Corporation and Interactive Processing, Inc. dated April 17, 1996
(1) <F1>
10.5 1996 Stock Option Plan (1) <F1> N/A
10.6 1996 Restricted Stock Plan (1) <F1> N/A
10.7 Merchandising License Agreement between ELP Communications N/A
and Interactive Processing, Inc. dated April 17, 1996 (1) <F1>
10.8 Joint Venture Agreement with CPNM 24
10.9 Consulting Agreement with Golden Treasures 32
10.10 Consulting Agreement with S.A. Alden 39
10.11 Fulfillment Contract with Golden Gems Nevada, Ltd. 46
27 Financial Data Schedule 49
<FN>
<F1>
(1) Incorporated by reference from the Exhibits filed with the Company's Form 10-SB, filed with
the Securities and Exchange Commission on November 25, 1996, Commission file number 0-
21791.
</FN>
</TABLE>
ITEM 2. DESCRIPTION OF EXHIBITS.
22
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934,
the registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
INTERACTIVE PROCESSING, INC.
Date: March 10, 1997 By:/s/Sheldon Silverman
Sheldon Silverman, President
23
<PAGE>
Exhibit 10.8
Joint Venture Agreement with CPNM
24
<PAGE>
JOINT VENTURE AGREEMENT
THIS JOINT VENTURE AGREEMENT, entered into this 25 day of NOV, 1996 is by and
between the following corporations, collectively referred to herein as "the
partners",
INTERACTIVE PROCESSING, INC., (referred to as "IP"), a NEVADA corporation with
offices at #1738 - 609 Granville Street, Vancouver, BC V7Y 1G5; and
CABLE/PRINT NETWORK MARKETING, INC., (referred to as "CPNM"), a Pennsylvania
corporation with offices in Suite 930, Benjamin Fox Pavilion, Jenkintown, PA
19046.
WHEREAS CPNM has developed proprietary multi-media marketing programs and is
skilled and experienced in the use of a variety of promotional, direct and
targeted marketing methods;
WHEREAS ____ is skilled and experienced in the manufacture of the
products/services listed in Exhibit "B" which is attached hereto and herewith
made part of this agreement;
WHEREAS the parties desire to enter into an agreement to form a Joint Venture
with the purpose of utilizing CPNM's Multi Media Marketing methods as to be
mutually agreed and listed in "Exhibit A";
NOW THEREFORE, in consideration of the foregoing and the mutual promises
contained herein, the parties, intending to be legally bound, agree as follows:
ARTICLE I
FORMATION
1.1 FORMATION & OWNERSHIP. The partners hereby form a Joint Venture to
implement the business as set forth herein. The Joint Venture shall be
a Delaware corporation.
1.2 NAME OF JOINT VENTURE. The name of the Joint Venture shall be _______.
1.3 TERM. The Joint Venture shall commence as of the date hereof and remain
in full force and effect until terminated by the parties in accordance
with the terms of this Agreement.
1.4 INITIAL CAPITALIZATION. Agrees to AID CPNM to secure investors or
sponsors for the initial marketing, in the amount of [marked out].
These funds will be placed into a checking account to be set up by the
Joint Venture. This initial capitalization and CPNM's marketing
management services are to be used for Multi Media Marketing tests as
mutually agreed to by the Partners, as listed in Exhibit "A". Full roll
out of CPNM's Multi Media Marketing will be funded by revenues from
test sales, and/or from mutually agreed to subsequent
<PAGE>
from test sales, and/or from mutually agreed to subsequent
capitalization.
1.5 INSPECTION. The books and records of the Joint Venture, to be
maintained by CPNM on behalf of the Joint Venture, shall be available
for inspection by the partners upon reasonable notice to CPNM.
Inspection shall take place at the offices of CPNM during normal
business hours.
1.6 CPNM shall maintain the checking account following the initial
capitalization and subsequent capitalization. All revenues generated by
the Joint Venture shall be deposited into a Joint Venture checking
account. Monthly balance reports shall be submitted to the Joint
Venture Partner.
