U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL
BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
DYNAMIC IMAGING GROUP, INC.
(Name of Small Business Issuer in its charter)
FLORIDA 65-0903895
(State of incorporation) (I.R.S. Employer Identification No.)
3418 North Ocean Boulevard, Ft. Lauderdale, Florida 33308
(Address of principal executive offices) (Zip Code)
Issuer's Telephone Number (954) 564-1133
Securities to be registered pursuant to 12(b) of the Act: None
Securities to be registered pursuant to 12(g) of the Act:
Common Stock $.001 Par Value
(Title of Class)
<PAGE>
INFORMATION REQUIRED IN REGISTRATION STATEMENT
PART I
ITEM 1. DESCRIPTION OF BUSINESS
-----------------------
Overview
Dynamic Imaging Group, Inc. (the "Company"), a development stag
company, was incorporated under the laws of the State of Florida in February
1999. The Company, through its wholly-owned subsidiary, Dynamic Imaging Group,
Inc., a Colorado corporation is engaged in the sale, marketing and rental of
portable show displays, accessories and graphics, all of which are used in the
trade show and trade exhibition industry .
The Trade Show and Exhibition Industry
Management of the Company's ("Management") market analysis shows that
during the past decade companies have realized the importance of displaying
their products through trade shows, conventions and company meetings. As a
result, Management believes that the show and exhibition display industry has
substantial growth potential both domestically and internationally.
According to the Center for Exhibition Industry Research, the
exhibitions, conventions and meetings industry contributed $79 billion to the
U.S. economy, $9.57 billion of which was directly related to the design,
services, shipping and promotion of trade show displays. The same source
confirms the show and exhibition display system and accessory market is a
rapidly growing industry, both domestically and internationally. More
specifically, during the 1980s the exhibition industry reportedly grew 72% and
in 1989 alone there were a total of 3,289 shows. Customer base for rental of the
show display systems was 5% of the direct exhibit design dollars spent in 1996.
Out of the 11,000 shows, the average show has 200 exhibitors and 60% or
1,320,000 of the exhibitors rent a show booth size that accommodates the
Company's display. Management estimates that in 1999 a total of 11,000 trade
shows are scheduled. By year 2001, the average exhibition is projected to span
131,900 net square feet of exhibit space, draw 470 exhibiting firms and 27,560
attendees. This projection includes both business-to-business and consumer
shows. Over 500 new shows are expected to be launched by the end of 2001.
Management believes the growth in the trade show and exhibits industry has
created a large demand for companies to either invest in their own show display
or rent a display through convention centers or local show display companies.
The Show Display Market
During the past years there have been numerous companies manufacturing
portable show displays and marketing the displays directly to the end user.
Research conducted by Management revealed that the average company would only
use a show display two to three times a year and that it was overly
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<PAGE>
burdensome and, in some cases, cost prohibitive to purchase, transport and
assemble their own show displays. Management also discovered that many companies
will pass up the opportunity to participate in smaller regional shows and
exhibitions due to the enormous cost in transporting and assembling the display
systems.
Based on these findings, Management created a new concept in renting
show displays. The Company's niche is catering to the trade show participant who
does not want the burden of purchasing, shipping and assembling their own
display when they can rent a display with graphics, which can be easily
assembled at a cost far below the current show display rental market. The
Company will target a customer base comprised of individuals and small companies
who have the ability to purchase Displays and use the Displays for their own
business (including but not limited to use at trade shows, conventions, grand
openings, weddings and company meetings) or allow the Company to rent their
Displays for them for which they will receive a royalty.
The Company's Show Displays
The Company's name brand displays are manufactured for the Company by
Jemco Displays. The Company's displays are light weight and can be easily
assembled without tools in approximately 15 minutes. The aluminum frame of the
Company's displays, which expands to a preconfigured exhibit structure carry an
unconditional lifetime warranty. Nylon, fabric and mylar custom covers
velcro-attach to the frame giving the Company's display what Management believes
is a dramatic, eye-catching effect. The display's frame also supports lighting,
shelves, signage and various other interchangeable lightweight products.
Fabric, photo panels and various graphics, which are also supplied by
the Company, easily attach to the display's frame by magnetic strips
strategically located on the panels. The Company's graphics available for use
with its displays are laser generated, true photographic, continuous tone
process, which creates the capability to take 24 inch by 12 inch poster, to a
10' X 10' foot mural and keep the image sharp and clear. Management believes
this revolutionized process far surpasses the inkjet and electrostatic process
at a much-reduced cost and turnaround time.
The displays come with molded plastic shipping cases with built-in
wheels for easy transporting. The shipping cases convert to a matching podium
table for the display. The Company intends to have up to five support outlets
strategically located in the rental areas throughout the United States for quick
twenty-four hour turn a round repair service.
Marketing Philosophy and Strategy
The Company intends to concentrate its show display marketing efforts
toward smaller companies which participate in major trade shows, conventions,
grand openings, weddings, company meetings, local
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companies with display needs, small trade shows that cater to individuals, as
well as product awareness through point of purchase and point of sale.
The Company is using the telemarketing approach to reach the highest
degree of contact with potential customers in the selling of the display system.
Rental of the Company's show display systems is being accomplished by using
worldwide retail outlets that presently cater to the equipment rental, printing
and graphics, and trade shows market. Convention centers, hotels and civic
centers are also a major source of rentals for the display systems. Any show
display the Company markets through rental franchise will most likely result in
the payment of a fee or commission to the rental franchise on a per unit basis.
The Company has its own public relations division that reaches over
21,000 potential clients through its mass mailing, telemarketing and direct
contact. Management believes that in house public relations is a more reliable
way to get the message out about the Company and will not require contracting
with outside public relation firms.
The Company currently has 12 employees, 8 of whom are involved in sales
and clerical and 4 of whom are involved in management of the Company.
Competition
Management's estimates that throughout the world there are
approximately fifteen major manufactures of pop up display systems, with the
leading competitors in the industry being Skyline, Nomadic, Abex, and Expo
Design, all of which gives a lifetime warranty. However, at this time
Management's believes that there are no nationally organized competitors
offering rental service other than independents in local areas.
ITEM 2. DESCRIPTION OF PROPERTY
-----------------------
The Company maintains its executive office, sales facility and
warehouse facility at 3418 N. Ocean Boulevard, Fort Lauderdale, Florida 33308.
The Company leases its executive offices, sales facility and warehouse facility
for $3,400 per month, $1,200 per month and $800 per month, respectively.
ITEM 3. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND SIGNIFICANT
--------------------------------------------------------
EMPLOYEES
---------
The following table sets forth the names, positions with the Company
and ages of the executive officers and directors of the Company. Directors will
be elected at the Company's annual meeting of shareholders and serve for one
year or until their successors are elected and qualify. Officers are elected by
the Board and their terms of office are, except to the extent governed by
employment contract, at the discretion of the Board.
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<PAGE>
The Directors, Executive Officers and key employees of the Company are as
follows:
<TABLE>
<CAPTION>
Name Age Positions Held
---- --- --------------
<S> <C>
Gary R. Morgan 54 Director, Chairman, and CEO
Roland L. Breton 49 Director and President
Howard I. Storfer 42 Director and Chief Operating Officer
</TABLE>
Gary R. Morgan has been Director, Chairman of the Board and Treasurer of the
Company since its inception in March 1998 and CEO of the Company since December
1998. Between July 1996 and March 1998, Mr. Morgan served as Chief Executive
Officer of Olympus Ventures, Inc., a garment contractor and manufacturer
company. Between March 1994 and July 1996, Mr. Morgan was President of Horizon
International Associates, Inc., a pre-owned aircraft marketing company.
Roland L. Breton has been Director and President of the Company since March
1998. Between September 1996 and December 1998 Mr. Breton acted as Director and
President of Olympus Ventures, Inc. Between November 1995 and September 1996,
Mr. Breton was President of Olympus Mills, Inc., the manufacturing division of
Olympus Ventures, Inc. Between October 1993 and November 1995 he was Executive
Vice President of Madison Group Associates, Inc., an entertainment and fitness
company.
Howard I. Storfer has been a Director and Chief Operating Officer of the Company
since March 1998. Between September 1996 and March 1998, Mr. Storfer was
President of All U.S. Credit Reporting, Inc., a credit profile supplier. Between
March 1994 and September 1996, Mr. Storfer was a partner in Howard Storfer, MBA,
P.A., a consumer credit consulting company.
Employment Agreements
Messrs. Morgan, Breton and Storfer entered into five year employment
agreements with the Company in February 1998. The agreements entitled each of
the officers to (i) receive a $120,000 base salary per year; (ii) a bonus equal
to 2.5% of the Company's gross profits for each year of the agreement; (iii)
options to purchase 300,000 shares of the Company's common stock exercisable at
$.80 per share for each year of the agreement, and (iv) an expense allowance
equal to 10% of the base salary. The agreements provide for an increase of at
least 10% per year in the base salary amounts. The agreements include standard
non-corporate and confidential provisions.
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<PAGE>
ITEM 4. EXECUTIVE COMPENSATION
----------------------
The following table sets forth information relating to the compensation
paid by the Company during the past two fiscal years to: (i) the Company's
Chairman, President and Chief Operating Officer; and (ii) each of the Company's
executive officers who earned more than $100,000 during the fiscal year ended
December 31, 1998:
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
- ------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
-------------------------------------------------------------------------------------
Awards Payout
-----------------------------------------------------
Securities
Other Under-
Annual Restricted Lying All Other
Name and Principal Compen- Stock Options/ LTIP Compen-
Position Year Salary Bonus sation Award(s) SARs Payouts sation
-------- ---- ------ ----- ------ -------- ---- ------- ------
($) ($) (#) ($) ($)
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Gary Morgan, Chairman* 1998 $15,000
- ------------------------------------------------------------------------------------------------------------------------------
Roland Breton, President* 1998 $15,000
- ------------------------------------------------------------------------------------------------------------------------------
Howard Storfer, COO* 1998 $15,000
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*Does not include options to purchase an aggregate amount of 1,500,000 shares of
the Company's common stock granted to an employment agreement dated February 28,
1998, exercisable at $.80 per share. Such options vest in five equal annual
installments of 300,000 shares begging on February 28, 2000 and are exercisable
for a period of seven years from the date of vesting.
Stock Options
<TABLE>
<CAPTION>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
- ------------------------------------------------------------------------------
Individual Grants
- -----------------------------------------------------------------------------
Percent of
Number Of Total
Securities Options/
Underlying SARs Granted Exercise Of
Options/SARs To Employees Base Price Expiration
Name Granted (#) In Fiscal Year (S/Sh) Date
- ------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gary Morgan* 1,500,000 33.33% N/A N/A
- ------------------------------------------------------------------------------
Roland Breton* 1,500,000 33.33% N/A N/A
- ------------------------------------------------------------------------------
Howard Storfer* 1,500,000 33.33% N/A N/A
- ------------------------------------------------------------------------------
</TABLE>
*Does not include options to purchase an aggregate amount of 1,500,000 shares of
the Company's common stock granted to an employment agreement dated February 28,
1998, exercisable at $.80 per share. Such options vest in five equal annual
installments of 300,000 shares begging on February 28, 2000 and are exercisable
for a period of seven years from the date of vesting.
Option Exercises and Holdings
- -----------------------------
The following table sets forth information with respect to the exercise
of options to purchase shares of Common Stock during the fiscal year ended
December 31, 1998, of each person named in the Summary Compensation Table and
the unexercised options held as of the end of the 1998 fiscal year.
<TABLE>
<CAPTION>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
- ------------------------------------------------------------------------------------------------------------------------------
Number of Value Of
Securities Unexercised
Underlying In-The-Money
Unexercised Options/SARs
Options/SARs At Fiscal Year-
Shares At Fiscal Year-End End
Acquired On Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Roland Breton, President N/A 0/1,500,000 N/A
- ------------------------------------------------------------------------------------------------------------------------------
Gary Morgan, Chairman N/A 0/1,500,000 N/A
- ------------------------------------------------------------------------------------------------------------------------------
Howard Storfer, CEO N/A 0/1,500,000 N/A
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
ITEM 5. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
---------------------------------------------------
MANAGEMENT
----------
The following table sets forth information as of June 8, 1999, with
respect to the beneficial ownership of shares of the Company's (the "Common
Stock") common stock by (i) each person or entity known by the Company to be the
owner of more than 5% of the outstanding shares of Common Stock, or to be under
common control, (ii) each officer and director, and (iii) all officers and
directors as a group.
Approximate
Percentage of
No. of Outstanding Shares
Name Shares(1) Beneficially Owned
- ---- --------- ------------------
Gary R. Morgan(2) 2,000,000 36.0%
Roland L. Breton(3) 2,000,000 36.0%
Howard I. Storfer(4) 500,000 9.0%
All Officers and Directors 4,500,000 81.0%
as a Group (3 persons)
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<PAGE>
(1) There were 5,549,710 shares of the Company's Common Stock and
outstanding as of June 8, 1999.
(2) Gary Morgan is Director and Chairman of the Board of the Company.
Includes 2,000,000 shares of the Company's Common Stock of the
3,500,000 owned by Horizon Associates, Inc. ("Horizon"), a corporation
of which Mr. Morgan is a 57% shareholder. Does not include options to
purchase an aggregate amount of 1,500,000 shares of the Company's
Common Stock granted to an employment agreement dated February 28,
1998, exercisable at $.80 per share. Such options vest in five equal
annual installments of 300,000 shares beginning on February 28, 2000
and are exercisable for a period of seven years from the date of
vesting.
(3) Mr. Breton is Director and President of the Company. Includes 500,000
shares of the Company's common stock owned by Deborah Breton and
1,500,000 shares of Company's Common Stock owned by Horizon in which
Mr. Breton is a 33% shareholder. Does not include options to purchase
an aggregate amount of 1,500,000 shares of the Company's Common Stock
granted to an employment agreement dated February 28, 1998, exercisable
at $.80 per share. Such options vest in five equal annual installments
of 300,000 shares beginning on February 28, 2000 and are exercisable
for a period of seven years from the date of vesting.
(4) Mr. Storfer is Chief Operating Officer and a Director of the Company.
Includes (i) 500,000 shares of the Company's Common Stock owned by
Elida Storfer, Mr. Storfer's wife. Does not include options to purchase
an aggregate amount of 1,500,000 shares of the Company's Common Stock
granted to an employment agreement dated February 28, 1998, exercisable
at $.80 per share. Such options vest in five equal annual installments
of 300,000 shares beginning on February 28, 2000 and are exercisable
for a period of seven years from the date of vesting.
ITEM 6. INTEREST OF MANAGEMENT AND OTHER CERTAIN TRANSACTIONS
-----------------------------------------------------
Between March 1998 and January 1999, Horizon Associates, Inc., a
company controlled by Messrs. Breton and Morgan, loaned the Company
approximately $7,400. As of May 31, 1999, the Company owed Horizon Associates,
Inc. $2,209.
ITEM 7. DESCRIPTION OF SECURITIES
-------------------------
The Company is authorized to issue 50,000,000 shares of Common Stock,
par value $.001 per Share, and 5,000,000 shares of Preferred Stock, par value
$.001 per Share. As of June 8, 1999, there were 5,549,710 shares of Common Stock
issued and outstanding and no shares of preferred stock outstanding.
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<PAGE>
Common Stock
- ------------
The authorized capital stock of the Company currently includes
50,000,000 shares of Common Stock, par value $.001 per share. The holders of
Common Stock: [i] have equal ratable rights to dividends from funds legally
available therefor, when, as and if declared by the Board of Directors of the
Company; [ii] are entitled to share ratably in all of the assets of the Company
available for distribution to holders of Common Stock upon liquidation,
dissolution or winding up of the affairs of the Company; [iii] do not have
preemptive subscription or conversion rights and there are no redemption or
sinking fund provisions applicable thereto; and [iv] are entitled to one vote
per share on all matters on which stockholders may vote at all meetings of
stockholders. All shares of Common Stock now outstanding are fully paid and
non-assessable. The holders of shares of Common Stock of the Company do not have
cumulative voting rights, which means that the holders of more than 51% of such
outstanding shares, voting for the election of Directors, can elect all of the
Directors to be elected, if the so choose and in such event, the holders of the
remaining shares will not be able to elect any of the Company's Directors. The
Company's Board of Directors is empowered to take all actions necessary to
increase the number of shares authorized in the Company as necessary, and
subject to appropriate financing arrangements, intends to alter the capital
stock structure of the Corporation.
Preferred Stock
- ---------------
The Company is authorized to issue 5,000,000 shares of Preferred Stock
with such designations, rights and preferences as may be determined from time to
time by the Board of Directors. Accordingly, the Board of Directors is
empowered, without stockholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting or other rights which could adversely effect the
voting power or other rights of the holders of the Company's Common Stock. In
the event of issuance, the Preferred Stock could be utilized, under certain
circumstances, as a method of discouraging, delaying or preventing a change in
control of the Company.
Certain Florida Legislation
- ---------------------------
Florida has enacted legislation that may deter or frustrate takeovers
of Florida corporations. The Florida Control Share Act generally provides that
shares acquired in excess of certain specified thresholds will not possess any
voting rights unless such voting rights are approved by a majority of a
corporation's disinterested shareholders. The Florida Affiliated Transactions
Act generally requires super majority approval by disinterested shareholders of
certain specified transactions between a public corporation and holders of more
than 10% of the outstanding voting shares of the corporation (or their
affiliates). Florida law and the Company's Articles and Bylaws also authorize
the Company to indemnify the Company's directors, officers, employees and
agents. In addition, the Company's Articles and Florida law presently limit the
personal liability of corporate directors for monetary damages, except where the
directors (i) breach their fiduciary duties; and (ii) such breach constitutes or
includes certain violations of criminal law,
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<PAGE>
a transaction from which the directors derived an improper personal benefit,
certain unlawful distributions or certain other reckless, wanton or willful acts
or misconduct.
Anti-takeover Effects of Certain Provisions of the Company's Articles of
- ------------------------------------------------------------------------
Incorporation and Bylaws
- ------------------------
paragraphs, and above under the Section entitled "Preferred Stock",
may be deemed to have an anti-takeover effect and may delay, defer or prevent a
tender offer or takeover attempt, including attempts that might result in a
premium being paid over the market price for the shares held by shareholders.
Despite the belief of the Company as to the benefits to shareholders of these
provisions of the Company's Articles of Incorporation, these provisions may also
have the effect of discouraging a future takeover attempt which would not be
approved by the Company's Board, but pursuant to which the shareholders may
receive a substantial premium for their shares over then current market prices.
