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U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12 (g) OF THE SECURITIES ACT OF 1934
ATM HOLDINGS, INC.
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(Name of Small Business Issuer in Its Charter)
Nevada 88-0361933
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
22048 Sherman Way, Canoga Park, California 91303
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(Address of Principal Executive Offices) (Zip Code)
(818) 716-6790
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(Issuer's Telephone Number, Including Area Code)
Securities to be registered under Section 12(g) of the Act:
Common Stock, $.0001 par value
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(Title of class)
Total Pages _________
Exhibit Index Page _____
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
ITEM 1. DESCRIPTION OF BUSINESS.
HISTORY
ATM Holdings, Inc. (the "Company") was incorporated under the laws of
the State of Nevada on May 30, 1996. In connection with its formation, the
Company issued an aggregate of 1,500,000 shares of its common stock in exchange
for all of the outstanding shares of common stock of Trigate Associates, Inc.
("Trigate"). Trigate was incorporated under the laws of the State of Nevada on
April 9, 1989 and, subsequent thereto, completed its initial public offering of
securities. For more than five years prior to the formation of the Company,
Trigate was inactive. At the time of its acquisition by the Company on May 30,
1996, Trigate did not have any assets or liabilities and had 17,500,000 shares
of common stock outstanding. The Company issued 1,500,000 shares of its common
stock for all of the shares of Trigate in order to effect a reverse common stock
split.
As of May 12, 1997, the Company issued 5,500,000 shares of its common
stock in exchange for all of the outstanding shares of common stock of
Nationwide Automated Systems, Inc. which was incorporated in the State of
California on November 26, 1996 ("Nationwide"). Unless the context indicates
otherwise, the term "Company" includes Nationwide.
The office of the Company and Nationwide is located at 22048 Sherman Way
- - - Suite 213, Canoga Park, California 91303. Telephone (818) 716-6790.
BUSINESS
The Company sells and operates automated teller machines ("ATMs"). ATMs
are placed at locations where the Company believes there will be a sufficient
number of customers who will use the ATM to enable the Company to make a profit.
The Company has developed what it calls a "turn-key program" for both
purchasers of ATMs and the locations in which they are placed. This turn-key
program enables owners of ATMs to receive monthly payments without being
involved in the operation of their ATMs. This turn-key program also enables
locations in which ATMs are placed to derive the benefits of having an ATM in
their premises without being involved in its operation. These locations also
receive monthly payments.
Through December 31, 1996, the Company was primarily engaged in
organizational matters, development of its business plan, entering into
agreements for the services required to operate ATMs, sales efforts and
obtaining locations for ATMs. During this period, the Company did not conduct
any other operations and was considered a development stage company.
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During the year ended December 31, 1997, the Company began selling ATMs,
placing these ATMs in locations and operating them. As a result of this
commencement of operations, the Company ceased to be a development stage
company. As of December 31, 1997, the Company had placed a total of 12 ATMs in
locations. Of these ATMs 8 have been placed in Southern California. Other areas
in which the Company has placed ATMs include locations in Orlando, Florida;
Northbrook, Illinois; Atlanta, Georgia; and Myrtle Beach, South Carolina.
Subsequent to December 31, 1997 (through March 25, 1998), the Company placed an
additional 5 ATMs in locations. The Company will not concentrate the location of
ATMs in any particular geographic area or areas.
ATM users are usually charged a transaction fee each time they make a
withdrawal. Transaction fees range between $2.00 and $3.00 per transaction
depending on the location of the ATM. The Company sets the amount of the
transaction fee for each ATM and may increase or decrease this fee at any time.
ATM users may also be charged an additional fee by their own banks which is
called an "interchange" fee. The Company receives all transaction fees and a
portion of the interchange fees.
ATMs are sold by the Company at a price that enables it to make a profit
on each sale. Upon a sale of an ATM, the Company enters into a lease agreement
with the ATM owner. These lease agreements provide that the ATM owner will
receive a monthly payment for each "approved transaction" generated by the ATM.
An "approved transaction" is an ATM transaction for which the ATM user is
charged a fee. The per transaction amount to be received by an ATM owner for
each approved transaction is determined at the time the lease agreement is
entered into and is generally $.50 for each approved transaction. Lease
agreements with ATM owners also provide that the Company will place the owner's
ATM in a location, operate it, provide all servicing and maintenance, and insure
the owner's ATM. All of these services are provided by the Company at no cost to
the ATM owner. There is no minimum monthly amount payable to ATM owners and the
Company does not guarantee or represent that any ATM owner will receive payments
of any amount or that any ATM will generate any number of monthly approved
transactions.
ATMs are placed at locations pursuant to leases which generally have an
initial five year term with a five year renewal option. Lease terms provide for
monthly payments to the location based on the number of approved transactions
generated by the ATM. The amount per approved transaction to be received by a
location is determined at the time the lease agreement is entered into. This
amount is based on, among other things, the number of approved transactions the
Company estimates will be generated by the ATM and if the location or the
Company provides vaulting services. In certain instances, the location is not
paid any monthly amount until the ATM has generated a specific number of
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approved transactions. The amount paid to locations ranges from $.25 to $1.00
per approved transaction. There is no minimum monthly amount payable to ATM
locations and the Company does not guarantee or represent that any location in
which an ATM is placed will receive payments of any amount or that any ATM will
generate any number of monthly approved transactions.
The Company has entered into agreements with unrelated third parties to
provide all of the services required to operate the ATMs it places in locations.
These services include processing of transactions, supplying and replenishing
the ATMs with required amounts of cash ("vaulting"), insurance, service and
maintenance.
OPERATIONS
The Company's plan of operation includes continuing to sell ATMs at a
profit and placing these ATMs in locations that will make each ATM an individual
profit center for the Company. The Company expects it will be able to pay the
costs related to the operation of ATMs it places in locations from the
transaction and interchange fees it receives.
Owners of ATMs and the locations in which they are placed receive a
monthly amount based on the number of approved transactions generated by the
ATM. The company providing processing services receives $.10 for each ATM
transaction. There are no minimum monthly payments required to be made by the
Company to ATM owners, locations or the processing company.
The Company pays certain other costs regardless of the number of
transactions generated by the ATM. These costs include vaulting, insurance,
service and maintenance.
Vaulting costs vary significantly between ATMs. The cost of vaulting
depends on the number of transactions generated by the ATM, the average amount
withdrawn, the amount of cash in the ATM and the number of times the cash in the
ATM has to be replenished. For the year ended December 31, 1997, vaulting costs
averaged $.92 per approved transaction.
The Company's insurance policy provides for an annual premium of
approximately $5,000 for up to 10 ATMs and $150 for each additional ATM insured.
This insurance covers the replacement cost of the ATM, but not the cash in the
ATM which is the responsibility of the company providing vaulting services. The
Company's service and maintenance contract provides for an annual payment of
$100 per ATM.
The Company expects its vaulting, insurance, service and maintenance
costs will be paid from the transaction fees not paid to the ATM owner, the
location and the processing company and the interchange fees it receives. In the
event these fees are not sufficient for the Company to pay these other operating
costs, there would be a negative effect on the Company.
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The Company has the option of relocating any ATM to a different location
if it does not generate a sufficient number of transactions. The Company will
pay the costs of any such move. Due to the Company's limited operating history,
there is no assurance that any ATM location will provide the Company with a
profit in any amount.
SALES OF ATMS
ATMs are sold by the Company's officers (who are not separately
compensated for these services) and by independent contractors. Independent
contractors are usually compensated at the rate of $1,000 for each ATM they
sell. This compensation may vary depending on the price at which the ATM is sold
and the number of ATMs sold by an independent contractor. Independent
contractors do not receive any portion of the transaction fees generated by the
ATMs they sell. The Company has not entered into any formal written agreements
for the sale of ATMs with any independent contractor. All sales of ATMs by
independent contractors are subject to prior approval by the Company before the
sale is completed.
The Company has made an arrangement with a financing company to enable a
purchaser to finance a portion of the purchase price of an ATM. No sales of ATMs
have been made to purchasers who have financed any portion of the sales prices
of their ATMs. The availability, amount and cost of any financing is based on
the finance company's independent evaluation of the purchaser. The Company does
not guarantee or represent to any prospective purchaser of an ATM that purchase
financing will be available on any terms. The Company will not receive any
portion of the financing charges or other amounts paid to the finance company by
the ATM purchaser. Purchasers of ATMs who desire to finance a portion of the
purchase price have no obligation to obtain financing from this financing
company. The Company does not have a formal written agreement with this finance
company.
The Company has purchased all of the ATMs it has sold from Triton
Corporation. Accordingly, the Company is dependent on this company to provide it
with ATMs in such quantities, at such times and at such prices it requires. The
Company has not entered into any agreement or arrangement with Triton
Corporation or any other manufacturer of ATMs to provide it with ATMs on any
terms.
LOCATION LEASES
The Company enters into location leases through the efforts of its
officers who are not separately compensated for these services. The Company
plans to engage independent contractors to seek locations for ATMs and
compensate them at the rate of $500 for each location lease obtained. This
compensation may vary depending on the Company's determination of the
suitability of the location in which the ATM is to be placed. The Company has
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not entered into any formal written agreement for obtaining locations in which
to place ATMs with any independent contractor. Independent contractors do not
receive any portion of the transaction fees generated by ATMs placed in the
locations they obtain. All location leases obtained by independent contractors
will be subject to prior approval of the Company.
The Company determines the suitability for placing an ATM in a location
based on various criteria. These criteria include the estimated number of
potential users of the ATM (foot traffic) in the location, the location's policy
of accepting checks and credit cards from its customers, the location's type of
business, the location's policy of cashing checks and the availability of other
ATMs in the area. The Company will use the same criteria in approving location
leases obtained by independent contractors.
The Company's limited operating history does not provide sufficient
information to enable the Company to make an accurate determination if any
location for an ATM will result in sufficient transactions to enable it to
become a profit center. The Company has not conducted any formal market research
or any formal test marketing program for the placement of ATMs and intends to
continue to place ATMs at locations without conducting any formal market
research or any formal test marketing program. The lack of formal market
research or a formal test marketing program may have an adverse effect on the
Company.
OPERATING AGREEMENTS
Processing - The Company enters into an agreement with an unaffiliated
processing company for ATM processing services for each ATM placed in a
location. This processing company first verifies that the user of the ATM has
sufficient funds in his bank account for the amount of the cash withdrawal
(including the transaction and interchange fee). Upon this verification, the
full amount is deducted from the user's bank account and the processing company
electronically authorizes the ATM to dispense the cash. Withdrawals made from
ATMs using credit cards are handled in a similar manner. Instead of deducting
the full amount from the ATM user's bank account, authorization is received from
the ATM user's credit card company before any cash is dispensed from the ATM.
The processing company deducts $.10 per transaction as a fee for its
services and remits the balance of the transaction and interchange fees to the
Company on a monthly basis who then makes the applicable payments to the owner
of the ATM and the location.
The processing company provides a report to the Company with each
payment. These reports include the number of transactions generated by each ATM
for the previous month and the amount of cash withdrawn. The Company uses these
reports to monitor the performance of the ATMs and insure that the ATM contains
the required amount of cash.
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Vaulting - The Company has entered into an agreement with an
unaffiliated company to supply and replenish ATMs with required amounts of cash
("vaulting"). The Company's cost for these vaulting services is based on the
actual amount of cash in the ATM on a daily basis and is computed at an annual
factor which is presently 12 1/2%. The Company also pays this company a fee when
it replenishes the ATM with cash. The Company is required to pay these vaulting
costs regardless of the number of transactions generated by the ATM.
Certain locations in which the Company has placed ATMs provide their own
vaulting services. In these instances, the Company does not incur any vaulting
costs and these locations receive an increased amount per approved transaction.
Decisions as to whether a location or the Company will vault the cash in an ATM
are made on a case by case basis.
Other Operating Costs - The Company has entered into agreements with
unaffiliated third parties to provide insurance, service and maintenance for the
ATMs it places in locations. The Company is required to pay these costs
regardless of the number of transactions generated by these ATMs.
These operating agreements are subject to termination or amendment.
Accordingly, the Company can not accurately determine the cost of these services
in the future. Because the Company enters into agreements with both ATM owners
and locations to pay them specific amounts based on the number of ATM
transactions, increases in these other operating expenses would have a negative
effect on the Company.
COMPANY OWNED ATMS
The Company plans to purchase ATMs and operate them for its own account.
As of December 31, 1997, the Company had purchased one ATM which it is operating
for its own account. By owning an ATM, the Company retains the per transaction
amount otherwise payable to the ATM owner. However, if the Company elects to
purchase an ATM and operate it for its own account (as opposed to selling it),
any profit that may have been realized on such sale would be eliminated. In
these instances, the Company will be relying on the per transaction amount
otherwise payable to the ATM owner to recover the cost of the ATMs it purchases.
The Company believes the per transaction amount it will retain from
direct ownership of ATMs (as opposed to paying these amounts to ATM owners) will
be sufficient for it to recover their cost. However, the Company's limited
operating history does not provide sufficient information to enable the Company
to determine if this belief is accurate. If an ATM owned by the Company does not
generated a sufficient number of transactions to enable the Company to recover
its cost, there will be a negative effect on the Company.
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The Company plans to use a significant portion of its future cash flow
to purchase ATMs for its own account. However, there is no assurance the
Company's future cash flow, if any, will enable it to purchase any ATMs. The
Company may also seek financing in order to purchase ATMs. There are no
arrangements or agreements for financing to purchase ATMs. There can be no
assurance any such financing will be available on terms acceptable to the
Company. Even if such financing becomes available, the Company has no commitment
to purchase any ATMs. Decisions regarding purchases of ATMs will be made based
on the financial position of the Company, the terms of available financing and
the Company's expected cash flow.
COMPETITION
The Company presently competes, and will be competing in the future,
with other companies who sell, own and operate ATMs. These competitors include
banks and other companies that operate in a manner similar to the Company. The
Company believes most of its competitors have greater financial and other
resources, more experience and personnel than the Company. The Company presently
competes and will be competing with these companies for sales of ATMs,
purchasing ATMs, seeking locations in which to place ATMs, required related
services and operating personnel.
The Company competes by describing its turn-key program to potential
purchasers of ATMs including the opportunity to receive monthly payments without
being involved in the operation of their ATM. The Company also describes its
turn-key program to locations including the benefits of having an ATM in a
locations without having any operating responsibility and the monthly payments
to be received. The Company believes the service and maintenance it provides for
ATMs are not competitive factors.
To the extent other companies offer purchasers of ATMs and/or the
locations in which they are placed similar or more favorable terms, the Company
will be negatively impacted. In such event, the Company may have to revise its
terms to remain competitive. The Company is and expects to continue to be for
the foreseeable future at a competitive disadvantage.
GOVERNMENT REGULATION
The Company believes its operations are not subject to any governmental
regulation that will adversely effect its business. Various regulations have
been proposed to reduce or eliminate amounts charged to users of ATMs. If any of
these regulations are enacted in the jurisdictions where the Company has placed
ATMs, the Company's revenues would decline and the Company would be negatively
impacted. The enactment of any such regulations may effectively prohibit the
Company from placing ATMs in such jurisdiction.
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EMPLOYEES
The Company presently employs 2 persons (who are its officers) on a
part-time basis. The Company also employs others on a part-time, as-needed,
basis for the installation of ATMs, clerical duties and other services. The
Company utilizes the services of independent contractors to sell ATMs and
intends to utilize the services of independent contractors to obtain locations
to place ATMs. The Company has no objective criteria for selecting these
independent contractors. All sales of ATMs and terms of location leases obtained
by independent contractors are subject to prior approval by the Company. The
Company does not anticipate the need for additional employees for the
foreseeable future.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
PLAN OF OPERATION
The Company's plan of operation for at least the next twelve months
includes continuing to sell ATMs at a profit, placing these ATMs in locations
and operating them. The Company has, to date, and plans to continue to sell ATMs
by describing its turn-key program to prospective purchasers. As part of its
sales efforts, the Company provides prospective purchasers with a descriptive
brochure and information regarding the number of transactions generated by ATMs
it is already operating and the amounts received by ATM owners. The Company has,
to date, and plans to continue to obtain location leases by informing locations
of the benefits of having a ATM in their premises and describing its turn-key
program. As part of its sales efforts, the Company provides locations with a
descriptive brochure.
In connection with its efforts to continue to sell ATMs and enter into
location leases, the Company plans to expand its marketing and sales efforts.
These marketing and sales efforts include additional advertising, attendance at
trade and other shows, and engaging additional independent contractors to sell
ATMs and obtain location leases.
Because of the uncertainty of its future resources, the Company has not
made any definitive plans as to the extent or type of additional marketing and
sales efforts it will undertake. Decisions regarding these efforts will be made
by management based on the Company's financial resources.
The Company's cash commitments for the next twelve months consist of
operating costs of the ATMs placed in locations that are not directly paid from
a portion of the transaction fees generated by the ATMs. Costs not directly paid
from a portion of transaction fees consist of vaulting, insurance and service
and
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maintenance. The Company believes it can make these cash payments solely from
its portion of transaction fees earned from the ATMs it operates. The Company
does not anticipate the need to raise additional funds for these cash
commitments or any other operating costs during at least the next twelve months.
The Company's plan of operation also includes the purchase of additional
ATMs for its own account. The Company plans to use a significant portion of its
future cash flow to purchase ATMs. However, there is no assurance that future
cash flow will enable the Company to purchase any ATMs for its own account. The
Company may also seek financing to purchase ATMs. Such financing may be in the
form of loans, which will probably be secured by the purchased ATMs, equity
financing or a combination thereof. The Company has not entered into any
arrangements or agreements to obtain any financing for the purchase of ATMs and
there is no assurance any financing for the purchase of ATMs will be available
on terms acceptable to the Company. Even if such financing becomes available,
the Company has no commitment to purchase any ATMs.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 1997 the Company had total current assets of $79,965
including cash of $63,278. The Company's total current liabilities of $59,005 as
of December 31, 1997 included $40,400 due for the purchase of ATMs sold. As of
December 31, 1997, the Company had working capital of $20,960. The Company has
no commitments for capital expenditures and has made no arrangements for
external sources of liquidity such as bank lines of credit.
The Company's initial financing was provided by the former shareholders
of Nationwide in the form of purchase of shares and contributions to
Nationwide's capital. These persons have not agreed to make any further
contributions to the Company should the need arise.
