UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10
GENERAL FORM FOR REGISTRATION OF SECURTIES
Pursuant to Section 12(b) or (g) of the Securities and Exchange
Act of 1934
AVIATION INDUSTRIES CORP.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 88-023361
(STATE OF ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
888 E. LAS OLAS BLVD., SUITE 700, FT. LAUDERDALE, FL 33301
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (954) 938-2500
Daniel G. Chapman, Esq., 1600 E. Desert Inn Rd. Suite 102, Las Vegas, NV
(Registrant's Agent for Service)
Agent's Telephone Number (702) 732-2253
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B)OF THE ACT:
NONE
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
COMMON
ITEM 1. BUSINESS.
(A) DEVELOPMENT OF BUSINESS
(I) GENERAL DEVELOPMENT
AVIATION INDUSTRIES CORPORATION (THE "COMPANY") WAS ORGANIZED
UNDER THE LAWS OF THE STATE OF NEVADA ON JANUARY 26, 1988, UNDER
THE NAME "NEVADA COMMERCIAL MANAGEMENT, INC." ON SEPTEMBER 24,
1997, THE COMPANY CHANGED ITS NAME TO "AVIATION INDUSTRIES
CORPORATION." ALSO IN SEPTEMBER, 1997, THE MANAGEMENT TEAM WHICH
PRECEDED IMMEDIATELY THE PRESENT MANAGEMENT TEAM (DISCUSSED
BELOW) PURCHASED THE MAJORITY OF ALL SHARES HELD BY A FORMER
CONTROL GROUP, IN CONSIDERATION FOR $300,000.
INTEGRATED MANAGEMENT PROFESSIONALS, INC. ("IMP") WAS
INCORPORATED UNDER THE LAWS OF THE STATE OF MICHIGAN ON JANUARY
14, 1994. IN OCTOBER, 1995, THE COMPANY REINCORPORATED IN NEVADA.
IN MAY, 1996, THE COMPANY PURCHASED THE OUTSTANDING CAPITAL STOCK
OF DAV-JEN, INC., D/B/A CASINO AIRLINK IN A TRANSACTION TREATED
AS A PURCHASE FOR ACCOUNTING PURPOSES. THE TOTAL PURCHASE PRICE
WAS $2,915,802 PLUS 1,700,000 SHARES OF IMP'S CLASS B PREFERRED
STOCK. ON OCTOBER 31, 1996, THE COMPANY'S NAME WAS CHANGED TO
CASINO AIRLINK, INC. IN DECEMBER, 1996, THE COMPANY PURCHASED THE
OUTSTANDING CAPITAL STOCK OF RESER CORP. IN A TRANSACTION TREATED
AS A PURCHASE FOR ACCOUNTING PURPOSES. THE PURCHASE PRICE WAS
$390,000, WHICH INCLUDED 156,000 SHARES OF COMMON STOCK. THE
COMPANY GUARANTEED THAT THE STOCK WOULD BE WORTH NO LESS THAN
$1.25 PER SHARE AS OF JANUARY 3, 1999.
SINCE DECEMBER 1997, A NUMBER OF SIGNIFICANT TRANSACTIONS HAVE
TAKEN PLACE:
FIRST IN OCTOBER 1997, THE COMPANY ACQUIRED FROM GENERAL
INVESTMENT BANK (FORMERLY COMMERCIAL BANK HELP) A LIEN OF
$1,800,000 IN KIWI INTERNATIONAL AIRLINES, INC., WHICH HAD JUST
RECENTLY TERMINATED ITS CHAPTER 11 BANKRUPTCY PROCEEDINGS AND
BEEN ACQUIRED BY A NEW CONTROL GROUP.
THE SECOND TRANSACTION IN WHICH THE COMPANY IS INVOLVED IS THE
ADVANCEMENT OF DEBTOR-IN-POSSESSION ("DIP") FINANCING TO SUNJET,
A COMMERCIAL AIR CARRIER WHICH HAD FILED FOR REORGANIZATION
PURSUANT TO CHAPTER 11 OF THE U.S. BANKRUPTCY CODE. THE COMPANY
PROVIDED $200,000 IN DIP FINANCING, WHICH WAS REPAID IN MAY,
1988. SUNJET'S CERTIFICATE OF OPERATION RECENTLY EXPIRED, AND THE
COMPANY DOES NOT ANTICIPATE ANY FURTHER INVESTMENT IN OR DEALINGS
WITH SUNJET.
IN FEBRUARY, 1998, THE COMPANY ACQUIRED CITA AMERICAS, INC. CITA
OPERATES CLINICS ASSOCIATED WITH HEALTH CARE FACILITIES TO TREAT
CHEMICAL DEPENDENCIES, UTILIZING ULTRA RAPID OPIATE
DETOXIFICATION AND STRUCTURED AFTERCARE REINTEGRATION TREATMENT.
CITA WAS ACQUIRED FOR $1,800,000 IN RESTRICTED COMMON STOCK. THE
COMPANY HAS ENTERED INTO A LETTER OF INTENT TO SELL CITA TO
SOUTHWESTERN ENVIRONMENTAL CORP. IN EXCHANGE FOR $2,200,000 WORTH
OF CLASS A PREFERRED STOCK. THE PREFERRED STOCK IS CONVERTIBLE
INTO AN EQUAL DOLLAR AMOUNT OF SOUTHWESTERN'S COMMON STOCK AT ANY
TIME AFTER ONE YEAR.
THE COMPANY RECENTLY MADE TWO MAJOR ACQUISITIONS. ON OR ABOUT
JULY 30, 1998, THE COMPANY ACQUIRED MAGNOLIA TOURS AND
TRANSPORTATION ("MAGNOLIA"), A BILOXI, MS COMPANY THAT PROVIDES
MOTOR COACH TRANSPORTATION SERVICES, INCLUDING AIRPORT TRANSFERS
FOR VISITORS TRAVELING TO AND FROM GULF COAST CASINOS AND HOTELS,
SHUTTLE SERVICES, AND LOCAL AREA TOURS. ON OR ABOUT AUGUST 3,
1998, THE COMPANY ACQUIRED BUSINESS TRAVEL, A NORCROSS, GA BASED
CORPORATE TRAVEL AGENCY WITH ANNUAL SALES OF APPROXIMATELY
$25,000,000, IN EXCHANGE FOR $1,200,000 IN CASH AND RESTRICTED
COMMON STOCK.
(II) AGREEMENT OF MERGER
THE COMPANY RECENTLY ENTERED INTO A DEFINITIVE AGREEMENT AND PLAN
OF MERGER WITH IMP. AT SOME TIME AFTER THE EFFECTIVE DATE OF THIS
REGISTRATION STATEMENT, IMP IS TO BE MERGED WITH CAL ACQUISITION CORP.,
A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY FORMED AS A NEVADA CORPORATION.
IMP WILL BE THE SURVIVING CORPORATION OF THAT MERGER. IMP AND AIC
WILL THEN MERGE, WITH AIC BEING THE SURVIVING CORPORATION. AIC
WILL THEN CHANGE ITS NAME TO INTEGRATED MARKETING PROFESSIONALS,
INC. IN ACCORDANCE WITH THIS AGREEMENT, ON AUGUST 3, 1998, THE
OFFICERS AND DIRECTORS OF AIC RESIGNED, WITH THE EXCEPTION OF MR.
KALOUSTIAN, AND WERE REPLACED BY THE OFFICERS AND DIRECTORS OF
IMP, WHO WILL REMAIN AS OFFICERS AND DIRECTORS OF THE NEW
COMPANY. THE BUSINESS OF IMP IS DISCUSSED IN SUBSECTION (C)
BELOW.
(B) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
ALL OF THE REVENUE FROM AIC AND IMP IS DERIVED FROM THE TRAVEL
AND TOURISM INDUSTRY. THE REQUIRED REVENUE, OPERATING PROFIT AND
LOSS, AND IDENTIFIABLE ASSETS ARE SHOWN IN ITEM 2 AND IN THE
FINANCIAL EXHIBITS PROVIDED IN ITEM 15 BELOW.
(C) NARRATIVE DESCRIPTION OF BUSINESS
AFTER THE MERGER IS COMPLETED, THE COMPANY WILL OPERATE THROUGH
FOUR SUBSIDIARIES - CASINO AIRLINK AND RESER, FROM THE CURRENT
IMP, AND MAGNOLIA AND BUSINESS TRAVEL, FROM AIC.
IMP
IMP IS A HOLDING COMPANY ACQUIRING TRAVEL-RELATED COMPANIES. IMP
OPERATES THROUGH TWO WHOLLY-OWNED SUBSIDIARIES, RESER
CORPORATION, AND CASINO AIRLINK (CAI). CAI IS A WHOLESALE TRAVEL
COMPANY THAT IS CURRENTLY THE EXCLUSIVE PROVIDER OF PACKAGED
CASINO VACATIONS FROM ATLANTA, GA AND FIVE CITIES IN FLORIDA TO
THE MISSISSIPPI GULF COAST. CAI PROVIDES NON-STOP, ROUNDTRIP JET
SERVICE, DESTINATION AIRPORT TRANSFERS, GROUND HANDLING, TWO-
THREE NIGHT DELUXE HOTEL ACCOMMODATIONS, NIGHTLY BUFFET MEALS,
AND ACCESS TO TWENTY-FOUR HOUR LAS VEGAS STYLE GAMING AND
ENTERTAINMENT. CAI DELIVERED MORE THAN 85,000 PASSENGERS TO THE
MISSISSIPPI GULF COAST AREA VIA THEIR CHARTERED AND SCHEDULED AIR
SERVICE IN 1997 AND INTENDS TO SPECIALIZE IN OFFERING CASINO
VACATIONS TO OTHER GAMING DESTINATIONS, INCLUDING TUNICA, MS,
ATLANTIC CITY, NJ, AND LAS VEGAS AND RENO, NV, IN ADDITION TO
ADDING NEW DEPARTURE CITIES FROM THE CAROLINAS, TEXAS, AND OTHER
NEARBY STATES.
RESER CORP. IS A TRAVEL AGENCY THAT SPECIALIZES IN PLANNING,
ORGANIZING, AND PRESENTING EDUCATIONAL SEMINARS TO TRAVEL AGENTS
ACROSS THE UNITED STATES. IN 1997, RESER HELD 40 SEMINARS TO
WHICH OVER 2,000 AGENTS ATTENDED TO LEARN ABOUT LATIN AMERICA,
FLORIDA, MEXICO, AND COLORADO. RESER ALSO PROCESSES RESERVATIONS
FOR TOUR OPERATORS. RESER OWNS EXPANSIVE HARDWARE AND SOFTWARE
THAT WORKS WELL FOR SMALL TOUR OPERATORS WHO DO NOT WISH TO
ABSORB THE OVERHEAD EXPENSES ASSOCIATED WITH A RESERVATION
CENTER. IN THE FOURTH QUARTER OF 1997, RESER BEGAN ACCEPTING
CASINO AIRLINK RESERVATIONS FROM CLIENTS IN GEORGIA, NORTH
CAROLINA, AND SOUTH CAROLINA.
AVIATION INDUSTRIES
AVIATION INDUSTRIES HAS NOT HAD SIGNIFICANT OPERATIONS DURING THE
LAST FEW YEARS, OTHER THAN THE RECENT TRANSACTIONS DISCUSSED
ABOVE. THE COMPANY HAS TWO NEWLY ACQUIRED SUBSIDIARIES, MAGNOLIA
AND BUSINESS TRAVEL.
THE COMPANY PLANS TO REPLACE MAGNOLIA'S FLEET OF FIVE MOTOR
COACHES WITH BRAND NEW 54 PASSENGER COACHES OFFERING STATE-OF-THE-
ART AUDIO/VISUAL EQUIPMENT, FIRST CLASS PASSENGER AMENITIES, AND
WILL OFFER VACATIONERS OPTIONAL TRIPS TO PLACES SUCH AS NEW
ORLEANS, ALLOWING THE COMPANY TO CAPITALIZE FURTHER ON THE
CONTINUED GROWTH OF THE GULF COAST MARKET.
BUSINESS TRAVEL, A CORPORATE TRAVEL AGENCY WITH OVER 400
CORPORATE ACCOUNTS AND ANNUAL SALES OF APPROXIMATELY $25,000,000,
FITS PERFECTLY WITH THE OVERALL MARKETING MIX OF THE NEW COMPANY,
ESPECIALLY WITH THE RESER SUBSIDIARY. THIS PROVIDES THE COMPANY
WITH OPPORTUNITIES TO MARKET PACKAGED CASINO VACATIONS OFFERED BY
THE COMPANY TO MORE THAN 20,000 PEOPLE EMPLOYED BY BUSINESS
TRAVEL'S CORPORATE CLIENTS.
ITEM 2. FINANCIAL INFORMATION.
(A) THE REGISTRANT'S FINANCIAL DATA PRESENTED BELOW HAS BEEN
DERIVED FROM THE FINANCIAL STATEMENTS APPEARING IN ITEM 15 BELOW.
AVIATION INDUSTRIES CORP.
(A DEVELOPMENT STAGE COMPANY)
YEAR ENDED DECEMBER 31
<TABLE>
<S> <C> <C> <C> <C>
MARCH 31, 1997 1996 1995
1998
SUMMARY OF OPERATIONS REVENUES $0 $0 $0 $0
GENERAL, SELLING AND $13,046 $8,050 $0 $0
ADMINISTRATIVE EXPENSES
NET PROFIT ($13,046) ($8,050) $0 $0
NET PROFIT PER COMMON SHARE ($0.0014) ($.0009) $.0000 $.0000
SUMMARY BALANCE SHEET DATA
TOTAL ASSETS $7,879,231 $6,004,231 $0 $0
</TABLE>
INTEGRATED MANAGEMENT PROFESSIONALS, INC.
YEAR ENDED DECEMBER 31
<TABLE>
<S> <C> <C> <C> <C>
JULY 31, 1997 1996 1995
1998
SUMMARY OF OPERATIONS - $9,920,150 $18,378,929 $18,942,574 $20,009,040
REVENUES
COST OF SALES $6,758,926 $13,876,269 $15,746,734 $16,736,046
TOTAL OPERATING EXPENSES $2,239,730 $4,027,435 $3,332,227 $3,272,994
OTHER INCOME ($4,113) ($121,030) ($145,208) $47,396
EXTRAORDINARY ITEMS $691,846 ($1,288,059)
NET PROFIT $807,384 $1,046,041 ($1,569,654) ($474,422)
NET PROFIT PER COMMON SHARE
BASIC $0.188
DILUTED $0.092 ($0.423) ($0.94)
SUMMARY BALANCE SHEET DATA
TOTAL ASSETS $4,434,404 $3,622,981 $4,112,16 $1,015,005
</TABLE>
(B) MANAGEMENT'S DISCUSSION AND ANALYSIS
MANAGEMENT'S LETTER TO THE SHAREHOLDERS OF IMP IS INCLUDED IN
IMP'S DECEMBER 31, 1997 ANNUAL REPORT WHICH IS INCLUDED AS
EXHIBIT 13 TO THIS FORM 10.
THE INTERNAL FINANCIALS OF IMP FOR THE PERIOD ENDING JULY 31,
1998, REFLECT THE STATUS OF THE COMPANY. THE COMPANY IS
PROFITABLE AND THE FUTURE INCOME PROJECTION SHOWS A PROFIT OF
$250,000 THROUGH DECEMBER 31, 1998. THERE ARE NO TRENDS FOR A
CHANGE IN ASSETS RESOLVING AN INCREASE OR DECREASE IN THE
COMPANY'S LIQUIDITY. THE CASH FLOW IMPROVED DURING THE FIRST
QUARTER OF 1998, DUE TO A SEASONALITY INCREASE IN BUSINESS. THE
FIRST QUARTER SAW PRE-TAX INCOME OF $508,000, WITH A PROJECTION
OF $1,000,000 FOR THE YEAR END. THROUGH JULY 31, PRE-TAX INCOME
EXCEEDED $750,000. THE COMPANY IS EXPECTED TO MAKE MONEY EACH
MONTH THROUGH THE END OF THE YEAR. THE COMPANY EXPECTS TO EXPAND
ITS BUSINESS TO NEW MARKETS IN 1999. THE 1999 PROJECTIONS ARE A
25% INCREASE IN REVENUE TO $20,000,000, AND A 40% INCREASE IN PRE-
TAX INCOME TO $1,500,000.
AVIATION HAS HAD NO OPERATIONS GENERATING REVENUES. THE BALANCE
SHEET OF MARCH 31, 1998 IS AUDITED AND REFLECTS THE STATUS OF ITS
ASSETS. THERE ARE NO TRENDS THAT WILL AFFECT THE LIQUIDITY OF ITS
BUSINESS. THE ASSETS ARE NOT EXPECTED TO CHANGE IN THE NEAR
FUTURE, AS THEY REPRESENT LONG-TERM INVESTMENTS.
ITEM 3. PROPERTIES.
THE COMPANY CURRENTLY MAINTAINS OFFICES AT 888 E. LAS OLAS BLVD.,
SUITE 700, FT. LAUDERDALE, FL 33301.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS - AVIATION
INDUSTRIES CORP.
<TABLE>
<S> <C> <C> <C>
TITLE OF NAME/ADDRESS OF OWNER SHARES PERCENT OF
CLASS BENEFICIALLY CLASS
OWNED
COMMON DIRAN M. KALOUSTIAN 3,000,000 32.00%
4605 S. OCEAN BLVD.
BOCA RATON, FL 334872
COMMON CEDE & CO. 1,620,569 17.29%
P.O. BOX 222
BOWLING GREEN STATION
NEW YORK, NY 10274
COMMON PROFESSIONAL ATHLETE 1,480,000 15.79%
SERVICES, INC.
1004 CORAL ISLE WAY
LAS VEGAS, NV 89108
COMMON CHATEAU VEGAS, INC. 1,230,000 13.12%
1700 E. DESERT INN RD. #100 A
LAS VEGAS, NV 89109
COMMON GENERAL INVESTMENT BANK 900,000 9.60%
CHRISTOPRUDNY BLVD. 12A
MOSCOW, RUSSIA
</TABLE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS - INTEGRATED
MANAGEMENT PROFESSIONALS, INC.
<TABLE>
<S> <C> <C> <C> <C>
TITLE OF NAME/ADDRESS OF SHARES PERCENT OF PERCENT OF
CLASS OWNER BENEFICIALLY CLASS CLASS --
OWNED DILUTED
COMMON LH FINANCIAL 4,130,000 30.93% 21.68%
COMMON ALEXANDER WESCOTT 2,333,333 17.47% 12.25%
PREFERRED A 4,000,000 20.99%
PREFERRED B 1,700,000 8.92%
</TABLE>
NOTE: THESE FIGURES DO NOT GIVE EFFECT TO THE DILUTIVE IMPACT
THAT THE ISSUANCE OF SHARES PURSUANT TO THE AGREEMENT AND PLAN OF
MERGER WITH IMP WILL HAVE ON THE "PERCENT OF CLASS" COLUMN. THE
PERCENT OF CLASS - DILUTED COLUMN FOR IMP TAKES INTO ACCOUNT
2,000,000 SHARES OF SERIES A CONVERTIBLE PREFERRED STOCK WHICH IS
CONVERTIBLE INTO 4,000,000 SHARES OF COMMON STOCK, AND 1,700,000
SHARES OF SERIES B PREFERRED STOCK WHICH IS CONVERTIBLE INTO A
LIKE NUMBER OF SHARES OF COMMON STOCK.
ITEM 5. DIRECTORS AND EXECUTIVE OFFICERS.
ON AUGUST 4, 1998, ALL MEMBERS OF THE BOARD OF DIRECTORS OF THE
COMPANY, EXCEPT FOR MR. DIRAN KALOUSTIAN, RESIGNED, AS AGREED
UPON IN THE MERGER AGREEMENT, AND THE BOARD WAS RECONSTITUTED TO
CONSIST OF MR. KALOUSTIAN AND THE MEMBERS OF THE BOARD OF
DIRECTORS OF IMP.
WILLIAM FORHAN, AGE 53
PRESIDENT/CHIEF EXECUTIVE OFFICER/DIRECTOR
1800 S. OCEAN BLVD., #510
POMPANO BEACH, FL 33062
JAMES MULDOWNEY, AGE 55
SECRETARY/TREASURER/DIRECTOR
16456 REDDINGTON DR.
REDDINGTON BEACH, FL 33708
DIRAN M. KALOUSTIAN, AGE 63
DIRECTOR
4605 S. OCEAN BLVD.
HIGHLAND, FL 33487
DEREK LEWIN, AGE 59
DIRECTOR
1800 S. OCEAN BLVD., #312
POMPANO BEACH, FL 33062
STEVEN YORK, AGE 48
DIRECTOR
4141 W. WALTON BLVD.
WATERFORD, MI 48329
WILLIAM G. FORHAN
MR. FORHAN HAS BUILT PROFITABLE BUSINESSES AND DEVELOPED STRONG
MANAGEMENT TEAMS DURING HIS TWENTY YEARS IN THE SALES INCENTIVE
INDUSTRY. HE HAS DEVELOPED AN IN-DEPTH UNDERSTANDING OF THE
MARKETING STRUCTURE OF MANY DIFFERENT INDUSTRIES, WHICH HAS LED
TO MARKETING PLANS DESIGNED TO INCREASE AND MOTIVATE SALES
PARTICIPATION FOR CLIENTS IN DIVERSE FIELDS.
MR. FORHAN LEFT HIS POSITION AS DISTRICT SALES MANAGER FOR AVIS
RENT-A-CAR, AND FOUNDED THREE COMPANIES IN THE MID 1970S;
MOTIVATION TRAVEL, INC., MOTIVATION ADVERTISING, INC., AND
MOTIVATION PLANNERS, INC., A SALES INCENTIVE COMPANY. IN 1984, HE
SOLD THE COMPANIES TO AMERICAN EXPRESS, AND WAS NAMED PRESIDENT
OF AMERICAN EXPRESS GROUP & INCENTIVE SERVICES. HE IS PRESENTLY
THE CEO OF INTEGRATED MARKETING PROFESSIONALS, INC.
MR. FORHAN GRADUATED FROM MICHIGAN STATE UNIVERSITY IN 1967 WITH
A BA IN BUSINESS.
JAMES M. MULDOWNEY
MR. MULDOWNEY IS A PROVEN GENERAL MANAGER WITH STRONG P&L
EXPERIENCE GAINED DURING HIS CAREER OF MORE THAN 25 YEARS IN THE
INTERNATIONAL AND DOMESTIC TRAVEL INDUSTRY. HE POSSESSES HANDS-ON
KNOWLEDGE OF OPERATIONS AND FINANCE, AND WAS INSTRUMENTAL IN THE
ACQUISITIONS OF SEVERAL CORPORATE TRAVEL BUSINESSES, TOTALING
$850,000,000 IN SALES WITH 1,500 EMPLOYEES.
MR. MULDOWNEY SPENT 23 YEARS WITH AMERICAN EXPRESS TRAVEL RELATED
SERVICES, MOST RECENTLY AS THE SENIOR VICE PRESIDENT IN CHARGE OF
WHOLESALE TRAVEL AND AIRLINE RELATIONS, WHERE HE MANAGED A STAFF
OF 600 AND AN ANNUAL PASSENGER VOLUME IN EXCESS OF 500,000.
MOST RECENTLY, MR. MULDOWNEY WAS PRESIDENT OF CLUB AMERICA, INC.,
A TRAVEL WHOLESALER, AND THE OWNER OF THE RESER CORPORATION, A
FULL SERVICE RESERVATIONS AND TELEMARKETING COMPANY. MR.
MULDOWNEY GRADUATED FROM SETON HALL UNIVERSITY IN 1967 WITH A BS
IN ECONOMICS AND ACCOUNTING.
DIRAN M. KALOUSTIAN
EDUCATION: GRADUATE OF DUKE UNIVERSITY AND NEW YORK UNIVERSITY
GRADUATE SCHOOL OF BUSINESS AND NEW YORK UNIVERSITY LAW SCHOOL.
EMPLOYMENT: MR. KALOUSTIAN WAS FORMERLY THE PRESIDENT AND
DIRECTOR OF DEPOSITORY TRUST COMPANY IN NEW YORK, ONE OF THE
WORLD'S LARGEST FINANCIAL INSTITUTIONS. MR. KALOUSTIAN ASSUMED
FULL EXECUTIVE AND FINANCE CONTROL OF DEPOSITORY TRUST COMPANY IN
1970 WHEN IT HAD REPORTED LOSSES AND DEPOSITED ASSETS OF $25
BILLION AND EXPANDED IT INTO A PROFITABLE COMPANY WITH DEPOSITED
ASSETS EXCEEDING $10 TRILLION.
DEREK LEWIN
MR. LEWIN IS A FOUNDING MEMBER OF THE FLORIDA VENTURE CAPITAL
GROUP, AND A MEMBER OF THE ASSOCIATION OF MANAGEMENT ACCOUNTANTS.
HE SPENT HIS EARLY CAREER AS OWNER AND DEVELOPER OF RETAIL AND
MANUFACTURING GROUPS IN THE UNITED KINGDOM, WITH AN EMPHASIS IN
DESIGN AND FINANCE. HE LATER GAINED EXPERIENCE IN SHIPPING
FINANCING, AND MORTGAGE AND INVESTMENT BANKING.
STEVEN YORK
MR. YORK IS THE FOUNDER AND CHIEF EXECUTIVE OFFICER OF CONTRACT
PROFESSIONALS, INC., AN ENGINEERING SERVICES COMPANY. HIS TIME IS
DEVOTED FULLY TO THE BUSINESS OF THAT COMPANY AND ITS AFFILIATES.
HE WAS FORMERLY VICE PRESIDENT OF OPERATIONS FOR AERO-DETROIT,
INC., A SUBSIDIARY OF TAD TECHNICAL SERVICES, INC., AND A
REGIONAL MANAGER FOR BUTLER SERVICE GROUP.
MR. YORK HAS BEEN A MEMBER OF THE BOARD OF DIRECTORS OF THE
NATIONAL TECHNICAL SERVICES ASSOCIATION SINCE 1987, DURING WHICH
TIME HE HAS SERVED AS SECRETARY AND TREASURER, AND HAS CHAIRED
SEVERAL COMMITTEES. HE IS ALSO A MEMBER OF THE YOUNG PRESIDENTS
ORGANIZATION AND THE STANFORD UNIVERSITY HUMAN RESOURCES
EXECUTIVE ROUND TABLE.
MR. YORK MAJORED IN ENGINEERING AT MICHIGAN STATE UNIVERSITY, AND
SERVED EIGHT AND ONE-HALF YEARS WITH THE UNITED STATES AIR FORCE.
ITEM 6. EXECUTIVE COMPENSATION.
IMP ENTERED INTO EMPLOYMENT AGREEMENTS WITH ITS KEY EMPLOYEES -
MR. WILLIAM FORHAN AND MR. JAMES MULDOWNEY. ADDITIONALLY, AS PART
OF THE AGREEMENT TO PURCHASE CASINO AIRLINK, IMP ENTERED INTO A 5-
YEAR CONSULTING AGREEMENT WITH MR. STEVEN SCHOEN, THE PREVIOUS
PRINCIPAL SHAREHOLDER OF CASINO AIRLINK. IN LATE 1996, IMP
CREATED A STOCK OPTION PLAN FOR EMPLOYEES AND DIRECTORS OF IMP.
DURING THE YEAR 1997, MR. FORHAN AND MR. MULDOWNEY WERE GRANTED
INCENTIVE STOCK OPTIONS. THE DESCRIPTION OF THE EMPLOYMENT
AGREEMENTS, THE STOCK OPTION PLAN, AND THE INCENTIVE STOCK
OPTIONS ARE PRESENTED IN THE NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS PRESENTED IN RESPONSE TO ITEM 15 BELOW. THE DOCUMENTS
ARE ATTACHED AS EXHIBITS TO THIS FORM 10.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
PURSUANT TO THE AGREEMENT AND PLAN OF MERGER WITH IMP, THE
OUTSTANDING COMMON AND PREFERRED STOCK OF IMP SHALL BE EXCHANGED
FOR SHARES OF THE COMPANY'S COMMON STOCK VALUED AT $11,994,018,
AS OF THE VALUATION DATE PROVIDED FOR IN THE AGREEMENT. IN
ADDITION, OPTIONS HELD BY WILLIAM FORHAN, JAMES MULDOWNEY, AND
MEMBERS OF THE BOARD OF DIRECTORS OF IMP TO ACQUIRE SHARES OF IMP
COMMON STOCK SHALL BE CONVERTED TO OPTIONS TO ACQUIRE SHARES OF
THE COMPANY'S COMMON STOCK. IN ADDITION, WARRANTS GRANTED TO
JOSEPH CHARLES & ASSOCIATES, INC. TO ACQUIRE SHARES OF IMP SHALL
BE EXCHANGED FOR WARRANTS TO ACQUIRE THE COMPANY'S STOCK.
THE AGREEMENT AND PLAN OF MERGER ALSO PROVIDE THAT AT CLOSING,
EXISTING SHAREHOLDERS CHATEAU VEGAS, INC., DIRAN KALOUSTIAN, AND
PROFESSIONAL ATHLETIC SERVICE, INC. (THE "GRANTING ENTITIES")
SHALL CONVEY 1,500,000 SHARES OF RESTRICTED COMMON STOCK OF THE
COMPANY TO WILLIAM FORHAN; 500,000 SHARES OF RESTRICTED COMMON
STOCK SHALL BE CONVEYED TO JAMES MULDOWNEY. WILLIAM FORHAN WILL
RECEIVE PROXIES TO VOTE 2,500,000 SHARES OF COMMON STOCK FROM THE
GRANTING ENTITIES FOR A PERIOD NOT TO EXCEED THIRTY-SIX (36)
MONTHS AFTER THE CONSUMMATION OF THE MERGER.
ITEM 8. LEGAL PROCEEDINGS.
THERE IS NO LITIGATION INVOLVING AIC AS A PARTY. AIC HAS RECEIVED
NOTICE, HOWEVER, OF AN APPLICATION MADE BY A JUDGEMENT CREDITOR
OF WASTACH INTERNATIONAL CORPORATION, IN THE SUPERIOR COURT OF
NEW JERSEY, LAW DIVISION, ESSEX COUNTY, REGARDING A LEVY MADE
UPON KIWI INTERNATIONAL HOLDINGS, INC., AND KIWI INTERNATIONAL
AIRLINES, INC., (COLLECTIVELY "KIWI"). THE LEVY PURPORTS TO
ATTACH A CONVERTIBLE DEBT POSITION PURPORTEDLY HELD BY WASTACH.
THIS CONVERTIBLE DEBT POSITION, HOWEVER, WAS SOLD BY WASTACH IN
SEPTEMBER, 1977, PRIOR TO ANY JUDGEMENT BEING ENTERED AGAINST
WASTACH, TO COMMERCIAL BANK HELP. SUBSEQUENTLY, AIC PURCHASED THE
CONVERTIBLE DEBT POSITION FROM COMMERCIAL BANK HELP. THE
PROPRIETY OF THE LEVY IS DISPUTED.
ITEM 9. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
REGISTRANT'S COMMON STOCK IS TRADED IN THE OVER-THE-COUNTER
MARKET IN THE UNITED STATES UNDER THE SYMBOL AVIA. THE FOLLOWING
ARE AVAILABLE HIGH AND LOW BIDS SINCE THE COMPANY STARTED TRADING
ON JANUARY 30, 1998.
AVIATION INDUSTRIES HIGH LOW
JANUARY 30, 1998 TO MARCH 31, 1998 $8.62 $4.37
APRIL 1, 1998 TO JUNE 30, 1998 $6.25 $1.37
IMP'S COMMON STOCK IS TRADED ON THE OVER-THE-COUNTER MARKET IN
THE UNITED STATES UNDER THE SYMBOL POKR. THE FOLLOWING ARE THE
AVAILABLE HIGH AND LOW BIDS SINCE JULY 1, 1996.
INTEGRATED MANAGEMENT PROFESSIONALS, INC. HIGH LOW
JULY 1, 1996 TO SEPTEMBER 30, 1996 $6.25 $1.06
OCTOBER 1, 1996 TO DECEMBER 31, 1996 $1.25 $0.31
JANUARY 1, 1997 TO MARCH 30, 1997 $0.60 $0.22
APRIL 1, 1997 TO JUNE 30, 1997 $0.44 $0.24
JULY 1, 1997 TO SEPTEMBER 30, 1997 $0.46 $0.15
OCTOBER 1, 1997 TO DECEMBER 31, 1997 $0.43 $0.18
JANUARY 1, 1998 TO MARCH 30, 1998 $0.43 $0.17
APRIL 1, 1998 TO JUNE 30, 1998 $0.48 $0.20
AS OF JUNE 1, 1998, THERE WERE 9,375,000 SHARES OF THE COMPANY'S
COMMON STOCK OUTSTANDING, HELD BY 47 RECORD OWNERS.
AS OF APRIL 23, 1998, IMP HAD 13,353,923 SHARES OF COMMON STOCK
OUTSTANDING, TOGETHER WITH 2,000,000 OF SERIES A, CONVERTIBLE
PREFERRED STOCK, AND 1,700,000 SHARES OF SERIES B PREFERRED
STOCK.
THE REGISTRANT HAS NEVER PAID A CASH DIVIDEND AND HAS NO PRESENT
INTENTION OF SO DOING.
ITEM 10. RECENT SALES OF UNREGISTERED SECURITIES.
THERE ARE NO RECENT SALES OF AIC'S UNREGISTERED SECURITIES TO BE
REPORTED. ON APRIL 23, 1998, IMP COMPLETED AN OFFERING UNDER RULE
504 OF REGULATION D. A TOTAL OF 7,244,583 SHARES OF COMMON STOCK
WERE SOLD IN THIS OFFERING AT AN AVERAGE PRICE OF $0.138.
ITEM 11. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE
REGISTERED.
THE SECURITIES OF AIC TO BE REGISTERED ARE COMMON STOCK WITH NO
PAR VALUE. THE SHARES ARE NON-ASSESSABLE, WITHOUT NON-CUMULATIVE
VOTING, BUT WITH PRE-EMPTIVE RIGHTS
ITEM 12. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
THE BYLAWS OF AIC DO NOT PROVIDE FOR THE INDEMNIFICATION OF ANY
DIRECTOR, OFFICER, EMPLOYEE OR AGENT OF THE ISSUER, OR ANY PERSON
SERVING IN SUCH CAPACITY FOR ANY OTHER ENTITY OR ENTERPRISE AT
THE REQUEST OF THE ISSUER AGAINST ANY AND ALL LEGAL EXPENSES
(INCLUDING ATTORNEYS FEES), CLAIMS AND LIABILITIES ARISING OUT OF
ANY ACTION, SUIT OR PROCEEDING, EXCEPT AN ACTION BY OR IN THE
RIGHT OF THE ISSUER. THE BYLAWS OF IMP DO PROVIDE FOR SUCH
INDEMNIFICATION, AND MANAGEMENT INTENDS THAT THE BYLAWS OF THE
SURVIVING POST-MERGER ENTITY SHALL PROVIDE FOR INDEMNIFICATION OF
OFFICERS AND DIRECTORS TO THE EXTENT PERMITTED BY NEVADA LAW.
INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE
FEDERAL SECURITIES LAWS MAY BE PERMITTED TO DIRECTORS AND
CONTROLLING PERSONS OF THE ISSUER, THE ISSUER HAS BEEN ADVISED
THAT IN THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION
SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE
LAW AND IS, THEREFOR, UNENFORCEABLE. IN THE EVENT A DEMAND FOR
INDEMNIFICATION IS MADE, THE ISSUER WILL, UNLESS IN THE OPINION
OF ITS COUNSEL THE MATTER HAS BEEN SETTLED BY CONTROLLING
PRECEDENT, SUBMIT TO A COURT OF APPROPRIATE JURISDICTION THE
QUESTION WHETHER SUCH INDEMNIFICATION BY IT IS AGAINST PUBLIC
POLICY AS EXPRESSED IN THE LAW AND WILL BE GOVERNED BY THE FINAL
ADJUDICATION OF SUCH ISSUE.
ITEM 13. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
THE FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA REQUIRED BY THIS
ITEM 13 FOLLOW THE INDEX OF FINANCIAL STATEMENTS APPEARING AT
ITEM 15 OF THIS FORM 10.
ITEM 14. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
AIC RECENTLY CHANGED ITS AUDITORS. THIS IS NOT DUE TO A DISPUTE
OR DISAGREEMENT WITH THE PREVIOUS AUDITOR. INSTEAD, THE CHANGE
WAS MADE BECAUSE MR. FRIEDMAN SPECIALIZES IN AUDITING "BLANK
CHECK" COMPANIES. AS A RESULT OF THE ACQUISITION OF IMP, THE
COMPANY IS NO LONGER A BLANK-CHECK COMPANY, AND, THEREFORE,
RETAINED A NEW AUDITOR, KURT SALIGER, WHO WAS MORE WILLING TO
UNDERTAKE SUCH AN AUDIT.
ITEM 15. FINANCIAL STATEMENTS AND EXHIBITS.
FINANCIAL STATEMENTS - AIC
REPORT OF INDEPENDENT AUDITOR BARRY L. FRIEDMAN,
CPA, DATED SEPTEMBER 24, 1996.
REPORTS OF INDEPENDENT AUDITOR, KURT D. SALIGER,
CPA DATED AUGUST 12, 1998.
BALANCE SHEETS AS OF DECEMBER 31, 1997 AND FOR THE
PERIOD ENDED MARCH 31, 1998.
STATEMENT OF OPERATION FOR THE YEARS ENDED
DECEMBER 31, 1997 AND FOR THE PERIOD ENDED MARCH
31, 1998.
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE YEARS
ENDED DECEMBER 31, 1997 AND FOR THE PERIOD ENDED
MARCH 31, 1998.
STATEMENT OF CASH FLOWS FOR THE YEARS ENDED
DECEMBER 31, 1997 AND FOR THE PERIOD ENDED MARCH
31, 1998.
NOTES TO FINANCIAL STATEMENTS FOR AIC DATED MARCH
31, 1998.
FINANCIAL STATEMENTS - IMP
REPORT OF INDEPENDENT AUDITOR HARVEY JUDKOWITZ,
CPA, DATED FEBRUARY 23, 1998.
BALANCE SHEETS FOR THE YEARS ENDED DECEMBER 31,
1995, DECEMBER 31, 1996 AND DECEMBER 31, 1997.
STATEMENT OF OPERATION FOR THE YEARS ENDED
DECEMBER 31, 1995, DECEMBER 31, 1996 AND DECEMBER
31, 1997.
STATEMENT OF STOCKHOLDERS' EQUITY FOR THE YEARS
ENDED DECEMBER 31, 1995, DECEMBER 31, 1996 AND
DECEMBER 31, 1997.
STATEMENT OF CASH FLOWS FOR THE YEARS ENDED
DECEMBER 31, 1995, DECEMBER 31, 1996 AND DECEMBER
31, 1997.
NOTES TO FINANCIAL STATEMENTS DATED DECEMBER 31,
1997.
AVIATION INDUSTRIES INDEPENDENT AUDITOR'S REPORT
BOARD OF DIRECTORS AUGUST 12, 1998
AVIATION INDUSTRIES CORP.
CLIFTON, NJ
I HAVE AUDITED THE ACCOMPANYING BALANCE SHEET OF AVIATION
INDUSTRIES CORP. (A DEVELOPMENT STAGE COMPANY), AS OF MARCH 31,
1998, AND THE RELATED STATEMENTS OF OPERATIONS, STOCKHOLDERS'
EQUITY AND CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 1998.
THESE FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF THE
COMPANY'S MANAGEMENT. MY RESPONSIBILITY IS TO EXPRESS AN OPINION
ON THESE FINANCIAL STATEMENTS BASED ON MY AUDIT.
I CONDUCTED MY AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED
AUDITING STANDARDS. THOSE STANDARDS REQUIRE THAT I PLAN AND
PERFORM THE AUDIT TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER
THE FINANCIAL STATEMENTS ARE FREE OF MATERIAL MISSTATEMENT. 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. I BELIEVE THAT MY
AUDIT PROVIDES A REASONABLE BASIS FOR MY OPINION.