As a result, shareholders who might desire to participate in such a transaction
may not have any opportunity to do so. Such provisions will also render the
removal of the Company's Board of Directors and management more difficult and
may tend to stabilize the Company's stock price, thus limiting gains which might
otherwise be reflected in price increases due to a potential merger or
acquisition. The Board of Directors, however, has concluded that the potential
benefits of these provisions outweigh the possible disadvantages. Pursuant to
applicable regulations, at any annual or special meeting of its shareholders,
the Company may adopt additional Articles of Incorporation provisions regarding
the acquisition of its equity securities that would be permitted to a Florida
corporation.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S
-------------------------------------------------
COMMON EQUITY AND OTHER STOCKHOLDER MATTERS
-------------------------------------------
There is currently no public trading market for the Company's common
stock.
The Company is in the process of engaging Corporate Stock Transfer as
the transfer agent for the Company's Common Stock. Corporate Stock Transfer is
located at 370 17th Street, Suite 2350, Denver, Colorado 80202.
The Company has never paid cash dividends on its Common Stock. The
Company presently intends to retain future earnings, if any, to finance the
expansion of its business and does not anticipate that any cash dividends will
be paid in the foreseeable future. The future dividend policy will depend on the
Company's earnings, capital requirements, expansion plans, financial condition
and other relevant factors.
ITEM 2. LEGAL PROCEEDINGS
-----------------
There are no material legal proceedings filed, or to the Company's
knowledge, threatened against the Company.
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<PAGE>
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
---------------------------------------------
Not Applicable.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
---------------------------------------
In March 1998, the Company granted options to purchase an aggregate of
4,500,000 shares of Common Stock to its Officers and Directors. The options are
exercisable in five equal annual installments of 900,000 beginning on February
28, 2000. The options are exercisable for a period of seven years from the date
of grant at $.80 per share. Because the Officers and Directors had access to all
information pertaining to the Company, the issuance was exempt from the
registration requirements of the Act pursuant to Section 4(2) of the Act.
In March 1999, the Company issued an aggregate of 5,000,000 shares of
Common Stock to the Officers and Directors of the Company for aggregate
consideration of $5,000. Such investors were founders of the Company, and
therefore, had access to all information pertaining to the Company. As a result,
the issuance was exempt from the registration requirements of the Act pursuant
to Section 4(2) of the Act.
In January , 1999, the Company issued an aggregate of 250,300 shares of
Common Stock at $.50 per share to 17 investors in accordance with Rule 504 of
Regulation D promulgated under the Act.
In March 1999, the Company issued an aggregate of 299,410 shares of
Common Stock at $2.50 per share to 37 investors in accordance with Rule 504 of
Regulation D promulgated under the Act.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
The Florida Business Corporation Act (the "Corporation Act") permits
the indemnification of directors, employees, officers and agents of Florida
corporations. The Company's Articles of Incorporation (the "Articles") and
Bylaws provide that the Company shall indemnify its directors and officers to
the fullest extent permitted by the Corporation Act. Insofar as indemnification
for liabilities arising under the Act may be permitted to directors, officers or
persons controlling the Company pursuant to the foregoing provisions, the
Company has been informed that, in the opinion of the Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed that
in the opinion of the Securities and Exchange Commission, such indemnification
is against public policy as express in the act and is therefore unenforceable.
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<PAGE>
The Articles of Incorporation and Bylaws of the Company require the
Company to indemnify its Directors and officers to the fullest extent permitted
by the Business Corporation Act of the State of Florida.
The above indemnification provisions notwithstanding, the Company is
aware that insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as express in the act and is
therefore unenforceable.
PART F/S
The financial statements and supplementary data are included herein.
FINANCIAL STATEMENTS AND EXHIBITS
- ---------------------------------
The following audited Financial Statements for the Company, include the
audited balance sheet at December 31, 1998, and the related audited statements
of operations, changes in capital deficiency and cash flows for each of the
years in the period from March 27, 1998 (inception) to December 31, 1998 and the
interim financial statements as of March 31, 1999 (unaudited).
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<PAGE>
DYNAMIC IMAGING GROUP, INC.
FINANCIAL STATEMENTS
CONTENTS
Report of Independent Certified Public Accountants..................F-2
Financial Statements for the Period from Inception (March 27, 1998)
to December 31, 1998:
Balance Sheet...................................................F-3
Statement of Operations.........................................F-4
Statement of Stockholders' Equity...............................F-5
Statement of Cash Flows.........................................F-6
Notes to Financial Statements....................................F-7-F-10
Financial Statements as of March 31, 1999
Balance Sheet.......................................................F-11
Statement of Operations.........................................F-12
Statement of Stockholders' Equity...............................F-13
Statement of Cash Flows.........................................F-14
Notes to Financial Statements...................................F-15-F-16
F-1
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Stockholders
Dynamic Imaging Group, Inc.
Fort Lauderdale, Florida
We have audited the accompanying balance sheet of Dynamic Imaging Group, Inc. as
of December 31, 1998 the related statements of operations, stockholders' equity,
and cash flows for the period from inception (March 27, 1998) to December 31,
1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
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.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Dynamic Imaging Group, Inc. as
of December 31, 1998, and the results of its operations and its cash flows for
the period from inception (March 27, 1998) to December 31, 1998, in conformity
with generally accepted accounting principles.
Millward & Co. CPAs
Fort Lauderdale, Florida
February 15, 1999
F-2
<PAGE>
DYNAMIC IMAGING GROUP, INC.
BALANCE SHEET
December 31, 1998
ASSETS
CURRENT ASSETS:
Cash $ 10,047
Accounts Receivable 4,507
--------
Total Current Assets 14,554
Property and Equipment, at Cost (Net of Accumulated
Depreciation of $560 ) 33,126
Security Deposit 1,590
--------
Total Assets $ 49,270
========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses $ 31,848
Deferred Income Taxes 1,620
Due to Affiliated Company 7,408
--------
Total Liabilities 40,876
--------
STOCKHOLDERS' EQUITY:
Preferred Stock (No Par Value; 5,000,000 Shares
Authorized; No Shares Issued and Outstanding) --
Common Stock ($.001 Par Value; 50,000,000 Shares Authorized;
5,000,000 Shares Issued and Outstanding ) 5,000
Additional Paid-in Capital 45,000
Accumulated Deficit (41,606)
--------
Total Stockholders' Equity 8,394
--------
Total Liabilities and Stockholders' Equity $ 49,270
========
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
DYNAMIC IMAGING GROUP, INC.
STATEMENT OF OPERATIONS
For the Period from Inception (March 27, 1998) to December 31, 1998
REVENUES:
Graphic Sales $ 21,626
Display Sales 186,535
Display Rental Income 1,618
---------
Total Revenues 209,779
COST OF SALES 68,370
---------
GROSS PROFIT 141,409
---------
OPERATING EXPENSES:
Advertising 19,446
Bank Charges 6,344
Depreciation 560
Dues and Subscriptions 402
Licenses and Permits 316
Office Supplies 6,581
Other 485
Postage and Delivery 5,479
Printing and Reproduction 7,294
Professional Fees 34,378
Rent 25,465
Repairs and Maintenance 1,701
Salaries 45,000
Telephone 11,272
Travel and Entertainment 11,613
Utilities 5,059
---------
Total Operating Expenses 181,395
---------
LOSS BEFORE PROVISION FOR INCOME TAXES (39,986)
---------
PROVISION FOR INCOME TAXES:
Current --
Deferred 1,620
---------
1,620
---------
NET LOSS $ (41,606)
=========
The accompanying notes are an integral part of these financial statements.
F-4
<PAGE>
DYNAMIC IMAGING, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period from Inception (March 27, 1998) to December 31, 1998
<TABLE>
<CAPTION>
Common Stock
Preferred Stock $.001 Par Value Additional
Shares Amount Shares Amount Paid-in Capital
------ ------ ------ ------ ---------------
<S> <C> <C> <C> <C> <C>
Shares Issued to Shareholders at Inception - $ - 5,000,000 $ 5,000 $ -
Recognition of Officers Compensation on Donated Services 45,000
Net Loss for the Period from Inception (March 27, 1998) to
December 31, 1998 - - - - -
----- ---- ---------- -------- ---------
Balance at December 31, 1998 - $ - 5,000,000 $ 5,000 $ 45,000
===== ==== ========== ======== =========
(RESTUBBED TABLE)
Total
Accumulated Stockholders'
Deficit Equity
------- ------
Shares Issued to Shareholders at Inception $ - $ 5,000
Recognition of Officers Compensation on Donated Services 45,000
Net Loss for the Period from Inception (March 27, 1998) to
December 31, 1998 (41,606) (41,606)
---------- --------
Balance at December 31, 1998 $ (41,606) $ 8,394
========== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
DYNAMIC IMAGING GROUP, INC.
STATEMENT OF CASH FLOWS
For the Period from Inception (March 27, 1998) to December 31, 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(39,986)
Adjustments to Reconcile Net Loss to Net Cash Flows
Provided by Operating Activities:
Depreciation 560
Recognition of Officers Compensation on Donated Services 45,000
(Increase) Decrease in:
Accounts Receivable (4,507)
Security Deposits (1,590)
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 31,848
Due to Affiliated Company 7,408
--------
Net Cash Flows Provided by Operating Activities 38,733
--------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Property and Equipment (33,686)
--------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 5,000
--------
Net Increase in Cash 10,047
Cash - Beginning of Period --
--------
Cash - End of Period $ 10,047
========
SUPPLEMENTAL INFORMATION:
Cash Paid During Year for:
Interest $ --
========
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
DYNAMIC IMAGING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company
Dynamic Imaging Group, Inc. (Colorado) (the "Colorado Company") was incorporated
on March 27, 1998 under the laws of the State of Colorado. The Colorado Company
is authorized to issue 5,000,000 shares of its no par common stock
Dynamic Imaging Group, Inc. (Florida) (The "Florida Company") was organized
under the law of the State of Florida during January 1999. The Florida Company's
articles of incorporation provide for the issuance of 5,000,000 shares of its
$.001 par value common stock and 5,000,000 shares of its no par value preferred
stock.
During January 1999, all of the issued and outstanding stock of the Colorado
Company was exchanged for all of the shares of the issued and outstanding common
stock of the Florida Company. The accompanying financial statements give
retroactive effect to the exchange of common stock. The Colorado Company and the
Florida Company are hereinafter referred to collectively as the Company.
The Company is engaged in the sale, marketing and rental of portable show
displays, accessories and graphics through an independent network of outlets
though out the United States. The Company maintains its principal business
operations in Fort Lauderdale, Florida.
Fair Market Value of Financial Instruments
The carrying amount reported in the balance sheet for cash, other receivables,
accounts payable, and accrued liabilities approximates fair market value due to
the immediate or short-term maturity of these financial instruments.
Use of Estimates
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements and the reported amounts of revenues and expenses during the
reporting period to prepare these consolidated financial statements in
conformity with generally accepted accounting principles. Actual results could
differ from those estimates and assumptions.
Property and Equipment
Property and equipment are stated on the basis of cost less accumulated
depreciation and amortization. The Company provides for depreciation on a
straight-line basis over the following estimated useful lives: equipment,
furniture and fixtures, 5 to 7 years.
When assets are retired or otherwise disposed of, the costs and accumulated
depreciation are removed from the respective accounts and any related gain or
loss is recognized. Maintenance and repair costs are charged to expense as
incurred, and renewals and improvements that extend the useful lives of assets
are capitalized.
F-7
<PAGE>
DYNAMIC IMAGING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Stock- Based Compensation
The Company uses SFAS No. 123, "Stock-Based Compensation," which permits
entities to recognize as expense over the vesting period the fair value of all
stock-based awards on the date of grant.
Income Taxes
The Company utilizes the asset and liability method of accounting for deferred
income taxes. Under this method, deferred tax assets and liabilities are
established based on the differences between financial statement and income tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse.
The Company provides a valuation allowance against deferred tax assets if, based
on the weight of available evidence, it is more likely than not that some or all
of the deferred tax assets will not be realized.
NOTE 2 - PROPERTY AND EQUIPMENT
Property and equipment and related accumulated depreciation consisted of the
following:
Furniture and fixtures $ 4,000
Machinery and Equipment 8,212
Displays 20,819
Leasehold Improvements 655
----------
33,686
Less: Accumulated depreciation (560)
----------
Total $ 33,126
==========
For the period from inception (March 27, 1998) to December 31, 1998,
depreciation expense amounted to $560.
NOTE 3 - INCOME TAXES
Income taxes are computed at statutory rates on pretax income. Deferred taxes
are recorded based on differences in financial statements and taxable income.
The tax effect of the temporary difference that gives rise to the deferred tax
liability at December 31 related to depreciation and amounted to $1,620.
F-8
<PAGE>
DYNAMIC IMAGING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 4 - RELATED PARTY TRANSACTIONS
A company related through common ownership advanced funds to Company for
operations. These amounts are non-interest bearing, non-collateralized, and are
payable on demand. As of December 31, 1998, amounts due to this related company
amounted to $7,408.
NOTE 5 - STOCKHOLDERS' EQUITY
Preferred Stock
The Company is authorized to issue 5,000,000 shares of Preferred Stock with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors.
Common Stock
During March 1998, the Company issued 5,000,000 shares of its $.001 par value
common shares for $5,000.
During March 1998, the Company granted options to three officers to acquire an
aggregate of 4,500,000 restricted shares of common stock at an exercise price of
$.80 per share. The options have been granted to these officers at a price equal
to the market value of the shares at date of grant, become exercisable in five
annual installments of 900,000 shares beginning on February 28, 2000, and expire
not more than seven years after the date of grant. The fair value of the option
grant was estimated on the date of grant using the Black-Scholes option-pricing
model with the following assumptions: dividend yield of 0%; expected volatility
of 100%; risk-free interest rate of 5.5%, and an expected live of 7 years. The
fair value of options granted was minimal.
For the period ended December 31, 1998, the Company recorded officers'
compensation expense of $45,000 relating to services donated to the Company.
NOTE 6 - COMMITMENTS
Employment Agreements
During March 1998, the Company entered into five (5) year employment agreements
with three officers of the Company. The agreements are effective beginning on
February 28, 1999 and provide for (i) an annual base salary of $120,000, plus a
discretionary expense account equal to 10% of the base pay and (ii) a bonus
equal to 2.5% of the Company's gross receipts for each year of the agreement, to
a maximum of 10% of the gross profits. The base salary shall increase not less
than 10% of the previous years base salary. Additionally, these officers were
granted options to acquire 300,000 shares of common stock of the Company per
calendar year in each year of employment at an exercise price of $.80 per share
(See Note 5).
F-9
<PAGE>
DYNAMIC IMAGING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS (Continued)
December 31, 1998
NOTE 6 - COMMITMENTS (Continued)
Operating Lease
The Company leases office space in Fort Lauderdale, Florida pursuant to
operating leases. The leases generally provide for fixed monthly rental payments
aggregating approximately $4,800 plus sales tax through July 2001. The Company
has the option of renewing these leases for up to three years. For the period
from inception (March 27, 1998) to December 31, 1998, rent expense amounted to
$25,465.
At December 31, 1998, the future minimum annual rental payment under the
non-cancelable operating lease is as follows:
Year
----
1999 $ 56,100
2000 39,600
2001 21,450
--------------
$ 117,150
==============
NOTE 7 - SUBSEQUENT EVENT
During January 1999, the Company issued 250,000 shares of common stock at a
price of $0.50 per share in accordance with Rule 504 under Regulation D
promulgated under the Securities Act of 1933 for net proceeds of $120,000 to be
used for the operations of the Company.
During February 1999, the Company issued 25,950 shares of common stock at a
price of $2.50 per share in accordance with Rule 504 under Regulation D
promulgated under the Securities Act of 1933 for net proceeds of $61,631 to be
used for the operations of the Company.
F-10
<PAGE>
DYNAMIC IMAGING GROUP, INC.
BALANCE SHEET
March 31, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash $ 44,350
Accounts Receivable 39,547
Due from Related Parties 41,301
---------
Total Current Assets 125,198
Property and Equipment, at Cost (Net of Accumulated
Depreciation of $1,560 ) 119,908
Security Deposit 1,590
---------
Total Assets $ 246,696
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable and Accrued Expenses $ 122,584
Deferred Income Taxes 1,620
Due to Affiliated Company 2,209
---------
Total Liabilities 126,413
---------
STOCKHOLDERS' EQUITY:
Preferred Stock (No Par Value; 5,000,000 Shares
Authorized; No Shares Issued and Outstanding) --
Common Stock ($.001 Par Value; 50,000,000 Shares Authorized;
5,549,710 Shares Issued and Outstanding ) 5,550
Additional Paid-in Capital 866,000
Accumulated Deficit (201,267)
Subscription Receivables (550,000)
---------
Total Stockholders' Equity 120,283
---------
Total Liabilities and Stockholders' Equity $ 246,696
=========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-11
<PAGE>
DYNAMIC IMAGING GROUP, INC.
STATEMENT OF OPERATIONS
For the Three Months Ended March 31, 1999
REVENUES:
Graphic Sales $ 17,021
Display Sales 53,986
-----------
Total Revenues 71,007
COST OF SALES 39,893
-----------
GROSS PROFIT 31,114
-----------
OPERATING EXPENSES:
Advertising 3,155
Auto expense 6,606
Contract Labor 45,591
Depreciation 1,000
Dues and Subscriptions 1,060
Insurance 2,546
Licenses and Permits 214
Office Supplies 6,729
Other 8,169
Postage and Delivery 3,053
Printing and Reproduction 8,361
Professional Fees 3,709
Rent 15,264
Repairs and Maintenance 3,150
Salaries 54,330
Telephone 6,158
Travel and Entertainment 20,109
Utilities 1,571
-----------
Total Operating Expenses 190,775
-----------
LOSS BEFORE PROVISION FOR INCOME TAXES (159,661)
-----------
PROVISION FOR INCOME TAXES:
Current --
Deferred --
-----------
--
-----------
NET LOSS $(159,661)
===========
The accompanying notes are an integral part of these financial statements.
F-12
<PAGE>
DYNAMIC IMAGING, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Three Months Ended March 31, 1999
<TABLE>
<CAPTION>
Common Stock
Preferred Stock $.001 Par Value Additional Accumulated
Shares Amount Shares Amount Paid-in Capital Deficit
------ ------ ------ ------ --------------- -------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 - $ - 5,000,000 $ 5,000 $ 45,000 $ (41,606)
Shares Issued in Connection with Offering - - 549,710 550 821,000 -
Net Loss for the Three Months Ended March 31, 1999 - - - - - (159,661)
----- ----- ---------- ------- -------- ----------
Balance at March 31, 1999 - $ - 5,549,710 5,550 866,000 (201,267)
===== ===== ========== ======= ======== ==========
(RESTUBBED TABLE)
Total
Subscription Stockholders'
Receivables Equity
----------- ------
Balance at December 31, 1998 $ - $ 8,394
Shares Issued in Connection with Offering (550,000) 271,550
Net Loss for the Three Months Ended March 31, 1999 - (159,661)
--------- --------
Balance at March 31, 1999 (550,000) 120,283
========= ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-13
<PAGE>
DYNAMIC IMAGING GROUP, INC.