1.7 ACCOUNTING. The accounts of the Joint Venture shall be maintained by
CPNM and audited by Cohen, Engel & Albert, an independent Certified
Public Accountancy, who shall prepare all necessary tax returns and
financial statements.
1.8 The Joint Venture shall be managed by a board of directors consisting
of the signatories of this Agreement and optionally, one nominee each.
The directors shall mutually agree on the budget for Exhibit "A",
selection of officers and all other discretionary matters.
1.9 OFFICES. The Joint Venture shall maintain offices at the following
places, unless otherwise agreed by the parties from time to time.
a. 930 Benjamin Fox Pavilion, Jenkintown, PA 19046, Phone -
215-887-5700, Fax - 215-887- 7076.
b. #1738 - 609 Granville Street, Vancouver, BC, Phone
604-689-4060, Fax 604 689 4089.
1.10 RESTRICTION ON SALE. Each of the partners covenants and agrees that it
shall not mortgage, pledge, sell, assign, hypothecate or otherwise
encumber, transfer or permit to be transferred in any manner or by any
means whatsoever, whether voluntarily or by operation of law all or any
part of its Joint Venture interest or withdraw from the Joint Venture,
except as set forth in this Agreement.
1.11 ALLOCATION OF PROFIT & LOSS. All profit and loss of the Joint Venture
shall be allocated equally to the Partners after the cost of
products/services to be marketed and multi media expenditures as
mutually agreed, on a quarterly basis.
1.12 NON-ENCUMBRANCE. Each of the partners covenants and agrees that it
shall not obligate the other to any third party without written notice
to the other.
<PAGE>
ARTICLE II
PARTNER'S OBLIGATIONS & RESPONSIBILITIES
2.1 IP's responsibilities and obligations shall include but not be limited
to:
To sell at negotiated prices which will not exceed the price charged to
IP's most favored client, to the Joint Venture sufficient quantities of
its products as the Joint Venture may agree to market to be paid out of
sales receipts of the Joint Venture.
2.2 CPNM's responsibilities and obligations shall include but not be
limited to:
Management of the marketing strategies and plans (listed in Exhibit
"A"), the implementation of which and budgeting for which are subject
to the approval of the Joint Venture partners.
ARTICLE III
INTELLECTUAL PROPERTY
3.1 COPYRIGHTS, PATENTS & TRADEMARKS
a. Any and all patents, trademarks or copyrights which the Joint
Venture may be entitled to register under state or federal law
shall be registered in the name of the Joint Venture.
b. All pre-existing Trademarks of the Partners shall remain their
respective property.
3.2 CUSTOMER LISTS. All customer lists developed by the Joint Venture will
be the property of the Joint Venture. CPNM will use its expertise and
be responsible for the marketing of the lists on behalf of the Joint
Venture.
3.3 WARRANTY/INDEMNIFICATION. The parties to this Agreement do hereby
warrant and covenant for itself that its undertaking hereunder does not
infringe or interfere with any intellectual property or other contract
rights of third parties, and each shall indemnify, save and hold the
other party harmless, including cost of defense, from any suit, demand,
claim, liability, or proceeding founded on such third party's claim or
settlement.
ARTICLE IV
TERMINATION
4.1 In the case of any unresolved breach of this Agreement by either party,
and after conformance with the cure provisions as defined in ARTICLE V,
Sub-Section 5.2, Sub-Paragraph thereafter, either party may declare
this Agreement terminated as to any further business to
<PAGE>
which the Joint Venture is not already obligated. Upon termination, the
assets of the Joint Venture, after retirement of all Joint Venture
obligations, shall be divided equally between the partners. The
partners agree that any obligations, financial or otherwise, to third
parties will be satisfied prior to the dissolution of the Joint Venture
and that each partner will fulfill its such obligations prior to such
dissolution.
