U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUER
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
AREA INVESTMENT AND DEVELOPMENT COMPANY
(Name of Small Business Issuer in its charter)
Utah 87-0284871
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
2133 East 9400 South, Suite 151, Sandy, Utah 84093
(Address of Principal Executive Offices and Zip Code)
Issuer's Telephone Number: (801) 944-0701
Securities to be registered under Section 12(b) of the Act:
Securities to be registered under Section 12(g) of the Act:
<PAGE>
TABLE OF CONTENTS
ITEM NUMBER AND CAPTION Page
Part I 3
1. Description of Business 3
2. Management's Discussion and Analysis or Plan of 7
Operations
3. Description of Properties 8
4. Security Ownership of Certain Beneficial Owners and 8
Management
5. Directors, Executive Officers, Promoters and Control 8
Persons
6. Executive Compensation 9
7. Certain Relationships and Related Transactions 10
8. Legal Proceedings 10
9. Market for Common Equity and Related Stockholder 10
Matters
10. Recent Sales of Unregistered Securities 11
11. Description of Securities 11
12. Indemnification of Directors and Officers 12
13. Financial Statements 13
14. Changes in and Disagreements with Accountants on 13
Accounting and Financial Disclosure
15. Financial Statements and Exhibits 13
<PAGE>
ITEM 1. DESCRIPTION OF BUSINESS
History
The Company was formed as a Utah corporation in June 1970, for
the purpose of engaging in real estate, general business and
investment opportunities. The Company has had no operations for
the past three years. The Company is a shell corporation seeking
a business venture to acquire. The Company entered into a
Financial Consulting Agreement with Park Street Investments,
Inc., a Utah corporation wholly owned by Ken Kurtz, an officer
and director. In consideration for consulting services and
payment of the Company's expenses, Company issued 3,000,000
shares of common stock to Park Street Investments, Inc., in
November 1997. Park Street Investments, Inc., assigned 2,000,000
of the shares to Ken Kurtz, and 500,000 each to Carrie Kurtz and
Tammy Gehring, both directors of the Company. In March 1999, the
Company completed the sale of 4,000,000 shares of its common
stock at a price of $0.03125 per share, or a total of $125,000.
The proceeds of the offering were used to pay outstanding
liabilities and a finders/consulting fee to Hudson Consulting
Group, Inc., in connection with a proposed acquisition of an
unrelated business. The proposed acquisition was subsequently
abandoned. In April 1999, the Company issued 2,000,000 shares of
its common stock to Ken Kurtz, an officer and director, at $0.01
per share, or a total of $20,000, which will be used as working
capital.
General
During the past three years, the Company has attempted to
identify and acquire a favorable business opportunity. The
Company has reviewed and evaluated a number of business ventures
for possible acquisition or participation by the Company. The
Company has not entered into any agreement, nor does it have any
commitment or understanding to enter into or become engaged in a
transaction as of the date of this filing. The Company continues
to investigate, review, and evaluate business opportunities as
they become available and will seek to acquire or become engaged
in business opportunities at such time as specific opportunities
warrant.
To date, opportunities have been made available to the Company
through its officers and directors and through professional
advisors including securities broker-dealers and through members
of the financial community. It is anticipated that business
opportunities will continue to be available primarily from these
sources.
To a large extent, a decision to participate in a specific
business opportunity may be made upon management's analysis
regarding the quality of the other firm's management and
personnel, the asset base of such firm or enterprise, the
anticipated acceptability of new products or marketing concepts,
the merit of the firms business plan, and numerous other factors
which are difficult, if not impossible, to analyze through the
application of any objective criteria.
Since its inception, the Company has had no active business
operations, and has been seeking to acquire an interest in a
business with long-term growth potential. The Company currently
has no commitment or arrangement to participate in a business and
cannot now predict what type of business it may enter into or
acquire. It is emphasized that the business objectives discussed
herein are extremely general and are not intended to be
restrictive on the discretion of the Company's management.
There are no plans or arrangements proposed or under
consideration for the issuance or sale of additional securities
by the Company prior to the identification of an acquisition
candidate. Consequently, management anticipates that it may be
able to participate in only one potential business venture, due
primarily to the Company's limited capital. This lack of
diversification should be considered a substantial risk, because
it will not permit the Company to offset potential losses from
one venture against gains from another.
3
<PAGE>
Selection of a Business
The Company anticipates that businesses for possible acquisition
will be referred by various sources, including its officers and
directors, professional advisors, securities broker-dealers,
venture capitalists, members of the financial community, and
others who may present unsolicited proposals. The Company will
not engage in any general solicitation or advertising for a
business opportunity, and will rely on personal contacts of its
officers and directors and their affiliates, as well as indirect
associations between them and other business and professional
people. By relying on "word of mouth", the Company may be
limited in the number of potential acquisitions it can identify.
While it is not presently anticipated that the Company will
engage unaffiliated professional firms specializing in business
acquisitions or reorganizations, such firms may be retained if
management deems it in the best interest of the Company.
Compensation to a finder or business acquisition firm may take
various forms, including one-time cash payments, payments based
on a percentage of revenues or product sales volume, payments
involving issuance of securities (including those of the
Company), or any combination of these or other compensation
arrangements. Consequently, the Company is currently unable to
predict the cost of utilizing such services. Pursuant to the
Financial Consulting Agreement between the Company and Park
Street Investments, Inc., Park Street Investments, Inc. is
entitled to 10% of the Company's issued and outstanding shares
after reorganization.
The Company will not restrict its search to any particular
business, industry, or geographical location, and management
reserves the right to evaluate and enter into any type of
business in any location. The Company may participate in a newly
organized business venture or a more established company entering
a new phase of growth or in need of additional capital to
overcome existing financial problems. Participation in a new
business venture entails greater risks since in many instances
management of such a venture will not have proved its ability,
the eventual market of such venture's product or services will
likely not be established, and the profitability of the venture
will be unproved and cannot be predicted accurately. If the
Company participates in a more established firm with existing
financial problems, it may be subjected to risk because the
financial resources of the Company may not be adequate to
eliminate or reverse the circumstances leading to such financial
problems.
In seeking a business venture, the decision of management will
not be controlled by an attempt to take advantage of any
anticipated or perceived appeal of a specific industry,
management group, product, or industry, but will be based on the
business objective of seeking long-term capital appreciation in
the real value of the Company.
The analysis of new businesses will be undertaken by or under the
supervision of the officers and directors. In analyzing
prospective businesses, management will consider, to the extent
applicable, the available technical, financial, and managerial
resources; working capital and other prospects for the future;
the nature of present and expected competition; the quality and
experience of management services which may be available and the
depth of that management; the potential for further research,
development, or exploration; the potential for growth and
expansion; the potential for profit; the perceived public
recognition or acceptance of products, services, or trade or
service marks; name identification; and other relevant factors.
It is anticipated that the results of operations of a specific
firm may not necessarily be indicative of the potential for the
future because of the requirement to substantially shift
marketing approaches, expand significantly, change product
emphasis, change or substantially augment management, and other
factors.
The Company will analyze all available factors and make a
determination based on a composite of available facts, without
reliance on any single factor. The period within which the
Company may participate in a business cannot be predicted and
will depend on circumstances beyond the Company's control,
including the availability of businesses, the time required for
the Company to complete its investigation and analysis of
prospective businesses, the time required to prepare appropriate
documents and agreements providing for the Company's
participation, and other circumstances.
4
<PAGE>
Acquisition of a Business
In implementing a structure for a particular business
acquisition, the Company may become a party to a merger,
consolidation, or other reorganization with another corporation
or entity; joint venture; license; purchase and sale of assets;
or purchase and sale of stock, the exact nature of which cannot
now be predicted. Notwithstanding the above, the Company does
not intend to participate in a business through the purchase of
minority stock positions. On the consummation of a transaction,
it is likely that the present management and shareholders of the
Company will not be in control of the Company. In addition, a
majority or all of the Company's directors may, as part of the
terms of the acquisition transaction, resign and be replaced by
new directors without a vote of the Company's shareholders.
In connection with the Company's acquisition of a business, the
present shareholders of the Company, including officers and
directors, may, as a negotiated element of the acquisition, sell
a portion or all of the Company's Common Stock held by them at a
significant premium over their original investment in the
Company. As a result of such sales, affiliates of the entity
participating in the business reorganization with the Company
would acquire a higher percentage of equity ownership in the
Company. Management does not intend to actively negotiate for or
otherwise require the purchase of all or any portion of its stock
as a condition to or in connection with any proposed merger or
acquisition. Although the Company's present shareholders did not
acquire their shares of Common Stock with a view towards any
subsequent sale in connection with a business reorganization, it
is not unusual for affiliates of the entity participating in the
reorganization to negotiate to purchase shares held by the
present shareholders in order to reduce the amount of shares held
by persons no longer affiliated with the Company and thereby
reduce the potential adverse impact on the public market in the
Company's common stock that could result from substantial sales
of such shares after the business reorganization. Public
investors will not receive any portion of the premium that may be
paid in the foregoing circumstances. Furthermore, the Company's
shareholders may not be afforded an opportunity to approve or
consent to any particular stock buy-out transaction.
In the event sales of shares by present shareholders of the
Company, including officers and directors, is a negotiated
element of a future acquisition, a conflict of interest may arise
because directors will be negotiating for the acquisition on
behalf of the Company and for sale of their shares for their own
respective accounts. Where a business opportunity is well suited
for acquisition by the Company, but affiliates of the business
opportunity impose a condition that management sell their shares
at a price which is unacceptable to them, management may not
sacrifice their financial interest for the Company to complete
the transaction. Where the business opportunity is not well
suited, but the price offered management for their shares is
high, Management will be tempted to effect the acquisition to
realize a substantial gain on their shares in the Company.
Management has not adopted any policy for resolving the foregoing
potential conflicts, should they arise, and does not intend to
obtain an independent appraisal to determine whether any price
that may be offered for their shares is fair. Stockholders must
rely, instead, on the obligation of management to fulfill its
fiduciary duty under state law to act in the best interests of
the Company and its stockholders.
It is anticipated that any securities issued in any such
reorganization would be issued in reliance on exemptions from
registration under applicable federal and state securities laws.
In some circumstances, however, as a negotiated element of the
transaction, the Company may agree to register such securities
either at the time the transaction is consummated, under certain
conditions, or at specified times thereafter. Although the terms
of such registration rights and the number of securities, if any,
which may be registered cannot be predicted, it may be expected
that registration of securities by the Company in these
circumstances would entail substantial expense to the Company.
The issuance of substantial additional securities and their
potential sale into any trading market which may develop in the
Company's securities may have a depressive effect on such market.