STATEMENT OF CASH FLOWS
For the Three Months Ended March 31, 1999
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss $(159,661)
Adjustments to Reconcile Net Loss to Net Cash Flows
Used in Operating Activities:
Depreciation 1,000
(Increase) Decrease in:
Accounts Receivable (35,040)
Due to Related Parties (41,301)
Increase (Decrease) in:
Accounts Payable and Accrued Expenses 90,736
Due to Affiliated Company (5,199)
---------
Net Cash Flows Used in Operating Activities (149,465)
---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of Property and Equipment (87,782)
---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of Common Stock 271,550
---------
Net Increase in Cash 34,303
Cash - Beginning of Period 10,047
---------
Cash - End of Period $ 44,350
=========
SUPPLEMENTAL INFORMATION:
Cash Paid During Year for:
Interest $ --
=========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Issuance of Common Stock for Subscription Receivable $ 550,000
=========
The accompanying notes are an integral part of these financial statements.
F-14
<PAGE>
DYNAMIC IMAGING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
NOTE 1 - BASIS OF PRESENTATION
The accompanying financial statements for the interim period are unaudited and
reflect all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the period presented. These
financial statements should be read in conjunction with the financial statements
and notes for the year ended December 31, 1998. The results of operations for
the three months ended March 31, 1999 are not necessarily indicative of the
results for the full fiscal year ending December 31, 1999.
NOTE 2 - PROPERTY AND EQUIPMENT
At March 31, 1999, property and equipment and related accumulated depreciation
consisted of the following:
Furniture and fixtures $ 7,000
Machinery and Equipment 11,467
Displays 100,100
Leasehold Improvements 2,901
-----------
121,468
Less: Accumulated depreciation (1,560)
-----------
Total $ 119,908
===========
For the three months ended March 31, 1999, depreciation expense amounted to
$1,000.
NOTE 3- LOSS PER SHARE
The Company has adopted Statement of Financial Accounting Standards No. 128 -
"Earnings Per Share" ("FAS 128") which requires the dual representation of basic
and diluted earnings per share for the periods ending after December 15, 1997.
Basic earnings per share is computed by dividing net income, after deducting
preferred stock dividends accumulated during the period, by the weighted average
number of shares of common stock outstanding during each period. Diluted
earnings per share is computed by dividing net income by the weighted average
number of shares of common stock, common stock equivalents and other potentially
dilutive securities outstanding during each period.
NOTE 4- SHAREHOLDERS' EQUITY
Preferred Stock
The Company is authorized to issue 5,000,000 shares of Preferred Stock with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors.
Common Stock
During March 1998, the Company issued 5,000,000 shares of its $.001 par value
common shares for $5,000.
F-15
<PAGE>
DYNAMIC IMAGING GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 1999
NOTE 4- SHAREHOLDERS' EQUITY (Continued)
Common Stock (Continued)
During March 1998, the Company granted options to three officers to acquire an
aggregate of 4,500,000 restricted shares of common stock at an exercise price of
$.80 per share. The options have been granted to these officers at a price equal
to the market value of the shares at date of grant, become exercisable in five
annual installments of 900,000 shares beginning on February 28, 2000, and expire
not more than seven years after the date of grant. The fair value of the option
grant was estimated on the date of grant using the Black-Scholes option-pricing
model with the following assumptions: dividend yield of 0%; expected volatility
of 100%; risk-free interest rate of 5.5%, and an expected live of 7 years. The
fair value of options granted was minimal.
For the period ended December 31, 1998, the Company recorded officers'
compensation expense of $45,000 relating to services donated to the Company.
During January 1999, the Company issued 250,300 shares of common stock at a
price of $0.50 per share in accordance with Rule 504 under Regulation D
promulgated under the Securities Act of 1933 for net proceeds of $120,000 to be
used for the operations of the Company.
During February and March 1999, the Company issued 299,410 shares of common
stock at a price of $2.50 per share in accordance with Rule 504 under Regulation
D promulgated under the Securities Act of 1933 for net proceeds of $151,550 to
be used for the operations of the Company. As of June 30, 1998, subscription
receivables amounted to $550,000.
NOTE 5 -COMPREHENSIVE INCOME
During the first quarter of fiscal 1999, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income."
This pronouncement sets forth requirements for disclosure of the Company's
comprehensive income and accumulated other comprehensive items. In general,
comprehensive income combines net income and "other comprehensive items," which
represent certain amounts that are reported as components of shareholders'
investment in the accompanying balance sheet, including foreign currency
translation adjustments. For the three months ending March 31, 1999, the Company
had no comprehensive income.
NOTE 6 - FUTURE EFFECTS OF RECENTLY ISSUED ACCOUNTING PRONOUNNCEMENTS
SFAS No. 131 "Disclosures about Segments of an Enterprise and Related
Information" was issued in June 1997. This statement changes the way public
companies report information about segments of their business in their annual
financial statement's. This statement is effective for the Company's fiscal year
ending December 31, 1999 However, information is not to be presented for interim
financial statements in the first year of implementation. Adoption of SFAS No.
131 is not expected to have a material effect on the Company's financial
statement disclosure.
F-16
<PAGE>
PART III
ITEM 1. INDEX TO EXHIBITS
Exhibits Description of Document
- -------- -----------------------
3.1 Articles of Incorporation of Dynamic Imaging Group, Inc.
3.2 Bylaws of Dynamic Imaging Group, Inc.
10.1 Employment Agreement between Dynamic Imaging Group, Inc. and
Gary Morgan dated March 2, 1998.
10.2 Employment Agreement between Dynamic Imaging Group, Inc. and
Roland Breton dated March 2, 1998.
10.3 Employement Agreement between Dynamic Imaging Group, Inc. and
Howard Storfer dated March 2, 1998.
10.4 Lease Agreement between Dynamic Imaging Group, Inc.
and Patricia Cheris dated June 1998.
10.5 Lease Agreement between Dynamic Imaging Group, Inc.
and Luisa Certain and Maria Certain dated November 19, 1998.
10.6 Lease Agreement between Dynamic Imaging Group, Ime, and
Luisa Certain and Maria Certain dated May 1, 1999.
23. Subsidiaries.
27 Financial Data Schedule.
<PAGE>
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of
1934, the Registrant caused this Amendment to its Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized.
DYNAMIC IMAGING GROUP, INC.
Date: June 18, 1999 By: /s/ Gary R. Morgan
--------------------------------
Gary R. Morgan, Chairman
Date: June 18, 1999 By: /s/ Roland Breton
--------------------------------
Roland Breton, President
Date: June 18, 1999 By: /s/ Howard Storfer
--------------------------------
Howard Storfer, Chief
Operating Officer
ARTICLES OF INCORPORATION
-------------------------
OF
--
DYNAMIC IMAGING GROUP, INC.
---------------------------
The undersigned, a natural person competent to contract, does hereby
make, subscribe and file these Articles of Incorporation for the purpose of
organizing a corporation under the laws of the State of Florida.
ARTICLE I
CORPORATE NAME
--------------
The name of this Corporation shall be: DYNAMIC IMAGING GROUP, INC.
ARTICLE II
PRINCIPAL OFFICE AND MAILING ADDRESS
------------------------------------
The principal office and mailing address of the Corporation is 3418 N.
Ocean Boulevard, Fort Lauderdale, FL 33308.
ARTICLE III
NATURE OF CORPORATE BUSINESS AND POWERS
---------------------------------------
The general nature of the business to be transacted by this Corporation
shall be to engage in any and all lawful business permitted under the laws of
the United States and the State of Florida.
<PAGE>
ARTICLE IV
CAPITAL STOCK
-------------
The maximum number of shares that this Corporation shall be authorized
to issue and have outstanding at any one time shall be 100,000,000 shares of
common stock, par value $.001 per share, and 10,000,000 shares of preferred
stock, par value $.001 per share. Series of the preferred stock may be created
and issued from time to time, with such designations, preferences, conversion
rights, cumulative, relative, participating, optional, or other rights,
including voting rights, qualifications, limitations, or restrictions thereof as
shall be stated and expressed in the resolution or resolutions providing for the
creation and issuance of such series of preferred stock as adopted by the Board
of Directors pursuant to the authority in this paragraph given.
ARTICLE V
TERM OF EXISTENCE
-----------------
This Corporation shall have perpetual existence.
ARTICLE VI
REGISTERED AGENT AND
INITIAL REGISTERED OFFICE IN FLORIDA
------------------------------------
The Registered Agent and the street address of the initial Registered
Office of this Corporation in the State of Florida shall be: Roland Breton, 3418
N. Ocean Boulevard, Fort Lauderdale, Florida 33308.
ARTICLE VII
BOARD OF DIRECTORS
------------------
This Corporation shall have one (1) Director initially.
2
<PAGE>
ARTICLE VIII
INITIAL DIRECTORS
-----------------
The name and address of the initial Director of this Corporation is:
Roland Breton, 3418 N. Ocean Boulevard, Fort Lauderdale, Florida 33308. The
person named as initial Director shall hold office for the first year of
existence of this Corporation, or until their successors are elected or
appointed and have qualified, whichever occurs first.
ARTICLE IX
INCORPORATOR
------------
The name and address of the person signing these Articles of
Incorporation as the Incorporator is Gary Morgan, 3418 N. Ocean Boulevard, Fort
Lauderdale, Florida 33308.
ARTICLE X
INDEMNIFICATION
---------------
This Corporation may indemnify any director, officer, employee or agent
of the Corporation to the fullest extent permitted by Florida law.
ARTICLE XI
AFFILIATED TRANSACTIONS
-----------------------
This Corporation expressly elects not to be governed by Section
607.0901 of the Florida Business Corporation Act, as amended from time to time,
relating to affiliated transactions.
3
<PAGE>
ARTICLE XII
CONTROL SHARE ACQUISITIONS
--------------------------
This Corporation expressly elects not to be governed by Section
607.0902 of the Florida Business Corporation Act, as amended from time to time,
relating to control share acquisitions.
IN WITNESS WHEREOF, the undersigned Incorporator has executed the
foregoing Articles of Incorporation on the 26th day of January, 1999.
-----------------------------
Gary Morgan, Incorporator
4
BY-LAWS
OF
DYNAMIC IMAGING GROUP, INC.
a Florida corporation
<PAGE>
<TABLE>
<CAPTION>
INDEX
-----
PAGE
----
ARTICLE I
---------
Offices
-------
<S> <C> <C> <C>
Section 1.01 Principal Office........................................................ 1
----------------
Section 1.02 Registered Office....................................................... 1
-----------------
Section 1.03 Other Offices........................................................... 1
-------------
ARTICLE II
----------
Meetings of Shareholders
------------------------
Section 2.01 Annual Meeting.......................................................... 1
--------------
Section 2.02 Special Meetings........................................................ 2
----------------
Section 2.03 Shareholders' List for Meeting.......................................... 2
------------------------------
Section 2.04 Record Date............................................................. 3
-----------
Section 2.05 Notice of Meetings and Adjournment...................................... 3
----------------------------------
Section 2.06 Waiver of Notice........................................................ 4
----------------
ARTICLE III
-----------
Shareholder Voting
------------------
Section 3.01 Voting Group Defined.................................................... 5
--------------------
Section 3.02 Quorum and Voting Requirements for
----------------------------------
Voting Groups..................................................... 5
-------------
Section 3.03 Action by Single and Multiple Voting
Groups............................................................ 5
------
i
<PAGE>
Section 3.04 Shareholder Quorum and Voting; Greater
or Lesser Voting Requirements..................................... 6
-----------------------------
Section 3.05 Voting for Directors; Cumulative Voting................................. 6
---------------------------------------
Section 3.06 Voting Entitlement of Shares............................................ 7
----------------------------
Section 3.07 Proxies................................................................. 8
-------
Section 3.08 Shares Held by Nominees................................................. 9
-----------------------
Section 3.09 Corporation's Acceptance of Votes....................................... 10
---------------------------------
Section 3.10 Action by Shareholders Without Meeting.................................. 11
--------------------------------------
ARTICLE IV
----------
Board of Directors and Officers
-------------------------------
Section 4.01 Qualifications of Directors............................................. 11
---------------------------
Section 4.02 Number of Directors..................................................... 11
-------------------
Section 4.03 Terms of Directors Generally............................................ 12
----------------------------
Section 4.04 Staggered Terms for Directors........................................... 12
-----------------------------
Section 4.05 Vacancy on Board........................................................ 12
----------------
Section 4.06 Compensation of Directors............................................... 12
-------------------------
Section 4.07 Meetings................................................................ 13
--------
Section 4.08 Action by Directors Without a Meeting................................... 13
-------------------------------------
Section 4.09 Notice of Meetings...................................................... 13
------------------
Section 4.10 Waiver of Notice........................................................ 13
----------------
Section 4.11 Quorum and Voting....................................................... 14
-----------------
Section 4.12 Committees.............................................................. 14
----------
ii
<PAGE>
Section 4.13 Loans to Officers, Directors and
Employees; Guaranty of Obligations............................... 15
----------------------------------
Section 4.14 Required Officers....................................................... 15
-----------------
Section 4.15 Duties of Officers...................................................... 16
------------------
Section 4.16 Resignation and Removal of Officers..................................... 16
-----------------------------------
Section 4.17 Contract Rights of Officers............................................. 16
---------------------------
Section 4.18 General Standards for Directors......................................... 16
-------------------------------
Section 4.19 Director Conflicts of Interest.......................................... 17
------------------------------
Section 4.20 Resignation of Directors................................................ 18
------------------------
ARTICLE V
---------
Indemnification of Directors, Officers,
---------------------------------------
Employees and Agents
--------------------
Section 5.01 Directors, Officers, Employees
and Agents........................................................ 18
----------
ARTICLE VI
----------
Office and Agent
----------------
Section 6.01 Registered Office and Registered Agent.................................. 22
--------------------------------------
Section 6.02 Change of Registered Office or Registered
Agent; Resignation of Registered Agent........................... 23
--------------------------------------
ARTICLE VII
-----------
Shares, Option, Dividends and Distributions
-------------------------------------------
Section 7.01 Authorized Shares....................................................... 24
-----------------
Section 7.02 Terms of Class or Series Determined
by Board of Directors............................................. 24
---------------------
iii
<PAGE>
Section 7.03 Issued and Outstanding Shares........................................... 25
-----------------------------
Section 7.04 Issuance of Shares...................................................... 25
------------------
Section 7.05 Form and Content of Certificates........................................ 26
--------------------------------
Section 7.06 Shares Without Certificates............................................. 27
---------------------------
Section 7.07 Restriction on Transfer of Shares
and Other Securities.............................................. 27
--------------------
Section 7.08 Shareholder's Pre-emptive Rights........................................ 27
--------------------------------
Section 7.09 Corporation's Acquisition of its
Own Shares........................................................ 28
----------
Section 7.10 Share Options........................................................... 28
-------------
Section 7.11 Terms and Conditions of Stock Rights
and Options....................................................... 28
-----------
Section 7.12 Share Dividends......................................................... 29
---------------
Section 7.13 Distributions to Shareholders........................................... 29
-----------------------------
ARTICLE VIII
------------
Amendment of Articles and Bylaws
--------------------------------
Section 8.01 Authority to Amend the Articles of
Incorporation..................................................... 31
-------------
Section 8.02 Amendment by Board of Directors......................................... 31
-------------------------------
Section 8.03 Amendment of Bylaws by Board of
Directors......................................................... 32
---------
Section 8.04 Bylaw Increasing Quorum or Voting
Requirements for Directors........................................ 32
--------------------------
ARTICLE IX
----------
Records and Report
------------------
iv
<PAGE>
Section 9.01 Corporate Records....................................................... 33
-----------------
Section 9.02 Financial Statements for Shareholders................................... 34
-------------------------------------
Section 9.03 Other Reports to Shareholders........................................... 34
-----------------------------
Section 9.04 Annual Report for Department of State................................... 35
-------------------------------------
ARTICLE X
---------
Miscellaneous
-------------
Section 10.01 Definition of the "Act"................................................. 35
-----------------------
Section 10.02 Application of Florida Law.............................................. 36
--------------------------
Section 10.03 Fiscal Year............................................................. 36
-----------
Section 10.04 Conflicts with Articles of
Incorporation.................................................... 36
-------------
</TABLE>
v
<PAGE>
ARTICLE I
---------
Offices
-------
Section 1.01. Principal Office.
-----------------
The principal office of the corporation in the State of Florida shall
be established at such places as the board of directors from time to time
determine.
Section 1.02. Registered Office.
-----------------
The registered office of the corporation in the State of Florida shall
be at the office of its registered agent as stated in the articles of
incorporation or as the board of directors shall from time to time determine.
Section 1.03. Other Offices.
-------------
The corporation may have additional offices at such other places,
either within or without the State of Florida, as the board of directors may
from time to time determine or the business of the corporation may require.
ARTICLE II
----------
Meetings of Shareholders
------------------------
Section 2.01. Annual Meeting.
--------------
(1) The corporation shall hold a meeting of shareholders annually, for
the election of directors and for the transaction of any proper business, at a
time stated in or fixed in accordance with a resolution of the board of
directors.
(2) Annual shareholders' meeting may be held in or out of the State of
Florida at a place stated in or fixed in accordance with a resolution by the
board of directors or, when not inconsistent with the board of directors'
resolution stated in the notice of the annual meeting. If no place is stated in
or fixed in accordance with these bylaws, or stated in the notice of the annual
meeting, annual meetings shall be held at the corporation's principal office.
(3) The failure to hold the annual meeting at the time stated in or
fixed in accordance with these bylaws or pursuant to the Act does not affect the
validity of any corporate action and shall not work a forfeiture of or
dissolution of the corporation.
1
<PAGE>
Section 2.02. Special Meeting.
---------------
(1) The corporation shall hold a special meeting of shareholders:
(a) On call of its board of directors or the person or persons
authorized to do so by the board of directors; or
(b) If the holders of not less than 10% of all votes entitled
to be cast on any issue proposed to be considered at the proposed special
meeting sign, date and deliver to the corporation's secretary one or more
written demands for the meeting describing the purpose or purposes for which it
is to be held.
(2) Special shareholders' meetings may be held in or out of the State
of Florida at a place stated in or fixed in accordance with a resolution of the
board of directors, or, when not inconsistent with the board of directors'
resolution, in the notice of the special meeting. If no place is stated in or
fixed in accordance with these bylaws or in the notice of the special meeting,
special meetings shall be held at the corporation's principal office.
(3) Only business within the purpose or purposes described in the
special meeting notice may be conducted at a special shareholders' meeting.
Section 2.03. Shareholders' List for Meeting.
------------------------------
(1) After fixing a record date for a meeting, a corporation shall
prepare a list of the names of all its shareholders who are entitled to notice
of a shareholders' meeting, in accordance with the Florida Business Corporation
Act (the "Act"), or arranged by voting group, with the address of, and the
number and class and series, if any, of shares held by, each.