Management believes the Company will be able to meet its cash
requirements for at least the next twelve months from funds received from
additional sales of ATMs and profits realized from operation of ATMs. Management
believes the Company will not require additional financing for at least the next
twelve months.
RESULTS OF OPERATIONS
From November 26, 1996 (inception) through December 31, 1996, the
Company was primarily engaged in organizational matters, development of its
business plan, entering into agreements for the services required to operate
ATMs, sales efforts and obtaining locations for ATMs. During this period, the
Company did not conduct any other operations and was considered a development
stage company. During the year ended December 31, 1997, the Company began
selling ATMs, placing these ATMs in
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locations and operating them. As a result of its commencement of operations, the
Company ceased to be a development stage company.
For the year ended December 31, 1997, revenue from sales of ATMs
aggregated $248,561. The cost of ATMs sold aggregated $138,121, resulting in a
profit on sales of ATMs of $114,440. The Company did not sell any ATMs during
1996. The Company is unable to determine the total number of ATMs it will sell
during the next twelve months. However, management believes sales of ATMs and
the related profit will exceed 1997 amounts.
For the year ended December 31, 1997, transaction fees earned from the
operation of ATMs were $61,125. Related costs including payments to ATM owners,
ATM locations, transaction processing and vaulting aggregated $52,396, resulting
in a profit from the operation of ATMs of $8,729. The Company did not operate
any ATMs during 1996. Management believes transaction fees earned and related
costs will substantially increase during the next twelve months over fiscal
1997. The ATMs operated by the Company during 1997 were placed in locations
during various times during the year and were not in operation for the entire
year. These ATMs are expected to be in operation at all times in the future. The
Company also expects to continue to place additional ATMs in locations and
operate them.
Selling and administrative expenses for fiscal 1997 totaled $79,565
compared to $12,084 for fiscal 1996. During 1996, the Company was in existence
for approximately one month and did not conduct any operations. Accordingly,
these expenses for fiscal 1996 and 1997 are not comparable. Major items included
in selling and administrative expenses for 1997 were printing of brochures for
sales and marketing, office costs (including rent and telephone), and
compensation to independent contractors for the sale of ATMs. The Company
expects to increase the level of its operations in future periods and expects
its selling and administrative expenses will increase. Management believes the
rate of increase in such expenses will be substantially less than the increase
in revenues and related costs.
The Company has been in operation for a limited period of time.
Accordingly, its results of operations for the year ended December 31, 1997 are
not necessarily indicative of its results of operations for any future period.
ITEM 3. DESCRIPTION OF PROPERTY.
The Company leases approximately 500 square feet of office space at
22048 Sherman Way, Suite 213, Canoga Park, California 91303 pursuant to a month
to month lease which requires monthly payments of approximately $550. The
Company believes this office space will be sufficient for its needs for the
foreseeable future.
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ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of March 25, 1998, the Company had a total of 7,000,000 shares of
common stock outstanding. The following table sets forth the number of shares of
common stock of the Company owed as of such date by (i) each of the officers and
directors of the Company and (ii) all officers and directors of the Company as a
group. Shares of common stock listed in the following table are directly owned
by the persons indicated.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OUTSTANDING
OF BENEFICIAL OWNER (1) OWNERSHIP (2) COMMON STOCK
- - ----------------------- ------------- ------------
<S> <C> <C>
Joel Gillis (3) 2,750,000 39.3%
Edward Wishner(3) 2,750,000 39.3%
All officers and directors
as a group (2 persons) (3) 5,500,000 78.6%
</TABLE>
(1) The address of Mr. Gillis and Mr. Wishner is 22048 Sherman Way - Suite 213,
Canoga Park, California 91303.
(2) Beneficial owners of common stock possess sole voting and investment power
with respect to the shares listed opposite their names.
(3) Messrs. Gillis and Wishner have agreed that, in the event the Company's
audited net income for the year ending December 31, 1999 is less than
$1,500,000, they will each return 1,000,000 (aggregate - 2,000,000) of the
shares of common stock that they own to the Company for cancellation.
(4) To the Company's knowledge, there are no beneficial owners of five percent
or more of the Company's common stock except for Messrs. Gillis and Wishner.
ItEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.
The following sets forth certain information with respect to each of the
directors and officers of the Company.
<TABLE>
<CAPTION>
Name Age Position with Company
---- --- ---------------------
<S> <C> <C>
Joel Gillis 57 President and Director
Edward Wishner 59 Secretary, Treasurer and
Director
</TABLE>
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Directors are elected to an annual term that expires at the Company's
annual meeting of stockholders. There is no family relationship between the
Company's officers and directors
JOEL GILLIS, has been the President and a director of the Company since
May 12, 1997. He has been an officer and director of Nationwide since its
formation on November 26, 1996. Since 1989, he has been an Executive Council
Agent with New York Life Insurance Company. Mr. Gillis attended Ferris State
University and Northwestern University.
EDWARD WISHNER has been Secretary, Treasurer and a director of the
Company since May 12, 1997. He has been an officer and director of Nationwide
since its formation on November 26, 1996. Since 1985, he has been the sole owner
of Edward Wishner Company, a tax preparation and accounting company. Mr. Wishner
received a Bachelor of Science degree from New York University.
ITEM 6. EXECUTIVE COMPENSATION.
No officer or director of the Company has received any cash or cash
equivalent compensation from the Company through December 31, 1997. The Company
has no agreements, commitments or understandings to compensate any of its
officers or directors.
Incentive Stock Option Plan
The Company has adopted an Incentive Stock Option Plan (the "Plan"). The
purpose of the Plan is to secure and retain key employees of the Company. The
Plan authorizes the granting of options to key employees of the Company to
purchase an aggregate of 500,000 shares of Common Stock, subject to adjustment
for various forms of reorganizations that may occur. No options may be granted
after June 4, 2006 and the fair value of an option to each optionee cannot
exceed $100,000 per year. An employee must have six months of continuous
employment with the Company before he or she may exercise an option granted
under the Plan. The option exercise price may not be less than 100% of the fair
market value of the shares at the time of the granting of such option. In the
event an option is granted to a stockholder who owns 10% or more of the
Company's shares at the time of the grant of the option, the option price must
not be less than 110% of the fair market value of the shares at the time of such
grant. Options granted under the Plan are non-assignable and terminate three
months after employment by the optionee ceases, except if employment terminates
due to the disability of the optionee, in which event the option will expire
twelve months from the date employment ceases. The Plan is administered by the
Company's Board of Directors. No options have been granted under the Plan and
there are no agreements, arrangements or understanding for the Company to grant
any stock options.
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ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
As of May 12, 1997, the Company issued 2,750,000 shares of its common
stock to Joel Gillis and 2,750,000 shares of its common stock to Edward Wishner
(aggregate - 5,500,000 shares) in exchange for all of the outstanding shares of
common stock of Nationwide. Messrs. Gillis and Wishner have agreed that, in the
event the Company's audited net income for the year ending December 31, 1999 is
less than $1,500,000, they will each return 1,000,000 (aggregate - 2,000,000)
shares of common stock they own to the Company for cancellation.
Messrs. Gillis and Wishner formed Nationwide on November 26, 1996 and
purchased an aggregate of 100 shares (100%) of its common stock for cash of
$8,347. Messrs. Gillis and Wishner subsequently contributed an aggregate of
$10,287 to the capital of Nationwide. Messrs. Gillis and Wishner may be each be
deemed to be a promoter of the Company.
ITEM 8. LEGAL PROCEEDINGS.
There is no litigation pending against the Company.
ITEM 9. MARKET FOR COMMON EQUITY AND RELATED SHAREHOLDER MATTERS.
The Company's common stock is traded in the over-the-counter market and
listed in what are commonly called the "pink sheets" under the symbol "ATMH".
Trading activity in the Company's common stock started in October 1997 and the
Company is not aware of any trading activity in its common stock prior to that
date. The following quotations were obtained from Standard & Poor's Comstock
service and reflect inter-dealer prices without mark-up, mark-down or commission
and may not necessarily reflect actual transactions.
<TABLE>
<CAPTION>
Low High
Bid Bid
--- ---
<S> <C> <C>
Quarter ended December 31, 1997 $.50 $2.00
</TABLE>
As of March 25 1998, there were approximately 30 holders of record of
the Company's common stock. The number of shareholders does not take into
account shareholders for whom shares are being held in the name of brokerage
firms or clearing agencies. The Company has never declared or paid a cash
dividend on its common stock and no cash dividends are expected to be paid on
the common stock in the foreseeable future.
14
<PAGE> 15
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
<TABLE>
<CAPTION>
Number
Acquirer Date of Shares Consideration
- - -------- ---- --------- -------------
<S> <C> <C> <C>
Joel Gillis 5/12/97 2,750,000 (1)
Edward Wishner 5/12/97 2,750,000 (1)
</TABLE>
(1) Issued in exchange for all of the outstanding shares of Nationwide. See
"Item 7. Certain Relationships and Related Transactions."
No underwriters were involved in the issuance of the shares set forth
above and no commission or other compensation was paid to anyone in connection
therewith. Such issuance of the shares of common stock of the Company did not
involve a public offering within the meaning of Section 4(2) of the Securities
Act of 1933 because the shares were issued to acquirers, each of whom gave the
Company a signed representation of their intent to acquire their shares for
investment only and not with a view to the distribution thereof. Each of such
acquirers represented to the Company that their prior investment experience and
general knowledge of business and investment transactions enabled him to make an
informed investment decision with regard to acquiring such shares. Each of the
certificates representing the shares of common stock issued to the foregoing
acquirers has been affixed with a legend restricting transfer of the shares
represented thereby and the Company had placed a "stop transfer" order with its
transfer agent with respect to these shares.
In connection with its formation on May 30, 1996, the Company issued
1,500,000 shares of its common stock to the Trigate shareholders on a pro rata
basis in exchange for all of the 17,500,000 outstanding shares of Trigate in
order to effect an 11 2/3 for 1 reverse common stock split. No cash or other
consideration was paid or received by the Company, Trigate or the Trigate
shareholders in connection with this transaction. No underwriters were involved
in this transaction and no commission or other compensation was paid in
connection therewith. Neither Mr. Gillis nor Mr. Wishner were shareholders of
Trigate and neither of them received any of the shares issued by the Company in
exchange for the Trigate shares. The issuance by the Company of shares of common
stock in exchange for shares of Trigate did not involve a public offering within
the meaning of Section 4(2) of the Securities Act of 1933 because the shares
were issued to the existing shareholders of Trigate.
ITEM 11. DESCRIPTION OF SECURITIES.
The Company is authorized to issue 50,000,000 shares of common stock,
$.0001 par value per share. Holders of common stock (a) have equal ratable
rights to dividends when and if declared by the Board of Directors; (b) are
entitled to share ratably in all of the assets of the Company available for
distribution to
15
<PAGE> 16
holders of common stock upon the liquidation or other winding up of the Company;
(c) do not have preemptive, subscription or conversion rights; and (d) are
entitled to one noncumulative vote per share.
The Company is also authorized to issue 10,000,000 shares of preferred
stock, $.001 par value per share. The Board of Directors of the Company has the
right to determine the characteristics of any preferred stock including voting
rights, conversion rights, dividend requirements redemption provisions and
liquidation preferences. No shares of preferred stock have been issued and there
are no agreements, arrangements or understanding for the Company to issue any
shares of preferred stock.
ITEM 12. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 78.751 of the Nevada Revised Statutes permits extensive
indemnification of present and former directors, officers, employees and agents
of a Nevada corporation. Under Nevada law, in order for a corporation to provide
such indemnification, a disinterested majority of the corporation's board of
directors, independent legal counsel, or the shareholders must find as a matter
of fact that the director, officer, employee or agent acted, or failed to act,
in good faith and in a manner which he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceedings, had no reason to believe such conduct was
unlawful. Statutory indemnification is permissive except in the event of a
successful defense, in which case a director, officer, employee or agent must be
indemnified against expenses, including attorneys' fees, actually and reasonably
incurred in connection therewith. With regard to actions by or in the right of
the corporation, indemnification is permitted to persons adjudged not to be
liable for "negligence or misconduct" in connection with the performance of
their corporate duties, and indemnification is allowed with respect to expenses,
including attorneys' fees, actually and reasonably incurred by such persons in
connection with the defense or settlement of such action or suit. with regard to
all other actions, indemnification is permitted to persons acting in good faith
and in a manner which they believe to be in, or not opposed to, the best
interests of the corporation, and indemnification is allowed with respect to
expenses, including attorneys' fees, judgments, fines and amounts paid in
settlement by such persons in connection with the defense or settlement of such
an action or suit.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Commission such indemnification is
against public policy and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than
16
<PAGE> 17
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Company will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 13. FINANCIAL STATEMENTS.
The Company's audited consolidated financial statements as of December
31, 1997 are included elsewhere herein
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
There have been no disagreements with the Company's accountants on any
matter of accounting or financial disclosure.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements
1. Audited consolidated financial statements of ATM Holdings, Inc.
and subsidiary as of December 31, 1997 and for the year ended
December 31, 1997 and the period from November 26, 1996
(inception) through December 31, 1996.
(b) Exhibits
2. Agreement dated as of May 12, 1997 by and between ATM Holdings, Inc.,
Nationwide Automated Systems, Inc. and Shareholders.
3(i) Articles of Incorporation of ATM Holdings, Inc.
3(ii) By-laws of ATM Holdings, Inc.
4 Specimen certificate of common stock.
10.1 Stock Option Plan
10.2 Form of Lease Agreement between the Company and ATM owner.
10.3 Form of Lease Agreement between the Company and location (Company vaults
cash)
10.4 Form of Lease Agreement between the Company and location (Location
vaults cash)
10.5 Form of Processing Agreement.
21 Subsidiaries
17
<PAGE> 18
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, thereto duly authorized.
ATM HOLDINGS, INC.
March 26, 1998 By /s/ Joel Gillis
-------------------------------
Joel Gillis, President
March 26, 1998 By /s/ Edward Wishner
-------------------------------
Edward Wishner, Treasurer
(Principal Accounting and Financial Officer)
18
<PAGE> 19
ITEM 15 (a) FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Financial Statements Page No.
<S> <C>
1. Audited consolidated financial statements of ATM Holdings, Inc. and
subsidiary as of December 31, 1997 and for the year ended December 31,
1997 and the period from November 26, 1996 (inception) through December
31, 1996
</TABLE>
<PAGE> 20
ATM HOLDINGS, INC. AND SUBSIDIARY
AUDITED CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
<PAGE> 21
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Accountant's Report...................................... 1
Consolidated Balance Sheet as of December 31, 1997....... 2
Consolidated Statements of Operations - Year ended
December 31, 1997 and Period from November 26, 1996
(inception) through December 31, 1996................... 3
Consolidated Statement of Shareholders' Equity -
Period from November 26, 1996 (inception) to
December 31, 1997....................................... 4
Consolidated Statements of Cash Flows - Year ended
December 31, 1997 and Period from November 26, 1996
(inception) through December 31, 1996................... 5
Notes to Consolidated Financial Statements............... 6
</TABLE>
<PAGE> 22
Ira J. Berkowitz, C.P.A
An Accountancy Corporation
20750 Ventura Boulevard, Suite 208
Woodland Hills, California 91364
(818) 999-1032
ACCOUNTANT'S REPORT
The Board of Directors
ATM Holdings, Inc.
Canoga Park, California
We have audited the accompanying consolidated balance sheet of ATM Holdings,
Inc. and subsidiary as of December 31, 1997 and the related consolidated
statements of operations, shareholders' equity and cash flows for the year ended
December 31, 1997 and the period from November 26, 1996 (date of inception) to
December 31, 1996. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion of these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes assessing the accounting principles used and
significant estimates made by management as well as evaluating the overall
financial statement presentation. We believe that out audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly in all
material respects, the consolidated financial position of ATM Holdings, Inc. and
subsidiary as of December 31, 1997 and the consolidated results of its
operations and cash flows for the year ended December 31, 1997 and the period
from November 26, 1996 (date of inception) to December 31, 1996 in conformity
with generally accepted accounting principles.
/s/ Ira J. Berkowitz C.P.A.
March 9, 1998
1
<PAGE> 23
ATM HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1997
ASSETS
<TABLE>
<S> <C>
Current Assets:
Cash $ 63,278
Receivables 10,851
Prepaid expenses 5,836
--------
Total Current Assets 79,965
Equipment, at cost, less accumulated
depreciation of $1,993 7,207
Company owned ATM, at cost, less accumulated
depreciation of $1,500 8,500
Deposits 4,987
--------
Total Assets $100,659
========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 45,409
Accrued expenses 4,096
Deposits received 5,000
Federal income taxes 4,500
--------
Total Current Liabilities 59,005
--------
Shareholders' Equity:
Preferred stock, $.001 par value
Authorized 10,000,000 shares, none
issued -0-
Common stock, $.0001 par value
Authorized 50,000,000 shares,
issued and outstanding 7,000,000 shares 700
Additional paid-in capital 17,934
Retained earnings 23,020
--------
Total Shareholders' Equity 41,654
--------
Total Liabilities and Shareholders' Equity $100,659
========
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 24
ATM HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Period from
November 26, 1996
Year ended (inception) to
December 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
Sales of ATMs $248,561 $-0-
Cost of ATMs sold 138,121 -0-
-------- ---------
Profit on sales of ATMs 114,440 -0-
-------- ---------
Transaction fees earned 61,125 -0-
ATM operating costs 52,396 -0-
-------- ---------
Profit from ATM operations 8,729 -0-
-------- ---------
Total operating profit 119,169 -0-
Selling and administrative
expenses 79,565 12,084
-------- ---------
Income (loss) before provision
for income taxes 39,604 (12,084)
Provision for income taxes 4,500 -0-
-------- ---------
Net Income (Loss) $ 35,104 $ (12,084)
======== =========
Net Income (loss) per share $ .005 $-0-
======== =========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 25
ATM HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE PERIOD NOVEMBER 26, 1996 (INCEPTION)
TO DECEMBER 31, 1996 AND FOR THE YEAR ENDED
DECEMBER 31, 1997
<TABLE>
<CAPTION>
Additional Retained
Common Paid-in Earnings
Stock Capital (Deficit) Net
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Formation of company $ 700 7,647 8,347
Contributions to capital 10,287 10,287
Net (loss) (12,084) (12,084)
-------- -------- -------- --------
Balance, December 31,
1996 700 17,934 (12,084) 6,550
Net income 34,104 35,104
-------- -------- -------- --------
Balance, December 31, 1997 $ 700 17,934 23,020 41,654
======== ======== ======== ========
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 26
ATM HOLDINGS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Period from
November 26,
1996
Year ended (inception)to
December 31, December 31,
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 35,104 $(12,084)
Depreciation 3,340 153
Changes in assets:
Decrease (increase) in:
Receivables (10,851) -0-
Prepaid expenses (3,801) (2,035)
Deposits made for ATMs 9,783 (9,783)
Deposits (1,900) (3,087)
Changes in liabilities:
Increase (decrease) in:
Accounts payable 43,559 1,850
Accrued expenses 4,096 -0-
Deposits received for ATMs (20,000) 25,000
Federal income taxes 4,500 -0-
-------- --------
Cash provided by(used in)
operating activities 63,830 14
Cash flows from investing activities:
Purchase of equipment -0- (9,200)
Purchase of ATM (10,000) -0-
-------- --------
Cash (used in) investing
activities (10,000) (9,200)
-------- --------
Cash flows from financing
activities - Formation of
Nationwide and capital
contributions -0- 18,634
-------- --------
Net increase in cash 53,830 9,448
Cash at beginning of period 9,448 -0-
-------- --------
Cash at end of period $ 63,278 $ 9,448
======== ========
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 27
ATM HOLDINGS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
Note 1 - Organization and Basis of Presentation
ATM Holdings, Inc. (the "Company") was organized under the laws of the
State of Nevada on May 31, 1996. As of May 12, 1997 the Company acquired all of
the outstanding shares of common stock of Nationwide Automated Systems, Inc.