4.2 At any time during or subsequent to the termination of this Joint
Venture as provided herein or otherwise, IP will not utilize any of
CPNM's Multi Media Marketing techniques and materials or any parts
thereof without the expressed written permission of CPNM.
ARTICLE V
MISCELLANEOUS PROVISIONS
5.1 EXECUTION OF OTHER DOCUMENTS. The parties will execute and deliver all
documents and instruments which are reasonably necessary to carry out
the terms of this Agreement.
5.2 MISCELLANEOUS.
a. This Agreement represents the entire agreement between the
parties and shall not be changed orally. There are no other
contemporaneous oral agreements.
b. This Agreement shall inure to the benefit of the parties
together with their successors and assigns.
c. If any portion of this Agreement is struck down or declared
unenforceable by a court of competent jurisdiction, it shall
not affect the other provisions of this Agreement.
d. The waiver by either party of any right hereunder shall not
constitute a waiver of any other rights, nor shall the waiver
of any right in an instance constitute the waiver of such
right on-going.
e. Any and all disputes arising under or related to this
Agreement shall be submitted to binding arbitration before the
American Arbitration Association, in accordance with the rules
and regulations then in effect. Any award may be entered by
either party as a judgment or decree in any court of competent
jurisdiction and enforced accordingly. The parties shall share
equally any AAA fees incurred by either party in connection
with any dispute. Any such arbitration shall take place in
Montgomery County, Pennsylvania. Any dispute under this
Agreement shall be governed by Pennsylvania law.
f. Neither party shall enforce an alleged breach of any provision
of this Agreement clearly without first giving the other party
written notice, clearly specifying the nature
<PAGE>
of such alleged breach, and an opportunity to cure said
alleged breach within THIRTY (30) DAYS of receipt by certified
mail of such notice.
g. All signatories to this Agreement hereby represent and warrant
that they have the requisite authority to enter into this
transaction, and that the entity which they represent has
complied with all necessary formalities under all applicable
bylaws or agreements, as well as all applicable state laws and
regulations.
h. EACH PARTNER AGREES THAT THE OTHER SHALL AT ALL TIMES BE FREE
TO ENGAGE IN ANY OTHER BUSINESS ACTIVITIES.
NOVEMBER 25, 1996 /S/ SHELDON SILVERMAN
DATE NAME - for Interactive Processing, Inc.
Sheldon Silverman President & CEO
/S/ DARYL V. WOLK
DATE Daryl V. Wolk - for CPNM, Inc.
--------------------------------------------------
<PAGE>
Exhibit 10.9
Consulting Agreement with Golden Treasures
32
<PAGE>
CONSULTING AGREEMENT
THIS AGREEMENT is dated the 1ST day of MAY , 1996.
BETWEEN:
INTERACTIVE PROCESSING, INC.
1738-609 Granville Street
Vancouver, BC
V7Y 1G5
(herein the "Client")
- and -
GOLDEN TREASURES DIST.
401-1755 West Broadway
Vancouver, British Columbia
V6J 4S5
(herein the "Consultant")
WHEREAS the Client desires to engage the Consultant to provide services
to the Client for the terms of this Agreement and the Consultant has
agreed to provide such services, all in consideration and upon the
terms and conditions contained herein;
NOW THEREFORE it is hereby agreed as follows:
1. SERVICES
The Client agrees to engage the Consultant to provide the
services describe in Schedule "A" attached hereto and the
Consultant has agreed to perform and provide such services
(collectively the "Services".)
2. TERM
Except as otherwise provided in this Agreement, the Client
agrees to engage the Consultant to provide the Services for a
term commencing MAY 1 , 1996 and ending upon the completion of
the Services.
3. FEE
(a) The Client agrees to pay the Consultant a fee for the
Services provided by the Consultant under the
Agreement in the amount of 4,000.00 per month on the
30th of each month.
<PAGE>
(b) The Consultant agrees to render monthly invoices to
the Client, in a form reasonably acceptable to the
Client, detailing the Services performed by the
Consultant.