(2) The shareholders' list must be available for inspection by any
shareholder for a period of ten days prior to the meeting or such shorter time
as exists between the record date and the meeting and continuing through the
meeting at the corporation's principal office, at a place identified in the
meeting notice in the city where the meeting will be held, or at the office of
the corporation's transfer agent or registrar. A shareholder or his agent or
attorney is entitled on written demand to inspect the list (subject to the
requirements of Section 607.1602(3) of the Act), during regular business hours
and at his expense, during the period it is available for inspection.
(3) The corporation shall make the shareholders' list available at the
meeting, and any shareholder or his agent or attorney is entitled to inspect the
list at any time during the meeting or any adjournment.
2
<PAGE>
Section 2.04. Record Date.
-----------
(1) The board of directors may set a record date for purposes of
determining the shareholders entitled to notice of and to vote at a
shareholders' meeting; however, in no event may a record date fixed by the board
of directors be a date preceding the date upon which the resolution fixing the
record date is adopted.
(2) Unless otherwise fixed by the board of directors, the record date
for determining shareholders entitled to demand a special meeting is the date
the first shareholder delivers his demand to the corporation. In the event that
the board of directors sets the record date for a special meeting of
shareholders, it shall not be a date preceding the date upon which the
corporation receives the first demand from a shareholder requesting a special
meeting.
(3) If no prior action is required by the board of directors pursuant
to the Act, and, unless otherwise fixed by the board of directors, the record
date for determining shareholders entitled to take action without a meeting is
the date the first signed written consent is delivered to the corporation under
Section 607.0704 of the Act. If prior action is required by the board of
directors pursuant to the Act, the record date for determining shareholders
entitled to take action without a meeting is at the close of business on the day
on which the board of directors adopts the resolution taking such prior action.
(4) Unless otherwise fixed by the board of directors, the record date
for determining shareholders entitled to notice of and to vote at an annual or
special shareholders' meeting is the close of business on the day before the
first notice is delivered to shareholders.
(5) A record date may not be more than 70 days before the meeting or
action requiring a determination of shareholders.
(6) A determination of shareholders entitled to notice of or to vote at
a shareholders' meeting is effective for any adjournment of the meeting unless
the board of directors fixes a new record date, which it must do if the meeting
is adjourned to a date more than one 120 days after the date fixed for the
original meeting.
Section 2.05. Notice of Meetings and Adjournment.
----------------------------------
(1) The corporation shall notify shareholders of the date, time and
place of each annual and special shareholders' meeting no fewer than 10 or more
than 60 days before the meeting date. Unless the Act requires otherwise, the
corporation is required to give notice only to shareholders entitled to vote at
the meeting. Notice shall be given in the manner provided in Section 607.0141 of
the Act, by or at the direction of the president, the secretary, of the officer
or persons calling the meeting. If the notice is mailed at least 30 days before
the date of the meeting, it may be done by a class of United States mail other
than first class. Notwithstanding Section 607.0141, if mailed, such notice shall
be deemed to be delivered
3
<PAGE>
when deposited in the United Statement mail addressed to the shareholder at his
address as it appears on the stock transfer books of the corporation, with
postage thereon prepaid.
(2) Unless the Act or the articles of incorporation requires otherwise,
notice of an annual meeting need not include a description of the purpose or
purposes for which the meeting is called.
(3) Notice of a special meeting must include a description of the
purpose or purposes for which the meeting is called.
(4) If an annual or special shareholders meeting is adjourned to a
different date, time, or place, notice need not be given of the new date, time,
or place if the new date, time or place is announced at the meeting before
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting. If
a new record date is or must be fixed under Section 607.0707 of the Act,
however, notice of the adjourned meeting must be given under this section to
persons who are shareholders as of the new record date who are entitled to
notice of the meeting.
(5) Notwithstanding the foregoing, no notice of a shareholders' meeting
need be given if: (a) an annual report and proxy statements for two consecutive
annual meetings of shareholders, or (b) all, and at least two checks in payment
of dividends or interest on securities during a 12-month period, have been sent
by first-class United States mail, addressed to the shareholder at his address
as it appears on the share transfer books of the corporation, and returned
undeliverable. The obligation of the corporation to give notice of a
shareholders' meeting to any such shareholder shall be reinstated once the
corporation has received a new address for such shareholder for entry on its
share transfer books.
Section 2.06. Waiver of Notice.
----------------
(1) A shareholder may waive any notice required by the Act, the
articles of incorporation, or bylaws before or after the date and time stated in
the notice. The waiver must be in writing, be signed by the shareholder entitled
to the notice, and be delivered to the corporation for inclusion in the minutes
or filing with the corporate records. Neither the business to be transacted at
nor the purpose of any regular or special meeting of the shareholders need be
specified in any written waiver of notice.
(2) A shareholder's attendance at a meeting: (a) Waives objection to
lack of notice or defective notice of the meeting, unless the shareholder at the
beginning of the meeting objects to holding the meeting or transacting business
at the meeting; or (b) waives objection to consideration of a particular matter
at the meeting that is not within the purpose or purposes described in the
meeting notice, unless the shareholder objects to considering the matter when it
is presented.
4
<PAGE>
ARTICLE III
-----------
Shareholder Voting
------------------
Section 3.01. Voting Group Defined.
--------------------
A "voting group" means all shares of one or more classes or series that
under the articles of incorporation or the Act are entitled to vote and be
counted together collectively on a matter at a meeting of shareholders. All
shares entitled by the articles of incorporation or the Act to vote generally on
the matter are for that purpose a single voting group.
Section 3.02. Quorum and Voting Requirements for Voting Groups.
------------------------------------------------
(1) Shares entitled to vote as a separate voting group may take action
on a matter at a meeting only if a quorum of those shares exists with respect to
that matter. Unless the articles of incorporation or the Act provides otherwise,
a majority of the votes entitled to be cast on the matter by the voting group
constitutes a quorum of that voting group for action on that matter.
(2) Once a share is represented for any purpose at a meeting, it is
deemed present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
(3) If a quorum exists, action on a matter (other than the election of
directors) by a voting group is approved if the votes cast within the voting
group favoring the action exceed the votes cast opposing the action, unless the
articles of incorporation or the Act requires a greater number of affirmative
votes.
Section 3.03. Action by Single and Multiple Voting Groups.
-------------------------------------------
(1) If the articles of incorporation or the Act provides for voting by
a single voting group on a matter, action on that matter is taken when voted
upon by that voting group as provided in Section 3.02 of these bylaws.
(2) If the articles of incorporation or the Act provides for voting by
two or more voting groups on a matter, action on that matter is taken only when
voted upon by each of those voting groups counted separately as provided in
Section 3.02 of these bylaws. Action may be taken by one voting group on a
matter even though no action is taken by another voting group entitled to vote
on the matter.
5
<PAGE>
Section 3.04. Shareholder Quorum and Voting; Greater or Lesser Voting
-------------------------------------------------------
Requirements.
------------
(1) A majority of the shares entitled to vote, represented in person or
by proxy, shall constitute a quorum at a meeting of shareholders, but in no
event shall a quorum consist of less than one-third of the shares entitled to
vote. When a specified item of business is required to be voted on by a class or
series of stock, a majority of the shares of such class or series shall
constitute a quorum for the transaction of such item of business by that class
or series.
(2) An amendment to the articles of incorporation that adds, changes or
deletes a greater or lesser quorum or voting requirement must meet the same
quorum requirement and be adopted by the same vote and voting groups required to
take action under the quorum and voting requirements then in effect or proposed
to be adopted, whichever is greater.
(3) If a quorum exists, action on a matter, other than the election of
directors, is approved if the votes cast by the holders of the shares
represented at the meeting and entitled to vote on the subject matter favoring
the action exceed the votes cast opposing the action, unless a greater number of
affirmative votes or voting by classes is required by the Act or the articles of
incorporation.
(4) After a quorum has been established at a shareholders' meeting, the
subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof.
(5) The articles of incorporation may provide for a greater voting
requirement or a greater or lesser quorum requirement for shareholders (or
voting groups of shareholders) than is provided by the Act, but in no event
shall a quorum consist of less than one-third of the shares entitled to vote.
Section 3.05. Voting for Directors; Cumulative Voting.
---------------------------------------
(1) Directors are elected by a plurality of the votes cast by the
shares entitled to vote in the election at a meeting at which a quorum is
present.
(2) Each shareholder who is entitled to vote at an election of
directors has the right to vote the number of shares owned by him for as many
persons as there are directors to be elected and for whose election he has a
right to vote. Shareholders do not have a right to cumulate their votes for
directors unless the articles of incorporation so provide.
6
<PAGE>
Section 3.06. Voting Entitlement of Shares.
----------------------------
(1) Unless the articles of incorporation or the Act provides otherwise,
each outstanding share, regardless of class, is entitled to one vote on each
matter submitted to a vote at a meeting of shareholders. Only shares are
entitled to vote.
(2) The shares of the corporation are not entitled to vote if they are
owned, directly or indirectly, by a second corporation, domestic or foreign, and
the first corporation owns, directly or indirectly, a majority of shares
entitled to vote for directors of the second corporation.
(3) This section does not limit the power of the corporation to vote
any shares, including its own shares, held by it in a fiduciary capacity.
(4) Redeemable shares are not entitled to vote on any matter, and shall
not be deemed to be outstanding, after notice of redemption is mailed to the
holders thereof and a sum sufficient to redeem such shares has been deposited
with a bank, trust company, or other financial institution upon an irrevocable
obligation to pay the holders the redemption price upon surrender of the shares.
(5) Shares standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or proxy as the bylaws of the
corporate shareholder may prescribe or, in the absence of any applicable
provision, by such person as the board of directors of the corporate shareholder
may designate. In the absence of any such designation or in case of conflicting
designation by the corporate shareholder, the chairman of the board, the
president, any vice president, the secretary, and the treasurer of the corporate
shareholder, in that order, shall be presumed to be fully authorized to vote
such shares.
(6) Shares held by an administrator, executor, guardian, personal
representative, 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 or the name of his nominee.
(7) Shares held by or under the control of a receiver, a trustee in
bankruptcy proceedings, or an assignee for the benefit of creditors may be voted
by him without the transfer thereof into his name.
(8) If a share or shares stand of record in the names of two or more
persons, whether fiduciaries, members of a partnership, joint tenants, tenants
in common, tenants by the entirety, or otherwise, or if two or more persons have
the same fiduciary relationship respecting the same shares, unless the secretary
of the corporation is given notice to the
7
<PAGE>
contrary and is furnished with a copy of the instrument or order appointing them
or creating the relationship wherein it is so provided, then acts with respect
to voting have the following effect:
(a) If only one votes, in person or in proxy, his act binds
all;
(b) If more than one vote, in person or by proxy, the act of
the majority so voting binds all;
(c) If more than one vote, in person or by proxy, but the vote
is evenly split on any particular matter, each faction is entitled to vote the
share or shares in question proportionally;
(d) If the instrument or order so filed shows that any such
tenancy is held in unequal interest, a majority or a vote evenly split for
purposes of this subsection shall be a majority or a vote evenly split in
interest;
(e) The principles of this subsection shall apply, insofar as
possible, to execution of proxies, waivers, consents, or objections and for the
purpose of ascertaining the presence of a quorum;
(f) Subject to Section 3.08 of these bylaws, nothing herein
contained shall prevent trustees or other fiduciaries holding shares registered
in the name of a nominee from causing such shares to be voted by such nominee as
the trustee or other fiduciary may direct. Such nominee may vote shares as
directed by a trustee or their fiduciary without the necessity of transferring
the shares to the name of the trustee or other fiduciary.
Section 3.07. Proxies.
-------
(1) A shareholder, other person entitled to vote on behalf of a
shareholder pursuant to Section 3.06 of these bylaws, or attorney in fact may
vote the shareholder's shares in person or by proxy.
(2) A shareholder may appoint a proxy to vote or otherwise act for him
by signing an appointment form, either personally or by his attorney in fact. An
executed telegram or cablegram appearing to have been transmitted by such
person, or a photographic, photostatic, or equivalent reproduction of an
appointment form, is a sufficient appointment form.
(3) An appointment of a proxy is effective when received by the
secretary or other officer or agent authorized to tabulate votes. An appointment
is valid for up to 11 months unless a longer period is expressly provided in the
appointment form.
8
<PAGE>
(4) The death or incapacity of the shareholder appointing a proxy does
not affect the right of the corporation to accept the proxy's authority unless
notice of the death or incapacity is received by the secretary or other officer
or agent authorized to tabulate votes before the proxy exercises his authority
under the appointment.
(5) An appointment of a proxy is revocable by the shareholder unless
the appointment form conspicuously states that it is irrevocable and the
appointment is coupled with an interest. Appointments coupled with an interest
include the appointment of: (a) a pledgee; (b) a person who purchased or agreed
to purchase the shares; (c) a creditor of the corporation who extended credit to
the corporation under terms requiring the appointment; (d) an employee of the
corporation whose employment contract requires the appointment; or (e) a party
to a voting agreement created in accordance with the Act.
(6) An appointment made irrevocable under this section becomes
revocable when the interest with which it is coupled is extinguished and, in a
case provided for in Subsection 5(c) or 5(d), the proxy becomes revocable three
years after the date of the proxy or at the end of the period, if any, specified
herein, whichever is less, unless the period of irrevocability is renewed from
time to time by the execution of a new irrevocable proxy as provided in this
section. This does not affect the duration of a proxy under subsection (3).
(7) A transferee for value of shares subject to an irrevocable
appointment may revoke the appointment if he did not know of its existence when
he acquired the shares and the existence of the irrevocable appointment was not
noted conspicuously on the certificate representing the shares or on the
information statement for shares without certificates.
(8) Subject to Section 3.09 of these bylaws and to any express
limitation on the proxy's authority appearing on the face of the appointment
form, a corporation is entitled to accept the proxy's vote or other action as
that of the shareholder making the appointment.
(9) If an appointment form expressly provides, any proxy holder may
appoint, in writing, a substitute to act in his place.
Section 3.08. Shares Held by Nominees.
-----------------------
(1) The corporation may establish a procedure by which the beneficial
owner of shares that are registered in the name of a nominee is recognized by
the corporation as the shareholder. The extent of this recognition may be
determined in the procedure.
(2) The procedure may set forth (a) the types of nominees to which it
applies; (b) the rights or privileges that the corporation recognizes in a
beneficial owner; (c) the manner in which the procedure is selected by the
nominee; (d) the information that must be provided when the procedure is
selected; (e) the period for which selection of the procedure is effective; and
(f) other aspects of the rights and duties created.
9
<PAGE>
Section 3.09. Corporation's Acceptance of Votes.
---------------------------------
(1) If the name signed on a vote, consent, waiver, or proxy appointment
corresponds to the name of a shareholder, the corporation if acting in good
faith is entitled to accept the vote, consent waiver, or proxy appointment and
give it effect as the act of the shareholder.
(2) If the name signed on a vote, consent, waiver, or proxy appointment
does not correspond to the name of its shareholder, the corporation if acting in
good faith is nevertheless entitled to accept the vote, consent, waiver, or
proxy appointment and give it effect as the act of the shareholder if: (a) the
shareholder is an entity and the name signed purports to be that of an officer
or agent of the entity; (b) the name signed purports to be that of an
administrator, executor, guardian, personal representative, or conservator
representing the shareholder and, if the corporation requests, evidence of
fiduciary status acceptable to the corporation has been presented with respect
to the vote, consent, waiver, or proxy appointment; (c) the name signed purports
to be that of a receiver, trustee in bankruptcy, or assignee for the benefit of
creditors of the shareholder and, if the corporation requests, evidence of this
status acceptable to the corporation has been presented with respect to the
vote, consent, waiver, or proxy appointment; (d) the name signed purports to be
that of a pledgee, beneficial owner, or attorney in fact of the shareholder and,
if the corporation requests, evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder has been presented with
respect to the vote, consent, waiver, or proxy appointment; or (e) two or more
persons are the shareholder as covenants or fiduciaries and the name signed
purports to be the name of at least one of the co-owners and the person signing
appears to be acting on behalf of all the co-owners.
(3) The corporation is entitled to reject a vote, consent, waiver, or
proxy appointment if the secretary or other officer or agent authorized to
tabulate votes, acting in good faith, has reasonable basis for doubt about the
validity of the signature on it or about the signatory's authority to sign for
the shareholder.
(4) The corporation and its officer or agent who accepts or rejects a
vote, consent, waiver, or proxy appointment in good faith and in accordance with
the standards of this section are not liable in damages to the shareholder for
the consequences of the acceptance or rejection.
(5) Corporate action based on the acceptance or rejection of a vote,
consent, waiver, or proxy appointment under this section is valid unless a court
of competent jurisdiction determines otherwise.
Section 3.10. Action by Shareholders Without Meeting.
--------------------------------------
10
<PAGE>
(1) Any action required or permitted by the Act to be taken at any
annual or special meeting of shareholders of the corporation may be taken
without a meeting, without prior notice and without a vote, if the action is
taken by the holders of outstanding stock of each voting group entitled to vote
thereon having not less than the minimum number of votes with respect to each
voting group that would be necessary to authorize or take such action at a
meeting at which all voting groups and shares entitled to vote thereon were
present and voted. In order to be effective, the action must be evidenced by one
or more written consents describing the action taken, dated and signed by
approving shareholders having the requisite number of votes of each voting group
entitled to vote thereon, and delivered to the corporation by delivery to its
principal office in this state, its principal place of business, the corporate
secretary, or another office or agent of the corporation having custody of the
book in which proceedings of meetings of shareholders are recorded. No written
consent shall be effective to take the corporate action referred to therein
unless, within 60 days of the date of the earliest dated consent is delivered in
the manner required by this section, written consent signed by the number of
holders required to take action is delivered to the corporation by delivery as
set forth in this section.
(2) Within 10 days after obtaining such authorization by written
consent, notice in accordance with Section 607.0704(3) of the Act must be given
to those shareholders who have not consented in writing.
ARTICLE IV
----------
Board of Directors and Officers
-------------------------------
Section 4.01. Qualifications of Directors.
----------------------------
Directors must be natural persons who are 18 years of age or older but
need not be residents of the State of Florida or shareholders of the
corporation.
Section 4.02. Number of Directors.
-------------------
(1) The board of directors shall consist of not less than one nor more
than nine individuals.
(2) The number of directors may be increased or decreased from time to
time by amendment to these bylaws.
(3) Directors are elected at the first annual shareholders' meeting and
at each annual meeting thereafter unless their terms are staggered under Section
4.04 of these bylaws.
Section 4.03. Terms of Directors Generally.
----------------------------
11
<PAGE>
(1) The terms of the initial directors of the corporation expire at the
first shareholders' meeting at which directors are elected.
(2) The terms of all other directors expire at the next annual
shareholders' meeting following their election unless their terms are staggered
under Section 4.04 of these bylaws.
(3) A decrease in the number of directors does not shorten an
incumbent director's term.