("Nationwide") in exchange for 5,500,000 shares of its previously unissued
shares of common stock. Nationwide was organized under the laws of the State of
California on November 26, 1996. Prior to the acquisition of Nationwide, the
Company was inactive and did not conduct any operations. The acquisition by the
Company of Nationwide has been treated as a "reverse acquisition" and accounted
for in a manner similar to a pooling of interests. Accordingly, the accompanying
consolidated financial statements include the accounts of Nationwide since its
formation on November 26, 1996. Unless the context indicates otherwise, the term
"Company" includes ATM Holdings, Inc.
and Nationwide.
Note 2 - Business
The Company sells, owns and operates automated teller machines (ATMs).
The Company did not conduct business operations through December 31, 1996 and
commenced business operations during the year ended December 31, 1997.
The Company sells ATMs and leases these ATMs from their owners. These
ATMs are placed in locations by the Company and are operated by the Company
without any involvement by the ATM owner or the location. ATM owners receive
monthly payments of a fixed amount for each transaction generated by their ATMs.
The Company is not required to pay ATM owners any minimum monthly amount.
Locations also receive a monthly payment of a fixed amount for each transaction
generated by the ATM in their premises. The Company is not required to pay
locations any minimum monthly amount.
The Company provides all of the services required to operate the ATMs it
places in locations. These services include processing of ATM transactions,
supplying and replenishing cash in the ATMs, service and maintenance, and
insurance. The Company has entered into agreements with unaffiliated parties to
provide all of these services and pays all of the related costs.
6
<PAGE> 28
ATM users are charged a fee for each ATM transaction. The amount of this
fee is determined by the Company and the Company receives all of these fees.
Amounts payable to ATM owners and locations are not based on the amount of the
fee charged to ATM users.
The company providing ATM processing services is paid a per transaction
amount which is not based on the amount of the fee charged to ATM users. The
companies providing the other ATM services are not paid a transaction amount nor
do any of them receive a portion of the fee charged to ATM users.
Note 2 - Summary of Significant Accounting Policies
Management Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from these estimates.
Sales of ATMs - Sales of ATMs are recorded at the time title passes to
the ATM purchaser. The cost of ATMs sold are recorded when the Company purchases
the ATM from the manufacturer.
Transaction fee revenue and related expenses - Transaction fees are
recorded as revenues when they are charged to the ATM user. Payments due to ATM
owners, locations and the processing company are recorded as expenses at the
same time.
Other operating expenses - The cost of cash in the ATMs operated by the
Company is based on the actual amount of cash in the ATMs and is recorded as an
expense as transaction fees are earned.
Equipment - Depreciation of equipment is computed using the
straight-line method over their five year estimated useful lives.
Company owned ATM - The Company owns one ATM which is depreciated using
the straight-line method over its five year estimated useful life.
Income (loss) per share - Income (loss) per share has been computed
based on the average number of shares of common stock outstanding during the
periods after giving retroactive effect to the shares issued to acquire
Nationwide as described in Note 1.
7
<PAGE> 29
The average number of shares used in the computation of income (loss) per share
was 7,000,000 for all periods presented.
Purchase deposits - Deposits made by the Company for purchases of ATMs
to be sold are recorded as purchase deposits. These deposits are charged to cost
of ATMs sold upon the sale of the related ATM.
Deposits received - Deposits received by the Company for the purchase of
ATMs are recorded as liabilities until the related ATM is sold. Upon the sale of
an ATM, the related deposit is included in revenues.
Note 3 - Receivables
Receivables at December 31, 1997 consist of transaction fees earned by
the Company which have not been received and amounts due from the company
providing vaulting services.
Note 4 - Accounts Payable
Accounts payable at December 31, 1997 consists of $40,460 payable for
the purchase of ATMs sold and $4,949 payable to ATM owners, locations and for
ATM processing services.
Note 5 - Leases
The Company leases ATMs from their owners for minimum five year terms.
Owners of ATMs receive monthly payments of a fixed amount for each transaction
generated by their ATM. There are no minimum payments required to be made to ATM
owners during the entire term of the lease. During the year ended December 31,
1997, lease expense to ATM owners aggregated $10,411.
The Company enters into leases with the locations in which ATMs are
placed for minimum five year terms. Locations receive monthly payments of a
fixed amount for each transaction generated by the ATM in their premises. There
are no minimum lease payments required to be made to locations during the entire
term of the lease. During the year ended December 31, 1997, lease expense to
locations aggregated $14,463.
Note 6 - Federal Income Taxes
The provision for federal income taxes has been computed by applying the
statutory rate to income before provision for income taxes after giving effect
to utilization of the Company's net operating loss carryforward. There are no
differences between income for financial statement purposes and income for
federal income tax purposes.
8
<PAGE> 30
Note 7 - Shareholders' Equity
In connection with the formation of Nationwide, its founders purchased
shares of its common stock for $8,347 in cash. Through December 31, 1996, these
founders contributed an additional $10,287 in cash to the capital of Nationwide.
Preferred Stock - The Company is authorized to issue a total of 10,000,000
shares of preferred stock with such designations as may be determined by its
Board of Directors. No shares of preferred stock are outstanding and the Company
has no agreements or commitments to issue any shares of preferred stock.
Common Stock - The Company is authorized to issue a total of 50,000,000
shares of common stock. As of December 31, 1997, 7,000,000 shares of common
stock were outstanding. The Company has no agreements or commitments to issue
any additional shares of common stock.
Return of Shares of Common Stock - The former shareholders of
Nationwide, who own an aggregate of 5,500,000 shares of the Company's common
stock, have agreed to return a total of 2,000,000 of their shares to the Company
for cancellation in the event the Company's audited net income for the year
ending December 31, 1999 is less than $1,500,000. No payment will be made to
such shareholders in the event these shares are returned.
9
<PAGE> 31
ATM HOLDINGS, INC.
FORM 10-SB
EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description Page
- - ----------- ----------- ----
<S> <C> <C>
2. Agreement dated as of May 12, 1997 by and between ATM Holdings,
Inc., Nationwide Automated Systems, Inc. and Shareholders.
3(i) Articles of Incorporation of ATM Holdings, Inc.
3(ii) By-laws of ATM Holdings, Inc.
4 Specimen certificate of common stock.
10.1 Stock Option Plan
10.2 Form of Lease Agreement between the Company and ATM owner.
10.3 Form of Lease Agreement between the Company and location (Company
vaults cash)
10.4 Form of Lease Agreement between the Company and location
(Location vaults cash)
10.5 Form of Processing Agreement.
21 Subsidiaries.
</TABLE>
<PAGE> 1
AGREEMENT made as of the 12th day of May 1997, by and between ATM
Holdings, Inc., a Nevada corporation ("Holdings"), the persons listed on the
signature page hereof (who are individually and collectively referred to as
"Shareholders"), and Nationwide Automated Systems, Inc., a California
corporation, ("Nationwide").
WHEREAS, Shareholders are the owners of all of the issued and
outstanding shares of Nationwide ("Nationwide Shares"), and
WHEREAS, Holdings desires to acquire all of the Nationwide Shares from
Shareholders in exchange for shares of Holdings' common stock, par value $.0001
per share ("Common Stock").
NOW THEREFORE, in consideration of the mutual promises, warranties,
representations, covenants and other statements contained herein, the parties
agree as follows:
1. Holdings shall acquire the Nationwide Shares from Shareholders in
exchange for Five Million Five Hundred Thousand (5,500,000) shares of its
authorized but unissued shares of Common Stock. Such shares are hereinafter
referred to as the "Acquisition Shares."
2. Holdings shall acquire the Nationwide Shares by issuing the
Acquisition Shares to the Shareholders as set forth on Exhibit A hereto. In no
event shall Holdings be required to issue more than an aggregate of Five Million
Five Hundred Thousand (5,500,000) shares of Common Stock in exchange for the
Nationwide Shares.
3. The closing of this transaction shall take place on the date first
above written. Such date is hereinafter referred to as the "Closing Date".
4. On the Closing Date, the following shall occur:
(a) Holdings shall deliver to Shareholders certificates representing an
aggregate of Five Million Five Hundred Thousand (5,500,000) of the Acquisition
Shares. Such certificates shall be issued in the names of Shareholders as set
forth on Exhibit A attached hereto. Certificates representing the Acquisition
Shares so delivered shall be issued in such denominations as may be reasonably
requested by Shareholders and shall bear such legends as may be appropriate and
reasonably requested by Holdings.
(b) Each Shareholder shall execute and deliver to Holdings an investment
letter with respect to the Acquisition Shares in such form as may reasonably be
requested by Holdings dated as of the Closing Date.
1
<PAGE> 2
(c) Each Shareholder shall deliver his Nationwide Shares to Holdings
with such signatures, signature guarantees, assignments, certificates and other
documentation which may reasonably be requested by Holdings.
(d) Each Shareholder shall execute and deliver to Holdings a release in
substantially the form attached hereto as Exhibit B dated as of the Closing
Date.
(e) Each of the present officers and directors of Holdings shall deliver
his written resignation to Holdings dated as of the Closing Date.
(f) It is the intention of all the parties hereto that the actions to be
taken pursuant to this Section shall be deemed to have been done simultaneously.
5. Representations and Warranties of Holdings:
(a) It is a corporation duly organized and validly existing under the
laws of the State of Nevada.
(b) Its Articles of Incorporation and By-Laws have not been modified or
amended and it has no knowledge of any proceeding or action that would affect
its Articles of Incorporation or By-Laws.
(c) It has authorized capital stock of 50,000,000 shares of common
stock, $.0001 par value per share and 10,000,000 shares of preferred stock,
$.001 per share.
(d) No shares of preferred stock are outstanding and One Million Five
Hundred Thousand (1,500,000) shares of Common Stock are outstanding. Except for
the transactions contemplated by this Agreement, it has no obligations,
commitments or agreements to issue any shares of preferred stock or additional
shares of Common Stock.
(e) Except for the transactions contemplated by this Agreement, it is
not a party to any contract or agreement.
(f) Its Board of Directors has approved the transactions contemplated by
this Agreement.
6. Representations and Warranties of Shareholders:
Each Shareholder represents and warrants as follows:
(a) Each Shareholder is the sole owner of the Nationwide Shares listed
opposite his name on Exhibit A.
2
<PAGE> 3
(b) The Nationwide Shares owned by each Shareholder listed opposite his
name on Exhibit A are free and clear of all claims, liens and encumbrances.
(c) Each Shareholder has full power and authority to enter into this
Agreement and perform the actions contemplated hereby.
(d) Notwithstanding any exemption that may be provided pursuant to any
federal, state or other regulation, each Shareholder agrees not to publicly sell
any of the Acquisition Shares for a period of two (2) years commencing with the
Closing Date and agrees to have the certificates representing the Acquisition
Shares stamped with a legend referencing this Agreement and the restriction on
the public sale of such shares as provided for herein.
(e) In the event that Holdings (including Nationwide) does not have
Consolidated Net Income (as herein defined) of at least One Million Five Hundred
Thousand ($1,500,000) Dollars for the fiscal year ending December 31, 1999,
Shareholders shall return to Holdings for cancellation an aggregate of Two
Million (2,000,000) of the Acquisition Shares. The shares subject to this return
provision are referred to herein as the "Return Shares". "Consolidated Net
Income" is defined as the consolidated net income of Holdings and its
subsidiaries (including Nationwide) as set forth on its audited consolidated
financial statements for the fiscal year ending December 31, 1999. Each
Shareholder agrees to place certificates representing his proportionate amount
of the Return Shares in escrow with Holdings and to have such certificates
affixed with a legend referencing this Agreement and the return provisions
provided for herein. Upon the attainment by Holdings of One Million Five Hundred
Thousand ($1,500,000) Dollars of Consolidated Net Income for the fiscal year
ending December 31, 1999, the Return Shares shall be released from escrow and
returned to Shareholders without the legend provided for herein.
(f) Each Shareholder is not an officer, director, affiliate or 5% or
more shareholder of any company or business entity that directly or indirectly
competes with the business of Nationwide.
(g) Each Shareholder agrees not to become an officer, director,
employee, affiliate or 5% or more shareholder of any company or business entity
that directly or indirectly competes with the business of Nationwide for a
period of five (5) years commencing with the Closing Date.
3
<PAGE> 4
7. Representations and Warranties of Nationwide:
(a) It is a corporation duly organized and existing under the laws of
the State of California and is qualified to do business under the laws of such
jurisdictions where it conducts its business.
(b) The only shares of capital stock that its has outstanding are the
Nationwide Shares and all of the Nationwide Shares are validly issued, fully
paid and non-assessable.
(c) It has no obligations, commitments or agreements to issue any
additional shares of common stock or any other equity security.
(d) It possesses all licenses, permits, etc. required and necessary for
it to conduct its operations in the normal course of business.
(e) Except for the contracts and agreements set forth on Exhibit C
attached hereto, it has no material agreements, contracts or commitments.
(f) Its audited balance sheet as of December 31, 1996 attached hereto as
Exhibit D is accurate as of such date and it owns and has title to all of the
assets included on such balance sheet free and clear of any claims or
encumbrances except as set forth thereon. As of December 31, 1996, it had no
liabilities other than those set forth on such balance sheet.
(g) Its unaudited balance sheet as of March 31, 1997 attached hereto as
Exhibit E is accurate as of such date and it owns and has title to all of the
assets included on such balance sheet free and clear of any claims or
encumbrances except as set forth thereon. As of March 31, 1997, it had no
liabilities other than those set forth on such balance sheet.
(h) Through the Closing Date, there has been no adverse change in its
financial condition or results of operations that would make such March 31, 1997
balance sheet inaccurate or misleading.
(i) It has filed all documents, statements and returns required by all
government agencies and all amounts due to any government agency have been paid
or provided for in its financial statements.
(j) It has no subsidiaries or is a party to any joint venture,
partnership or similar agreement.
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<PAGE> 5
(k) It has no litigation pending, or to the best of its knowledge, there
is no litigation threatened against it.
8. Neither this Agreement, nor any provision hereof, shall be amended or
modified or deemed amended or modified, except by an agreement in writing duly
subscribed and acknowledged with the same formality as this Agreement. Any
waiver by either party of any provision of this Agreement or any right or option
hereunder, shall not be controlling nor shall it prevent or stop such party from
thereafter enforcing such provision, right or option, and the failure of either
party to insist in any one or more instances upon the strict performances of any
of the terms and provisions of this Agreement by the other party shall not be
construed as a waiver or relinquishment for the future of any such term or
provision, but the same shall continue in full force and effect.
9. All matters affecting the interpretation of this Agreement and the
rights of the parties hereto shall be governed by the laws of the State of
California.
10. In the event that any provision of this Agreement shall be held
contrary to, or invalid under the laws of any country, state or other
jurisdiction, such invalidity shall not affect in any way any provision hereof,
all of which shall continue in full force and effect in any country, state or
jurisdiction in which such provision is legal and valid.
11. Each of the respective rights and obligations of the parties
hereunder shall be deemed independent and may be enforced independently,
irrespective of any other rights and obligations set forth herein.
12. This Agreement contains the entire understanding of the parties, who
hereby acknowledge that there have been and are no representations, warranties,
covenants or understandings other than those expressly set forth herein.
13. This Agreement may be signed in counterparts and, when all such
counterparts are considered together, they shall act as a formal and binding
document by those affixing their signature to such counterparts.
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IN WITNESS WHEREOF, the parties hereto have set their hands and seals as of the
day and year first above written.
ATM HOLDINGS, INC.
By/s/ Michael Roberts
-------------------------------
Michael Roberts, President
Attest:
/s/ Steve Doherty
- - -------------------------------
Steve Doherty, Secretary
NATIONWIDE AUTOMATED SERVICES, INC.
By /s/ Joel Gillis
-----------------------------
Joel Gillis, President
Attest:
/s/ Edward Wishner
- - -------------------------------
Edward Wishner, Secretary
SHAREHOLDERS:
/s/ Joel Gillis
-------------------------------
Joel Gillis
/s/ Edward Wishner
-------------------------------
Edward Wishner
6
<PAGE> 1
ARTICLES OF INCORPORATION
OF
ATM HOLDINGS, INC.
FIRST: The name of the corporation is ATM HOLDINGS, INC.
SECOND: Its principal office in the State of Nevada is located at 6550
South Pecos Road, Las Vegas, Nevada 89120. The name and address of its resident
agent is William Page, 6550 South Pecos Road, Las Vegas, Nevada 89120.
THIRD: The nature of the business or objects or purposes proposed to be
transacted, promoted or carried on are:
To engage in any lawful activity and to manufacture, purchase or
otherwise acquire, invest in, own, mortgage, pledge, sell, assign, and transfer
or otherwise dispose of, trade, deal in and deal with goods, wares and
merchandise and personal property of every class and description.