4. EXPENSES
The Client shall pay for or reimburse the Consultant for all
reasonable, ordinary and necessary expenses incurred by the Consultant
in the ordinary course of performing the Services upon presentation of
proper accounts, statements, invoices or receipts for such items.
5. INDEPENDENT CONTRACTOR
The Consultant's relationship with the Client as created by this
Agreement is that of an independent contractor for the purpose of the
INCOME TAX ACT (Canada) and any similar provincial taking legislation.
It is intended that the Consultant shall have general control and
direction over the manner in which its services are to by provided to
the Client under this Agreement. Nothing contained in this Agreement
shall be regarded or construed as creating any relationship (whether by
way of employer/employee, agency, joint venture, association, or
partnership) between the parties other than as an independent
contractor as set forth herein.
6. TIME AND EFFORT
The Consultant shall be free to devote such portion of the Consultant's
time, energy, effort and skill as the Consultant see fit, and to
perform the Consultant's duties when and where the Consultant see fit,
so long as the Consultant performs the Services set out in this
Agreement in a timely and professional fashion.
7. AUTHORITY
The Consultant acknowledges that it is being retained as a consultant
to the Client and that as such it does not have the authority and
cannot commit or bind the Client to any matter, contract or negotiation
without prior written authorization of the Client.
8. COMPLIANCE
(a) The Consultant shall comply with all applicable
federal, provincial and municipal laws, rules and
regulations arising out of or connected with the
performance of the Services under this Agreement by
the Consultant or its employees.
(b) The Consultant shall be responsible for all
Unemployment Insurance Contributions, Income Tax and
Workers' Compensation payments relating to or arising
out of the fees
<PAGE>
paid to the Consultant under this Agreement and the
Services performed by the Consultant or
its employees. Payments relating to any of the above
shall be the responsibility of the Consultant and
shall be forwarded by the Consultant as appropriate,
directly to the government agencies involved. Proof
of compliance with this requirement shall be
available to the Client upon request.
9. KEY PERSON
The parties acknowledge that Keith Balderson is integral to the
successful performance of the Services by the Consultant under this
Agreement. It is acknowledged by the Consultant that Keith Balderson
will perform substantial portion of the Services, unless the Client
otherwise consents in writing.
10. SUPPORT
The Client agrees to provide such assistance and make available such
employees, office space and support to the Consultant as is reasonable
necessary to enable the Consultant to perform the Services under this
Agreement.
11. CONFIDENTIAL INFORMATION
(a) The Consultant acknowledge that certain of the material and
information made available to the Consultant by the Client in
the performance of the Services ("Confidential Information")
will be of a confidential nature. The Consultant recognizes
that the Confidential Information is the sole and exclusive
property of the Client, and the Consultant shall use its best
efforts and exercise utmost diligence to protect and maintain
the confidentiality of the Confidential Information. The
Consultant shall not, directly or indirectly, use the
Confidential Information for its own benefit, or disclose to
another any Confidential Information, whether or not acquired,
learned, obtained or developed by the Consultant alone or in
connection with, except as such disclosure or use may be
required in connection with the performance of the Services or
as may be consented to in writing by the Client.
(b) The Confidential Information is and shall remain the sole and
exclusive property of the Client regardless of whether such
information was generated by the Consultant or by others, and
the Consultant agrees that upon termination of this Agreement
it shall deliver promptly to the Client all such tangible
parts of the Confidential Information including records, data,
notes, reports, proposals, client list, correspondence,
materials, marketing or sales information, computer programs,
equipment, or other documents or property which are in the
procession or under the control of the Consultant without
retaining copies thereof.
(c) Each of the foregoing obligations of the Consultant in this
clause shall also apply to any confidential information of
customers, joint venture parties, contractors and other
entities, of any nature whatsoever, with whom the Client or
any associate or affiliate of the Client has business
relations.