(4) The term of a director elected to fill a vacancy expires at the
next shareholders' meeting at which directors are elected.
(5) Despite the expiration of a director's term, he continues to serve
until his successor is elected and qualifies or until there is a decrease in the
number of directors.
Section 4.04. Staggered Terms for Directors.
-----------------------------
The directors of any corporation organized under the Act may, by the
articles of incorporation, or by amendment to these bylaws adopted by a vote of
the shareholders, be divided into one, two or three classes with the number of
directors in each class being as nearly equal as possible; the term of office of
those of the first class to expire at the annual meeting next ensuing; of the
second class one year thereafter; at the third class two years thereafter; and
at each annual election held after such classification and election, directors
shall be chosen for a full term, as the case may be, to succeed those whose
terms expire. If the directors have staggered terms, then any increase or
decrease in the number of directors shall be so apportioned among the classes as
to make all classes as nearly equal in number as possible.
Section 4.05. Vacancy on Board.
----------------
(1) Whenever a vacancy occurs on a board of directors, including a
vacancy resulting from an increase in the number of directors, it may be filled
by the affirmative vote of a majority of the remaining directors.
(2) A vacancy that will occur at a specific later date (by reason of a
resignation effective at a later date) may be filled before the vacancy occurs
but the new director may not take office until the vacancy occurs.
Section 4.06. Compensation of Directors.
--------------------------
The board of directors may fix the compensation of directors.
Section 4.07. Meetings.
--------
12
<PAGE>
(1) The board of directors may hold regular or special meetings in or
out of the State of Florida.
(2) A majority of the directors present, whether or not a quorum
exists, may adjourn any meeting of the board of directors to another time and
place. Notice of any such adjourned meeting shall be given to the directors who
were not present at the time of the adjournment and, unless the time and place
of the adjourned meeting are announced at the time of the adjournment, to the
other directors.
(3) Meetings of the board of directors may be called by the chairman of
the board or by the president.
(4) The board of directors may permit any or all directors to
participate in a regular or special meeting by, or conduct the meeting through
the use of, any means of communication by which all directors participating may
simultaneously hear each other during the meeting. A director participating in a
meeting by this means is deemed to be present in person at the meeting.
Section 4.08. Action by Directors Without a Meeting.
-------------------------------------
(1) Action required or permitted by the Act to be taken at a board of
directors' meeting or committee meeting may be taken without a meeting if the
action is taken by all members of the board or of the committee. The action must
be evidenced by one or more written consents describing the action taken and
signed by each director or committee member.
(2) Action taken under this section is effective when the last director
signs the consent, unless the consent specifies a different effective date.
(3) A consent signed under this section has the effect of a meeting
vote and may be described as such in any document.
Section 4.09. Notice of Meetings.
------------------
Regular and special meetings of the board of directors may be held
without notice of the date, time, place, or purpose of the meeting.
Section 4.10. Waiver of Notice.
----------------
Notice of a meeting of the board of directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and a waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has
13
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been called or convened, except when a director states, at the beginning of the
meeting or promptly upon arrival at the meeting, any objection to the
transaction of business because the meeting is not lawfully called or convened.
Section 4.11. Quorum and Voting.
-----------------
(1) A quorum of a board of directors consists of a majority of the
number of directors prescribed by the articles of incorporation or these bylaws.
(2) If a quorum is present when a vote is taken, the affirmative vote
of a majority of directors present is the act of the board of directors.
(3) A director of a corporation who is present at a meeting of the
board of directors or a committee of the board of directors when corporate
action is taken is deemed to have assented to the action taken unless:
(a) He objects at the beginning of the meeting (or promptly
upon his arrival) to holding it or transacting specified business at the
meeting; or
(b) He votes against or abstains from the action taken.
Section 4.12. Committees.
----------
(1) The board of directors, by resolution adopted by a majority of the
full board of directors, may designate from among its members an executive
committee and one or more other committees each of which, to the extent provided
in such resolution, shall have and may exercise all the authority of the board
of directors, except that no such committee shall have the authority to:
(a) Approve or recommend to shareholders actions or proposals
required by the Act to be approved by shareholders.
(b) Fill vacancies on the board of directors or any committee
thereof.
(c) Adopt, amend, or repeal these bylaws.
(d) Authorize or approve the reacquisition of shares unless
pursuant to a general formula or method specified by the board of directors.
(e) Authorize or approve the issuance or sale or contract for
the sale of shares, or determine the designation and relative rights,
preferences, and limitations of a voting group except that the board of
directors may authorize a committee (or a senior
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executive officer of the corporation) to do so within limits specifically
prescribed by the board of directors.
(2) The sections of these bylaws which govern meetings, notice and
waiver of notice, and quorum and voting requirements of the board of directors
apply to committees and their members as well.
(3) Each committee must have two or more members who serve at the
pleasure of the board of directors. The board, by resolution adopted in
accordance herewith, may designate one or more directors as alternate members of
any such committee who may act in the place and stead of any absent member or
members at any meeting of such committee.
(4) Neither the designation of any such committee, the delegation
thereto of authority, nor action by such committee pursuant to such authority
shall alone constitute compliance by any member of the board of directors not a
member of the committee in question with his responsibility to act in good
faith, in a manner he reasonably believes to be in the best interests of the
corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.
Section 4.13. Loans to Officers, Directors, and Employees; Guaranty of
--------------------------------------------------------
Obligations.
- -----------
The corporation may lend money to, guaranty any obligation of, or
otherwise assist any officer, director, or employee of the corporation or of a
subsidiary, whenever, in the judgment of the board of directors, such loan,
guaranty, or assistance may reasonably be expected to benefit the corporation.
The loan, guaranty, or other assistance may be with or without interest and may
be unsecured or secured in such manner as the board of directors shall approve,
including, without limitation, a pledge of shares of stock of the corporation.
Nothing in this section shall be deemed to deny, limit, or restrict the powers
of guaranty or warranty of any corporation at common law or under any statute.
Loans, guaranties, or other types of assistance are subject to section 4.19.
Section 4.14. Required Officers.
-----------------
(1) The corporation shall have such officers as the board of directors
may appoint from time to time.
(2) A duly appointed officer may appoint one or more assistant
officers.
(3) The board of directors shall delegate to one of the officers
responsibility for preparing minutes of the directors' and shareholders'
meetings and for authenticating records of the corporation.
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(4) The same individual may simultaneously hold more than one office in
the corporation.
Section 4.15. Duties of Officers.
------------------
Each officer has the authority and shall perform the duties set forth
in a resolution or resolutions of the board of directors or by direction of any
officer authorized by the board of directors to prescribe the duties of other
officers.
Section 4.16. Resignation and Removal of Officers.
-----------------------------------
(1) An officer may resign at any time by delivering notice to the
corporation. A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made effective at a
later date and the corporation accepts the future effective date, the board of
directors may fill the pending vacancy before the effective date if the board of
directors provides that the successor does not take office until the effective
date.
(2) The board of directors may remove any officer at any time with or
without cause. Any assistant officer, if appointed by another officer, may
likewise be removed by the board of directors or by the officer which appointed
him in accordance with these bylaws.
Section 4.17. Contract Rights of Officers.
---------------------------
The appointment of an officer does not itself create contract rights.
Section 4.18. General Standards for Directors.
-------------------------------
(1) A director shall discharge his duties as a director, including his
duties as a member of a committee:
(a) In good faith;
(b) With the care an ordinarily prudent person in a like
position would exercise under similar circumstances; and
(c) In a manner he reasonably believes to be in the best
interests of the corporation.
(2) In discharging his duties, a director is entitled to rely on
information, opinions, reports or statements, including financial statements and
other financial data, if prepared or presented by:
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(a) One or more officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to
matters the director reasonably believes are within the persons' professional or
expert competence; or
(c) A committee of the board of directors of which he is not a
member if the director reasonably believes the committee merits confidence.
(3) In discharging his duties, a director may consider such factors as
the director deems relevant, including the long-term prospects and interests of
the corporation and its shareholders, and the social, economic, legal, or other
effects of any action on the employees, suppliers, customers of the corporation
or its subsidiaries, the communities and society in which the corporation or its
subsidiaries operate, and the economy of the state and the nation.
(4) A director is not acting in good faith if he has knowledge
concerning the matter in question that makes reliance otherwise permitted by
subsection (2) unwarranted.
(5) A director is not liable for any action taken as a director, or any
failure to take any action, if he performed the duties of his office in
compliance with this section.
Section 4.19. Director Conflicts of Interest.
------------------------------
No contract or other transaction between a corporation and one or more
interested directors shall be either void or voidable because of such
relationship or interest, because such director or directors are present at the
meeting of the board of directors or a committee thereof which authorizes,
approves or ratifies such contract or transaction, or because his or their votes
are counted for such purpose, if:
(1) The fact of such relationship or interest is disclosed or known to
the board of directors or committee which authorizes, approves or ratifies the
contract or transactions by a vote or consent sufficient for the purpose without
counting the votes or consents of such interested directors;
(2) The fact of such relationship or interest is disclosed or known to
the shareholders entitled to vote and they authorize, approve or ratify such
contract or transaction by vote or written consent; or
(3) The contract or transaction is fair and reasonable as to the
corporation at the time it is authorized by the board, a committee or the
shareholders.
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Common or interested directors may be counted in determining the
presence of a quorum at the meeting of the board of directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
For the purpose of paragraph (2) above, a conflict of interest
transaction is authorized, approved or ratified if it receives the vote of a
majority of the shares entitled to be counted under this subsection. Shares
owned by or voted under the control of a director who has a relationship or
interest in the conflict of interest transaction may not be counted in a vote of
shareholders to determine whether to authorize, approve or ratify a conflict of
interest transaction under paragraph (2). The vote of those shares, however, is
counted in determining whether the transaction is approved under other sections
of the Act. A majority of the shares, whether or not present, that are entitled
to be counted in a vote on the transaction under this subsection constitutes a
quorum for the purpose of taking action under this section.
Section 4.20. Resignation of Directors.
------------------------
A director may resign at any time by delivering written notice to the
board of directors or its chairman or to the corporation.
A resignation is effective when the notice is delivered unless the
notice specifies a later effective date. If a resignation is made effective at a
later date, the board of directors may fill the pending vacancy before the
effective date if the board of directors provides that the successor does not
take office until the effective date.
ARTICLE V
Indemnification of Directors, Officers,
---------------------------------------
Employees and Agents
--------------------
Section 5.01. Directors, Officers, Employees and Agents.
-----------------------------------------
(1) The corporation shall have power to indemnify any person who was or
is a party to any proceeding (other than an action by, or in the right of, the
corporation), by reason of the fact that he is or was a director, officer,
employee, or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against liability
incurred in connection with such proceeding, including any appeal thereof, if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any proceeding by judgment, order, settlement,
or conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in, or not opposed to, the best
interests of the corporation or, with
18
<PAGE>
respect to any criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful.
(2) The corporation shall have power to indemnify any person, who was
or is a party to any proceeding by or in the right of the corporation to procure
a judgment in its favor by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee, or agent of another
corporation, partnership, joint venture, trust, or other enterprise, against
expenses and amounts paid in settlement not exceeding, in the judgment of the
board of directors, the estimated expense of litigating the proceeding to
conclusion, actually and reasonably incurred in connection with the defense or
settlement of such proceeding, including any appeal thereof. Such
indemnification shall be authorized if such person acted in good faith and in a
manner he reasonably believed to be in, or not opposed to, the best interests of
the corporation, except that no indemnification shall be made under this
subsection in respect of any claim, issue, or matter as to which such person
shall have been adjudged to be liable unless, and only to the extent that, the
court in which such proceeding was brought, or any other court of competent
jurisdiction, shall determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
(3) To the extent that a director, officer, employee, or agent of the
corporation has been successful on the merits or otherwise in defense of any
proceeding referred to in subsections (1) or (2), or in defense of any claim,
issue, or matter therein, he shall be indemnified against expenses actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under subsections (1) or (2), unless pursuant
to a determination by a court, shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee, or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in subsections (1) or (2).
Such determination shall be made:
(a) By the board of directors by a majority vote of a quorum
consisting of directors who were not parties to such proceeding;
(b) If such a quorum is not obtainable or, even if obtainable,
by majority vote of a committee duly designated by the board of directors (in
which directors who are parties may participate) consisting solely of two or
more directors not at the time parties to the proceeding;
(c) By independent legal counsel:
(i) Selected by the board of directors prescribed in
paragraph (a) or the committee prescribed in paragraph (b); or
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<PAGE>
(ii) If a quorum of the directors cannot be obtained
for paragraph (a) and the committee cannot be designed under paragraph (b),
selected by majority vote of the full board of directors (in which directors who
are parties may participate); or
(d) By the shareholders by a majority vote of a quorum
consisting of shareholders who were not parties to such proceeding or, if no
such quorum is obtainable, by a majority vote of shareholders who were not
parties to such proceeding.
(5) Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible. However, if the determination of permissibility
is made by independent legal counsel, persons specified by paragraph (4)(c)
shall evaluate the reasonableness of expenses and may authorize indemnification.
(6) Expenses incurred by an officer or director in defending a civil or
criminal proceeding may be paid by the corporation in advance of the final
disposition of such proceeding upon receipt of an undertaking by or on behalf of
such director or officer to repay such amount if he is ultimately found not to
be entitled to indemnification by the corporation pursuant to this section.
Expenses incurred by other employees and agents may be paid in advance upon such
terms or conditions that the board of directors deems appropriate.
(7) The indemnification and advancement of expenses provided pursuant
to this section are not exclusive, and the corporation may make any other or
further indemnification or advancement of expenses of any of its directors,
officers, employees, or agents, under any bylaw, agreement, vote of shareholders
or disinterested directors, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office.
However, indemnification or advancement of expenses shall not be made to or on
behalf of any director, officer, employee, or agent if a judgment or other final
adjudication establishes that his actions, or omissions to act, were material to
the cause of action so adjudicated and constitute:
(a) A violation of the criminal law, unless the director,
officer, employee, or agent had reasonable cause to believe his conduct was
lawful or had no reasonable cause to believe his conduct was unlawful;
(b) A transaction from which the director, officer, employee,
or agent derived an improper personal benefit;
(c) In the case of a director, a circumstance under which the
liability provisions of Section 607.0834 under the Act are applicable; or
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<PAGE>
(d) Willful misconduct or a conscious disregard for the best
interests of the corporation in a proceeding by or in the right of the
corporation to procure a judgment in its favor or in a proceeding by or in the
right of a shareholder.
(8) Indemnification and advancement of expenses as provided in this
section shall continue as, unless otherwise provided when authorized or
ratified, to a person who has ceased to be a director, officer, employee, or
agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person, unless otherwise provided when authorized or ratified.
(9) Notwithstanding the failure of the corporation to provide
indemnification, and despite any contrary determination of the board or of the
shareholders in the specific case, a director, officer, employee, or agent of
the corporation who is or was a party to a proceeding may apply for
indemnification or advancement of expenses, or both, to the court conducting the
proceeding, to the circuit court, or to another court of competent jurisdiction.
On receipt of an application, the court, after giving any notice that it
considers necessary, may order indemnification and advancement of expenses,
including expenses incurred in seeking court-ordered indemnification or
advancement of expenses, if it determines that:
(a) The director, officer, employee, or agent if entitled to
mandatory indemnification under subsection (3), in which case the court shall
also order the corporation to pay the director reasonable expenses incurred in
obtaining court-ordered indemnification or advancement of expenses;
(b) The director, officer, employee, or agent is entitled to
indemnification or advancement of expenses, or both, by virtue of the exercise
by the corporation of its power pursuant to subsection (7); or
(c) The director, officer, employee, or agent is fairly and
reasonably entitled to indemnification or advancement of expenses, or both, in
view of all the relevant circumstances, regardless of whether such person met
the standard of conduct set forth in subsection (1), subsection (2) or
subsection (7).
(10) For purposes of this section, the term "corporation" includes, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger, so that
any person who is or was a director, officer, employee, or agent of a
constituent corporation, or is or was serving at the request of a constituent
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust or other enterprise, is in the same position
under this section with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
(11) For purposes of this section:
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(a) The term "other enterprises" includes employee benefit
plans;
(b) The term "expenses" includes counsel fees, including those
for appeal;
(c) The term "liability" includes obligations to pay a
judgment, settlement, penalty, fine (including an excise tax assessed with
respect to any employee benefit plan), and expenses actually and reasonably
incurred with respect to a proceeding;
(d) The term "proceeding" includes any threatened, pending, or
completed action, suit or other type of proceeding, whether civil, criminal,
administrative, or investigative and whether formal or informal;
(e) The term "agent" includes a volunteer;
(f) The term "serving at the request of the corporation"
includes any service as a director, officer, employee, or agent of the
corporation that imposes duties on such persons, including duties relating to an
employee benefit plan and its participants or beneficiaries; and
(g) The term "not opposed to the best interest of the
corporation" describes the actions of a person who acts in good faith and in a
manner he reasonably believes to be in the best interests of the participants
and beneficiaries of an employee benefit plan.
(12) The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
ARTICLE VI
Office and Agent
----------------
Section 6.01. Registered Office and Registered Agent.
--------------------------------------
(1) The corporation shall have and continuously maintain in the State
of Florida:
(a) A registered office which may be the same as its place of
business; and
(b) A registered agent, who, may be either:
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(i) An individual who resides in the State of Florida
whose business office is identical with such registered office; or
(ii) Another corporation or not-for-profit
corporation as defined in Chapter 617 of the Act, authorized to transact
business or conduct its affairs in the State of Florida, having a business
office identical with the registered office; or
(iii) A foreign corporation or not-for-profit foreign
corporation authorized pursuant to chapter 607 or chapter 617 of the Act to
transact business or conduct its affairs in the State of Florida, having a
business office identical with the registered office.
Section 6.02. Change of Registered Office or Registered Agent; Resignation
------------------------------------------------------------
of Registered Agent.
- --------------------
(1) The corporation may change its registered office or its registered
agent upon filing with the Department of State of the State of Florida a
statement of change setting forth:
(a) The name of the corporation;
(b) The street address of its current registered office;
(c) If the current registered office is to be changed, the
street address of the new registered office;
(d) The name of its current registered agent;
(e) If its current registered agent is to be changed, the name
of the new registered agent and the new agent's written consent (either on the
statement or attached to it) to the appointment;
(f) That the street address of its registered office and the
street address of the business office of its registered agent, as changed, will
be identical;
(g) That such change was authorized by resolution duly adopted
by its board of directors or by an officer of the corporation so authorized by
the board of directors.
ARTICLE VII
-----------
Shares, Options, Dividends and Distributions
--------------------------------------------
Section 7.01. Authorized Shares.
-----------------
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<PAGE>
(1) The articles of incorporation prescribe the classes of shares and
the number of shares of each class that the corporation is authorized to issue,
as well as a distinguishing designation for each class, and prior to the
issuance of shares of a class the preferences, limitations, and relative rights
of that class must be described in the articles of incorporation.