FOURTH: The total number of authorized shares of capital stock that may
be issued by the corporation is Sixty Million (60,000,000) shares, of which
Fifty Million (50,000,000) shares of a par value of One Hundredth of One Cent
($.0001) per share, amounting in the aggregate to Five Thousand ($5,000.00)
Dollars shall be common stock, and of which Ten Million (10,000,000) shares of
par value of One Tenth of One Cent ($.001) per share, amounting in the aggregate
to Ten Thousand ($10,000) Dollars shall be preferred stock.
The Board of Directors shall have the authority to fix, by resolution
adopted for the issuance of such preferred stock, the designations, preferences
and relative participating, voting, optional or other special rights, or
qualifications, limitations or restrictions of such stock.
FIFTH: The capital stock, after the amount of the subscription price, or
par value has been paid, shall not be subject to assessment to pay the debts of
the corporation.
SIXTH: The governing board of the Corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be provided by the By laws of the corporation,
provided that the number of directors shall not be reduced to less than three
(3), except that in cases where all of the shares of the corporation are owned
beneficially and of record by either one or two stockholders, the number of
directors may be less than three (3) but not less than the number of
stockholders.
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The names and post office addresses of the first Board of Directors,
which shall be two (2) in number, are as follows:
<TABLE>
<CAPTION>
Name Post Office Address
---- -------------------
<S> <C>
JOSH SOLOVY 20969 Ventura Boulevard
Woodland Hills,
California 91367
KAVIT VILASVORATARN 20969 Ventura Boulevard
Woodland Hills,
California 91367
</TABLE>
SEVENTH: In the furtherance, and not in limitation of the powers
confirmed by statute, the Board of Directors is expressly authorized to:
Subject to the By laws, if any, adopted by the stockholders, make, alter
or amend the By laws of the corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in, to authorize and cause to be executed mortgages and liens
upon the real and personal property of the corporation.
By resolution passed by a majority of the whole board, to designate one
(1) or more committees, each committee to consist of one (1) or more of the
directors of the corporation, which, to the extent provided in the resolution or
in the By laws of the corporation, shall have and may exercise the powers of the
Board of Directors in the management of the business and affairs of the
corporation and may authorize the seal of the Corporation to be affixed to all
papers which may require it. Such committee or committees shall have such name
or names as may be stated in the By laws of the corporation or as may be
determined from time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of stockholders holding
stock entitling them to exercise at least a majority of the voting power, given
at a stockholders' meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock issued
and outstanding, the Board of Directors shall have the power and authority to
sell, lease or exchange all of the property and assets of the corporation,
including its good will and its corporate franchises, upon such terms and
conditions as the Board of Directors deems expedient and in the best interests
of the corporation.
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<PAGE> 3
EIGHTH: The name and post office address of the incorporator signing the
Articles of Incorporation is as follows:
<TABLE>
<CAPTION>
Name Post Office Address
---- -------------------
<S> <C>
CARMELA MILILLO 570 Seventh Avenue
New York, N.Y. 10018
</TABLE>
NINTH: The corporation is to have perpetual existence.
TENTH: Meetings of stockholders may be held outside the State of Nevada,
if the By laws so provide. The books of the corporation may be kept (subject to
any provision contained in the Nevada Revised Statutes) outside the State of
Nevada at such place as may be designated from time to time by the Board of
Directors or in the By laws of the corporation.
ELEVENTH: No stockholder of the corporation shall, by reason of his
holding shares of any class of stock of the corporation, have any preemptive or
preferential right to purchase or subscribe to any class of stock of the
corporation now or hereafter to be authorized, or any notes, debentures, bonds,
or other securities convertible into or carrying options to purchase shares of
stock, now or hereafter to be authorized, whether or not the issuance of any
such shares, or such notes, debentures, bonds or other securities, would
adversely affect the dividend or voting rights of such shareholders, other than
such rights, if any, as the Board of Directors, in its discretion from time to
time may grant, and at such price as the Board of Directors, in its discretion,
may fix; and the Board of Directors may issue shares of any class of stock of
the corporation, or any notes, debentures, bonds or other securities convertible
into or carrying options or warrants to purchase shares of any class of stock of
the corporation, without offering any such shares of any class of stock, either
in whole or in part, to the existing stockholders of any class of stock.
TWELFTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed by statute, or by the Articles of Incorporation, and
all rights conferred upon stockholders herein are granted subject to this
reservation.
THIRTEENTH: To the fullest extent provided by Chapter 78 of the Nevada
Revised Statutes, as the same exists or may hereafter be amended, an officer or
director of the corporation shall not be liable to the corporation or its
stockholders for monetary damages due to breach of fiduciary duty as such
officer.
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<PAGE> 4
FOURTEENTH: To the fullest extent permitted by Chapter 78 of the Nevada
Revised Statutes, as the same exists or may hereafter be amended, an officer or
director of the corporation who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, including an action by
or in the right of the corporation, or is or was serving at the request of the
corporation as an officer, director, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall be indemnified by
the corporation against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding.
I. THE UNDERSIGNED, being the incorporator hereinbefore name, for the
purpose of forming a corporation pursuant to the General Corporation Law of the
State of Nevada, do make and file these Articles of Incorporation, hereby
declaring and certifying that the facts herein stated are true, and accordingly,
have hereunto set my hand this 20th day of May 1996.
/s/ CARMELA MILILLO
--------------------
CARMELA MILILLO
Incorporator
4
<PAGE> 1
BYLAWS OF
ATM HOLDINGS, INC.
A NEVADA CORPORATION
ARTICLE I
OFFICERS
Section 1. Principal Executive Office. The principal executive office of the
corporation is hereby fixed and located in the State of Nevada at 6550 South
Pecos Road, Las Vegas, Nevada 89120. The Board of Directors of the corporation
(herein called the "Board") is hereby granted full power and authority to change
the principal executive office or the location of any other corporate office
from one location to another. Any such change shall be noted on the Bylaws in
this Section, or this Section may be amended to state the new location.
Section 2. Other Offices. Branch or subordinate offices may, at any time, be
established by the Board at any place or places.
ARTICLE II
SHAREHOLDERS
Section 1. Shareholders of Record. Only shareholders of record on the books of
the corporation shall be entitled to be treated by the corporation as holders in
fact of the shares standing in their respective names, and the corporation shall
not be bound to recognize any equitable or other claim to, or interest in, any
shares on the part of any other person, firm or corporation, whether or not it
shall have express or other notice thereof, except as expressly provided by the
laws of Nevada.
Section 2. Place of Meetings. Meetings of shareholders shall be held either at
the principal executive office of the corporation or at any other place within
or without the State of Nevada which may be designated either by the Board or by
the written consent of all persons entitled to vote thereat, given either before
or after the meeting and filed with the Secretary.
Section 3. Annual Meetings. The annual meetings of shareholders shall be held on
July 15, at 11:00 o'clock a.m., local time, or such other date or such other
time as may be fixed by the Board; provided, however, that should said day fall
upon a Saturday, Sunday, or legal holiday observed by the corporation at its
principal executive office, then any such annual meeting of shareholders shall
be held at the same time and place on the next day thereafter ensuing which is a
full business day. At such meetings directors shall be elected and any other
proper business may be transacted.
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<PAGE> 2
Section 4. Special Meetings. Special meetings of the shareholders may be called
at any time by the Board, the Chairman of the Board, the President, or by the
holders of shares entitled to cast not less than 10 percent of the votes at such
meeting. Upon request in writing to the Chairman of the Board, the President,
any Vice President or the Secretary by any person entitled to call a special
meeting of shareholders, the officer forthwith shall cause notice to be given in
writing to the shareholders entitled to vote at a meeting will be held at a time
requested by the person or persons calling the meeting, not less than 35 nor
more than 60 days after the receipt of the request. If the notice is not given
within 20 days after receipt of the request, the persons entitled to call the
meeting may give the notice.
Section 5. Notice of Annual or Special Meetings. Written notice of each annual
or special meeting of shareholders shall be given not less than 10 nor more than
60 days before the date of the meeting to each shareholder entitled to vote
thereat. Such notice shall state the place, date, and hour of the meeting and
(a) in the case of a special meeting, the general nature of the business to be
transacted, and no other business may be transacted, or (b) in the case of the
annual meeting, those matters which the Board, at the time of the mailing of the
notice, intends to present for action by the shareholders, but, subject to the
provisions of applicable law, any proper matter may be presented at the meeting
for such action. The notice of any meeting at which directors are to be elected
shall include the names of nominees intended at the time of the notice to be
presented by management for election.
Notice of a shareholders' meeting shall be given either by mail or by
other means of written communication, addressed to the shareholder at the
address of such shareholder appearing on the books of the corporation or given
by the shareholder to the corporation for the purpose of notice, or, if no such
address appears or is given, at the place where the principal executive office
of the corporation is located or by publication at least once in a newspaper of
general circulation in the county in which the principal executive office is
located. Notice by mail shall be deemed to have been given at the time a written
notice is deposited in the United States mails, postage prepaid. Any other
written notice shall be deemed to have been given at the time it is personally
delivered to the recipient or is delivered to a common carrier for transmission,
or actually transmitted by the person giving the notice by electronic means, to
the recipient.
Section 6. Quorum. A majority of the shares entitled to vote, represented in
person or by proxy, shall constitute a quorum at any meeting of shareholders. If
a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and voting at the meeting (which shares voting
affirmatively also constitute at least a majority of the required quorum) shall
be the act of the shareholders, unless the vote of a greater number or
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<PAGE> 3
voting by classes is required by law or by the Articles of Incorporation and
except as provided in the following sentence. The shareholders present at a duly
called or held meeting at which a quorum is present may continue to do business
until adjournment, notwithstanding the withdrawal of enough shareholders to
leave less than a quorum, if any action taken (other than adjournment) is
approved by at least a majority of the shares required to constitute a quorum.
Section 7. Adjourned Meetings and Notice Thereof. Any shareholders' meeting,
whether or not a quorum is present, may be adjourned from time to time by the
vote of a majority of the shares, represented either in person or by proxy, but
in the absence of a quorum (except as provided in Section 6 of this Article II)
no other business may be transacted at such meeting.
It shall not be necessary to give any notice of the time and place of
the adjourned meeting or of the business to be transacted thereat, other than by
announcement at the meeting at which such adjournment is taken; provided,
however, when any shareholders' meeting is adjourned for more than 45 days, or
if after adjournment, a new record date is fixed for the adjourned meeting,
notice of the adjourned meeting shall be given as in the case of an original
meeting.
Section 8. Voting. The shareholders entitled to notice of any meeting or to vote
at any such meeting shall be only such persons in whose name shares stand on the
stock records of the corporation on the record date determined in accordance
with Section 9 of this Article II.
Voting shall, in all cases, be subject to the provisions of Chapter 78
of the Nevada Revised Statutes and to the following provisions:
(a) Subject to clause (g), shares held by an administrator, executor,
guardian, conservator or custodian may be voted by such holder either in person
or by proxy, without a transfer of such shares into the holder's name; and
shares standing in the name of a trustee may be voted by the trustee, either in
person or by proxy, but no trustee shall be entitled to vote shares held by such
trustee without a transfer of such shares into the trustee's name.
(b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into the receiver's name if authority
to do so is contained in an order of the court by which such receiver was
appointed.
(c) Subject to the provisions of Chapter 78 of the Nevada Revised
Statutes, and except where otherwise agreed in writing between the parties, a
shareholder whose shares are pledged shall
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<PAGE> 4
be entitled to vote such shares until the shares have been transferred into the
name of the pledgee, and thereafter the pledgee shall be entitled to vote the
shares so transferred.
(d) Shares standing in the name of a minor may be voted and the
corporation may treat all rights incident thereto as exercisable by the minor,
in person or by proxy, whether or not the corporation has notice, actual or
constructive, of the minority, unless a guardian of the minor's property has
been appointed and written notice of such appointment given to the corporation.
(e) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent or proxyholder as the bylaws of
such other corporation may prescribe or, in the absence of such provision, as
the Board of Directors of such other corporation may determine or, in the
absence of such determination, by the chairman of the board, president or any
vice president of such other corporation, or by any other person authorized to
do so by the chairman of the board, president or any vice president of such
other corporation. Shares which are purported to be voted or any proxy purported
to be executed in the name of a corporation (whether or not any title of the
person signing is indicated) shall be presumed to be voted or the proxy executed
in accordance with the provisions of this clause, unless evidence to the
contrary is produced.
(f) Shares of the corporation owned by any subsidiary shall not be
entitled to vote on any matter.
(g) Shares held by the corporation in a fiduciary capacity, and shares
of the corporation held in a fiduciary capacity by any subsidiary, shall not be
entitled to vote on any matter, except to the extent that the settlor or
beneficial owner possesses and exercises a right to vote or to give the
corporation binding instruction as to how to vote such shares.
(h) If shares stand of record in the names of two or more persons,
whether fiduciaries, members of a partnership, joint tenants, tenants in common,
husband and wife as community property, tenants by the entirety, voting
trustees, persons entitled to vote under a shareholder voting agreement or
otherwise, or if two or more persons (including proxyholders) have the same
fiduciary relationship respecting the same shares, unless the Secretary of the
corporation is given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the relationship wherein
it is so provided, their acts with respect to voting shall have the following
effect:
(i) If only one votes, such act binds all;
(ii) If more than one vote, the act of the majority so voting binds all;
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<PAGE> 5
(iii) If more than one vote, but the vote is evenly split on any
particular matter, each faction may vote the securities in question
proportionately.
If the instrument so filed or the registration of the shares shows that
any such tenancy is held in unequal interests, a majority or even split for the
purpose of this section shall be a majority or even split in interest.
Elections need not be by ballot; provided, however, that all elections
for director must be by ballot upon demand made by a shareholder at the meeting
and before the voting begins.
In any election of directors, the candidates receiving the highest
number of votes up to the number of directors to be elected shall be elected.
Section 9. Record Date. The Board may fix, in advance, a record date for the
determination of the shareholders entitled to notice of any meeting or to vote,
or entitled to receive payment of any dividend or other distribution, or any
allotment of rights, or to exercise rights in respect to any other lawful
action. The record date so fixed shall be not more than 60 nor less than 10 days
prior to the date of the meeting nor more than 60 days prior to any other
action. When a record date is so fixed, only shareholders of record on that date
are entitled to notice of and to vote at the meeting or to receive the dividend,
distribution, or allotment of rights, or to exercise of the rights, as the case
may be, notwithstanding any transfer of shares on the books of the corporation
after the record date. A determination of shareholders of record entitled to
notice of or to vote at a meeting of shareholders shall apply to any adjournment
of the meeting unless the Board fixes a new record date for the adjourned
meeting. The Board shall fix a new record date if the meeting is adjourned for
more than 45 days.
If no record date is fixed by the Board, the record date for determining
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the business day next preceding the day on which
notice is given or, if notice is waived, at the close of business of the
business day next preceding the day on which the meeting is held. The record
date for determining shareholders for any purpose other than set forth in this
Section 9 or Section 11 of this Article II shall be at the close of business on
the day on which the Board adopts the resolution relating thereto, or the 60th
day prior to the date of such other action, whichever is later.
Section 10. Voting Record. The officer or agent having charge of the stock
transfer books for shares of the corporation shall make, at least 10 days before
such meeting of shareholders, a complete record of the shareholders entitled to
vote at each meeting of
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<PAGE> 6
shareholders or any adjournment thereof, arranged in alphabetical order, with
the address of and the number of shares held by each. The record, for a period
of 10 days prior to such meeting, shall be kept on file at the principal
executive office of the corporation, and shall be subject to inspection by any
shareholder for any purpose germane to the meeting at any time during usual
business hours. Such record shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting for the purposes thereof. The original
stock transfer books shall be the prima facie evidence as to who are the
shareholders entitled to examine the record or transfer books or to vote at any
meeting of shareholders.
Section 11. Action Without Meeting. As provided in Chapter 78 of the Nevada
Revised Statutes, any action which may be taken by the vote of shareholders at
an annual or special meeting, may be taken at any annual or special meeting of
shareholders, may be taken without a meeting and without prior notice if a
consent in writing, setting forth the action so taken, shall be signed by the
holders of outstanding shares having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted. Unless a record date
for voting purposes be fixed as provided in Section 9 of this Article II, the
record date for determining shareholders entitled to give consent pursuant to
this Section 11, when no prior action by the Board has been taken, shall be the
day on which the first written consent is given.
Section 12. Proxies. At any meeting of the shareholders of the corporation any
shareholder may be represented and vote by a proxy or proxies appointed by an
instrument in writing. In the event that any such instrument in writing shall
designate two or more persons to act as proxies, a majority of such persons
present at the meeting, or, if only one shall be present, then that one shall
have and may exercise all of the power conferred by such written instrument upon
all of the persons so designated unless the instrument shall otherwise provide.
No such proxy shall be valid after the expiration of six months from the
date of its execution, unless coupled with an interest, or unless the person
executing it specifies therein the length of time for which it is to continue in
force, which in no case shall exceed one year from the date of its execution.
Subject to the above, any proxy duly executed is not revoked and continues in
full force and effect until an instrument revoking it or a duly executed proxy
bearing a later date is filed with the Secretary of the corporation.
Section 13. Inspectors of Election. In advance of any meeting of shareholders,
the Board may appoint inspectors of election to act at such meeting and any
adjournment thereof. If inspectors of
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election are not so appointed, or if any person so appointed fails to appear or
refuses to act, the chairman of any such meeting may, and on the request of any
shareholder or shareholder's proxy shall, make such appointment at the meeting.
The number of inspectors shall be at the discretion of the Board. If appointed
at a meeting on the request of one or more shareholders or proxies, the majority
of shares present shall determine how many inspectors are to be appointed.
The duties of such inspectors shall be as prescribed by Chapter 78 of
the Nevada Revised Statutes and shall include: determining the number of shares
outstanding and the voting power of each; determining the shares represented at
the meeting; determining the existence of a quorum; determining the
authenticity, validity, and effect of proxies; receiving votes, ballots, or
consents; hearing and determining all challenges and questions in any way
arising in connection with the right to vote; counting and tabulating all votes
or consents, determining when the polls shall close; determining the result; and
doing such acts as may be proper to conduct the election or vote with fairness
to all shareholders. The decision, act, or certificate of a majority of the
inspectors is effective in all respects as the decision, act, or certificate of
all.