<PAGE>
(d) Notwithstanding the foregoing provisions of this clause, the
Consultant shall not be liable for the disclosure or use of
any of the Confidential Information to the extent that:
(i) the Confidential Information is or becomes available
to the public from a source other than the Consultant
and through no fault of the Consultant or:
(ii) the Confidential Information is lawfully obtained by
the Consultant from a third party or a source outside
this agreement.
(e) The covenants and agreements contained in this clause shall
survive the termination of this Agreement.
12. OTHER SERVICES
The Consultant will be free to perform consulting and other services to
the Consultant's other clients during the term of this Agreement,
provided however, that the Consultant shall ensure that the Consultant
is able to perform the Services pursuant to this Agreement in a timely
and professional fashion. The Consultant agrees not to perform services
for the Consultant's other clients which may create a conflict of
interest or interfere with the Consultant's duties pursuant to this
Agreement.
13. TERMINATION
(a) In the event that the Consultant breaches this Agreement, or otherwise
fails to perform the Services in accordance with the terms of this
Agreement, the Client may terminate this Agreement immediately and
without notice for cause. Either party may terminate this Agreement at
any time, without cause or reason, upon giving two weeks advance
written notice to the other.
(b) Upon Termination of this Agreement:
(i) the Client's obligations to the Consultant under this
Agreement shall terminate except for the Client's obligation
to pay any fee and expenses in accordance with the terms of
the Agreement, to the date of termination; and
(ii) the Consultant's obligations to the Client under this
Agreement shall terminate except those obligations which are
specifically expressed to survive the termination of this
Agreement.
14. GOVERNING LAW
This agreement shall be governed by the laws of the Province of British
Columbia and the federal laws of Canada applicable therein.
<PAGE>
15. SEVERABILITY
If any provision of this Agreement, or the application of such
provision to any person or in any circumstance, shall be determined to
be invalid, illegal or unenforceable, the remaining provisions of this
Agreement, and the application of such provision to any person or in
any circumstances other than that to which it is held to be invalid,
illegal or unenforceable, shall not be affected thereby.
16. AMENDMENTS
Any amendment to this Agreement must be in writing and signed by both
parties hereto.
17. TIME OF ESSENCE
Time shall be of essence in this Agreement.
18. INDEMNIFICATION
This is the entire Agreement between the Client and the Consultant with
respect to the consulting services to be provided by the Consultant to
the Client and supersedes any prior agreements with respects to such
whether written oral.
19. NOTICES
Notice hereunder shall be in writing and must be either personally
delivered or sent by double registered mail to the address(es) set
forth above. A party may change the address set forth above by the
proper notice to the other.
20. NO WAIVER
The failure of any party to insist upon the strict performance of a
covenant or obligation hereunder, irrespective of the length of time
for which such failure continues, shall not be a waiver of such party's
right to demand strict performance in the future. No consent or waiver,
express or implied, to or of any breach or default in the performance
of any covenant or obligation hereunder shall constitute a consent or
waive to or of any other breach or default in the performance of the
same of any other obligations hereunder shall constitute a consent or
waiver to or of any other breach or default in the performance of the
same or of any other obligations hereunder.
21. ASSIGNMENT
The Agreement is personal in nature and may not be assigned by either
party hereto.
<PAGE>
22. INUREMENT
This Agreement shall be binding upon and shall inure to the benefit of
each of the parties hereto and their respective employees and permitted
receivers, successors and assigns.
IN WITNESS WHEREOF the parties hereto have signed this Agreement as of the day
and year first above written.
Interactive Processing, Inc.
Per: /S/ KEITH W. BALDERSON
Keith Balderson
Vice President of Interactive Processing, Inc.
/S/ SHELDON SILVERMAN
Sheldon Silverman
Secretary of Golden Treasures Dist.
SCHEDULE "A'
DESCRIPTION OF SERVICES
Project Management
Provide recommendation for Financing, Marketing and Promotion
Monitor and verify work being performed by the contractors
Report Writing
Act as Liaison between contractors and client
<PAGE>
Exhibit 10.10
Consulting Agreement with S.A. Alden
39
<PAGE>
CONSULTING AGREEMENT
THIS AGREEMENT is dated the MAY 1 day of , 1996.