While the actual terms of a transaction to which the Company may
be a party cannot be predicted, it may be expected that the
parties to the business transaction will find it desirable to
structure the acquisition as a so-called "tax-free" event under
sections 351 or 368(a) of the Internal Revenue Code of 1986, (the
"Code"). In order to obtain tax-free treatment under section 351
of the Code, it would be necessary for the owners of the acquired
business to own 80% or more of the voting stock of the surviving
entity. In such event, the shareholders of the Company would
5
<PAGE>
retain less than 20% of the issued and outstanding shares of the
surviving entity. Section 368(a)(1) of the Code provides for tax-
free treatment of certain business reorganizations between
corporate entities where one corporation is merged with or
acquires the securities or assets of another corporation.
Generally, the Company will be the acquiring corporation in such
a business reorganization, and the tax-free status of the
transaction will not depend on the issuance of any specific
amount of the Company's voting securities. It is not uncommon,
however, that as a negotiated element of a transaction completed
in reliance on section 368, the acquiring corporation issue
securities in such an amount that the shareholders of the
acquired corporation will hold 50% or more of the voting stock of
the surviving entity. Consequently, there is a substantial
possibility that the shareholders of the Company immediately
prior to the transaction would retain less than 50% of the issued
and outstanding shares of the surviving entity. Therefore,
regardless of the form of the business acquisition, it may be
anticipated that stockholders immediately prior to the
transaction will experience a significant reduction in their
percentage of ownership in the Company.
Notwithstanding the fact that the Company is technically the
acquiring entity in the foregoing circumstances, generally
accepted accounting principles will ordinarily require that such
transaction be accounted for as if the Company had been acquired
by the other entity owning the business and, therefore, will not
permit a write-up in the carrying value of the assets of the
other company.
The manner in which the Company participates in a business will
depend on the nature of the business, the respective needs and
desires of the Company and other parties, the management of the
business, and the relative negotiating strength of the Company
and such other management.
The Company will participate in a business only after the
negotiation and execution of appropriate written agreements.
Although the terms of such agreements cannot be predicted,
generally such agreements will require specific representations
and warranties by all of the parties thereto, will specify
certain events of default, will detail the terms of closing and
the conditions which must be satisfied by each of the parties
prior to such closing, will outline the manner of bearing costs
if the transaction is not closed, will set forth remedies on
default, and will include miscellaneous other terms.
Operation of Business After Acquisition
The Company's operation following its acquisition of a business
will be dependent on the nature of the business and the interest
acquired. The Company is unable to predict whether the Company
will be in control of the business or whether present management
will be in control of the Company following the acquisition. It
may be expected that the business will present various risks,
which cannot be predicted at the present time.
Governmental Regulation
It is impossible to predict the government regulation, if any, to
which the Company may be subject until it has acquired an
interest in a business. The use of assets and/or conduct of
businesses which the Company may acquire could subject it to
environmental, public health and safety, land use, trade, or
other governmental regulations and state or local taxation. In
selecting a business in which to acquire an interest, management
will endeavor to ascertain, to the extent of the limited
resources of the Company, the effects of such government
regulation on the prospective business of the Company. In
certain circumstances, however, such as the acquisition of an
interest in a new or start-up business activity, it may not be
possible to predict with any degree of accuracy the impact of
government regulation. The inability to ascertain the effect of
government regulation on a prospective business activity will
make the acquisition of an interest in such business a higher
risk.
6
<PAGE>
Competition
The Company will be involved in intense competition with other
business entities, many of which will have a competitive edge
over the Company by virtue of their stronger financial resources
and prior experience in business. There is no assurance that the
Company will be successful in obtaining suitable investments.
Employees
The Company is a development stage company and currently has no
employees. Executive officers, who are not compensated for their
time contributed to the Company, will devote only such time to
the affairs of the Company as they deem appropriate, which is
estimated to be approximately 20 hours per month per person.
Management of the Company expects to use consultants, attorneys,
and accountants as necessary, and does not anticipate a need to
engage any full-time employees so long as it is seeking and
evaluating businesses. The need for employees and their
availability will be addressed in connection with a decision
whether or not to acquire or participate in a specific business
industry.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATIONS
Results of Operations
Period Ended May 31, 1999 and Calendar Years Ended December 31,
1998 and 1997
The Company had no revenue from continuing operations for the
periods ended May 31, 1999, December 31, 1998 and 1997.
General and administrative expenses for period ended May 31, 1999
were $90,000, compared to $480 for the year ended December 31,
1998 and $46,107 for the year ended December 31, 1997. General
and administrative expenses during the fiscal year 1999,
consisted of a finder/consulting fee in the amount of $90,000 to
Hudson Consulting Group, Inc. for introducing a potential
candidate or acquisition by the Company.
The Company has a net loss of $90,000 for the period ended May
31, 1999, a net income of $51,435 for the year ended December 31,
1998 and a net loss of $46,107 for the year ended December 31,
1997. The Company's net gain for the year ended December 31,
1998 is attributable to management's negotiation of accounts
payable due to a prior consultant in the amount of $51,915.
The Company does not expect to generate any meaningful revenue or
incur operating expenses unless and until it acquires an interest
in an operating company.
Liquidity and Capital Resources
At May 31, 1999, the Company had a working capital of $20,000.
The Company's cash in the amount of $20,000 resulted from the
sale of 2,000,000 of the Company's common stock to Ken Kurtz, the
Company's president and a director. The shares were sold to
obtain capital to pay the costs of becoming a reporting company
under the Securities Exchange Act of 1934. Management is hopeful
that becoming a reporting company will increase the number of
prospective business ventures that may be available to the
Company. Management believes that the Company has sufficient
cash to meet the anticipated needs of the Company's operations
through at least the first calendar quarter of 2000. However,
there can be no assurances to that effect, as the Company has no
revenues and the Company's need for capital may change
dramatically if it acquires an interest in a business opportunity
during that period. The Company's current operating plan is to
(i) handle the administrative and reporting requirements of a
public company; and (ii) search for potential businesses,
products, technologies and companies for acquisition. At
present, the Company has no understandings, commitments or
agreements with respect to the acquisition of any business,
product, technology or company and there can be no assurance that
the Company will identify any such business, product, technology
7
<PAGE>
or company suitable for acquisition in the future. Further,
there can be no assurance that the Company would be successful in
consummating any acquisition on favorable terms or that it will
be able to profitably manage the business, product, technology or
company it acquires. If the Company is unable to participate in
a business venture by the end of the first calendar quarter of
2000, it may require additional capital to continue its search
for a business venture and avoid dissolution. There is no
assurance additional capital will be available to the Company on
acceptable terms.
ITEM 3. DESCRIPTION OF PROPERTIES
The Company uses offices and related clerical services at 2133
East 9400 South, Suite 151, Sandy, Utah 84093, provided by an
officer and director of the Company.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth as of July 31, 1999, the number
and percentage of the outstanding shares of common stock which,
according to the information supplied to the Company, were
beneficially owned by (i) each person who is currently a director
of the Company, (ii) each executive officer, (iii) all current
directors and executive officers of the Company as a group and
(iv) each person who, to the knowledge of the Company, is the
beneficial owner of more than 5% of the outstanding common stock.
Except as otherwise indicated, the persons named in the table
have sole voting and dispositive power with respect to all shares
beneficially owned, subject to community property laws where
applicable.
Common Percent
Shares of
Class
Name and Address
Ken Kurtz (1) 4,000,000 44.2
2133 East 9400 South, Suite 151
Sandy, Utah 84093
Carrie Kurtz (1) 500,000 5.5
2133 East 9400 South, Suite 151
Sandy, Utah 84093
Tammy Gehring (1) 500,000 5.5
2133 East 9400 South, Suite 151
Sandy, Utah 84093
All Executive officers and 4,800,000 55.2
Directors as a Group (3
persons)
(1) Messrs. Ken Kurtz, Carrie Kurtz and Gehring are all of the
officers and directors of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS
Directors and Officers
The following table sets forth the names, ages, and positions
with the Company for each of the directors and officers of the
Company.
8
<PAGE>
Name Age Positions (1) Since
Ken Kurtz 31 President and Director 1997
Carrie Kurtz 36 Vice President and Director 1997
Tammy Gehring 24 Secretary, Treasurer and 1997
Director
All executive officers are elected by the Board and hold office
until the next Annual Meeting of stockholders and until their
successors are elected and qualify.
The following is information on the business experience of each
director and officer.
Mr. Kurtz has been since February 1992, the president, sole
director and sole shareholder of Park Street Investments, Inc., a
Utah corporation and the Company's largest shareholder. Through
Park Street Investments, Inc., Mr. Kurtz provides consulting
services to public and private companies on mergers,
recapitalizations, and other forms of corporate reorganization.
Mr. Kurtz is, and additionally, Mr. Kurtz has served on the board
of directors and as an officer of other reporting publicly held
companies including Hamilton Exploration Co., Inc. in 1995 and is
currently deemed a control person of Nugget Exploration, Inc. Mr.
Kurtz graduated from the University of Utah with a Bachelor's of
Science degree in Finance.
Mrs. Kurtz, age 36, has been Vice-President and director of the
Company since September 25, 1997. Mrs. Kurtz is married to Ken
Kurtz, the Company's President and director. From January 1992
until the present, Mrs. Kurtz has held several part time
positions in the health, banking, and food service industries
while also working as a homemaker. Prior to 1992, Mrs. Kurtz
spent seven years in the banking industry in positions ranging
from customer representative to branch manager. Mrs. Kurtz is
not an officer, director or control person of any other public
company.
Tammy Gehring, age 24, became Secretary, Treasurer and director
of the Company on September 25, 1997. Ms. Gehring is employed at
Park Street Investments, Inc. as an assistant and consultant in
Mergers and Acquisitions since June 1997. Prior to this, Ms.
Gehring was employed as an administrative assistant in the
mergers and acquisitions department of a financial consulting
firm based in Salt Lake City, Utah since December 1995. Previous
to that, Ms. Gehring was an accounting and finance student at
Salt Lake Community College. Ms. Gehring served as an officer
and director of Flexweight Corporation from August 1996 until May
1998. Currently, Ms. Gehring is not an officer, director or
control person of any other public company.
Other Shell Company Activities
Mr. Kurtz is currently an officer, director, and controlling
stockholder of Score One, Inc. and of Nugget Exploration, Inc.,
both publicly held shell corporations seeking a business
acquisition. The possibility exists that Mr. Kurtz could become
an officers, director, or major stockholder of other shell
companies in the future. Certain conflicts of interest are
inherent in the participation of the Company's officers and
directors as management in other shell companies, which may be
difficult, if not impossible, to resolve in all cases in the best
interests of the Company. Failure by management to conduct the
Company's business in its best interests may result in liability
of management of the Company to the shareholders.