Section 14. Conduct of Meeting. The Chairman of the Board, or if no such office
exists, the President shall preside as chairman at all meetings of the
shareholders. The chairman shall conduct each such meeting in a businesslike and
fair manner, but shall not be obligated to follow any technical, formal or
parliamentary rules or principles of procedure. The chairman's rulings on
procedural matters shall be conclusive and binding on all shareholders, unless,
at the time of a ruling, a request for a vote is made to the shareholders
entitled to vote and represented in person or by proxy at the meeting, in which
case the decision of a majority of such shares shall be conclusive and binding
on all shareholders. Without limiting the generality of the foregoing, the
chairman shall have all of the power usually vested in the chairman of a meeting
of shareholders.
ARTICLE III
DIRECTORS
Section 1. Powers. Subject to limitations of the Articles of Incorporation, of
these Bylaws, and Chapter 78 of the Nevada Revised Statutes relating to action
required to be approved by the shareholders or by the outstanding shares, the
business and affairs of the corporation shall be managed and all corporate
powers shall be exercised by or under the direction of the Board. The Board may
delegate the management of the day-to-day operation of the business of the
corporation to a management company or other person provided that the business
and affairs of the corporation shall be managed and all corporate powers shall
be exercised under the ultimate
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direction of the Board. Without prejudice to such general powers, but subject to
the same limitations, it is hereby expressly declared that the Board shall have
the following powers in addition to the other powers enumerated in these Bylaws:
(a) To select and remove all the officers, agents, and employees of the
corporation, prescribe the powers and duties for them as may not be inconsistent
with law, the Articles of Incorporation or these Bylaws, fix their compensation,
and require from them security for faithful service.
(b) To conduct, manage, and control the affairs and business of the
corporation and to make such rules and regulations therefor not inconsistent
with law, the Articles of Incorporation or these Bylaws, as they may deem best.
(c) To adopt, make, and use a corporate seal, and to prescribe the forms
of certificates of stock, and to alter the form of such seal and of such
certificates from time to time as they may deem best.
(d) To authorize the issuance of shares of stock of the corporation from
time to time, upon such terms and for such consideration as may be lawful.
(e) To borrow money and incur indebtedness for the purposes of the
corporation, and to cause to be executed and delivered therefor, in the
corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages,
pledges, hypothecations, or other evidences of debt and securities therefor.
Section 2. Number and Qualification of Directors. The number of directors of the
corporation shall be not less than three (3) nor more than nine (9) until
changed by amendment of this Section 2 of Article III by a resolution adopted by
the Board provided, however, that an amendment reducing the minimum number of
directors on a fixed numbered Board, or the minimum number of directors on a
variable numbered Board, to a number less than three (3) must be pursuant to
Chapter 78 of the Nevada Revised Statutes, as amended. Until changed as herein
provided, the number of directors of this corporation is hereby fixed at three
(3). The number so fixed may be changed, within the limits specified in this
Section 2, by approval of the Board at a duly held meeting at which a quorum is
present, or by the unanimous written consent of the Board.
Section 3. Election and Term of Office. The directors shall be elected at each
annual meeting of shareholders, but if any such annual meeting is not held or
the directors are not elected thereat, the directors may be elected at any
special meeting of shareholders held for that purpose. Each director shall hold
office until the next annual meeting and until a successor has been elected and
qualified.
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Section 4. Vacancies. Any director may resign effective upon giving written
notice to the Chairman of the Board, the President, the Secretary, or the Board,
unless the notice specifies a later time for the effectiveness of such
resignation. If the resignation is effective at a future time, a successor may
be elected to take office when the resignation becomes effective.
Vacancies in the Board, except those existing as a result of a removal
of a director, may be filled by a majority of the remaining directors, though
less than a quorum, or by a sole remaining director, and each director so
elected shall hold office until the next annual meeting and until such
director's successor has been elected and qualified.
A vacancy or vacancies in the Board shall be deemed to exist in case of
the death, resignation, or removal of any director, or if the authorized number
of directors be increased, or if the shareholders fail, at any annual or special
meeting of shareholders at which any director or directors are elected, to elect
the full authorized number of directors to be voted for at that meeting.
The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors. Any such election may be
held at a special meeting of shareholders which is called and held for that
purpose on by action without a meeting as provided for herein.
Any director may be removed from office by the vote or written consent
of stockholders representing not less than two-thirds of the issued and
outstanding capital stock entitled to voting power.
The Board may declare vacant the office of a director who has been
declared of unsound mind by an order of court or convicted of a felony.
No reduction of the authorized number of directors shall have the effect
of removing any director prior to the expiration of the director's term of
office.
Section 5. Place of Meetings. Regular or special meetings of the Board shall be
held at any place within or without the State of Nevada which has been
designated from time to time by the Board. In the absence of such designation,
regular meetings shall be held at the principal executive office of the
corporation.
Section 6. Regular Meetings. Immediately following each annual meeting of
shareholders the Board shall hold a regular meeting for the purpose of the
election of officers and the transaction of other business.
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Section 7. Special Meetings. Special meetings of the Board for any purpose or
purposes may be called at any time by the Chairman of the Board, the President,
any Vice President, the Secretary, or by any two directors.
Special meetings of the Board shall be held upon four days written
notice or 48 hours notice given personally or by telephone, telegraph, telex, or
other similar means of communication. Any such notice shall be addressed or
delivered to each director at such director's address as it is shown upon the
records of the corporation or as may have been given to the corporation by the
director for purposes of notice or, if such address is not shown on such records
or is not readily ascertainable, at the place in which the meetings of the
directors are regularly held.
Notice by mail shall be deemed to have been given at the time a written
notice is deposited in the United States mails, postage prepaid. Any other
written notice shall be deemed to have been given at the time it is personally
delivered to the recipient or is delivered to a common carrier for transmission,
or actually transmitted by the person giving the notice by electronic means, to
the recipient. Oral notice shall be deemed to have been given at the time it is
communicated, in person or by telephone or wireless, to the recipient or to a
person at the office of the recipient whom the person giving the notice has
reasons to believe will promptly communicate it to the recipient.
Section 8. Quorum. A majority of the authorized number of directors constitutes
a quorum of the Board for the transaction of business, except to adjourn as
hereinafter provided. Every act or decision done or made by a majority of the
directors present at a meeting duly held at which a quorum is present shall be
regarded as the act of the Board, unless a greater number be required by law or
by the Articles of Incorporation. A meeting at which a quorum is initially
present may continue to transact business notwithstanding the withdrawal of
directors, if any action taken is approved by at least a majority of the
required quorum.
Section 9. Participation by Electronic Means. Except as may be otherwise
provided by the Articles of Incorporation or Bylaws, any member of the Board or
any committee designated by such Board may participate in a meeting of the Board
or committee by means of conference telephone or similar communications
equipment by which all persons participating in the meeting can hear each other
at the same time. Such participation shall constitute presence in person at the
meeting.
Section 10. Waiver of Notice. Notice of a meeting need not be given to any
director who signs a waiver of notice or a consent to holding the meeting or an
approval of the minutes thereof, whether before or after the meeting, or who
attends the meeting without protesting, prior thereto or at its commencement,
the lack of
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notice to such director. All such waivers, consents and approvals shall be filed
with the corporate records or made a part of the minutes of the meeting.
Section 11. Adjournment. A majority of the directors present, whether or not a
quorum is present, may adjourn any directors' meeting to another time and place.
Notice of the time and place of holding an adjourned meeting need not be given
to absent directors if the time and place be fixed at the meeting adjourned,
except as provided in the next sentence. If the meeting is adjourned for more
than 24 hours, notice of any adjournment to another time or place shall be given
prior to the time of the adjourned meeting to the directors who were not present
at the time of the adjournment.
Section 12. Fees and Compensation. Directors and members of committees may
receive such compensation, if any, for their services, and such reimbursement
for expenses, as may be fixed or determined by the Board.
Section 13. Action Without Meeting. Any action required or permitted to be taken
by the Board may be taken without a meeting if all members of the Board shall
individually or collectively consent in writing to such action. Such consent or
consents shall have the same effect as a unanimous vote of the Board and shall
be filed with the minutes of the proceedings of the Board.
Section 14. Rights of Inspection. Every director shall have the absolute right
at any reasonable time to inspect and copy all books, records, and documents of
every kind and to inspect the physical properties of the corporation and also of
its subsidiary corporations, domestic or foreign. Such inspection by a director
may be made in person or by agent or attorney and includes the right to copy and
obtain extracts of all such books, records and documents.
Section 15. Committees. The Board may designate one or more committees, each
consisting of two or more directors, and delegate to such committees any of the
authority of the Board except with respect to:
(a) The approval of any action for which the Nevada Revised Statutes
require shareholders' approval or approval of the outstanding shares;
(b) The filling of vacancies on the Board or in any committee;
(c) The fixing of compensation of the directors for serving on the Board
or on any committee;
(d) The amendment or repeal of bylaws or the adoption of new bylaws;
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(e) The amendment or repeal of any resolution of the Board which by its
express terms is not so amendable or repealable;
(f) A distribution to the shareholders of the corporation except at a
rate or in a periodic amount or within a price range determined by the Board; or
(g) The appointment of other committees of the Board or the members
thereof.
Any such committee must be designated, and the members or alternate
members thereof appointed, by resolution adopted by a majority of the authorized
number of directors, and any such committee may be designated an Executive
Committee or by such other name as the Board shall specify. Alternate members of
a committee may replace any absent member at any meeting of the committee. The
Board shall have the power to prescribe the manner in which proceedings of any
such committee shall be conducted. In the absence of any such prescription, such
committee shall have the power to prescribe the manner in which its proceedings
shall be conducted. Unless the Board or such committee shall otherwise provide,
the regular and special meetings and other actions of any such committee shall
be governed by the provisions of Section 5, 6 and 7 of this Article III
applicable to meetings and actions of the Board. Minutes shall be kept of each
meeting of each committee.
ARTICLE IV
OFFICERS
Section 1. Officers. The officers of the corporation shall be a President, a
Secretary, and a Treasurer. The corporation may also have, at the discretion of
the Board, a Chairman of the Board, one or more Vice-Presidents, one or more
Assistant Secretaries, one or more Assistant Treasurers, and such other officers
as may be elected or appointed in accordance with the provisions of Section 3 of
this Article IV.
Section 2. Election. The officers of the corporation, except such officers as
may be elected or appointed in accordance with the provisions of Section 3 or
Section 5 of this Article, shall be chosen annually by, and shall serve at the
pleasure of, the Board and shall hold their respective offices until their
resignation, removal, or other disqualification from service, or until their
respective successors shall be elected.
Section 3. Subordinate Officers. The Board may elect, and may empower the
President to appoint, such other officers as the business of the corporation may
require, each of whom shall hold office for such period, have such authority,
and perform such duties as are provided in these Bylaws or as the Board may from
time to time determine.
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Section 4. Removal and Resignation. Any officer may be removed at any time,
either with or without cause, by the Board or, by any officer upon whom such
power of removal may be conferred by the Board except in a case of an officer
chosen by the Board. Any such removal shall be subject to the rights, if any, of
the officer under any contract of employment.
Any officer may resign at any time by giving written notice to the
corporation, but without prejudice to the rights, if any, of the corporation
under any contract to which the officer is a party. Any such resignation shall
take effect at the date of the receipt of such notice or at any later time
specified therein and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective.
Section 5. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification, or any other cause shall be filled in the manner
prescribed in these Bylaws for regular election or appointment to such office.
Section 6. Chairman of the Board. The Chairman of the Board, if there shall be
such an officer, shall, if present, preside at all meetings of the Board and
exercise and perform such other powers and duties as may be from time to time
assigned by the Board.
Section 7. President. Subject to such powers, if any, as may be given by the
Board to the Chairman of the Board, if there be such an officer, the President
is the general manager and chief executive officer of the corporation and has,
subject to the control of the Board, general supervision, direction, and control
of the business and officers of the corporation. The President shall preside at
all meetings of the shareholders and, in the absence of the Chairman of the
Board, or if there be none, at all meetings of the Board. The President has the
general powers and duties of management usually vested in the office of
president and general manger of a corporation and such other powers and duties
as may be prescribed by the Board.
Section 8. Vice Presidents. In the absence or disability of the President, the
Vice Presidents in order of their rank as fixed by the Board or, if not ranked,
the Vice President designated by the Board, shall perform all the duties of the
President, and when so acting shall have all the powers of, and be subject to,
all the restrictions upon the President. The Vice Presidents shall have such
other powers and perform such other duties as from time to time may be
prescribed for them respectively by the Board.
Section 9. Secretary. The Secretary shall keep or cause to be kept, at the
principal executive office and such other place as the Board may order, a book
of minutes of all meetings of shareholders, the Board, and its committees, with
the time and place of holding,
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whether regular or special and, if special, how authorized, the notice thereof
given, the names of those present at Board and committee meetings, the number of
shares present or represented at shareholders' meetings, and the proceedings
thereof. The Secretary shall keep, or cause to be kept, a copy of the Bylaws of
the corporation at the principal executive office or business office in
accordance with Chapter 78 of the Nevada Revised Statutes.
The Secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, if one be appointed, a share register, or a duplicate share register,
showing the names of the shareholders and their addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the same, and the number and date of cancellation of every certificate
surrendered for cancellation.
The Secretary shall give, or cause to be given, notice of all the
meetings of the shareholders and of the Board and of any committees thereof
required by these Bylaws or by law to be given, shall keep the seal of the
corporation in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the Board.
Section 10. Treasurer. The Treasurer is the chief financial officer of the
corporation and shall keep and maintain, or cause to be kept and maintained,
adequate and correct accounts of the properties and business transactions of the
corporation, and shall send or cause to be sent to the shareholders of the
corporation such financial statements and reports as are by law or these Bylaws
required to be sent to them. The books of account shall at all times be open to
inspection by any director.
The Treasurer shall deposit all moneys and other valuables in the name
and to the credit of the corporation with such depositories as may be designated
by the Board. The Treasurer shall disburse the funds of the corporation as may
be ordered by the Board, shall render to the President and directors, whenever
they request it, an account of all transactions as Treasurer and of the
financial condition of the corporation, and shall have such other powers and
perform such other duties as may be prescribed by the Board.
ARTICLE V
DIVIDENDS
Section 1. Subject to the provisions of the Articles of Incorporation and the
laws of the State of Nevada, the Board of Directors may declare dividends
whenever, and in such amounts, as in the Board's opinion the condition of the
affairs of the corporation shall render such advisable.
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ARTICLE VI
FINANCE
Section 1. Reserve Funds. The Board of Directors, in its discretion, may set
aside from time to time, out of the net profits or earned surplus of the
corporation, such sum or sums as it deems expedient as a reserve fund to meet
contingencies, for equalizing dividends, for maintaining any property of the
corporation, and for any other purpose.
Section 2. Banking. The moneys of the corporation shall be deposited in the name
of the corporation in such bank or banks or trust company or trust companies, as
the Board shall designate, and may be withdrawn only on checks signed in the
name of the corporation by such person or persons as the Board may direct by
appropriate resolution. Notes and commercial paper shall be signed in the name
of the corporation by such officer or officers or agent or agents as shall be
authorized from time to time by the Board by appropriate resolution.
ARTICLE VII
SHARES AND TRANSFER OF SHARES
Section 1. Regulation. The Board may make such rules and regulations as it may
deem appropriate concerning the issuance, transfer and registration of
certificates for shares of the corporation, including the appointment of
transfer agents and registrars.
Section 2. Certificates of Stock. Every holder of shares of the corporation
shall be entitled to have a certificate signed in the name of the corporation by
the President or a Vice President and by the Treasurer or an Assistant Treasurer
or the Secretary or an Assistant Secretary, certifying the number of shares and
the class or series of shares owned by the shareholder. Any or all of the
signatures on the certificate may be facsimile. If any officer, transfer agent,
or registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased to be such officer, transfer agent, or registrar
before such certificate is issued, it may be issued by the corporation with the
same effect as if such person were an officer, transfer agent, or registrar at
the date of issue.
Section 3. Lost, Stolen or Destroyed Certificates. Except as provided in this
Section, no new certificate for shares shall be issued in lieu of an old one
unless the latter is surrendered and canceled at the same time. The Board may,
however, if any certificate for shares is alleged to have been lost, stolen or
destroyed, authorize a new certificate in lieu thereof, and the corporation may
require the posting of a bond or other adequate
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security sufficient to indemnify it against any claim that may be made against
it (including expense or liability) on account of the alleged loss, theft, or
destruction of such certificate or the issuance of such new certificate.
Section 4. Transfer Agent. Unless otherwise specified by the Board by
resolution, the Secretary of the corporation shall act as transfer agent of the
certificates representing the shares of stock of the corporation. The Secretary
shall maintain a stock transfer book, the stubs in which shall set forth among
other things, the names and addresses of the holders of all issued shares of the
corporation, the number of shares held by each, the certificate numbers
representing such shares, the date of issue of the certificates representing
such shares, and whether or not such shares originate from original issue or
from transfer. The names and addresses of the shareholders as they appear on the
stubs of the stock transfer book shall be conclusive evidence as to who are the
shareholders of record and as such entitled to receive notice of the meetings of
shareholders; to vote at such meetings; to examine the list of the shareholders
entitled to vote at meetings; to receive dividends; and to own, enjoy and
exercise any other property or rights deriving from such shares of the
corporation. Each shareholder shall be responsible for notifying the Secretary
in writing of any change in his or her name or address and failure so to do will
relieve the corporation, its directors, officers and agents, from liability for
failure to direct notices or other documents, or pay over or transfer dividends
or other property or rights, to a name or address other than the name and
address appearing on the stub of the stock transfer book.
Section 5. Close of Transfer Book and Record Date. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders, or any adjournment thereof, or entitled to receive payment of any
dividend, or in order to make a determination of shareholders for any other
proper purpose, the Board may provide that the stock transfer books shall be
closed for a stated period, but not to exceed, in any case, 60 days. If the
stock transfer books shall be closed for the purpose of determining shareholders
entitled to notice of, or to vote at a meeting of shareholders, such books shall
be closed for at least ten days immediately preceding such meeting. In lieu of
closing the stock transfer books, the Board may fix in advance a date as the
record date for any such determination of shareholders, such date in any case to
be not more than 60 days and, in case of a meeting of shareholders, not less
than 10 days prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board declaring
such dividend is adopted, as the
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case may be, shall be the record date for such determination of shareholders.
When determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof.
ARTICLE VIII
OTHER PROVISIONS
Section 1. Inspection of Corporate Records.
(a) A shareholder or shareholders holding at least 15% in the aggregate
of the outstanding voting shares of the corporation, upon five business days
written demand upon the corporation, or any judgment creditor of the
corporation, without prior demand, shall have an absolute right to do any of the
following:
(i) Inspect and copy the record of shareholders' names and
addresses and shareholdings during usual business hours; or
(ii) Obtain from the transfer agent, if any, or custodian of the
records for the corporation, and upon the tender of its usual
charges for such a list (the amount of which charges shall be
stated to the shareholder by the transfer agent upon request), a
list of the shareholders' names and addresses who are entitled to
vote for the election of directors and their shareholdings, as of
the most recent record date for which it has been compiled or as
of a date specified by the shareholder subsequent to the date of
demand; and
(iii) Inspect the books of account and all financial records of
the corporation.
(b) All costs for making extracts or conducting an audit shall be borne
by the shareholder or shareholders exercising his, hers or their rights under
subsection (a) above.
(c) An inspection authorized by section (a) above may be denied to such
stockholder or other person upon such stockholder's refusal to furnish to the
corporation an affidavit that such inspection, extracts or audit is not desired
for any purpose not related to his interest in the corporation as a shareholder
or which is not in the interest of a business or object other than the business
of the corporation and that such stockholder has not at any time sold or offered
for sale or abetted any person in procuring any such record of stockholders for
any such purpose.
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(d) The record of shareholders shall also be open to inspection and
copying by any shareholder or holder of a voting trust certificate at any time
during usual business hours upon written demand on the corporation, for a
purpose reasonably related to such holder's interest as a shareholder or holder
of a voting trust certificate.
(e) Any inspection and copying under this Article may be made in person
or by agent or attorney.
Section 2. Inspection of Bylaws. The corporation shall keep in its principal
office in the State of Nevada or, if its principal executive office is not in
such State, at its principal business office, the original or a copy of these
Bylaws as amended to date, which shall be open to inspection by shareholders at
all reasonable times during usual office hours. If the principal executive
office of the corporation is outside the State of Nevada and the corporation has
no principal business office in such state, it shall upon the written request of
any shareholder furnish to such shareholder a copy of these Bylaws as amended to
date.
Section 3. Endorsement of Documents; Contracts. Subject to the provisions of
applicable law, any note, mortgage, evidence of indebtedness, contract, share
certificate, conveyance, or other instrument in writing and any assignment or
endorsements thereof executed or entered into between the corporation any other
person, when signed by the Chairman of the Board, the President or any Vice
President, and the Secretary, and Assistant Secretary, the Treasurer or any
Assistant Treasurer of the corporation shall be valid and binding on the
corporation in the absence of actual knowledge on the part of the other person
that the signing officers had no authority to execute the same. Any such
instruments may be signed by any other person or persons and in such manner as
from time to time shall be determined by the Board and, unless so authorized by
the Board, no officer, agent, or employee shall have any power or authority to
bind the corporation by any contract or engagement or to pledge its credit or to
render it liable for any purpose or amount.
Section 4. Representation of Shares of Other Corporations. The President or any
other officer or officers authorized by the Board or the President are each
authorized to vote, represent, and exercise on behalf of the corporation all
rights incident to any and all shares of any other corporation or corporations
standing in the name of the corporation. The authority herein granted may be
exercised either by any such officer in person or by any other person authorized
so to do by proxy or power of attorney duly executed by said officer.
Section 5. Stock Purchase Plans. The corporation may adopt and carry out a stock
purchase plan or agreement or stock option plan or agreement providing for the
issue and sale for such
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consideration as may be fixed for its unissued shares, or for issued shares
acquired or to be acquired, to one or more of the employees or directors of the
corporation or of a subsidiary or to a trustee on their behalf and for the
payment for such shares in installments or at one time, and may provide for
aiding any such persons in paying for such shares by compensation for services
rendered, promissory notes, or otherwise.
Any such stock purchase plan or agreement or stock option plan or
agreement may include, among other features, the fixing of eligibility for
participation therein, the class and price of shares to be issued or sold under
the plan or agreement, the number of shares which may be subscribed for, method
of payment therefor, the reservation of title until full payment therefore, the
effect of the termination of employment, an option or obligation on the part of
the corporation to repurchase the shares upon termination of employment,
restrictions upon transfer of the shares, the time limits of and termination of
the plan, and any other matters, not in violation of applicable law, as may be
included in the plan as approved or authorized by the Board or any committee of
the Board.
Section 6. Preemptive Rights; Assessments. the Shareholders of the corporation
shall not have preemptive rights with respect to the shares of Common Stock or
any other shares of capital stock of the corporation and the shares of the
corporation shall be non-assessable.
Section 7. Annual List of Officers, Directors and Resident Agent. The
corporation shall, on or before the last day of the month in which the
anniversary date of incorporation occurs in each year, file with the Secretary
of State of Nevada a list of its officers and directors and a designation of its
resident agent within the State of Nevada, certified by the corporation's
President, Secretary or other officer of the corporation, along with the
appropriate filing fee.
The registered agent so designated in the list of officers, directors
and resident agent shall be authorized to accept service of all legal process
and any demand or notice authorized by law to be served upon a corporation in
the manner provided in the Nevada Revised Statutes.
Section 8. Construction and Definitions. Unless the context otherwise requires,
the general provisions, rules of construction, and definitions contained in the
general provisions of Chapter 78 of the Nevada Revised Statutes shall govern the
construction of these Bylaws.
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ARTICLE IX
INDEMNIFICATION
Section 1. Definitions. For purposes of this Article IX, "agent" includes any
person who is or was a director, officer, employee, or other agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, or other enterprise, or was a
director, officer, employee or agent of a foreign or domestic corporation which
was a predecessor corporation of the corporation or of another enterprise at the
request of such predecessor corporation; "proceeding" includes any threatened,
pending, or completed action or proceeding, whether civil, criminal,
administrative or investigative; and "expenses" includes, without limitation,
attorney's fees and any expenses of establishing a right to indemnification
under Section 4 or Section 5(c) of this Article IX.
Section 2. Indemnification in Actions by Third Parties. The corporation shall
have the power to indemnify any person who was or is a party or is threatened to
be made a party to any proceeding (other than an action by or in the right of
the corporation) by reason of the fact that such person is or was an agent of
the corporation, against expenses, judgments, fines, settlements, and other
amounts actually and reasonably incurred in connection with such proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in the best interests of the corporation and, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct of such person was
unlawful. The termination of any proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which the person reasonably believed to be in the best interests of the
corporation or that the person had reasonable cause to believe that the person's
conduct was unlawful.
Section 3. Indemnification in Actions by or in the Right of the Corporation. The
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending, or completed
action by or in the right of the corporation to procure a judgment in its favor
by reason of the fact that such person is or was an agent of the corporation,
against expenses actually and reasonably incurred by such person in connection
with the defense or settlement of such action if such person acted in good
faith, in a manner such person believed to be in the best interests of the
corporation, and with such care, including reasonable inquiry, as an ordinarily
prudent person in a like position would use under similar circumstances. No
indemnification shall be made under this Section 3 in respect of any claim,
issue, or matter as to which such person shall have been
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adjudged to be liable to the corporation in the performance of such person's
duty to the corporation, unless and only to the extent that the court in which
such action was brought shall determine upon application that, in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for the expenses which such court shall determine.
Section 4. Indemnification Against Expenses. To the extent that an agent of the
corporation has been successful on the merits in defense of any proceeding
referred to in Sections 2 or 3 of this Article IX or in defense of any claim,
issue or matter therein, the agent shall be indemnified against expenses
actually and reasonably incurred by the agent in connection therewith.
Section 5. Required Determinations. Except as provided in Section 4 of this
Article IX, any indemnification under this Article shall be made by the
corporation only if authorized in the specific case, upon a determination that
indemnification of the agent is proper in the circumstances because the agent
has met the applicable standards of conduct set forth in Sections 2 or 3 of this
Article IX by:
(a) A majority vote of those directors who are not parties to such
proceeding;
(b) Approval of a majority of shareholders, with the Shares owned by the
person to be indemnified not being entitled to vote thereon; or
(c) The court in which such proceeding is or was pending upon
application made by the corporation or the agent or the attorney or other person
rendering services in connection with the defense, whether or not such
application by the agent, attorney, or other person is opposed by the
corporation.
Section 6. Advance of Expenses. Expenses incurred in defending any proceeding
must be advanced by the corporation prior to the final disposition of such
proceeding upon receipt of an undertaking by or on behalf of the agent to repay
such amount unless it shall be determined ultimately that the agent is entitled
to be indemnified as authorized in this Article IX.
Section 7. Other Indemnification. No provision made by the corporation to
indemnify its, or its subsidiary's directors or officers for the defense of any
proceeding, whether contained in the Articles of Incorporation, Bylaws, a
resolution of shareholders or directors, an agreement, or otherwise shall be
valid unless consistent with this Article IX. Nothing contained in this Article
shall affect any right to indemnification to which persons other than such
directors and officers may be entitled by contract or otherwise.
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Section 8. Forms of Indemnification Not Permitted. No indemnification or advance
shall be made under this Article IX, except as provided in Section 4 or Section
5(c) in any circumstance where it appears:
(a) That it would be inconsistent with a provision of the Articles of
Incorporation, these Bylaws, a resolution of the shareholders or an agreement in
effect at the time of the accrual of the alleged cause of action asserted in the
proceeding in which the expenses were incurred or other amounts were paid, which
prohibits or otherwise limits indemnification; or
(b) That it would be inconsistent with any condition expressly imposed
by a court in approving a settlement.
Section 9. Insurance. The corporation shall have power to purchase and maintain
insurance on behalf of any agent of the corporation against any liability
asserted against or incurred by the agent in such capacity or arising out of the
agent's status as such whether or not the corporation would have the power to
indemnify the agent against such liability under the provisions of this Article
IX.
Section 10. Nonapplicability to Fiduciaries of Employee Benefit Plans. This
Article IX does not apply to any proceeding against any trustee, investment
manager, or other fiduciary of an employee benefit plan in such person's
capacity as such, even though such person may also be an agent of the
corporation as defined in Section 1 of this Article IX.
Section 11. Limitation of Liability and Indemnification of Officers and
Directors. The corporation shall, to the maximum extent currently permitted by
Nevada law, as so amended from time to time, eliminate the personal liability of
its officers and directors for monetary damages for breaches of their duties,
and indemnify such officers and directors against liabilities incurred in their
capacities as such. In the event of a conflict between the provisions of this
Section 11 of this Article IX and any other provisions of these Bylaws, the
provisions of this Section 11 shall prevail.
ARTICLE X
AMENDMENTS
These Bylaws may be amended or repealed either by approval of the
outstanding shares or by the approval of the Board; provided, however, that
after the issuance of shares, a Bylaw specifying or changing a fixed number of
directors or the maximum or minimum number or changing from a fixed to a
variable number of directors or vice versa may only be adopted by approval of
the outstanding shares pursuant to Chapter 78 of the Nevada Revised Statutes.
22
<PAGE> 1
SPECIMEN
ATM HOLDINGS, INC.
COMMON STOCK
Incorporated under the laws of the State of Nevada
This Certifies That CUSIP 009187 10 6
is the Registered Owner of ______________________ Shares of Common Stock of
ATM HOLDINGS, INC.
Transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
William Page Sasson Rejwan
- - ------------------------------- -------------------------------
President Secretary
CORPORATE SEAL
ATM HOLDINGS, INC.
May 31, 1996
<PAGE> 1
ATM HOLDINGS, INC.
STOCK OPTION PLAN
1. Purpose
1.1. The purpose of this Stock Option Plan ("Plan") is to encourage and
enable members of management and other employees of ATM Holdings, Inc., a Nevada
corporation, ("Company") and its subsidiaries to acquire a proprietary interest
in the Company through the ownership of common stock, $.0001 par value ("Common
Stock") of the Company. Such ownership will provide such members of management
and employees with a more direct stake in the future welfare of the Company and
encourage them to remain with the Company and its subsidiaries. It is also
expected that the Plan will encourage qualified persons to seek and accept
employment with the Company and its subsidiaries. Pursuant to the Plan, such
members of management and employees will be offered the opportunity to acquire
Common Stock through the grant of stock options which will qualify as "incentive
stock options" pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended ("Code") or "nonqualified stock options" pursuant to Section 422 of the
Code.
1.2. As used herein, the term "subsidiary" shall mean any present or
future corporation which is or would be a "subsidiary corporation" of the
Company as that term is defined in Section 425 of the Code.
2. Administration of the Plan
2.1. The Plan shall be administered by the Board of Directors of the
Company ("Board") or by a Committee appointed by the Board consisting of three
or more directors of the Company to whom administration of the Plan has been
duly delegated. Any action of the Board or the Committee, as the case may be,
with respect to administration of the Plan shall be taken by a majority vote or
written consent of its members.
2.2. In administering the Plan, the Board or Committee, as the case may
be, may adopt rules and regulations for carrying out the Plan. The
interpretation and decision with regard to any questions arising under the Plan
made by the Board or Committee, as the case may be, shall be final and
conclusive on all members of management and employees of the Company and its
subsidiaries participating or eligible to participate in the Plan. The Board or
Committee, as the case may be, shall determine the members of management and
employees to whom, and the time or times at which, grants shall be made, the
number of options to be included in the grants and the option price.
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<PAGE> 2
2.3. Subject to the provisions of the Plan, the Board or Committee, as
the case may be, shall have the authority (i) to construe and interpret the
Plan, (ii) to define the terms used in the Plan, (iii) to prescribe, amend and
rescind any and all rules and regulations relating to the Plan (providing such
amendment or recession does not materially adversely affect the rights of a
participant under the Plan with respect to options or shares of Common Stock
previously issued under the Plan), (iv) to determine the persons to whom options
shall be granted, (v) to determine whether such options will be either incentive
stock options or nonqualified stock options, (vi) to determine the number of
shares of Common Stock to be subject to each option, (vii) to determine the
option price, (viii) to determine the number of installments (if any) in which
each option may be exercised, (ix) to determine the vesting of each option, (x)
to determine the duration, if any, of leaves of absence which may be granted to
participants without constituting a termination of their employment for the
purposes of the Plan, and (xi) to make any and all other determinations
necessary or advisable for the administration of the Plan. All determinations
and interpretations made by the Board or Committee, as the case may be, shall be
binding and conclusive on all participants and their legal representatives and
beneficiaries.
3. Shares Subject to the Plan
3.1. Except as provided herein, the number of shares that may be issued
or transferred pursuant to the exercise of options granted under the Plan shall
not exceed 500,000 shares of Common Stock. Such shares may be authorized and
unissued shares or previously issued shares acquired by the Company and held in
its treasury. Any shares subject to an option which for any reason expires or is
terminated unexercised as to such shares may again be subject to an option right
under the Plan.
4. Eligibility and Participation
4.1. Options may be granted only to members of management and employees
of the Company or any one or more of its subsidiaries.
4.2. No member of management or employee shall have any right to be
granted options solely due to their employment.
5. Duration of Plan and Options
5.1. Subject to the provisions as provided herein, the Plan shall remain
in effect until the earlier of (i) when all shares subject to or which may
become subject to the Plan shall have been purchased pursuant to the exercise of
options granted
2
<PAGE> 3
pursuant to the Plan, (ii) ten (10) years from the date that the Plan is adopted
by the Board, or (iii) ten (10) years from the date that the Plan is approved by
the shareholders of the Company as provided for herein.
5.2. Each option and all rights associated therewith shall expire on
such date as the Board or Committee, as the case may be, shall determine, but in
no event later than ten (10) years from the date on which the option is granted
and such option shall be subject to earlier termination as provided herein.
6. Limitation on Exercise of Incentive Stock Options
6.1. The aggregate fair market value (determined at the time the option
is granted as provided for herein) of the Common Stock with respect to which
incentive stock options issued by the Company are first exercisable by any
optionee during the same calendar year shall not exceed $100,000.
7. Option Agreements
7.1. All stock options granted pursuant to the Plan shall be evidenced
by stock option agreements in such form, not inconsistent with this Plan, as the
Board or Committee, as the case may be, shall approve, which agreements shall
contain in substance the following terms and conditions:
a) Option Price - The purchase price under each option shall be 100% of
the fair market value (as herein defined) of the Common Stock at the time the
option is granted, but in no case less than the par value of the Common Stock.
In the case of a person who owns, within the meaning of Section 425 (d) of the
Code, more than 10 percent of the voting power or value of the Company's stock,
the purchase price must be at least 110% of the fair market value of the Common
Stock at the time the option is granted.
b) Medium and Time of Payment - Shares of Common Stock purchased
pursuant to an option agreement shall be paid for in full at the time of
purchase in cash or by certified or cashier's check payable to the order of the
Company. Upon receipt of payment, the Company shall, without stock transfer tax
to the optionee or other person entitled to exercise the option, deliver to the
person exercising the option a certificate or certificates representing such
shares of Common Stock.
c) Fair Market Value - The fair market value of a share of Common Stock
shall be determined by reference to the closing price of the Common Stock on the
principal stock exchange on which such shares are traded, or if such shares are
not then
3
<PAGE> 4
traded on a principal stock exchange, the mean between the closing bid and asked
price of a share of Common Stock as supplied by the National Association of
Securities Dealers, Inc. (or its successor). If the Common Stock is not publicly
traded, fair market value shall be determined by the Board or Committee, as the
case may be, by reference to the most recent sale price of the Common Stock and
such other factors as the Board or Committee, as the case may be, may in good
faith deem appropriate.
8. Provisions Relating to Options
8.1. A recipient of options shall have no rights as a shareholder of the
Company with respect to any shares issuable or transferable upon exercise
thereof until the date a stock certificate is issued to such recipient for such
shares. Except as otherwise expressly provided in the Plan, no adjustment shall
be made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.
8.2. No option shall be assignable or transferable by the recipient
except by will or by the laws or descent and distribution. During the life of a
recipient, options shall be exercisable only by such recipient.