------ ---------------
BETWEEN:
INTERACTIVE PROCESSING, INC.
1738-609 Granville Street
Vancouver, BC
V7Y 1G5
(herein the "Client")
- and -
S.A. ALDEN HOLDINGS, INC.
2186 West 14th Avenue
Vancouver, BC
V6K 2V7
(herein the "Consultant")
WHEREAS the Client desires to engage the Consultant to provide services
to the Client for the terms of this Agreement and the Consultant has
agreed to provide such services, all in consideration and upon the
terms and conditions contained herein;
NOW THEREFORE it is hereby agreed as follows:
1. SERVICES
The Client agrees to engage the Consultant to provide the
services describe in Schedule "A" attached hereto and the
Consultant has agreed to perform and provide such services
(collectively the "Services".)
2. TERM
Except as otherwise provided in this Agreement, the Client
agrees to engage the Consultant to provide the Services for a
term commencing MAY 1 , 1996 and ending upon the completion of
the Services.
3. FEE
(a) The Client agrees to pay the Consultant a fee for the
Services provided by the Consultant under the
Agreement in the amount of $1,200.00 per month on the
30th of each month. [INITIALS]
<PAGE>
(b) The Consultant agrees to render monthly invoices to
the Client, in a form reasonably acceptable to the
Client, detailing the Services performed by the
Consultant.
4. EXPENSES
The Client shall pay for or reimburse the Consultant for all
reasonable, ordinary and necessary expenses incurred by the Consultant
in the ordinary course of performing the Services upon presentation of
proper accounts, statements, invoices or receipts for such items.
5. INDEPENDENT CONTRACTOR
The Consultant's relationship with the Client as created by this
Agreement is that of an independent contractor for the purpose of the
INCOME TAX ACT (Canada) and any similar provincial taking legislation.
It is intended that the Consultant shall have general control and
direction over the manner in which its services are to by provided to
the Client under this Agreement. Nothing contained in this Agreement
shall be regarded or construed as creating any relationship (whether by
way of employer/employee, agency, joint venture, association, or
partnership) between the parties other than as an independent
contractor as set forth herein.
6. TIME AND EFFORT
The Consultant shall be free to devote such portion of the Consultant's
time, energy, effort and skill as the Consultant see fit, and to
perform the Consultant's duties when and where the Consultant see fit,
so long as the Consultant performs the Services set out in this
Agreement in a timely and professional fashion.
7. AUTHORITY
The Consultant acknowledges that it is being retained as a consultant
to the Client and that as such it does not have the authority and
cannot commit or bind the Client to any matter, contract or negotiation
without prior written authorization of the Client.
8. COMPLIANCE
(a) The Consultant shall comply with all applicable
federal, provincial and municipal laws, rules and
regulations arising out of or connected with the
performance of the Services under this Agreement by
the Consultant or its employees.
(b) The Consultant shall be responsible for all
Unemployment Insurance Contributions, Income Tax and
Workers' Compensation payments relating to or arising
out of the fees
<PAGE>
paid to the Consultant under this Agreement and the
Services performed by the Consultant or
its employees. Payments relating to any of the above
shall be the responsibility of the Consultant and
shall be forwarded by the Consultant as appropriate,
directly to the government agencies involved. Proof
of compliance with this requirement shall be
available to the Client upon request.
9. KEY PERSON
The parties acknowledge that Keith Balderson is integral to the
successful performance of the Services by the Consultant under this
Agreement. It is acknowledged by the Consultant that Keith Balderson
will perform substantial portion of the Services, unless the Client
otherwise consents in writing.
10. SUPPORT
The Client agrees to provide such assistance and make available such
employees, office space and support to the Consultant as is reasonable
necessary to enable the Consultant to perform the Services under this
Agreement.