IN MY OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT
FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF
AVIATION INDUSTRIES CORP. AT MARCH 31, 1998 AND THE RESULTS OF
THEIR OPERATIONS AND THEIR CASH FLOWS FOR THE THREE MONTHS ENDED
MARCH 31, 1998 IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
/S/ KURT D. SALIGER C.P.A.
KURT D. SALIGER, C.P.A.
LAS VEGAS, NV
INDEPENDENT AUDITOR'S REPORT
BOARD OF DIRECTORS AUGUST 12, 1998
AVIATION INDUSTRIES CORP.
CLIFTON, NJ
I HAVE AUDITED THE ACCOMPANYING BALANCE SHEET OF AVIATION
INDUSTRIES CORP. (A DEVELOPMENT STAGE COMPANY), AS OF DECEMBER
31, 1997, AND THE RELATED STATEMENTS OF OPERATIONS, STOCKHOLDERS'
EQUITY AND CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 1997. THESE
FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF THE COMPANY'S
MANAGEMENT. MY RESPONSIBILITY IS TO EXPRESS AN OPINION ON THESE
FINANCIAL STATEMENTS BASED ON MY AUDIT.
I CONDUCTED MY AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED
AUDITING STANDARDS. THOSE STANDARDS REQUIRE THAT I PLAN AND
PERFORM THE AUDIT TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER
THE FINANCIAL STATEMENTS ARE FREE OF MATERIAL MISSTATEMENT. 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. I BELIEVE THAT MY
AUDIT PROVIDES A REASONABLE BASIS FOR MY OPINION.
IN MY OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT
FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF
AVIATION INDUSTRIES CORP. AT DECEMBER 31, 1997 AND THE RESULTS OF
THEIR OPERATIONS AND THEIR CASH FLOWS FOR THE YEAR ENDED DECEMBER
31, 1997IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
/S/ KURT D. SALIGER C.P.A.
KURT D. SALIGER, C.P.A.
LAS VEGAS, NV
AVIATION INDUSTRIES CORP.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
<TABLE>
<S> <C> <C>
MARCH 31, DECEMBER 31,
1998 1997
ASSETS
CURRENT ASSETS:
CASH $1,004,231 $1,004,231
TOTAL CURRENT ASSETS $1,004,231 $1,004,231
OTHER ASSETS;
BOND, COMMERCIAL BANK (NOTE 6) $2,500,000 $2,500,000
INVESTMENT IN KIWI HOLDINGS (NOTE 3) $2,500,000 $2,500,000
INVESTMENT IN CITA AMERICAS, INC. (NOTE $1,875,000
4)
TOTAL OTHER ASSETS $6,875,000 $5,000,000
TOTAL ASSETS $6,004,231
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES;
ACCOUNTS PAYABLE $25,327 $12,281
TOTAL CURRENT LIABILITIES $25,327 $12,281
LONG TERM DEBT (NOTE 7) $1,000,000
STOCKHOLDERS' EQUITY;
COMMON STOCK, $0.001 PAR VALUE,
AUTHORIZED 50,000,000 SHARES
ISSUED AND OUTSTANDING:
DECEMBER 31, 1997 - 9,000,000 SHARES $9,000
MARCH 31, 1998 - 9,375,000 SHARES $9,375
ADDITIONAL PAID-IN CAPITAL $6,878,125 $5,003,500
DEFICIT ACCUMULATED DURING DEVELOPMENT ($33,596) ($20,550)
STAGE
TOTAL STOCKHOLDERS' EQUITY $6,853,904 $4,991,950
TOTAL LIABILITIES AND STOCKHOLDERS' $7,879,231 $6,004,231
EQUITY
</TABLE>
AVIATION INDUSTRIES CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATION
<TABLE>
<S> <C> <C>
THREE MONTHS YEAR ENDED
ENDED DEC. 31,
MARCH. 31, 1997
1998
INCOME:
REVENUE $0 $0
EXPENSES: $13,046 $8,050
NET PROFIT/(LOSS) ($13,046) ($8,050)
NET PROFIT/LOSS ($0.0014) ($0.0009)
(-) PER WEIGHTED SHARE (NOTE1)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES 9,375,000 9,000,000
OUTSTANDING
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS & AUDIT REPORT
AVIATION INDUSTRIES CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<S> <C> <C> <C> <C>
COMMON STOCK ADDITIONAL (DEFICIT)
SHARES AMOUNT PAID-IN ACCUMULATED
CAPITAL DURING
DEVELOPMENT
STAGE
BALANCE JANUARY 1, 9,000,000 $9,000,000 $5,003,500 ($20,550)
1998
FEBRUARY 24, 1998 375,000 $375 $1,874,625 -$204
ISSUED FOR CITA
AMERICAS, INC. STOCK
(NOTE 4)
NET LOSS ($13,046)
JANUARY 1, 1998 TO
MARCH 31, 1998
BALANCE, MARCH 31, 9,375,000 $9,375 $6,878,125 ($33,596)
1998
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS & AUDIT REPORT.
AVIATION INDUSTRIES CORP.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
<TABLE>
<S> <C> <C>
THREE YEAR
MONTHS ENDED
ENDED DEC. 31,
MARCH 31, 1997
1998
CASH FLOWS FROM OPERATING
ACTIVITIES:
NET LOSS ($13,046) ($8,050)
INCREASE IN ACCOUNTS PAYABLE $13,046 $8,050
CASH FLOWS FROM INVESTING
ACTIVITIES
NET INCREASE IN CASH $0 $0
CASH, BEGINNING OF PERIOD $1,004,231 $1,004,231
CASH, END OF PERIOD $1,004,231 $1,004,231
</TABLE>
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS & AUDIT REPORT
AVIATION INDUSTRIES CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 1 - HISTORY AND ORGANIZATION OF THE COMPANY
THE COMPANY WAS ORGANIZED JANUARY 26, 1988, UNDER THE LAWS OF THE
STATE OF DELAWARE. THE COMPANY CURRENTLY HAS NO OPERATIONS AND,
IN ACCORDANCE WITH SFAS #7, IS CONSIDERED A DEVELOPMENT STAGE
COMPANY.
ON JANUARY 2, 1994, AT A MEETING OF THE BOARD OF DIRECTORS, THE
BOARD APPROVED AMENDING ITS ARTICLES OF INCORPORATION. THESE
AMENDMENTS WERE APPROVED BY A MAJORITY VOTE OF THE STOCKHOLDERS.
THE COMPANY AUTHORIZED CHANGING ITS COMMON STOCK AUTHORIZED,
2,500 SHARES, $0.001 PAR VALUE, TO 50,000,000 SHARES, COMMON
STOCK PAR VALUE $0.001.
NOTE 2- ACCOUNTING POLICIES AND PROCEDURES
THE COMPANY HAS NOT DETERMINED ITS ACCOUNTING POLICIES AND
PROCEDURES, EXCEPT AS FOLLOWS:
A.) THE COMPANY USES THE ACCRUAL METHOD OF ACCOUNTING.
B.) EARNINGS OR LOSS PER SHARE IS COMPUTED USING THE WEIGHTED
AVERAGE NUMBER OF SHARES OF COMMON SHARES OUTSTANDING AS OF THE
BALANCE SHEET DATE.
NOTE 3- INVESTMENT IN KIWI HOLDINGS
THE INVESTMENT IN KIWI HOLDINGS REPRESENTS A MINORITY INTEREST
POSITION IN KIWI INTERNATIONAL HOLDINGS. ON OCTOBER 15, 1997 THE
COMPANY ACQUIRED A CONVERTIBLE DEBT POSITION OF $1,750,000 FROM
COMMERCIAL BANK HELP IN KIWI INTERNATIONAL HOLDINGS. THIS
POSITION REPRESENTS A 10% TO 15% INTEREST IN KIWI INTERNATIONAL
HOLDINGS DEPENDING UPON THE DILUTION OF THE COMPANY THROUGH ITS
ISSUED AND OUTSTANDING STOCK. KIWI INTERNATIONAL HOLDINGS LEASES
EIGHT 727 COMMERCIAL AIRCRAFT WHICH OPERATE IN SEVEN MAJOR
AIRLINE MARKETS. MARKETS SERVED INCLUDE NEW YORK CITY, ATLANTA,
CHICAGO, BOSTON, ORLANDO, WEST PALM BEACH IN THE UNITED STATES,
AND SAN JUAN, PUERTO RICO. MONTHLY PASSENGERS SERVED AVERAGE
100,000 PER MONTH.
AVIATION INDUSTRIES CORP.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE 4 - INVESTMENT IN CITA AMERICAS, INC.
THE INVESTMENT IN CITA AMERICAS, INC. REPRESENTS A 100% INTEREST
IN A DRUG REHABILITATION COMPANY. ON FEBRUARY 24, 1998 THE
COMPANY ISSUED 375,000 SHARES OF COMMON STOCK VALUED AT $5 PER
SHARE PLUS AN ASSUMPTION OF $80,000 IN EXISTING ACCOUNTS PAYABLE
TO ACQUIRE CITA AMERICAS, INC. THE 375,000 SHARES OF COMMON STOCK
ISSUED WAS SECTION 144 RESTRICTED COMMON STOCK.
NOTE 5 - WARRANTS AND OPTIONS
THERE ARE NO WARRANTS OR OPTIONS TO ISSUE ANY ADDITIONAL SHARES
OF COMMON STOCK OF THE COMPANY.
NOTE 6- BOND
WITH COMMERCIAL BANK HELP, THE BOND IS REPAYABLE ON SEPTEMBER 29,
2002, AND BEARS INTEREST AT THE RATE OF 3% PER ANNUM.
NOTE 7 - LONG TERM DEBT
THE DEBT WAS REPAID ON APRIL 7, 1998 WHICH WAS PRIOR TO MATURITY.
INTEGRATED MARKETING PROFESSIONALS, INC.
INDEPENDENT AUDITOR'S REPORT
BOARD OF DIRECTORS FEBRUARY 23, 1998
CASINO AIRLINK, INC.
I HAVE AUDITED THE ACCOMPANYING CONSOLIDATED BALANCE SHEET OF
CASINO AIRLINK, INC. AND SUBSIDIARIES AS OF DECEMBER 31, 1997 AND
THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS, CHANGES IN
STOCKHOLDERS' EQUITY AND CASH FLOWS FOR THE YEAR THEN ENDED.
THESE FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF THE
COMPANY'S MANAGEMENT. MY RESPONSIBILITY IS TO EXPRESS AN OPINION
ON THESE FINANCIAL STATEMENTS BASED ON MY AUDIT.
I CONDUCTED MY AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED
AUDITING STANDARDS. THOSE STANDARDS REQUIRE THAT I PLAN AND
PERFORM THE AUDIT TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER
THE FINANCIAL STATEMENTS ARE FREE OF MATERIAL MISSTATEMENT. 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. I BELIEVE THAT MY
AUDIT PROVIDES A REASONABLE BASIS FOR MY OPINION.
IN MY OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT
FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF
CASINO AIRLINK, INC. AND SUBSIDIARIES AS OF DECEMBER 31, 1997 AND
THE RESULTS OF ITS OPERATIONS AND ITS CASH FLOWS FOR THE YEARS
THEN ENDED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
HARVEY JUDKOWITZ, CPA
CERTIFIED PUBLIC ACCOUNTANT
MIAMI, FL
INTEGRATED MARKETING PROFESSIONALS, INC.
INDEPENDENT AUDITOR'S REPORT
BOARD OF DIRECTORS FEBRUARY 23, 1997
CASINO AIRLINK, INC.
I HAVE AUDITED THE ACCOMPANYING CONSOLIDATED BALANCE SHEET OF
CASINO AIRLINK, INC. AND SUBSIDIARIES AS OF DECEMBER 31, 1996 AND
1995 AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS,
CHANGES IN STOCKHOLDERS' EQUITY AND CASH FLOWS FOR THE TWO YEARS
THEN ENDED. THESE FINANCIAL STATEMENTS ARE THE RESPONSIBILITY OF
THE COMPANY'S MANAGEMENT. MY RESPONSIBILITY IS TO EXPRESS AN
OPINION ON THESE FINANCIAL STATEMENTS BASED ON MY AUDIT.
I CONDUCTED MY AUDIT IN ACCORDANCE WITH GENERALLY ACCEPTED
AUDITING STANDARDS. THOSE STANDARDS REQUIRE THAT I PLAN AND
PERFORM THE AUDIT TO OBTAIN REASONABLE ASSURANCE ABOUT WHETHER
THE FINANCIAL STATEMENTS ARE FREE OF MATERIAL MISSTATEMENT. 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. I BELIEVE THAT MY
AUDIT PROVIDES A REASONABLE BASIS FOR MY OPINION.
IN MY OPINION, THE FINANCIAL STATEMENTS REFERRED TO ABOVE PRESENT
FAIRLY, IN ALL MATERIAL RESPECTS, THE FINANCIAL POSITION OF
CASINO AIRLINK, INC. AND SUBSIDIARIES AS OF DECEMBER 31, 1996 AND
THE RESULTS OF ITS OPERATIONS AND ITS CASH FLOWS FOR THE TWO
YEARS THEN ENDED IN CONFORMITY WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES.
THE ACCOMPANYING FINANCIAL STATEMENTS HAVE BEEN PREPARED ASSUMING
THAT THE COMPANY WILL CONTINUE AS A GOING CONCERN. AS DISCUSSED
IN NOTE 11 TO THE FINANCIAL STATEMENT, THE COMPANY'S OPERATING
LOSSES RAISE SUBSTANTIAL DOUBT ABOUT ITS ABILITY TO CONTINUE AS A
GOING CONCERN. THE FINANCIAL STATEMENTS DO NOT INCLUDE ANY
ADJUSTMENTS THAT MIGHT RESULT FROM THE OUTCOME OF THIS
UNCERTAINTY.
HARVEY JUDKOWITZ, CPA
CERTIFIED PUBLIC ACCOUNTANT
MIAMI, FL
INTEGRATED MARKETING PROFESSIONALS, INC.
CONSOLIDATED BALANCE SHEET
FOR THE SEVEN MONTHS ENDED JULY 31, 1998 (UNAUDITED)
AND THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995 (AUDITED)
<TABLE>
<S> <C> <C> <C> <C>
JULY 31, DECEMBER DECEMBER DECEMBER
1998 31, 1997 31, 1996 31, 1995
ASSETS
CURRENT ASSETS
CASH $1,114,474 $268,830 $101,522 $127,757
ACCOUNTS RECEIVABLE 177,432 7,669 100,841 121,000
PREPAID EXPENSES 343,928 101,148 245,251 160,807
OTHER RECEIVABLES 414,619
TOTAL CURRENT ASSETS 1,635,834 $377,647 $447,614 $824,183
FIXED ASSETS, AT COST
AUTOMOBILE $10,292 $10,292
FURNITURE AND FIXTURES $53,610 53,610 53,610 58,272
OFFICE EQUIPMENT 368,463 568,080 564,097 165,088
COMPUTER SOFTWARE 26,259 23,958
LEASEHOLD IMPROVEMENTS 5,300 5,300 5,300 2,500
ACCUMULATED DEPRECIATION (294,430) (317,978) (180,244) (51,380)
TOTAL FIXED ASSETS 132,943 $345,803 $477,013 $174,480
OTHER ASSETS
GOODWILL $1,856,100 $1,856,100 $1,856,100
NON COMPETE AGREEMENT 500,000 500,000 500,000
CUSTOMER LISTS 700,000 775,000 775,000
TRADEMARK 100,000 100,000 100,000
ACCUMULATED DEPRECIATION (606,814) (450,941) (163,373)
ORGANIZATION EXPENSE 436 872
SURETY BOND 110,000 110,000 110,000 10,000
SECURITY DEPOSIT 6,342 8,936 8,935 6,342
TOTAL OTHER ASSETS $2,665,628 $2,899,531 $3,187,534 $16,342
TOTAL ASSETS $4,434,404 $3,622,981 $4,112,161 $1,015,005
LIABILITIES AND EQUITY
CURRENT LIABILITIES
10% NOTES PAYABLE ON $512,800 $915,912 $884,000
PURCHASE - CURRENT
ACCOUNTS PAYABLE 430,190 382,908 631,640 $290,567
AIRCRAFT EXPENSE ADVANCE 45,644 394,336
UNEARNED REVENUE 1,064,635 949,826 746,085
FEDERAL EXCISE TAX
PAYABLE 30,168 81,505 397,718 375,000
AMT. DUE UNDER CAP. 2,069 2,069 21,752 28,778
LEASES- CURRENT
INTEREST PAYABLE 5,000 2,000
NOTES PAYABLE TO FORMER 257,404
OWNER OF DAV-JEN
NOTES PAYABLE TO FORMER 41,584
OWNER OF RESER
LEGAL SETTLEMENT PAYABLE 30,000
OFFICERS BONUS PAYABLE 54,000 72,240
DUE TO SHAREHOLDER 413 68,569
TOTAL CURRENT LIABILITIES 2,094,275 2,518,572 3,015,183 $1,090,681
LONG TERM DEBT
10% NOTES PAYABLE $329,371 $524,404 $1,676,846
CAPITALIZED LEASES 1,978 1,978 4,047 23,712
TOTAL LONG TERM DEBT 526,382 1,680,893 23,712
STOCKHOLDERS' EQUITY
CLASS A COMMON STOCK $0.10 1,564,559 $610,934 $529,886 300,000
PAR VALUE, 25,000,000
SHARES AUTHORIZED,
6,109,340 ISSUED AND
OUTSTANDING IN 1997,
5,298,857 IN 1996
SERIES A CONVERTIBLE 100,000 200,000 200,000
PREFERRED STOCK, $0.10
PAR VALUE, 5,000,000
SHARES AUTHORIZED,
2,000,000 ISSUED AND
OUTSTANDING
SERIES B PREFERRED STOCK, 170,000 170,000 170,000
$0.10 PAR VALUE,
1,700,000 SHARES
AUTHORIZED, ISSUED, AND
OUTSTANDING
ADDITIONAL PAID IN CAPITAL 1,110,173 1,176,653 1,141,800 86,349
EQUITY INVESTMENT RESER (252,720)
INC.
DEFICIT (1,490,616) (1,579,560) (2,525,601) (485,737)
PROFIT FOR PERIOD 807,384
TOTAL STOCKHOLDERS' $2,008,781 $578,027 ($583,915) (99,388)
EQUITY
TOTAL LIABILITIES AND $4,434,404 $3,622,981 $4,112,161 $1,015,005
EQUITY
</TABLE>
INTEGRATED MARKETING PROFESSIONALS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SEVEN MONTHS ENDED JULY 31, 1998 (UNAUDITED)
AND THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995 (AUDITED)
<TABLE>
<S> <C> <C> <C> <C>
JULY 31, DECEMBER DECEMBER DECEMBER
1998 31, 1997 31, 1996 31, 1995
REVENUES EARNED $9,801,927 $18,378,929 $18,942,574 $20,009,040
COST OF REVENUES EARNED 6,758,926 13,876,269 15,746,734 16,736,046
GROSS PROFIT 3,043,001 4,502,660 3,195,840 3,272,994
OPERATING EXPENSES 2,239,730 4,027,435 3,332,227 3,530,578
EARNINGS (LOSS) FROM $803,271 $475,225 ($136,387) (257,584)
OPERATIONS
OTHER INCOME (EXPENSES)
GAIN ON SALE OF ASSETS 47,396
INTEREST INCOME $4,355 $1,822
INTEREST EXPENSE (4,113) (125,385) (15,228) (14,727)
OFFICER'S BONUS (131,802) (249,507)
COMPENSATION
INCOME BEFORE $354,195 $0 (216,838)
EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF
ACCOUNTING CHANGE
GAIN ON MODIFICATION OF $316,846
TERMS OF CARRYING VALUE
OF DEBT (NOTE 9)
CUMULATIVE EFFECT OF 375,000
ACCOUNTING CHANGE
(NOTE 8)
LOSS FROM CONTINUING $0 ($281,595) (474,422)
OPERATIONS
LOSS FROM DISCONTINUED ($1,288,059)
OPERATIONS
NET INCOME (LOSS) $807,384 $1,046,041 ($1,569,654) ($474,422)
PER COMMON SHARE
BASIC
INCOME BEFORE $0.064
EXTRAORDINARY ITEM
INCOME FROM EXTRAORDINARY $0.057
GAIN
INCOME FROM CUMULATIVE $0.067
EFFECT OF ACCOUNTING
CHANGE
NET INCOME PER SHARE $0.188
DILUTED
INCOME (LOSS) BEFORE $0.031 $(0.075) $(0.94)
EXTRAORDINARY ITEM
INCOME FROM EXTRAORDINARY $0.028
GAIN
INCOME (LOSS) FROM $(0.348)
DISCONTINUED OPERATIONS
INCOME FROM CUMULATIVE $0.033
EFFECT OF ACCOUNTING
CHANGE
NET INCOME PER SHARE $0.092 $(0.423) $(0.94)
</TABLE>
INTEGRATED MARKETING PROFESSIONALS, INC.
CONSOLIDATED STATEMENT OF CHANGE IN STOCKHOLDERS' EQUITY
FOR THE SEVEN MONTHS ENDED JULY 31, 1998 (UNAUDITED)
AND THE YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995 (AUDITED)
<TABLE>
<S>
<C> <C> <C> <C> <C> <C>
COMMON STOCK SERIES A SERIES A ADDITIONAL DEFICIT
SHARES $$ & B PFD. & B PFD. PAID-IN
(000'S) (000'S) (000'S) (000'S) CAPITAL
BALANCE 12/31/94 5 5 $40,700 ($11,315)
TRANSFER OF AMOUNT 79,087
DUE TO SHAREHOLDER TO
PAID IN CAPITAL
EFFECT OF 495 45 (45,000)
REINCORPORATION
AND CHANGE IN PAR
SALES OF COMMON STOCK 2,500 250 11,562
NET INCOME 1995 (474,422)
BALANCE 12/31/95 3,000 300 $86,349 ($485,737)
PURCHASE CASINO 253,651 (359,175)
AIRLINK, INC.
PURCHASE OF DAV-JEN 5,925 (140,079)
PURCHASE OF RESER 136,250 (70,956)
SALES OF STOCK 2,143 214 426,135
ISSUANCE OF PREFERRED A 2,000 200 50,000
ISSUANCE OF PREFERRED B 1,700 170 141,100
PURCHASE OF RESER 156 15 42,120
LOSS FOR 1996 (1,569,654)
BALANCE 12/31/96 5,299 $529 3,700 $370 $1,141,800 ($2,625,601)
ISSUANCE 810 82 34,853
NET INCOME 1997 1,046,041
BALANCE 12/31/97 6,109 $611 3,700 $370 $1,176,653 ($1,046,041)
</TABLE>
INTEGRATED MARKETING PROFESSIONALS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR YEARS ENDED DECEMBER 31, 1997, 1996, AND 1995 (AUDITED)
<TABLE>
<S>
<C> <C> <C>
DECEMBER 31, DECEMBER 31, DECEMBER 31,
1997 1996 1995
FOR OPERATING ACTIVITIES
NET INCOME (LOSS) $1,046,041 ($1,569,654) ($474,422)
ADJUSTMENT TO RECONCILE NET
INCOME TO NET CASH USED FOR
OPERATING ACTIVITIES
DEPRECIATION AND AMORTIZATION 425,738 $292,237 40,994
CHANGE IN ACCOUNTS RECEIVABLE 93,162 434,778 (535,619)
CHANGE IN PREPAID EXPENSES 144,103 (84,444) (160,807)
CHANGE IN UNEARNED REVENUES 203,741 351,749 394,336
CHANGE IN OTHER ASSETS (103,465) (16,342)
CHANGE IN ESTIMATE OF OLD (316,314)
FEDERAL EXCISE TAX PAYABLE
CHANGE IN ACCOUNTS PAYABLE AND (165,848) 396,791 656,595
ACCRUED EXPENSES
CASH PROVIDED FROM OPERATIONS $1,430,623 ($282,008) (95,265)
CASH FROM INVESTING ACTIVITIES
PURCHASE OF FURNITURE & (6,524) (7,291) (160,160)
FIXTURES
CASH FLOWS FROM FINANCING
ACTIVITIES
ISSUANCE OF COMMON STOCK 115,910
EFFECT ON PAID IN CAPITAL FROM (174,114)
ACQUISITIONS
RECEIPT FOR SALES OF STOCK 890,435 261,562
LOANS FROM STOCKHOLDERS 22,456 66,456
CHANGE IN STOCKHOLDER LOANS (188,835)
CHANGE IN AMOUNTS DUE RESER (41,584)
CORP.
PAYMENT OF 10% NOTE PAYABLE (1,120,530) (396,552)
CHANGE IN CAPITALIZED LEASES (21,752) (26,691) 52,490
NET CASH USED FROM FINANCING (1,256,791) 315,534 380,508
ACTIVITIES
NET INCREASE (DECREASE) 167,308 (26,235) 125,083
CASH AT BEGINNING OF YEAR 101,522 127,757 2,674
CASH AT END OF YEAR $268,830 $101,522 $127,757
CASH PAID DURING THE PERIOD $125,385 $10,602
FOR INTEREST AND TAXES
</TABLE>
INTEGRATED MARKETING PROFESSIONALS, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
ORGANIZATION
THE COMPANY WAS FORMED IN THE STATE OF MICHIGAN ON JANUARY 14,
1994, UNDER THE NAME OF INTEGRATED MARKETING PROFESSIONALS, INC.
TO SERVE AS A FULL SERVICE TRAVEL AGENCY, SPECIALIZING IN CRUISES
AND TOUR PACKAGES. IN OCTOBER, 1995 THE COMPANY REINCORPORATED IN
THE STATE OF NEVADA AND INCREASED ITS AUTHORIZED SHARES TO
25,000,000, $0.10 PAR VALUE SHARES. ACCORDINGLY, THE SHARES
ALREADY ISSUED WERE SPLIT 100 TO 1. IN MAY, 1996 THE COMPANY
PURCHASED THE OUTSTANDING CAPITAL STOCK OF DAV-JEN, INC., DOING
BUSINESS UNDER THE NAME OF CASINO AIRLINK. CASINO AIRLINK IS A
WHOLESALE TOUR AND TRAVEL COMPANY, WHICH OPERATES TOURS BETWEEN
FLORIDA CITIES AND BILOXI, MISSISSIPPI. THE TRANSACTION HAS BEEN
TREATED AS A PURCHASE TRANSACTION IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES.
ON OCTOBER 31, 1996, THE COMPANY'S NAME WAS CHANGED TO CASINO
AIRLINK, INC. IN NOVEMBER, 1996, THE COMPANY AUTHORIZED THE
ISSUANCE OF 2,000,000 SHARES OF SERIES A PREFERRED STOCK AND
1,700,000 SHARES OF SERIES B PREFERRED STOCK. EACH SHARE OF
PREFERRED A STOCK CARRIES A $0.1 0 PAR VALUE, HAS VOTING RIGHTS
AND IS CONVERTIBLE INTO TWO SHARES OF COMMON STOCK. EACH SHARE OF
PREFERRED B IS CONVERTIBLE INTO ONE SHARE OF COMMON STOCK. THERE
ARE NO VOTING RIGHTS ASSOCIATED WITH THE SERIES B PREFERRED.
IN DECEMBER 1996, THE COMPANY PURCHASED THE OUTSTANDING CAPITAL
STOCK OF RESER CORPORATION, A GEORGIA CORPORATION, ENGAGED IN THE
TRAVEL SERVICE AND SEMINAR BUSINESS. THIS TRANSACTION HAS ALSO
BEEN TREATED AS A PURCHASE TRANSACTION IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES.
FIXED ASSETS
FIXED ASSETS ARE CARRIED AT COST. THE COMPANY PROVIDES
DEPRECIATION OVER THE ESTIMATED USEFUL LIVES OF FIXED ASSETS
USING THE STRAIGHT LINE METHOD. UPON RETIREMENT OR SALE OF FIXED
ASSETS, THEIR NET BOOK VALUE IS REMOVED FROM THE ACCOUNTS AND THE
DIFFERENCE BETWEEN SUCH NET BOOK VALUE AND PROCEEDS RECEIVED IS
RECORDED AS INCOME OR LOSS. EXPENDITURES FOR MAINTENANCE AND
REPAIRS ARE CHARGED TO INCOME WHILE RENEWALS AND BETTERMENTS ARE
CAPITALIZED.
ESTIMATED USEFUL LIVES ARE AS FOLLOWS: FURNITURE: 7 YEARS
OFFICE EQUIPMENT: 5 YEARS
INCOME TAXES
THE COMPANY HAS ADOPTED SFAS 109. THE COMPANY HAS NOT MADE A
PROVISION FOR INCOME TAX PURPOSES DUE TO INCURRING LOSSES SINCE
INCEPTION. THE NET LOSSES OF APPROXIMATELY $1,580,000 CAN BE
CARRIED FORWARD TO OFFSET FUTURE TAXABLE INCOME. THE NET
OPERATING LOSS CARRY FORWARD BEGINS TO EXPIRE IN 2009.
REVENUE RECOGNITION
THE COMPANY RECEIVES RESERVATIONS FOR TOURS FOR FUTURE DATES. THE
AMOUNT RECEIVED IS BOOKED AS UNEARNED REVENUES AND IS NOT
RECOGNIZED AS INCOME UNTIL THE TOUR ACTUALLY OCCURS. AT THE DATE
THAT THE TOUR COMMENCES, THE UNEARNED REVENUES ARE TAKEN INTO
INCOME AND THE ESTIMATED COST TO COMPLETE THE TOUR ARE ACCRUED.
INTANGIBLE ASSETS
IN CONNECTION WITH THE PURCHASE OF CASINO AIRLINK, THE COMPANY
PAID COSTS IN EXCESS OF THE NET TANGIBLE ASSETS ACQUIRED. (SEE
NOTE 6) THE COST PAID IN EXCESS OF THE NET TANGIBLE ASSETS IS
ATTRIBUTABLE TO LONG-LIVED INTANGIBLE ASSETS HAVING CONTINUING
VALUE. THESE INTANGIBLE ASSETS WILL BE AMORTIZED OVER THEIR
ESTIMATED USEFUL LIVES, AS FOLLOWS:
NON COMPETE AGREEMENT: 5 YRS TRADEMARK: 10 YRS CUSTOMER LISTS:
7 YRS GOODWILL: 40 YRS
USE OF ESTIMATES
THE PREPARATION OF FINANCIAL STATEMENTS IN CONFORMITY WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES REQUIRES MANAGEMENT TO
MAKE ESTIMATES AND ASSUMPTIONS THAT AFFECT THE AMOUNTS REPORTED
IN THE FINANCIAL STATEMENTS AND FOOTNOTES THERETO. ACTUAL RESULTS
MAY DIFFER FROM THOSE ESTIMATES.
NET INCOME PER SHARE
THE COMPANY HAS ELECTED EARLY ADOPTION OF SFAS 1 28, EARNINGS PER
SHARE ISSUED BY THE FINANCIAL ACCOUNTING STANDARDS BOARD. IT
REPLACES THE PRESENTATION OF PRIMARY AND FULLY DILUTED EPS WITH
BASIC AND DILUTED EPS. BASIC EPS EXCLUDES ALL DILUTION. IT IS
BASED ON THE WEIGHED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
DURING THE PERIOD. DILUTED EPS REFLECTS THE POTENTIAL DILUTION
THAT WOULD OCCUR IF SECURITIES OR OTHER CONTRACTS TO ISSUE COMMON
STOCK WERE EXERCISED OR CONVERTED INTO COMMON STOCK. THE SERIES A
AND SERIES B PREFERRED SHARES WERE ISSUED ON DECEMBER 7, 1996 AND
DECEMBER 12, 1996, RESPECTIVELY.
NOTE 2: LEASES
OPERATING LEASES
THE COMPANY LEASES OFFICE SPACE IN FT. LAUDERDALE, FLORIDA ON A
MONTH TO MONTH BASIS. THE COMPANY ALSO LEASES OFFICE FACILITIES
AND CERTAIN EQUIPMENT, IN CLEARWATER, FLORIDA, UNDER NON
CANCELABLE OPERATING LEASES WHICH EXPIRE AT VARIOUS DATES THROUGH
THE YEAR 2000, AS FOLLOWS:
1998: $105,000 1999: $110,000 2000: $57,500 TOTAL: $272,500
RENT EXPENSE FOR THE YEAR ENDED DECEMBER 31, 1997 WAS $101,040.
CAPITALIZED LEASES
THE COMPANY ACQUIRED OFFICE EQUIPMENT UNDER PROVISIONS OF A LONG-
TERM LEASE. COST AND ACCUMULATED AMORTIZATION OF SUCH ASSETS
TOTALED $84,453. AT DECEMBER 31, 1997 FUTURE ANNUAL PAYMENTS ARE
AS FOLLOWS:
1998: $ 2,069
1999: 1,978
TOTAL: 4,047
LESS CURRENT PORTION: 2,069
AMOUNT DUE LONG-TERM: 978
NOTE 3: RECAPITALIZATION
THE COMPANY BECAME A NEVADA CORPORATION IN LATE 1995 AND
RESTRUCTURED ITS CAPITAL STOCK TO AUTHORIZE 25,000,000 SHARES OF
COMMON STOCK, $0.10 PAR VALUE. THE OUTSTANDING 5,000 SHARES OF
$1.00 PAR VALUE THEREBY BECAME 500,000 SHARES OF THE NEW COMMON
STOCK. ACCORDINGLY, AN ADDITIONAL 495,000 SHARES OF COMMON STOCK
WERE ISSUED TO THE COMPANY'S SHAREHOLDERS AND THE PAR VALUE ON
THE BALANCE SHEET WAS ADJUSTED TO REFLECT THE SHARES ISSUED. THIS
NON MONETARY TRANSACTION NECESSITATED AN INCREASE IN PAR VALUE
AND A DECREASE IN ADDITIONAL PAID-IN CAPITAL OF $45,000. IN
DECEMBER, 1995 AN ADDITIONAL 2,500,000 SHARES OF COMMON STOCK
WERE SOLD.
NOTE 4: PURCHASE OF DAV-JEN
THE PURCHASE PRICE OF DAV-JEN WAS ORIGINALLY $3,500,000, SUBJECT
TO ADJUSTMENT, IF NECESSARY UPON COMPLETION OF AN AUDIT OF THE
CASINO AIRLINK FINANCIAL STATEMENTS AT MAY 31, 1996. THE AMOUNT
WAS PAYABLE IN SEVEN SUCCESSIVE EQUAL QUARTERLY PAYMENTS OF
$500,000 BEGINNING JUNE 3, 1996. ADDITIONAL PAYMENTS WERE DUE ON
THE FIRST DAY OF SEPTEMBER AND DECEMBER 1996 AND MARCH, JUNE,
SEPTEMBER AND DECEMBER 1997. THE OUTSTANDING BALANCE WAS TO BEAR
INTEREST AT THE RATE OF 8% PER YEAR COMMENCING SEPTEMBER 1, 1996.
ON JUNE 3, THE COMPANY PAID $500,000 TO THE FORMER PRINCIPAL
STOCKHOLDER OF CASINO AIRLINK AS THE INITIAL QUARTERLY PAYMENT.
THE AUDIT OF CASINO AIRLINK FOR THE FIVE MONTHS ENDED MAY 31,
1996 REQUIRED AN ADJUSTMENT (REDUCTION) TO THE PURCHASE PRICE IN
THE AMOUNT OF $684,198. ACCORDINGLY, THE SCHEDULED QUARTERLY
PAYMENT FOR SEPTEMBER 3, 1996 OF $500,000 WAS CANCELED AND THE
AMOUNT DUE AT DECEMBER 3, 1996 WAS REDUCED TO $31 5,802.
IN ADDITION, THE COMPANY WAS TO PAY $2.50 FOR EACH PASSENGER
FLYING VIA CASINO AIRLINK FOR A PERIOD OF TWO YEARS, IN
CONSIDERATION FOR MR. SCHOEN'S GUARANTEE OF A SURETY BOND OWNED
BY THE COMPANY, AND THE GUARANTEE OF THE COMPANY'S CREDIT CARD
MERCHANT ACCOUNT
THE ALLOCATION OF THE $3,500,000 PURCHASE PRICE, LESS THE
ADJUSTMENT OF $684,198 WAS AS FOLLOWS:
NON COMPETE AGREEMENT $500,000
OFFICE FURNITURE AND
EQUIPMENT 200,000
CUSTOMER LIST 700,000
TRADEMARK 100,000
GOODWILL 1,856,100
ON DECEMBER 6, 1996, THE SALES AGREEMENT WAS AMENDED, RETROACTIVE
TO MAY 31, 1996. THE OUTSTANDING DEBT WAS REDUCED TO $745,000
PAYABLE OVER A 24 MONTH PERIOD COMMENCING ON JANUARY 15, 1997
BEARING INTEREST AT 10%. IN ADDITION THE SELLERS RECEIVED
1,700,000 SHARES OF SERIES B CONVERTIBLE PREFERRED STOCK.
NOTE 5: PURCHASE OF RESER CORP.
THE PURCHASE PRICE OF RESER CORP. WAS THE NET ASSET VALUE OF THE
COMPANY AT DECEMBER 31, 1996 A TOTAL OF $252,720 IN EXCESS OF THE
NET WORTH OF THE COMPANY. THIS EXCESS WAS ACCOUNTED FOR AS
FOLLOWS: NOTES PAYABLE IN THE AMOUNT OF $195,000 AND THE ISSUANCE
OF 156,000 SHARES OF COMMON STOCK, WHICH WERE VALUED AT $.37 PER
SHARE, OR $57,720.
IN THE EVENT THAT THE TRADING PRICE OF THE COMPANY'S COMMON STOCK
IS LESS THAN $1.25 A SHARE, ON JANUARY 3, 1 999, THE COMPANY IS
LIABLE TO PAY THE SELLER THE AMOUNT OF 1 56,000 SHARES MULTIPLIED
BY THE DIFFERENCE OF $1.25 AND THE ACTUAL SELLING PRICE ON THAT
DATE. THEREFORE THE COMPANY IS CONTINGENTLY LIABLE FOR THIS
DIFFERENCE.
NOTE 6: EMPLOYMENT CONTRACTS
ON JUNE 17, 1996 , THE COMPANY ENTERED INTO EMPLOYMENT CONTRACTS
WITH CERTAIN KEY EMPLOYEES, AS FOLLOWS:
MR. WILLIAM FORHAN; PRESIDENT, $149,000 PER ANNUM. AS AN
INCENTIVE BONUS, MR. FORHAN IS ELIGIBLE TO RECEIVE, 30 DAYS AFTER
THE BOARD OF DIRECTORS APPROVES INTERIM FINANCIAL STATEMENTS FOR
THE LAST-ENDED FISCAL QUARTER, A PAYMENT EQUAL TO FIVE PERCENT
(5%) OF THE COMPANY'S PRE-TAX NET INCOME FOR THE LAST-ENDED
FISCAL QUARTER FOR EACH FISCAL QUARTER AFTER DECEMBER 31, 1996.
MR. FORHAN'S RIGHT TO RECEIVE THIS INCENTIVE BONUS WILL BE OFFSET
BY AN EQUAL PERCENTAGE OF PRE-TAX NET LOSSES, IF ANY, REALIZED
FROM TIME TO TIME.
MR. JAMES MULDOWNEY; PRESIDENT OF CASINO AIRLINK, $150,000 PER
ANNUM. MR. MULDOWNEY IS ALSO ELIGIBLE TO RECEIVE THE SAME BONUS
AS MR. FORHAN, ABOVE. HOWEVER, MR. MULDOWNEY'S RATE OF BONUS IS
2.5%.
AS PART OF THE AMENDMENT TO THE PURCHASE AGREEMENT, MR. STEVEN
SCHOEN'S CONTRACT WAS AMENDED AND HE WILL RECEIVE $125,000 A YEAR
FOR A FIVE YEAR CONSULTING AGREEMENT, PLUS A 5% BONUS OF CASINO
AIRLINK (SUBSIDIARY) PRE-TAX INCOME.