(2) The articles of incorporation must authorize:
(a) One or more classes of shares that together have unlimited
voting rights, and
(b) One or more classes of shares (which may be the same class
or classes as those with voting rights) that together are entitled to receive
the net assets of the corporation upon dissolution.
(3) The articles of incorporation may authorize one or more classes of
shares that have special, conditional, or limited voting rights, or no rights,
or no right to vote, except to the extent prohibited by the Act;
(a) Are redeemable or convertible as specified in the articles
of incorporation;
(b) Entitle the holders to distributions calculated in any
manner, including dividends that may be cumulative, non-cumulative, or partially
cumulative;
(c) Have preference over any other class of shares with
respect to distributions, including dividends and distributions upon the
dissolution of the corporation.
(4) Shares which are entitled to preference in the distribution of
dividends or assets shall not be designated as common shares. Shares which are
not entitled to preference in the distribution of dividends or assets shall be
common shares and shall not be designated as preferred shares.
Section 7.02. Terms of Class or Series Determined by Board of Directors.
---------------------------------------------------------
(1) If the articles of incorporation so provide, the board of directors
may determine, in whole or part, the preferences, limitations, and relative
rights (within the limits set forth in Section 7.01) of:
(a) Any class of shares before the issuance of any shares of
that class, or
(b) One or more series within a class before the issuance of
any shares of that series.
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<PAGE>
(2) Each series of a class must be given a distinguishing designation.
(3) All shares of a series must have preferences, limitations, and
relative rights identical with those of other shares of the same series and,
except to the extent otherwise provided in the description of the series, of
those of other series of the same class.
(4) Before issuing any shares of a class or series created under this
section, the corporation must deliver to the Department of State of the State of
Florida for filing articles of amendment, which are effective without
shareholder action, in accordance with Section 607.0602 of the Act.
Section 7.03. Issued and Outstanding Shares.
-----------------------------
(1) A corporation may issue the number of shares of each class or
series authorized by the articles of incorporation. Shares that are issued are
outstanding shares until they are reacquired, redeemed, converted, or canceled.
(2) The reacquisition, redemption, or conversion of outstanding shares
is subject to the limitations of subsection (3) and to Section 607.06401 of the
Act.
(3) At all times that shares of the corporation are outstanding, one or
more shares that together have unlimited voting rights and one or more shares
that together are entitled to receive the net assets of the corporation upon
dissolution must be outstanding.
Section 7.04. Issuance of Shares.
------------------
(1) The board of directors may authorize shares to be issued for
consideration consisting of any tangible or intangible property or benefit to
the corporation, including cash, promissory notes, services performed, promises
to perform services evidenced by a written contract, or other securities of the
corporation.
(2) Before the corporation issues shares, the board of directors must
determine that the consideration received or to be received for shares to be
issued is adequate. That determination by the board of directors is conclusive
insofar as the adequacy of consideration for the issuance of shares relates to
whether the shares are validly issued, fully paid, and non-assessable. When it
cannot be determined that outstanding shares are fully paid and non-assessable,
there shall be a conclusive presumption that such shares are fully paid and
non-assessable if the board of directors makes a good faith determination that
there is no substantial evidence that the full consideration for such shares has
not been paid.
(3) When the corporation receives the consideration for which the board
of directors authorized the issuance of shares, the shares issued therefor are
fully paid and non-assessable. Consideration in the form of a promise to pay
money or a promise to perform
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<PAGE>
services is received by the corporation at the time of the making of the
promise, unless the agreement specifically provides otherwise.
(4) The corporation may place in escrow shares issued for a contract
for future services or benefits or a promissory note, or make other arrangements
to restrict the transfer of the shares, and may credit distributions in respect
of the shares against their purchase price, until the services are performed,
the note is paid, or the benefits received. If the services are not performed,
the shares escrowed or restricted and the distributions credited may be canceled
in whole or part.
Section 7.05. Form and Content of Certificates.
--------------------------------
(1) Shares may but need not be represented by certificates. Unless the
Act or another statute expressly provides otherwise, the rights and obligations
of shareholders are identical whether or not their shares are represented by
certificates.
(2) At a minimum, each share certificate must state on its face:
(a) The name of the issuing corporation and that the
corporation is organized under the laws of the State of Florida;
(b) The name of the person to whom issued; and
(c) The number and class of shares and the designation of the
series, if any, the certificate represents.
(3) If the shares being issued are of different classes of shares or
different series within a class, the designations, relative rights, preferences,
and limitations applicable to each class and the variations in rights,
preferences, and limitations determined for each series (and the authority of
the board of directors to determine variations for future series) must be
summarized on the front or back of each certificate. Alternatively, each
certificate may state conspicuously on its front or back that the corporation
will furnish the shareholder a full statement of this information on request and
without charge.
(4) Each share certificate:
(a) Must be signed (either manually or in facsimile) by an
officer or officers designated by the board of directors, and
(b) May bear the corporate seal or its facsimile.
(5) If the person who signed (either manually or in facsimile) a share
certificate no longer holds office when the certificate is issued, the
certificate is nevertheless valid.
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(6) Nothing in this section may be construed to invalidate any share
certificate validly issued and outstanding under the Act on July 1, 1990.
Section 7.06. Shares Without Certificates.
---------------------------
(1) The board of directors of the corporation may authorize the issue
of some or all of the shares of any or all of its classes or series without
certificates. The authorization does not affect shares already represented by
certificates until they are surrendered to the corporation.
(2) Within a reasonable time after the issue or transfer of shares
without certificates, the corporation shall send the shareholder a written
statement of the information required on certificates by the Act.
Section 7.07. Restriction on Transfer of Shares and Other Securities.
------------------------------------------------------
(1) The articles of incorporation, these bylaws, an agreement among
shareholders, or an agreement between shareholders and the corporation may
impose restrictions on the transfer or registration of transfer of shares of the
corporation. A restriction does not affect shares issued before the restriction
was adopted unless the holders of such shares are parties to the restriction
agreement or voted in favor of the restriction.
(2) A restriction on the transfer or registration of transfer of shares
is valid and enforceable against the holder or a transferee of the holder if the
restriction is authorized by this section, and effected in compliance with the
provisions of the Act, including having a proper purpose as referred to in the
Act.
Section 7.08. Shareholder's Pre-emptive Rights.
---------------------------------
The shareholders of the corporation do not have a pre-emptive right to
acquire the corporation's unissued shares.
Section 7.09. Corporation's Acquisition of its Own Shares.
-------------------------------------------
(1) The corporation may acquire its own shares, and, unless otherwise
provided in the articles of incorporation or except as provided in subsection
(4), shares so acquired constitute authorized but unissued shares of the same
class but undesignated as to series.
(2) If the articles of incorporation prohibit the reissue of acquired
shares, the number of authorized shares is reduced by the number of shares
acquired, effective upon amendment of the articles of incorporation.
27
<PAGE>
(3) Articles of amendment may be adopted by the board of directors
without shareholder action, shall be delivered to the Department of State of the
State of Florida for filing, and shall set forth the information required by
Section 607.0631 of the Act.
(4) Shares of the corporation in existence on June 30, 1990, which are
treasury shares under Section 607.004(18), Florida Statutes (1987), shall be
issued, but not outstanding, until canceled or disposed of by the corporation.
Section 7.10. Share Options.
-------------
(1) Unless the articles of incorporation provide otherwise, the
corporation may issue rights, options, or warrants for the purchase of shares of
the corporation. The board of directors shall determine the terms upon which the
rights, options, or warrants are issued, their form and content, and the
consideration for which the shares are to be issued.
(2) The terms and conditions of stock rights and options which are
created and issued by the corporation, or its successor, and which entitle the
holders thereof to purchase from the corporation shares of any class or classes,
whether authorized by unissued shares, treasury shares, or shares to be
purchased or acquired by the corporation, may include, without limitation,
restrictions, or conditions that preclude or limit the exercise, transfer,
receipt, or holding of such rights or options by any person or persons,
including any person or persons owning or offering to acquire a specified number
or percentage of the outstanding common shares or other securities of the
corporation, or any transferee or transferees of any such person or persons, or
that invalidate or void such rights or options held by any such person or
persons or any such transferee or transferees.
Section 7.11. Terms and Conditions of Stock Rights and Options.
------------------------------------------------
The terms and conditions of the stock rights and options which are
created and issued by the corporation [or its successor], and which entitle the
holders thereof to purchase from the corporation shares of any class or classes,
whether authorized but unissued shares, treasury shares, or shares to be
purchased or acquired by the corporation, may include, without limitation,
restrictions or conditions that preclude or limit the exercise, transfer,
receipt or holding of such rights or options by any person or persons, including
any person or persons owning or offering to acquire a specified number or
percentage of the outstanding common shares or other securities of the
corporation, or any transferee or transferees of any such person or persons, or
that invalidate or void such rights or options held by any such person or
persons or any such transferee or transferees.
Section 7.12. Share Dividends.
---------------
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(1) Shares may be issued pro rata and without consideration to the
corporation's shareholders or to the shareholders of one or more classes or
series. An issuance of shares under this subsection is a share dividend.
(2) Shares of one class or series may not be issued as a share dividend
in respect of shares of another class or series unless:
(a) The articles of incorporation so authorize,
(b) A majority of the votes entitled to be cast by the class
or series to be issued approves the issue, or
(c) There are no outstanding shares of the class or series to
be issued.
(3) If the board of directors does not fix the record date for
determining shareholders entitled to a share dividend, it is the date of the
board of directors authorizes the share dividend.
Section 7.13. Distributions to Shareholders.
-----------------------------
(1) The board of directors may authorize and the corporation may make
distributions to its shareholders subject to restriction by the articles of
incorporation and the limitations in subsection (3).
(2) If the board of directors does not fix the record date for
determining shareholders entitled to a distribution (other than one involving a
purchase, redemption, or other acquisition of the corporation's shares), it is
the date the board of directors authorizes the distribution.
(3) No distribution may be made if, after giving it effect:
(a) The corporation would not be able to pay its debts as they
become due in the usual course of business; or
(b) The corporation's total assets would be less than the sum
of its total liabilities plus (unless the articles of incorporation permit
otherwise) the amount that would be needed, if the corporation were to be
dissolved at the time of the distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
receiving the distribution.
(4) The board of directors may base a determination that a distribution
is not prohibited under subsection (3) either on financial statements prepared
on the basis of accounting practices and principles that are reasonable in the
circumstances or on a fair
29
<PAGE>
valuation or other method that is reasonable in the circumstances. In the case
of any distribution based upon such a valuation, each such distribution shall be
identified as a distribution based upon a current valuation of assets, and the
amount per share paid on the basis of such valuation shall be disclosed to the
shareholders concurrent with their receipt of the distribution.
(5) Except as provided in subsection (7), the effect of a distribution
under subsection (3) is measured;
(a) In the case of distribution by purchase, redemption, or
other acquisition of the corporation's shares, as of the earlier of:
(i) The date money or other property is transferred
or debt incurred by the corporation, or
(ii) The date the shareholder ceases to be a
shareholder with respect to the acquired shares;
(b) In the case of any other distribution of indebtedness, as
of the date the indebtedness is distributed;
(c) In all other cases, as of:
(i) The date the distribution is authorized if the
payment occurs within 120 days after the date of authorization, or
(ii) The date the payment is made if it occurs more
than 120 days after the date of authorization.
(6) A corporation's indebtedness to a shareholder incurred by reason of
a distribution made in accordance with this section is at parity with the
corporation's indebtedness to its general, unsecured creditors except to the
extent subordinated by agreement.
(7) Indebtedness of the corporation, including indebtedness issued as a
distribution, is not considered a liability for purposes of determinations under
subsection (3) if its terms provide that payment of principal and interest are
made only if and to the extent that payment of a distribution to shareholders
could then be made under this section. If the indebtedness is issued as a
distribution, each payment of principal or interest is treated as a
distribution, the effect of which is measured on the date the payment is
actually made.
30
<PAGE>
ARTICLE VIII
------------
Amendment of Articles and Bylaws
--------------------------------
Section 8.01. Authority to Amend the Articles of Incorporation.
-------------------------------------------------
(1) The corporation may amend its articles of incorporation at any time
to add or change a provision that is required or permitted in the articles of
incorporation or to delete a provision not required in the articles of
incorporation. Whether a provision is required or permitted in the articles of
incorporation is determined as of the effective date of the amendment.
(2) A shareholder of the corporation does not have a vested property
right resulting from any provision in the articles of incorporation, including
provisions relating to management, control, capital structure, dividend
entitlement, or purpose or duration of the corporation.
<PAGE>
Section 8.02. Amendment by Board of Directors.
--------------------------------
The corporation's board of directors may adopt one or more amendments
to the corporation's articles of incorporation without shareholder action:
(1) To extend the duration of the corporation if it was incorporated at
a time when limited duration was required by law;
(2) To delete the names and addresses of the initial directors;
(3) To delete the name and address of the initial registered agent or
registered office, if a statement of change is on file with the Department of
State of the State of Florida;
(4) To delete any other information contained in the articles of
incorporation that is solely of historical interest;
(5) To change each issued and unissued authorized share of an
outstanding class into a greater number of whole shares if the corporation has
only shares of that class outstanding;
(6) To delete the authorization for a class or series of shares
authorized pursuant to Section 607.0602 of the Act, if no shares of such class
or series have been issued;
(7) To change the corporate name by substituting the word
"corporation," "incorporated," or "company," or the abbreviation "corp.," Inc.,"
or Co.," for a similar word or abbreviation in the name, or by adding, deleting,
or changing a geographical attribution for the name; or
31
<PAGE>
(8) To make any other change expressly permitted by the Act to be made
without shareholder action.
Section 8.03. Amendment of Bylaws by Board of Directors.
-----------------------------------------
The corporation's board of directors may amend or repeal the
corporation's bylaws unless the Act reserves the power to amend a particular
bylaw provision exclusively to the shareholders.
Section 8.04. Bylaw Increasing Quorum or Voting Requirements for Directors.
------------------------------------------------------------
(1) A bylaw that fixes a greater quorum or voting requirement for the
board of directors may be amended or repealed:
(a) If originally adopted by the shareholders, only by the
shareholders;
(b) If originally adopted by the board of directors, either by
the shareholders or by the board of directors.
(2) A bylaw adopted or amended by the shareholders that fixes a greater
quorum or voting requirement for the board of directors may provide that it may
be amended or repealed only by a specified vote of either the shareholders or
the board of directors.
(3) Action by the board of directors under paragraph (1)(b) to adopt or
amend a bylaw that changes the quorum or voting requirement for the board of
directors must meet the same quorum requirement and be adopted by the same vote
required to take action under the quorum and voting requirement then in effect
or proposed to be adopted, whichever is greater.
ARTICLE IX
----------
Records and Reports
-------------------
Section 9.01. Corporate Records.
-----------------
(1) The corporation shall keep as permanent records minutes of al
meetings of its shareholders and board of directors, a record of all actions
taken by the shareholders or board of directors without a meeting, and a record
of all actions taken by a committee of the board of directors in place of the
board of directors on behalf of the corporation.
(2) The corporation shall maintain accurate accounting records.
32
<PAGE>
(3) The corporation or its agent shall maintain a record of its
shareholders in a form that permits preparation of a list of the names and
addresses of all shareholders in alphabetical order by class of shares showing
the number and series of shares held by each.
(4) The corporation shall maintain its records in written form or in
another form capable of conversion into written form within a reasonable time.
(5) The corporation shall keep a copy of the following records:
(a) Its articles or restated articles of incorporation and all
amendments to them currently in effect;
(b) Its bylaws or restated bylaws and all amendments to them
currently in effect;
(c) Resolutions adopted by the board of directors creating one
or more classes or series of shares and finding their relative rights,
preferences, and limitations, if shares issued pursuant to those resolutions are
outstanding;
(d) The minutes of all shareholders' meetings and records of
all action taken by shareholders without a meeting for the past three years;
(e) Written communications to all shareholders generally or
all shareholders of a class or series within the past three years, including the
financial statements furnished for the past three years;
(f) A list of the names and business street addresses of its
current directors and officers; and
(g) Its most recent annual report delivered to the Department
of State of the State of Florida.
Section 9.02. Financial Statements for Shareholders.
-------------------------------------
(1) Unless modified by resolution of the shareholders within 120 days
of the close of each fiscal year, the corporation shall furnish its shareholders
annual financial statements which may be consolidated or combined statements of
the corporation and one or more of its subsidiaries, as appropriate, that
include a balance sheet as of the end of the fiscal year, an income statement
for that year, and a statement of cash flows for that year. If financial
statements are prepared for the corporation on the basis of generally-accepted
accounting principles, the annual financial statements must also be prepared on
that basis.
33
<PAGE>
(2) If the annual financial statements are reported upon by a public
accountant, his report must accompany them. If not, the statements must be
accompanied by a statement of the president or the person responsible for the
corporation's accounting records:
(a) Stating his reasonable belief whether the statements were
prepared on the basis of generally-accepted accounting principles and, if not,
describing the basis of preparation; and
(b) Describing any respects in which the statements were not
prepared on a basis of accounting consistent with the statements prepared for
the preceding year.
(3) The corporation shall mail the annual financial statements to each
shareholder within 120 days after the close of each fiscal year or within such
additional time thereafter as is reasonably necessary to enable the corporation
to prepare its financial statements, if for reasons beyond the corporation's
control, it is unable to prepare its financial statements within the prescribed
period. Thereafter, on written request from a shareholder who was not mailed the
statements, the corporation shall mail him the latest annual financial
statements.
Section 9.03. Other Reports to Shareholders.
------------------------------
(1) If the corporation indemnifies or advances expenses to any
director, officer, employee or agent otherwise than by court order or action by
the shareholders or by an insurance carrier pursuant to insurance maintained by
the corporation, the corporation shall report the indemnification or advance in
writing to the shareholders with or before the notice of the next shareholders'
meeting, or prior to such meeting if the indemnification or advance occurs after
the giving of such notice but prior to the time such meeting is held, which
report shall include a statement specifying the persons paid, the amounts paid,
and the nature and status at the time of such payment of the litigation or
threatened litigation.
(2) If the corporation issues or authorizes the issuance of shares for
promises to render services in the future, the corporation shall report in
writing to the shareholders the number of shares authorized or issued, and the
consideration received by the corporation, with or before the notice of the next
shareholders' meeting.
Section 9.04. Annual Report for Department of State.
--------------------------------------
(1) The corporation shall deliver to the Department of State of the
State of Florida for filing a sworn annual report on such forms as the
Department of State of the State of Florida prescribes that sets forth the
information prescribed by Section 607.1622 of the Act.
(2) Proof to the satisfaction of the Department of State of the State
of Florida on or before July 1 of each calendar year that such report was
deposited in the United States
34
<PAGE>
mail in a sealed envelope, properly addressed with postage prepaid, shall be
deemed in compliance with this requirement.