8.3. No option shall be exercisable after termination of employment with
the Company or a subsidiary unless such termination of employment occurs by
reason of (i) resignation with the consent of the Company, (ii) the act of the
Company without cause, (iii) disability, or (iv) death. In the event of the
retirement of the recipient of options, with the consent of the Company, the
options which were otherwise exercisable on the date of resignation shall expire
unless exercised within a period of thirty (30) days after the date of
resignation. Option rights shall not be affected by any change of employment as
long as the recipient continues to be employed by either the Company or a
subsidiary. In the event of termination of employment by the act of the Company
without cause, the options which were otherwise exercisable on the date of
termination shall expire unless exercised within a period of thirty (30) days
after the date of termination. In the event of termination of employment by
reason of disability, the options which were otherwise exercisable on the date
of termination shall expire unless exercised within a period of one (1) year
after the date of termination. In the event of the death of a recipient of
options (i) while an employee of the Company or any subsidiary of the Company,
(ii) within the thirty (30) day period following termination of employment by
the act of the Company without cause, (iii) within the one (1) year period
following termination of employment by reason of disability or (iv) within the
thirty (30) day period
4
<PAGE> 5
following termination of employment by reason of resignation with the consent of
the Company, the options which were otherwise exercisable on the date of
termination of employment shall be exercisable by his personal representatives,
heirs or legatees at any time prior to the expiration of one (1) year from the
date of his death. In no event, however, shall an option be exercisable after
ten (10) years from the date it is granted. Nothing in the Plan or in any option
shall confer any right to the holder of such option to continue in the employ of
the Company or any subsidiary or interfere in any way with the right of the
Company or any of its subsidiaries to terminate the employment of the holder of
such option at any time.
8.4 In the event that dividends payable on the Common Stock in shares of
Common Stock during any fiscal year of the Company exceed in the aggregate five
(5%) percent of the Common Stock issued and outstanding at the beginning of the
fiscal year, or in the event there is, during any fiscal year of the Company,
one or more splits, subdivisions or combinations of shares of Common Stock
resulting in an increase or decrease by more than five (5%) percent of the
shares outstanding at the beginning of the fiscal year, the number of shares
available under the Plan shall be increased or decreased proportionately, as the
case may be, and the number of shares deliverable upon the exercise of any
options theretofore granted shall be increased or decreased proportionately, as
the case may be, without change in the aggregate purchase price. Any such Common
Stock dividends, splits, subdivisions or combinations during any fiscal year
which do not exceed in the aggregate five (5%) percent of the Common Stock
issued and outstanding at the beginning of such year shall be ignored for
purposes of the Plan. All adjustments shall be made as of the day such action
necessitating such adjustment becomes effective. Any such adjustment and any
adjustment provided for herein may provide for the elimination of any fractional
share interests which otherwise might become subject to an option.
8.5. In the event that the Company is merged or consolidated with
another corporation, or in case the property or stock of the Company is acquired
by another corporation, or in case of a separation, reorganization or
liquidation of the Company, the Board of Directors of the Company, or the Board
of Directors of any corporation assuming the obligations of the Company
hereunder, shall either (i) make appropriate provisions for the protection of
any outstanding options by the substitution on an equitable basis of appropriate
stock of the Company, or appropriate stock of the merged, consolidated or
otherwise reorganized corporation, provided only that the excess of the
aggregate fair market value of the shares subject to options outstanding under
the Plan immediately after such substitution
5
<PAGE> 6
over the purchase price thereof is not more than the excess of the aggregate
fair market value of the shares subject to options outstanding under the Plan
immediately after such substitution, or (ii) give written notice to recipients
that their options must be exercised within sixty (60) days of the date of such
notice or such option will be terminated.
8.6. Each option granted under the Plan shall be subject to the
requirement that, if at any time the Board of Directors shall determine, in its
discretion, that the listing, registration or qualification of the shares
issuable or transferable upon exercise thereof upon any securities exchange or
under any state or Federal law, or the consent or approval of any governmental
regulatory body is necessary or desirable as a condition of, or in connection
with, the granting of such option or the issue, transfer or purchase of shares
thereunder, such option may not be exercised in whole or in part unless such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board of
Directors.
8.7. The Company shall not be obligated to sell or issue any shares of
Common Stock in any manner in contravention of the Securities Act of 1933, as
amended, or any state securities law. The Board or Committee, as the case may
be, may, in connection with the granting of each option, require the person to
whom the option is to be granted to enter into an agreement with the Company
stating that as a condition precedent to each exercise of the option, in whole
or in part, such person shall, if then required by the Company, represent to the
Company in writing that such exercise is for investment only and not with a view
to distribution, and also setting forth such other terms and conditions as the
Board or Committee, as the case may be, may prescribe.
9. Termination and Amendment of the Plan
9.1. The Board shall have the right to amend, suspend or terminate the
Plan at any time; provided, however, that no such action shall affect or in any
way impair the rights of a recipient under any option right theretofore granted
under the Plan and, provided, further, that unless first duly approved by the
holders of Common Stock entitled to vote thereon at a meeting (which may be the
annual meeting) duly called and held for such purpose, except as herein
provided, no amendment or change shall be made in the Plan (i) increasing the
total number of shares which may be issued or transferred under the Plan, (ii)
changing the purchase price hereinbefore specified for the shares subject to
options, or (iii) extending the period during which options may be granted or
exercised under the Plan.
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<PAGE> 7
10. Effective Date of Plan
10.1. Effectiveness of the Plan is subject to approval by the holders of
the outstanding voting stock of the Company as herein provided within twelve
(12) months from the date the Plan is adopted by the Board. The Plan shall be
deemed approved by the holders of the outstanding voting stock of the Company by
(i) the affirmative vote of the holders of a majority of the voting shares of
the Company represented and voting at a duly held meeting of shareholders at
which a quorum is present or (ii) the written consent of the holders of a
majority of the outstanding voting shares of the Company. Any options granted
pursuant to the Plan prior to obtaining such shareholder approval shall be
granted on the conditions that the options so granted (i) shall not be
exercisable prior to such approval and (ii) shall become null and void if such
shareholder approval is not obtained.
7
<PAGE> 1
OWNER LEASE AGREEMENT
This lease agreement ("Agreement") is made as of the day of
, 19 by and between Nationwide Automated Systems, Inc. ("Nationwide") and
("Owner").
WHEREAS, Nationwide is in the business of operating automated teller
machines ("ATMs"), and
WHEREAS, Owner is the owner of the ATM(s) as set forth on Schedule A
hereto, and
WHEREAS, Nationwide desires to lease Owner's ATM(s) on the terms and
conditions set forth herein and Owner desires to lease such ATM(s) to Nationwide
on such terms and conditions.
NOW, THEREFORE, with respect to the foregoing and in consideration of
the following, the parties hereto represent, acknowledge and agree as follows:
1. Upon the execution of this Agreement, Nationwide shall lease Owner's
ATM(s) for a period of ten (10) years commencing with the date hereof. Owner
shall have the option of renewing this Agreement for successive three (3) year
periods on the same terms and conditions contained herein by giving Nationwide
at least sixty (60) days prior written notice.
2. Owner has full power and authority to enter this Agreement and is the
owner of the ATM(s) leased to Nationwide hereby. Owner makes no representation
as to the condition of the ATM(s) leased to Nationwide hereby and Nationwide
agrees and acknowledges that it is leasing such ATM(s) on an "as is" basis.
3. Nationwide, at its sole cost and expense, shall install Owner's
ATM(s) in a location or locations selected solely by Nationwide and Owner shall
have no say in the location of any Owner's ATM(s).
4. Nationwide, at its sole cost and expense, shall operate Owner's
ATM(s) and provide all services relating thereto. Such services include, but are
not limited to, processing transactions, loading of cash, insurance,
maintenance, servicing and advertising.
5. Nationwide, at its sole cost and expense, shall secure insurance on
Owner's ATM(s) against fire, flood, vandalism, liability and the like in an
amount not less than the full replacement value of Owner's ATM(s). All insurance
proceeds shall be payable directly to Owner. Upon the occurrence of any such
insurable event, Owner shall have the option of retaining such
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<PAGE> 2
proceeds and canceling this Agreement or replacing the ATM with a similar ATM.
6. Nationwide, at its sole option and at its sole cost and expense, may
relocate any or all of Owner's ATM(s) to any other location(s) at any time or
times during the term of this Agreement including any extensions.
7. Nationwide shall pay to Owner as lease payments an amount equal to
for each approved transaction (as defined herein) produced by Owner's ATM(s) for
each calendar month during the term of this Agreement including any extensions.
For purposes of this Agreement, an "approved transaction" is defined as a
transaction produced by Owner's ATM(s) for which the appropriate ATM system and
federal, state and local laws permit a transaction fee to be charged to users of
ATMs.
8. Commencing with the first month of this Agreement and continuing
during its term, including any extensions, Nationwide shall provide Owner with
an accounting of the number of approved transactions produced by Owner's ATM(s)
during the previous calendar month. Concurrently therewith, Nationwide shall
make lease payments to Owner as provided for herein. All such accountings and
lease payments will be due no later than thirty (30) days after the end of each
calendar month.
9. It is understood that Owner shall be solely responsible for any and
all taxes resulting from the lease payments made to Owner by Nationwide.
10. The parties hereto understand and acknowledge that Nationwide does
not represent, warranty or guarantee that any Owner's ATM(s) will, either
individually or in the aggregate, produce any number of approved transactions
for any month during the term of this Agreement, including any extensions.
Nationwide shall not be liable to Owner for loss of lease payments or any other
damages based on the number of approved transactions generated by Owner's ATM(s)
for any month or the failure of Owner's ATM(s) to operate as intended.
11. It is the intention of the parties that this is a net lease to Owner
and that Nationwide shall bear full and sole responsibility for the operation of
Owner's ATM(s). In connection therewith, Owner agrees not to interfere with the
operation of Owner's ATM(s) by Nationwide in any manner including, but not
limited, to contact with locations and the methods used by Nationwide of
operating such ATM(s).
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<PAGE> 3
12. Owner shall have the right to terminate this Agreement at any time
upon sixty (60) days written notice to Nationwide, provided, however, that if
such termination occurs during the first two (2) years of this Agreement, Owner
shall concurrently pay Nationwide its reasonable costs of removing Owner's
ATM(s) from location(s) and delivering Owner's ATM(s) to the address specified
in any such notice of termination.
13. Upon termination of this Agreement, either by Owner or upon
expiration of its term, including any extensions, Nationwide shall, at its sole
cost and expense (except as set forth above) deliver Owner's ATM(s) to the
address contained herein or any other address designated by Owner. Such ATM(s)
so delivered shall be free and clear of all liens, attachments, encumbrances and
judgments except for those incurred by Owner and shall be in operating
condition, reasonable wear and tear excepted.
14. The parties acknowledge that this Agreement contains the full
understanding between the parties and supersedes any and all prior agreements
between them.
15. This Agreement shall be governed by the laws of the State of
California.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
NATIONWIDE:
Nationwide Automated Systems, Inc.
22048 Sherman Way - Suite 213
Canoga Park, California 91308
By
OWNER:
(Name)
(Street Address)
(City, State, Zip Code)
(Signature)
3
<PAGE> 1
NATIONWIDE AUTOMATED SYSTEMS, INC.
LOCATION AGREEMENT
(Company Vaults)
This agreement is effective this _________ day of _____________, 19 and is
between Nationwide Automated Systems, Inc. ("Company") with an office at 22048
Sherman Way, Suite 213, Canoga Park, California 91303
and________________________________ ("Location").
LEASE OF AREA - Company hereby leases from Location the area in its premises as
set forth on Exhibit A ("Area") for the placement of an AUTOMATED TELLER MACHINE
("ATM") by Company on the following terms and conditions.
EQUIPMENT - Company, at its sole cost and expense, shall install an ATM in the
Area.
TERM - The term of this agreement shall commence on the date when the ATM is
installed and continue for an initial period of five (5) years thereafter.
Company may extend this agreement for an additional five (5) year term by giving
written notice to Location at least fifteen (15) days prior to the expiration of
the initial five (5) year period. Upon the expiration of this Agreement,
Company, at its sole cost and expense, shall remove the ATM from Location's
premises and all obligations between Company and Location shall therewith
terminate.
CONSENT - Location shall provide Company with a consent in the form attached
hereto as Exhibit B.
LOCATION PAYMENTS - Payments to Location by Company will be made on the 25th of
each calendar month commencing with the first full month after the ATM is
installed. Location will receive payments based on the number of "approved
withdrawals" (as herein defined) made during the previous calendar month based
on the following schedule:
Number of Payment Per
Approved Approved
Withdrawals Withdrawal
----------- ----------
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<PAGE> 2
An "approved withdrawal" is defined as a withdrawal from the ATM in Location's
premises for which the user of the ATM is charged a fee.
AVAILABILITY - The ATM shall, at all times, be available for use by Location's
customers during Location's normal business hours for the entire term of this
agreement.
MAINTENANCE AND SERVICE - Company, at its sole cost and expense, shall provide
all required maintenance and service for the ATM during the term of this
agreement. Company shall, at all times during Location's business hours, have
the right to enter Location's premises for the purpose of inspecting repairing,
maintaining and servicing the ATM. Location shall make no alteration to the ATM
and shall not permit anyone other than Company to perform any maintenance or
service on the ATM. In the event of any operating difficulty with the ATM,
Location shall promptly notify Company.
PROCESSING SERVICES - Company, at its sole cost and expense, shall provide
processing services for the ATM in Location's premises.
SIGNS AND ADVERTISING - Company, at its sole cost and expense, shall provide
Location with such signs and advertising materials as it deems necessary in
order to make Location's customers aware of the presence of the ATM and
encourage its use. Location shall display such signs and advertising materials
throughout its premises.
VAULTING - Company, at its sole cost and expense, shall keep sufficient cash in
the ATM at all times. The cash in the ATM shall be the sole property of Company
and Location shall not have any responsibility for, claim to or interest in such
cash. Company shall, at all times during Location's normal business hours, have
the right to enter Location's premises to replenish the cash in the ATM.
TELEPHONE AND ELECTRICAL REQUIREMENTS - Location, at its sole cost and expense,
shall provide a dedicated telephone line and one (1) operating electrical power
outlet (110V) within two (2) feet of the Area for the exclusive use of the ATM
and be responsible for all charges relating thereto.
INSURANCE - Location shall protect the ATM from damage, loss, theft and
destruction and shall, at its sole cost and expense, maintain property insurance
with respect to the ATM in an amount not less than Fifteen Thousand ($15,000)
Dollars. If Location fails to maintain such insurance, Company may obtain such
insurance and deduct its cost from amounts otherwise payable to Location.
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<PAGE> 3
LOCATION'S OCCUPANCY RIGHTS - Location is either (1) the owner of the premises
in which the ATM is to be placed or (2) holds a lease (including options to
renew) on such premises for a term not less than the initial term of this
agreement.
EXCLUSIVITY - Location shall not permit the removal of the ATM from its premises
nor shall it allow any other ATM or similar device to be installed in its
premises.
RELOCATION - In the event Location transfers or moves its business, Company, at
its sole cost and expense, may move the ATM to the new location or terminate
this agreement.
TERMINATION - Company may terminate this agreement by notifying Location by
United States Mail, postage prepaid at the address set forth herein upon the
occurrence of any of the following:
1. For any consecutive two (2) month period, less than _____ approved
transactions per month have been made from the ATM.
2. The breach by Location of a material breach of its lease agreement or
the institution of foreclosure proceedings against the premises.
3. The filing of a voluntary or involuntary petition in bankruptcy by or
against Location.
In the event Company terminates this agreement pursuant to the
foregoing, Company shall obtain immediate possession of the ATM and shall be
entitled to receive from Location any costs incurred relating to the removal of
the ATM.
NO GUARANTEE OF NUMBER OF APPROVED WITHDRAWALS - Company does not represent,
warranty or guarantee that the ATM will generate any number of approved
transactions for any month during the term of this agreement. Company shall not
be liable to Location for loss of payments or any other damages due to the
failure of the ATM to generate any number of approved transactions or to
operate.
NO AGENCY - Company and Location are not agents of each other nor are they
partners, joint venturers or in any way responsible for each other's acts.
Neither Company nor Location has the authority to act on behalf of the other.
GOVERNING LAW - This agreement shall be governed by the laws of the State of
California.
BINDING EFFECT - This agreement shall be binding on, obligate and extend to both
Company's and Location's successors, transferees, assigns and grantees.
WAIVERS - A waiver by either party of a breach of any provision of this
agreement shall not constitute a waiver of such party's right to demand strict
compliance with this agreement.
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<PAGE> 4
ENTIRE AGREEMENT - The parties acknowledge that this agreement contains the full
understanding between the parties and supersedes any and all prior agreements
and understandings between them.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first above written.
Nationwide Automated Systems, Inc.
22048 Sherman Way - Suite 213
Canoga Park, California 91308
By_________________________
Joel Gillis, President
LOCATION:
-------------------------------------
(Name)
-------------------------------------
(Street Address)
-------------------------------------
(City, State, Zip Code)
-------------------------------------
(Signature)
<PAGE> 1
NATIONWIDE AUTOMATED SYSTEMS, INC.
LOCATION AGREEMENT
(Location Vaults)
This agreement is effective this _________ day of _____________, 19 and is
between Nationwide Automated Systems, Inc. ("Company") with an office at 22048
Sherman Way, Suite 213, Canoga Park, California 91303
and________________________________ ("Location").
LEASE OF AREA - Company hereby leases from Location the area in its premises as
set forth on Exhibit A ("Area") for the placement of an AUTOMATED TELLER MACHINE
("ATM") by Company on the following terms and conditions.
EQUIPMENT - Company, at its sole cost and expense, shall install an ATM in the
Area.
TERM - The term of this agreement shall commence on the date when the ATM is
installed and continue for an initial period of five (5) years thereafter.
Company may extend this agreement for an additional five (5) year term by giving
written notice to Location at least fifteen (15) days prior to the expiration of
the initial five (5) year period. Upon the expiration of this Agreement,
Company, at its sole cost and expense, shall remove the ATM from Location's
premises and all obligations between Company and Location shall therewith
terminate.
CONSENT - Location shall provide Company with a consent in the form attached
hereto as Exhibit B.
LOCATION PAYMENTS - Payments to Location by Company will be made on the 25th of
each calendar month commencing with the first full month after the ATM is
installed. Location will receive payments based on the number of "approved
withdrawals" (as herein defined) made during the previous calendar month based
on the following schedule:
Number of Payment Per
Approved Approved
Withdrawals Withdrawal
----------- ----------
1
<PAGE> 2
An "approved withdrawal" is defined as a withdrawal from the ATM in Location's
premises for which the user of the ATM is charged a fee.