NOTE 7:1996 STOCK OPTION PLAN
EFFECTIVE DECEMBER 27, 1996, THE 1996 STOCK OPTION PLAN HAS BEEN
ADOPTED TO ENCOURAGE STOCK OWNERSHIP BY DIRECTORS AND EMPLOYEES
OF CASINO AIRLINK, INC., IN ORDER TO INCREASE THE PROPRIETARY
INTEREST IN THE SUCCESS OF THE COMPANY AND TO ENCOURAGE THEM TO
PROVIDE FUTURE SERVICES TO THE COMPANY.
ON JANUARY 18, 1997, WILLIAM FORHAN WAS GRANTED AN INCENTIVE
STOCK OPTION TO PURCHASE UP TO 2,000,000 SHARES OF COMMON STOCK
AT A PRICE OF $0.30 PER SHARE, THE FAIR MARKET VALUE OF THE
COMPANY'S STOCK AT THE DATE OF GRANT. THE EXPIRATION DATE OF THIS
GRANT IS JANUARY 1 8, 2007.
IN DECEMBER, 1997, JAMES MULDOWNEY WAS GRANTED AN INCENTIVE STOCK
OPTION TO PURCHASE 400,000 SHARES OF COMMON STOCK AT A PRICE OF
$0.21 PER SHARE, THE FAIR MARKET VALUE OF THE COMPANY'S STOCK AT
THE DATE OF GRANT. THE EXPIRATION OF THIS GRANT IS DECEMBER 29,
2008.
NOTE 8: CUMULATIVE EFFECT OF ACCOUNTING CHANGE
AS OF DECEMBER 31, 1996, THE COMPANY HAD ACCRUED $375,000 FOR
FEDERAL EXCISE TAXES. DURING THE SIX MONTHS ENDED JUNE 30, 1997,
IT WAS DETERMINED THAT THIS AMOUNT WAS NOT DUE AND AN ADJUSTMENT
WAS MADE TO CORRECT THE OVER ACCRUAL. THIS AMOUNT IS REFLECTED IN
THE ACCOMPANYING STATEMENT OF OPERATIONS AS A CUMULATIVE EFFECT
OF AN ACCOUNTING CHANGE.
NOTE 9: MODIFICATION OF TERMS - CARRYING VALUE OF DEBT
EXCEEDS FUTURE CASH PAYMENTS
ON DECEMBER 29, 1997, THE COMPANY MODIFIED THE TERMS OF ITS 10%
NOTES PAYABLE TO THE SELLER. THE AMOUNT OF DEBT AT DECEMBER 31,
1997 WAS $1,676,846 AND THE SELLER HAS AGREED TO ACCEPT
$1,360,000 AT THE SAME 10% RATE OVER THE SAME PERIOD.
ACCORDINGLY, THE AMOUNT OF THE NOTE HAS BEEN REDUCED BY $316,846
AND AN EXTRAORDINARY GAIN OF $316,846 ($0.05 A SHARE) HAS BEEN
INCLUDED IN NET INCOME IN 1997.
NOTE 10: SETTLEMENT OF EQUITY CLAIMS
DURING THE YEAR ENDED DECEMBER 31, 1997, CERTAIN CLAIMS AGAINST
THE COMPANY WERE SETTLED BY THE ISSUANCE OF COMMON STOCK. UNDER
THE TERMS OF THESE SETTLEMENTS, 670,483 SHARES WERE ISSUED IN
EXCHANGE OF $160,901 IN CLAIMS. THE DIFFERENCE BETWEEN THE PAR
VALUE OF $67,048 AND THE $160,901 IN CLAIMS, OR $93,852, WAS
CHARGED AGAINST INCOME DURING THE YEAR.
EXHIBITS
2. AGREEMENT OF MERGER
3.1 ARTICLES OF INCORPORATION -- AIC
3.2 BY-LAWS - AIC
3.3 ARTICLES OF INCORPORATION - IMP
3.4 BY-LAWS - IMP
4.1 DESCRIPTION OF IMP SERIES A CONVERTIBLE PREFERRED STOCK
4.2 DESCRIPTION OF IMP SERIES B PREFERRED STOCK
4.3 OPTION AGREEMENT - WILLIAM FORHAN
4.4 OPTION AGREEMENT - JAMES MULDOWNEY
4.5 WARRANT AGREEMENT
10.1 EMPLOYMENT AGREEMENT - WILLIAM FORHAN
10.2 EMPLOYMENT AGREEMENT - JAMES MULDOWNEY
13 1997 ANNUAL REPORT TO IMP SHAREHOLDERS
99.1 PRESS RELEASE - BUSINESS TRAVEL
99.2 PRESS RELEASE - MAGNOLIA TOURS
99.3 PRESS RELEASE - IMP MERGER
99.4 PRESS RELEASE - AVIATION BOARD
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934, THE REGISTRANT HAS DULY CAUSED THIS
REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
AVIATION INDUSTRIES CORP.
BY:
WILLIAM E. FORHAN, PRESIDENT
AGREEMENT AND PLAN OF MERGER
by and between
AVIATION INDUSTRIES CORP.
a Nevada Corporation
and
CAL ACQUISITION CORP.,
a Nevada Corporation to be formed
and
INTEGRATED MARKETING PROFESSIONALS, INC.
F/K/A CASINO AIRLINK, INC.
a Nevada Corporation
AGREEMENT AND PLAN OF MERGER, dated as of ____________ 1998,
between AVIATION INDUSTRIES CORP., a Nevada corporation ("AIC"),
and CAL ACQUISITION CORP., a Nevada corporation to be formed
("CAL"), and INTEGRATED MARKETING PROFESSIONALS, INC. f/k/a
CASINO AIRLINK, INC., a Nevada corporation ("CASINO")
WHEREAS, AIC and CASINO are publicly traded companies, the shares
of which are quoted on the over-the-counter bulletin board; and
WHEREAS, AIC and CASINO have executed a letter of intent for a
merger of CASINO with and into AIC, subject to entering into a
formal merger agreement, and
WHEREAS, CAL is a wholly owned subsidiary of AIC; and
WHEREAS, the respective boards of directors of AIC and CASINO
deem it advisable to merge CASINO with CAL pursuant to this
Agreement and Articles of Merger to be executed by each company
("Articles of Merger"), whereby the holders of shares of common
and preferred stock of CASINO (such shares of common stock being
sometimes hereinafter called, collectively, the "Common Stock"
and such shares of preferred stock being sometimes hereinafter
called, collectively, the "Preferred Stock") outstanding at the
effective time (as hereinafter defined) of the merger shall
receive shares of AIC common stock $.001 par value per share (the
"AIC Shares"), in the manner and in such amount as is set forth
in Article I hereof and upon the terms and conditions otherwise
set forth in this Agreement; and
WHEREAS, to effectuate the foregoing, the parties desire to adopt
a plan of reorganization in accordance with the provisions of
Section 368 (a)(1)(A) of the Internal Revenue Code of 1986, as
amended (the "Code").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, and for the purpose of
stating the terms and conditions of the merger, the mode of
carrying the same into effect, the manner of converting the
shares of CASINO issued and outstanding immediately prior to the
effective date of the merger into AIC shares, and such other
details and provisions as are deemed desirable, the parties
hereto, severally and jointly, have agreed, and do hereby agree,
subject to the terms and conditions hereinafter set forth as
follows:
ARTICLE I
THE MERGER
1.01 Execution of Certificates, and Articles of Merger. Subject
to the provisions of this Agreement, the Articles of Merger with
respect to the merger shall be executed and acknowledged by CAL
and CASINO and thereafter delivered to the Secretary of State of
the State of Nevada for filing, as provided by the Nevada
Business Corporation Law, as soon as practicable on or after the
closing date (as hereinafter defined) of such merger. The merger
shall become effective upon the filing of the Articles of Merger
with the Secretary of State of the State of Nevada. The date when
the merger becomes effective shall be called the "effective date"
of such merger. At the effective date of the merger, the separate
existence of CAL shall cease and such company shall be merged
with and into CASINO. CASINO shall be the surviving corporation
of the merger, and shall be a wholly owned subsidiary of AIC.
1.02 Consummation of the Merger. As soon as practicable after the
approval of the merger by the stockholders, AIC, CAL and CASINO
will cause such merger to be consummated in accordance with
applicable law, subject to the conditions hereinafter set forth.
1.03 Conversion of Shares of CASINO / AIC.
(a) On the effective date of the merger, each of 15,645,189
outstanding shares of CASINO common stock, each of the 1,000,000
outstanding shares of CASINO Series A preferred stock, and each
of the 1,700,000 outstanding shares-of CASINO preferred stock,
shall be exchanged for shares of AIC common stock having a value
equal to $11,994,018. The number of AIC shares for which the
outstanding common and preferred stock of CASINO is to be
exchanged shall be determined by dividing 11,994,018 by the
average closing price of AIC common stock over the ten trading
days commencing five trading days prior to the effective date of
the merger.
(b) On the effective date of the merger, each share of CAL
common stock shall be exchanged for and converted into one share
of CASINO common stock.
(c) On the effective date of the merger, (i) the 2,000,000
options granted to William Forhan to purchase 2,000,000 shares of
CASINO common stock at an exercise price of $.30 per share shall
be exchanged for options to purchase 2,000,000 shares of AIC
common stock at an exercise price of $1.80 per share, (ii) the
400,00 options granted to James Muldowney to purchase 400,000
shares of CASINO common stock at an exercise price of $.20 per
share shall be exchanged for options to purchase 400,000 shares
of AIC common stock at an exercise price of $1.20 per share, and
(iii) the 150,000 options granted to each member of CASINO's
Board of Directors to purchase an aggregate of 750,000 shares of
CASINO common stock at an exercise price of $.28 per share shall
be exchanged for options to purchase an aggregate of 750, 000
shares of AIC common stock at an exercise price of $1.68 per
share.
(d) On the effective date of the merger, the 643,333 five year
warrants granted to Joseph Charles & Associates, Inc. ("JCA") to
purchase 643,333 shares of CASINO common stock at an exercise
price of $.35 per share, shall be exchanged for five year
warrants to purchase the quantity of shares of AIC common stock
JCA would have received in the merger had the warrants been
exercised prior to the merger, at an exercise price of $2.10 per
share.
1.04 Exchange of Certificates. On or after the effective date of
the merger, each holder of a certificate theretofore evidencing
outstanding shares of common stock of CASINO (other than shares
held by dissenting stockholders and shares that are automatically
cancelled as hereinafter provided), upon surrender of the same to
the transfer agent of such other agent or agents as shall be
appointed by AIC, shall be entitled to receive in exchange
therefor a certificate or certificates evidencing the pro-rata
number of full AIC shares for which the shares of common stock of
CASINO theretofore represented by the certificate or certificates
so surrendered and exchanged. As soon as practicable after the
effective date of the merger, the Transfer Agent will send a
notice and transmittal form to each holder of an outstanding
certificate which immediately prior to the effective time of such
merger evidenced shares of common stock of CASINO and which is to
be exchanged for AIC as provided for herein, advising such
stockholder of the terms of the exchange effected by such merger
and the procedure for surrendering to the Transfer Agent (which
may appoint forwarding agents) such certificate for exchange into
one or more certificates evidencing AIC shares. Until so
surrendered, each outstanding certificate which, prior to the
effective date of such merger, represented common stock of CASINO
(other than shares previously held by dissenting stockholders)
will be deemed for all corporate purposes of AIC to evidence
ownership of the pro-rata number of full AIC shares for which the
shares of common stock of CASINO represented thereby were
exchanged; provided, however, that until such outstanding
certificates formerly evidencing common stock of CASINO are
surrendered, no dividend payable to holders of record of AIC
shares as of any date subsequent to the effective date of such
merger or any cash in lieu of any fraction of a AIC share payable
pursuant to Section 1,05 hereof shall be paid to the holder of
such outstanding certificates in respect thereof. After the
effective date of such merger there shall be no further registry
of transfers on the records of CASINO of shares of common stock
of CASINO and, if a certificate evidencing such shares is
presented to AIC, it shall be canceled and exchanged for a
certificate evidencing shares of AIC common stock as herein
provided.
1.05 No fractional shares. Neither certificates nor scrip for
fractional AIC shares will be issued, but in lieu thereof each
holder of shares of CASINO who would otherwise have been entitled
to a fraction of a AIC share, upon surrender of all the
certificates evidencing shares of common stock of such company
registered in the name of such holder, will be paid the cash
value of such fraction, which shall be equal to such fraction
multiplied by the market value of a AIC share at the close of
trading of the AIC shares on the trading day immediately
preceding the effective date of such merger.
1.06 Certificate of incorporation;-By-laws; Directors. The
Certificate of incorporation and By-laws of AIC and CASINO, as in
effect immediately prior to the effective date of the merger,
shall continue to be the Certificate of Incorporation and By-laws
of AIC and CASINO, until they shall thereafter be duly altered,
amended or repealed, except that (i) on the effective date of the
merger, the name of AIC! shall be changed to "Integrated
Marketing Professionals, Inc.", (ii) the name of CASINO shall be
changed to a name other than Integrated Marketing Professionals,
Inc., and (iii) the By-Laws of AIC shall be amended in the manner
provided on Schedule 1.06.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF AIC
AIC represents and warrants to CASINO, knowing and intending that
CASINO will rely on these representations and warranties in
entering into this Agreement, as follows:
2.01 Corporate Authority.
(a) AIC has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The
execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by
the Board of Directors of AIC, and, except for the approval of
AIC's stockholders, no other corporate proceedings on the part of
AIC are necessary to authorize this Agreement and the
transactions contemplated hereby.
(b) CAL is, or will be by the effective date of the merger, a
wholly owned subsidiary of AIC. The capitalization of CAL shall
be set forth in Schedule 2.01.
2.02 Due Organization; Power, Qualification, Subsidiaries, Etc.
(a) AIC is a corporation duly organized, validly existing, and
in good standing under the laws of the State of Nevada and has
the corporate power to own its property and to carry on its
business as now and where now conducted. AIC is duly qualified or
licensed as a foreign corporation and is in good standing in all
jurisdictions in which the nature of its business or the property
owned, leased or operated by it makes such qualification or
licensing necessary.
(b) Other than CAL, AIC has no subsidiaries or affiliates (as
that term is used in the regulations promulgated under the
Securities Act of 1933), except as disclosed in Schedule 2.02,
(c) AIC has previously furnished to CASINO true and complete
copies of the Articles (or Certificates) of Incorporation of AIC
certified by the Secretary of State of the domicile of AIC and of
the By-Laws (or Codes of Regulations) of AIC, certified by its
corporate Secretary.
(d) AIC has heretofore furnished to CASINO or its counsel for
examination-the minute and stock record book or books of AIC and
the same are true and complete and reflect all resolutions
adopted and all actions authorized or ratified by the
shareholders and the directors of AIC. All such actions and any
other actions required by or reflected in any "contracts" (as
identified in Section 2.06 and Schedule 2.06), and all other
material actions taken by AIC, have been duly so authorized or
ratified.
2.03 Capitalization. The authorized capital stock of AIC consists
of 50,000,000 shares of common stock, $.001 par value per share,
of which 9,375,000 shares are issued and outstanding as of the
date hereof. There are no options, warrants, convertible
securities or rights which may require any Company to issue
additional shares of its capital stock. All the outstanding
shares of common stock and preferred stock of AIC have been duly
authorized, and are validly issued, fully paid and nonassessable.
AIC has no obligation of any kind to issue any additional
securities, except as disclosed in Schedule 2.03, or as provided
for herein,
2.04 Financial Information; No Material Adverse Change.
(a) AIC has heretofore delivered to CASINO its audited financial
statements ("Financial Statements") for the year ending December
31, 1997 and the quarter ending March 31, 1998. All of the
Financial Statements (i) have been prepared in accordance with
generally accepted accounting principles applied on a consistent
basis during the periods, (ii) fairly present the financial
condition, results of its operations and changes in its financial
position at and for the periods therein specified for the
entities covered thereby, (iii) are true and complete, (iv) are
consistent with the books and records of the entities covered
thereby, and (v) with respect to any unaudited Financial
Statements, include all adjustments, consisting only of normal
recurring adjustments, required for a fair presentation. As of
the respective dates, such Financial Statements did not contain
any untrue statement of a material fact or omit to state a
material fact required to be stated therein in order to make the
statements therein, in light of the circumstances under which
they were made, not misleading.
(b) Since March 31, 1998 there has not been any material adverse
change in the business, or financial condition or the operations
of AIC or to the best knowledge of AIC any occurrence,
circumstance, or combination thereof which reasonably could be
expected to result in such a material adverse change in the
future.
(c) At March 31, 1998, there were no liabilities, absolute or
contingent of AIC that were not shown or reserved against on the
balance sheets included in the Financial-3 Statements, except
obligations under the contracts shown on or as otherwise
disclosed in Schedule 2.04.
(d) Since March 31, 1998, AIC has not sold or otherwise disposed
of or encumbered any of the properties or assets reflected on the
Financial Statements, or otherwise owned or leased by it except
in the ordinary course of business, except as described in
Schedule 2.04.
(e) AIC has no liabilities or obligations, whether accrued or
unaccrued, fixed or contingent, which have not been reflected in
the Financial Statements or described on Schedules to this
Agreement, except liabilities incurred and obligations entered
into in the ordinary course of business since March 31, 1998. AIC
is not in default with respect to any such liability or
obligation.
2.05 Tax Matters.
(a) AIC has filed or caused to be filed with the appropriate
federal, state, county, local and foreign governmental agencies
of instrumentalities all tax returns and tax reports required to
be filed, and all taxes, assessments, fees and other governmental
charges have been fully paid when due.
(b) There is no pending or, to the best knowledge of AIC, any
threatened federal, state or local tax audit of AIC; there is no
agreement with any federal, state or local taxing authority by
AIC that may affect the subsequent tax liabilities of AIC.
(c) Without limiting the foregoing: (a) the financial statements
include adequate provision for all taxes, assessments fees,
penalties and governmental charges which have been or in the
future may be assessed against AIC with respect to the period
then ended and all periods prior thereto; and (b) AIC is not, on
the date hereof, liable for taxes, assessments, fees or
governmental charges.
(d) AIC has heretofore furnished to CASINO or its counsel true
and complete copies of all federal, state and local income,
franchise or other tax returns filed by AIC.
2.06 No Conflict or Default Neither the execution and delivery of
this Agreement, nor compliance with the terms and provisions
hereof, including without limitation the consummation of the
transactions contemplated hereby, will violate any statute,
regulation or ordinance of any governmental authority, or
conflict with or result in the breach of any term condition or
provisions of the Articles of Incorporation or By-laws of AIC, or
of any agreement, deed, contract, mortgage, indenture, writ,
order decree, legal obligation or instrument to which AIC is a
party or by which it or any of its respective assets or
properties are or may be bound: or constitute a default (or an
event which, with the lapse of time or the giving of notice, or
both, would constitute a default) thereunder, or result in the
creation or imposition of any lien, charge or encumbrance, or
restriction of any nature whatsoever with respect to any
properties or assets of AIC, or give to others any interest or
rights, including rights of termination, acceleration or
cancellation in or with respect to any of the properties, assets,
contracts, or business of AIC.
2.07 Party to Agreements.
(a) AIC is not a party to any contract or other arrangements
except those made in the ordinary course of business or which are
terminable on the giving of sixty (60) days (or less) notice of
AIC's intent to terminate such contract. AIC is not in default in
any material respect under any contract or agreements to which it
is a party or by which it or any of its assets is or may be
bound.
(b) Schedule 2.07 is a true and complete list of all contracts,
understandings, commitments, arrangements and agreements (all of
which, and any other agreements set forth on any other Schedule
or list, or furnished in writing to CASINO pursuant to this
Agreement, are collectively referred to in this Agreement as
"contracts") , which are in full force and effect unperformed in
whole or in part, to which AIC is a party, including, but not
limited to, the following;
(i) bonus, incentive, pension, profit-sharing, hospitalization,
insurance, deferred compensation, retirement, stock option or
stock purchase plans or similar plans providing employee
benefits;
(ii) factoring, loan, note, financing or similar contracts with
any lenders, or guarantees of undertakings to answer for the
debts or defaults of another, or any contracts encumbering title
to any of AIC's assets;
(iii) contracts for the acquisition or disposition of the
property, assets or capital stock or other securities of a
business or company;
(iv) management or consulting contracts;
(v) partnership or joint venture contracts involving a sharing
of profits;
(vi) contracts for the employment or compensation of any
employee, officer, director or agent; and
(vii) contracts not made in the ordinary course.
2.08 Litigation. Except as disclosed in Schedule 2.08, there are
no actions, suits, investigations, or proceedings pending, or, to
the knowledge of AIC, threatened, against or affecting or which
may affect AIC, the performance of the terms and conditions
hereof, or the consummation of the transactions contemplated
hereby, in any court or by or before any governmental body or
agency, including without limitation any claim, proceeding or
litigation for the purpose of challenging, enjoining or
preventing the execution, delivery or consummation of this
Agreement; and AIC does not know of any state of facts which
would give rise to any such action, suit, investigation or
proceeding. AIC is not subject to any order, judgment, decree,
stipulation or consent or any agreement with any governmental
body or agency which affects its business or operation.
2.09 Securities Filings. AIC has previously filed all reports
required to be filled by it with the Securities and Exchange
Commission ("SEC") and will have on the closing date and
thereafter, made all filings required to be made by AIC with the
SEC and any state securities authorities, and will have done so
in a timely manner.
2.10 Governmental Approval. AIC has all permits, licenses, orders
and approvals of all federal, state, local or foreign
governmental or regulatory bodies required for AIC to conduct its
business as presently conducted. All such permits, licenses,
orders and approvals are in full force and effect and no
suspension or cancellation of any of them is threatened, and none
of such permits licenses, orders of approvals will be affected by
the consummation of the transactions contemplated by this
Agreement.
2.11 Salaries. Schedule 2.11 annexed hereto and made a part
hereof is a true and complete list, as of the date of this
agreement, of all of the persons who are employed by AIC,
together with their compensation (including bonuses) for the
calendar year ended December 31, 1997, and the three (3) month
period ended March 31, 1998, and the rate of compensation
(including bonus arrangements) currently being paid to each such
employee.
2.12 Accrued Compensation. AIC does not have outstanding
liability for payment of wages , vacation pay (whether accrued or
otherwise) , salaries, bonuses, pensions or contributions under
any labor or employment contract, whether oral or written, or by
reason of any past practices with respect to such employees based
upon or accruing with respect to services of present or former
employees of AIC, except as disclosed in Schedule 2.12.
2.13 Employee Benefit Plans. AIC does not have any pension plan,
profit-sharing plan or employees' savings plan, and AIC is not
otherwise subject to any applicable provisions of the Employee
Retirement Income Security Act of 1974 ("ERISA").
2.14 Conflicts of Interest. Transactions between management of
AIC and such Corporation, Management's interest in affiliated
Corporations, agreements as to Management's remuneration, as well
as any other actual or potential conflicts of interest are
disclosed in Schedule 2.14.
2.15 Title to Assets. AIC has good, valid and, except as to
leased assets, marketable title to all of its assets (real and
personal, tangible and intangible), including, but not limited
to, all assets reflected or required to be reflected in the
Financial Statements and all assets purchased or leased by them
since March 31, 1998 (except for properties and assets so
reflected or required to be reflected, which have been sold or
otherwise disposed of in the ordinary course of business),
subject to no liens, pledges, encumbrances, mortgages, security
interests, charges or other similar restrictions of any nature
whatsoever, except as disclosed in the Financial Statements or in
Schedules to this Agreement. The personal property owned or
leased by AIC for the operation of, or used in, its business is
in its possession and is in good operating or working condition
and repair, after taking into account routine maintenance and
repair, age of equipment and ordinary wear and tear, and is
adequate for the operation of its business as presently
conducted.
2.16 Patents and Trademarks
(a) Except as disclosed in Schedule 2.16, AIC does not own or
use in its operations, any patent or any applications therefor.
All trademarks, trade names, service marks or applications owned
by AIC or used in its operations are listed on Schedule 2.16 and,
to the extent indicated thereon, have been duly registered and
filed.
(b) All copyright registrations (both U.S. and foreign), pending
copyright registration applications, all common law copyrights
and other intellectual property rights owned by AIC or used in
its operations are listed on Schedule 2.16 and, to the extent
indicated thereon, have been duly registered and, tiled.
(c) AIC has not been charged with infringement or violation of,
or otherwise been put on notice of the existence of, any
adversely held patent, trademark, trade name, service mark,
copyright or other intellectual property right.
2.17 Environmental Concerns. AIC has not engaged in any
operations which have resulted or will result in any chemicals,
hazardous, noxious or toxic wastes being deposited, spilled,
leaked, disposed of, dumped or buried at any facility, contiguous
property, or any other real property, which have, will, or may
result in property damages, personal injury or clean-up costs.
2.18 Material Misstatements or Omissions. No representations or
warranties made by AIC in this Agreement or in any certificate,
schedule or other document furnished or to be furnished to CASINO
or its counsel pursuant hereto, or in connection with the
transactions contemplated by this Agreement, contains or will
contain any untrue statement of a material fact, or omits or will
omit to state a material fact necessary to make the statements of
fact contained therein not misleading. All statements made and
data presented by AIC in this Agreement and in any certificate,
schedule, chart, list, letter, compilation or other document
provided to CASINO by AIC pursuant to this Agreement are deemed
to be representations and warranties made under this Agreement to
CASINO by AIC. References in any such document to any other
document as to which AIC on or prior to the closing has not
provided to CASINO a copy or, if oral, a written summary thereof,
shall not be deemed for any purposes of this Agreement to be a
disclosure of any term, provision or statement of fact of, or
relating to, such document. To the extent that any such
representations and warranties are stated as being to the best
knowledge of AIC, the same are being made after diligent and
reasonable investigation under the circumstances by them as to
the subject matter thereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF CASINO
CASINO represents and warrants to AIC, knowing and intending that
AIC will rely on these representations and warranties in entering
into this Agreement, as follows:
3.01 Corporate Authority. CASINO has the corporate power and
authority to enter into this Agreement and to carry out its
obligation hereunder. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly authorized by its Board of Directors and,
except for the approval of its stockholders, no other corporate
proceedings on the part of such Company are necessary to
authorize this Agreement and the transactions contemplated
hereby.
3.02 Due organization; Power; Qualification; Subsidiaries and
Affiliates, Etc.
(a) CASINO is a corporation duly organized, validly existing, in
good standing under the laws of the State of Nevada and is
authorized to do business in the State of Florida and has the
corporate power to own its property and to carry on its business
as now conducted. The nature of the business now conducted by
CASINO, the character of the property owned by it, or any other
state of facts does not require CASINO to be qualified to do
business as a foreign corporation in any jurisdiction.
(b) Except as disclosed in Schedule 3.02 there are no
subsidiaries or affiliates (as that term is used in the
regulations promulgated under the Securities Act of 1933) of
CASINO.
3.03 Capitalization. The authorized capital stock of CASINO
consists of 25,000,000 shares of common stock, $.10 par value per
share, of which 15,645,189 shares are issued and outstanding as
of the date hereof; 5,000,000 shares of Preferred "All (each
convertible to two shares of Common Stock), 1,000,000 shares of
which are issued and outstanding as of the date hereof; 1,700,000
shares of Preferred "B" (each convertible to one share of Common
Stock), all of which are issued and outstanding as of the date
hereof. There are no options, warrants, convertible securities or
rights which may require any Company to issue additional shares
of its capital stock, except as disclosed in Section 1.03. All
the outstanding shares of common stock and preferred stock of
CASINO have been duly authorized, and are validly issued, fully
paid and nonassesable. CASINO has no obligation of any kind to
issue any additional securities, except as disclosed in Schedule
3.03, or as provided for herein.
3.04 Financial Information, No Material Adverse Change.
(a) CASINO has heretofore delivered to AIC (i) audited financial
statements for the year ended December 31, 1996, and December 31,
1997; and (ii) unaudited financial statements for the quarter
ending March 31, 1998 (collectively "Financial Statements") and
month ending April 30, 1998. All of the Financial Statements (i)
have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis during the
periods, (ii) fairly present the financial condition, results of
its operations and changes in its financial position at and for
the periods therein specified for the entities covered thereby,
(iii) are true and complete, (iv) are consistent with the books
and records of the entities covered thereby, and (v) with respect
to any unaudited Financial Statements, include all adjustments,
consisting only of normal recurring adjustments, required for a
fair presentation. As of the respective dates, such documents did
not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein in order to
make the statements therein, in light of the circumstances under
which they were made, not misleading.
(b) At April 30, 1998, there were no liabilities, absolute or
contingent of CASINO that were not shown or reserved against on
the balance sheets included in the Financial Statements, except
obligations under the contracts shown in Schedule 3.07, or as
otherwise disclosed on Schedule 3.04.
(c) Since April 30, 1998, CASINO has not sold or otherwise
disposed of or encumbered any of the properties or assets
reflected on the Financial Statements, or otherwise owned or
leased by it, except in the ordinary course of business.
(d) Since April 30, 1998, there has been no material adverse
change in the business or financial condition or the operations
of CASINO or to the best knowledge of CASINO any occurrence,
circumstance, or combination thereof which reasonably could be
expected to result in such a material adverse change in the
future.
(e) CASINO has no liabilities or obligations, whether accrued or
unaccrued, fixed or contingent, which have not been reflected in
the Financial Statements or described on Schedules to this
Agreement, except liabilities incurred and obligations entered
into in the ordinary course of business since April 30, 1998.
CASINO is not in default with respect to any such liability or
obligation.
3.05 Tax Matters.
(a) CASINO has filed or caused to be filed with the appropriate
federal, state, county, local and foreign governmental agencies
or instrumentalities all tax returns and tax reports required to
be filed, and all taxes, assessments, fees and other governmental
charges have been fully paid when due.
(b) There is no pending or, to the best knowledge of CASINO,
threatened federal, state or local tax audit of CASINO; there is
no agreement with any federal, state or local taxing authority
that may affect the subsequent tax liabilities of CASINO.
(c) Without limiting the foregoing: (i) the Financial Statements
include adequate provision for all taxes, assessments, fees,
penalties and governmental charges which have been or in the
future may be assessed against CASINO with respect to the period
then ended and all periods prior thereto; and (b) CASINO is not,
on the date hereof, liable for taxes, assessments, fees or
governmental charges.
(d) CASINO has heretofore furnished to AIC or its counsel true
and complete copies of all federal, state and local income,
franchise or other tax returns filed by CASINO.
3.06 No Conflict or Default. Neither the execution and delivery
of this Agreement, nor compliance with the terms and provisions
hereof, including without limitation the consummation of the
transactions contemplated hereby, will violate any statute,
regulation or ordinance of any governmental authority, or
conflict with or result in the breach of any term, condition or
provisions of the Articles of Incorporation or By-laws of CASINO,
or of any agreement, deed, contract, mortgage, indenture, writ,
order decree, legal obligation or instrument to which CASINO is a
party or by which it or any of its respective assets or
properties are or may be bound, or constitute a default (or an
event which, with the lapse of time or the giving of notice, or
both, would constitute a default) thereunder or result in the
creation or imposition of any lien, charge or encumbrance, or
restriction of any nature whatsoever with respect to any
properties or assets of CASINO, or give to others any interest or
rights, including rights of termination, acceleration or
cancellation in or with respect to any of the properties, assets,
contracts or business of CASINO.
3.07 Party to Agreements.
(a) CASINO is not a party to any contract or other arrangement
except those made in the ordinary course of business or which are
terminable on the giving of sixty (60) day' s (or- less) notice
of CASINO, s intent to terminate such contract, except as set
forth on Schedule 3.08 annexed hereto. CASINO is not in default
in any material respect under any contract or agreement to which
it is a party or by which it or any of its assets is or may be
bound.
(b) CASINO has heretofore furnished to AIC or its counsel true
and complete copies of each document, and a written description
of each oral contract, set forth on Schedule 3.07. Schedule 3.07
is a true and complete list of all contracts, understandings,
commitments, arrangements and agreements (all of which, and any
other agreements Bet forth on any other Schedule or list, or
furnished to AIC pursuant to this Agreement, are collectively
referred to in this Agreement as "contracts"), which are in full
force and effect unperformed in whole or in part, to which CASINO
is a party, including, but not limited to, the following:
(i) bonus, incentive, pension, profit-sharing, hospitalization,
insurance, deferred compensation, retirement, stock option or
stock purchase plans or similar plans providing employee
benefits;
(ii) factoring, loan, note, financing or similar contracts with
any lenders, or guarantees of undertakings to answer for the
debts or defaults of another, or any contracts encumbering title
to any of CASINO's assets;
(iii) contracts for the acquisition or disposition of the
property, assets or capital stock or other securities of a
business or company;
(iv) management or consulting contracts;
(v) partnership or joint venture contracts involving a sharing
of profits,
(vi) contracts for the employment or compensation of any
employee, officer, director or agent, and
(vii) contracts not made in the ordinary course.
3.08 Litigation. Other than as disclosed in its Financial
Statements or in a Schedule 3,08, there are no actions suits,
investigations, or proceedings pending, or, to the knowledge of
CASINO, threatened, against or affecting or which may affect
CASINO, the performance of the terms and conditions hereof, or
the consummation of the transactions contemplated hereby, in any
court or by or before any governmental body or agency, including
without limitation any claim, proceeding or litigation for the
purpose of challenging, enjoining or preventing the execution,
delivery or consummation of this agreement; and except as
otherwise disclosed herein does not know of any state of f acts
which would give rise to any such action, suit investigation or
proceeding. CASINO is not subject to any order, judgment, decree,
stipulation or consent or any agreement with any governmental
body or agency which affects its business or operation.
3.09 Securities Filings. CASINO will have on the closing date and
thereafter, made all filings required to be made by it with the
Securities and Exchange Commission and any state securities
authorities, and will have done so in a timely manner.
3.10 Governmental Approval. CASINO has all permits, licenses,
orders and approvals of all federal state, local or foreign
governmental or regulatory bodies required for CASINO to conduct
its business as presently conducted. All such permits, licenses,
orders and approvals are in full force and effect and no
suspension or cancellation of any of them is threatened, and none
of such permits licenses, orders of approvals will be affected by
the consummation of the transactions contemplated by this
Agreement.
3.11 Salaries. Schedule 3.11 annexed hereto and made a part
hereof is a true and complete list, as of the date of this
Agreement, of all of the persons who are employed by CASINO,
together with their compensation (including bonuses) for the year
ended December 31, 1997 and the three month period ended March
31, 1998, and the rate of compensation (including bonus
arrangements) currently being paid to each such employee. Any
amounts due and owing immediately prior to the effective date of
the merger to the officers, directors, and employees of CASINO
shall not be paid to such persons out of funds of AIC, existing
as of the closing date.
3.12 Accrued Compensation. CASINO does not have any outstanding
liability for payment of wages, vacation pay (whether accrued or
otherwise) , salaries, bonuses, pensions or contributions under
any labor or employment contract, whether oral or written or by
reason of any past practices with respect to such employees based
upon or accruing with respect to services or present or former
employees of CASINO, except as disclosed in Schedule 3.12.
3.13 Employee Benefit Plans. CASINO does not have any pension
plan, profit-sharing plan or employees, savings plan, and CASINO
is not otherwise subject to any applicable provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA").
3.14 Conflicts of Interest. Transactions between Management of
CASINO and such Corporation, Management's interest in affiliated
Corporations, agreements as to Management's remuneration, as well
as any other actual or potential conflicts of interest are
disclosed in Schedule 3.14.
3.15 Title to Assets. CASINO has good, valid and, except as to
leased assets, marketable title to all of its assets (real and
personal, tangible and intangible), including, but not limited
to, all assets reflected or required to be reflected in the
Financial Statements and all assets purchased or leased by them
since March 31, 1998 (except for properties and assets so
reflected or required to be reflected, which have been sold or
otherwise disposed of in the ordinary course of business),
subject to no liens, pledges, encumbrances, mortgages, security
interests, charges or other similar restrictions of any nature
whatsoever, except as disclosed in the Financial Statements or in
Schedules to this Agreement. The personal property owned or
leased by CASINO for the operation of, or used in, its business
is in its possession and is in good operating or working
condition and repair, after taking into account routine
maintenance and repair, age of equipment and ordinary wear and
tear, and is adequate for the operation of its business as
presently conducted.
3.16 Patents and Trademarks.
(a) CASINO does not own or use in its operations, any patent or
any applications therefor. All trademarks, trade names, service
marks or applications owned by CASINO or used in its operations
are listed on Schedule 3.16 and, to the extent indicated thereon,
have been duly registered and filed.
(b) All copyright registrations (both U.S. and foreign), pending
copyright registration applications, all common law copyrights
and other intellectual property rights owned by CASINO or used in
its operations are listed on Schedule 3.16 and, to the extent
indicated thereon, have been duly registered and, filed.
(c) CASINO has not been charged with infringement or violation
of, or otherwise been put on notice of the existence of, any
adversely held patent, trademark, trade name, service mark,
copyright or other intellectual property right.
3.17 Environmental Concerns. CASINO has not engaged in any
operations which have resulted or will result in any chemicals,
hazardous, noxious or toxic wastes being deposited, spilled,
leaked, disposed of, dumped or buried at any facility, contiguous
property, or any other real property, which have, will, or may
result in property damages, personal injury or clean-up costs.
3.18 Material Misstatements or Omissions. No representations or
warranties made by CASINO in this Agreement or in any
certificate, schedule or other document furnished or to be
furnished to AIC or its counsel pursuant hereto, or in connection
with the transactions contemplated by this Agreement, contains or
will contain any untrue statement of a material fact, or omits or
will omit to state a material fact necessary to make the
statements of fact contained therein not misleading. All
statements made and data presented by CASINO in this Agreement
and in any certificate, schedule, chart, list, letter,
compilation or other document provided to AIC by CASINO pursuant
to this Agreement are deemed to be representations and warranties
made under this Agreement to AIC by CASINO. References in any
such document to any other document as to which CASINO on or
prior to the closing has not provided to AIC a copy or, if oral,
a written summary thereof, shall not be deemed for any purposes
of this Agreement to be a disclosure of any term, provision or
statement of fact of, or relating to, such document. To the
extent that any such representations and warranties are stated as
being to the best knowledge of CASINO, the same are being made
after diligent and reasonable investigation under the
circumstances by them as to the subject matter thereof.
3.19 Title and Authority. To the best of the knowledge of CASINO,
shareholders as listed in Schedule 3.19 constitute the holders of
record as of the date set forth therein (the "Record Date") of
all of the outstanding shares of CASINO common stock and
preferred stock. CASINO has no knowledge that any such
shareholder does not have:
(a) full legal title to all of such shares free and clear of any
liens, security interests, encumbrances, pledges, charges,
claims, voting trusts, restrictions on transfer, and of any
rights or interest therein, direct or contingent, in favor of any
other parties; and
(b) full and unrestricted right, power and authority to sell,
assign, transfer and deliver the same or to cause the same to be
surrendered in accordance with this Agreement.
ARTICLE IV
COVENANTS
4.01 Covenants Of CASINO. agrees that prior to the closing date:
(a) No dividend shall be declared or paid by other distribution
(whether in cash, stock, property or any combination thereof) or
payment declared or made in respect to CASINO common stock or
preferred stock, nor shall CASINO purchase, acquire or redeem or
split, combine or reclassify any shares of its capital stock.
(b) Except as herein provided or disclosed on Schedule 4.01, no
change shall be made in the number of shares of authorized or
issued CASINO common stock; nor shall any option, warrant, call,
right, commitment or agreement of any character be granted or
made by CASINO relating to its authorized or issued CASINO common
or preferred stock; nor shall CASINO issue, grant or sell any
securities or obligations convertible into or exchangeable for
shares of CASINO common stock.
(c) Except as disclosed on Schedule 4.01, CASINO will not (i)
incur any indebtedness for borrowed money; (ii) assume,
guarantee, endorse, or otherwise become liable or responsible
(whether directly contingently or otherwise) for the obligations
of any other individual, firm or corporation; or (iii) make any
loans, advances or capital contributions to or investments in,
any other individual, firm or corporation.