11. CONFIDENTIAL INFORMATION
(a) The Consultant acknowledge that certain of the material and
information made available to the Consultant by the Client in
the performance of the Services ("Confidential Information")
will be of a confidential nature. The Consultant recognizes
that the Confidential Information is the sole and exclusive
property of the Client, and the Consultant shall use its best
efforts and exercise utmost diligence to protect and maintain
the confidentiality of the Confidential Information. The
Consultant shall not, directly or indirectly, use the
Confidential Information for its own benefit, or disclose to
another any Confidential Information, whether or not acquired,
learned, obtained or developed by the Consultant alone or in
connection with, except as such disclosure or use may be
required in connection with the performance of the Services or
as may be consented to in writing by the Client.
(b) The Confidential Information is and shall remain the sole and
exclusive property of the Client regardless of whether such
information was generated by the Consultant or by others, and
the Consultant agrees that upon termination of this Agreement
it shall deliver promptly to the Client all such tangible
parts of the Confidential Information including records, data,
notes, reports, proposals, client list, correspondence,
materials, marketing or sales information, computer programs,
equipment, or other documents or property which are in the
procession or under the control of the Consultant without
retaining copies thereof.
(c) Each of the foregoing obligations of the Consultant in this
clause shall also apply to any confidential information of
customers, joint venture parties, contractors and other
entities, of any nature whatsoever, with whom the Client or
any associate or affiliate of the Client has business
relations.
<PAGE>
(d) Notwithstanding the foregoing provisions of this clause, the
Consultant shall not be liable for the disclosure or use of
any of the Confidential Information to the extent that:
(i) the Confidential Information is or becomes available
to the public from a source other than the Consultant
and through no fault of the Consultant or:
(ii) the Confidential Information is lawfully obtained by
the Consultant from a third party or a source outside
this agreement.
(e) The covenants and agreements contained in this clause shall
survive the termination of this Agreement.
12. OTHER SERVICES
The Consultant will be free to perform consulting and other services to
the Consultant's other clients during the term of this Agreement,
provided however, that the Consultant shall ensure that the Consultant
is able to perform the Services pursuant to this Agreement in a timely
and professional fashion. The Consultant agrees not to perform services
for the Consultant's other clients which may create a conflict of
interest or interfere with the Consultant's duties pursuant to this
Agreement.
13. TERMINATION
(a) In the event that the Consultant breaches this Agreement, or otherwise
fails to perform the Services in accordance with the terms of this
Agreement, the Client may terminate this Agreement immediately and
without notice for cause. Either party may terminate this Agreement at
any time, without cause or reason, upon giving two weeks advance
written notice to the other.
(b) Upon Termination of this Agreement:
(i) the Client's obligations to the Consultant under this
Agreement shall terminate except for the Client's obligation
to pay any fee and expenses in accordance with the terms of
the Agreement, to the date of termination; and
(ii) the Consultant's obligations to the Client under this
Agreement shall terminate except those obligations which are
specifically expressed to survive the termination of this
Agreement.
14. GOVERNING LAW
This agreement shall be governed by the laws of the Province of British
Columbia and the federal laws of Canada applicable therein.
<PAGE>
15. SEVERABILITY
If any provision of this Agreement, or the application of such
provision to any person or in any circumstance, shall be determined to
be invalid, illegal or unenforceable, the remaining provisions of this
Agreement, and the application of such provision to any person or in
any circumstances other than that to which it is held to be invalid,
illegal or unenforceable, shall not be affected thereby.
16. AMENDMENTS
Any amendment to this Agreement must be in writing and signed by both
parties hereto.
17. TIME OF ESSENCE
Time shall be of essence in this Agreement.
18. INDEMNIFICATION
This is the entire Agreement between the Client and the Consultant with
respect to the consulting services to be provided by the Consultant to
the Client and supersedes any prior agreements with respects to such
whether written oral.