AVAILABILITY - The ATM shall, at all times, be available for use by Location's
customers during Location's normal business hours for the entire term of this
agreement.
MAINTENANCE AND SERVICE - Company, at its sole cost and expense, shall provide
all required maintenance and service for the ATM during the term of this
agreement. Company shall, at all times during Location's business hours, have
the right to enter Location's premises for the purpose of inspecting repairing,
maintaining and servicing the ATM. Location shall make no alteration to the ATM
and shall not permit anyone other than Company to perform any maintenance or
service on the ATM. In the event of any operating difficulty with the ATM,
Location shall promptly notify Company.
PROCESSING SERVICES - Company, at its sole cost and expense, shall provide
processing services for the ATM in Location's premises.
SIGNS AND ADVERTISING - Company, at its sole cost and expense, shall provide
Location with such signs and advertising materials as it deems necessary in
order to make Location's customers aware of the presence of the ATM and
encourage its use. Location shall display such signs and advertising materials
throughout its premises.
VAULTING - Location, at its sole cost and expense, shall keep sufficient cash in
the ATM at all times. The cash in the ATM shall be the sole property of Location
and Company shall not have any responsibility for, claim to or interest in such
cash. Upon the termination of this agreement, all cash in the ATM shall be
removed by Location.
TELEPHONE AND ELECTRICAL REQUIREMENTS - Location, at its sole cost and expense,
shall provide a dedicated telephone line and one (1) operating electrical power
outlet (110V) within two (2) feet of the Area for the exclusive use of the ATM
and be responsible for all charges relating thereto.
INSURANCE - Location shall protect the ATM from damage, loss, theft and
destruction and shall, at its sole cost and expense, maintain property insurance
with respect to the ATM in an amount not less than Fifteen Thousand ($15,000)
Dollars. If Location fails to maintain such insurance, Company may obtain such
insurance and deduct its cost from amounts otherwise payable to Location.
2
<PAGE> 3
LOCATION'S OCCUPANCY RIGHTS - Location is either (1) the owner of the premises
in which the ATM is to be placed or (2) holds a lease (including options to
renew) on such premises for a term not less than the initial term of this
agreement.
EXCLUSIVITY - Location shall not permit the removal of the ATM from its premises
nor shall it allow any other ATM or similar device to be installed in its
premises.
RELOCATION - In the event Location transfers or moves its business, Company, at
its sole cost and expense, may move the ATM to the new location or terminate
this agreement.
TERMINATION - Company may terminate this agreement by notifying Location by
United States Mail, postage prepaid at the address set forth herein upon the
occurrence of any of the following:
1. For any consecutive two (2) month period, less than _____ approved
transactions per month have been made from the ATM.
2. The breach by Location of a material breach of its lease agreement or
the institution of foreclosure proceedings against the premises.
3. The filing of a voluntary or involuntary petition in bankruptcy by or
against Location.
In the event Company terminates this agreement pursuant to the
foregoing, Company shall obtain immediate possession of the ATM and shall be
entitled to receive from Location any costs incurred relating to the removal of
the ATM.
NO GUARANTEE OF NUMBER OF APPROVED WITHDRAWALS - Company does not represent,
warranty or guarantee that the ATM will generate any number of approved
transactions for any month during the term of this agreement. Company shall not
be liable to Location for loss of payments or any other damages due to the
failure of the ATM to generate any number of approved transactions or to
operate.
NO AGENCY - Company and Location are not agents of each other nor are they
partners, joint venturers or in any way responsible for each other's acts.
Neither Company nor Location has the authority to act on behalf of the other.
GOVERNING LAW - This agreement shall be governed by the laws of the State of
California.
BINDING EFFECT - This agreement shall be binding on, obligate and extend to both
Company's and Location's successors, transferees, assigns and grantees.
WAIVERS - A waiver by either party of a breach of any provision of this
agreement shall not constitute a waiver of such party's right to demand strict
compliance with this agreement.
3
<PAGE> 4
ENTIRE AGREEMENT - The parties acknowledge that this agreement contains the full
understanding between the parties and supersedes any and all prior agreements
and understandings between them.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as
of the date first above written.
Nationwide Automated Systems, Inc.
22048 Sherman Way - Suite 213
Canoga Park, California 91308
By_________________________
Joel Gillis, President
LOCATION:
-------------------------------------
(Name)
-------------------------------------
(Street Address)
-------------------------------------
(City, State, Zip Code)
-------------------------------------
(Signature)
4
<PAGE> 1
ATM PROCESSING AGREEMENT
Electronic Processing, Inc.
Payment Systems Division of NBA
8787 Complex Drive
San Diego, CA 92123
888.712.1611
Fax 619.712.1617
This Agreement Is effective this day of , 199
between ELECTRONIC PROCESSING. INC, 8787 Complex Dr., San Diego, CA 92123
('EPI'), and
("Customer"),
1. Equipment: Customer agrees to operate an AUTOMATED TELLER MACHINE (ATM) on a
promises in an Indoor location(s) as mutually agreed and as identified below. ("
Location").
Location Name (Where ATM will be located):
Phone:
Fax:
Location Address:
City:
State:
Zip:
Location Contact:
Type of Business (include SIC Code)
2. Availability: Customer agrees that the ATM shall at all times remain
available for use by Location's customers during Location's normal business
hours for the term of this Agreement. The previous sentence notwithstanding, EPI
reserves the right to schedule reasonable downtime to accomplish necessary
maintenance or system improvements. These improvements are at the sole
discretion of the Processing Center and should not to exceed five percent (5%)
of available time, per calendar month,
3, Transaction Processing Fees: EPI agrees to pay Customer for each transaction
made on the ATM, hereinafter Customer Rebate ("CR"). The CR for this purpose is
defined as any surcharged cash withdrawal made from a cardholder's account on
the Location's ATM.
EPI will pay Customer in accordance to options in below.
SECTION A TRANSACTION FEE INFO
SURCHARGE AMOUNT [ ] $1.00 [ ] $1.50
[ ] $2.00 [ ] OTHER______
Plan "A" (QSP)
CUSTOMER REBATE ________ %
MONTHLY ACCESS &
STATEMENT FEE $ 0.00 _____ INITIAL
Plan "B"
CUSTOMER REBATE $ _________
MONTHLY ACCESS &
STATEMENT FEE $ 30 ______ INITIAL
Customer understands they will receive a rebate on valid surcharged cash
withdrawal transactions only.
Customer may be charged fees for transaction activity based upon Individual
Network policy. EPI, or any of its assignors may debit Customer's bank account
for the amount of monthly fees or any overdue invoices.
Customer acknowledges that without notice, transaction fccs and CR's may be
adjusted to reflect any charges in fees from the processor, banks or Network
fees assessed EPI. Customer understands monthly fees for Plan "B" are
automatically deducted from any applicable rebates as may be noted in section A.
Customer's bank account will be credited or debited the net amount of rebates or
fees on a monthly basis. CR will continue as long as EPI receives them from the
Networks. CRs for transactions will be disbursed monthly via ACH direct debit by
EPI on the first Thursday following the 20th of each calendar month following
the calendar month In which the transactions occurred.
4 Installation & Setup: Upon execution of the Agreement. Customer authorizes EPI
or any of its agents or third party service providers to install the ATM(s) at
the location(s) set forth on the Agreement. Any special installation requests or
circumstances requiring additional charges to be incurred arising due to
Customer. will be paid by Customer. If for any reason the Customer does not
comply with the obligations of this paragraph or otherwise defaults under this
Agreement, Customer shall be responsible for all costs and expanses associated
with the installation, set-up and any subsequent de-installation of the
Terminal(s) incurred by EPI. CUSTOMER FURTHERMORE AUTHORIZES EPI TO DEBIT
CUSTOMER'S BANK ACCOUNT (AS SHOWN ON ACH AUTHORIZATION RELEASE ("ACH") ATTACHED
TO THIS AGEEMENT) TO REIMBURSE EPI FOR SUCH COSTS AND EXPENSES.
5. Location Access: EPI shall at any reasonable time and at all times during
business hours have the right to enter location for the purpose of inspecting,
repairing, maintaining, or upgrading the ATM and observing its use.
<PAGE> 2
6. Processing Services: EPI agrees to provide and Customer agrees to utilize
exclusively during the term of this Agreement. such data processing services as
EPI, in its sole discretion, has selected to process all ATM transactions.
Customer agrees to accurately complete, or has accurately completed, all of he
necessary documentation as is reasonably required by EPI to facilitate the
implementation and delivery of such processing and other services. Monthly
reports will be mailed to the Customer address listed on the reverse bottom side
of this document unless Customer specifies. otherwise in writing.
7, Inventory Requirements:
a. Customer shall inventory an adequate supply of paper and ribbons at
Location's premises. which are available from EPI at a cost to the Customer,
b. Customer shall keep sufficient amounts of cash in ATM at all times ("Cash
Replenishment").
c. Customer is responsible for monthly terminal balancing.
d. Customer, may at its sole discretion seek to hire or contract out the
services of Cash Replenishment.
e. EPI will maintain daily transaction data to assist in the balancing
process should the Customer require assistance.
8. Phone & Electrical Requirements: Customer shall, at its expense, provide and
maintain a business telephone line and one (1) operating isolated ground power
outlet (110V) both directly behind the intended installation area of the ATM.
Customer shall pay for monthly charges incurred in connection with such
telephone line and electrical power usage.
9. Exclusivity: Customer shall not permit the removal of the ATM from the
Premises nor allow the placement of any other ATM on the Premises nor subscribe
to any other data processing service for processing ATM transactions during the
term of this Agreement, except as may be agreed by EPI In writing or required by
any lessor of the ATM.
10. Insurance Requirements: Customer agrees to protect the ATM from damage,
loss, theft or destruction. Customer shall provide and maintain property
insurance against loss, theft. damage or destruction of the ATM in an amount not
less than the full replacement value of the ATM. Insurance shall include a
waiver of any subrogation rights and Customer waives any right of recovery
against EPI arising from such loss, theft, damage or destruction. Customer is
solely responsible for providing security against theft at the location and EPI
shall have no liability to Customer in the event of theft or damage. All cash
kept in the ATM shall be the property of the Customer (unless those services
have been hired or contracted out) and Customer shall bear the risk of loss if
any cash is stolen or otherwise lost or destroyed. Customer agrees it shall make
no alteration nor addition to the ATM and shall not permit anyone, other than an
authorized representative of EPI, to perform any service or repair work on the
ATM without EPI's prior written approval.
11. Term & Termination: The Initial term of this Agreement shall be a minimum of
five (5) years. The initial term shall commence upon the date hereof and shall
be automatically renewed after the initial term for successive twenty four (24)
month terms: provided, however that either party may. by giving other party
ninety (90) days prior written notice, terminate this Agreement at the end of
initial or subsequent terms, Should this Agreement be terminated or breached
prior to the and of the initial term by the Customer, Customer agrees to pay a
one time termination fee equal to the number of months remaining on the initial
term at the rate of $75 per month. This fee will be deducted via ACH debit at
the time termination is determined. Unless a written notice of termination is
received, ATM inactivity for a period of 30 days will constitute Customer's
termination of this Agreement,
12. Property Ownership or Lease Terms: Customer represents and warrants that it
is the owner of the Location or holds an agreement with the owner of the
Location, that it holds a lease or an agreement with the holder of the lease or
an option to renew the lease or an agreement with the holder of the option to
renew the lease for said location of equal or greater length than the initial
five-year term of this Agreement.
13. Equipment Relocation: In the event Customer transfers or moves its business
from the location, Customer shall notify this EPI not less than thirty (30) days
prior to any such event. In such event, this Customer shall be automatically
deemed amended to apply to Customers new Location for the remaining term of this
Agreement. The ATM shall be placed in a mutually agreed upon indoor location or
locations.
14. Cancellation: In addition to paragraph 11, either party may terminate this
Agreement in its entirely, effective thirty (30) days after receipt of written
notice of termination upon the occurrence of a default, provided that such
default continues for more than thirty (30) days after receipt of notice of such
default. All notices hereunder shall be in writing and shall be by registered or
certified return receipt requested, addressed, if to EPI at its address as
listed below, and, if to Customer simply to whom it may concern, at its address
as listed below, Any party may change its address for notice in accordance with
the terms of this paragraph. All notices shall be deemed receive three (3)
business days after the date of such mailing
15. Limitation of Liability:
a. Except for insuring that funds are transferred to reimburse Customer for
cash dispensing transactions, EPI'S SOLE LIABILITY, IF ANY. TO CUSTOMER
HEREUNDER, EXCEPT AS OTHERWISE PROVIDED, SHALL BE TO REMEDY ANY BREACH OF THIS
AGREEMENT IN A TIMELY MANNER, EPI SHALL HAVE NO LIABILITY FOR SPECIAL INCIDENTAL
OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OR SUMS PAID BY CUSTOMER TO THIRD
PARTIES.
b. Customer and EPI agree that these provisions herein am reasonable in light
of all present and predictable circumstances, including but not limited to. any
and all fees charged by EPI under this Agreement and the possible amount of
actual damages to Customer.
<PAGE> 3
c. No action arising out of this Agreement may be brought by either patty
more than one year after the cause of action occurred.
d. If EPI Is required to appear in, or is made a defendant in, any legal
action with respect to the cash dispensing services, Customer shall indemnify
and hold EPI harmless from all loss. liability and expense, except for any loss,
liability or expense arising out of EPI's own lack of reasonable care. In which
case EPI liability shall be limited as provided above.
e. Customer agrees that EPI will not be liable for loss, expense or cost
incurred by Customer, customers or any persons or entity as result of any cause
beyond the reasonable control of EPI including but not limited to, weather and
all other Acts of God, war, fire, explosions, power failures, Government
priorities, labor stoppage, supplier failure or delay, civil disorder,
malfunction or breakdown of equipment, transportation facilities or other
equipment of any nature. EPI's performance shall be exercised during the
pendency of any such event but EPI shall use its best efforts to limit the
duration of any such delay.
f. In any dispute between parties. whether or not resulting In litigation.
the prevailing party shall be entitled to recover from the other party all
reasonable costs including, without limitation, reasonable attorney's fees.
'Prevailing party' shall include, without limitation, a party who dismisses an
action for recovery in exchange for sums allegedly due, performance for
covenants allegedly breached or consideration substantially equal to the relief
sought in the action or which receives, in connection with any dispute,
performance from the other party substantially equivalent to any of these.
g. EPI MAKES NO WARRANTIES, EXPRESSED OR IMPLIED, WITH RESPECT TO THE CASH
DISPENSING SERVICES, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT. NO ORAL OR
WRITTEN PRESENTATION OR STATEMENT MADE BY EPI OR ANY OF ITS AGENTS OR EMPLOYEES
INCLUDING BUT NOT LIMITED TO, ANY SPECIFICATIONS, DESCRIPTIONS OR STATEMENTS
CONTAINED IN USER GUIDES PROVIDED TO CUSTOMER, SHALL BE BINDING UPON EPI AS A
WARRANTY PROMISE OF PERFORMANCE UNLESS EXPRESSLY CONTAINED IN THIS AGREEMENT.
16. Not Assignable: Customer shall not assign or in any way dispose of all or
any part of its rights or obligations under this Agreement without the prior
written consent of EPI.
17. Controlling Law: This Agreement shall be construed, interpreted and enforced
in accordance with the laws of the State of California. The jurisdiction and
Venue for any legal proceeding to interpret or enforce this Agreement shall be
in San Diego County, California.
18. Cardholder Chargebacks: In the event any transaction is disputed by the
cardholder's financial institution and as a result is charged back by that
financial institution, Customer hereby authorizes charging any such disputed
amount (plus any assessed fees) directly to Customer's clearing account as
defined in the signed ACH or any such disputed amount (plus any assessed fees)
may, at EPI's discretion, offset and reduce any CR's due Customer pursuant to
Paragraphs 3, above.
a. In accordance with Banking Regulation E and NACHA rules, requests for
adjustments of transaction amounts may not be made more than ninety (90) days
from transaction date.
19. Customer Service: EPI will provide Customer with a TOLL FREE, 24 hour
Customer Help line to be used by Customer and/or Location's employees in the
event help is needed in regards to the ATM.
20. Waiver: A waiver by either party of a breach of any provision of this
Agreement shall not constitute a waiver of that party's rights to otherwise
demand strict compliance with this Agreement and any and all provisions hereof .
21. Entire Agreement: This Agreement constitutes the entire Processing Agreement
of the parties hereto. There are no other promises, representations, terms,
conditions or obligations other then those contained herein. This Processing
Agreement, except for a corresponding ATM Application and Purchase Agreement.
supersedes all prior communications. representations or agreements, oral or
written. between the parties in regard to the services that EPI or the ATM
provides and shall not be modified except in writing and signed by both parties.
IN WITNESS WHERE0F, the undersigned duty authorized representatives of the
parties have executed this Agreement as of the day and year last stated below.
ELECTRONIC PROCESSING, INC,
8787 Complex Dr.
San Diego, CA 92123
819.712.1611
By:
Noah C. Wieder
Vice President - ATM _______________
Date
CUSTOMER
--------------------------
Customer Name
--------------------------
Address
--------------------------
City, State Zip
By: _______________________
----------------------------
Printed Name Title
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
<TABLE>
<CAPTION>
Name State of Incorporation
---- ----------------------
<S> <C>
Nationwide Automated Systems, Inc. California
Trigate Associates, Inc. (inactive) Nevada
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED
CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S FORM 10-SB AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 63,278
<SECURITIES> 0
<RECEIVABLES> 10,851
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 79,965
<PP&E> 19,200
<DEPRECIATION> (3,493)
<TOTAL-ASSETS> 100,659
<CURRENT-LIABILITIES> 59,005
<BONDS> 0
0
0
<COMMON> 700
<OTHER-SE> 40,954
<TOTAL-LIABILITY-AND-EQUITY> 100,659
<SALES> 248,561
<TOTAL-REVENUES> 309,686
<CGS> 138,121
<TOTAL-COSTS> 190,517
<OTHER-EXPENSES> 79,565
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 39,604
<INCOME-TAX> 4,500
<INCOME-CONTINUING> 35,104
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,104
<EPS-PRIMARY> .005
<EPS-DILUTED> 0
</TABLE>