(d) CASINO will not take, agree to take or knowingly permit to
be taken any action or do or knowingly permit to be done
anything, in the conduct of the business of CASINO or otherwise,
which would be contrary to or in breach of any of the terms or
provisions of this Agreement, or which would cause any of
CASINO's representations contained herein to be or become untrue
in any material respect at the closing date.
(e) CASINO will not alter or change any employment or other
contract with any of its management personnel or make, adopt,
alter, revise, or amend any pension, bonus, profit-sharing or
other employee benefit plan, or grant any salary increase or
bonus to any person without the prior written consent of AIC.
4.02 Covenants of AIC. AIC agrees that prior to the closing date:
(a) No dividend shall be declared or paid or other distribution
(whether in cash, stock, property or any combination thereof) or
payment declared or made in respect of AIC Common Stock nor shall
AIC purchase, acquire or redeem or split, combine or reclassify
any shares of AIC Common Stock.
(b) Except as herein provided, no change shall be made in the
number of shares of authorized or issued AIC common stock; nor
shall any option, warrant, call, right, commitment or agreement
(other than this Agreement) of any character be granted or made
by AIC relating to its authorized or issued AIC Common stock; nor
shall AIC issue, grant or sell any securities or obligation
convertible into or exchangeable for shares of common stock,
(c) AIC will not (i) incur any indebtedness for borrowed money;
(ii) assume, guarantee, endorse, or otherwise become liable or
responsible (whether directly contingently or otherwise) for the
obligations of any other individual, firm or corporation; or
(iii) make any loans, advances of capital contributions to or
investments in, any other individual, firm or corporation.
(d) AIC will not alter or change any employment or other
contract with any of its management personnel or make, adopt,
alter, revise, or amend any pension, bonus, profit-sharing or
other employee benefit plan, or grant any salary increase or
bonus to any person or owe any accrued salary or other
compensation under any agreement or plan without the prior
written consent of CASINO.
(e) AIC will not take, agree to take, or knowingly permit to be
taken any action, or do, or knowingly permit to be done anything
in the conduct of the business of AIC, or otherwise, which would
be contrary to or in breach of any of the terms or provisions of
this Agreement, or which would cause any of the representations
of AIC contained herein to be or become untrue in any material
respect at the Closing Date.
4.03 Mutual Covenants. AIC and CASINO further agree and covenant
as follows:
(a) Stockholders' Meetings. CASINO and AIC will take all actions
necessary in accordance with applicable law, including proxy
solicitation requirements, and the Articles of Incorporation and
By-Laws to convene meetings of stockholders as promptly as
practicable, upon the effectiveness of the required Registration
Statement, to consider and vote upon the approval of this merger.
(b) Conduct of Business Pending the Merger. Prior to the
effective date of the merger, unless AIC and CASINO shall
otherwise agree in writing, each Company shall not (i) operate
its business otherwise than in the ordinary course, (ii) grant
any compensation increase to any director, officer or employee,
(iii) issue, authorize or propose the issuance of additional
shares of capital stock of any class or securities convertible
into any such shares or rights, warrants or options to acquire
any such shares or convertible securities, (iv) amend its
Articles of Incorporation or By-laws, (v) split, combine or
reclassify its outstanding shares of common or preferred stock,
or (vi) authorize, recommend or propose any merger,
consolidation, acquisition of assets, disposition of assets,
material change in its capitalization or any comparable event,
not in the ordinary course of business (other than the
transactions contemplated hereby and transactions as to which
written notice has been given to AIC prior to the date hereof).
(c) Takeover Proposals. CASINO and AIC will not, and will not
authorize or permit any officer, director or employee of, or any
investment banker, attorney, accountant or other representative
retained by, or agent of such company or any affiliate of such
company, to directly or indirectly solicit or encourage any
proposal for a merger or other business combination involving
such company for the acquisition of a substantial equity interest
in such company or a substantial portion of such company's
assets, other than as contemplated by this Agreement. Each
company will promptly advise the other company of the terms of
any such proposal that it may receive.
(d) Registration / Proxy Statements. The parties hereto shall
forthwith agree upon a time table for the filing of a
registration statement and any required amendments thereto, Blue
Sky filings, proxies and all other steps necessary to register
the shares proposed to be distributed to the shareholders of
CASINO pursuant to this Agreement. The registration statement
shall be prepared by AIC, at AIC's expense, with the cooperation
of CASINO and filed with the United States Securities and
Exchange commission ("SEC"). The parties shall select counsel and
such other professionals as are required to prepare and file the
necessary registration statements. In connection with the
preparation of a Registration Statement, Proxy Statement and/or
any other filings, CASINO and AIC will cooperate with each other
and will furnish the information relating to CASINO and AIC, as
the case may be, required by the Securities Act of 1933 and/or
the Securities Exchange Act of 1934 to be set forth in such,
Registration Statement, Proxy Statement and/or any other filings,
The information to be provided shall continue to be true and
correct in all material respects and shall not contain any untrue
statement of a material fact, or omit to state a material fact
required to be stated therein to make the statements made, in the
light of the circumstances under which they were made, not
misleading.
(e) Press Releases. CASINO and AIC agree to cooperate with each
other in releasing information concerning this Agreement and the
transaction contemplated herein. where possible, each of the
parties shall furnish to the other drafts of all releases prior
to publication. Nothing contained herein shall prevent either
party at any time from furnishing any information to any
governmental agency, provided that each party shall give at least
48 hours prior written notice to the other of the intent to make
any such disclosure.
(f) Recommendation of Approval. The Board of Directors of AIC
and CASINO shall continue to recommend to their respective
stockholders approval of this Agreement and the merger to which
such company is a party, except as the fiduciary obligations of
each such Board of Directors may otherwise require.
(g) Access. Prior to the closing, CASINO shall afford to the
officers, attorneys, accountants, and other authorized
representatives of AIC free and full access to the premises,
books and records of CASINO in order that AIC may make such
investigation as it may desire of the affairs of CASINO. Prior to
the closing, AIC shall afford to the officers, attorneys,
accountants, and other authorized representatives of CASINO free
and full access to the premises, books and records of AIC so that
purchasers may make such investigations as it may desire of the
affairs of AIC.
ARTICLE V
CONDITIONS
5.01 Conditions to the Obligations of AIC. The obligations of AIC
to consummate the merger contemplated by this Agreement are
subject to the satisfaction, at or before the consummation of
such merger, of each of the following conditions:
(a) No action shall have been threatened, taken by or be pending
before, and no statute, rule, regulation or order shall have been
promulgated, enacted, entered, enforced or deemed applicable to
the merger by any federal, state or foreign government or
governmental authority or by any court, domestic or foreign,
including the entry, of a preliminary or permanent injunction,
which would (i) make the merger illegal, (ii) require the
divestiture by AIC of the shares of AIC or of a material portion
of the business of AIC, (iii) impose material limits on the
ability of AIC to effectively control the business of AIC, (iv)
otherwise materially adversely affect AIC or (v) if the merger is
consummated, subject any officer, director, or employee of AIC to
criminal penalties or to civil liabilities not adequately covered
by insurance or enforceable indemnification maintained by AIC.
(b) CASINO shall have complied in all material respects with its
agreements and covenants herein, and all representations and
warranties of CASINO herein shall be true and correct in all
material respects at the time of consummation of the merger and
it made at that time, except to the extent they expressly relate
to an earlier date, and AIC shall have received a certificate to
that effect to the best of the knowledge of CASINO, signed by the
President of CASINO.
(c) The holders of not more than ten percent (10%) of the issued
and outstanding shares of common and preferred stock of CASINO
with respect to which such merger is proposed shall have
exercised their right to dissent as dissenting stockholders.
(d) AIC shall have received from the accountants for CASINO, an
opinion, in form and substance satisfactory to AIC, that there
has been no material or adverse change 'in the financial
condition of CASINO as of the date of consummation of the merger,
or reflected in the Financial Statements.
5.02 Conditions to the Obligations of CASINO. The obligations of
CASINO to consummate the merger contemplated by this Agreement
are subject to the satisfaction, at or before the consummation of
such merger, of each of the following conditions:
(a) No action shall have been threatened, taken by or be pending
before, and no statute, rule, regulation or order shall have been
promulgated, enacted, entered, enforced or deemed applicable to
the merger by any federal, state of foreign government or
governmental authority or by any court, domestic or foreign,
including the entry of a preliminary or permanent injunction,
which would (i) make the merger illegal, (ii) require the
divestiture by CASINO of the shares of CASINO or of a material
portion of the business of CASINO, (iii) impose material limits
on the ability of CASINO to effectively control the business of
CASINO, (iv) otherwise materially adversely affect CASINO or (v)
if the merger is consummated, subject any officer, director, or
employee of CASINO to criminal penalties or to civil liabilities
not adequately covered by insurance of enforceable
indemnification maintained by CASINO.
(b) AIC shall have complied in all material respects with its
agreements and covenant , s herein, and all representations and
warranties of AIC herein shall be true and correct in all
material respect at the time of consummation of the merger and if
made at the time, except to the extent they expressly relate to
an earlier date, and CASINO shall have received a certificate to
that effect to the best of the knowledge of AIC, signed by the
President of AIC.
(c) The holders of no more than ten percent (10%) of the issued
and outstanding shares of common stock of AIC with respect to
which such merger is proposed shall have exercised their right to
dissent as dissenting stockholders.
(d) CASINO shall have received from the accountants for AIC, an
opinion, in form and substance satisfactory to AIC, that there
has been no material or adverse change in the financial condition
of AIC as of the date of consummation of the merger, or reflected
in the Financial Statements.
5.03 Conditions to Each Company's Obligations. The obligation of
each company to consummate the merger contemplated by this
Agreement is subject to the satisfaction, at or before the
consummation of such merger, of each of the following conditions:
(a) The stockholders of CASINO shall have duly approved the
merger in accordance with applicable law.
(b) The stockholders of AIC shall have duly approved the merger
in accordance with applicable law.
(c) No action shall have been taken, and no statute, rule,
regulation or order shall have been promulgated, enacted,
entered, enforced or deemed applicable to the merger by any
federal, state or foreign government or governmental authority or
by any court domestic or foreign, including the entry of a
preliminary or permanent injunction, which would (i) make the
merger illegal, or (ii) if the merger is consummated, subject any
officer, director or employee of CASINO or AIC to criminal
penalties or to civil liability not adequately covered by
insurance or enforceable indemnification arrangements maintained
by CASINO or AIC.
(d) No action or proceeding before any court or governmental
authority domestic or foreign, by any government or governmental
authority or by any other person, domestic or foreign, shall be
threatened, instituted or pending which would reasonably be
expected to result in any of the consequences referred to in
clauses (i) and (ii) of paragraph (c) above,
(e) The Registration Statement filed under the Securities Act of
1933 and any Proxy Statement filed under the Exchange Act of 1934
shall have become effective and not be subject to a stop order or
any threatened stop order.
(f) The officers and directors of AIC and CASINO shall each have
executed releases for any claims for compensation or other
payment for services rendered as of the closing date-
(g) Each party's satisfactory completion of due diligence
review.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.01 Transfer of Restricted Shares. At closing under the terms of
this Merger Agreement, Joe Logan, Jr., Diran Kaloustian and
Consolidated Equities (collectively referred to as "Existing
Shareholders") shall convey to William Forhan one and one-half
million (1,500,000) shares of common stock of AIC; Existing
Shareholders shall also convey to James Muldowney five hundred
thousand (500,000) shares of common stock of AIC. It is agreed
and acknowledged that the shares to be conveyed pursuant to this
paragraph are issued and outstanding shares owned by Existing
Shareholders and are restricted against resale. Existing
Shareholders shall also grant voting proxies to William Forhan to
vote 2,500,000 of shares retained by them for a period of thirty
six (36) months after consummation of the merger, or sale of the
shares to bona-fide third party purchasers, whichever first
occurs, provided that in the event of a block trade (being
defined as a trade of over 150, 000 shares) , the sale will be
subject to the unexpired term of the proxies. In addition,
375,000 shares owned by Existing Shareholders shall be retired
and returned to treasury upon consummation of the merger.
6.02 Cita Americas, Inc. The merger contemplated herein is
conditioned upon and subject to Joe Logan, Jr. and Diran
Kaloustian, and/or their assigns, being able to acquire all of
AIC's interest in Cita Americas, Inc., without adverse tax or
accounting consequence. Provided that Joe Logan, Jr. and Diran
Kaloustian receive necessary opinions of accountants or other
professionals that there will be no such adverse consequences, on
the effective date of the merger (unless the conveyance is made
prior thereto) AIC shall convey all of its interest in Cita
Americas, Inc. to Joe Logan, Jr. and Diran Kaloustian in
satisfaction of loans made by them to AIC, or for such other
consideration as the parties may agree.
ARTICLE VII
INDEMNIFICATION AND WAIVER OF CLAIMS
7.01 Survival of Representations and Warranties. Notwithstanding
the closing of the transactions contemplated by this Agreement or
any investigation made by or on behalf of AIC or CASINO, the
representations and warranties of AIC and CASINO contained in
this Agreement or in any certificate, schedule, chart, list,
letter, compilation or other document delivered pursuant hereto,
shall survive the Closing for a period of one (1) year; provided,
however, that the representations and warranties contained in
Sections 2.05 and 3.05 with respect to tax matters shall be
deemed to survive for so long as any applicable statute of
limitations with respect to tax claims shall not have expired,
shall have been suspended or shall have been waived or extended,
and for thirty (30) days thereafter; provided further, however,
that as to any breach of or misstatement in any such
representation or warranty as to which the non-breaching party
has given notice to the breaching party an or prior to the
expiration of the applicable period as to tax or non-tax matters,
as above set forth, the same shall continue to survive beyond
said period, but only as to the matters contained in such notice.
7.02 Indemnification. AIC hereby agrees to indemnify and hold
CASINO, its officers, directors, employees and agents harmless
from and against the following:
(a) Any and all liabilities, losses, damages, claims, costs and
expenses of AIC of any nature, whether absolute, contingent or
otherwise, which are not expressly assumed by CASINO as herein
provided, including but not limited to any and all claims or
rights to dissent from the shareholders of AIC, purported
shareholders of AIC, claims of AIC creditors, Federal or State or
Local taxing authorities, and other claimants of AIC.
(b) Any and all damages or deficiencies resulting from any
misrepresentation, breach of any warranty, or non-fulfillment of
any covenant or agreement on the part of AIC contained in this
Agreement or in any statement or certificate furnished or to be
furnished to CASINO pursuant hereto or in connection with the
transactions contemplated hereby; and
(c) AIC, as of the date immediately preceding this Agreement,
will indemnify and hold harmless CASINO, from and against any and
all losses, claims, damages, expenses or liabilities, joint or
several, to which it may become subject within the meaning of the
Securities Exchange Act of 1934 and the Securities Act of 1933
(collectively the "Act") or under any other statutes or at common
law or otherwise, and will reimburse and indemnify CASINO and its
officers and directors for any legal or other expense including
the cost of any investigation and preparation reasonably incurred
by them or any of them in connection with investigating or
defending any litigation or claim, whether or not resulting in
any liability insofar as such losses, claims, damages, expenses,
liabilities or actions arise out of are based upon any untrue
statement or alleged untrue statement or a material fact
contained in any annual reports, Forms 10K or other $EC filings,
Prospectus, Private Placement Memorandums, Offering Circulars,
Proxy Statements, and Verbal, Written and other representations
in connection with or related to Limited Partnership Offerings,
Joint Ventures, any stock or bond offering, stock conversion
rights granted, investment contracts, or other security as that
term is define under the Act or any State Security Act (as
amended or as supplemented) or arise out of or are based upon the
omission or alleged omission to state therein a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading or any negligent
misrepresentation of any officer, director, agent, or employee of
AIC; or any failure to perform any of the terms or conditions of
this Agreement. CASINO agrees upon its receipt of written notice
of the commencement of any action against them as aforesaid, in
respect of which indemnity may be sought from AIC, on account of
the indemnity agreement contained in this section 7.02, to notify
AIC promptly in writing of the commencement thereof. CASINO
agrees to notify AIC promptly of the commencement of any
litigation or proceeding against it or any of the officers or
directors of CASINO of which it may be advised in connection with
the issue and sale of any of its securities.
7.03 Indemnification by CASINO. CASINO hereby agrees to indemnify
and hold AIC, its officers, directors, employees and agents
harmless from and against the following:
(a) Any and all liabilities, losses, damages, claims, costs and
expenses of CASINO of any nature, whether absolute, contingent or
otherwise, which are not expressly assumed by AIC as herein
provided, including but not limited to any and all claims or
rights to dissent from the shareholders of CASINO, purported
shareholders of CASINO, claims of CASINO creditors, Federal or
State or Local taxing authorities and other claimants of CASINO;
(b) Any and all damages or deficiencies resulting from any
misrepresentation, breach of any warranty, or non-fulfillment of
any covenant or agreement on the part of CASINO contained in this
Agreement or in any statement or certificate furnished or to be
furnished to CASINO pursuant hereto or in connection with the
transactions contemplated hereby; and
(c) CASINO, as of the date immediately preceding this Agreement,
will indemnify and hold harmless AIC from and against any and all
losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them become subject within the
meaning of the Securities Exchange Act of 1934 and the Securities
Act of 1933 (collectively the "Act") or under any other statutes
or a common law or otherwise, and will reimburse and indemnify
AIC and its officers and directors for any legal or other
expenses including the cost of any investigation and preparation
reasonably incurred by them or any of them in connection with
investigating or defending any litigation or claim, whether or
not resulting in any liability insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of are based
upon any untrue statement or alleged untrue statement or a
material fact contained in any annual reports, Forms 10K or other
SEC filings, Prospectus, Private Placement Memorandum, Offering
Circulars, Proxy Statements, and Verbal, Written and other
representations in connection with or related to Limited
Partnership Offerings, Joint Ventures, any stock or bond
offering, stock conversion rights granted, investment contracts,
or other security as that term is defined under the Act or any
State Security Act (as amended or as supplemented) or arise out
of or are based upon the omission or alleged omission to state
therein in a material fact required to be saved therein or
necessary in order to make the statements therein not misleading;
or any negligent misrepresentation of any officer, director,
agent, or employee of CASINO; or any failure to perform any of
the terms or conditions of this Agreement. AIC agrees upon its
receipt of written notice of the commencement of any action
against them as aforesaid, in respect of which indemnity may be
sought from CASINO, its Directors and officers on account of the
indemnity agreement contained in this section 7.03, to notify
CASINO promptly in writing of the commencement thereof. AIC
agrees to notify CASINO promptly of the commencement of any
litigation or proceeding against it or against any of the
officers or directors of CASINO of which it may be advised, in
connection with the issue and sale of any of its securities.
ARTICLE VIII
CLOSING DATE
8.01 The closing for the consummation of the merger contemplated
by this Agreement shall, unless another date or place is agreed
to in writing by the parties hereto, take place at the Office of
Atlas Pearlman Trop & Borkson, P.A., on the date which is no
later than the fifth business day after the last to occur of the
following dates:
(a) The date the Registration Statement required for the
transactions contemplated herein becomes effective pursuant to
applicable rules and regulations of the SEC.
(b) The date the stockholders of AIC and CASINO shall have given
the approval referred to in Section 5.01 (a) and 5.01 (b); or
(c) The date on which all the conditions set forth in Article V
hereof shall have been satisfied, except to the extent any such
conditions are capable of being waived and shall have been waived
by AIC or CASINO.
(d) December 31, 1998.
ARTICLE IX
RESIGNATION AND ELECTION
9.01 Once this Agreement is signed by all parties, AIC shall
cause to be held a meeting of its shareholders at which time
William Forhan, James Muldowney, Steve York, James Ponder and
Derek Lewin shall be elected to the Board of Directors of AIC and
Joe Logan, Jr., shall resign as a member of the Board of
Director, such that the Board shall be comprised of six (6)
members- William Forhan, James Muldowney, Steve York, James
Ponder, Derek Lewin, and Diran Kaloustian. Diran Kaloustian, or
his nominee, shall remain on the Board for so long as William
Forhan holds the voting proxies provided for in Section 6.01. It
is agreed and understood that in the event the merger
contemplated herein is not consummated for any reason, including
AIC a dissatisfaction with due diligence, Forhan, Muldowney,
York, Ponder and Lewin shall promptly tender their resignations
as members of the Board of Directors and, if applicable, officers
of AIC.
9.02 At the closing, AIC will cause all of its officers to resign
from office and those persons designated by AIC's Board as
constituted pursuant to Section 9.01, shall be appointed.
ARTICLE X
INTENTIONALLY LEFT BLANK
ARTICLE XI
MISCELLANEOUS
11.01 Termination. With respect to each company, this
Agreement may be terminated and the merger to which such company
is proposed to be a party as contemplated herein may be abandoned
(i) by the mutual consent of AIC and CASINO at any time; (ii) by
either CASINO or AIC if the merger has not been consummated prior
to December 31, 1998; (iii) in the event of any material adverse
change in the business, property, or financial condition of AIC
or CASINO; (iv) in the event of any action, suit, or proceeding
at law or equity against either CASINO or AIC or by any Federal,
State, Local government agency or commissions, board or agency,
where any unfavorable decision would materially adversely affect
the business, property or financial condition or income of CASINO
or AIC; (v) by a party (the "terminating party") in the event of
the failure of the other party to comply with a condition
described in Article V and such condition is not waived by the
terminating party (provided that the terminating party is not
itself in default); or (vi) in the event the merger violates any
federal or state statue, rule or regulation. In the event of such
termination and abandonment, neither AIC nor CASINO (or any of
its directors or officers) shall have any liability or further
obligation to any other party to this Agreement, except that
nothing herein will relieve any party from liability for any
willful breach of this Agreement.
11.02 Expenses. Whether or not any merger is consummated, all
out-of-pocket costs and expenses incurred in connection with the
merger and this agreement will be paid by the party incurring
such expenses.
11.03 Indebtedness of CASINO. As disclosed elsewhere herein
or in a Schedule hereto, CASINO is currently indebted to certain
persons in the aggregate amount of approximately $350,000
including accrued interest. This indebtedness is not disclosed in
the Financial Statements of CASINO previously delivered to AIC
(but will be set forth on Schedule 3.04 to this Agreement).
CASINO is currently in default of its payment obligation to such
persons. It is intended by the parties that, on or after the
effective date of the merger contemplated hereby, this
indebtedness of CASINO will be converted into an aggregate of
approximately 200,000 shares of AIC common stock. The precise
structure of this debt conversion is to be reviewed by
professional advisors to CASINO and AIC and their recommendations
will be taken into account in determining the final structure of
the conversion.
11.04 Tax Structure of Merger. The merger contemplated by
this Agreement is intended to qualify as a tax-free
reorganization, as contemplated by Section 368(A) of the Internal
Revenue Code of 1986, as amended. To the extent that the parties'
legal, tax and accounting advisors indicate that all or a portion
of the transactions contemplated hereby adversely affect the tax-
free nature of such transactions, the parties agree to negotiate,
in good faith, modifications to this Agreement so as to enable
the parties to consummate the transactions contemplated hereby
without adverse tax consequences to the parties or their
shareholders.
11.05 Schedules. The parties agree that the Schedules
contemplated by this Agreement shall be delivered by each party
to the other not more than 10 days following the date hereof. The
information set forth on the Schedules shall be subject to the
parties due diligence review and to the provisions of Section
5.03.
11.06 CTC Acquisitions. The parties acknowledge that prior to
the date hereof, CASINO entered into a letter of intent to
acquire all of the outstanding securities of Corporate Travel
Consultants ("CTC"). Notwithstanding the foregoing, the parties
hereto contemplate that subsequent to the execution of this
Agreement and prior to the closing hereof, AIC will endeavor to
acquire all of the outstanding stock of CTC. In the event that
AIC completes the acquisition of CTC, and the transactions
contemplated by this Agreement are not consummated, AIC hereby
agrees to sell all of the outstanding securities to CASINO at a
price equal to the value of the consideration paid by AIC for the
securities of CTC.
11.07 Brokers. No broker or finder is entitled to any
brokerage or finder's fee or other commission or fee from any
Company or based upon arrangements made by or on behalf of any
Company with respect to the transactions contemplated by this
Agreement.
11.08 Arbitration. Any controversy arising out of, connected
to, or relating to any matters herein or the transactions
contemplated by this Agreement, or the breach thereof, including,
but not limited to any claims of violations of Federal and/or
State Securities Acts, Banking Statutes, Consumer Protection
Statutes, Federal and/or State anti-Racketeering (e.g. RICO)
claims as well as any common law claims and any State Law claims
of fraud, negligence, negligent misrepresentations, and/or
conversion shall be settled by arbitration in Washington, D.C.,
under the rules of the American Arbitration Association; and
judgment on the arbitrator's award may be entered in any court
having jurisdiction thereof in accordance with the provisions of
the law of the State of Nevada. In the event of such a dispute,
each party to the conflict shall select an arbitrator, both of
whom shall select a third arbitrator which shall constitute the
three person arbitration board. The decision of a majority of the
board of arbitrators shall be binding upon the parties.
11.09 Other Actions. Each of the parties hereto agrees to
execute and deliver such other documents, certificates,
agreements and other writings and -to take such other actions as
may be necessary or desirable to consummate the transactions
contemplated by this Agreement.
11.10 Waiver and Amendment. Any provision of this Agreement
may be waived at any time by the party which is or whose
stockholders are, entitled to the benefits thereof and this
Agreement may be amended or supplemented at any time. No such
waiver, amendment or supplement shall be effective unless in
writing and signed by the party or parties necessary thereto.
11.11 Entire Agreement. This Agreement contains the entire
agreement between AIC and CASINO with respect to the merger and
the other transactions contemplated hereby.
11.12 Applicable Law. This agreement shall be governed by and
construed in accordance with the laws of the State of Nevada.
11.13 Descriptive Headings. The descriptive headings are for
convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
11.14 Notices. All notes or other communications hereunder
shall be in writing and shall be deemed to have been duly given
if delivered personally or sent by registered or certified mail
postage prepaid, addressed as follows:
If to AIC, to: AVIATION INDUSTRIES CORP.
1580 Lemoine Avenue, Suite 8
Fort Lee, NJ 07024
and to: SONNENBLICK PARKER & SELVERS,
P.C.
Attention; Mark S. Vincent,
Esq.
4400 Route 9 South, Suite 3000
Freehold, NJ 07728
If to CASINO, to: INTEGRATED MARKETING
PROFESSIONALS, INC.
888 E. Las Olas Blvd., Ste.
701
Fort Lauderdale, FL 33301
and to: ATLAS, PEARLMAN, TROP &
BORKSON, PA
Attention: Steven I.
Weinberger, Esq.
200 E. Las Olas Blvd.
Fort Lauderdale, FL 33301
11.15 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one
agreement.
11.16 Signatures. Each of the undersigned, have been duly
authorized to execute this Agreement on behalf of AIC and CASINO,
respectively, and, to the extent the undersigned ate directors
and shareholders of AIC and CASINO, respectively, each of the
undersigned hereby agree to vote all shares held of record by him
and to recommend to the shareholders a vote, in favor of the
transactions contemplated by the within Agreement at the meeting
of shareholders of said corporation contemplated by this
Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto
as of the date first hereinabove written.
AVIATION INDUSTRIES CORP.
By: /s/ Gerald D'Ambrosio
GERALD D'AMBROSIO, PRESIDENT
INTEGRATED MARKETING PROFESSIONALS, INC.
By: /s/ William Forhan
WILLIAM FORHAN, PRESIDENT
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
AVIATION INDUSTRIES CORPORATION
(FORMERLY NEVADA COMMERCIAL MANAGEMENT INC.)
KNOW ALL MEN BY THESE PRESENTS:
That I, the undersigned, for the purpose of association to
establish a corporation for the transaction of business and the
promotion and conduct of the objects and purposes hereinafter
stated, under the provisions of and subject to the requirements
of the laws of the State of Nevada, do make, record and file
these Articles of Incorporation in writing and I do hereby
certify:
I.
That the name of said Corporation shall be: NEVADA COMMERCIAL
MANAGEMENT, INC.
II.
That the principal office and place of business of the
corporation shall be 7088 Delwood, Las Vegas, Nevada 89117 and
that the Resident Agent in charge thereof shall be Lawana
Beckett.
III.
That the purpose for which said corporation is formed and the
nature of the objects to be transacted and carried on by it are:
To engage in any and all lawful activity,
IV.
This corporation is authorized to issue 2,000,000 shares of
Common Stock of no par value.
The initial number of Stockholders will be less than three. Any
and all shares issued by the corporation, the fixed consideration
for which has been paid or delivered, shall be deemed fully paid
stock and not liable for any further call or assessment thereon,
and the holders of such stock shall not be liable for any further
assessments.
If, for any reason, the amount of outstanding capital stock of
the corporation is to be increased, such increase shall be
offered to, and may be subscribed for by, the then existing
shareholders in proportion to their shareholdings at that tine
for such amount as may be determined at the offering price of the
stock to either shareholders or non-shareholders.
V.
The governing board of the corporation shall consist of not less
than two nor more than ten, the exact amount to be fixed by the
by-laws of the corporation, provided that the number so fixed by
the by-laws may be increased or decreased from time to time. The
first Board of Directors, consisting of one member is:
FIRST BOARD OF DIRECTORS
NAME POST OFFICE ADDRESS
Lawana Beckett 7088 Delwood, Las Vegas, NV 89117
VI.
The name of the incorporators signing these Articles are as
follows:
NAME POST OFFICE
ADDRESS
Lawana Beckett 7088 Delwood, Las Vegas, NV 89117
VII.
At all elections for directors of this corporation, each holder
of stock shall be entitled to as many votes as shall equal the
number of his shares of stock, multiplied by the number of
directors to be elected, and he may cast all such notes for a
single director or may distribute them among the number to be
noted for, or any two or more of them, as he wishes.
VIII.
This Corporation shall have perpetual existence.
IN WITNESS WHEREOF, the undersigned incorporator has executed
these Articles of Incorporation this 22nd day of January, 1988.
/s/ Lawana Beckett
Lawana Beckett
BY-LAWS
OF
NEVADA COMMERCIAL DEVELOPMENT, INC.
ARTICLE I. OFFICES
The principal office of the corporation in the State of Nevada
shall be located in the City of Las Vegas, Country of Clark. The
corporation may have such other offices, either within or without
the State of Nevada, as the Board of Directors may designate or
as the business of the corporation may require from time to time.
ARTICLE II. SHAREHOLDERS
SECTION 1. Annual Meeting: The annual meeting of the shareholders
shall be held on the 22nd day in the month of January in each
year, beginning with the year 1989, at the hour of 1:00 o'clock
P.M., for the purpose of electing Directors and for the
transaction of such other business as may come before the
meeting. If the day fixed for the annual meeting shall be a legal
holiday in the State of Nevada, such meeting shall be held on the
next succeeding business day. If the election of Directors shall
not be held on the day designated herein for any annual meeting
of the shareholders, or at any adjournment thereof, the Board of
Directors shall cause the election to be held at a special
meeting of the shareholders as soon thereafter as conveniently
may be.
SECTION 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, unless otherwise
prescribed by statute, may be called by the President or by the
Board Directors, and shall be called by the President at the
request the holders of not less than twenty-five per cent of all
the outstanding shares of the corporation entitled to vote at the
meeting.
SECTION 3. Place of Meeting. The Board of Directors may designate
any place, either within or without the State of Nevada unless
otherwise prescribed by statute, as the place of meeting for any
annual meeting or for any special meeting called by the Board of
Directors. A waiver of notice signed by all shareholders entitled
to vote at a meeting may designate any place, either within or
without the State of Nevada, unless otherwise prescribed by
statute, as the place for the holding of such meeting. If no
designation is made, or if a special meeting be Otherwise called,
the place of meeting shall be the principal office of the
corporation in the State of Nevada.
SECTION 4. Notice of Meeting. Written notice stating the place,
day and hour of the meeting and, in case of special meeting, the
purpose or purposes for which the meeting is called, shall unless
otherwise prescribed by statute, be delivered not less than ten
nor more than thirty days before the date of the meeting, either
personally or by mail, by or at the direction of the President,
or the Secretary, or the persons calling the meeting, to each
shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder
at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record Date.
For the purpose of determining shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment
thereof, or shareholders entitled to receive payment of any
dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the
corporation may provide that the stock transfer books shall be
closed for a stated period but not to exceed, in any case, ten
days. If the stock transfer books shall be closed for the purpose
of determining shareholders entitled to notice of or to vote at a
meeting of shareholders, such books shall be closed for at least
ten days immediately preceding such meeting. In lieu of closing
the stock transfer books, the Board of Directors may fix in
advance a date as the record date for any such determination of
shareholders, such date in any case to be not more than ten days
and, in case of a meeting of shareholders, not less than ten days
prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If the stock
transfer books are not closed and no record date is fixed for the
determination of shareholders entitled to notice of or to vote at
a meeting of shareholders, or shareholders entitled to receive
payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be,
shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any
meeting of shareholders 'has been made as provided in this
section, such determination shall apply to any adjournment
thereof.
SECTION 6. Voting Lists. The officer or agent having charge of
the stock transfer books for shares of the corporation shall make
a complete list of the shareholders entitled to vote at each
meeting of shareholders or any adjournment thereof. Such list
shall be produced and kept open at the time and place of the
meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting for the purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of shareholders. If less
than a majority of the outstanding shares are represented at a
meeting, a majority of the shares so represented may adjourn the
meeting from time to time without further notice. At such
adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been
transacted at the meeting as originally noticed. The shareholders
present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in writing by
shareholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the secretary of the corporation before
or at the time of the meeting. No proxy shall be valid after one
month from the date of its execution, unless otherwise provided
in the proxy.
SECTION 9. Voting of Shares. Each outstanding share entitled to
vote shall be entitled to one vote upon each matter submitted to
a vote at a meeting of shareholders.
SECTION 10. Voting of Shares by Certain Holders. Shares standing
in the name of another corporation may be voted by such officer,
agent or proxy as the by-laws of such corporation may prescribe,
or, in the absence of such provision, as the board of directors
of such corporation may determine.
Shares held by an administrator, executor, guardian or
conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing
in the name of a trustee may be voted by him, either in person or
by proxy, but no trustee shall be entitled to vote shares held by
him without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver
may be voted by such receiver without the transfer thereof into
his name if authority so to do be contained in an appropriate
order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name
of the pledgee, and thereafter the pledgee shall be entitled to
vote the shares so transferred.
Shares of its own stock belonging to the corporation shall not be
voted, directly or indirectly, at any meeting, and shall not be
counted in determining the total number of outstanding shares at
any given time.
SECTION 11. Informal Action by Shareholders. Unless otherwise
provided by law, any action required to be taken at a meeting of
the shareholders, or any other action which may be taken at a
meeting of the shareholders, may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect
to the subject matter thereof.
ARTICLE III. BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the
corporation shall be managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number
directors of the corporation shall be no less than one. Each
director shall hold office until the next annual meeting of
shareholders and until his successor shall have been elected and
qualified.
SECTION 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting
of shareholders. The Board of Directors may provide, by
resolution, the time and place for the holding of additional
regular meetings without other notice than such resolution.
SECTION 4. Special meetings. Special meetings of the Board
Directors may be called by or at the request of the President or
any two directors. The person or persons authorized to call
special meetings of the Board of Directors may fix the place for
holding any special meeting of the Board of Directors called by
them.
SECTION 5. Notice. Notice of any special meeting shall be given
at least ten days previously thereto by written notice delivered
personally or mailed to each director at his business address, or
by telegram. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail so addressed,
with postage thereon prepaid. If notice be given by telegram,
such notice shall be deemed to be delivered when the telegram is
delivered to the telegraph company. Any director may waive notice
of any meeting. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not
lawfully called or convened.
SECTION 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors,
but if less than such majority is present at a meeting, a
majority the directors present may adjourn the meeting from time
to time without further notice.
SECTION 7. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall
be the act of the Board of Directors.
SECTION S. Action Without A Meeting. Any action that may be taken
by the Board of Directors at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so to
be taken, shall be signed before such action by all of the
Directors.
SECTION 9. Vacancies. Any vacancy occurring in the Board
Directors may be filled by the affirmative vote of a majority of
the remaining directors though less than a quorum of the Board of
Directors, unless otherwise provided by law. A director elected
to fill a vacancy shall be elected for the unexpired term of his
predecessor in office. Any directorship to be filled by reason of
an increase in the number of directors may be filled by election
by the Board of Directors for a term of office continuing only
until the next election of Directors by the shareholders.
SECTION 10. Compensation. By resolution of the Board of
Directors, each Director may be paid his expenses, if any, of
attendance at each meeting of the Board of Directors, and may be
paid a stated salary as director or a fixed sum for attendance at
each meeting of the Board of Directors or both. No such payment
shall preclude any director from serving the corporation in any
other capacity and receiving compensation therefor.
SECTION 11. Presumption of Assent. A director of the corporation
who is present at a meeting of the Board of Directors at which
action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his dissent shall be entered
in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the secretary of
the meeting before the adjournment thereof or shall forward such
dissent by registered mail to the Secretary of the corporation
immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a Director who voted in favor of such
action.
ARTICLE IV. OFFICERS
SECTION 1. Number. The officers of the corporation shall be a
President, a Secretary and a Treasurer, each of whom shall be
elected by the Board of Directors. Such other officers and
assistant officers as may be deemed necessary may be elected or
appointed by the Board of Directors.
SECTION 2. Election and Term of office. The officers of the
corporation to be elected by the Board of Directors shall be
elected annually by the Board of Directors at the first meeting
of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified
or until his death or until he shall resign or shall have been
removed in manner hereinafter provided.
SECTION 3. Removal. Any officer or agent may be removed by the
Board of Directors whenever in its judgment, the best interests
of the corporation will be served thereby, but such removal shall
be without prejudice to the contract rights, if any, of the
person so removed. Election or appointment of an officer or agent
shall not of itself create contract rights.
SECTION 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be
filled by the Board of Directors for the unexpired portion of the
term.
SECTION 5. President. The President shall be the principal
executive officer of the corporation and, subject to the control
of the Board of Directors, shall in general supervise and control
all of the business and affairs of the corporation. He shall,
when present, preside at all meetings of the shareholders and of
the Board of Directors. He may sign, with the Secretary or any
other proper officer of the corporation thereunto authorized by
the Board of Directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, contracts, or other
instruments which the Board of Directors has authorized to be
executed, except in cases where the signing and execution thereof
shall be expressly delegated by the Board of Directors or by
these By-Laws to some other officer or agent of the corporation,
or shall be required by law to be otherwise signed or executed;
and in general shall perform all duties incident to the office of
President and such other duties as may be prescribed by the Board
of Directors from time to time.
SECTION 6. Vice-President. In the absence of the President or in
event of his death, inability or refusal to act, the Vice-
President shall perform 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-President shall perform
such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.
SECTION 7. Secretary. The Secretary shall: (a) keep the minutes
of the proceedings of the shareholders and of the Board of
Directors in one or more books provided for that purpose; (b) see
that all notices are duly given in accordance with the provisions
of these By-Laws or as required by law; (c) be custodian of the
corporate records and of the seal of the corporation and see that
the seal of the corporation is affixed to all documents the
execution of which on behalf of the corporation under its seal is
duly authorized; (d) keep a register of the post office address
of each shareholder which shall be furnished to the Secretary by
such shareholder; (e). sign with the President, certificates for
shares of the corporation, the issuance of which shall have been
authorized by resolution of the Board of Directors; (f) have
general charge of the stock transfer books of the corporation;
and (g) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
SECTION 8. Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) receive and give receipts for moneys due and
payable to the corporation from any source whatsoever, and
deposit all such moneys in the name of the corporation in such
banks, trust companies or other depositories as shall be selected
in accordance with the provisions of Article V of these By-Laws;
and (c) in general perform all of the duties incident to the
office of Treasurer and such other duties as from time to time
may be assigned to him by the President or by the Board of
Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his duties in
such sum and with such surety or sureties as the Board of
Directors shall determine.