ITEM 6. EXECUTIVE COMPENSATION
The Company has no agreement or understanding, express or
implied, with any officer, director, or principal stockholder, or
their affiliates or associates, regarding employment with the
Company or compensation for services. The Company has no plan,
agreement, or understanding, express or implied, with any
officer, director, or principal stockholder, or their affiliates
or associates, regarding the issuance to such persons of any
shares of the Company's authorized and unissued common stock.
10
<PAGE>
There is no understanding between the Company and any of its
present stockholders regarding the sale of a portion or all of
the common stock currently held by them in connection with any
future participation by the Company in a business. There are no
other plans, understandings, or arrangements whereby any of the
Company's officers, directors, or principal stockholders, or any
of their affiliates or associates, would receive funds, stock, or
other assets in connection with the Company's participation in a
business. No advances have been made or contemplated by the
Company to any of its officers, directors, or principal
stockholders, or any of their affiliates or associates.
There is no policy that prevents management from adopting a plan
or agreement in the future that would provide for cash or stock
based compensation for services rendered to the Company.
On acquisition of a business, it is possible that current
management will resign and be replaced by persons associated with
the business acquired, particularly if the Company participates
in a business by effecting a stock exchange, merger, or
consolidation as discussed under "BUSINESS." In the event that
any member of current management remains after effecting a
business acquisition, that member's time commitment and
compensation will likely be adjusted based on the nature and
location of such business and the services required, which cannot
now be foreseen.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1997, the Company entered into a consulting agreement
with Park Street Investments, Inc., a corporation wholly owned by
Ken Kurtz, the Company's President and Director. Pursuant to
that agreement, Park Street Investment, Inc. has agreed to pay
all necessary expenses to maintain the Company in good standing
and to assist in seeking out a favorable business opportunity.
In consideration for the above services, the Company issued
3,000,000 shares of common stock to Park Street Investments,
Inc., which were subsequently assigned to Mr. Kurtz and the other
two directors of the Company. In addition to these shares, Park
Street Investments, Inc. is entitled to up to 15% of the total
outstanding shares of the Company post-merger, as well as any
cash fees it can obtain from a merger candidate.
In April 1999, the Company sold 2,000,000 shares of common stock
to Ken Kurtz, an officer and director, for $20,000. The shares
were sold to raise working capital to pay the cost of the Company
becoming a reporting company under the Securities Exchange Act of
1934.
ITEM 8. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal
proceedings, and to the best of its knowledge, no such
proceedings by or against the Company have been threatened.
ITEM 9. MARKET FOR COMMON EQUITY AND OTHER STOCKHOLDER MATTERS
The Company's common stock has traded thinly in the over-the-
counter market. There was no trading market for the common stock
prior to the last quarter of 1998. The following table sets
forth for the respective periods indicated the prices of the
common stock in the over-the-counter market, as reported and
summarized on the OTC Bulletin Board. Such prices are based on
inter-dealer bid and asked prices, without markup, markdown,
commissions, or adjustments and may not represent actual
transactions.
Calendar Quarter High Bid ($) Low Bid ($)
Ended
December 31, 1998 2.5 0.00
March 31, 1999 1.5 0.25
June 30, 1999 0.5 0.25
10
<PAGE>
Since its inception, no dividends have been paid on the Company's
common stock. The Company intends to retain any earnings for use
in its business activities, so it is not expected that any
dividends on the common stock will be declared and paid in the
foreseeable future.
At July 31, 1999, there were approximately 41 holders of record
of the Company's Common Stock.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES
On April 5, 1999, the Company issued 2,000,000 shares of common
stock to Ken Kurtz, the Company's president and a director, for
$20,000. The shares were issued in reliance on the exemption
under Section 4(2) of the Securities Act of 1933. No broker was
involved and no commissions were paid.
On March 30, 1999, the Company completed an offering of 4,000,000
shares of the Company's common stock at a price of $0.03125, or a
total of $125,000. The shares were offered and sold in reliance
on the exemption set forth in Rule 504 of Regulation D. The
offering was made in anticipation of a business combination with
an Internet company, which subsequently failed to occur. No
broker was involved in the offering and no commissions were paid.
The name and number of shares purchased by each investor are as
follows:
Investor Name Shares Purchased
Type Investment Holdings, Ltd. 81,250
Leeward Consulting Group, L.L.C. 81,250
A-Z Oil, L.L.C. 770,000
David Michael Irrevocable Trust 730,000
Ariel Finances, Inc. 800,000
Arno Holding Corp. 800,000
Yosif Flek 737,500
In November 1997, the Company issued 3,000,000 shares of its
common stock to Park Street Investments, Inc., as compensation
for services and advancement of certain costs for the benefit of
the Company. The shares were subsequently assigned to the
officers and directors of the Company. The shares were sold in
reliance on the exemption under Section 4(2) of the Securities
Act of 1933. No broker was involved and no commissions were
paid.
ITEM 11. DESCRIPTION OF SECURITIES
The Company is authorized to issue 50,000,000 shares of common
stock, par value $0.01 per share, of which 9,048,171 shares are
issued and outstanding. Holders of common stock are entitled to
one vote per share on each matter submitted to a vote at any
meeting of stockholders. Shares of common stock do carry
cumulative voting rights and, therefore, shareholders are
entitled to accumulate their vote by giving one candidate as many
votes as the number of such directors multiplied by the number of
the shareholders shares, or by distributing such votes computed
among any number of such candidates. The Company's board of
directors has authority, without action by the Company's
stockholders, to issue all or any portion of the authorized but
unissued shares of common stock, which would reduce the
percentage ownership in the Company of its stockholders and which
may dilute the book value of the common stock. Stockholders of
the Company have no pre-emptive rights to acquire additional
shares of common stock. The common stock is not subject to
redemption and carries no subscription or conversion rights. In
the event of liquidation of the Company, the shares of common
stock are entitled to share equally in corporate assets after
satisfaction of all liabilities.
Holders of common stock are entitled to receive such dividends as
the board of directors may from time to time declare out of funds
legally available for the payment of dividends. The Company has
not paid dividends on its common stock and does not anticipate
that it will pay dividends in the foreseeable future.
11
<PAGE>
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 16-10a-902 of the Utah Code Annotated provides in
relevant part as follows:
(1) Except as provided in Subsection (4), a corporation may
indemnify an individual made a party to a proceeding because he
is or was a director, against liability incurred in the
proceeding if:
(a) his conduct was in good faith; and
(b) he reasonably believed that his conduct was in, or not
opposed to, the corporation's best interests; and
(c) in the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
(4) A corporation may not indemnify a director under this
section:
(a) in connection with a proceeding by or in the right of
the corporation in which the director was adjudged liable to the
corporation; or
(b) in connection with any other proceeding charging that
the director derived an improper personal benefit, whether or not
involving action in his official capacity, in which proceeding he
was adjudged liable on the basis that he derived an improper
personal benefit.
(5) Indemnification permitted under this section in
connection with a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in
connection with the proceeding.
Section 16-10a-903 of the Utah Code Annotated provides in
relevant part as follows:
Unless limited by its articles of incorporation, a corporation
shall indemnify a director who was successful, on the merits or
otherwise, in the defense of any proceeding, or in the defense of
any claim, issue, or matter in the proceeding, to which he was a
party because he is or was a director of the corporation, against
reasonable expenses incurred by him in connection with the
proceeding or claim with respect to which he has been successful.
Section 16-10a-907 of the Utah Code Annotated provides in
relevant part as follows:
Unless a corporation's articles of incorporation provide
otherwise:
(1) an officer of the corporation is entitled to mandatory
indemnification under Section 16-10a-903, and is entitled to
apply for court-ordered indemnification under Section 16-10a-905,
in each case to the same extent as a director;
(2) the corporation may indemnify and advance expenses to an
officer, employee, fiduciary, or agent of the corporation to the
same extent as to a director; and
(3) a corporation may also indemnify and advance expenses to
an officer, employee, fiduciary, or agent who is not a director
to a greater extent, if not inconsistent with public policy, and
if provided for by its articles of incorporation, bylaws, general
or specific action of its board of directors, or contract.
The Company's by-laws provide that the Company shall indemnify to
the full extent of its power to do so under Utah law, all
directors and officers of the Company for any liability including
costs of defense reasonably incurred in connection with any
action, suit, or proceeding to which such person may be a party
by reason of such person's position with the Company, if the
officer or director acted in good faith and in a manner the
12
<PAGE>
officer or director reasonably believed to be in, or not opposed
to, the best interests of the corporation. Consequently, the
Company intends to indemnify its officers and directors to the
full extent permitted by the statute noted above.
ITEM 13. FINANCIAL STATEMENTS
The financial statements of the Company appear at the end of
this report beginning with the Index to Financial Statements on
page F-1.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no changes in or disagreements with accountants
since the Company's organization.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS
The following financial statements of the Company appear at the
end of this registration statement beginning with the Index to
Financial Statements on page F-1.
Independent Auditors' Report
Balance Sheets
Statement of Operations
Statement of Stockholders' Equity
Statement of Cash Flows
Notes to the Financial Statements
Exhibits
Copies of the following documents are included as exhibits to
this report pursuant to Item 601 of Regulation S-B.
Exhibi SEC Title of Document Page
t Ref.
No. No.
1 (3)(i) Articles of Incorporation
E-1
2 (3)(ii) By-Laws E-9
3 (10) Assignment of Accounts Receivable E-22
Dated December 14, 1998
4 (10) Settlement Agreement Dated June 25, E-23
1998
5 (10) Financial Consulting Agreement Dated E-24
June 15, 1997
6 (27) Financial Data Schedules *
* The Financial Data Schedule is presented only in the
electronic filing with the Securities and Exchange Commission.
13
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act
of 1934, the registrant caused this registration statement to be
signed on its behalf by the undersigned thereunto duly
authorized.