19. NOTICES
Notice hereunder shall be in writing and must be either personally
delivered or sent by double registered mail to the address(es) set
forth above. A party may change the address set forth above by the
proper notice to the other.
20. NO WAIVER
The failure of any party to insist upon the strict performance of a
covenant or obligation hereunder, irrespective of the length of time
for which such failure continues, shall not be a waiver of such party's
right to demand strict performance in the future. No consent or waiver,
express or implied, to or of any breach or default in the performance
of any covenant or obligation hereunder shall constitute a consent or
waive to or of any other breach or default in the performance of the
same of any other obligations hereunder shall constitute a consent or
waiver to or of any other breach or default in the performance of the
same or of any other obligations hereunder.
21. ASSIGNMENT
The Agreement is personal in nature and may not be assigned by either
party hereto.
<PAGE>
22. INUREMENT
This Agreement shall be binding upon and shall inure to the benefit of
each of the parties hereto and their respective employees and permitted
receivers, successors and assigns.
IN WITNESS WHEREOF the parties hereto have signed this Agreement as of the day
and year first above written.
Interactive Processing, Inc.
Per: /S/ SHELDON SILVERMAN
C.E.O., Interactive Processing, Inc.
/S/ SHERRILL BALDERSON
Sherrill Balderson
President, S.A. Alden Holdings Inc.
SCHEDULE "A'
DESCRIPTION OF SERVICES
Project Management
Provide recommendation for Financing, Marketing and Promotion
Monitor and verify work being performed by the contractors
Report Writing
Act as Liaison between contractors and client
<PAGE>
Exhibit 10.11
Fulfillment Contract with Golden Gems Nevada, Ltd.
46
<PAGE>
[INTERACTIVE PROCESSING, INC. LETTERHEAD]
FULFILLMENT CONTRACT
The following agreement is hereby dated on June 1 1996 between the following
parties:
Golden Gems Nevada Ltd. / Distribution Center
4410 N. Rancho Drive #194
Las Vegas, NV
89130
AND
Interactive Processing, Inc. / Client
609 Granville St. #1738
Vancouver B.C.
V7Y 1G5
Golden Gems will be known as GG and Interactive Processing will be known as IP.
GG will be responsible for inventory control, transportation of merchandise,
mail, fedex, bulk boxes, credit card authorizations, and accounting.
1. CREDIT CARDS
GG shall pay for each credit card authorization, charges for all credit cards
carried by GG. The current credit cards available are Amex, Mastercard, Visa,
Discover. IP shall pay for any charge backs of fraudulent credit cards.
2. MAILINGS
GG shall charge IP $5.00 for each unit shipped to individual customers. $5.95
shipping & handling will be charged to customers at time of shipping. IP shall
cover the cost of Fedex via their account and any other customs and duty for off
shore shipping.
3. BULK SHIPMENTS
GG shall charge IP $0.50 each unit per 50 piece bulk box of TV Terminators for
shipping to Catalog Companies and Home Shopping Networks and all bulk shipments
sent F.O.B.
<PAGE>
[Interactive Processing, Inc. Letterhead] Page 2
4. TERM
The Term of this contract shall be 1 year and if both parties wish to end this
agreement then that party shall give 30 days notice to the other party.
5. INVENTORY
GG shall keep an up to date inventory by the 15th of the following month and fax
and mail IP a spread sheet on all mailing, credit card sales and any other costs
to IP.
6. COSTS
IP shall cover any extra costs such as envelopes, long distance faxing, special
mailings authorized by IP and any other reasonable requests. GG shall not make
any other decisions not covered in this agreement without the written consent of
IP.
7. SPECIAL SHIPPING
IP and GG will discuss costing per special shipments to overseas or any other
shipments not covered in this agreement. IP will agree to pay GG on a per
special shipment basis.
Golden Gems Nevada Ltd. Interactive Processing, Inc.
By: /S/ HARRY SILVERMAN By: /S/ SHELDON SILVERMAN
Harry Silverman, President Sheldon Silverman, President & CEO
<PAGE>
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