SECTION 9. Salaries. The salaries of the officers shall be fixed
from time to time by the Board of Directors and no officer shall
be prevented from receiving such salary by reason of the fact
that he is also a director of the corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract
or execute and deliver any instrument in the name of and on
behalf of the corporation, and such authority may be general or
confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in
its name unless authorized by a resolution of the Board of
Directors. Such authority may be general or confined to specific
instances.
SECTION 3. Checks, drafts, etc. All checks, drafts or other
orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the corporation, shall be
signed by such officer or officers, agent or agents of the
corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of
the corporation in such banks, trust companies or other
depositories as the Board of Directors may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates representing
shares of the corporation shall be in such form as shall be
determined by the Board of Directors. Such certificates shall be
signed by the President and by the Secretary or by such other
officers authorized by law and by the Board of Directors so to
do, and sealed with the corporate seal. All certificates for
shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue,
shall be entered on the stock transfer books of the corporation.
All certificates surrendered to the corporation for transfer
shall be canceled and no new certificate shall be issued until
the former certificate for a like number of shares shall have
been surrendered and canceled, except that in case of a lost,
destroyed or mutilated certificate a new one may be issued
therefor upon such terms and indemnity to the corporation as the
Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the
corporation shall be made only on the stock transfer books of the
corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the
corporation, and on surrender for cancellation of the certificate
for such shares. The person in whose name shares stand on the
books of the corporation shall be deemed by the corporation to be
the owner thereof for all purposes.
ARTICLE VII. FISCAL YEAR
The fiscal year of the corporation shall begin on the 1st day of
January and end on the 31st day of December in each year.
ARTICLE VIII. DIVIDENDS
The Board of Directors may from time to time declare, and the
corporation may pay dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law and its
articles of incorporation.
ARTICLE IX. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall
be circular in form and shall have inscribed thereon the name of
the corporation and the state of incorporation and the words,
"Corporate Seal".
ARTICLE X. WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required
to be given to any shareholder or director of the corporation
under the provisions of these By-Laws or under the provisions of
the articles of incorporation or under the provisions of the
Business Corporation Act, a waiver thereof in writing, signed by
the person or persons entitled to such notice, whether before or
after the time stated therein, shall be deemed equivalent to the
giving of such notice.
ARTICLE XI. AMENDMENTS
These By-Laws may be altered, amended or repealed and new By-Laws
may be adopted by the Board of Directors at any regular or
special meeting of the Board of Directors.
ARTICLES OF INCORPORATION
OF
INTEGRATED MARKETING PROFESSIONALS, INC.
Pursuant to the provisions of Act 284, Public Acts of 1972, as
amended, the undersigned corporation executes the following
Articles:
I.
The name of the corporation is: INTEGRATED MARKETING
PROFESSIONALS, INC.
II.
The purpose or purposes for which the corporation is organized is
to engage in any activity within the purposes for which
corporations may be organized under the Business Corporation Act
of Michigan.
III.
The total authorized capital stock is:
1. Common Shares 20,000 Class A Voting - Par Value Per Share
$1.00
Common Shares 40,000 Class B Non-Voting - Par Value Per
Share $1.00
The common shares will be identical in all respects with the
sole exception of the voting rights held solely by the Class
"A" common.
2. A statement of all or any of the relative rights, preference
and limitations of each class is as follows:
This Corporation is a small business corporation as defined
in the Internal Revenue Code of 1986, and such common shares
as shall be issued shall qualify to receive the benefits of
Section 1244 of said Internal Revenue Code.
No shares of stock in this Corporation shall be transferred
without first offering the same to the Corporation through its
President for a period of ten (10) days and then to the
stockholders pro-rata for an additional thirty (30) days. No
stock in this Corporation may pass by intestate succession or
bequest without compliance with the Stock Transfer Agreement
signed by all shareholders and on file at the offices of the
Corporation.
Error! Not a valid link.
UNANIMOUS WRITTEN CONSENT
OF THE DIRECTORS OF
CASINO AIRLINK, INC.
(FORMERLY KNOWN AS
INTEGRATED MARKETING PROFESSIONALS, INC.)
The undersigned, constituting all of the directors of Casino
Airlink, Inc. (formerly known as Integrated Marketing
Professionals, Inc.) (the "corporation") acting pursuant to the
authority of Section 78.315.2 of the Nevada Revised Statutes,
hereby consent to the adoption of the following resolutions, to
have the same force and effect as if duly adopted at a meeting
duly noticed and held:
WHEREAS, the corporation's Articles of Incorporation authorize
the issuance of twenty-five million (25,000,000) shares of common
stock of the corporation with a par value of $.10 (the "Common
Stock") and, additionally, ten million (10,000,000) shares of
preferred stock, also with a par value of $.10 per share (the
"Preferred Stock"); and,
WHEREAS, the board of directors has determined that it is in the
best interest of the corporation to issue to certain investors
shares of the Company's Preferred Stock, as authorized for
issuance by the Company's Articles of Incorporation;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to Section 78.1955
of the Nevada Revised Statutes, the corporation shall, and hereby
does, create a series of its Preferred Stock:
RESOLVED FURTHER, that the Series A Preferred Stock shall and
hereby does comprise a total of five million (5,000,000) shares;
and
RESOLVED FURTHER, that the rights, preferences, privileges and
restrictions granted to or imposed upon the Series A Preferred
Stock shall be, and hereby are as follows:
RESOLVED FURTHER, that the President and such other officers as
he may designate be, and each hereby is, authorized, directed and
empowered to execute all other documents and to take such other
action as they may deem necessary or advisable in order to carry
out and perform the purpose of these resolutions.
RESOLVED FURTHER, that the President and such officers as he may
designate be, and each hereby is, authorized, directed and
empowered to take such actions and execute such documents as they
may deem necessary or appropriate to effect the issuance of such
shares of the Series A Preferred Stock for such consideration.
Date: December 7, 1996.
/s/ William Forhan
William Forhan, Director
/s/ Ellen Forhan
Ellen Forhan, Director
RIGHTS, PREFERENCES, AND PRIVILEGES OF SERIES A PREFERRED STOCK
1. Voting Rights. Except as otherwise required by law or
Section 6 hereof, the holder of each share of Series A Preferred
Stock issued and outstanding shall be entitled to the number of
votes equal to the number of shares of Common Stock into which
such shares of Series A Preferred Stock could be converted at the
record date for the determination of the shareholders entitled to
vote on such matters, or, if no such record date is established,
at the date such vote is taken or any written consent of
shareholders is solicited, such votes to be counted together with
all other shares of the corporation having general voting power
and not separately as a class. Fractional votes by the holder of
Series A Preferred Stock shall not, however, be permitted, and
any fractional voting rights shall (after aggregating all shares
into which shares of Series A Preferred Stock held by each holder
could be converted) be rounded down to the nearest whole number.
2. Dividends. The holders of the Series A Preferred Stock shall
be entitled, when, as and if declared by the board of directors
of the corporation, to noncumulative dividends in such amount as
may be determined from time to time by the board of directors,
such dividends to be paid out of funds legally available
therefor. No dividend or distribution shall be declared or paid
on any shares of Common Stock (other than dividends payable
solely in common stock of the corporation) unless at the same
time an equivalent dividend or distribution is paid or declared
and set aside for payment on the Series A Preferred Stock (on an
as-if converted to Common Stock basis).
3. Liquidation Preference. In the event of any liquidation,
dissolution, or winding up of the corporation, either voluntary
or involuntary, distributions to the shareholders of the
corporation shall be made in the following manner:
(a) The holders of the Series A Preferred Stock shall be
entitled to receive, prior and in preference to any distribution
of any of the assets or surplus funds of the corporation to the
holders of the Common Stock by reason of their ownership of such
shares, an amount equal to $.63 for each shares of Series A
Preferred Stock then held by them, plus all declared but unpaid
dividends on such shares, minus an amount equal to all dividends
per share on the Series A Preferred Stock paid since the date
such shares were issued (the "Original Issuance Date") that were
not also paid with respect to the Common Stock. If the assets
and funds thus distributed among the holders of the Series A
Preferred Stock shall be insufficient to permit the payment to
such holders of the full preferential amount, then the entire
assets and funds of the corporation legally available for such
distribution shall be distributed among the holders of the Series
A Preferred Stock in proportion to the shares of Series A
Preferred Stock then held by them. After payment has been made
to the holders of the Series A. Preferred Stock of the full
amounts as to which they shall be entitled as aforesaid, the
holders of the Common Stock shall be entitled to receive ratably
all of the remaining assets.
(b) For purposed of this paragraph 3, (i) a merger or
consolidation of the corporation with or into any other
corporation or corporations, or (ii) the merger of any other
corporation or corporations into the corporation, as a result of
which consolidation or merger (A) the shareholders of the
corporation receive distributions in cash or securities or
another corporation or corporations as a result of such
consolidation or merger or (B) the shareholders of the
corporation shall own less than fifty percent (50%) of the voting
securities of the surviving corporation, or (iii) a sales of all
of substantially all of the assets of the corporation, shall be
treated as liquidation, dissolution or winding up of the
corporation.
(c) Any securities to be delivered to the holders of the
Series A Preferred Stock pursant to paragraph 3(b) above shall be
valued as follows:
(i) If traded on an securities exchange, the value shall be
deemed to be the average of the closing prices of the securities
on such exchange over the 30 day period ending three (3) days
prior to the closing;
(ii) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices
(whichever are applicable over the 30-day period ending three (3)
days prior to the closing; and
(iii) If there is no active public market, the value shall be
the fair market value thereof, as mutually determined by the
corporation and the holder of Series A Preferred Stock who would
been entitled to receive such securities or the same type of
securities and whose Series A Preferred Stock represents at least
a majority of the voting power of all then outstanding shares of
such Series A Preferred Stock.
4. Conversion. The holders of the Series A Preferred Stock
shall have conversion rights as follows (the "Conversion
Rights"):
(a) Rights to Convert. Each share of Series A Preferred Stock
shall be convertible, at the option of the holder thereof, at any
time after the date of issuance of such share at the office of
the corporation or any transfer agent for the Series A Preferred
Stock. Each shares of Series A Preferred Stock shall be
convertible into the number of fully paid and nonassessable
shares of Common Stock which results from dividing the Conversion
Price (as hereinafter defined) per share in effect for the Series
A Preferred Stock at the time of conversion into the per share
conversion value (as hereinafter defined) of such series. The
initial Conversion Price per share of Series A Preferred Stock
shall be $0.315, and the per share Conversion Value of Series A
Preferred Stock shall be $0.630, plus any declared but unpaid
dividends on the Series A Preferred Stock. The initial
Conversion Price of Series A Preferred Stock shall be subject to
adjustment from time to time as provided below. The number of
shares of Common Stock into which a share of Series A Preferred
Stock is convertible is hereinafter referred to as the
"Conversion Rate" of such series.
(b) Mechanics of Conversion. Before any holder of Series A
Preferred Stock shall be entitled to convert the same into full
shares of Common Stock and receive certificates therefor, he or
she shall surrender the certificate or certificates therefor,
duly endorsed, at the office of the corporation or of any
transfer agent for the Series A Preferred Stock and shall give
written notice to the corporation at such office that such holder
elects to convert the same. The corporation shall issue
certificates evidencing the shares of Common Stock issuable upon
such conversion if the holder notifies the corporation or its
transfer agent that such certificates have been lost, stolen or
destroyed and executes an agreement satisfactory to the
corporation to indemnify the corporation from any loss incurred
by it in connection with such certificates. The corporation
shall, as soon as practicable after such delivery, or such
agreement of indemnification in the case of a lost certificate,
issue and deliver at such office to such holder of Series A
Preferred Stock, a certificate or certificates for the number of
shares of Common Stock to which the holder shall be entitled as a
foresaid and a check payable to the holder in the amount of any
cash amounts payable in lieu of conversion into fractional shares
of Common Stock as set forth below. Such conversion shall be
deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Series A
Preferred Stock to be converted, and the person or persons
entitled to receive the shares of Common Stock issuable upon such
conversion shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on such date.
(c) Fractional Shares. In lieu of any fractional shares to
which the holder of Series A Preferred Stock would otherwise be
entitled, the corporation shall pay cash equal to such fraction
multiplied by the fair market value of one share of Common Stock,
as determined in the sole discretion of the board of directors of
the corporation. Whether or not fractional shares would be
issuable upon such conversion shall be determined on the basis of
the total number of shares of Series A Preferred Stock of each
holder at the time converting into Common Stock and the number of
shares of Common Stock issuable upon such aggregate conversion.
(d) Adjustment of Conversion Price. The Conversion Price of
Series A Preferred Stock shall be subject to adjustment from time
to time as follows:
(i) If the corporation shall issue any Common Stock ("Additional
Stock"), not including "Excluded Stock," as defined below, for a
consideration per share less than the conversion Price in effect
immediately prior to the issuance of such Common Stock (excluding
stock dividends, subdivisions, split-ups, combinations, dividends
or recapitalizations which are covered by subparagraph 4(d)(iii),
(iv), (v) and (vi)), the Conversion Price in effect immediately
after such issuance of Additional Stock shall forthwith (except
as provided in this paragraph 4(d) be adjusted to a price
determined by multiplying the Conversion Price in effect
immediately prior to such issuance of Additional Stock by a
fraction:
the numerator of which shall be equal to the sum of:
(x) the total number of shares of Common Stock outstanding
(including any shares of Common Stock issuable upon conversion of
the Series A Preferred Stock, or deemed to have been issued
pursuant to subdivision (3)(B), (C) and (D) of this clause (I)
immediately prior to such issuance, plus
(y) the number shares of Common Stock that the aggregate
consideration received by the corporation for the Additional
Stock would purchase at the Conversion Price in effect
immediately before such issuance of Additional Stock;
(B) and the denominator of which shall be the total number of
shares of Common Stock outstanding (including any shares of
Common Stock issuable upon conversion of the Series A Preferred
Stock or deemed to have been issued pursuant to subdivision (3)
(B), (C) and (D) of this clause (i) immediately after the
issuance of such Additional Stock.
For the purposes of any adjustment of the conversion Price
pursuant to this clause (i), the following provisions shall be
applicable:
(1) In the case of the issuance of Additional Stock for cash,
the consideration shall be deemed to be the amount of cash paid
therefor before deducting any discounts, commissions or expenses
paid or incurred by the corporation in connection with the
issuance and sale thereof.
(2) In the case of the issuance of Additional Stock for a
consideration in whole or in part other than cash, the
consideration other than cash shall be deemed to be the fair
value thereof as determined by the board of directors of the
corporation in its sole discretion; provided, however, that if,
at the time of such determination , the corporation's Common
Stock is traded in the over-the-counter market or on a national
or regional securities exchange, such fair market value as
determined by the board of directors of the corporation shall not
exceed the aggregate "Current Market Price" (as defined below) of
the shares of Additional Stock being issued.
(3) In the case of the issuance of (i) options to purchase or
rights to subscribe for Common Stock (other than Excluded Stock),
(ii) securities by their terms convertible into or exchangeable
for Common Stock (other than Excluded Stock), or (iii) options to
purchase or rights to subscribe for such convertible or
exchangeable securities:
(A) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options to purchase or rights
to subscribe for Common Stock shall be deemed to have been issued
at the time such options or rights were issued and for a
consideration equal to the consideration (determined in the
manner provided in subdivisions (1) and (2) above), if any
received by the corporation upon the issuance of such options or
rights plus the minimum purchase price provided in such options
or rights for the Common Stock covered thereby;
the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such
convertible or exchangeable securities, or upon the exercise of
options to purchase or rights to subscribe for such convertible
or exchangeable securities and subsequent conversions or exchange
thereof, shall be deemed to have been issued at the time such
securities were issued or such options or rights were issued and
for a consideration equal to the consideration received by the
corporation for any such securities and related options or rights
(excluding any cash received on account of accrued interest or
accrued dividends), plus the minimum additional consideration, if
any, to be received by the corporation upon the conversion or
exchange of such securities or the exercise of any related
options or rights (the consideration in each case to be
determined in the manner provided in subdivisions (1) and (2)
above);
on any change in the number of shares of Common Stock deliverable
upon exercise of any such options or rights or conversion of or
exchange for such convertible or exchangeable securities, or on
any change in the minimum purchase price of such options, rights
or securities, other than a change resulting from the
antidilution provisions of such options, rights or securities,
the Conversion Price shall forthwith be readjusted to such
conversion Price as would have obtained had the adjustment made
upon the issuance of such options, rights or securities not
exercised, converted or exchanged prior to such change, as the
case may be, been made upon the basis of such change; and
on the expiration of any such options or rights, the termination
of any such rights to convert or exchange or the expiration of
any options or rights related to such convertible or exchangeable
securities, the Conversion Price shall forthwith be readjusted to
such Conversion Price as would have obtained had the adjustment
made upon the issuance of such options, rights, convertible or
exchangeable securities or options or rights related to such
convertible or exchangeable securities, as the case may be, been
made upon the basis of the issuance of only the number of shares
of Common Stock actually issued upon the exercise of such options
or rights, upon the conversion or exchange of such convertible or
exchangeable securities or upon the exercise of the options or
tights related to such convertible or exchangeable securities, as
the case may be.
"Excluded Stock" shall mean:
all shares of Series A Preferred Stock and the Common Stock into
which the shares of Series A Preferred Stock are convertible;
shares of Common Stock or other securities issuable to employees,
directors or consultants of the corporation pursuant to plans and
arrangements approved by the board of directors of the
corporation;
all shares of Common Stock or other securities issued as a
distribution or dividend with respect to the Series A Preferred
Stock; and
all shares of Common Stock or other securities the issuance of
which gives rise to an adjustment of the conversion Price of the
Series A Preferred Stock pursuant to subparagraph 4(d)(iii) or
(iv) or a distribution with respect to the Series A Preferred
Stock pursuant to subparagraph 4(d)(v) or (vi).
(iii) If the number of shares of Common Stock outstanding at
any time after the date hereof is increased by a stock dividend
payable in shares of Common Stock or by a subdivision or split-up
of shares of Common Stock, then, on the date such payment is made
or such change is effective, the Conversion Price of the Series A
Preferred Stock shall be appropriately decreased so that the
number of shares of Common Stock issuable on conversion of any
shares of such Series A Preferred Stock shall be increased in
proportion to such increase of outstanding shares.
(iv) If the number of shares of Common Stock outstanding at any
time after the date hereof is decreased by a combination of the
outstanding shares of Common Stock, the, on the effective date of
such combination the conversion Price of the Series A Preferred
Stock shall be appropriately increased so that the number of
shares of Common Stock issueable on conversion of any shares of
such Series A Preferred Stock shall be decreased in proportion to
such decrease in outstanding shares.
(v) In case the corporation shall declare a cash dividend upon
its Common Stock payable otherwise than out of retained earnings
or shall distribute to holders of its Common Stock shares of its
capital stock (other than Common Stock), stock or other
securities of other persons, evidences of indebtedness issued by
the corporation or other persons, asset (excluding cash
dividends) or options or rights (excluding options to purchase
and rights to subscribe for Common Stock or other securities of
the corporation convertible into or exchangeable for Common
Stock), then, in each such case, the holders of shares of Series
A Preferred Stock shall, concurrent with the distribution to
holders of Common Stock, receive a like distribution based upon
the number of shares of Common Stock into which each share of
Series A Preferred Stock is then convertible.
(vi) In case, at any time after the date hereof, of any capital
reorganization or any reclassification of the stock of the
corporation (other than as a result of s stock dividend or
subdivision, split-up or combination of shares), the shares of
the Series A Preferred Stock shall, after such reorganization or
reclassification, be convertible into the kind and number of
shares of stock or other securities or property of the
corporation or otherwise to which such holder would have been
entitled if immediately prior to such reorganization or
reclassification, he or she had converted his or her shares of
Series A Preferred Stock into Common Stock. The provisions of
this clause (vi) shall similarly apply to successive
reorganizations and reclassifications.
(vii) All calculations under this paragraph 4 shall be made
to the nearest cent or to the nearest one hundredth (1/100) of a
share, as the case may be.
(viii) For the purpose of any computation pursuant to this
paragraph 4(d), the "Current Market Price" at any date of one
share of Common Stock shall be deemed to be the closing price or
the average of the highest reported bid and the lowest reported
ask prices, as applicable, on the preceding business day as
furnished by a nationally-recognized source of quotations.
Minimal Adjustments. No adjustment in the Conversion Price need
be made is such adjustment would result in a change in the
Conversion Price of less than $0.01. Any adjustment of less than
$0.01 which is not made shall be carried forward and shall be
made at the time of and together with any subsequent adjustment
which, on a cumulative basis, amounts to an adjustment of $0.01
or more in the Conversion Price.
No Impairment. The corporation will not through any
reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed hereunder by the corporation, but will at all times in
good faith assist in the carrying out of all the provisions of
this paragraph 4 and in the taking of all such action as may be
necessary or appropriate in order to protect the Conversion
Rights of the holders of Series A Preferred Stock against
impairment. This provision shall not restrict the corporation's
right to amend its Articles of Incorporation with the requisite
shareholder consent.
Certificate as to Adjustment. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant to
this paragraph 4, the corporation at its expense shall promptly
compute such adjustment or readjustment in accordance with the
terms hereof and prepare and furnish to each holder of Series A
Preferred Stock a certificate setting forth such adjustment or
readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The corporation shall, upon
written request at any time of any holder of Series A Preferred
Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) all such adjustments and
readjustments, (ii) the conversion Price at the time in effect,
and (iii) the number of shares of Common Stock and the amount, if
any, of other property that at the time would be received upon
the conversion of such holder's shares of Series A Preferred
Stock.
Notices of Record Date. In the event that the corporation shall
propose at any time:
(i) to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock or other securities,
whether or not a regular cash dividend and whether or not out of
earnings or earned surplus;
to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class
or series or other rights;
to effect any reclassification or recapitalization of its Common
Stock outstanding involving a change in the Common Stock; or
to merge or consolidate with or into any other corporation, or
sell, lease or convey all or substantially all its property or
business, or to liquidate, dissolve or wind up;
then, in connection with each such event, the corporation shall
send to the holders of the Series A Preferred Stock:
at least 10 days' prior written notice of the date on which a
record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders
of Common Stock shall be entitled thereto and the amount and
character of such dividend, distribution or right) or for
determining rights to vote in respect of the matters referred to
in (iii) and (iv) above; and
in the case of the matters referred to in (iii) and (iv) above,
at least 20 days' prior written notice of the date when the same
shall take place (and specifying the date on which the holders of
Common Stock shall be entitled to exchange their common Stock for
securities or other property deliverable upon the occurrence of
such event or the record date for the determination of such
holders if such record date is earlier).
Each such written notice shall be delivered personally or given
by first class mail, postage prepaid, addressed to the holders of
the Series A Preferred Stock at the address for each such holder
as shown on the books of the corporation.
Reservation of Stock Issuable Upon Conversion. The corporation
shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock solely for the
purpose of effecting the conversion of the shares of Series A
Preferred Stock such number of shares of its Common Stock as
shall from time to time be sufficient to effect the conversion of
all outstanding shares of Series A Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then
outstanding shares of Series A Preferred Stock, the corporation
will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
Reissuance of Converted or Contributed Shares. In case any shares
of Series A Preferred Stock are converted into Common Stock
pursuant to Section 4 hereof or contributed back to the
corporation, after the Original Issue Date of such shares, all
such shares so converted or contributed shall, upon such
conversion or contribution, resume the status of authorized, but
undesignated and unissued, shares of Series A Preferred Stock.
5. Registration Rights.
The corporation shall, at any time after January 1, 1998, upon
the written request of the holder(s) of the Series A Preferred
Stock, register under the Securities Act of 1933, as amended
(hereinafter, the "Act") all or any part of the shares of Series
A Preferred Stock, or Common Stock issued upon conversion of the
Preferred Stock, as promptly as practicable and notify all
holders of such shares thereof. No holder will be required to
register shares if he, she or it does not choose to do so. The
corporation will file such registration statement at its own cost
and expense, and will maintain such registration statement
current for a period of nine (9) months subsequent to its
effective date. The corporation's obligation hereunder is further
limited to effecting only one such registration.
If at any time the corporation shall of its own volition register
any securities on Form S-1 or Form S-18 under the Act, the
corporation will give at least thirty (30) days prior written
notice thereof to the holders of the Series A Preferred Stock
purchased hereunder (or Common Stock issued upon conversion of
such Series A Preferred Stock), and, upon request of any such
holder or holders, include in such registration, at the cost and
expense of the corporation, such shares in the amount so
requested; provided, however, that the corporation's underwriters
do not object to the inclusion of such securities in the
registration statement. The corporation's obligation hereunder is
further limited to effecting only one such registration of the
securities.
The corporation agrees to use its best efforts, at its expense,
to register or qualify the securities covered by such
registration statement under such other securities or blue sky
laws of such jurisdiction as each such holder shall reasonably
request.
In connection with any registration statement to be filed
pursuant to this Section 5, the primary responsibility for
preparing and filing such registration statement shall be that of
the corporation, but the holder whose shares are being registered
shall furnish such information to the corporation, in writing, as
it may reasonably request to assist in the preparation of such
registration statement.
The corporation agrees to furnish to such holder(s) the number of
prospectuses conforming to the requirements of the Act, and the
rules and regulations thereunder, relating to the shares so
registered, as may from time to time be requested by such
holder(s). The cost of printing such prospectuses shall be paid
in the same manner as other costs of the registration statement.
If the offering to which the proposed registration statement
relates is to be on an underwritten basis, and such holder(s)
shall not consent to have their shares of Stock distributed upon
the same terms and conditions as those applicable to the other
person(s) (including the corporation) whose securities are being
included in such registration statement, then the holder(s) will
not, without the written consent of the corporation, commence the
distribution of any shares of stock of the corporation held by
such holder(s) until ninety (90) days after the effective date of
such registration statement.
In the event of the registration of any shares of Series A
Preferred Stock, or the Common Stock into which such stock may be
converted, subject hereto, the corporation will indemnify the
holder(s) thereof and hold the holder(s) thereof harmless against
any losses, claims, damages or liabilities arising out of, or
based upon, any untrue statement or alleged untrue statement of
any material fact contained in any registration statement under
which such shares of stock are registered, any preliminary
prospectus or final prospectus contained therein, or any
amendment or supplement thereto, or arising out of or based upon
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the holder(s) for any
legal or any other expenses reasonably incurred by the holder(s)
in connection with investigating or defending any such loss,
claim, damage, liability or actions; provided, however, tat to
the extent that any such loss, claim, damage, liability or action
arises out of, or is based upon, and untrue statement or alleged
untrue statement or omission or alleged omission made in said
registration statement, said preliminary prospectus or said final
prospectus or any said amendment or supplement in reliance upon,
and in conformity with, written information furnished to the
corporation by any such holder(s), then such holder(s) will
indemnify and hold harmless the corporation, its officers,
directors and control persons, against any losses, claims,
damages, or liabilities to which the corporation may become
subject under the Act, but only insofar as such statement or
omission was made in reliance upon, and in conformity with,
written information furnished to the corporation by or on behalf
of such holder(s) specifically for use in the preparation
thereof, and will reimburse the corporation for any legal or
other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage,
liability or action.
Protective Provisions. In addition to any other rights provided
by law, so long as any Series A Preferred Stock shall be
outstanding, this corporation shall not, without first obtaining
the vote or written consent of the holders of not less than a
majority of such outstanding shares of Series A Preferred Stock:
amend or repeal any provision of, or add any provision to, this
corporation's Articles of Incorporation or bylaws if such action
would alter or change materially and adversely the preferences,
rights, privileges or powers of, or the restrictions provided for
the benefit of, the Series A Preferred Stock;
authorize or issue shares of any class or series of stock (or
securities convertible into or exchangeable for such stock)
having any rights, preferences or privileges superior to or on a
parity with any such rights, preferences or privileges of the
Series A Preferred Stock; or
authorize a sale or transfer of all or substantially all of the
assets of the corporation or a merger or consolidation of the
corporation if, as a result of such merger or consolidation, the
shareholders of the corporation shall own less than fifty percent
(50%) of the voting securities of the surviving corporation.
CASINO AIRLINK, INC.
Certificate of voting powers, designations, preferences, and
rights of preferred stock
By resolution of the Board of Directors.
We, William G. Forhan and Ellen Forhan of Casino Airlink, Inc., a
corporation organized in existing under the Business Corporation
Law of the state of Nevada, in accordance with 78.195 of the
Nevada Revised Statutes thereof, do hereby certify:
That, pursuant to authority conferred upon the Board of Directors
by the Articles of Incorporation or an amendment thereto of said
Corporation, said Board of Directors, by unanimous written
consent pursuant to Section 78.315.2 of the Nevada Revised
Statutes, on December 11, 1996 duly adopted a resolution
providing for the issuance of a series of one million seven
hundred thousand (1,700,000) shares of the Corporation's
preferred stock, to be known as its "Series B Preferred Stock,"
which resolution is as follows:
WHEREAS, the corporations Articles of Incorporation authorize the
issuance of 25 million (25,000,000) shares of common stock of the
corporation with a par value of $0.10 (the "Common Stock") and,
additionally, 10 million (10,000,000) shares of preferred stock,
also with a par value of $0.10 per share (the "Preferred Stock");
and,
WHEREAS, the Board of Directors has determined that it is in the
best interests of the Corporation to issue to certain investors
shares of the Company's Preferred Stock, as authorized for
issuance by the Company's Articles of Incorporation, with certain
rights, preferences and privileges;
NOW, THEREFORE, BE IT RESOLVED, that pursuant to Section 78.1955
of the Nevada Revised Statutes, the corporation shall, and hereby
does, create a series of one million seven hundred thousand
shares (1,700,000) of its Preferred Stock, to be and hereby known
as the Series B Preferred Stock; and
RESOLVED FURTHER, that the rights, preferences, privileges and
restrictions granted to or imposed upon the Series B Preferred
Stock shall be, and hereby are, as follows:
RIGHTS, PREFERENCES, AND PRIVILEGES OF SERIES B PREFERRED STOCK
1. No voting rights. Except as otherwise required by law or
Section 5 hereof, the holders of Series B preferred stock issued
and outstanding shall not be entitled to vote on matters
submitted to the other shareholders of the corporation and shall
not have the right to vote separately as a class on such matters.
2. Dividends. The holders of the Series B preferred stock shall
be entitled, when, as and if declared by the board of directors
of the corporation, to noncumulative dividends in such amount as
may be determined from time to time by the board of directors,
such dividends to be paid out of funds legally available
therefore. No dividend or distribution shall be declared or paid
on any shares of common stock (other than dividends payable
solely in common stock of the corporation) unless at the same
time an equivalent dividend or distribution is paid or declared
and set aside for payment on the Series B preferred stock (on an
as-if converted to common stock basis).
3. Liquidation preference. In the event of any liquidation,
dissolution, or winding up of the corporation, either voluntary
or involuntary, distributions to shareholders of the corporation
shall be made in the following manner:
(a) the holders of the Series B preferred stock shall be entitled
to receive, prior and in preference to any distribution of any of
the assets or surplus funds of the corporation to the holders of
the common stock, but after any such distribution to holders of
the series A preferred stock, by reason of their ownership of
such shares, an amount equal to $1.25 for each share of Series B
preferred stock then held by them plus all declared but unpaid
dividends on such shares, minus an amount equal to all dividends
per share on the Series B preferred stock paid since the day to
such shares were issued (the "Original Issuance Date") that were
not also paid with respect to the common stock. If the assets
and funds thus distributed among the holders of the Series B
preferred stock shall be insufficient to permit the payment to
such holders of the full preferential amount, then the entire
assets and funds of the corporation legally available for such
distribution shall be distributed among the holders of the Series
B preferred stock in proportion to the shares of Series B
preferred stock then held by them. After payment has been made
to the holders of the Series A preferred stock and Series B
preferred stock of full amounts as to which they shall be
entitled as aforesaid, the holders of the common stock should be
entitled to receive ratably all the remaining assets.
(b) for purposes of this paragraph 3, (i) a merger or
consolidation of the corporation with or into any other
corporation or corporations, or (ii) the merger of any other
corporation or corporations into the corporation, as a result of
which consolidation or merger (A) the shareholders of the
corporation receive distributions in cash or securities of
another corporation or corporations as a result of such
consolidation or merger or (B) the shareholders of the
corporation shall own less than fifty percent (50%) of the voting
securities of the surviving corporation, or (iii) a sale of all
or substantially all of the assets of the corporation, shall be
treated as a liquidation, dissolution or winding up of the
corporation
(c) any securities to be delivered to the holders of the Series B
preferred stock pursuant to paragraph 3(b) below shall be valued
as follows:
(i) If traded on a Securities Exchange, the value shall be deemed
to be the average of the closing prices three (3) days prior to
the closing;
(ii) If actively traded over-the-counter, the value shall be
deemed to be the average of the closing bid or sale prices
(whichever are applicable) over the 30-day period ending three
(3) days prior to the closing, and
(iii) If there is no active public market, the value shall be the
fair market value thereof, as mutually determined by the
corporation and the holders of the Series B preferred stock who
would be entitled to receive such securities or the same type of
securities and whose Series B preferred stock represents at least
a majority voting power of all then outstanding shares of such
series B preferred stock.
4. Conversion. The holders of the Series B preferred stock shall
have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series B preferred stock
shall be convertible, at the option of the holder thereof, at any
time after the date of issuance of such share at the office of
the corporation or any transfer agent for the Series B preferred
stock. Each share of Series B preferred stock shall be
convertible into one (1) share of fully paid and nonassessable
Common Stock,
(b) Mechanics of Conversion. Before any holder of Series B
Preferred Stock shall be entitled to convert the same into full
shares of common stock and receive certificates therefore, he or
she shall surrender the certificate or certificates, duly
endorsed, at the office of the corporation or of any transfer
agent for the Series B Preferred Stock and shall give written
notice to the corporation at such office that such holder elects
to convert. The corporation shall issue certificates evidencing
the shares of common stock issuable upon such conversion if the
holder notifies the corporation or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the corporation to indemnify the
corporation from any loss incurred by it. The Corporation shall,
as soon as practicable after such delivery, or such agreement of
indemnification in the case of a lost certificate, issue and
deliver at such office to such holder of Series B preferred
stock, a certificate or certificates for the number of shares of
common stock to which the holder shall be entitled as aforesaid
and a check payable to the holder in the amount of any cash
amounts payable in lieu of conversion into fractional shares of
Common Stock as set forth below. Such conversion shall be deemed
to have been made immediately prior to the close of business on
the date of such surrender of the shares of Series B Preferred
Stock to be converted, and the person or persons entitled To
receive the shares of common stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders
of such shares of common stock on such date.
(c) Fractional Shares. In lieu of any fractional shares to which
the holder of Series B Preferred Stock would otherwise be
entitled, the corporation shall pay cash equal to such a fraction
multiplied by the fair market value of one share of common stock,
as determined in the sole discretion of the board of directors of
the corporation. Whether or not fractional shares would be
issuable upon such conversion shall be determined on the basis of
the total number of shares of Series B Preferred Stock at the
time converting and the number of shares of common stock issuable
upon such aggregate conversion.
(d) No Impairment. The corporation will not through any
reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or
performed hereunder by the corporation, but will at all times in
good faith assist in the carrying out of all the provisions of
this paragraph 4 and in the taking of all such action as may be
necessary or appropriate in order to protect the Conversion
Rights of the holders of Series B Preferred Stock against
impairment. This provision shall not restrict the corporation's
right to amend its Articles of Incorporation with the requisite
shareholder consent.
(e) Notices of Record Date. In the event that the corporation
shall propose at any time:
(i) to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock or other securities,
whether or not a regular cash dividend and whether or no out of
earnings or earned surplus;
(ii) to offer for subscription pro rata to the holders of any
class or series of its stock any additional shares of stock of
any class or series or other rights;
(iii) to effect any reclassification or recapitalization of its
Common Stock outstanding involving a change in the Common Stock;
or
(iv) to merge or consolidate with or into any other corporation
or sell, lease or convey all or substantially all its property or
business, or to liquidate, dissolve or wind up;
then, in connection with each such event, the corporation shall
send to the holders of the Series B Preferred Stock:
(A) at least 10 days' prior written notice of the date on which a
record shall be taken for such dividend, distribution or
subscription rights (and specifying the date on which the holders
of Common Stock shall be entitled thereto and the amount and
character of such dividend, distribution or right) or for
determining rights to vote in respect of the matters referred to
in (iii) and (iv) above; and
(B) in the case of the matters referred to in (iii) and (iv)
above, at least 20 days' prior written notice of the date when
the same shall take place (and specifying the date on which the
holders of Common Stock shall be entitled to exchange their
Common Stock for securities or other property deliverable upon
the occurrence of such event or the record date for the
determination of such holders if such record date is earlier).
Each such written notice shall be delivered personally or given
by first class mail, postage prepaid, addressed to the holders of
the Series B Preferred Stock at the address for each such holder
as shown on the books of the corporation.
(f) Reservation of Stock Issuable Upon Conversion. The
corporation shall at all times reserve and keep available out of
its authorized but unissued shares of Common Stock solely for the
purpose of effecting the conversion of the shares of Series B
Preferred Stock such number of shares of its Common Stock as
shall from time to time be sufficient to effect the conversion of
all outstanding shares of Series B Preferred Stock; and if at any
time the number of authorized but unissued shares of Common Stock
shall not be sufficient to effect the conversion of all then
outstanding shares of Series B Preferred Stock, the corporation
will take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be
sufficient for such purpose.
(g) Reissuance of Converted or Contributed Shares. In case any
shares of Series B Preferred Stock are converted into Common
Stock pursuant to Section 4 hereof or contributed back to the
corporation, after the Original Issue Date of such shares, all
such shares so converted or contributed shall, upon such
conversion or contribution, resume the status of authorized, but
undesignated and unissued, shares of Preferred Stock.
5. Protective Provisions. In addition to any other right provided
by law, so long as any Series B Preferred Stock shall be
outstanding, this corporation shall not, without first obtaining
the vote or written consent of the holders of not less than a
majority of such outstanding shares of Series B Preferred Stock:
(a) amend or repeal any provision of, or add any provision to,
this corporation's Articles of Incorporation or bylaws if such
action would alter or change materially and adversely the
preferences, rights, privileges or powers of, or the restrictions
provided for the benefit of, the Series B Preferred Stock;
(b) authorize or issue shares of any class or series of stock (or
securities convertible into or exchangeable for such stock)
having any rights, preferences or privileges superior to or on a
parity with any such rights, preferences or privileges of the
Series B Preferred Stock; or
(c) authorize a sale or transfer of all or substantially all of
the assets of the corporation or a merger or consolidation of the
corporation if, as a result of such merger or consolidation, the
shareholders of the corporation shall own less than fifty percent
(50%) of the voting securities of the surviving corporation.
IN WITNESS WHEREOF, Casino Airlink, Inc. has caused its corporate
seal to be hereunto affixed and this certificate to be signed by
William Forhan, its President and Secretary, and by Ellen Forhan,
its Chief Financial Officer, this 11th day of December, 1996.
By: /s/ William Forhan
William Forhan, President and Secretary
By: /s/ Ellen Forhan
Ellen Forhan, Chief Financial Officer
CASINO AIRLINK, INC.
1996 Stock Option Plan
GRANT OF INCENTIVE STOCK OPTION
Date of Grant: January 18, 1997.
THIS GRANT, dated as of the date of grant first stated above (the
"Date of Grant"), is delivered by Casino Airlink, Inc. a Nevada
corporation (the "Company") to William E. Forhan (the "Grantee"),
who is an employee or officer of the Company or one of its
subsidiaries (the Grantee's employer is sometimes referred to
herein as the "Employer").
WHEREAS, the Board of Directors of the Company (the "Board")
January 17, 1997, adopted, with subsequent stockholder approval,
the Company's 1996 Stock Option Plan (the "Plan");
WHEREAS, the Plan provides for the granting of incentive stock
options by the Board to directors, officers and key employees of
the Company or any subsidiary of (excluding directors and
officers who are not employees) to purchase, or to exercise
certain rights with respect to, shares of the Common Stock of the
Company, $0.10 par value (the "Stock"), in accordance with the
terms and provisions thereof; and
WHEREAS, the Board considers the Grantee to be a person who is
eligible for a grant of incentive stock options under the Pian,
and has determined that it would be in the best interest of the
Company to grant the incentive stock options documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Grant of Option.