AREA INVESTMENT AND DEVELOPMENT
COMPANY
Date: August 6, 1999 By: /s/ Ken Kurtz, President
In accordance with the Exchange Act, this registration statement
has been signed by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Dated: August 6, 1999 /s/ Ken Kurtz, Director
Dated: August 6, 1999 /s/ Carrie Kurtz, Director
Dated: August 6, 1999 /s/ Tammy Gehring, Director
14
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
TABLE OF CONTENTS
AUDITOR'S REPORT F-2
FINANCIAL STATEMENTS
Balance Sheets F-3
Statements of Operations F-4
Statements of Shareholders' Equity F-5
Statements of Cash Flows F-6
Notes of Financial Statements F-7
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
Board of Directors
Area Investment and Development Company
Salt Lake City, Utah
We have audited the accompanying balance sheets of Area Investment
and Development Company as of June 30, 1999 and December 31, 1998
and 1997, and the related statements of operations, shareholders'
equity, and cash flows for the six months ended June 30, 1999 and
for the two years ending December 31, 1998 and 1997. These
financial statements are the responsibility of the Company's
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatements. An audit
includes examining on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Area
Investment and Development Company as of as of June 30, 1999 and
December 31, 1998 and 1997, and the results of its operations and
its cash flows for the six months ended June 30, 1999 and for the
two years ending December 31, 1998 and 1997 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been presented assuming
the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company is not a going concern.
The financial statements do not include any adjustments that might
otherwise be required since the Company is not a going concern.
Sellers & Associates
July 6, 1999
F-2
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Balance Sheets
June 30, December 31,___
1999 1998 1997
ASSETS
Current Assets:
Cash $ 20,000 $ - $ -
Total Current Assets - - -
Total Assets $ 20,000 $ - $ -
LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT)
LIABILITIES
Current Liabilities:
Accounts Payable $ - $ 35,000 $ 86,435
Total Liabilities: - 35,000 86,435
COMMITMENTS/CONTINGENCIES - - -
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock $.01 par
value; authorized
50,000,000 shares
Issued and outstanding
9,048,173 shares at 6-30-99
and 3,048,173 shares at
12-31-98 and 12-31-97
90,482 30,482 30,482
Additional paid-in 116,700 31,700 31,700
capital
Accumulated (deficit) (187,182) (97,182) (148,617)
Net stockholders'
equity (deficit) 20,000 (35,000) (86,434)
Total Liabilities and
Stockholders' Equity
(Deficit) $ 20,000 $ - $ -
See accompanying notes
F-3
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Statements of Operations
Six Months
Ended
June 30, December 31,______
1999 1998 1997__
Revenues $ - $ - $ -
Costs and Expenses 90,000 $ 480 46,107
(Loss) from regular
activity - (480) (46,107)
Debt forgiveness
from settlement
of payable - 51,915 -
Net Income (loss) $ (90,000) $ 51,435 $ (46,107)
Income (loss per
share $ ( 0.01) $ 0.02 $ ( .04)
Weighted average
shares outstanding
during the period 6,197,344 3,048,173 1,278,309
See accompanying notes
F-4
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Statements of Stockholders' Equity
June 30, 1999 and
December 31, 1998 and 1997
Common Stock
____________________
Additional
Number of Par Paid In (Deficit)
Shares Value Capital Accumulated
__________ ________ _________ _______________
Balance December
31, 1996 48,173 $ 482 $ 31,700 $(102,510)
Issuance of
stock 3,000,000 30,000 - -
Net (loss) - - - (46,107)
Balance December
31, 1997 3,048,173 30,482 31,700 (148,617)
Net income - - - 51,435
Balance December
30, 1998 3,048,173 30,482 31,700 ( 97,182)
Issuance of
stock 6,000,000 60,000 85,000 -
Net (loss) - - - ( 90,000)
Balance June
30, 1999 9,048,173 $90,482 $116,700 $(187,182)
========= ======== ========== =============
See accompanying notes
F-5
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Statements of Cash Flows
Six Months
Ended
June December 31, __
30, 1999 1998 1997
Cash flows from
operating activities:
Net income (loss) ($90,000) $ 51,435 $(46,107)
Reconciliation of net income (loss)
To net cash provided (used) by
operating activities:
Increase/(decrease) in Accounts
Payable regular (35,000) - 16,107
Settlement of debt (payables) - (51,435) -
Net Cash provided (used) by ___________ ________ ________
operating activities (125,000) - (30,000)
Non cash flows from investing
activities
Issuance of stock for cash 142,461
Issuance of stock for settlement
of debt 2,539 - 30,000
Issuance of stock for services-
non cash activity - - 30,000
Net increases (decreases) in cash 20,000 - -
Cash, beginning of year/period - - -
Cash, end of year/period $ 20,000 $ - $ -
Supplemental Schedule of Non Cash Activities
On June 15, 1997 2,000,000 shares of restricted common stock valued at
$20,000 were authorized to be issued for services at $.01 per share and
on November 10, 1997 1,000,000 shares of restricted common stock valued
at $10,000 were authorized to be issued for services at $.01 per share.
All 3,000,000 shares were issued by November 25,1997.
On March 24, 1999, the Company issued 81,250 shares of common stock for
$2,539 in debt settlement.
See accompanying notes
F-6
<PAGE>
AREA INVESTMENT AND DEVELOPMENT COMPANY
Notes to Financial Statements
June 30, 1999 and
December 31, 1998 and 1997
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Organization:
The Company was incorporated under the laws of the State of Utah
on June 10, 1970 to engage in real estate development, general
business and investment opportunities.
Income Taxes:
The Company has adopted the provisions of statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes,"
which incorporates the use of the asset and liability approach of
accounting for income taxes. The asset and liability approach
requires the recognition of deferred tax assets and liabilities
for the expected future consequences of temporary differences
between the financial reporting basis and tax basis of assets and
liabilities.
At June 30, 1999, the Company has $187,182 net operating loss of
which $187,182 is the net operating loss carry-forward that could
be offset against future taxable income, including the remaining
of the current year to end December 31, 1998. The loss carry-
forward expires December 31, 2014. Because of the uncertainty of
ever using the net operating loss, it has no value assigned to
the financial statements.
The Company changed its income tax reporting year end from June
30 to December 31, effective December 31, 1998.
Statement of Cash Flows:
For the purpose of the statement of cash flows, the Company
considers all highly liquid investments with maturity of three
months or less to be cash equivalents.
Net Income (Loss) Per Share:
Primary net income (loss) per share is computed by dividing net
income (loss) by the weighted average number of common shares
outstanding.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could
differ from those estimates.
NOTE 2 GOING CONCERN AND EFFORTS TO REVIVE COMPANY:
Up until January 26, 1999 the Company had been inactive and non-
operating for years; consequently, it was not a going concern.
In June of 1995, the Company's previous board of directors was
approached by its current President and Director who proposed to
revive the Corporation and to seek out and identify a suitable
candidate with which to merge in order to provide value to its
shareholders. In July of 1995, the Company's board of directors
F-7
<PAGE>
resigned and was replaced by a new board of directors including
its current President. Because the Company had no assets or
resources to compensate or induce personnel to assist it with
such a program of reviving or combining the Company with an
operational business, the Company entered into a Financial
Consulting Agreement ("Agreement") with Park Street Investments,
Inc. ("Park Street") in June of 1997. Park Street is a Utah
Corporation 100% owned by Ken Kurtz, the Company's President,
majority shareholder and director.
According to the Agreement, Park Street has agreed to assist the
Company with its corporate maintenance, administration, financial
statement preparation and securities filings. In addition, Park
Street is to actively pursue, negotiate and structure a merger or
business combination with a third party on behalf of the Company.
Park Street has also agreed to pay for the costs associated with
these responsibilities until the Company effects a combination
with another entity.
As consideration for its services and payment of the Company's
costs therewith, the Company's board authorized the issuance of
3,000,000 restricted common stock shares valued at $.01 per
share. By November 25, 1997 all 3,000,000 shares were issued. Of
this, Park assigned 2,000,000 shares to Ken Kurtz, who is both
the Company's and Park's President and 500,000 shares to each of
the Company's two directors for their assistance with Park in
implementing its contract with the Company.
Also according to the Agreement, Park Street shall be entitled to
as much as 15% of the total issued and outstanding shares of the
Company after a business combination. Park Street shall also be
entitled to any cash consideration it can negotiate from a
potential reorganization entity.
Because the exact number of shares to be outstanding after a
business combination is currently unknown and because the exact
percentage of ownership that Park Street is entitled to will be
subject to negotiations between the Company, Park Street, and a
potential target Company, the actual number of shares to be owned
by Park Street will be modified by mutual agreement by the
parties involved. Moreover, the amount of cash that Park Street
is to receive is also subject to negotiations and is currently
unknown. In no event, shall Park Street's ownership percentage
exceed more than 15% of the total outstanding shares of the
Company after a business combination.
This agreement resulted in a change in control of the Company
giving Ken Kurtz 66% control of the Company's common stock. This
stock issuance is not deemed to be at arms length.
In January 1999, the Company began discussions with
representatives of Fax4free.com, Inc. - an online service
provider - for the possibility of a business combination. As
such, the Company changed its business plan from seeking a
business combination with an unidentified Company to effecting a
business transaction with Fax4free.com, Inc. In anticipation of
such business combination, the Company authorized an offering for
4,000,000 shares of its common stock under Regulation D Rule 504
at $.03125 per share to raise $125,000. Proceeds were to be used
to pay expenses related to the business combination and to pay
off the remainder of the Company's debts.
On March 30, 1999, the Company closed the offering after having
sold the 4,000,000 shares to seven investors of which 3,918,750
shares were sold for $122,461 in cash and 81,250 were sold for
$2,539 in debt settlement. On March 24, 1999, the Company paid
off the remainder of its debts in the amount of $32,461 and paid
a finder/consulting fee in the amount of $90,000 to Hudson
Consulting Group, Inc. ("Hudson") for introducing Fax4free.com,
Inc. to the Company. Hudson has agreed to assist in locating
another merger acquisition candidate as part of its $90,000 fee
F-8
<PAGE>
which has been already paid. Management has opted to expense the
entire $90,000 fee which is non-refundable because Hudson does
not have an exclusive agreement with management and is not
obligated to perform. Therefore, there are no assurances that
the Company may not be obligated to pay additional fees to other
parties in the future.
On April 5, 1999 the Company sold and issued 2,000,000 restricted
shares of its common stock to it its President, Ken W. Kurtz for
$20,000 cash.
Later in April, the company terminated its negotiations with
Fax4free.com, Inc.
NOTE 3 CONTINGENT LIABILITY:
On or before the corporate year end of June 30, 1992, the Company
reported uncollected receivables of $22,554, $11,643 of which
were loans to stockholders. Reported liabilities were $1,700.
The corporation continued in this state of no activity
thereafter. In 1995, prior management personally assumed all
corporate debt in exchange for the forgiveness of the loans to
stockholders and the uncollected receivables of the Company, thus
leaving the Company with no assets or liabilities.