(3) Each report shall be executed by the corporation by an officer or
director or, if the corporation is in the hands of a receiver or trustee, shall
be executed on behalf of the corporation by such receiver or trustee, and the
signing thereof shall have the same legal effect as if made under oath, without
the necessity of appending such oath thereto.
(4) Information in the annual report must be current as of the date the
annual report is executed on behalf of the corporation.
(5) Any corporation failing to file an annual report which complies
with the requirements of this section shall not be permitted to maintain or
defend any action in any court of this state until such report is filed and all
fees and taxes due under the Act are paid and shall be subject to dissolution or
cancellation of its certificate of authority to do business as provided in the
Act.
ARTICLE X
---------
Miscellaneous
-------------
Section 10.01. Definition of the "Act".
----------------------
All references contained herein to the "Act" or to sections of the
"Act" shall be deemed to be in reference to the Florida Business Corporation
Act.
Section 10.02. Application of Florida Law.
---------------------------
Whenever any provision of these bylaws is inconsistent with any
provision of the Florida Business Corporation Act, Statutes 607, as they may be
amended from time to time, then in such instance Florida law shall prevail.
Section 10.03. Fiscal Year.
-----------
The fiscal year of the corporation shall be determined by resolution of
the board of directors.
Section 10.04. Conflicts with Articles of Incorporation.
----------------------------------------
In the event that any provision contained in these bylaws conflicts
with any provision of the corporation's articles of incorporation, as amended
from time to time, the provisions of the articles of incorporation shall prevail
and be given full force and effect, to the full extent permissible under the
Act.
35
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered in to on this the 2nd day March 1998 by and
between Dynamic Imagning Group, Inc., a Colorado corporation, having its
principal place of business at3418 N. Ocean Blvd., Fort Lauderdale, Florida
33308 (herein after refereed to as "THE COMPANY") and Gary R. Morgan (herein
after referred to as "Executive").
WHEREAS, The Company desires to employ Executive as a Director and
Chairman, and the Executive is willing to accept employment, all subject to
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, as well as other valuable considerations, receipt of which is hereby
knowledged, the parties hereto agree as follows:
1. Employment Term: Subject to the terms and conditions hereof The Company
hereby employs Executive and Executive hereby accepts employment by The Company
for a period commencing on the 2nd day of March, 1998 or as soon as Executive
commences employment and continuing until March 3,2001, unless extended or
unless Executive employment shall be terminated. This Agreement shall
automatically be extended at the end of its term for an additional three year
period unless Executive gives written notice of intent not to extend the
Agreement 60 days prior to the end of the term of the Agreement or the Company
can show proof that the Executive is not in full accordance with this agreement,
at which time they may give a 60 day termination notice.
2 Duties: Executive shall serve The Company as Chairman of the Board reporting
directly to the Board of Directors of The Company. Executive shall serve and
prepare all documentation demeaned necessary related directly or indirectly to
his position.
2.1 Executive shall perform such Executive, administrative, development,
marketing, programming and other duties as are indicative of the office he holds
and as may, from time to time, be assigned to him by the Board of Directors of
said Corporations and devote such time shall be reasonable and necessary for the
performance of Executives job.
3. Compensation: As base compensation for the services to be rendered by
Executive hereunder The Company shall pay Executive in Dynamic Imaging Group,
Inc.,As of February 27, 1998 $120,000 per year plus standard fringe benefits. In
addition, the Executive will receive a bonus of 2.5% of the gross receipts
actually collected by the Company. Each additional year from year one the
Executive shall have an increase of not less than 10% of the previous year base
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<PAGE>
salary. The only alteration to this compensation will have to be mutually agreed
upon by both parties. Also to be made as a part of this agreement an Executive
profit/incentive plan in which certain key executives and consultants will share
profits/incentives. This profit/incentive plan will be a separate agreement
between Company and Executive to be attached to this agreement.
3.1 Vacation and Benefits: Executive shall receive 3 weeks paid vacation per
year and shall share in all other benefits offered by said Corporation including
but not limited to health insurance. However, said vacation time shall not be
deamned to have accrued unless and until said.
4. Termination on Disability or Death:
a) In the event that the Executive, due to physical or mental
disability or incapacity, is unable to substantially perform his duties
hereunder for a period of three months, The Company or Executive may, upon 10
days prior written notice, may terminate this Agreement and be excused from any
further acts to be performed pursuant to this Agreement. Executive's employment
shall terminate immediately upon his death.
b) Upon termination of Executive's employment by reason of his death or
disability as aforesaid, Executive, or in the case of Executive's personal
representatives, shall be entitled to receive all compensation, including
salary, commissions and bonuses earned or accrued to the date of such
termination. Additionally, Company will maintain a disability policy at its
expense equal to the Executives contracted salary which will pay the same to the
Executive upon his or her incapacity.
5. Termination for Certain Causes: In the event of the (A) breach of any
provision this Agreement provided Executive shall have 30 days to cure such
default, (B) conviction of the Executive for any felony involving moral
turpitude under federal or state law, this Agreement and Executive's employment
hereunder may be terminated by The Company immediately and without prior notice.
Executive shall not be entitled to any severance pay or any compensation
whatsoever if terminated for cause pursuant to the provisions of this section.
6. Confidentiality: Executive understands and hereby acknowledges that as a
result of his employment with The Company, he will necessarily become informed
of, and have access to certain valuable and confidential information of The
Company and any of its subsidiaries, joint ventures and affiliates, including,
without limitations, trade secrets, technical information, know-how, plans,
specifications, identity of customers and suppliers, and that such information,
even though it may be developed or otherwise acquired by Executive in trust and
solely for The Companies benefit. Accordingly, Executive hereby agrees that he
2
<PAGE>
shall not at any time either during or subsequent to his employment hereunder,
use, reveal, report, furnish transfer or otherwise disclose to any person,
corporation or other entity, any of The Companies confidential information
without the prior written consent of The Company.
6.1 Upon the termination of his employment with The Company for any reason
whatsoever, Executive shall promptly deliver to The Company all drawings,
manuals, letters, notes, notebook, reports, computer diskettes and copies
thereof and all other materials, including, without, limitation, those of a
secret and confidential nature, relating to The Companies business which are in
Executive possession or control.
7. Non-Competition: Executive agrees that, during the term of this Agreement,
not, directly or indirectly:
(a) Solicit or attempt to solicit business of any customers of The Company.
(b) Otherwise divert or attempt to divert from The Company any business
whatsoever:
(C) Solicit or attempt to solicit for any business endeavor any employee of The
Company.
(d) Interfere with any business relationship between the Company and any other
person; or
(e) Render any services as an officer, director, employee, partner, lender or in
connection with any person who is so engaged.
8. Remedies: Because The Company does not have an adequate remedy at law to
protect its business from Executive's competition or to protect its interest in
its trade secrets, privileged, proprietary or confidential information and
similar commercial assets, The Company shall be entitled to injunctive relief,
in addition to such other remedies and relief that would, in the event of a
breach of the provisions of Section 7 and 8, be available to The Company. In the
event of such a breach, in addition to any other remedies, The Company shall be
entitled to receive from Executive payment of, or reimbursement for, its
reasonable attorney's fees and disbursements incurred in enforcing any such
provisions.
9. Survival: The provisions of Section 6, 7, and 8 shall survive termination of
this Agreement.
10. Entire Agreement: This Agreement sets forth the entire understanding of the
parties and mergers and supersedes any prior or contemporaneous Agreements
3
<PAGE>
between the parties pertaining to the subject matter hereof. This Agreement may
not be changed or terminated orally, and no change, termination or attempted
waiver of any provisions hereof shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced; provides, however,
that the Executive's compensation may be increased at any time by The Company
without in any way affecting any of the terms and conditions of this Agreement,
which in all other respects shall remain in full force effect. Failure of a
party to enforce one or more of the provisions of this Agreement or to require
at any time performance of any obligations hereof shall not be construed to be a
waiver of such provisions by such party nor to in any way affect the validity of
this Agreement of such party's right thereafter to enforce any provision of this
Agreement, nor to preclude such party from taking any other action at any time
which it would legally be entitled to take.
11. Successors and Assigns: Neither party shall have the right to assign this
personal Agreement, or any rights or obligations hereunder, without the consent
of the other party; provided, however, that upon the sale of all or
substantially all of the assets, business and goodwill of The Company to another
entity, or upon the merger or consolidation of The Company with another entity,
this Agreement shall inure to the benefit of, and be binding upon, both
Executive and the entity purchasing such assets, business and goodwill, or
surviving such merger or consolidation, as the case may be, in the same manner
and to the same extent as though such other entity were The Company. Subject to
the foregoing, this Agreement shall inure to the benefit of, and bind, the
parties hereto and their legal representatives, heirs, successors and assigns.
12. Additional Acts: Executive and The Company each agrees that they shall, as
often as requested to do so, execute, acknowledge and deliver and file, or cause
to be executed, acknowledge and delivered and filed, any and all further
instruments, Agreements or documents as may be necessary or expedient in order
to consummate the transactions provided for in this Agreement and do any and all
further acts and things as may be necessary or expedient in order to carry out
the purpose and intent of this Agreement.
13. Communications: All notices, request, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been given at the
time when mailed in any United States post office enclosed in a registered or
certified postage prepaid envelope and addressed to the addresses set forth at
the beginning of this Agreement, or to do such other address as any party may
specify by notice to the other party; provided, however, that any notice of
change of address shall be effective only upon receipt.
4
<PAGE>
14. Construction: The headings of the paragraphs of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
otherwise affect the construction of the terms or provisions hereof. References
in this Agreement to Sections are sections of this Agreement.
15. Counterparts: This Agreement may be executed in multiple counterparts, each
of which shall be deemed to be one and the same instrument.
16. Attorney's Fees: In any action to enforce the provision of this Agreement,
the prevailing party shall be entitled to reimbursement of reasonable attorney's
fees and cost from the non-prevailing party.
17. Severability: If any provision of this Agreement is held to be invalid or
unenforceable by a court or tribunal of competent jurisdiction, such invalidity
or unenforceability shall not affect the validity and enforceability of the
other provision held to be invalid or unenforceable shall be carried out as
nearly as possible according to its original terms and intent to eliminate such
invalidity or unenforceability.
18. Governing Law: This Agreement is made and executes and shall be governed by
the laws of the State of Florida.
19. Indemnification: The Company agrees to indemnify and hold Executive harmless
for any action taken by Executive within the scope of his employment which The
Company authorizes or directs Executive to take.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first set forth.
Dynamic Imaging Group, Inc.
By:
-----------------------
Board of Directors
Gary R. Morgan, Executive
Date:__________
5
<PAGE>
ADDENDUM TO EMPLOYMENT AGREEMENT
--------------------------------
OF GARY R. MORGAN
-----------------
Executive is entitled to purchase Three Hundred Thousand (300,000) shares of
restricted common stock per calendar year with the starting date of March 1,
2000 and each year there after for five consecutive years, at the par value of
.80 per share. The company will loan the Executive all funds necessary to
purchase shares interest free. The said loan must be repaid prior to the
expiration of the Executives contract or the end of the fifth year. As this
benefit is available to other Executives/ Key Personnel, all Executives will be
given the option of borrowing said funds from the company equally and at the
same time. Should sufficient funds not be available for all Executives to
exercise their options totally, said funds will be divided equally among those
Executives wishing to exercise their purchase option. Should Executive not
exercise his option to purchase all or part of said stock, the unpurchased
amount will accrue.
Approved by the Board of Directors:
- ----------------------------
Roland Breton- Director
- ----------------------------
Howard I Storfer- Director
EMPLOYMENT AGREEMENT
THIS AGREEMENT entered in to on this the 2nd day March 1998 by and
between Dynamic Imaging Group, Inc., a Colorado corporation, having its
principal place of business at 3418 N. Ocean Blvd., Fort Lauderdale, Florida
33308 (herein after referred to as "THE COMPANY") and Roland Breton (herein
after referred to as "Executive").
WHEREAS, The Company desires to employ Executive as a Director and
President, and the Executive is willing to accept employment, all subject to the
terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, as well as other valuable considerations, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Employment Term: Subject to the terms and conditions hereof The Company
hereby employs Executive and Executive hereby accepts employment by The Company
for a period commencing on the 27th day of February, 1998 and continuing until
February 28 ,2003. This Agreement shall automatically be extended at the end of
its term for an additional five year period unless Executive gives written
notice of intent not to extend the Agreement 60 days prior to the end of the
term of the Agreement.
2 Duties: Executive shall serve The Company as President reporting directly to
the Board of Directors of The Company. Executive shall serve and prepare all
documentation demeaned necessary and which are related directly or indirectly to
his position as President.
2.1 Executive shall perform such Executive, administrative, development,
marketing, programming and other duties as are indicative of the office he holds
and as may, from time to time, be assigned to him by the Board of Directors. He
shall devote such time which is reasonable and necessary for the performance of
his position.
3. Compensation: As base compensation for the services to be rendered by
Executive hereunder The Company shall pay Executive
1
<PAGE>
in Dynamic Imaging Group, Inc.,as of February 27, 1998 One Hundred Twenty
Thousand Dollars ($120,000.00) per year. In addition, the Executive will receive
a bonus of 2.5% of gross receipts actually collected by the Company, to a
maximum of 10% of the gross profit, and a discretionary expense account equal to
10% of the Executives base pay. Each additional year from year one the Executive
shall have an increase in base pay of not less than 10% of the previous years
base salary. The actual increase in base salary for which the Executive is
entitled will be determined by a majority vote of the Board of Directors. The
Executive will also be given an Executive profit/incentive plan in which he will
share profits/incentives with other Executives and Key personnel. This
profit/incentive plan will be a separate agreement between Company and Executive
to be attached to this agreement. As the Executive will be required to travel to
best represent the interests of the company, the Company will provide the
Executive with an automobile for his sole use while employed with the Company.
The type and budget for this vehicle will be determined by a majority vote of
the Board of Directors. Company will pay all expenses affiliated with the
operation of said vehicle.
3.1 Vacation and Benefits: Executive shall receive 3 weeks paid vacation for the
first year of employment and an additional week of vacation for each additional
year of employment with a maximum of 10 (Ten) weeks per year. Should Executive
elect not to utilize any or all of his vacation time, the Company will pay
executive his proportionate base salary for each vacation week not taken.
Executive may accrue vacation time at his own discretion. The Company will
provide for the Executive and his family paid major medical and dental insurance
as well as other benefits offered by the Company to it's employees.
4. Termination on Disability or Death:
-----------------------------------
a) In the event that the Executive, due to physical or mental
disability or incapacity, is unable to substantially perform his duties
hereunder, The Executive may, upon 10 days prior written notice, terminate this
Agreement and be excused from any further acts to be performed pursuant to this
Agreement. The Company agrees to maintain at it's expense a disability policy
payable to the Executive upon the occurrence of any of the above situations and
in an amount sufficient to compensate the
2
<PAGE>
Executive for his base salary, and all benefits for which he is entitled under
this contract for as long as he is disabled or incapacitated.
b) The Company will maintain, at it's expense, a life insurance policy
sufficient to pay the Executives survivors the full amount of the Executives
ownership in the Company, as well as the balance of any compensation owed the
Executive in accordance with this agreement. The Company will purchase
additional life insurance as the amounts and types of compensation due the
Executive change. The beneficiary on all insurance policies shall be the spouse
of the Executive. In the case of the Executive not being married, the
beneficiary shall be any other designate of the Executive.
5. Termination for Certain Causes: In the event of a breach of any provision
this Agreement, the Executive shall have 30 days to cure such default.
6. Confidentiality: Executive understands and hereby acknowledges that as a
result of his employment with The Company, he will necessarily become informed
of, and have access to certain valuable and confidential information of The
Company and any of its subsidiaries, joint ventures and affiliates, including,
without limitations, trade secrets, technical information, know-how, plans,
specifications, identity of customers and suppliers, and that such information,
even though it may be developed or otherwise acquired by Executive in trust and
solely for The Companies benefit. Accordingly, Executive hereby agrees that he
shall not at any time either during or subsequent to his employment hereunder,
use, reveal, report, furnish transfer or otherwise disclose to any person,
corporation or other entity, any of The Companies confidential information
without the prior written consent of The Company.
6.1 Upon the termination of his employment with The Company for any reason
whatsoever, Executive shall promptly deliver to The Company all drawings,
manuals, letters, notes, notebook, reports, computer diskettes and copies
thereof and all other materials, including, without, limitation, those of a
secret and confidential nature, relating to The Companies business which are in
Executive possession or control.
3
<PAGE>
7. Non-Competition: Executive agrees that, during the term of this Agreement,
not, directly or indirectly:
(a) Solicit or attempt to solicit business of any customers of The Company.
(b) Otherwise divert or attempt to divert from The Company any business
whatsoever:
(C) Solicit or attempt to solicit for any business endeavor any employee of The
Company.
(d) Interfere with any business relationship between the Company and any other
person; or
(e) Render any services as an officer, director, employee, partner, lender or in
connection with any person who is so engaged.
8. Remedies: Because The Company does not have an adequate remedy at law to
protect its business from Executive's competition or to protect its interest in
its trade secrets, privileged, proprietary or confidential information and
similar commercial assets, The Company shall be entitled to injunctive relief,
in addition to such other remedies and relief that would, in the event of a
breach of the provisions of Section 7 and 8, be available to The Company. In the
event of such a breach, in addition to any other remedies, The Company shall be
entitled to receive from Executive payment of, or reimbursement for, its
reasonable attorney's fees and disbursements incurred in enforcing any such
provisions.
9. Survival: The provisions of Section 6, 7, and 8 shall survive termination of
this Agreement.
10. Entire Agreement: This Agreement sets forth the entire understanding of the
parties and mergers and supersedes any prior or contemporaneous Agreements
between the parties pertaining to the subject matter hereof. This Agreement may
not be changed or terminated orally, and no change, termination or attempted
waiver of any provisions hereof shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced; provides, however,
that the Executive's compensation
4
<PAGE>
may be increased at any time by The Company without in any way affecting any of
the terms and conditions of this Agreement, which in all other respects shall
remain in full force effect. Failure of a party to enforce one or more of the
provisions of this Agreement or to require at any time performance of any
obligations hereof shall not be construed to be a waiver of such provisions by
such party nor to in any way affect the validity of this Agreement of such
party's right thereafter to enforce any provision of this Agreement, nor to
preclude such party from taking any other action at any time which it would
legally be entitled to take.
11. Successors and Assigns: Neither party shall have the right to assign this
personal Agreement, or any rights or obligations hereunder, without the consent
of the other party; provided, however, that upon the sale of all or
substantially all of the assets, business and goodwill of The Company to another
entity, or upon the merger or consolidation of The Company with another entity,
this Agreement shall inure to the benefit of, and be binding upon, both
Executive and the entity purchasing such assets, business and goodwill, or
surviving such merger or consolidation, as the case may be, in the same manner
and to the same extent as though such other entity were The Company. Subject to
the foregoing, this Agreement shall inure to the benefit of, and bind, the
parties hereto and their legal representatives, heirs, successors and assigns.