Subject to the terms and conditions hereinafter set forth, the
Company, with the approval and at the direction of the Board,
hereby grants to the Grantee, as of the Date of Grant, an option
to purchase up to two million (2,000,000) shares of Stock at a
price of $0.30 per share, the fair market value of such shares on
the date of grant. Such option is hereinafter referred to as the
"Option" and the shares of stock purchasable upon exercise of the
Option are hereinafter sometimes referred to as the "Option
Shares." The Option is intended by the parties hereto to be, and
shall be treated as, an incentive stock option (as such term is
defined under section 422 of the Internal Revenue Code of 1986).
2. Installment Exercise.
Subject to such further limitations as are provided herein, the
Option shall become exercisable in five (5) installments, the
Grantee having the right hereunder to purchase from the Company
the following number of Option Shares upon exercise of the
Option, on and after the following dates, in cumulative fashion:
(a) on and after the Date of Grant, up to one-fifth (ignoring
fractional shares) of the total number of Option Shares;
(b) on and after the first anniversary of the Date of Grant, up
to an additional one-fifth (ignoring fractional shares) of the
total number of Option Shares;
(c) on and after the second anniversary of the Date of Grant, up
to an additional one-fifth (ignoring fractional shares) of the
total number of Option Shares; and
(d) on and after the third anniversary of the Date of Grant, up
to an additional one-fifth (ignoring fractional shares) of the
total number of Option Shares; and
(e) on and after the fourth anniversary of the Date of Grant,
the remaining Option Shares.
3. Termination of Option.
(a) The Option and all rights hereunder with respect thereto, to
the extent
such rights shall not have been exercised, shall terminate and
become null and void after the expiration of ten (10) years from
the Date of Grant (the "Option Term").
(b) Upon the Occurrence of the Grantee's ceasing for any reason
to be employed by the Employer (such occurrence being a
"termination of the Grantee's employment"), the Option, to the
extent not previously exercised, shall terminate and become null
and void at the close of business on the thirtieth (30") day
following the date of termination of Grantee's employment, except
in a case where the termination of the Grantee's employment is by
reason of retirement, disability or death.
Upon a termination of the Grantee's employment by reason of
retirement, disability or death, the Option i-nay be exercised
during the following periods, but only to the extent that the
Option was outstanding and exercisable on any such date of
retirement, disability or death: (i) the one-year period
following the date of such termination of the Grantee's
employment in the case of a disability (within the meaning of
Section 22(e) (3) of the Code); (ii) the six-month period
following the date of issuance of letters testamentary or letters
of administration to the executor or administrator of a deceased
Grantee, in the case of Grantee's death during his employment by
the Employer, but not later than one year after the Grantee's
death; and (iii) the three-month period following the date of
such termination in the case of retirement on or after attainment
of age 65, or in the case of disability other than as described
in (i) above. In no event, however, shall any such period extend
beyond the Option Term.
(c) In the event of the death of the Grantee, the Option may be
exercised by the Grantee's legal representative(s), but only to
the extent that the Option would otherwise have been exercisable
by the grantee.
(d) A transfer of the Grantee's employment between the Company
and any subsidiary of the Company, or between any subsidiaries of
the Company, shall not be deemed to be a termination of the
Grantee's employment.
(e) Notwithstanding any other provisions set forth herein or in
the Plan, if the grantee shall (i) commit any act of malfeasance
or wrongdoing affecting the Company or any subsidiary of the
Company, (ii) breach any covenant not to compete, or employment
contract, with the Company or any subsidiary of the Company, or
(iii) engage in conduct that would warrant the Grantee's
discharge for cause (excluding general dissatisfaction with the
performance of the Grantee's duties, but including any act of
disloyalty or any conduct clearly tending to bring discredit upon
the Company or any subsidiary of the Company) any unexercised
portion of the Option shall immediately terminate and be void.
4. Exercise of Option.
(a) The Grantee may exercise the Option with respect to all or
any part of the number of Option Shares then exercisable
hereunder by giving the Secretary of the Company written notice
of intent to exercise. The notice of exercise shall specify the
number of Option Shares as to which the Option is to be exercised
and the date of exercise thereof, which date shall be at least
five (5) days after the giving of such notice unless an earlier
time shall have been mutually agreed upon.
(b) Full payment (in U.S. dollars) by the Grantee of the option
price for the Option Shares purchased shall be made on or before
the exercise date specified in the notice of exercise in cash,
or, with the prior written consent of the Board, in whole or in
part through the surrender of previously acquired shares of Stock
at their fair market value on the exercise date.
On the exercise date specified in the Grantee's notice or as soon
thereafter as is practicable, the Company shall cause to be
delivered to the Grantee, a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued
Stock or reacquired Stock, as the Company may elect) upon full
payment for such Option Shares. The obligation of the Company to
deliver Stock shall, however, be subject to the condition that if
at any time the Board shall determine in its discretion that the
listing, registration or qualification of the Option or the
Option Shares upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or
in connection with, the Option or the issuance or purchase of
Stock thereunder, the Option may not be exercised in whole or in
part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any
conditions not acceptable to the Board.
(c) If the Grantee fails to pay for any of the Option Shares
specified in such notice or fails to accept delivery thereof, the
Grantee's right to purchase such Option Shares may be terminated
by the Company. The date specified in the Grantee's notice as
the date of exercise shall be deemed the date of exercise of the
Option, provided that payment in full for the Option Shares to be
purchased upon such exercise shall have been received by such
date.
5. Adjustment of and Changes in Stock of the Company.
In the event of a reorganization, recapitalization, change of
shares, stock split, spin-off, stock dividend, reclassification,
subdivision or combination of shares, merger, consolidation,
rights offering, or any other change in the corporate structure
or shares of capital stock of the Company, the Board shall make
such adjustment as it deems appropriate in the number and kind of
shares of Stock subject to the Option or in the option price;
provided, however, that no such adjustment shall give the Grantee
any additional benefits under the Option.
6. Fair Market Value.
As used herein, the "fair market value" of a share of Stock shall
be the average of the high and low sale prices per share of Stock
on the stock exchange, composite tape or other recognized market
source, as determined by the Board, on the applicable date of
reference hereunder, or if there is no sale on such date, then
the average of such high and low sale prices on the last previous
day on which a sale is reported. In the event there is no
established trading market for the Stock on any date as to which
fair market value must be established, the Board shall determine
the fair market value in the exercise of its good faith business
judgment, and such determination shall be final and binding for
all purposes hereunder.
7. No Rights of Stockholders.
Neither the Grantee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of
the Company with respect to any shares of Stock purchasable or
issuable upon the exercise of the Option, in whole or in part,
prior to the date of exercise of the Option.
8. Non-Transferability of Option.
During the Grantee's lifetime, the Option hereunder shall be
exercisable only by the Grantee or any guardian or legal
representative of the Grantee, and the Option shall not be
transferable except, in case of the death of the Grantee, by will
or the laws of descent and distribution, nor shall the Option be
subject to attachment, execution or other similar process. In
the event of (a) any attempt by the Grantee to alienate, assign,
pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution
or similar process upon the rights or interest hereby conferred,
the Company may terminate the Option by notice to the Grantee and
it shall thereupon become null and void.
9. Employment Not Affected.
Neither the granting of the Option nor its exercise shall not be
construed as granting to the Grantee any right with respect to
continuance of employment of the Employer. Except as may
otherwise be limited by a written agreement between the Employer
and the Grantee, the right of the Employer to terminate at will
the Grantee's employment at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by
the Company, as the Employer or on behalf of the Employer
(whichever the case may be). Such right is hereby acknowledged
by the Grantee.
10. Amendment of Option.
The Option may be amended by the Board at any time (i) if the
Board determines, in its sole discretion, that amendment is
necessary or advisable in the light of any addition to or change
in the Internal Revenue Code of 1986 or in the regulations issued
thereunder, or any federal or state securities law or other law
or regulation, which change occurs after the Date of Grant and by
its terms applies to the Option; or (ii) other than in the
circumstances described in clause (i), with the consent of the
Grantee.
11. Notice.
Any notice to the Company provided for in this instrument shall
be addressed to it in care of its Secretary at its executive
offices at 888 E. Las Olas Blvd., Suite 700, Fort Lauderdale, FL
33301, and any notice to the Grantee shall be addressed to the
Grantee at the current address shown on the payroll records of
the Employer. Any notice shall be deemed to be duly given if and
when properly addressed and posted by registered or certified
mail, postage prepaid.
12. Incorporation of Plan by Reference.
The Option is granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and the
Option shall in all respects be interpreted in accordance with
the Plan. The Board shall interpret and construe the Plan and
this instrument, and its interpretations and determinations shall
be conclusive and binding on the parties hereto and any other
person claiming an interest hereunder, with respect to any issue
arising hereunder or thereunder.
13. Governing, Law.
The validity, construction, interpretation and effect of this
instrument shall exclusively be governed by and determined in
accordance with the law of the State of Nevada, except to the
extent preempted by federal law.
IN WITNESS WHEREOF, the Company has caused its duly authorized
officers to execute and attest this Grant of Incentive Stock
Option, and to apply the corporate seal hereto, and the Grantee
has placed his or her signature hereon, effective as of the Date
of Grant.
CASINO AIRLINK, INC.
By: /s/ William Forhan
William Forhan
President
Attest:
By: /s/ Ellen Forhan
Secretary
ACCEPTED AND AGREED TO:
By: /s/ William Forhan
Grantee
UNANIMOUS WRITTEN CONSENT
OF THE DIRECTORS OF
CASINO AIRLINK, INC.
The undersigned, constituting all of the directors of Casino
Airlink, Inc. (the "corporation") acting pursuant to the
authority of Section 78.315.2 of the Nevada Revised Statutes,
hereby consent to the adoption of the following resolutions, to
have the same force and effect as if duly adopted at a meeting
duly noticed and held:
Grant of Incentive Stock 0ptions To James Muldowney
WHEREAS, the board of directors believes it to be in the best
interest of the corporation to grant incentive stock options to
James Muldowney, under the 1996 stock option plan, in order to
ensure his commitment to the success of the corporation, to
secure his efforts to effect the profitable operation of the
corporation in the near future, and to provide an ongoing forward
looking incentive to his performance,
NOW, THEREFORE, BE IT RESOLVED, that the corporation shall and
hereby does grant to James Muldowney options to purchase up to a
total of four hundred thousand (400,000) shares of the
corporation's stock, as specified in detail and subject to the
limitations, restrictions and specifications set forth in the
Grant of Incentive Stock Option, dated as of the same date as and
accompanying these resolutions.
RESOLVED FURTHER, that such options shall be exercisable at the
price of $0.21 per share, the fair market value of the
corporation's stock as of December 31, 1997.
RESOLVED FURTHER, that the President and such other officers of
the corporation as he may designate be, and each hereby is,
authorized, directed and empowered (or in the event any such
action has already been taken it is ratified and confirmed), for
and on behalf of the corporation, to execute all other documents
and to take such other action as they may deem necessary or
advisable in order to carry out and perform the purposes of these
resolutions.
Date: January 18, 1998.
/s/ William Forhan
William Forhan, Director
/s/ Ellen Forhan
Ellen Forhan, Director
WARRANT TO PURCHASE
COMMON STOCK
OF
INTEGRATED MARKETING PROFESSIONALS, INC.
(formerly known as Casino Airlink, Inc.)
This is to certify that Joseph Charles & Associates, Inc.
(the "Holder") is entitled, subject to the terms and
conditions hereinafter set forth, to purchase Six Hundred
Forty Three Thousand Three Hundred Thirty Three (643,333)
shares (the "Common Shares") of Common Stock, $.001 par
value per share (the "Common Stock"), of INTEGRATED
MARKETING PROFESSIONALS, INC. (formerly known as Casino
Airlink, Inc.), a Nevada corporation (the "Company"), from
the Company at the price per share and on the terms set
forth herein and to receive a certificate for the Common
Shares so purchased on presentation and surrender to the
Company with the subscription form attached, duly executed
and accompanied by payment of the purchase price of each
share purchased either in cash or by certified or bank
cashier's check or other check payable to the order of the
Company.
Exercise
The purchase rights represented by this Warrant are
exercisable at a price per Common Share of Forty Four Cents
($0.44), beginning April 21, 1998 and for a period of five
(5) years thereafter, subject to adjustment as hereinafter
provided.
The purchase rights represented by this Warrant are
exercisable at the option of the registered owner hereof in
whole or in part, from time to time, within the period
specified; provided, however, that such purchase rights
shall not be exercisable with respect to a fraction of a
Common Share. In case of the purchase of less than all of
the Common Shares purchasable under this Warrant, the
Company shall cancel this Warrant n surrender hereof and
shall execute and deliver a new Warrant of like tenor and
date for the balance of the shares purchasable hereunder.
The Company agrees at all times to take appropriate action
to reserve or hold available a sufficient number of Common
Shares to cover the number of shares issuable on exercise of
this and all other Warrants of like tenor then outstanding.
The Company agrees to obtain any authorization required from
its shareholders in order to amend its Articles of
Incorporation to increase the authorized capitalization to
permit the exercise of this Warrant and other Warrants of
like tenor.
No Voting Rights
This Warrant shall not entitle the holder hereof to any
voting rights or other rights as a shareholder of the
Company, or to any other rights whatever except the rights
herein expressed, and no dividends shall be payable or
accrue in respect of this Warrant or the interest
represented hereby or the Common Shares purchasable
hereunder until or unless, and except to the extent that,
this Warrant shall be exercised.
Adjustments
The number of shares of Common Stock purchasable upon
exercise of this Warrant and the Purchase Price shall be
subject to adjustments from time to time as follows:
If the Company shall at any time prior to the expiration of
this Warrant subdivide or combine its Common Stock, by
forward or reverse stock split or otherwise, or issue
additional shares of its Common Stock as a dividend with
respect to any shares of its Common Stock, the number of
Common Shares issuable upon exercise of the Warrant shall
forthwith the proportionately increased or decreased.
Appropriate adjustments shall also be made to the purchase
price, but the aggregate purchase price payable for the
total number of Common Shares purchasable under this Warrant
(as adjusted) shall remain the same. Any adjustments under
this paragraph shall become effective at the close of
business on the date the subdivision or combination becomes
effective or as of the record date of such dividend, or in
the event that no record date is fixed, upon the making of
such dividend.
In the event of any reclassification, capital reorganization
or other change in the Common Stock of the Company or in the
event of any sale of all or substantially all of the
Company's assets or any merger, consolidation or
restructuring to which the Company is a party in which the
Company's stockholders before the transaction or series of
transactions hold less than 50% of the voting power of the
surviving entity immediately after the transaction or series
of transaction (other than as a result of a subdivision,
combination or stock dividend provided for above), lawful
provision shall be made, and duly executed documents
evidencing the same shall be made and shall be delivered to
the Holder in substitution for the Holder's rights under
this Warrant, so that the Holder shall have the right at any
time and from time to time prior to the expiration of this
Warrant to purchase at a total price equal to that payable
upon exercise of this Warrant immediately prior to such
event, the kind and amount of shares of stock or other
securities or property receivable in connection with such
reclassification, reorganization or change by a Holder of
same number of shares of Common Stock as were purchasable by
the Holder immediately prior to such reclassification,
reorganization or change. In any such case, appropriate
provisions shall be made with respect to the rights and
interest of the Holder so that the provisions hereof shall
hereafter be applicable with respect to any shares of stock
or other securities or property deliverable upon exercise
hereof, and appropriate adjustment shall be made to the
purchase price per Common Shares payable hereunder, provided
the aggregate purchase price shall remain the same.
Upon, any adjustments of the number of Common Shares
issuable upon exercise of this Warrant or the purchase price
pursuant to this paragraph, the Company within thirty (30)
days thereafter shall cause to be prepared a certificate of
the Chief Financial or Accounting Officer of the company
setting forth the number of Common Shares issuable upon
exercise of this Warrant and the purchase price after such
adjustments, and setting forth in reasonable detail the
method of calculation used and cause a copy of such
certificate to be mailed to the Holder of the Warrant.
In the event of dissolution, liquidation, merger or
combination of the Company in which the Company is not a
surviving corporation, this Warrant shall terminate, but the
registered owner of this Warrant shall have the right,
immediately prior to such dissolution, liquidation, merger
or combination, to exercise this Warrant in whole or in
part, to the extent that it shall not have theretofore been
exercised.
The foregoing adjustments and the manner of application of
the foregoing provisions may provide for the elimination of
fractional share interests.
Registration Rights
The Company has agreed to grant the Holders of the Common
Shares issued upon exercise of the Warrants evidenced
hereby, "piggyback" registration rights in connection with a
registration statement (the "Registration Statement")
subsequently filed by the Company with the Securities and
Exchange Commission (the "SEC"), whereby the company seeks
to register shares of its Common Stock for sale to the
public, for the account of the Company or any of its
principal shareholders. The Company will undertake to
include in any such Registration Statement, subject to the
approval of the Underwriter, and in a registration statement
other than Form S-8, S-4 or comparable, the Common Shares
issued upon exercise of the Warrants. The Company has
agreed to pay form, all costs and expenses incident to the
issuance, offer, sale and delivery of the Common Shares,
including, but not limited to, all expenses and fees of
preparing, filing and printing the Registration Statement
and Prospectus and related exhibits, amendments and
supplements thereto and mailing of such items. However, the
Company will not pay selling commissions and expenses
associated with the Holders' sale of Common Shares, nor
shall the company pay transfer taxes in connection with such
sale of the Common Shares or fees and expenses of the
Holders' counsel. The Company has agreed to indemnify the
selling security Holders against civil liabilities including
liabilities under the Securities Act of 1933.
The Holders will be required to furnish certain information
to the Company and to indemnify the Company against certain
civil liabilities, including liabilities arising under the
Act with respect to such information. There can be no
assurance that any such registration statement will become
effective under the Act.
Indemnification
When pursuant hereto a Registration Statement registering
the resale of Common Shares or this Warrant is filed under
the Act, amended or supplemented by the Company will
indemnify and hold harmless each Holder of the Common Shares
and Warrant covered by such Registration Statement,
amendment or supplement and each person, if any, who
controls (within the meaning of the Act) the Holder, and
each underwriter (within the meaning of the Act) of such
securities and each person, if any, who controls (within the
meaning of the Act) any such underwriter, against any
losses, claims, damages or liabilities, joint or several, to
which the Holder, any such controlling person or any such
underwriter may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities, or
actions in resect thereof, arise out of or are based upon
any untrue statement or alleged untrue statement of any
material fact contained in any such Registration Statement
or any preliminary prospectus or final prospectus
constituting a part thereof or any amendment or supplement
thereto, or arising out of or based upon the omission or the
alleged omission to state therein a material fact required
to be stated therein or necessary to make the statement
therein not misleading and will reimburse the Holder or such
controlling person or underwriter in connection with
investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Company
will not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in said Registration
Statement, said preliminary prospectus, and final prospectus
or said amendment or supplement in reliance upon and in
conformity with written information furnished by such Holder
or any other Holder for use in the preparation thereof.
The Holder will indemnify and hold harmless the Company,
each of its directors, each of its officers who have signed
said Registration Statement and such amendments and
supplements thereto, and each person, if any, who controls
the Company (within the meaning of the Act) against any
losses, claims, damages or liabilities, joint or several, to
which the Company or any such director, officer or
controlling person may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or
liabilities, or actions in respect thereof, arise out of or
are based upon the omission or the alleged omission to the
state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading,
in each case to extent, but only to the extent, that such
loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or
omission or alleged omission made in Registration Statement,
said preliminary prospectus, and said final prospectus or
said amendment or supplement in reliance upon and in
conformity with written information furnished by such Holder
for use in preparation thereof; and will reimburse the
Company or any such director, officer or controlling person
for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss,
claim, damage, liability or action.
Promptly after receipt by an indemnified party under this
paragraph of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to
be made against any indemnifying party, give the
indemnifying party notice of the commencement thereof, but
the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any
indemnified party otherwise than under this paragraph.
In case any such action is brought against any indemnified
party, and it notices an indemnifying party of the
commencement thereof, the indemnifying party will be
entitled to participate in and, to the extent that it may
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party (however,
in the event of disagreement as to the selection of counsel,
the indemnified party shall have the right to select such
counsel), and after notice from the indemnifying party will
not be liable to such indemnified party under this paragraph
for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. Any
settlement of such action shall require the indemnifying
party's consent, which shall not be unreasonably withheld.
MISCELLANEOUS
The Company shall not be required to issue or deliver any
certificate for Common Shares purchased on exercise of this
Warrant or any portion thereof to fulfillment of all the
following conditions:
(a) The completion of any registration or other
qualifications of such shares under any federal law or under
the rulings or regulations of the Securities and Exchange
Commission or any other government regulatory body which is
necessary;
(b) The obtaining of any approval or other clearance from
any federal or state government agency which is necessary;
(c) The obtaining from the registered owner of the Warrant
a representation in writing that the owner is acquiring such
Common Shares for the owner's own account for investment and
not with a view to, or for sale in connection with, the
distribution of any part thereof, if the Warrants and the
related shares have not been registered under the Act; and;
(d) The placing on the certificate of an appropriate legend
and the issuance of stop transfer instructions in connection
therewith if this Warrant and the related, Common Shares
have not been registered under the Act to the following
effect;
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS
OF ANY STATE AND HAVE BEEN ISSUED PURSUANT TO AN EXEMPTION
FROM REGISTRATION PERTAINING TO SUCH SECURTIES AND PURSUANT
TO A REPRESENTATION BY THE SECURITY HOLDER NAMED HEREON THAT
SAID SECURITIES HAVE BEEN ACQUIRED FOR PURPOSES OF
INVESTMENT AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF REGISTRATION.
FURTHERMORE, NO OFFER, SALE, TRANSFER, PLEDGE OR
HYPOTHECATION IS TO TAKE ACCORDANCE WITH THE ABOVE
INSTRUCTIONS."
The Company may make any changes or corrections in the
Warrant (i) that it shall deem appropriate to cure any
ambiguity or to correct any defective or inconsistent
provision or manifest mistake or error herein contained; or
(ii) that it may deem necessary or desirable and which shall
not adversely affect the interest of the Holder; provided,
however, that this Warrant shall not otherwise be modified,
supplemented or altered in any respect except with the
consent in writing of the Holders representing no less than
50% of the Warrants then outstanding; and provided, further,
that no change in the number or nature of the securities
purchasable upon the exercise of any Warrant, or any
increase in the purchase price therefor, or any shortening
of the Warrant exercise period shall be made without the
consent in writing of the Holders representing such Warrant,
other than such changes as are specifically prescribed by
this Warrant as originally executed.
The terms and provisions of this Warrant shall inure to the
benefit of, and be binding upon, the Company and its
successors and assigns.
IN WITNESS WHEREOF, the Company has caused this Warrant to
be executed by the signature of its duly authorized officer.
INTEGRATED MARKETING PROFESSIONALS, INC.
By: /s/ William Forhan
William Forhan, President
Dated:
SUBSCRIPTION FORM
(To be executed by the registered holder to exercise the
rights to purchase Common Shares evidenced by the within
Warrant.)
Integrated Marketing Professionals, Inc.
888 Las Olas Blvd.
Fort Lauderdale, FL 33301
Gentlemen:
The undersigned hereby irrevocably subscribes for Common
Shares pursuant to and in accordance with the terms and
conditions of this Warrant, and herewith makes payment of $
therefor, and requests that a certificate for such Common
Shares be issued in the name of the undersigned and be
delivered to the undersigned at the address stated below,
and if such number of shares shall not be all of the shares
purchasable hereunder, that a new Warrant of like tenor for
the balance of the remaining Common Shares purchasable
hereunder shall be delivered to the undersigned at the
address stated below.
Dated: Signed:
Address:
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of January, 1998
(the "Commencement Date") by and among Integrated Marketing
Professionals, Inc., a Nevada Corporation (hereinafter the
"Company"), and William Forhan an individual residing in Florida
("Employee");
RECITAL
WHEREAS, the Company desires to retain the services of Employee
and Employee is willing to continue employment by Company, on the
terms and subject to the conditions set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, the parties as follows:
Section 1. As used in this Agreement, the following terms shall
have the meanings set forth below:
"Affiliate" shall mean a corporation which, directly or
indirectly, controls, is controlled by or is under common control
with the Company, or which is a successor in interest to the
Company, and for purposes hereof, "control" shall mean the
ownership of 20% or more of the voting shares of the corporation
in question.
"Basic Salary" shall have the meaning assigned to it in Section 5
of this Agreement.
"The Business" shall mean the business conducted by the Company
in the past and on the date of execution of this Agreement,
including business Activities under investigation or in
developmental stages, all other business activities which flow
therefrom by a reasonable expansion of the present activities of
the Company, all business activities which may be developed by
the Company during the Term, and all business activities now
conducted by the Company or any Affiliate thereof or which may be
developed by the Company or such Affiliates, during the term of
this Agreement, as reasonable expansions of their present
activities.
"Commencement Date" shall be the effective date of this
Agreement, as stated on page 1.
"Confidential Information" shall include, without limitation,
trade "know-how," trade secrets, subscriber, advertiser and
customer lists, pricing policies, operational methods, methods of
doing business, technical processes, formulae, designs and design
projects, inventions, research projects, and other business
affairs of the Company or its Subsidiaries and Affiliates, which
(i) were, in the case of the Company, or is or are designed to be
used in or are or may be useful in connection with the business
of the Company or any Subsidiary or Affiliate thereof, or which,
in the case of any of these entities, results from any of the
research or development activities of any such entity, which (ii)
is private or confidential in that it is not generally known or
available to the public, except as the result of unauthorized
disclosure by or information supplied by Employee or (iii) which
gives the Company or any Subsidiary or Affiliate of the Company
an opportunity or the possibility of obtaining an advantage over
competitors who may not know or use such information or who are
not lawfully permitted to use the same.
"Employment Year" shall mean each twelve-month period, or part
thereof, during which Employee is employed hereunder, commencing
on the Commencement Date or on January I of any subsequent
calendar year, the first such subsequent Employment Year being
the twelve-month period which will begin on January 1, 1998.
"Fiscal Quarter" shall mean each four-month period, or part
thereof, during which Employee is employed hereunder, commencing
on the Commencement Date or on January I of any subsequent
calendar year, the first such subsequent Fiscal Quarter being the
four-month period which will begin on January 1, 1998.
"Incentive Bonus" shall have the meaning assigned to it in
Section 6.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit
corporation, entity or government (whether Federal, state,
county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or
department thereof).
"Restricted Period" shall mean the term of employment of Employee
under this Agreement or any extension thereof and the twelve-
month month period thereafter, or such shorter period as may be
provided pursuant to any sections of this Agreement; provided,
however, that the Restricted Period shall terminate immediately
upon the occurrence of any termination of the employment of
Employee by the Company other than pursuant to this Agreement or
as authorized by law.
"Subsidiary" shall mean a corporation, 50% or more of the
outstanding voting shares of which is owned or controlled
directly or indirectly by the Company.
"Term" shall mean the term of employment of Employee under this
Agreement.
"Termination Date" shall have the meaning assigned to it in
Section 8.
"Termination Payment" shall have the meaning assigned to it in
Section 8.
Wherever from the context it appears appropriate, each word or
phrase stated in either the singular or the plural shall include
the singular and the plural and each pronoun stated in the
masculine, feminine or neuter gender shall include the masculine,
feminine and neuter.
Section 2. Employment and Duties of Employee.
2.1. Employment; Title, Duties. The Company hereby employs
Employee, and Employee
hereby accepts appointment as, and his election as, President and
Chief Executive Officer of the Company. The principal duty of
Employee shall be to serve in such capacities. In such
capacities, Employee shall render such services as are necessary
and desirable to protect and advance the best interests of the
Company, acting, in all instances, under the supervision of and
in accordance with the policies set by the Board of Directors.
2.2. Place of Employment. The principal place of employment of
Employee shall be 888 E. Las Olas Blvd., Suite 700, Fort
Lauderdale, Florida, 33301, or such other location as is
consented to by Employee and the Company. It is however
distinctly understood and agreed that Employee may be required in
connection with the performance of his duties, to work from time
to time at other locations designated by the Board of Directors
or as required in connection with the Business of the Company.
When required to travel to and/or spend time at such other
locations, Employee's reasonable traveling and temporary living
expenses shall be reimbursed to him by the Company, upon his
submittal of detailed written vouchers, supported by appropriate
documentation and subject to the general reimbursement policies
of the Company with respect to executive officers. Employee may
not be assigned duties that would require Employee to change his
principal residence to a location outside the state of Florida.
2.3. Performance of Duties. Employee shall devote his full
working time and efforts to the performance of his duties as an
executive of the Company and to the performance of such other
duties as are assigned him from time to time by the Board of
Directors of the Company. Employee shall not engage in or become
employed, directly or indirectly, in the commercial or
professional business of any other Person, without the prior
written consent of the Board of Directors of the Company, nor
shall he act as a consultant to or provide any services to,
whether on a remunerative basis or otherwise, the commercial or
professional business of any other Person, without such written
consent, which, in both instances, may be given or withheld by
the Board of Directors in its absolute discretion. Attention to
Employee's personal investments shall not be deemed to violate
this Subsection to the extent such attention does not constitute
the conduct of a separate business.
2.4. Services to the Company and/or its Affiliates. During the
term of this Agreement, it is understood that Employee may be
requested from time to time to provide assistance or consultative
or other services to, or to act temporarily as an Executive of an
Affiliate or Subsidiary of the Company. Employee shall perform
such services and, if elected as an officer or director of any
such other company, shall hold such office (and discharge its
duties) without additional compensation other than the
compensation set forth in this Agreement. During the term of
this Agreement, Employee shall also accept election or
appointment, and serve, during all or any part of the Term, as an
officer and director of any Subsidiary of the Company, and
perform the duties appropriate thereto, without additional
compensation other than as set forth in this Agreement.
Section 3. Term of Employment
The employment of Employee pursuant to this Agreement shall
commence as of the Commencement Date and end on the earlier to
occur of (i) January 1, 2008, or (ii) the first date on which
such employment is terminated in accordance with Section 10
hereof (the "Termination Date").
Section 4. Compensation and Benefits.
The Company shall pay Employee as compensation for all of the
services to be rendered by him hereunder during the Term, and in
consideration of the various restrictions imposed upon Employee
during the Term and the Restricted Period, and otherwise under
this Agreement, the Basic Salary and other benefits as provided
for and determined to Sections 5 to 10, inclusive, of this
Agreement.
Section 5. Basic Salary.
The Company shall pay Employee, as compensation for all of the
services to be rendered hereunder by him during the Term a salary
of one hundred ninety-nine thousand dollars ($199,000) per year
(the "Basic Salary"), payable in accordance with the regular
payroll practices of the Company for executives, less such
deductions or amounts as are required to be deducted or withheld
by applicable laws or regulations and less such other deductions
or amounts, if any, as are authorized by Employee. Such Basic
Salary may be increased but not decreased, from time to time in
the sole discretion of the Board of Directors.
Section 6. Incentive Bonus.
6.1. Obligation to Pay Incentive Bonus. Employee shall be
eligible to receive as additional compensation, 30 days after the
day the Board of Directors approves interim financial statements
for the last-ended Fiscal Quarter, a payment equal to five
percent (5%) of the Company's pre-tax net income for the last-
ended Fiscal Quarter for each Fiscal Quarter during the term be
after December 31, 1996 (the "Incentive Bonus"). It is the
intention of the parties that Employee's right to receive
Incentive Bonus payments shall be offset by an equal percentage
of pre-tax net losses, if any, realized from time to time. In
the event of a pre-tax net loss for a Fiscal Quarter, there shall
be set up an offset amount equal to five percent (5%) of such net
loss, which amount shall be deducted from, or offset against the
entirety of, the next Incentive Bonus payment to which Employee
becomes eligible. Likewise, if there are consecutive loss Fiscal
Quarters, the offset amounts shall accumulate and Employee shall
not be entitled to receive a further Incentive Bonus payment
until the entire accumulated loss amounts have been offset
against amounts earned in subsequent profitable Fiscal Quarters.
It is also the intention of the parties that Employee shall
receive the benefit of, or suffer the detriment resulting from,
any adjustment to the pre-tax net profit or loss as reported in
the final audited financial statements for each Fiscal Quarter
subject to the provisions of this Section 6. Any additions to, or
subtraction from, any Incentive Bonus payment made on the basis
of interim financial statements shall be taken into account and
used to adjust, as appropriate, the next Incentive Bonus payment
which Employee shall become entitled to receive. Notwithstanding
any such adjustment or subsequent net loss Fiscal Quarter, in no
event shall Employee be obligated to return to the Company any
amount which he shall have received in good faith pursuant to the
terms of this Subsection 6. 1, it being expressly understood and
agreed that all such amounts may only be used to offset future
Incentive Bonus payment obligations arising hereunder.
6.2. Partial Quarter Adjustment Provisions.
If, at any time during the Term, Employee is employed hereunder
for less than a full Fiscal Quarter as a result of the
termination of this Agreement (except in the case of termination
pursuant to Subsections 9.3 or 9.6 hereof), then the Incentive
Bonus in respect of such Fiscal Quarter shall be prorated by
determining the Incentive Bonus which would have been payable if
Employee had been employed for the entire Fiscal Quarter, and
multiplying the resultant Incentive Bonus by the Fiscal Quarter
Fraction. The Fiscal Quarter Fraction shall mean the number of
days in any period of less than a full Fiscal Quarter during
which Employee is employed hereunder divided by 91.
6.3. No Assignment. Employee shall have no right to assign or
give any third parties any rights in and to the Incentive Bonus,
except that his rights thereto, in the event of his death, shall
be transferred to the personal representatives of his estate.
6.4. Limitation on Payments. Employee's right to receive an
Incentive Bonus shall be determined on a quarterly basis and
shall not be subject to cumulation, nor to diminution by reason
of an excess or underage of gross business receipts in any other
Fiscal Quarter.
Section 7. Additional Benefits and Reimbursement for Expenses
7.1. Additional Benefits. The Company shall provide the
following additional benefits to Employee during the Tern:
(i) Payment of premiums on a term life insurance policy to be
maintained by the Company on Employee's life, to pay benefits in
the aggregate amount of $1 million to a beneficiary or
beneficiaries designated by Employee. It is understood that the
Company shall report the amount of premiums paid on such policy
to the Internal Revenue Service in accordance with the Internal
Revenue Code and the Regulations issued thereunder as income
payable to Employee;
(ii) Participation on an equitable basis in medical
hospitalization or accident/disability insurance plans and health
programs; and
(iii) Four (4) weeks vacation with pay in each Employment
Year comparable to that afforded other executives of the Company
and its subsidiaries. Provided however, Employee shall not be
entitled to take more than ten (10) consecutive business days as
vacation days without prior approval of the Company's Board of
Directors upon Employee's request made not less than three (3)
weeks prior to the intended vacation days, which approval shall
not be unreasonably withheld. There will be no carryover of
unused vacation time or pay from year to year. Employee shall
also be entitled to all holiday privileges regularly observed by
the Company during the Tern.
(iv) Company car shall be provided for Employee, monthly cost not
to exceed $ 1,000.
In addition, the Company, in its sole discretion, may include
Employee in any benefit plans which it now maintains or
establishes in the future for executives.
7.2. Reimbursement for Expenses. The Company shall pay or
reimburse Employee for all reasonable expenses actually incurred
or paid by him during the Term in the performance of his services
under this Agreement, upon presentation of such bills, expense
statements, vouchers or such other supporting information as the
Company may reasonably require. The Board of Directors may from
time to time require prior approval for individual expense items
in excess of pre-established aggregate amounts for a fixed period
or in excess of pre-established amounts for any type of
expenditure during any fixed period.
Section 8. Termination of Employment.
8.1 Death. If Employee dies during the Term, within sixty (60)
days of his death, the Company shall pay his designated
beneficiary an amount equal to one year's salary, in equal
payments over the next twelve months. If Employee dies during
the Term, his rights to receive his Incentive Bonus hereunder for
any Fiscal Quarter which has ended shall remain vested in his
estate, but his right to receive his Incentive Bonus for the
Fiscal Quarter in which he has died shall be prorated to the date
of his death. If Employee dies during the Term, neither Employee
nor his estate shall have any further right to receive an
Incentive Bonus except as stated hereinabove.
8.2. Disability.
8.2.1. If during the Term, Employee becomes physically or
mentally disabled, whether totally or partially, so that he is
unable to perform substantially all his services hereunder for
(i) a period of six (6) consecutive months, or (H) for shorter
periods aggregating six (6) months during any twelve (12) month
period, the Company may, at any time after the last day of the
sixth consecutive month of disability, or after the day on which
the shorter periods of disability shall have equaled an aggregate
of six (6) months, reduce compensation due Employee from that day
forward by twenty-five percent (25%). Employee's full
compensation shall be reinstated upon the Board of Directors'
determination that Employee has become able again to perform all
his services hereunder. If, during the Term, Employee's
disability continues such that Employee is unable to perform
substantially all his services hereunder for (i) a period of nine
(9) consecutive months, or (ii) for shorter periods aggregating
nine (9) months during any twelve (12) month period, the Company
may, at any time after the last day of the ninth consecutive such
month, or after the last day on which the shorter periods of
disability shall have equaled an aggregate of nine (9) months,
terminate Employee's employment by written notice to him. The
date on which Company sends written notice of termination under
this Subsection 8.2 shall be the Termination Date hereunder. In
case of any dispute as to whether or not Employee is disabled
within the meaning of this Subsection 8.2, the determination of
disability is to be made by a licensed physician selected by the
Board of Directors of the Company and acceptable to Employee, in
his reasonable judgment, which physicians decision shall be final
and binding on the parses hereto. In the event Employee's
employment is terminated pursuant to this Subsection 8.2, the
Company shall pay him an amount equal to all compensation
remaining unpaid at the time of the Termination Date plus any
compensation that would accrue to Employee through the end of the
month of the Termination Date. If Employee's employment is
terminated under this Subsection 8.2, his right to receive his
Incentive Bonus hereunder for any Fiscal Quarter which has ended
shall remain vested, but his right to receive his Incentive Bonus
for the Fiscal Quarter in which he is terminated shall be
prorated to the Termination Date, as provided in Subsection 6.2,
and Employee shall have no right to receive further Incentive
Bonus payments thereafter.
8.2.2. The Company shall maintain a disability insurance
policy for the benefit of Employee in the amount of $150,000
annually.
8.3. Termination for Cause. If Employee is convicted of or
indicted for an offense involving (i) fraud, (ii) embezzlement,
or (iii) any other crime involving moral turpitude, or if
Employee commits (iv) gross or willful neglect of duty, (v) a
breach of any of the material provisions of this Employment
Agreement, on his part to be performed (including breach of the
representations and warranties of Section 9), (vi) such conduct
as results or as is likely to result in substantial damage to the
reputation of the Company, or any of its Subsidiaries or
Affiliates, or (vii) if Employee declines to follow any
significant instruction adopted by the Board of Directors of the
Company and communicated to Employee, and if Employee adheres to
persistent refusal or neglect to follow such instructions or
policy, the Company may at any time thereafter terminate
Employee's employment hereunder by written notice to him
effective immediately and the date of the notice shah be the
Termination Date hereunder. Any such termination shall be deemed
to be termination for cause, for purposes of this Agreement. If
Employee's employment is terminated for cause hereunder, then
Employee shall be entitled to receive only the following
payments: any portion of his Basic Salary accrued to the date of
such termination and not theretofore paid to him- and any
Incentive Bonus to which he is entitled for any completed Fiscal
Quarter under this contract which has not theretofore been paid
to him; plus reimbursement for any expenses properly incurred by
Employee, and supported by appropriate vouchers, which expenses
have been incurred prior to the date of such termination and
which have not theretofore been reimbursed. Except as set forth
in the immediately preceding sentence, all of Employee's rights
to compensation hereunder shall be terminated, in the event of
termination for cause, as of the Termination Date.