NOTE 4 CHANGE IN COMPANY MANAGEMENT:
In June 1997 the Company appointed Ken Kurtz, a director at the
time, as the Company's President. In September 1997, the Company
appointed Tammy Gehring and Carrie Kurtz as additional directors
and as Secretary/Treasurer and Vice President respectively. Ms.
Gehring is also employed by Park. Mrs. Kurtz is the wife of the
Company's President/Director.
NOTE 5 REDUCED SETTLEMENT OF PAYABLE
Present management negotiated a settlement of accounts payable
due to a prior consultant. On June 25, 1998, the payable was
reduced by $51,915, going from $86,915 to $35,000. In February
1999, the Company issued 81,250 common stock shares to a creditor
towards payment of its $35,000 note payable. The 81,250 share
issuance was valued at $.03125 per share and hence reduced the
$35,000 obligation by $2,539. On March 24, 1999, the Company paid
off the remainder of its debts in the amount of $32,461 from
proceeds of its January 1999 Regulation D Rule 504 common stock
offering. Currently, the Company has no debts.
NOTE 6 ISSUANCE OF ADDITIONAL STOCK:
In June of 1997, the company entered into a consulting agreement
with Park Street Investments, Inc. ("Park"), a firm 100% owned by
the Company's President whereby Park has agreed to pay all
necessary expenses to maintain the company in good standing and
to seek out a merger with a viable operating entity. Park has
also agreed to provide all administrative assistance, office
space and costs as part of its Agreement. In consideration for
the above, the Company authorized the issuance of 3,000,000
restricted common stock shares valued at $.01 per share. By
November 25, 1997 all 3,000,000 shares were issued. Of this, Park
assigned 2,000,000 shares to Ken Kurtz, who is the Company's and
Park's President and 500,000 shares to each of the Company's two
directors for their assistance with Park in implementing its
contract with the Company.
In January 1999, the Company authorized an offering for 4,000,000
shares of its common stock under Regulation D Rule 504 at $.03125
per share to raise $125,000. Proceeds were to be used to pay
F-9
<PAGE>
expenses related to the business combination and to pay off the
remainder of the Company's debts. On March 30, 1999, the
Company closed the offering after having sold the 4,000,000
shares to seven investors of which 3,918,750 shares were sold for
$122,461 in cash and 81,250 were sold for $2,539 in debt
settlement.
On April 5, 1999 the Company sold and issued 2,000,000 restricted
shares of its common stock to it its President, Ken W. Kurtz for
$20,000 cash.
F-10
<PAGE>
E-1
Exhibit No. 1
Form 10-SB
Area Investment and Development Company
ARTICLES OF INCORPORATION
OF
AREA INVESTMENT AND DEVELOPMENT COMPANY
We, the undersigned natural persons of the age of twenty-one
years or more, acting as Incorporators under the Utah Business
Corporation Act, adopt the following Articles of Incorporation
for Area Investment and Development Company.
ARTICLE I
CORPORATE NAME
The name of this corporation is: AREA INVESTMENT AND
DEVELOPMENT COMPANY.
ARTICLE II
DURATION OF CORPORATION
The corporation is to have perpetual existence unless
dissolved or terminated according to law.
ARTICLE III
CORPORATE PURPOSES
The purpose for which the corporation is organized is to
transact the business of investing in behalf of itself or others
any part of its capital and such additional funds as it may
obtain or any interest herein, either as tenant is common or
otherwise, and selling or otherwise disposing of the same or any
part thereof or interest herein. In carrying out these general
purposes and objectives, the corporation shall have the power:
(a) To act as principal or agent for others; to
hold property, including shares of its own stock, in
trust as trustee for stockholders of the corporation
E-1
<PAGE>
other others, to participate as a partner in any
partnership allowed by law; to subdivide and improve
land in any manner and to any extent.
(b) To do all things to the same extent and as
fully as natural persons now do or could do in the
State of Utah or in any other state, country, or place,
to do all things and engage in all lawful transactions
which a corporation organized or existing under the
laws of the State of Utah might do or engage in, even
though not expressly stated herein.
The foregoing shall be construed both as objects and powers,
but no recitation or declaration of specific or special powers or
purposes herein enumerated shall be deemed to be exclusive; and
it is hereby expressly declared that all other lawful purposes
not inconsistent herewith are hereby included.
ARTICLE IV
SHARES
The aggregate number of shares which this corporation shall
have authority to issue is FIFTY MILLION (50,000,000) shares as a
par value of ONE CENT (.01) per share, being an aggregate capital
of $500,000.00. All stock of the corporation shall be of the one
class and have the same rights and preferences. Fully paid stock
of this corporation shall not be liable to any further call or
assessment.
ARTICLE V
COMMENCING BUSINESS
This corporation will no commence business until
consideration of a value of at least $1,000.00 has been received
for the issuance of shares.
ARTICLE VI
PRE-EMPTIVE RIGHTS CUMULATIVE VOTING
The authorized stock of this corporation may be issued at
E-2
<PAGE>
such times, upon such terms and conditions, and for such
consideration as the Board of Directors shall determine.
Stockholders shall have no pre-emptive rights in issues of
authorized stock.
At each election for directors, every shareholder entitled
to vote at such election shall have the right to accumulate his
vote by giving one candidate as many votes as the number of such
directors multiplied by the number of his shares shall equal, or
by distributing such votes computed among any number of such
candidates.
ARTICLE VII
INTERNAL AFFAIRS
The Directors shall adopt Bylaws for the regulation of the
internal affairs of the corporation, which Bylaws may be amended
form time to time or repealed pursuant to law.
ARTICLE VIII
REGISTERED OFFICE AND AGENT
The address of this corporation's initial registered office
is:
7545 South 2700 East
Salt Lake City, Utah 84121
The name of this corporation's initial registered agent is:
Edward B. Erekson
7545 South 2700 East
Salt Lake City, Utah 84121
ARTICLE IX
DIRECTORS
The Board of Directors shall consist of a variable number of
three (3) to nine (9) members, as the Board of Directors may
itself from time to time determine; until determination is made
in the future by the Board of Directors, the Board shall consist
E-3
<PAGE>
of (3) Directors. The names and addresses of the persons who are
to serve as Directors until the first annual meeting of
shareholders or until their successors be elected and qualify,
are as follows:
NAME
ADDRESS
DENNIS C. SAHLEEN 2863 Bridgewater Drive
Salt Lake City, Utah
EDWARD B. EREKSON 7545 South 2700 East
Salt Lake City, Utah
VERN MAESER YOUNG 372 South 850 East
Bountiful, Utah
ARTICLE X
POWER TO SELL ASSETS AND CREATE INDEBTEDNESS
In carrying on the business of the corporation, the Board of
Directors is authorized and empowered to sell, exchange,
mortgage, bond or otherwise dispose of, deal with and encumber
any or all of the property of the corporation, upon such terms
and conditions as such Board of Directors may deem just and
proper and for the best interest of the corporation, without
prior authorization or subsequent confirmation by a vote of the
stockholders or otherwise.
ARTICLE XI
OFFICERS AND DIRECTORS CONTRACTS
No contract or other transaction between this corporation
and any other corporation shall be affected by the fact that a
Director or officer of this corporation is interested in or is a
Director or officer of such other corporation; and any Director,
individually, or jointly, may be a party to or may be interested
in any corporation or transaction of this corporation or in which
this corporation is interested; and no contract or other
transaction of this corporation with any person, firm or
E-4
<PAGE>
corporation shall be affected by the fact that any Director of
this corporation is a party to or is interested in such contract,
act, or transaction or in any way connected with such person,
firm, or corporation, and every person who may become a Director
of this corporation is hereby relieved from liability that might
otherwise exist from contraction with the corporation for the
benefit of himself or any firm, association or corporation in
which he may be in any way interested, provided said Director
acts in good faith and discloses his interest in any such
transaction to the Board of Director of the corporation.
ARTICLE XII
INCORPORATORS
The name and address of each incorporator is as follows:
NAME
ADDRESS
DENNIS C. SAHLEEN 2863 Bridgewater Drive
Salt Lake City, Utah 84121
EDWARD B. EREKSON 7545 South 2700 East
Salt Lake City, Utah 84121
VERN MAESER YOURG 372 South 850 East
Bountiful, Utah
ARTICLE XIII
SECTION 1244 STOCK
Shares of stock of this corporation authorized and issued
pursuant to these Articles within two years from the date of
incorporation are, for purposes of the Internal Revenue Code,
authorized and issued in compliance with and as prescribed by
Section 1244 of the Internal Revenue Code of 1954, and shall be
known as "Section 1244 Stock."
Dated this 8th day of June, 1970.
E-4
<PAGE>
/s/ Edward B. Erekson
EDWARD B. EREKSON
/s/ Dennis C. Sahleen
DENNIS C. SAHLEEN
/s/ Vern Maeser Young
VERN MAESER YOUNG
STATE OF UTAH )
: ss.
COUNTY OF )
I, the undersigned a Notary Public, hereby certify that
EDWARD B. EREKSON personally appeared before me, and being duly
sworn by me, severally declared that he is the person who signed
the foregoing document as Incorporator, and that the statements
therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 8 day of June, 1970.
/s/ Walter L. Colbuis
NOTARY PUBLIC
My Commission Expires Nov.8, 1972 Residing in Salt Lake City, UT
E-6
<PAGE>
STATE OF UTAH )
: ss.
COUNTY OF )
I, the undersigned a Notary Public, hereby certify that
DENNIS C. SAHLEEN personally appeared before me, and being duly
sworn by me, severally declared that he is the person who signed
the foregoing document as Incorporator, and that the statements
therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 8 day of June, 1970.
/s/ Walter L. Colbuis
NOTARY PUBLIC
My Commission Expires Nov.8, 1972 Residing in Salt Lake City, UT
E-7
<PAGE>
STATE OF UTAH )
: ss.
COUNTY OF )
I, the undersigned a Notary Public, hereby certify that VERN
MAESER YOUNG personally appeared before me, and being duly sworn
by me, severally declared that he is the person who signed the
foregoing document as Incorporator, and that the statements
therein contained are true.
IN WITNESS WHEREOF, I have hereunto set my hand and seal
this 8th day of June, 1970.
/s/ Georgia B. Peterson
NOTARY PUBLIC
My Commission Expires 4-15-73 Residing in Salt Lake City, UT
E-7
<PAGE>
Exhibit No. 2
Form 10-SB
Area Investment and Development Company
AMENDED
BYLAWS FOR THE REGULATION,
EXCEPT AS OTHERWISE PROVIDED BY STATUTE
OR ITS ARTICLES OF INCORPORATION,
OF
AREA INVESTMENT AND DEVELOPMENT COMPANY
ARTICLE 1
Offices
Section 1.01 -- Principal And Registered Office.