8.4. Constructive Termination of Employee. In the event the
Company removes Employee from the position of President and Chief
Executive Officer, or if Employee is removed as a Director of the
Company without his consent (or fails to be re-elected at any
meeting of the Board of Directors of the Company held for the
purpose of electing or re-electing Directors of the Company) or
substantially changes his duties or his reporting responsibility
to the Board of Directors under Section 2. 1, the employment of
Employee, at his option, exercisable by written notice given to
the Company at any time within sixty (60) days following such
event (or failure to re-elect) (time of notice being deemed to be
of the essence), shall be deemed to have been constructively
terminated by the Company hereunder, as of the date of Employee's
notice, provided, however, that such constructive notice shall
not be deemed a breach by the Company of its obligations under
this Agreement and further provided, however, that termination
for cause pursuant to Subsection 8.3 shall make the provisions of
this Subsection 8.4 inapplicable. The date of such written
notice shall be deemed the Termination Date hereunder.
If Employee's employment is terminated under this Subsection 8.4,
and the Termination Date is within four years of the Commencement
Date, Employee shall receive, within thirty (30) days of such
written notice to the Company, a Termination Payment, which shall
be determined according to the following schedule: (i) if the
Termination Date hereunder is within one year of the Commencement
Date, the Termination Payment shall be two million dollars
($2,000,000); (ii) if the Termination Date is within two years of
the Commencement Date, the Termination Payment shall be one
million eight hundred thousand dollars ($1,800,000); (ii) if the
Termination Date is within three years of the Commencement Date,
the Termination Payment shall be one million six hundred thousand
dollars ($1,600,000); (iv) if the Termination Date is within four
years of the Commencement Date, the Termination Payment shall be
one million four hundred thousand dollars ($1,400,000); and so
forth. Additionally, Employee shall continue to receive the
additional benefits provided in Subsection 7.1 for a period of
two (2) years from the Termination Date.
If Employee's employment is terminated under this Subsection 8.4,
and the Termination Date is later than four years after the
Commencement Date, Employee shall receive an amount equal to his
aggregate Base Salary for two (2) years following the date of
such Constructive Termination, or an amount equal to his
aggregate Base Salary through the end of the Term whichever is
the lesser amount, and Employee shall continue to receive the
additional benefits provided in Subsection 7.1 during the period
he is entitled to receive Base Salary pursuant to the provisions
of this Subsection 8.4.
In the event of the Constructive Termination of Employee's
Employment pursuant to this Section 8.4, Employee's right to
receive an Incentive Bonus for each Fiscal Quarter completed
during the period of such continued Base Salary payments shall
remain in effect, and Employee's right to remove an Incentive
Bonus on account of the year in which his employment terminated
by virtue of Constructive Termination shall be prorated to the
date of such termination.
8.5. Other Termination of Employment by the Company. In the
event the Company terminates the employment of Employee hereunder
other than pursuant to any of the prior provisions hereof without
Employee's consent, Employee shall be deemed to have been
constructively terminated by the Company, and such termination
shall be subject to the provisions of Subsection 8.4.
8.6. Other Termination of Employment by Employee If Employee
quits his employment (other than as authorized under Subsection
8.4 hereof), he shall be deemed to have been terminated by the
Company for cause and shall be subject to the provisions of
Subsection 8.3 hereof.
Section 9. Representations and Warranties by Employee.
Employee hereby represents and warrants, the same being part of
the essence of this Agreement, that, as of the Commencement Date,
he is not a party to any agreement, contract or understanding,
and no other facts or circumstances exist, which would in any way
restrict or prohibit him from undertaking or performing any of
his obligations under this Agreement. The foregoing
representation and warranty shall remain in effect throughout the
Term.
Section 10. Confidential Information and Proprietary
Interests.
10.1. Acknowledgment of Confidentility. Employee understands and
acknowledges that he may obtain Confidential Information in the
perfomance of his services. Employee further acknowledges that
the services to be rendered by him are of a special, unique and
extraordinary character and that, in connection with such
services, he will have access to Confidential Information vital
to the Company's, its Subsidiaries' and Affiliates' business and
perhaps vital to the business of the Company. Accordingly,
Employee agrees that he shall not, either during the Term or at
any time thereafter, (i) use or disclose any such Confidential
Information outside the Company, and its Subsidiaries and
Affiliates- (ii) publish any works, speeches or articles with
respect thereto; or (iii), except as required in the proper
performance of his services hereunder, remove or aid in the
removal from the premises of the Company, or its Subsidiaries or
Affiliates, of any Confidential Information or any property or
material relating thereto.
The foregoing confidentiality provisions shall cease to be
applicable to any Confidential Information which becomes
generally available to the public (except by reason of or in
consequence of a breach by Employee of his obligations under this
Section 10).
In the event Employee is required by law or a court order to
disclose any such Confidential Information, he shall promptly
notify the Company of such requirement and provide the Company
with a copy of any court order or of any law which in his opinion
requires such disclosure and, if the Company so elects, permit
the Company an adequate opportunity, at its own expense, to
contest such law or court order.
10.2. Delivery of Material. Employee shall promptly, and
without charge, deliver to the Company on the termination of his
employment hereunder, or at any other time the Company may so
request, all memoranda, notes, records, reports, manuals,
computer disks, videotapes, drawings, blueprints and other
documents (and all copies thereof) relating to the business of
the Company, and its Subsidiaries and Affiliates, and all
property associated therewith, which he may then possess or have
under his control.
10.3. Customer Lists. Employee acknowledges that (i) all
fists of suppliers, advertisers, customers and vendors of the
Company or of its Subsidiaries or Affiliates developed during the
course of Employee's employment and/or by the Company are and
shall be the sole and exclusive property of the Company, its
Subsidiaries or Affiliates, as the case may be, and Employee
further acknowledges and agrees that he neither has nor shall
have any personal right, title or interest therein; (ii) that
such lists are and must continue to be confidential- and (iii)
that such lists are not readily accessible to competitors of the
Company or its Subsidiaries or Affiliates.
10.4. Ideas, Programs, Etc. If during the Term, Employee
invents or develops any ideas, programs, formats, software
systems or the likes, source codes, proprietary codes or the
like, relating to or useful in connection with the Business of
the Company, the same are and shall remain the property of the
Company, and he will promptly deliver all copies of the same to
the Company, assign his interest therein to the Company and
execute such documents as the Company's counsel may request to
convey title thereto to the Company including, but not limited to
patent applications, copyright applications, trademark
Applications and the like. Employee shall not be entitled to any
compensation, other than as provided in this Agreement, for
carrying out his obligations to the Company under Subsection 10.4
or any other Subsection of this Section 10.
Section 11. Non-Competition Provisions.
Employee agrees that he will not, during the Restricted Period,
compete directly or indirectly with the business of the Company.
The phrase "compete directly or indirectly with the business of
the Company" shall be deemed to include, without limitingting the
generality thereof (1) engaging or having a material interest,
directly or indirectly, as owner, employee, officer, director,
partner, sales representative, stockholder, capital investor,
lessor, renderer of consultation services or advise, either alone
or in association with another or others, in the opmfion of any
aspect of any type of business or enterprise competitive with the
business or operation of the Company, (2) soliciting any of the
employees of the Company to leave the employ of the Company, or
so soliciting any employee of any Subsidiary or Affiliate of the
Company; (3) soliciting any of the employees of the Company to
become employees of any other Person, or so soliciting any
employee of any Subsidiary or Affiliate of the Company; or (4)
soliciting any customer or supplier of the Company or any
Affiliate or Subsidiary of either of them with respect to their
business. Similarly, Employee shall not raid, entice or induce
any Person who on the Termination Date is, or within one (1) year
immediately preceding the Termination Date was, a customer or
supplier of the Company, or any of its Subsidiaries or
Affiliates, to become a customer of any other Person for products
or services the same as, or similar to, those products and
services as from time to time shall be provided by the Company,
or any of its Subsidiaries and Affiliates, and Employee shall not
approach any Person for such purpose- nor shall Employee raid,
entice or induce any Person who on the Termination Date is, or
within one year immediately preceding the Termination Date was,
an employee of the Company or any of its Subsidiaries or
Affiliates, to become employed by any other Person, similarly,
Employee shall not approach any such employee for such purpose or
authorize or knowingly approve the taking of such actions by any
other Person or assist any such other Person in taking any such
action.
The phrase "compete directly or indirectly with the business of
the Company" shall not be deemed to include an ownership interest
as an inactive investor, which, for purposes of this Agreement,
shall mean only the beneficial ownership of less than five (5%)
percent of the outstanding shares of any series or class of
securities of any competitor of the Company, which securities of
such series or class are publicly traded in the securities
market.
Section 12. Disputes and Remedies.
12.1. Waiver of Jury Trial. EMPLOYEE AND THE COMPANY HEREBY
WAIVE THE RIGHT TO A BY JURY IN THE EVENT OF ANY DISPUTE WHICH
ARISES UNDER THIS AGREEMENT.
12.2. Injunctive Relief If Employee commits a breach, or
threatens to commit a breach, of any of the provisions of Section
2 or of Sections 10 or I 1, the Company shall have the following
rights and remedies (each of which shall be independent of the
other, and shall be severally enforceable, and all of which shall
be in addition to, and not in lieu of any other rights and
remedies available to the Company):
(i) the right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged by Employee that any such
breach or threatened breach will or may cause irreparable injury
to the Company and that money damages will or may not provide an
adequate remedy to the Company; and
(ii) the right and remedy to require Employee to account for and
pay over to the Company all compensation profits, monies,
increments, things of value or other benefits, delivered or
received by Employee as the result of any acts or transactions
constituting a breach of any of the provisions of Section 2 or of
Sections 10 or 11 of this Agreement, and Employee hereby agrees
to account for and pay over all such compensation, profits,
monies, increments, things of value or other benefits to the
Company.
Employee specifically agrees not to object to any application
made by the Company to any court having equity jurisdiction,
seeking an injunction restraining him from committing,
threatening or continuing any violation of Section 2 or Sections
10 or 11 of this Agreement.
12.3. Partial Enforceability. If any provision contained in
Section 2 or in Section 10 or 11, or any part thereof is
construed to be invalid or unenforceable, the same shall not
affect the remainder of Employee's agreements, covenants and
undertakings, or the other restrictions which he has accepted, in
Section 2 or in Sections 10 or 11, and the remaining such
agreements, covenants, undertakings and restrictions shall be
given the fullest possible effect, without regard to the invalid
parts.
12.4 Adjustment of Restrictions. Despite the prior provisions of
this Section 12, if any covenant or agreement contained in
Sections 2, 10 or 11, or any part thereof is held by any court of
competent jurisdiction to be unenforceable because of the
duration of such provision or the geographic area covered
thereby, the court making such determination shall have the power
to reduce the duration or geographic area of such provision and,
in its reduced form such provision shall be enforceable.
12.5. Attorneys Fees and Expenses In the event that any
action, suit or other proceeding at law or in equity is brought
to enforce the provisions of this Agreement, or to obtain money
damages for the breach thereof, and such action results in the
award of a judgment for money damages or in the granting of any
injunction in favor of the Company, then all reasonable expenses,
including, but not limited to, reasonable attorneys' fees and
disbursements (including those incurred on appeal) of the Company
in such action, suit or other proceeding shall (on demand of the
Company) forthwith be paid by Employee. If such action results
in a judgment in favor of Employee, then all reasonable expenses,
including but not limited to, reasonable attorney's fees and
disbursements (including those incurred on appeal) of Employee in
such action, suit or other proceeding shall (on demand of
Employee) forthwith be paid by the Company.
12.6. Limited Enforceability . In the event that Employee
elects to terminate this Agreement pursuant to Subsection 8.4, or
the Company terminates the employment of Employee hereunder other
than pursuant to any of the provisions of this Agreement,
Employee shall be released as of the Termination Date from any
and all further restrictions pursuant to Section 2 and Section
11.
Section 13. Survival.
The provisions of Sections 10, 11, 12 and this Section 13 shall
survive termination of this Agreement and remain enforceable
according to their terms.
Section 14. Severability.
The invalidity or unenforceability of any provision of this
Agreement shall in no way affect the validity or enforceability
of any other provisions hereof
Section 15. Notices.
All notices, demands and requests required or permitted to be
given under the provisions of this Agreement shall be deemed duly
given if made in writing and delivered personally or mailed by
postage prepaid certified or registered mail, return receipt
request, accompanied by a second copy sent by ordinary mail,
which notices shall be addressed as follows:
If to the Company:
Casino Airlink, Inc.
888 East Las Olas Blvd., Suite 700
Fort Lauderdale, FL 33301
with a copy to:
Niesar & Diamond LLP
90 New Montgomery Street, 9th Floor
San Francisco, CA 94105
If to Employee:
William Forhan
888 East Las Olas Blvd., Suite 700
Fort Lauderdale, FL 33301
By notifying the other parties in writing, given as aforesaid,
any party may from time to time change its address or the name of
any person to whose attention notice is to be given, or may add
another person, to whose attention notice is to be given, in
connection with notice to any party.
Section 16. Assignment and Successors.
Neither this Agreement nor any of his rights or duties hereunder
may be assigned or delegated by Employee. This Agreement is not
assignable by the Company except to any successor in interest
which takes over all or substantially all of the business of the
Company, as it is conducted at the time of such assignment. Any
corporation into or with which the Company is merged or
consolidated or which takes over all or substantially all of the
business of Company shall be deemed to be a successor of the
Company for purposes hereof This Agreement shall be binding upon
and, except as aforesaid, shall inure to the benefit of the
parties and their respective successors and ed assigns.
Section 17. Entire Agreement and Waiver.
17.1. Integration. This Agreement contains the entire agreement
of the parties hereto on its subject matter and supersedes all
previous agreements between the parties hereto, written or oral,
express or implied, covering the subject matter hereof. No
representations, inducements, promises or agreements, oral or
otherwise, not embodied herein shall be of any force or effect.
Provided, however, that this Agreement shall not affect or
operate to reduce any benefit or compensation inuring to Employee
of a kind elsewhere provided and not expressly provided in this
Agreement, including, without limitation, any grant of Incentive
Stock Options to Employee.
17.2. No Waiver. No waiver or modification of any of the
provisions of this Agreement shall be valid unless in writing and
signed by or on behalf of the party granting such waiver or
modification. No waiver by any party of any breach or default
hereunder shall be deemed a waiver of any repetition of such
breach or default or shall be deemed a waiver of any other breach
or default, nor shall it in any way affect any of the other terms
or conditions of this Agreement or the enforceability thereof No
failure of the Company to exercise any power given it hereunder
or to insist upon strict compliance by Employee with any
obligation hereunder, and no custom or practice at variance with
the terms hereof shall constitute a waiver of the right of the
Company to demand strict compliance with the terms hereof
Employee shall not have the right to sign any waiver or
modification of any provisions of this Agreement on behalf of the
Company, nor shall any action taken by Employee, as the Vice
President of Marketing of the Company, or otherwise, reduce Ins
obligations under this Agreement.
This Agreement may not be supplemented or rescinded except by
instrument in writing signed by all of the parties hereto after
the Commencement Date. Neither this Agreement nor any of the
rights of any of the parties hereunder may be terminated except
as provided herein.
Section 18. Governing Law.
This Agreement shall be governed by and construed, and the rights
and obligations of the parties hereto enforced, in accordance
with the laws of the State of Florida.
Section 19. Headings.
The Section and Subsection headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date written above, which shall be deemed to be the
Commencement Date.
"The Company"
INTEGRATED MARKETING PROFESSIONALS, INC.
By: /s/ William Forhan
William Forhan, President and CEO
"Employee"
/s/ William Forhan
William Forhan
EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of the 1st day of January, 1998
(the "Commencement Date") by and among Integrated Marketing
Professionals, Inc., a Nevada Corporation (hereinafter the
"Company"), and James Muldowney, an individual residing in
Georgia ("Employee");
R E C I T A L
WHEREAS, the Company desires to retain the services of Employee
and Employee is willing to continue employment by Company, on the
terms and subject to the conditions set forth in this Agreement.
A G R E E M E N T
NOW, THEREFORE, the parties as follows:
Section 1. As used in this Agreement, the following terms share
have the meanings set forth below:
"Affiliate" shall mean a corporation which, directly or
indirectly, controls, is controlled by or is under common control
with the Company, or which is a successor in interest to the
Company, and for put-poses hereof, "control" shall mean the
ownership of 20% or more or the voting shares of the corporation
in question.
"Basic Salary" shall have the meaning assigned to it in Section 5
of this Agreement.
"The Business" shall mean the business conducted by the Company
in the past and on the date of execution of this Agreement,
including business activities under investigation or in
developmental stages, all other business activities which flow
therefrom by a reasonable expansion of the present activities of
the Company, all business activities which may be developed by
the Company during the Term, and all business activities now
conducted by the Company or any Affiliate thereof or which may be
developed by the Company or such Affiliates, during the term of
this Agreement, as reasonable expansions of their present
activities.
"Commencement Date" shall be the effective date of this
Agreement, as stated on page 1.
"Confidential Information" shall include, without limitation,
trade "know-how," trade secrets, subscriber, advertiser and
customer lists, pricing policies, operational methods, methods of
doing business, technical processes, formulae, designs and design
projects, inventions, research projects, and other business
affairs of the Company or its Subsidiaries and Affiliates, which
(i) were, in the case of the Company, or is ot- are designed to
be used in or are or may be useful in connection with the
business of the Company or any Subsidiary or Affiliate thereof or
which, in the case of any of these entities, results from any of
the research or development activities of any such entity, which
(ii) is private or confidential in that it is not generally known
or available to the public, except as the result of unauthorized
disclosure by or information supplied by Employee or (iii) which
gives the Company or any Subsidiary or Affiliate of the Company
an opportunity or the possibility of obtaining an advantage over
competitors who may not know or use such information or who are
not lawfully permitted to use the same.
"Employment Year" shall mean each twelve-month period, or part
thereof, during which Employee is employed hereunder, commencing
on the Commencement Date or on January I of any subsequent
calendar - year, the first such subsequent Employment Year being
the twelve-month period which will begin on January 1, 1998.
"Fiscal Quarter" shall mean each four-month period, or part
thereof, during which Employee is employed hereunder, commencing
on the Commencement Date or on January 1 of any subsequent
calendar year, the first such subsequent Fiscal Quarter being the
four-month period which will begin on January 1, 1998.
"Incentive Bonus" shall have the meaning assigned to it in
Section 6.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, public benefit
corporation, entity or government (whether Federal, state,
county, city, municipal or otherwise, including, without
limitation, any instrumentality , division, agency, body or
department thereof).
"Restricted Period" shall mean the term of employment of Employee
under this Agreement or any extension thereof and the twelve-
month period thereafter, or such shorter period as may be
provided pursuant to any sections of this Agreement- provided,
however, that the Restricted Period shall terminate immediately
upon the Occurrence of any termination of the employment of
Employee by the Company other than pursuant to this Agreement or
as authorized by law.
"Subsidiary" shall mean a corporation, 50% or more of the
outstanding voting shares of which is owned or controlled
directly or indirectly by the Company.
"Term" shall mean the ten-n of employment of Employee under this
Agreement.
"Termination Date" shall have the meaning assigned to it in
Section 8.
"Termination Payment" shall have the meaning assigned to it in
Section 8.
Wherever from the context it appears appropriate, each word or
phrase stated in either the singular or the plural shall include
the singular and the plural, and each pronoun stated in the
masculine, feminine or neuter gender shall include the masculine,
feminine and neuter.
Section 2. Employment and Duties of Employee.
2.1. Employment; Title; Duties. The Company hereby employs
Employee, and Employee hereby accepts appointment as, and his
election as, Executive Vice President of the Company, and
President of the Subsidiary, Casino Airlink. The principal duty
of Employee shall be to serve in such capacities. In such
capacities, Employee shall tender such services as are necessary
and desirable to protect and advance the best interests of the
Company, acting, in all instances, under the supervision of and
in accordance with the policies set by the Board of Directors.
2.2. Place of Employment. The principal place of employment of
Employee shall be 5590 Ulmerton Road, Clearwater, Florida, 34620,
or such other location as is consented to by Employee and the
Company. It is however distinctly understood and agreed that
Employee may be required, in connection with the performance of
his duties, to work from time to time at other locations
designated by the Board or Directors or as required in connection
with the Business of the Company. When required to travel to
and/or spend time at such other locations, Employee's reasonable
traveling and temporary living expenses shall be reimbursed to
him by the Company, upon his submittal of detailed written
vouchers, supported by appropriate documentation and subject to
the general reimbursement policies of the Company with respect to
executive officers. Employee may not be assigned duties that
would require Employee to change his principal residence to a
location outside the state of Florida.
2.3 Performance of Duties. Employee shall devote his full
working time and efforts to the performance of his duties as an
executive of the Company and to the performance of such other
duties as are assigned him from time to time by the Board of
Directors of the Company. Employee shall not engage in or become
employed, directly or indirectly, in the commercial or
professional business of any other Person, without the prior
written consent of the Board of Directors of the Company, nor
shall he act as a consultant to or provide any services to,
whether on a remunerative basis or otherwise, the commercial or
professional business of any other Person, without such written
consent, which, in both instances, may be given or withheld by
the Board of Directors in its absolute discretion. Attention to
Employee's personal investments shall not be deemed to violate
this Subsection to the extent such attention does not constitute
the conduct of a separate business.
2.4 Services to the Company and/or its Affiliates. During the
term of this Agreement, it is understood that Employee may be
requested from time to time to provide assistance or consultative
or other services to, or to act temporarily as an Executive of an
Affiliate or Subsidiary of the Company. Employee shall perform
such services and, if elected as all officer or director of any
such other company, shall hold such office (and discharge its
duties) without additional compensation other than the
compensation set forth in this Agreement. During the term of
this Agreement, Employee shall also accept election or
appointment, and serve, during all or any part of the Term, as an
officer and director of any Subsidiary of the Company, and
perform the duties appropriate thereto, without additional
compensation other than as set forth in this Agreement.
Section 3. Term of Employment.
The employment of Employee pursuant to this Agreement shall
commence as of the Commencement Date and end on the earlier to
occur of (i) December 31, 2008, or (ii) the first date on which
such employment is terminated in accordance with Section 10
hereof (the "Termination Date").
Section 4. Compensation and Benefits.
The Company shall pay Employee as compensation for all of the
services to be rendered by him hereunder during the Tenn, and in
consideration of the various restrictions imposed upon Employee
during the Term and the Restricted Period, and otherwise under
this Agreement, the Basic Salary and other benefits as provided
for and determined pursuant to Sections 5 to 10, inclusive, of
this Agreement.
Section 5. Basic Salary
The Company shall pay Employee, as compensation for all of the
services to be rendered hereunder by him during the Term, a
salary of one hundred fifty thousand dollars ($150,000) per year
(the "Basic Salary"), payable in accordance with the regular
payroll practices of the Company for executives, less such
deductions oi- amounts as are required to be deducted or withheld
by applicable laws or regulations and less such other deductions
or amounts, if any, as are authorized by Employee. Such Basic
Salary may be increased, but not decreased, from time to time in
the sole discretion of the Board of Directors.
Section 6. Incentive Bonus.
6.1. Obligation to Pay Incentive Bonus. Employee shall be
eligible to receive as additional compensation, 30 days after the
day the Board of Directors approves interim financial statements
for the last-ended Fiscal Quarter, a payment equal to two and one-
half percent (2.5%) of the Company's pre-tax net income for the
last-ended Fiscal Quarter for each Fiscal Quarter during the term
beginning after December- 31, 1997 (the "Incentive Bonus"). It
is the intention of the parties that Employee's right to receive
Incentive Bonus payments shall be offset by ail equal percentage
of pre-tax net losses, if any, realized from time to time. In
the event of a pre-tax net loss for a Fiscal Quarter, there shall
be set up ail offset amount equal to two and one-half percent
(2.5%) of such net loss, which amount shall be deducted from, or
offset against the entirely of, the next Incentive Bonus payment
to which Employee becomes eligible. Likewise, if there are
consecutive loss Fiscal Quarters, the offset amounts shall
accumulate and Employee shall not be entitled to receive a
further Incentive Bonus payment until the entire accumulated loss
amounts have been offset against amounts carried in subsequent
profitable Fiscal Quarters. It is also the intention of the
parties that Employee shall receive the benefit of, or suffer the
detriment resulting from, any adjustment to the pre-tax net
profit or loss as reported in the final audited financial
statements for each Fiscal Quarter subject to the provisions of
this Section 6. Any additions to, or subtraction from, any
Incentive Bonus payment made on the basis of interim financial
statements shall be taken into account and used to adjust, as
appropriate, the next Incentive Bonus payment which Employee
shall become entitled to receive. Notwithstanding any such
adjustment or subsequent net loss Fiscal Quarter, in no event
shall Employee be obligated to return to the Company any amount
which lie shall have received in good faith pursuant to the terms
of this Subsection 6.1, it being expressly understood and agreed
that all such amounts may only be used to offset future I
incentive Bonus payment obligations arising hereunder.
6.2. Partial Quarter Adjustment Provisions.
1f, at any time during the Term, Employee is employed hereunder
for less than a full Fiscal Quarter as a result of the
termination of this Agreement (except in the case of termination
pursuant to Subsections 9.3 of- 9.6 hereof), then the Incentive
Bonus in respect of such Fiscal Quarter shall be prorated by
determining the Incentive Bonus which would have been payable if
Employee had been employed for the entire Fiscal Quarter, and
multiplying the resultant Incentive Bonus by the Fiscal Quarter
Fraction. The Fiscal Quarter Fraction shall mean the number of
days in any period of less than a full Fiscal Quarter during
which Employee is employed hereunder divided by 91.
6.3 No Assignment. Employee shall have no fight to assign or
give any third parties any rights in and to the Incentive Bonus,
except that his rights thereto, in the event of his death, shall
be transferred to the personal representatives of his estate.
Section 7. Additional Benefits and Reimbursement for Expenses.
7.1. Additional Benefits. The Company shall provide the
following additional benefits to Employee during the Term:
(i) Participation on an equitable basis in medical,
hospitalization or accident/disability insurance plans and health
programs; and
(ii) Four (4) weeks vacation with pay in each Employment Year
comparable to that afforded other executives of the Company and
its subsidiaries. Provided however, Employee shall riot be
entitled to take more than ten (10) consecutive business days as
vacation days without prior approval of the Company's Board of
Directors upon Employee's request made riot less than three (3)
weeks prior to the intended vacation days, which approval shall
not be unreasonably withheld. There will be no carryover of
unused vacation time or pay from year to year. Employee shall
also be entitled to all holiday privileges regularly observed by
the Company during the Term, and
(iii) Payment of premiums on a term life insurance policy to
be maintained by the Company on Employee's life, to pay benefits
in the aggregate amount of $400,000 to a beneficiary or
beneficiaries designated by Employee. It is understood that the
Company shall report the amount of premiums paid on such policy
to the Internal Revenue Service in accordance with the Internal
Revenue Code and the Regulations issued thereunder as income
payable to Employee, and
(iv) Company Car shall be provided for employee, monthly cost not
to exceed $500.
In addition, the Company, in its sole discretion, may include
Employee in any benefit plans which it now maintains or
establishes in the future for executives.
7.2. Reimbursement for Expenses. The Company shall pay or
reimburse Employee for all reasonable expenses actually incurred
or paid by him during the 1'en-n in the performance of his
services under this Agreement, upon presentation of such bills,
expense statements, vouchers or such other supporting information
as the Company may reasonably require. The Board of Directors
may from time to time require prior approval for individual
expense items in excess of pre-established aggregate amounts for
a fixed period or in excess of pre-established amounts for any
type of expenditure during any fixed period.
Section 8. Termination of Employment.
8.1. Death. If Employee dies during the Term, the Company shall
pay his designated beneficiary an amount equal to one year's
compensation, in equal payments over the next twelve months. If
Employee dies during the Term, his rights to receive his
Incentive Bonus hereunder for any Fiscal Quarter which has ended
shall remain vested in his estate, but his fight to receive his
Incentive Bonus for the Fiscal Quarter in which he has died shall
be prorated to the date of his death. If Employee dies during
the Term, neither Employee nor his estate shall have any further
fight to receive an Incentive Bonus except as stated hereinabove.
8.2. Disability.
8.2.1. If, during the Term, Employee becomes physically or
mentally disabled, whether totally or partially, so that he is
unable to perform substantially all his services hereunder for
(i) a period of six (6) consecutive months, or (ii) for shorter
periods aggregating six (6) months during any twelve ( 12) month
period, the Company may, at any time after the last day of the
sixth consecutive month of disability, or after the day on which
the shorter periods of disability shall have equaled an aggregate
of six (6) months, reduce compensation due Employee from that day
forward by twenty-five percent (25%). Employee's full
compensation shall be reinstated upon the Board of Directors'
determination that Employee has become able again to perform all
his services hereunder. If, during the Term, Employee's
disability Continues Such that Employee is unable to perform
substantially all his services hereunder for (i) a period or nine
(9) consecutive months, or (ii) for shorter periods aggregating
nine (9) months during any twelve (12) month period, the Company
may, at any time after the last day of the ninth consecutive such
month, or after the last day on which the shorter periods of
disability shall have equaled an aggregate of nine (9) months,
terminate Employee's employment by written notice to him. The
date on which Company sends written notice, of termination under
this Subsection 8.2 shall be the Termination Date hereunder. In
case of any dispute as to whether or not Employee is disabled
within the meaning of this Subsection 8.2, the determination of
disability is to be made by a licensed physician selected by the
Board of Directors of the Company and acceptable to Employee, in
his reasonable judgment, which physician's decision shall be
final and binding on the parties hereto. In the event Employee's
employment is terminated pursuant to this Subsection 8.2, the
Company shall pay him an amount equal to all compensation
remaining unpaid at the time of the Termination Date plus any
compensation that would accrue to Employee through the end of the
month of the Termination Date. If Employee's employment is
terminated under this Subsection 8.2, his right to receive his
Incentive Bonus hereunder for any Fiscal Quarter which has ended
shall remain vested, but his right to receive his Incentive Bonus
for the Fiscal Quarter in which he is terminated shall be
prorated to the Termination Date, as provided in Subsection 6.2,
and Employee shall have no right to receive further Incentive
Bonus payments thereafter.
8.3 Termination for Cause. If Employee is convicted of or
indicted for an offense involving (i) fraud, (ii) embezzlement,
or (iii) any other crime involving moral turpitude, or if
Employee commits (iv) gross or willful neglect of duty, (v) a
breach of any of the material provisions of this Employment
Agreement, on his part to be performed (including breach of the
representations and warranties of Section 9), (vi) such conduct
as results or as is likely to result in substantial damage to the
reputation of the Company, or any of its Subsidiaries or
Affiliates, or (vii) if Employee declines to follow any
significant instruction adopted by the Board of Directors of the
Company and communicated to Employee, and if Employee adheres to
persistent refusal or neglect to follow such instructions or
policy, the Company may at any time thereafter terminate
Employee's employment hereunder by written notice to him,
effective immediately and the date of the notice shall be the
Termination Date hereunder. Any Such termination shall be deemed
to be termination for cause, for purposes of this Agreement. It'
Employee's employment is terminated for cause hereunder, then
Employee shall be entitled to receive only the following
payments: any portion of his Basic Salary accrued to the date of
such termination and not theretofore paid to him; and any
Incentive Bonus to which he is entitled for any completed Fiscal
Quarter under this contract which has not theretofore been paid
to him; plus reimbursement for any expenses properly incurred by
Employee, and supported by appropriate vouchers, which expenses
have been incurred prior to the date of such termination and
which have not theretofore been reimbursed. Except as set forth
in the immediately preceding sentence, all of Employee's rights
to compensation hereunder shall be terminated, in the event of
termination for cause, as of the Termination Date.
8.4 Constructive Termination of Employee. In the event the
Company removes Employee from the position of Executive Vice
President, or if Employee is removed as a Director of the Company
without his consent (or fails to be re-elected at any meeting of
the Board of Directors of the Company held for the purpose of
electing or reelecting Directors of the Company) or substantially
changes his duties or his reporting responsibility to the Board
of Directors under Section 2.1, the employment of Employee, at
his option, exercisable by written notice given to the Company at
any time within sixty (60) days following such event (or failure
to re-elect) (time of notice being deemed to be of the essence),
shall be deemed to have been constructively terminated by the
Company hereunder, as of the date of Employee's notice; provided,
however, that such constructive termination shall not be deemed a
breach by the Company of its obligations under this Agreement and
further provided, however, that termination for cause pursuant to
Subsection 8.3 shall make the provisions of this Subsection 8.4
inapplicable. The date of such written notice shall be deemed
the Termination Date hereunder.
If Employee's employment is terminated under this Subsection 8.4,
and the Termination Date is within four years of the Commencement
Date, Employee shall receive, within thirty (30) days of such
written notice to the Company, a Termination Payment, which shall
be determined according to the following schedule: (i) if the
Termination Date hereunder is within one year of the Commencement
Date, the Termination Payment shall be one million five hundred
thousand dollars ($1,500,000); (ii) if the Termination Date is
within two years of the Commencement Date, the Termination
Payment shall be one million three hundred fifty thousand dollars
($1,350,000); (ii) if the Termination Date is within three years
of the Commencement Date, the Termination Payment shall be one
million two hundred thousand dollars ($1,200,000); (iv) if the
Termination Date is within four years of the Commencement Date,
the Termination Payment shall be one million fifty thousand
dollars ($1,050,000), and so forth. Additionally, Employee shall
continue to receive the additional benefits provided in
Subsection 7.1 for a period of two (2) years from the Termination
Date.
If Employee's employment is terminated under this Subsection 8.4,
and the Termination Date is later than four years after the
Commencement Date, Employee shall receive an amount equal to his
aggregate Base Salary for two (2) years following the date of
such Constructive Termination, or an amount equal to his
aggregate Base Salary through the end of the Term, whichever is
the lesser amount, and Employee shall continue to receive the
additional benefits provided in Subsection 7.1 during the period
lie is entitled to receive Base Salary pursuant to the provisions
of this Subsection 8.4.
In the event or the Constructive Termination of Employee's
Employment pursuant to this Section 8.4, Employee's tight to
receive an Incentive Bonus for each Fiscal Quarter completed
during the period of such continued Base Salary payments shall
remain in effect, and Employee's fight to receive an Incentive
Bonus on account of the year in which his employment terminated
by virtue of Constructive Termination shall be prorated to the
date of such termination.
8.5. Other Termination of Employment by the Company. In the
event the Company terminates the employment of Employee hereunder
other than pursuant to any of the prior provisions hereof,
without Employee's consent, Employee shall be deemed to have been
constructively terminated by the Company, and such termination
shall be subject to the provisions of Subsection 8.4.
8.6. Other Termination of Employment by Employee. If Employee
quits his employment (other than as authorized under Subsection
8.4 hereof), he shall be deemed to have been terminated by the
Company for cause and shall be subject to the provisions of
Subsection 8.3 hereof
Section 9. Representations and Warranties by Employee.
Employee hereby represents and warrants, the same being part of
the essence of this Agreement, that, as of the Commencement Date,
he is not a party to any agreement, contract or understanding,
and no others facts or circumstances exist, which would in any
way restrict or prohibit him from undertaking or performing any
or his obligations under this Agreement. The foregoing
representation and warranty shall remain in effect throughout the
Term.
Section 10. Confidential Information and Proprietary Interests.
10.1. Acknowledgment of Confidentiality . Employee
understands and acknowledges that he may obtain Confidential
Information in the performance of his services. Employee further
acknowledges that the services to be rendered by him are of a
special, unique and extraordinary character and that, in
connection with such services, lie will have access to
Confidential Information vital to the Company's, its
Subsidiaries' and Affiliates' business and perhaps vital to the
business of the Company. Accordingly, Employee agrees that he
shall not, either during the Term or at any time thereafter, (i)
use or disclose any such Confidential Information outside the
Company, and its Subsidiaries and Affiliates; (ii) publish any
works, speeches or articles with respect thereto; or (iii),
except as required in the proper performance of his services
hereunder, remove or aid in the removal 1'roi-n the premises of
the Company, or its Subsidiaries or Affiliates, of any
Confidential Information or any property or material relating
thereto.
The foregoing confidentiality provisions shall cease to be
applicable to any Confidential Information which becomes
generally available to the public (except by reason of or in
consequence of a breach by Employee of his obligations under this
Section 10).
In the event Employee is required by law or a court order to
disclose any such Confidential Information, he shall promptly
notify the Company of such requirement and provide the Company
with a copy of any court order or of any law which in his opinion
requires such disclosure and, if the Company so elects, permit
the Company an adequate opportunity, at its own expense, to
contest such law or court order
10.2. Delivery of Material. Employee shall promptly, and
without charge, deliver to the Company on the termination of his
employment hereunder, or at any other time the Company may so
request, all memoranda, notes, records, reports, manuals,
computer disks, videotapes, drawings, blueprints and other
documents (and all copies thereof relating to the business of the
Company, and its Subsidiaries and Affiliates, and all property
associated therewith, which he may then possess or have under his
control.
10.3. Customer Lists. Employee acknowledges that (i) all
lists of suppliers, advertisers, customers and vendors of the
Company or of its Subsidiaries or Affiliates developed during the
course or Employee's employment and/or by the Company are and
shall be the sole and exclusive property of the Company, its
Subsidiaries or Affiliates, as the case i-nay be, and Employee
further acknowledges and agrees that lie neither has nor shall
have any personal right, title or interest therein; (ii) that
such lists are and must continue to be confidential-, and (iii)
that such lists are not readily accessible to competitors of the
Company or its Subsidiaries or Affiliates.
10.4. Ideas, Programs, Etc. If, during the Term, Employee
invents or develops any ideas, programs, formats, software
systems or the likes, source codes, proprietary codes or the
like, relating to or useful in connection with the Business of
the Company, the same are and shall remain the property of the
Company, and lie will promptly deliver all copies of the same to
the Company, assign his interest therein to the Company and
execute such documents as the Company's counsel may request to
convey title thereto to the Company including, but not limited to
patent applications, copyright applications, trademark
applications and the like. Employee shall not be entitled to any
compensation, other than as provided in this Agreement, for
carrying out his obligations to the Company under Subsection 10.4
or any other Subsection of this Section 10.
Section 11. Non-Competition Provisions.
Employee agrees that he will not, during the Restricted Period,
compete directly or indirectly with the business of the Company.
The phrase "compete directly or indirectly with the business of
the Company" shall be deemed to include, without limiting the
generality thereof, (1) engaging or having a material interest,
directly or indirectly, as owner, employee, officer, director,
partner, sales representative, stockholder, capital investor,
lessor, renderer of consultation services or advise, either alone
or in association with another or others, in the operation of any
aspect of any type of business or enterprise competitive with the
business or operation of the Company- (2) soliciting any of the
employees of the Company to leave the employ of the Company, or
so soliciting any employee of any Subsidiary or Affiliate of the
Company; (3) soliciting any of the employees of the Company to
become employees of any other Person, or so soliciting any
employee of any Subsidiary or Affiliate of the Company, or (4)
soliciting any customer or supplier of the Company or any
Affiliate or Subsidiary of either of them, with respect to their
business. Similarly, Employee shall not raid, entice or induce
any Person who on the Termination Date is, or within one (1) year
immediately preceding the Termination Date was, a customer or
supplier of the Company, or any of its Subsidiaries or
Affiliates, to become a customer of any other Person for products
or services the same as, or similar to, those products and
services as from time to time shall be provided by the Company,
or any of its Subsidiaries and Affiliates, and Employee shall not
approach any Person for such purpose; nor shall Employee raid,
entice or induce any Person who on the Termination Date is, or
within one year immediately preceding the Termination Date was,
an employee of the Coi-npany or any of its Subsidiaries or
Affiliates, to become employed by any other Person; similarly,
Employee shall not approach any such employee for such purpose or
authorize or knowingly approve the taking of such actions by any
other Person or assist any such other Person in taking any such
action.
The phrase "compete directly or indirectly with the business of
the Company" shall not be deemed to include all ownership
interest as an inactive investor, which, for purposes of this
Agreement, shall mean only the beneficial ownership of less than
five (5%) percent of the outstanding shares of any series or
class of securities of any competitor of the Company, which
securities of such series or class are publicly traded in the
securities market.
Section 12. Disputes and Remedies.
12.1. Waiver of Jury Trial. EMPLOYEE AND THE COMPANY HEREBY
WAIVE THE RIGHT TO A TRIAL BY JURY IN THE EVENT OF ANY DISPUTE
WHICH ARISES UNDER THIS AGREEMENT.
12.2. Injunctive Relief. If Employee commits a breach, or
threatens to commit a breach, of any of the provisions of Section
2 or of Sections 10 or 11, the Company shall have the following
rights and remedies (each of which shall be independent of the
other, and shall be severally enforceable, and all of which shall
be in addition to, and not in lieu of, any other rights and
remedies available to the Company)
(i) the right and remedy to have the provisions of this
Agreement specifically enforced by any court having equity
jurisdiction, it being acknowledged by Employee that any such
breach or threatened breach will or may cause irreparable injury
to the Company and that money damages will or may not provide an
adequate remedy to the Company- and
(ii) the right and remedy to require Employee to account for and
pay over to the Company all compensation, profits, monies,
increments, things of value or other benefits, derived or
received by Employee as the result of any acts or transactions
constituting a breach of any of the provisions of Section 2 or of
Sections 10 or 11 of this Agreement, and Employee hereby agrees
to account for and pay over all such compensation, profits,
monies, increments, things of value or other benefits to the
Company.
Employee specifically agrees not to object to any application
made by the Company to any court having equity jurisdiction,
seeking an injunction restraining him from committing,
threatening or continuing any violation of Section 2 or Sections
10 or 11 of this Agreement.
12.3. Partial Enforceability. If any provision contained in
Section 2 or in Section 10 or 11, or any part thereof is
construed to be invalid or unenforceable, the same shall not
affect the remainder of Employee's agreements, covenants and
undertakings, or the other restrictions which he has accepted, in
Section 2 or in Sections 10 or 11, and the remaining such
agreements, covenants, undertakings and restrictions shall be
given the fullest possible effect, without regard to the invalid
parts.
12.4 Adjustment of Restrictions. Despite the prior provisions of
this Section 12, if any covenant or agreement contained in
Sections 2, 10 or 11, or any part thereof, is held by any court
of competent jurisdiction to be unenforceable because of the
duration of such provision or the geographic area covered
thereby, the court making such determination shall have the power
to reduce the duration or geographic area of such provision and,
in its reduced form, such provision shall be enforceable.
12.5. Attorneys Fees and Expenses. In the event that any
action, suit or other proceeding at law or in equity is brought
to enforce the provisions of this Agreement, or to obtain money
damages for the breach thereof, and such action results in the
award of a judgment for money damages or in the granting of any
injunction in favor of the Company, then all reasonable expenses,
including, but not limited to, reasonable attorneys' fees and
disbursements (including those incurred on appeal) of the Company
in such action, suit or other proceeding shall (on demand of the
Company) forthwith be paid by Employee. If such action results
in a judgment in favor of Employee, then all reasonable expenses,
including but not limited to, reasonable attorney's fees and
disbursements (including those incurred on appeal) of Employee in
such action, suit or other proceeding shall (on demand of
Employee) forthwith be paid by the Company.
12.6. Limited Enforceability. In the event that Employee
elects to terminate this Agreement pursuant to Subsection 8.4, or
the Company terminates the employment of Employee hereunder other
than pursuant to any of the provisions of this Agreement,
Employee shall be released as of the Termination Date from any
and all further restrictions pursuant to Section 2 and Section
11.
Section 13. Survival
The provisions of Sections 10, 11, 12 and this Section 13 shall
survive termination of this Agreement and remain enforceable
according to their terms.
Section 14. Severability.
The invalidity or unenforceability of any provision or this
Agreement shall in no way affect the validity or enforceability
of any other provisions hereof.
Section 15. Notices.
All notices, demands and requests required or permitted to be
given under the provisions of this Agreement shall be deemed duly
given if made in writing and delivered personally or mailed by
postage prepaid certified or registered mail, return receipt
request, accompanied by a second copy sent by ordinary mail,
which notices shall be addressed as follows;
If to the Company:
Integrated Marketing Professionals, Inc.
888 East Las Olas Blvd., Suite 700
Fort Lauderdale, FL 33301
With a copy to:
Niesar & Diamond LLP
90 New Montgomery Street, 9th Floor
San Francisco, CA 94105
If to Employee:
James Muldowney
c/o Casino Airlink
5590 Ulmerton Road
Clearwater, FL 34620
By notifying the other parties in writing, given as aforesaid,
any party may from time to time change its address or the name or
any person to whose attention notice is to be given, or may add
another person, to whose attention notice is to be given, in
connection with notice to any party,
Section 16. Assignment and Successors.
Neither this Agreement nor any of his fights or duties hereunder
may be assigned or delegated by Employee. This Agreement is not
assignable by the Company except to any successor in interest
which takes over all or substantially all of the business of the
Company, as it is conducted at the time of such assignment. Any
corporation into or with which the Company is merged or
consolidated or which takes over all or substantially all of the
business of Company shall be deemed to be a successor of the
Company for purposes hereof this Agreement shall be binding upon
and, except as aforesaid, shall inure to the benefit of the
parties and their respective successors and permitted assigns.
Section 17. Entire Agreement and Waiver.
17.1. Integration. This Agreement contains the entire agreement
of the parties hereto on its subject matter and supersedes all
previous agreements between the parties hereto, written or oral,
express or implied, covering the subject matter hereof No
representations, inducements, promises or agreements, oral or
otherwise, not embodied herein, shall be of any force or effect.
Provided, however, that this Agreement shall not affect or
operate to reduce any benefit or compensation inuring to Employee
of a kind elsewhere provided and not expressly provided in this
Agreement, including, without limitations any grant of Incentive
Stock Options to Employee.
17.2. No Waiver. No waiver or modification of any of the
provisions of this Agreement shall be valid unless in writing and
signed by or on behalf of the party granting such waiver or
modification. No waiver by any party of any breach or default
hereunder shall be deemed a waiver of any repetition of such
breach or default or shall be deemed a waiver of any other breach
or default, nor shall it in any way affect any of the other terms
or conditions of this Agreement or the enforceability thereof. No
failure of the Company to exercise any power given it hereunder
or to insist upon strict compliance by Employee with any
obligation hereunder, and no custom or practice at variance with
the terms hereof, shall constitute a waiver of the right of the
Company to demand strict compliance with the terms hereof
Employee shall not have the right to sign any waiver or
modification of any provisions of this Agreement on behalf of the
Company, nor shall any action taken by Employee, as the Vice
President of Marketing of the Company, or otherwise, reduce his
obligations under this Agreement.
This Agreement may not be supplemented or rescinded except by
instrument in writing signed by all of the parties hereto after
the Commencement Date. Neither this Agreement nor any of the
rights of any of the parties hereunder may be terminated except
as provided herein.
Section 18. Governing Law.
This Agreement shall be governed by and construed, and the rights
and obligations of the parties hereto enforced, in accordance
with the laws of the State of Florida.
Section 19. Headings.
The Section and Subsection headings contained herein are for
reference purposes only and shall not in any way affect the
meaningg or interpretation of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above, which shall be deemed to be the
Commencement Date.
"The Company"
INTEGRATED MARKETING PROFESSIONALS, INC.
By: /s/ William Forhan
William Forhan
Its President and CEO
"Employee"
/s/ James Muldowney
James Muldowney
Integrated Marketing Professionals, Inc.
Letter To Shareholders
To All Shareholders:
Turnaround! That word best describes 1997 at Integrated Marketing
Professionals, Inc. Turnaround; That was the goal of the new
management team: Jim Muldowney, President of Casino Airlink, and
myself. When we took control of Casino Airlink on December 8,
1996, we had the challenge of making Casino Airlink profitable.
Our goal was to focus on increasing market penetration in our
Florida departure cities and stop the losses incurred with the
Midwest departure gateways. Our Florida customers are unique;
they can travel midweek (Sunday through Thursday), assuring
Casino Airlink full air charters seven days per week, plus they
will travel to an exciting gaming destination year-round.
Highlights of changes in 1997 included:
Eliminated all Midwest departure cities to the Mississippi Gulf
Coast Focused on Florida tour & travel marketplace Started
scheduled air service in April 1997 from Tampa, Orlando, and
Atlanta Invested $250,000 marketing dollars into new departure
city: Atlanta, Georgia Increased marketing budget in all Florida
cities, creating 30 second TV and 60 second radio ads Results
for 1997 are $1,046,041 profit, including extraordinary income
Strategic planning also paid off for IMPI: we decided to reduce
Casino Airlink's aircraft commitments from two planes to one in
an effort to eliminate risk. The reduction in aircraft reduced
casino junket revenue, but management felt it was important to
build our tour and travel product (casino vacations to
individuals). We accomplished that goal with our strategic
alliance with Reno Air, offering daily scheduled service from
Orlando, Tampa, and Atlanta, and charter service from Ft.
Lauderdale, Palm Beach, and Ft. Myers, to the Mississippi Gulf
Coast. We also implemented a "yield management" philosophy from
all departure cities, which called for special promotional prices
to fill seats on flights with low bookings. This philosophy
maximized our profits.
The results are more clearly reflected in the financial section
of this annual report: 1997 Profits of $1,046,041 versus a 1996
loss of $1,569,964; and a 1997 per share value of $0.092 versus a
per share loss of $0.42.
That's a turnaround.
IMPI's management team and employees from Casino Airlink and
ReSer Corporation look forward to the challenges in the future;
our team is dedicated to increasing profits, improving supplier
and customer relations, and continuing to create a company of
enthusiastic employees.
We thank you, our shareholders, for your support.
"Turnaround. That word best describes 1997 at Integrated
Marketing Professionals, Inc".
Sincerely,
William Forhan, Chairman; CEO
<PAGE>
Integrated Marketing Professionals, Inc.
Executive Summary
Integrated Marketing Professionals' challenge for 1998 is to
promote the company to new investors, increase stock value, and
complete a secondary offering; providing the cash required for
acquisitions; and working capital to expand our two subsidiaries:
ReSer Corporation and Casino Airlink.
The company has targeted several profitable travel-related
companies to acquire; these acquisitions will increase revenues
and profits, plus provide synergism with Integrated Marketing
Professionals' current subsidiaries.
The corporate objective is to be a diversified holding company
focusing on TRAVEL - RELATED industries.
<PAGE>
Integrated Marketing Professionals, Inc.
Subsidiary Information
Subsidiary Information: ReSer Corp.
ReSer Corp. is an ARC appointed travel agency that specializes in
planning, organizing, and presenting educational seminars to
travel agents across the United States.
In 1997, ReSer held 40 seminars to which over 2,000 agents
attended to learn about Latin America, Florida, Mexico, and
Colorado.
Another major activity at ReSer is to process reservations for
tour operators. The expansive hardware and software owned by
ReSer is perfect for small tour operators who do not wish to have
the overhead expenses of their own reservation center.
During 1997, ReSer was brought on-line with the Casino Airlink
operations center in Clearwater, Florida, providing effective
disaster recovery both from a system and telephone reservation
standpoint. In the fourth quarter of 1997, ReSer began accepting
Casino Airlink reservations from clients in Georgia, North
Carolina, and South Carolina.
<PAGE>
Subsidiary Information: Casino Airlink
Casino Airlink is a wholesale travel company that is currently
the exclusive provider of packaged casino vacations from five
cities in Florida and from Atlanta, Georgia to the Mississippi
Gulf Coast. Casino Airlink's travel packages include non-stop,
round-trip jet service, destination airport transfers, ground
handling, 2-3 night deluxe hotel accommodations, nightly buffet
meals, and access to 24-hour Las Vegas style gaming and
entertainment.
Casino Airlink offers air service from Ft. Lauderdale, Palm
Beach, Orlando, Tampa, Ft. Myers, and Atlanta, Georgia. A total
of 75 flights operate round-trip monthly.
Casino Airlink promotes its packages via television and radio
advertising, travel agent faxes, and weekly newspaper ads in
Sunday travel sections. The customers call Casino Airlink's
reservations offices in Tampa or Atlanta, or their local travel
agent to book their travel dates. Casino Airlink sends travel
documents via mail, and greets all travelers upon arrivals in
Gulfport, Mississippi.
Casino Airlink delivered over 85,000 passengers to the
Mississippi Gulf Coast in 1997.
The future of Casino Airlink is to specialize in offering casino
vacations to other gaming destinations: Tunica (Mississippi),
Atlantic City, Las Vegas, and Reno, Nevada.
<PAGE>
Integrated Marketing Professionals, Inc.
Market Conditions || Marketing Strategies
Market Conditions
Mississippi Gulf Coast
The travel industry is enjoying record growth and profits. The
economy is strong and Americans have more disposable income with
which to experience the excitement of travel.
Casino Airlink is capitalizing on the growth of retirees in
Florida by offering a great travel value to the Mississippi Gulf
Coast, one of the fastest growing gaming destinations in the
world.
The Mississippi Gulf Coast is expanding with new casinos, hotels,
and enlarged convention centers. Legalized gambling has grown
this sleepy village into an exciting resort destination that
features 7,000 deluxe casino hotel rooms, 13 casinos open 24
hours per day, 19 challenging golf courses, and entertainment in
hotel lounges and showrooms.
The Mississippi Gulf Coast is expanding and Casino Airlink
intends to add new departure cities from the Carolinas, Texas,
and other nearby states. Casino Airlink's goal is to maintain
being the largest travel supplier to this exciting destination.
<PAGE>
Marketing Strategies
Integrated Marketing Professionals' strategy for growth is to
acquire companies in TRAVEL-RELATED industries and to grow the
revenues and profits of Casino Airlink and ReSer Corporation.
Casino Airlink's growth will be generated by increasing current
marketplaces and adding new departure gateways to the Mississippi
Gulf Coast.
ReSer Corporation's marketing strategy is to sell its teleservice
capabilities to Convention & Visitor's Bureaus, and wholesale
travel companies; plus continue expanding their destination
travel seminars to travel agents.
Acquisitions, of travel-related companies, will be done
throughout 1998 utilizing cash and stock to acquire companies
from the following industries:
Wholesale Travel
Corporate Travel
Incentive Travel
Retail Travel
<PAGE>
Integrated Marketing Professionals, Inc.
Management Team
WILLIAM FORHAN,
Chairman; CEO of Integrated Marketing Professionals:
William Forhan's goal is to expand IMPI through Mergers and
Acquisitions of travel-related companies. His responsibility is
to improve shareholders' return on investment and provide the
vision to grow revenues and net income.
JIM MULDOWNEY,
President; Casino Airlink:
Jim Muldowney's challenge is to grow Casino Airlink and increase
its net income. The challenge is to find new markets interested
in the Mississippi Gulf Coast, minimizing risk and maximizing
market penetration.
SUE GUTTOWSKY,
Vice President; Casino Airlink:
Sue Guttowsky oversees the operations of Casino Airlink:
reservations center, customer service, and coordination of air
and hotel manifests to suppliers. Her responsibility starts with
the customer's initial phone inquiries and extends through the
traveler's completed trip.
TRICIA WYS,
Vice President; ReSer Corporation:
Tricia Wys' twenty years of experience in travel, reservations
centers, and teleservices are an asset to ReSer. She is
responsible for day-to-day operations and accomplishing the
business plan goals.
<PAGE>
Integrated Marketing Professionals, Inc.
Financial Information
Harvey Judkowitz
CERTIFIED PUBLIC ACCOUNTANT
14281 S.W. 74 Terrace (305) 387 - 2968
Miami, Florida 33183 Fax: (305) 383 - 1559
Independent Auditor's Report
I have audited the accompanying consolidated balance sheet of
Casino Airlink, Inc. and subsidiaries as of December 31, 1997 and
the related consolidated statements of operations, changes in
stockholders' equity and cash flows for the year then ended.
These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion
on these financial statements based on my audit.
I conducted my audit in accordance with generally accepted
auditing standards. Those standards require that I plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. 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. I believe that my
audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of
Casino Airlink, Inc. and subsidiaries as of December 31, 1997 and
the results of its operations and its cash flows for the years
then ended in conformity with generally accepted accounting
principles.
Certified Public Accountant
Miami, Florida
February 23, 1998
NOTE: The financial statements are included by reference to Item
13 of the Form 10.
<PAGE>
Integrated Marketing Professionals, Inc.
Notes To Consolidated Financial Statements
December 31, 1997
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Organization
The Company was formed in the state of Michigan on January 14,
1994, under the name of Integrated Marketing Professionals, Inc.
to serve as a full service travel agency, specializing in cruises
and tour packages. In October, 1995 the Company reincorporated in
the state of Nevada and increased its authorized shares to
25,000,000, $0.10 par value shares. Accordingly, the shares
already issued were split 100 to 1. In May, 1996 the Company
purchased the outstanding capital stock of Dav-Jen, Inc., doing
business under the name of Casino Airlink. Casino Airlink is a
wholesale tour and travel company, which operates tours between
Florida cities and Biloxi, Mississippi. The transaction has been
treated as a purchase transaction in accordance with generally
accepted accounting principles.
On October 31, 1996, the Company's name was changed to Casino
Airlink, Inc. In November, 1996, the Company authorized the
issuance of 2,000,000 shares of Series A Preferred stock and
1,700,000 shares of Series B Preferred stock. Each share of
Preferred A stock carries a $0.10 par value, has voting rights
and is convertible into two shares of common stock. Each share of
Preferred B is convertible into one share of common stock. There
are no voting rights associated with the Series B Preferred.
In December 1996, the Company purchased the outstanding capital
stock of ReSer Corporation, a Georgia Corporation, engaged in the
Travel Service and Seminar Business. This transaction has also
been treated as a purchase transaction in accordance with
generally accepted accounting principles.
Fixed Assets
Fixed assets are carried at cost. The Company provides
depreciation over the estimated useful lives of fixed assets
using the straight line method. Upon retirement or sale of fixed
assets, their net book value is removed from the accounts and the
difference between such net book value and proceeds received is
recorded as income or loss. Expenditures for maintenance and
repairs are charged to income while renewals and betterments are
capitalized.
Estimated useful lives are as follows: Furniture: 7 years Office
equipment: 5 years
Income Taxes
The Company has adopted SFAS 109. The Company has not made a
provision for income tax purposes due to incurring losses since
inception. The net losses of approximately $1,580,000 can be
carried forward to offset future taxable income. The net
operating loss carry forward begins to expire in 2009.
Revenue Recognition
The Company receives reservations for tours for future dates. The
amount received is booked as unearned revenues and is not
recognized as income until the tour actually occurs. At the date
that the tour commences, the unearned revenues are taken into
income and the estimated cost to complete the tour are accrued.
Intangible Assets
In connection with the purchase of Casino Airlink, the Company
paid costs in excess of the net tangible assets acquired. (See
Note 6) The cost paid in excess of the net tangible assets is
attributable to long-lived intangible assets having continuing
value. These intangible assets will be amortized over their
estimated useful lives, as follows:
Non compete agreement: 5 years Trademark: 10 years Customer
lists: 7 years Goodwill: 40 years
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported
in the financial statements and footnotes thereto. Actual results
may differ from those estimates.
Net Income Per Share
The Company has elected early adoption of SFAS 128, Earnings per
Share issued by the Financial Accounting Standards Board. It
replaces the presentation of primary and fully diluted EPS with
basic and diluted EPS. Basic EPS excludes all dilution. It is
based on the weighed average number of common shares outstanding
during the period. Diluted EPS reflects the potential dilution
that would occur if securities or other contracts to issue common
stock were exercised or converted into common stock. The Series A
and Series B preferred shares were issued on December 7, 1996 and
December 12, 1996, respectively.
NOTE 2: LEASES
Operating Leases
The Company leases office space in Ft. Lauderdale, Florida on a
month to month basis. The Company also leases office facilities
and certain equipment, in Clearwater, Florida, under non
cancelable operating leases which expire at various dates through
the year 2000, as follows:
1998: $105,000 1999: $110,000 2000: $57,500 Total: $272,500
Rent expense for the year ended December 31, 1997 was $101,040.
Capitalized Leases
The Company acquired office equipment under provisions of a long-
term lease. Cost and accumulated amortization of such assets
totaled $84,453. At December 31, 1997 future annual payments are
as follows:
1998:$ 2,0691999:1,978Total:4,047Less current portion:2,069Amount
due long-term:$ 1,978
NOTE 3: RECAPITALIZATION
The Company became a Nevada Corporation in late 1995 and
restructured its capital stock to authorize 25,000,000 shares of
common stock, $0.10 par value. The outstanding 5,000 shares of
$1.00 par value thereby became 500,000 shares of the new Common
stock. Accordingly, an additional 495,000 shares of common stock
were issued to the Company's shareholders and the par value on
the balance sheet was adjusted to reflect the shares issued. This
non monetary transaction necessitated an increase in par value
and a decrease in additional paid-in capital of $45,000. In
December, 1995 an additional 2,500,000 shares of Common stock
were sold.
NOTE 4: PURCHASE OF DAV-JEN
The purchase price of Dav-Jen was originally $3,500,000, subject
to adjustment, if necessary upon completion of an audit of the
Casino Airlink financial statements at May 31, 1996. The amount
was payable in seven successive equal quarterly payments of
$500,000 beginning June 3, 1996. Additional payments were due on
the first day of September and December 1996 and March, June,
September and December 1997. The outstanding balance was to bear
interest at the rate of 8% per year commencing September 1, 1996.
On June 3, the Company paid $500,000 to the former principal
stockholder of Casino Airlink as the initial quarterly payment.
The audit of Casino Airlink for the five months ended May 31,
1996 required an adjustment (reduction) to the purchase price in
the amount of $684,198. Accordingly, the scheduled quarterly
payment for September 3, 1996 of $500,000 was canceled and the
amount due at December 3, 1996 was reduced to $315,802.
In addition, the Company was to pay $2.50 for each passenger
flying via Casino Airlink for a period of two years, in
consideration for Mr. Schoen's guarantee of a Surety Bond owned
by the Company, and the guarantee of the Company's credit card
merchant account.
The allocation of the $3,500,000 purchase price, less the
adjustment of $684,198 was as follows:
Non compete agreement $500,000
Office furniture and equipment 200,000
Customer list 700,000
Trademark 100,000
Goodwill 1,856,100
On December 6, 1996, the sales agreement was amended, retroactive
to May 31, 1996. The outstanding debt was reduced to $745,000
payable over a 24 month period commencing on January 15, 1997
bearing interest at 10%. In addition the sellers received
1,700,000 shares of Series B Convertible preferred stock.
NOTE 5: PURCHASE OF RESER CORP.
The purchase price of ReSer Corp. was the net asset value of the
Company at December 31, 1996 a total of $252,720 in excess of the
net worth of the Company. This excess was accounted for as
follows: Notes payable in the amount of $195,000 and the issuance
of 156,000 shares of common stock, which were valued at $.37 per
share, or $57,720.
In the event that the trading price of the Company's Common stock
is less than $1.25 a share, on January 3, 1999, the Company is
liable to pay the seller the amount of 156,000 shares multiplied
by the difference of $1.25 and the actual selling price on that
date. Therefore the Company is contingently liable for this
difference.
NOTE 6: EMPLOYMENT CONTRACTS
On June 17, 1996 , the Company entered into employment contracts
with certain key employees, as follows: Mr. William Forhan;
President, $149,000 per annum. As an incentive bonus, Mr. Forhan
is eligible to receive, 30 days after the Board of Directors
approves interim financial statements for the last-ended fiscal
quarter, a payment equal to five percent (5%) of the Company's
pre-tax net income for the last-ended fiscal quarter for each
fiscal quarter after December 31, 1996. Mr. Forhan's right to
receive this incentive bonus will be offset by an equal
percentage of pre-tax net losses, if any, realized from time to
time.
Mr. James Muldowney; President of Casino Airlink, $150,000 per
annum. Mr. Muldowney is also eligible to receive the same bonus
as Mr. Forhan, above. However, Mr. Muldowney's rate of bonus is
2.5%.
As part of the amendment to the Purchase agreement, Mr. Steven
Schoen's contract was amended and he will receive $125,000 a year
for a five year consulting agreement, plus a 5% bonus of Casino
Airlink (Subsidiary) pre-tax income.
NOTE 7: 1996 STOCK OPTION PLAN
Effective December 27, 1996, the 1996 Stock Option Plan has been
adopted to encourage stock ownership by directors and employees
of Casino Airlink, Inc., in order to increase the proprietary
interest in the success of the Company and to encourage them to
provide future services to the Company.
On January 18, 1997, William Forhan was granted an incentive
stock option to purchase up to 2,000,000 shares of Common stock
at a price of $0.30 per share, the fair market value of the
Company's stock at the date of grant. The expiration date of this
grant is January 18, 2007.
In December, 1997, James Muldowney was granted an incentive stock
option to purchase 400,000 shares of common stock at a price of
$0.21 per share, the fair market value of the Company's stock at
the date of grant. The expiration of this grant is December 29,
2008.
NOTE 8: CUMULATIVE EFFECT OF ACCOUNTING CHANGE
As of December 31, 1996, the Company had accrued $375,000 for
federal excise taxes. During the six months ended June 30, 1997,
it was determined that this amount was not due and an adjustment
was made to correct the over accrual. This amount is reflected in
the accompanying statement of operations as a cumulative effect
of an accounting change.
NOTE 9: MODIFICATION OF TERMS - CARRYING VALUE OF DEBT EXCEEDS
FUTURE CASH PAYMENTS
On December 29, 1997, the Company modified the terms of its 10%
Notes payable to the seller. The amount of debt at December 31,
1997 was $1,676,846 and the seller has agreed to accept
$1,360,000 at the same 10% rate over the same period.
Accordingly, the amount of the note has been reduced by $316,846
and an extraordinary gain of $316,846 ($0.05 a share) has been
included in net income in 1997.
NOTE 10: SETTLEMENT OF EQUITY CLAIMS
During the year ended December 31, 1997, certain claims against
the Company were settled by the issuance of Common stock. Under
the terms of these settlements, 670,483 shares were issued in
exchange of $160,901 in claims. The difference between the par
value of $67,048 and the $160,901 in claims, or $93,852, was
charged against income during the year.
<PAGE>
Integrated Marketing Professionals, Inc.
Corporate & Shareholders' Information
GENERAL INFORMATION
Incorporation Date 10/31/96
Original State of incorporation Michigan
Current State of Incorporation Nevada
Standard & Poor's Listing Yes
Moody's OTC Industrial Listing No
Fiscal Year End 12/31
Annual Shar. Meeting Date Floats
In Good Standing Yes
TRADING & QUOTATION DATA
OTC Bulletin Board Symbol "POKR"
Bid Price $0.19
Offer 12/31/97 $0.21
REPORTING STATUS
1933 - Act Registration No1934 - Act RegistrationNo
BENEFIT AND OTHER PLANS
1996 Employee Stock Compensation Plan
1996 Stock Option Plan
TRANSFER AGENT
United Stock Transfer
13275 East Fremont Place, Suite 302
Englewood, Colorado 80112-3910
Tel.: (303) 792-3650 - Fax: (303) 792-3675
AUDITOR
Harvey Judkowitz, CPA
14281 SW 74 Terrace - Miami, FL 33183
Tel.: (305) 387-2968 - Fax: (305) 383-1559
OFFICERS
William ForhanChairman of the Board;
Chief Executive Officer
James Muldowney Director; Secretary/Treasurer;
President of Casino Airlink
IMPI BOARD OF DIRECTORS William Forhan Chairman of Board James
Muldowney Director Derek Lewin Director; James Ponder Director;
VP of Target Marketing, Jefferson Pilot Steve York Director;
President of Contract Professionals, Inc.
LEGAL COUNSEL Charles Pearlman, ATLAS PEARLMAN
TROP & BORKSON, PA200 E. Las Olas Blvd., Ste. 1900 - Ft.
Lauderdale, FL 33301 Tel.: (954) 763-1200 - Fax: (954) 766-7800
COMPANY ADDRESS
888 E. Las Olas Blvd., Ste. 700 - Ft. Lauderdale, FL 33301
Tel.: (954) 938-2500 - Fax: (954) 523-4820
AVIATION INDUSTRIES COMPLETES
ITS FIRST TRAVEL INDUSTRY ACQUISITION
Acquisition Program Underway; More Transactions Planned as
Prelude to Pending Merger with Integrated Marketing Professionals
Fort Lauderdale, Florida, August 12, 1998-William Forhan,
recently appointed Chairman and CEO of Aviation Industries
Corporation (OTC Bulletin Board: AVIA), today reported that the
Company's acquisition program, targeting candidates in the travel
and leisure industry is now fully underway with the completion of
the purchase of Norcross, Georgia-based Business Travel, Inc.
The Company acquired Business Travel, a corporate travel agency
with annual sales of approximately $25 million, in exchange for
$1.2 million, consisting of a combination of cash and restricted
common stock. Further terms of the transaction were not yet
disclosed.
Founded in 1982, Business Travel specializes in corporate travel,
with over 400 corporate accounts, of which approximately half
operate on a fee basis and with the majority of their account
averaging between $100,000 and $250,000 annually.
"This transaction marks our first acquisition since the
management of Integrated Marketing Professionals assumed
operational control of Aviation Industries," commented William G.
Forhan, Chairman of both Aviation Industries and Integrated
Marketing Professionals. "Business Travel fits perfectly with
our overall business mix, particularly Integrated Marketing's
Reser Corporation subsidiary, an Atlanta, Georgia-based
reservations center that services wholesale travel companies.
Additionally, we foresee opportunities to market packaged casino
vacations offered by Integrated Marketing to the more than 20,000
people employed by Business Travel's corporate clients. We are
now working to complete additional transactions in the weeks
ahead that are designed to further enhance our vertical
integration and expand our growth in the travel and leisure
industry. Overall, our acquisition strategy is centered on
companies that compliment the business mix expected to develop as
a result of the pending merger of Aviation Industries and
Integrated Marketing Professionals."
As previously reported, Aviation Industries Corporation has
agreed to acquire Integrated Marketing Professionals, Inc. (OTC
Bulletin Board: POKR) in a transaction valued at approximately
$11.9 million. Pursuant to the terms of the definitive merger
agreement, Aviation Industries reconstituted its Board of
Directors to consist of the five members of the Board of
Directors of Integrated Marketing Professionals, as well as Diran
Kaloustian, previously a director of Aviation Industries.
Completion of the transaction is subject to the completion of
regulatory review by the Securities and Exchange Commission, as
well as approval by shareholders of each company.
Aviation Industries Corp, which holds an equity position in
Newark, N.J-based KIWI International Air Lines, is recently
formed investment concern seeking acquisition opportunities in
the travel and leisure industry.
Integrated Marketing Professionals, Inc., formerly known as
Casino Airlink, Inc., is a diversified travel and leisure
company. The Company is currently the exclusive provider of
packaged casino vacations from five cities in Florida and
Atlanta, Georgia to the Mississippi Gulf Coast, which include non-
stop, round trip jet service, destination airport transfers,
ground handling, 2-3 night deluxe hotel accommodations, nightly
buffet meals and access to 24-hour Las Vegas style gaming and
entertainment. Additional information regarding Integrated
Marketing Professionals may be found on the Internet at PR
Newswire's Web sit (http://www.prnewswire.com) under Company News
On-Call, or accessed directly at
http://www.prnewswire.com/gh/cnoc/comp/123827.html.
Statements about the Company's future expectations, including
future revenues and earnings, and all other statements in the
press release other than historical facts are "forward-looking
statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company intends that such
forward-looking statements be subject to the safe harbors created
thereby. Since these statements involve risks and uncertainties
and are subject to change at any time, the Company's actual
results could differ materially from expected results.
AVIATION INDUSTRIES COMPLETES AQUISITON
OF MAGNOLIA TOURS AND TRANSPORTATION
Transaction Marks Second Acquisition Completed
Fort Lauderdale, Florida, August 18, 1998-Aviation Industries
Corporation (OTC Bulletin Board: AVIA) today reported that it has
completed the acquisition of Biloxi, Mississippi-base Magnolia
Tours and Transportation, a motor coach transportation company
operating in the Mississippi Gulf Coast area. Terms of the
transaction were not disclosed.
Magnolia Tours and Transportation provides a wide range of motor
coach-based transportation services, including airport transfers
for visitors traveling to and from Mississippi Gulf Coast casino
and hotel, shuttle services and local area tours.
"This transaction marks the second acquisition undertaken as a
prelude to our pending merger with Integrated Marketing
Professionals," commented William G. Forhan, Chairman of Aviation
Industries. "Magnolia is well established in the Gulf Coast
market and offers opportunities to further expand our revenue
base. Our immediate plans call for the replacement of its fleet
of five motor coaches with brand new 54 passenger coaches
offering state-of-the-art audio and visual equipment, first class
passenger amenities, and the utmost in comfort and safety. We
also plan to use these new coaches to offer vacationers optional
trips to places such as New Orleans. This will allow us to
further capitalize on the continued growth of the Gulf Coast
market, including the increasing growing number of large groups
and conventions being drawn to the area."
Aviation Industries Corp., which holds an equity position in
Newark, N. J.-based KIWI International Air Lines, is in the
process of acquiring Integrated Marketing Professionals, Inc.
Integrated Marketing Professionals, Inc. formerly known as Casino
Airlink, Inc. is a diversified travel and leisure company. The
Company is the exclusive provider of packaged casino vacations
from five cities in Florida, three cities in Texas, Tulsa,
Oklahoma, and Atlanta, Georgia to the Mississippi Gulf Coast,
which include non-stop, round trip jet service, destination
airport transfers, ground handling, 2-3 night deluxe hotel
accommodations, nightly buffet meals and access to 24-hour Las
Vegas style gaming and entertainment.
Statements about the Company's future expectations including
future revenues and earnings, and all other statements in the
press release other than historical facts are "forward-looking
statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company intends that such
forward-looking statements be subject to the safe harbors created
thereby. Since these statements involve risks and uncertainties
and are subject to change at any time, the Company's actual
results could differ materially from expected results.
FOR IMMEDIATE RELEASE CONTACT: Barry A. Rothman
B. Alan Associates, Inc.
(561) 483-7743
William G. Forhan
Integrated Marketing Professionals, Inc.
(954) 938-2500
INTEGRATED MARKETING PROFESSIONALS REPORTS
TERMS OF MERGER WITH AVIATION INDUSTRIES
Fort Lauderdale, Florida, July 16, 1998-Integrated Marketing
Professionals, Inc. (OTC Bulletin Board: POKR), formerly known as
Casino Airlink, today reported terms of its previously announced
definitive merger agreement with Aviation Industries Corporation
(OTC Bulletin Board: AVIA). Under the terms of the agreement,
shares of the Company's common stock will be valued at $.62 per
share in determining the share exchange rate. As a result,
shares of POKR common stock will be exchanged for one share of
Aviation Industries common stock at a rate determined by dividing
the average closing price of Aviation Industries common stock
(calculated over the ten trading days commencing five trading
days prior to the effective date of the merger) by 0.62 (avg.
price / 0.62 = number of shares of POKR exchange per one share of
AVIA). Completion of the transaction is subject to the
completion of regulatory review by the Securities and Exchange
Commission, as well as approval by shareholders of each company.
As previously reported, Aviation Industries has agreed to
reconstitute its Board of Directors to consist the members of the
Board of Directors of Integrated Marketing Professionals, as well
as Diran Kaloustian, currently Chairman of Aviation Industries.
Mr. Forhan, currently CEO of Integrated Marketing Professionals,
will assume the post of Chairman, President and CEO of Aviation
Industries.
We expect this merger, "commented William G. Forhan, CEO of
Integrated Marketing Professionals, "to greatly facilitate the
expansion of our business plan. We look to benefit from Aviation
Industries' wide range of travel industry and investment banking
relationships."
Aviation Industries Corp., which holds an equity position in
Newark, N.J.-based KIWI International Air Lines, is a newly
formed investment concern concentrating its efforts on the
regional and charter aviation markets.
Integrated Marketing Professionals, Inc. formerly know as Casino
Airlink, is a wholesale travel company that is currently the
exclusive provider of packaged casino vacation from five cities
in Florida and Atlanta, Georgia to the Mississippi Gulf Coast.
Casino Airlink provides non-stop, round trip jet service,
destination airport transfers, ground handling, 2-3 night deluxe
hotel accommodations, nightly buffet meals and access to 24-hour
Las Vegas style gaming and entertainment. The Company, with
revenues of $18.3 million in 1997, delivered more than 85,000
passengers to the Mississippi Gulf Coast area via their chartered
and scheduled air service in 1997.
Statements about the Company's future expectations, including
revenues and earnings, and all other statements in the press
release other than historical facts are "forward-looking
statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company intends that such
forward-looking statements be subject to the safe harbors created
thereby. Since these statements involve risks and uncertainties
and are subject to change at any time, the Company's actual
results could differ materially from expected results.
FOR IMMEDIATE RELEASE CONTACT: Barry A. Rothman
B. Alan Associates, Inc.
(561) 483-7743
William G. Forhan
Integrated Marketing Professionals, Inc.
(954) 938-2500
INTEGRATED MARKETING PROFESSIONALS' BOARD ASSUMES
CONTROL OF AVIATION INDUSTRIES' BOARD OF DIRECTORS
William Forhan Also names Chairman, President and CEO of Aviation
Industries
Fort Lauderdale, Florida, August 3, 1998-Aviation Industries
Corporation (OTC Bulletin Board: AVIA) today reported that, as
agreed upon in its definitive merger agreement with Integrated
Marketing Professionals, Inc. (OTC Bulletin Board: POKR), all
members of its Board of Directors, with the exception of Mr.
Diran Kaloustian, have resigned and the Board has been
reconstituted to consist of William Forhan, James Muldowny, Steve
York, James Ponder, and Derek Lewin, currently members of the
Board of Directors of Integrated Marketing Professionals, as well
as Diran Kaloustian, previously Chairman of Aviation Industries.
Concurrently, the Board appointed Mr. Forhan, Chairman of
Integrated Marketing Professionals, to also assume the post of
Chairman, President and Chief Executive Officer of Aviation
Industries. As previously reported, completion of the
transaction is subject to the of regulatory review by the
Securities and Exchange Commission, as well as approval by
shareholders of each company.
"We have now completed this important first step toward becoming
one entity," commented William G. Forhan, Chairman of both
Aviation Industries and Integrated Marketing Professionals.
"Moving forward, we will now begin to more aggressively implement
various aspects of our business plan to facilitate our expansion
into new markets and the development of new products and
services. In the upcoming weeks we plan to complete several key
acquisitions in the travel and leisure industry that will further
enhance our vertical integration and expand our growth."
Aviation Industries Corp., which holds an equity position in
Newark, N.J-based KIWI International Air Lines, is a recently
formed investment concern seeking acquisition opportunities in
the travel and leisure industry.
Integrated Marketing Professionals, Inc., formerly known as
Casino Airlink, Inc. is a diversified travel and leisure
company. The Company is currently the exclusive provider of
packaged casino vacations from five cities in Florida and
Atlanta, Georgia to the Mississippi Gulf Coast, which include non-
stop, round trip jet service, destination airport transfers,
ground handling, 2-3 night deluxe hotel accommodations, nightly
buffet meals and access to 24-hour Las Vegas style gaming and
entertainment. Additional information regarding Integrated
Marketing Professionals may be found on the Internet at PR
Newswire's Web site (http://www.prnewswire.com) under Company New
On-Call, or accessed directly at
http://ww.prnewswire.com/gh/cnoc/comp/12387.html.
Statements about the Company's future expectations, including
future revenues and earnings, and all other statements in the
press release other than historical facts are "forward-looking
statements' within the meaning of the Private Securities
Litigation Reform Act of 1995. The Company intends that such
forward-looking statements be subject to the safe harbors created
thereby. Since these statements involve risks and uncertainties
and are subject to change at any time, the Company's actual
results could differ materially from expected results.