The principal and registered office for the transaction of
the business of the Corporation is hereby fixed and located at
268 West 400 South, Suite 300, Salt Lake City, Utah 84101. The
Corporation may have such other offices, either within or without
the State of Utah as the Corporation's board of directors (the
"Board) may designate or as the business of the Corporation may
require from time to time.
Section 1.02 -- Other Offices.
Branch or subordinate offices may at any time be established
by the Board at any place or places where the Corporation is
qualified to do business.
ARTICLE 2
Meetings of Shareholders
Section 2.01 -- Meeting Place.
All annual meetings of shareholders and all other meetings
of shareholders shall be held either at the principal office or
at any other place within or without the State of Utah which may
be designated either by the Board, pursuant to authority
hereinafter granted, or by the written consent of all
shareholders entitled to vote thereat, given either before or
after the meeting and filed with the secretary of the
Corporation.
Section 2.02 -- Annual Meetings.
E-8
<PAGE>
A. The annual meetings of shareholders shall be held on
the third Monday of July each year, at the hour of 2:00 o' clock
p.m., commencing with the year 1970 , provided, however, that
should the day of the annual meeting fall upon a legal holiday,
then any such annual meeting of shareholders shall be held at the
same time and place on the next business day thereafter which is
not a legal holiday.
B. Written notice of each annual meeting signed by the
president or vice president, or the secretary, or an assistant
secretary, or by such other person or persons as the Board may
designate, shall be given to each shareholder entitled to vote
thereat, either personally or by mail or other means of written
communication, charges prepaid, addressed to such shareholder at
his address appearing on the books of the Corporation or given by
him to the Corporation for the purpose of notice. If a
shareholder gives no address, notice shall be deemed to have been
given to him if sent by mail or other means of written
communication addressed to the place where the principal office
of the Corporation is situated, or if published at least once in
some newspaper of general circulation in the county in which said
office is located. All such notices shall be sent to each
shareholder entitled thereto, or published, not less than ten
(10) nor more than sixty (60) days before each annual meeting,
and shall specify the place, the day and the hour of such
meeting, and shall also state the purpose or purposes for which
the meeting is called.
C. Failure to hold the annual meeting shall not constitute
dissolution or forfeiture of the Corporation, and a special
meeting of the shareholders may take the place thereof.
Section 2.03 -- Special Meetings.
Special meetings of the shareholders, for any purpose or
purposes whatsoever, may be called at any time by the president
or by the Board, or by one or more shareholders holding not less
that ten percent (10%) of the voting power of the Corporation.
Except in special cases where other express provision is made by
statute, notice of such special meetings shall be given in the
same manner as for annual meetings of shareholders. Notices of
any special meeting shall specify in addition to the place, day
and hour of such meeting, the purpose or purposes for which the
meeting is called.
Section 2.04 -- Adjourned Meetings And Notice Thereof.
A. Any shareholders' meeting, annual or special, whether or
not a quorum is present, may be adjourned from time to time by
the vote of a majority of the shares, the holders of which are
either present in person or represented by proxy thereat, but in
the absence of a quorum, no other business may be transacted at
any such meeting.
B. When any shareholders' meeting, either annual or
special, is adjourned for thirty (30) days or more, notice of the
adjourned meeting shall be given as in the case of an original
meeting. Otherwise, it shall not be necessary to give any notice
of an adjournment or of the business to be transacted at an
adjourned meeting, other than by announcement at the meeting at
which such adjournment is taken.
E-9
<PAGE>
Section 2.05 -- Entry Of Notice.
Whenever any shareholder entitled to vote has been absent
from any meeting of shareholders, whether annual or special, an
entry in the minutes to the effect that notice has been duly
given shall be conclusive and incontrovertible evidence that due
notice of such meeting was given to such shareholder, as required
by law and these bylaws.
Section 2.06 -- Voting.
At all annual and special meetings of shareholders, each
shareholder entitled to vote thereat shall have one vote for each
share of stock so held and represented at such meetings, either
in person or by written proxy, unless the Corporation's articles
of incorporation ("Articles") provide otherwise, in which event,
the voting rights, powers and privileges prescribed in the
Articles shall prevail. Voting for directors and, upon demand of
any shareholder, upon any question at any meeting, shall be by
ballot. If a quorum is present at a meeting of the shareholders,
the vote of a majority of the shares represented at such meeting
shall be sufficient to bind the corporation, unless otherwise
provided by law or the Articles.
Section 2.07 -- Quorum.
The presence in person or by proxy of the holders of a
majority of the shares entitled to vote at any meeting shall
constitute a quorum for the transaction of business. 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.
Section 2.08 -- Consent Of Absentees.
The transactions of any meeting of shareholders, either
annual or special, however called and notice given thereof, shall
be as valid as though done at a meeting duly held after regular
call and notice, if a quorum be present either in person or by
proxy, and if, either before of after the meeting, each of the
shareholders entitled to vote, not present in person or by proxy,
sign a written Waiver of Notice, or a consent to the holding of
such meeting, or an approval of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate
records or made a part of the minutes of such meeting.
Section 2.09 -- Proxies.
Every person entitled to vote or execute consents shall have
the right to do so either in person or by an agent or agents
authorized by a written proxy executed by such person or his duly
authorized agent and filed with the secretary of the Corporation;
provided however, that no such proxy shall be valid after the
expiration of eleven (11) months from the date of its execution,
unless the shareholder executing it specifies therein the length
of time for which such proxy is to continue in force, which in no
case shall exceed seven (7) years from the date of its execution.
E-10
<PAGE>
Section 2.10 -- Shareholder Action Without A Meeting.
Any action required or permitted to be taken at a meeting of
the shareholders may be taken without a meeting if a written
consent thereto is signed by shareholders holding at least a
majority of the voting power, except that if a different
proportion of voting power is required for such an action at a
meeting, then that proportion of written consents is required.
In no instance where action is authorized by this written consent
need a meeting of shareholders be called or notice given. The
written consent must be filed with the proceedings of the
shareholders.
ARTICLE 3
Board of Directors
Section 3.01 -- Powers.
Subject to the limitations of the Articles, these bylaws,
and the Small Business Investment Act of 1958 as amended and the
rules and regulations thereunder (the "SBIA"), and the provisions
of the Utah corporate law as to action to be authorized or
approved by the shareholders, and subject to the duties of
directors as prescribed by these bylaws, all corporate powers
shall be exercised by or under the authority of, and the business
and affairs of the corporation shall be controlled by, the Board.
Without prejudice to such general powers, but subject to the same
limitations, it is hereby expressly declared that the directors
shall have the following powers:
A. To select and remove all the other officers, agents and
employees of the Corporation, prescribe such powers and duties
for them as are not inconsistent with law, with the Articles, 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
therefore not inconsistent with the law, the Articles, the SBIA,
or these bylaws, as they may deem best.
C. To change the principal office for the transaction of
the business if such change becomes necessary or useful; to fix
and locate from time to time one or more subsidiary offices of
the Corporation within or without the State of Utah, as provided
in Section 1.02 of Article 1 hereof; to designate any place
within or without the State of Utah for the holding of any
shareholders' meeting or meetings; and 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 in their judgment they may
deem best, provided such seal and such certificates shall at all
times comply with the provisions of law.
D. To authorize the issuance of shares of stock of the
Corporation from time to time, upon such terms as may be lawful,
in consideration of money paid, labor done or services actually
rendered, debts or securities canceled, or tangible or intangible
E-11
<PAGE>
property actually received, or in the case of shares issued as a
dividend, against amounts transferred from surplus to stated
capital.
E. To borrow money and incur indebtedness for the purposes
of the Corporation, and to cause to be executed and delivered
therefore, in the corporate name, promissory notes, bonds,
debentures, deeds of trust, mortgages, pledges, hypothecation or
other evidences of debt and securities therefore.
F. To appoint an executive committee and other committees
and to delegate to the executive committee any of the powers and
authority of the Board in management of the business and affairs
of the Corporation, except the power to declare dividends and to
adopt, amend or repeal bylaws. The executive committee shall be
composed of one or more directors.
Section 3.02 -- Number And Qualification Of Directors.
The authorized number of directors of the Corporation shall
not be less than three (3) nor more than nine (9); provided
however, that after shares are issued, (i) for so long as the
Corporation has fewer than seven (7) shareholders entitled to
vote for the election of directors, the Corporation's Board may
consist of a number of individuals equal to or greater than the
number of these shareholders (but no more than three); and (ii)
once the Corporation has three (3) or more shareholders entitled
to vote for the election of directors, the Board shall consist of
three directors, or such other number as may be required by law.
Section 3.03 -- 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. All directors shall hold
office until their respective successors are elected.
Section 3.04 -- Vacancies.
A. Vacancies in the Board 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 or appointed
shall hold office until his successor is elected at an annual or
a special meeting of the shareholders.
B. 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.
C. The shareholders may elect a director or directors at
any time to fill any vacancy or vacancies not filled by the
directors.
E-12
<PAGE>
D. No reduction of the authorized number of directors shall
have the effect of removing any director prior to the expiration
of his term of office.
ARTICLE 4
Meetings of the Board of Directors
Section 4.01 -- Place Of Meetings.
Regular meetings of the Board shall be held at any place
within or without the State of Utah which has been designated
from time to time by resolution of the Board or by written
consent of all members of the Board. In the absence of such
designation, regular meetings shall be held at the principal
office of the Corporation. Special meetings of the Board may be
held either at a place so designated, or at the principal office.
Failure to hold an annual meeting of the Board shall not
constitute forfeiture or dissolution of the Corporation.
Section 4.02 -- Organization Meeting.
Immediately following each annual meeting of shareholders,
the Board shall hold a regular meeting for the purpose of
organization, election of officers, and the transaction of other
business. Notice of such meeting is hereby dispensed with.
Section 4.03 -- Other Regular Meetings.
Other regular meetings of the Board shall be held, without
call, unless the directors agree to not have this regular
meeting, on the first Monday of each month at the hour of 3:00 o'
clock p.m.; provided however, that should the day of the meeting
fall upon a legal holiday, then such meeting shall be held at the
same time on the next business day thereafter which is not a
legal holiday. Notice of all such regular meetings of the Board
are hereby dispensed with.
Section 4.04 -- Special Meetings.
A. Special meetings of the Board may be called at any time
for any purpose or purposes by the president, or, if he is absent
or unable or refuses to act, by any vice president or by any two
directors.
B. Written notice of the time and place of special meetings
shall be delivered personally to each director or sent to each
director by mail (including overnight delivery services such as
Federal Express) or telegraph, charges prepaid, addressed to him
at his address as it is shown upon the records of the
Corporation, or if it is not shown upon such records or is not
readily ascertainable, at the place in which the regular meetings
of the directors are normally held. No such notice is valid
unless delivered to the director to whom it was addressed at
least twenty-four (24) hours prior to the time of the holding of
the meeting. However, such mailing, telegraphing, or delivery as
above provided herein shall constitute prima facie evidence that
such director received proper and timely notice.
E-13
<PAGE>
Section 4.05 -- Notice Of Adjournment.
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.
Section 4.06 -- Waiver Of Notice.
The transactions of any meeting of the Board, however called
and noticed or wherever held, shall be as valid as though a
meeting had been duly held after regular call and notice, if a
quorum be present, and if, either before or after the meeting,
each of the directors not present sign a written waiver of notice
or a consent to holding such meeting or an approval of the
minutes thereof. All such waivers, consents or approvals shall
be filed with the corporate records or made a part of the minutes
of the meeting.
Section 4.07 -- Quorum.
If the Corporation has only one director, then the presence
of that one director constitutes a quorum. If the Corporation
has only two directors, then the presence of both such directors
is necessary to constitute a quorum. If the Corporation has
three or more directors, then a majority of those directors shall
be necessary to constitute a quorum for the transaction of
business, except to adjourn as hereinafter provided. A director
may be present at a meeting either in person or by telephone.
Every act or decision done or made by a majority of the directors
present at a meeting duly held at which quorum is present, shall
be regarded as the act of the Board, unless a greater number be
required by law or by the Articles.
Section 4.08 -- Adjournment.
A quorum of the directors may adjourn any directors' meeting
to meet again at a stated day and hour; provided however, that in
the absence of a quorum, a majority of the directors present at
any directors' meeting, either regular or special, may adjourn
such meeting only until the time fixed for the next regular
meeting of the Board.
Section 4.09 -- Fees And Compensation.
Directors shall not receive any stated salary for their
services as directors, but by resolution of the Board, a fixed
fee, with or without expenses of attendance, may be allowed for
attendance at each meeting. Nothing stated herein shall be
construed to preclude any director from serving the Corporation
in any other capacity as an officer, agent, employee, or
otherwise, and receiving compensation therefore.
Section 4.10 -- Action Without A Meeting.
Any action required or permitted to be taken at a meeting of
the Board, or a committee thereof, may be taken without a meeting
E-14
<PAGE>
if, before or after the action, a written consent thereto is
signed by all the members of the Board or of the committee. The
written consent must be filed with the proceedings of the Board
or committee.
E-15
<PAGE>
ARTICLE 5
Officers
Section 5.01 -- Executive Officers.
The executive officers of the Corporation shall be a
president, a secretary, and a treasurer/chief financial officer.
The corporation may also have, at the direction 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 appointed in accordance with the
provisions of Section 5.03 of this Article. Officers other than
the president and the chairman of the board need not be
directors. Any one person may hold two or more offices, unless
otherwise prohibited by the Articles or by law.
Section 5.02 -- Appointment.
The officers of the corporation, except such officers as may
be appointed in accordance with the provisions of Sections 5.03
and 5.05 of this Article, shall be appointed annually by the
Board, and each shall hold his office until he resigns or is
removed or otherwise disqualified to serve, or his successor is
appointed and qualified.
Section 5.03 -- Subordinate Officers.
The Board may 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.
Section 5.04 -- Removal And Resignation.
A. Any officer may be removed, either with or without
cause, by a majority of the directors at the time in office, at
any regular or special meeting of the Board.
B. Any officer may resign at any time by giving written
notice to the Board or to the president or secretary. Any such
resignation shall take effect on the date such notice is received
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 5.05 -- 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 appointments to
such office.
Section 5.06 -- Chairman Of The Board.
E-16
<PAGE>
The Chairman of the Board, if there 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 to him by the Board or prescribed by these
bylaws.
Section 5.07 -- President.
Subject to such supervisory powers, if any, as may be given
by the Board to the Chairman of the Board (if there be such an
officer), the president shall be the chief executive officer of
the Corporation and shall, subject to the control of the Board,
have general supervision, direction and control of the business
and officers of the Corporation. He 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.
He shall be an ex-officio member of all the standing committees,
including the executive committee, if any, and shall have the
general powers and duties of management usually vested in the
office of president of a corporation, and shall have such other
powers and duties as may be prescribed by the Board or these
bylaws.
Section 5.08 -- Vice President.
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 or these bylaws.
Section 5.09 -- Secretary.
A. The secretary shall keep, or cause to be kept, at the
principal office or such other place as the Board may direct, a
book of (i) minutes of all meetings of directors and
shareholders, with the time and place of holding, whether regular
or special, and if special, how authorized, the notice thereof
given, the names of those present and absent at directors'
meetings, the number of shares present or represented at
shareholders' meetings, and the proceedings thereof; and (ii) any
waivers, consents, or approvals authorized to be given by law or
these bylaws.
B. The secretary shall keep, or cause to be kept, at the
principal office, a share register, or a duplicate share
register, showing (i) the name of each shareholder and his or her
address; (ii) the number and class or classes of shares held by
each, and the number and date of certificates issued for the
same; and (iii) the number and date of cancellation of every
certificate surrendered for cancellation.
C. The secretary shall give, or cause to be given, notice
of all the meetings of the shareholders and of the Board required
by these bylaws or by law to be given, and he shall keep the seal
of the Corporation, if any, in safe custody, and shall have such
other powers and perform such other duties as may be prescribed
by the Board or these bylaws.
E-17
<PAGE>
Section 5.10 -- Treasurer/Chief Financial Officer.
A. The treasurer/chief financial officer shall keep and
maintain, or cause to be kept and maintained, adequate and
correct accounts of the properties and business transactions of
the Corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, surplus and
shares. Any surplus, including earned surplus, paid-in surplus
and surplus arising from a reduction of stated capital, shall be
classified according to source and shown in a separate account.
The books of account shall at all times be open to inspection by
any director.
B. The treasurer/chief financial officer shall deposit all
monies and other valuables in the name and to the credit of the
Corporation with such depositories as may be designated by the
Board. He 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 of his
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 or these bylaws.
ARTICLE 6
Miscellaneous
Section 6.01 -- Record Date And Closing Stock Books.
The Board may fix a time in the future, not exceeding
fifteen (15) days preceding the date of any meetings of
shareholders, and not exceeding thirty (30) days preceding the
date fixed for the payment of any dividend or distribution, or
for the allotment of rights, or when any change or conversion or
exchange of shares shall go into effect, as a record date for the
determination of the shareholders entitled to notice of and to
vote at any such meeting, or entitled to receive any such
dividend or distribution, or any such allotment of rights, or to
exercise the rights in respect to any such change, conversion or
exchange of shares, and in such case only shareholders of record
on the date so fixed shall be entitled to notice of and to vote
at such meetings, or to receive such dividend, distribution or
allotment of rights, or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares on the books of
the Corporation after any record date fixed as herein set forth.
The Board may close the books of the Corporation against
transfers of shares during the whole, or any part, of any such
period.
Section 6.02 -- Inspection Of Corporate Records.
The share register or duplicate share register, the books of
account, and records of proceedings of the shareholders and
directors shall be open to inspection upon the written demand of
any shareholder or the holder of a voting trust certificate, at
any reasonable time, and for a purpose reasonably related to his
interests as a shareholder or as the holder of a voting trust
certificate, and shall be exhibited at any time when required by
the demand of ten percent (10%) of the shares represented at any
E-18
<PAGE>
shareholders' meeting. Such inspection may be made in person or
by an agent or attorney, and shall include the right to make
extracts. Demand of inspection other than at a shareholders'
meeting shall be made in writing upon the president, secretary,
or assistant secretary, and shall state the reason for which
inspection is requested.
Section 6.03 -- Checks, Drafts, Etc.
All checks, drafts or other orders for payment of money,
notes or other evidences of indebtedness, issued in the name of
or payable to the Corporation, shall be signed or endorsed by
such person or persons and in such manner as, from time to time,
shall be determined by resolution of the Board.
Section 6.04 -- Annual Report.
The Board shall cause to be sent to the shareholders not
later than one hundred twenty (120) days after the close of the
fiscal or calendar year an annual report.
Section 6.05 -- Contracts: How Executed.
The Board, except as otherwise provided in these bylaws, may
authorize any officer, officers, agent, or agents, to enter into
any contract, deed or lease, or execute any instrument in the
name of and on behalf of the Corporation, and such authority may
be general or confined to specific instances; 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 render it
liable for any purpose or for any amount.
Section 6.06 -- Certificates Of Stock.
A certificate or certificates for shares of the capital
stock of the Corporation shall be issued to each shareholder when
any such shares are fully paid up. All such certificates shall
be signed by the president or a vice president and the secretary
or an assistant secretary, or be authenticated
by facsimiles of the signature of the president and secretary or
by a facsimile of the signatures of the president and the written
signature of the secretary or an assistant secretary. Every
certificate authenticated by a facsimile of a signature must be
countersigned by a transfer agent or transfer clerk.
Section 6.07 -- Representations Of Shares Of Other Corporations.
The president or any vice president and the secretary or
assistant secretary of this Corporation are authorized to vote,
represent, and exercise on behalf of this Corporation, all rights
incident to any and all shares of any other corporation or
corporations standing in the name of this Corporation. The
authority herein granted to said officers to vote or represent on
behalf of this Corporation or corporations may be exercised
either by such officers in person or by any person authorized so
to do by proxy or power of attorney duly executed by said
officers.
E-19
<PAGE>
Section 6.08 -- Inspection Of Bylaws.
The Corporation shall keep in its principal office for the
transaction of business the original or a copy of these bylaws,
as amended or otherwise altered to date, certified by the
secretary, which shall be open to inspection by the shareholders
at all reasonable times during office hours.
Section 6.09 -- Indemnification.
A. The Corporation shall indemnify its officers and
directors for any liability including reasonable costs of defense
arising out of any act or omission of any officer or director on
behalf of the Corporation to the full extent allowed by the laws
of the State of Utah, if the officer or director acted in good
faith and in a manner the officer or director reasonably believed
to be in, or not opposed to, the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe the conduct was
unlawful.
B. Any indemnification under this section (unless ordered
by a court) shall be make by the corporation only as authorized
in the specific case upon a determination that indemnification of
the director or officer is proper in the circumstances because
the officer or director has met the applicable standard of
conduct. Such determination shall be made by the board of
directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or,
regardless of whether or not such a quorum is obtainable and a
quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, or by the stockholders.
ARTICLE 7
Amendments
Section 7.01 -- Power Of Shareholders.
New bylaws may be adopted, or these bylaws may be amended or
repealed, by the affirmative vote of the shareholders
collectively having a majority of the voting power or by the
written assent of such shareholders.
Section 7.02 -- Power Of Directors.
Subject to the rights of the shareholders as provided in
Section 7.01 of this Article, bylaws other than a bylaw, or
amendment thereof, changing the authorized number of directors,
may also be adopted, amended, or repealed by the Board.
Certificate of Secretary
The undersigned does hereby certify that the undersigned is the
Secretary of Area Investment and Development Company, a
corporation duly organized and existing under and by virtue of
the laws of the state of Utah; that the above and foregoing
bylaws of said corporation were duly and regularly adopted as
E-20
<PAGE>
such by the board of directors of the Corporation at the first
meeting of said Board, which duly and regularly held on the 26th
day of April, 1996, and that the above and foregoing bylaws are
now in full force and effect.
DATED this 26th day of April, 1996.
/s/ Secretary
E-21
<PAGE>
Exhibit No. 3
Form 10-SB
Area Investment and Development Company
ASSIGNMENT OF ACCOUNT RECEIVABLE
WHEREAS, as of June 30, 1998 and December 14, 1998, Area
Investment an Development Company ("AIDCO") had an outstanding
payable obligation owed to Canton Financial Services Corporation
("Canton") which is an account receivable to Canton in the amount
of $35,000 for certain service rendered to AIDCO by Canton over
the past several years; and
NOW THEREFORE, for good and valuable consideration, the
adequacy and sufficiency of which is hereby acknowledged, Canton
does hereby assign, transfer, and convey to Lexington Sales
Corporation, Ltd., its successor and assigns, all of its rights,
title, and interest in and to such account receivable; and
FURTHER THEREFORE, upon such assignment which is effective
immediately, Canton hereby forever discharges AIDCO from any
debts owed to it by AIDCO up until the date of this agreement.
IN WITNESS WHEREOF, the parties have executed and delivered
this Assignment as of the 14th day of December 1998.
/s/ Canton Financial Services Corporation
/s/ Lexington Sales Corporation, Ltd.
E-22
<PAGE>
Exhibit No. 4
Form 10-SB
Area Investment and Development Company
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT ("Agreement"), effective June 25,
1998, is entered into between Canton Financial Services
Corporation, a Nevada corporation, with principal offices at 268
West 400 South, Suite 300, Salt Lake City, Utah 84101 ("Canton"),
and Area Investment and Development Company ("AIDCO") and any of
their affiliates or control persons or entities directly or
indirectly controlled by either.
Recitals
WHEREAS, Canton entered into a Consulting Agreement with
AIDCO on January 5, 1996 and such Agreement was terminated on
April 1, 1997.
WHEREAS, As of the date herein, there is currently $86,914
still due and outstanding to Canton pursuant this Agreement.
WHEREAS, AIDCO believes that the amount of this bill will
negatively effect AIDCO's ability to attract a potential merger
candidate, hence AIDCO's ability to pay Canton any of the amounts
due and would therefore like a reduction in the amount due.
THEREFORE, Canton has agreed to a reduction in the amount
owed as an incentie for AIDCO to accelerate its payment. The
amount owed will be reduced to $35,000.
IN WITNESS WHEREOF, the signatures of the Parties below
evidence their execution of this Settlement Agreement.
Area Investment and Development Company
/s/ Ken Kurtz, President
Canton Financial Services Corporation
/s/ Richard Surber, President
E-23
<PAGE>
Exhibit No. 5
Form 10-SB
Area Investment and Development Company
FINANCIAL CONSULTING AGREEMENT
This Consulting Agreement ("Agreement") is made effective
this 15th day of June, 1997 by and between, Park Street
Investments, Inc. ("Consultant"), a Utah corporation and Area
Investment and Development Company ("Client"), a Utah corporation
with respect to the following:
RECITALS
WHEREAS, Consultant is in the business of providing general
business consulting services to privately held and publicly held
corporations; and
WHEREAS, Client desires to retain Consultant to provide
advice relative to corporate and business consulting services.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises,
covenants, and agreements contained herein, and for other good
and valuable consideration, the receipt and adequacy of which is
expressly acknowledged, Client and Consultant agree as follows:
1. Engagement of Consultant. Consultant agrees to use its best
efforts to assist Client:
a. and counsel of Client relative to the steps necessary to
prepare Client for a merger, acquisition or business combination
("Reorganization"). This includes, but is not limited to,
facilitating efforts to cause Client's corporate status with the
state to be in good standing and to maintain its standing as so
during the term of this Agreement; in the negotiations for
potential settlement of Client's outstanding debts and
litigation; in preparing financial statements and obtaining an
audit on the financial statements in accordance with US GAAP
standards by an accounting firm with SEC peer review; in
preparing and filing other documents with the necessary
regulatory bodies as is required by law, including, but not
limited to, preparing and filing Forms 10-K and 10-Q as
necessary;
b. in prospecting for, negotiating with and structuring a
merger or business combination with a potential reorganization
candidate ("Reorganization Candidate").
c. in finding an attorney to provide any necessary legal
assistance and opinions as required or if requested;
d. to maintain Client's corporate books and records and to
assist Client in the preparation of corporate resolutions, and
other correspondences necessary to fulfill its obligations under
this Agreement, including Board and shareholder resolutions,
resignations and appointments;
e. in paying for all of the costs for the above.
E-24
<PAGE>
All of the foregoing services collectively are referred to
herein as the "Consulting Services."
2. Compensation Client shall compensate Consultant for
consulting services ("Consulting Services") rendered pursuant to
this Agreement as follows:
a. Client shall issue to Consultant and/or its designees,
3,000,000 shares of its Restricted Common Stock valued at $0.01
par value.
b. Client shall issue to Consultant, shares of its common stock
in an amount not to exceed ten percent (10%) of the total issued
and outstanding shares of Client which amount is to be based on
the total issued and outstanding shares of Client after a
Reorganization between Client and a Reorganization Candidate.
c. Consultant shall also be entitled to any cash fee that it is
able to achieve from the reorganization candidate.
d. All shares issued to Consultant pursuant to Section 2(b) of
this Agreement shall be registered under Rule 504 of Regulation D
of the Securities and Exchange Act (the "Act"). If Consultant's
shares are deemed restricted under the Act, such shares shall
have "piggy back" registration rights with any registration
statement, such statement filed at such time as Client, in its
sole discretion, deems advisable.
3. Term of Agreement, Extensions and Renewals
This Agreement shall have a term of three years (the
"Initial Consulting Period") from the date first appearing
herein. This Agreement may be extended on a month to month
basis (the "Extension Period") by mutual agreement of the
parties executed in writing specifying the compensation for
the Extension Period. This Agreement may also be terminated
when a Reorganization is completed and Consultant is
compensated as described in this Agreement.
Notwithstanding the above in this paragraph, in the event of
early termination, Client shall be obligated for any amounts
due under this agreement. Such notice of either extension
or termination shall be in writing and shall be delivered
via U.S. certified mail, when applicable, effective ten (10)
days after delivery to the other party.
4. Best Efforts Basis
Consultant agrees that it will at all times faithfully, to
the best of its experience, ability and talents, perform all
the duties that may be required of and from Consultant
pursuant to the terms of this Agreement. Consultant does
not guarantee that its efforts will have any impact on the
Clients' business or that any subsequent financial
improvement will result from Consultants' efforts. Client
understands and acknowledges that the success or failure of
Consultants' efforts will be predicated on the Clients'
assets and operating results.
5. Independent Legal and Financial Advice
Consultant is not a law firm; neither is it an accounting
firm. Consultant does, however, employ professionals in
those capacities to better enable Consultant to provide
Consulting Services. Client represents that they have not
nor will they construe any of the Consultants'
representations to be statements of law. Each entity has
and will continue to seek the independent advice of legal
E-25
<PAGE>
and financial counsel regarding all material aspects of the
transactions contemplated by this Agreement, including the
review of all documents provided by Consultant to Client and
all opportunities Consultant introduces to Client.
6. Miscellaneous
a. The execution and performance of this Agreement has been
duly authorized by all requisite individual or corporate actions
and approvals and is free of conflict or violation of any other
individual or corporate actions and approvals entered into
jointly and severally by the parties hereto. This Agreement
represents the entire Agreement between the parties hereto, and
supersedes any prior agreements with regards to the subject
matter hereof. This Agreement may be executed in any number of
facsimile counterparts with the aggregate of the counterparts
together constituting one and the same instrument. This
Agreement constitutes a valid and binding obligation of the
parties hereto and their successors, heirs and assigns and may
only be assigned or amended by written consent from the other
party.
b. No term of this Agreement shall be considered waived and no
breach excused by either party unless made in writing. In the
event that any one or more of the provisions contained in this
Agreement shall for any reason be held to be invalid, illegal, or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be constructed as if it never
contained any such invalid, illegal or unenforceable provisions.
From time to time, each party will execute additional instruments
and take such action as may be reasonably requested by the other
party to confirm or perfect title to any property transferred
hereunder or otherwise to carry out the intent and purposes of
this Agreement.
c. The validity, interpretation, and performance of this
Agreement shall be governed by the laws of the State of Utah and
any dispute arising out of this Agreement shall be brought in a
court of competent jurisdiction in Salt Lake County, Utah. If
any action is brought to enforce or interpret the provisions of
this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees, court costs, and other costs incurred
in proceeding with the action from the other party.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date herein above written.
Area Investment and Development Company
/s/ Ken Kurtz, President
Park Street Investments, Inc.
/s/ Ken Kurtz, President
E-26
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998
<PERIOD-END> JUN-30-1999 DEC-31-1998
<CASH> 20,000 0
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 20,000 0
<PP&E> 0 0
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 20,000 0
<CURRENT-LIABILITIES> 0 35,000
<BONDS> 0 0
0 0
0 0
<COMMON> 90,482 30,482
<OTHER-SE> 116,700 31,700
<TOTAL-LIABILITY-AND-EQUITY> 20,000 0
<SALES> 0 0
<TOTAL-REVENUES> 0 0
<CGS> 0 0
<TOTAL-COSTS> 90,000 480
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 0
<INCOME-PRETAX> 0 0
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 51,915
<CHANGES> 0 0
<NET-INCOME> (90,000) 51,435
<EPS-BASIC> (0.01) 0.02
<EPS-DILUTED> (0.01) 0.02
</TABLE>