12. Additional Acts: Executive and The Company each agrees that they shall, as
often as requested to do so, execute, acknowledge and deliver and file, or cause
to be executed, acknowledge and delivered and filed, any and all further
instruments, Agreements or documents as may be necessary or expedient in order
to consummate the transactions provided for in this Agreement and do any and all
further acts and things as may be necessary or expedient in order to carry out
the purpose and intent of this Agreement.
13. Communications: All notices, request, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been given at the
time when mailed in any United States post office enclosed in a registered or
certified postage prepaid envelope and addressed to the addresses set forth
5
<PAGE>
at the beginning of this Agreement, or to do such other address as any party may
specify by notice to the other party; provided, however, that any notice of
change of address shall be effective only upon receipt.
14. Construction: The headings of the paragraphs of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
otherwise affect the construction of the terms or provisions hereof. References
in this Agreement to Sections are sections of this Agreement.
15. Counterparts: This Agreement may be executed in multiple counterparts, each
of which shall be deemed to be one and the same instrument.
16. Attorney's Fees: In any action to enforce the provision of this Agreement,
the prevailing party shall be entitled to reimbursement of reasonable attorney's
fees and cost from the non-prevailing party.
17. Severability: If any provision of this Agreement is held to be invalid or
unenforceable by a court or tribunal of competent jurisdiction, such invalidity
or unenforceability shall not affect the validity and enforceability of the
other provision held to be invalid or unenforceable shall be carried out as
nearly as possible according to its original terms and intent to eliminate such
invalidity or unenforceability.
18. Governing Law: This Agreement is made and executes and shall be governed by
the laws of the State of Florida.
19. Indemnification: The Company agrees to indemnify and hold Executive harmless
for any action taken by Executive within the scope of his employment which The
Company authorizes or directs Executive to take.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first set forth.
Dynamic Imaging Group, Inc.
By:
------------------------------------
Gary R. Morgan-Director
By:
------------------------------------
Howard I. Storfer-Director
------------------------------------
Roland Breton, Executive
Date:
-----------
7
<PAGE>
ADDENDUM TO EMPLOYMENT AGREEMENT
--------------------------------
OF ROLAND BRETON
----------------
Executive is entitled to purchase Three Hundred Thousand (300,000) shares of
restricted common stock per calendar year with the starting date of March 1,
2000 and each year there after for five consecutive years, at the par value of
.80 per share. The company will loan the Executive all funds necessary to
purchase shares interest free. The said loan must be repaid prior to the
expiration of the Executives contract or the end of the fifth year. As this
benefit is available to other Executives/ Key Personnel, all Executives will be
given the option of borrowing said funds from the company equally and at the
same time. Should sufficient funds not be available for all Executives to
exercise their options totally, said funds will be divided equally among those
Executives wishing to exercise their purchase option. Should Executive not
exercise his option to purchase all or part of said stock, the unpurchased
amount will accrue.
Approved by the Board of Directors:
- ------------------------------------
Howard I. Storfer- Director
- ------------------------------------
Gary Morgan- Director
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT entered in to on this the 2nd day March 1998 by and
between Dynamic Imaging Group, Inc., a Colorado corporation, having its
principal place of business at 3418 N. Ocean Blvd., Fort Lauderdale, Florida
33308 (herein after referred to as "THE COMPANY") and Howard I.Storfer (herein
after referred to as "Executive").
WHEREAS, The Company desires to employ Executive as a Director and
Chief Operating Officer, and the Executive is willing to accept employment, all
subject to the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, as well as other valuable considerations, receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Employment Term: Subject to the terms and conditions hereof The Company
hereby employs Executive and Executive hereby accepts employment by The Company
for a period commencing on the 27th day of February, 1998 and continuing until
February 28 ,2003. This Agreement shall automatically be extended at the end of
its term for an additional five year period unless Executive gives written
notice of intent not to extend the Agreement 60 days prior to the end of the
term of the Agreement.
2 Duties: Executive shall serve The Company as Chief Operating Officer reporting
directly to the Board of Directors of The Company. Executive shall serve and
prepare all documentation demeaned necessary and which are related directly or
indirectly to his position as Chief Operating Officer.
2.1 Executive shall perform such Executive, administrative, development,
marketing, programming and other duties as are indicative of the office he holds
and as may, from time to time, be assigned to him by the Board of Directors. He
shall devote such time which is reasonable and necessary for the performance of
his position.
3. Compensation: As base compensation for the services to be rendered by
Executive hereunder The Company shall pay Executive
1
<PAGE>
in Dynamic Imaging Group, Inc.,as of February 27, 1998 One Hundred Twenty
Thousand Dollars ($120,000.00) per year. In addition, the Executive will receive
a bonus of 2.5% of gross receipts actually collected by the Company, to a
maximum of 10% of the gross profit, and a discretionary expense account equal to
10% of the Executives base pay. Each additional year from year one the Executive
shall have an increase in base pay of not less than 10% of the previous years
base salary. The actual increase in base salary for which the Executive is
entitled will be determined by a majority vote of the Board of Directors. The
Executive will also be given an Executive profit/incentive plan in which he will
share profits/incentives with other Executives and Key personnel. This
profit/incentive plan will be a separate agreement between Company and Executive
to be attached to this agreement. As the Executive will be required to travel to
best represent the interests of the company, the Company will provide the
Executive with an automobile for his sole use while employed with the Company.
The type and budget for this vehicle will be determined by a majority vote of
the Board of Directors. Company will pay all expenses affiliated with the
operation of said vehicle.
3.1 Vacation and Benefits: Executive shall receive 3 weeks paid vacation for the
first year of employment and an additional week of vacation for each additional
year of employment with a maximum of 10 (Ten) weeks per year. Should Executive
elect not to utilize any or all of his vacation time, the Company will pay
executive his proportionate base salary for each vacation week not taken.
Executive may accrue vacation time at his own discretion. The Company will
provide for the Executive and his family paid major medical and dental insurance
as well as other benefits offered by the Company to it's employees.
4. Termination on Disability or Death:
-----------------------------------
a) In the event that the Executive, due to physical or mental
disability or incapacity, is unable to substantially perform his duties
hereunder, The Executive may, upon 10 days prior written notice, terminate this
Agreement and be excused from any further acts to be performed pursuant to this
Agreement. The Company agrees to maintain at it's expense a disability policy
payable to the Executive upon the occurrence of any of the above situations and
in an amount sufficient to compensate the
2
<PAGE>
Executive for his base salary, and all benefits for which he is entitled under
this contract for as long as he is disabled or incapacitated.
b) The Company will maintain, at it's expense, a life insurance policy
sufficient to pay the Executives survivors the full amount of the Executives
ownership in the Company, as well as the balance of any compensation owed the
Executive in accordance with this agreement. The Company will purchase
additional life insurance as the amounts and types of compensation due the
Executive change. The beneficiary on all insurance policies shall be the spouse
of the Executive. In the case of the Executive not being married, the
beneficiary shall be any other designate of the Executive.
5. Termination for Certain Causes: In the event of a breach of any provision
this Agreement, the Executive shall have 30 days to cure such default.
6. Confidentiality: Executive understands and hereby acknowledges that as a
result of his employment with The Company, he will necessarily become informed
of, and have access to certain valuable and confidential information of The
Company and any of its subsidiaries, joint ventures and affiliates, including,
without limitations, trade secrets, technical information, know-how, plans,
specifications, identity of customers and suppliers, and that such information,
even though it may be developed or otherwise acquired by Executive in trust and
solely for The Companies benefit. Accordingly, Executive hereby agrees that he
shall not at any time either during or subsequent to his employment hereunder,
use, reveal, report, furnish transfer or otherwise disclose to any person,
corporation or other entity, any of The Companies confidential information
without the prior written consent of The Company.
6.1 Upon the termination of his employment with The Company for any reason
whatsoever, Executive shall promptly deliver to The Company all drawings,
manuals, letters, notes, notebook, reports, computer diskettes and copies
thereof and all other materials, including, without, limitation, those of a
secret and confidential nature, relating to The Companies business which are in
Executive possession or control.
3
<PAGE>
7. Non-Competition: Executive agrees that, during the term of this Agreement,
not, directly or indirectly:
(a) Solicit or attempt to solicit business of any customers of The Company.
(b) Otherwise divert or attempt to divert from The Company any business
whatsoever:
(C) Solicit or attempt to solicit for any business endeavor any employee of The
Company.
(d) Interfere with any business relationship between the Company and any other
person; or
(e) Render any services as an officer, director, employee, partner, lender or in
connection with any person who is so engaged.
8. Remedies: Because The Company does not have an adequate remedy at law to
protect its business from Executive's competition or to protect its interest in
its trade secrets, privileged, proprietary or confidential information and
similar commercial assets, The Company shall be entitled to injunctive relief,
in addition to such other remedies and relief that would, in the event of a
breach of the provisions of Section 7 and 8, be available to The Company. In the
event of such a breach, in addition to any other remedies, The Company shall be
entitled to receive from Executive payment of, or reimbursement for, its
reasonable attorney's fees and disbursements incurred in enforcing any such
provisions.
9. Survival: The provisions of Section 6, 7, and 8 shall survive termination of
this Agreement.
10. Entire Agreement: This Agreement sets forth the entire understanding of the
parties and mergers and supersedes any prior or contemporaneous Agreements
between the parties pertaining to the subject matter hereof. This Agreement may
not be changed or terminated orally, and no change, termination or attempted
waiver of any provisions hereof shall be binding unless in writing and signed by
the party against whom the same is sought to be enforced; provides, however,
that the Executive's compensation
4
<PAGE>
may be increased at any time by The Company without in any way affecting any of
the terms and conditions of this Agreement, which in all other respects shall
remain in full force effect. Failure of a party to enforce one or more of the
provisions of this Agreement or to require at any time performance of any
obligations hereof shall not be construed to be a waiver of such provisions by
such party nor to in any way affect the validity of this Agreement of such
party's right thereafter to enforce any provision of this Agreement, nor to
preclude such party from taking any other action at any time which it would
legally be entitled to take.
11. Successors and Assigns: Neither party shall have the right to assign this
personal Agreement, or any rights or obligations hereunder, without the consent
of the other party; provided, however, that upon the sale of all or
substantially all of the assets, business and goodwill of The Company to another
entity, or upon the merger or consolidation of The Company with another entity,
this Agreement shall inure to the benefit of, and be binding upon, both
Executive and the entity purchasing such assets, business and goodwill, or
surviving such merger or consolidation, as the case may be, in the same manner
and to the same extent as though such other entity were The Company. Subject to
the foregoing, this Agreement shall inure to the benefit of, and bind, the
parties hereto and their legal representatives, heirs, successors and assigns.
12. Additional Acts: Executive and The Company each agrees that they shall, as
often as requested to do so, execute, acknowledge and deliver and file, or cause
to be executed, acknowledge and delivered and filed, any and all further
instruments, Agreements or documents as may be necessary or expedient in order
to consummate the transactions provided for in this Agreement and do any and all
further acts and things as may be necessary or expedient in order to carry out
the purpose and intent of this Agreement.
13. Communications: All notices, request, demands and other communications under
this Agreement shall be in writing and shall be deemed to have been given at the
time when mailed in any United States post office enclosed in a registered or
certified postage prepaid envelope and addressed to the addresses set forth
5
<PAGE>
at the beginning of this Agreement, or to do such other address as any party may
specify by notice to the other party; provided, however, that any notice of
change of address shall be effective only upon receipt.
14. Construction: The headings of the paragraphs of this Agreement have been
inserted for convenience of reference only and shall in no way restrict or
otherwise affect the construction of the terms or provisions hereof. References
in this Agreement to Sections are sections of this Agreement.
15. Counterparts: This Agreement may be executed in multiple counterparts, each
of which shall be deemed to be one and the same instrument.
16. Attorney's Fees: In any action to enforce the provision of this Agreement,
the prevailing party shall be entitled to reimbursement of reasonable attorney's
fees and cost from the non-prevailing party.
17. Severability: If any provision of this Agreement is held to be invalid or
unenforceable by a court or tribunal of competent jurisdiction, such invalidity
or unenforceability shall not affect the validity and enforceability of the
other provision held to be invalid or unenforceable shall be carried out as
nearly as possible according to its original terms and intent to eliminate such
invalidity or unenforceability.
18. Governing Law: This Agreement is made and executes and shall be governed by
the laws of the State of Florida.
19. Indemnification: The Company agrees to indemnify and hold Executive harmless
for any action taken by Executive within the scope of his employment which The
Company authorizes or directs Executive to take.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the date first set forth.
Dynamic Imaging Group, Inc.
By:
--------------------------------
Roland Breton- Director
By:
--------------------------------
Gary R. Morgan- Director
--------------------------------
Howard I.Storfer, Executive
Date:
------------
7
<PAGE>
ADDENDUM TO EMPLOYMENT AGREEMENT
--------------------------------
OF HOWARD STORFER
-----------------
Executive is entitled to purchase Three Hundred Thousand (300,000) shares of
restricted common stock per calendar year with the starting date of March 1,
2000 and each year there after for five consecutive years, at the par value of
.80 per share. The company will loan the Executive all funds necessary to
purchase shares interest free. The said loan must be repaid prior to the
expiration of the Executives contract or the end of the fifth year. As this
benefit is available to other Executives/ Key Personnel, all Executives will be
given the option of borrowing said funds from the company equally and at the
same time. Should sufficient funds not be available for all Executives to
exercise their options totally, said funds will be divided equally among those
Executives wishing to exercise their purchase option. Should Executive not
exercise his option to purchase all or part of said stock, the unpurchased
amount will accrue.
Approved by the Board of Directors:
- --------------------------------
Roland Breton- Director
- --------------------------------
Gary Morgan- Director
Business Lease
THIS AGREEMENT, entered into this day of June 1998 between PATRICIA
CHERIS, hereinafter called the lessor, party of the first part, and DYNAMIC
IMAGING GROUP, INC. of the County of Broward and State of Florida hereinafter
called the lessee or tenant, party of the second part:
WITNESSETH, That the said lessor does this day lease unto said lessee,
and said lessee does hereby hire and take as tenant under said lessor both
stories in the two-story office building located at 3418 North Ocean Boulevard,
Fort Lauderdale, Florida 33308 to be used and occupied by the lessee as an
office building and for no other purposes or uses whatsoever, for the term of
three (3) years, beginning the 15th day of July 1998, and ending the 14th day of
July, 2001 at and for the agreed rental as provided in Paragraph of the Rider to
this Lease.
all payments to be made to the lessor on the first day of each and
every month in advance without demand at the office of Lessor, 2400 Park Lane,
in the City of Hollywood, FL 33021 or at such other place and to such other
person, as the lessor may from time to time designate in writing.
The following express stipulations and conditions are made a part of this
lease and are hereby assented to by the lessee:
FIRST: The lessee shall not assign this lease, nor sub-let the
premises, or any part thereof nor use the same or any part thereof, nor permit
the same, or any part thereof, to be used for any other purpose than as above
stipulated, nor make any alterations therein, and all additions thereto, without
the written consent of the lessor, and all additions, fixtures or improvements
which may be made by lessee, except movable office furniture, shall become the
property of the lessor and remain upon the premises as a part thereof, and be
surrendered with the premises at the termination of this lease.
SECOND: All personal property placed or moved in the premises above
described shall be at the risk of the lessee or owner thereof, and lessor shall
not be liable for any damage to said personal property, or to the lessee arising
from the bursting or leaking of water pipes, or from any act of negligence of
any co-tenant or occupants of the building or of any other person whomsoever.
THIRD: That the tenant___________shall promptly execute and comply with
all statutes, ordinances, rules, orders, regulations and requirements of the
Federal, State and City Government and of any and all their Departments and
Bureaus applicable to said premises, for the correction, prevention, and
abatement of nuisance forcibly or otherwise, and the lessee or other grievances,
in, upon or connected with said premises during said term; and shall also
promptly comply with and execute all rules, orders and regulations of the
Southeastern Underwriters Association for the prevention of fires, at its own
cost and expense.
FOURTH: In the event the premises shall be destroyed or so damaged or
injured by fire or other casualty during the life of this agreement the same
shall be rendered untenantable, then the lessor shall have the right to render
said premises tenantable by repairs within ninety days therefrom. If said
premises are not rendered tenantable within said time, it shall be optional with
either party hereto to cancel this lease, and in the event of such cancellation
the rent shall be paid only to the date of such fire or casualty. The
cancellation herein mentioned shall be evidenced in writing.
<PAGE>
SIXTH: If the less hall abandon or vacate said premises before the- end
of the ter7n of this lease, or shall suffer the rent to be in arrears, the
lessor may, at his option, forthwith cancel this lease or he may enter said
premises as the agent of the lessee, by force or otherwise, without being liable
in any way therefor, and relet the premises with or without any furniture that
may be therein, as the agent of the lessee, at such price and upon such terms
and for such duration of time as the lessor may determine, and receive the rent
therefor, applying the same to the payment of the rent due by these presents,
and if the full rental herein provided shall not be realized by lessor over and
above the expenses to lessor in such re-letting, the said lessee shall pay any
deficiency, and if more than the full rental is realized lessor will pay over to
said lessee the excess of demand.
SEVENTH: Lessee agrees to pay the cost of collection and ten per cent
attorney's fee on any part of said rental that may be collected by suit or by
attorney, after the same is past due.
EIGHTH: The lessee agrees that he will pay all charges for rent, gas,
electricity or other illumination, and for all water used on said premises, and
should said charges for rent, light or water herein provided for at any time
remain due and unpaid for the space of five days after the same shall have
become due, the lessor may at its option consider the said lessee tenant at
sufferance and immediately re-enter upon said premises and the entire rent for
the rental period then next ensuing shall at once be due and payable and may
forthwith be collected by distress or otherwise.
NINTH: The said lessee hereby pledges and assigns to the lessor all the
furniture, fixtures, goods and chattels of said lessee, which shall or may be
brought or put on said premises as security for the payment of the rent herein
reserved, and the lessee agrees that the said lien may be enforced by distress
foreclosure or otherwise at the election of the said lessor, and does hereby
agree to pay attorney's fees of ten percent of the amount so collected or found
to be due, together with all costs and charges therefore incurred or paid by the
lessor.
It being further understood and agreed that the lessee will not be
required to vacate said premises during the winter season: namely, November
first to May first, by reason of the above paragraph.
<PAGE>
ELEVENTH: The lessor, or any of his agents, shall have the right to
enter said premises during all reasonable hours, to examine the same to make
such repairs, additions or alterations as may be deemed necessary for the
safety, comfort, or preservation thereof, or of said building, or to exhibit
said premises, and to put or keep upon the doors or window,% thereof a notice
"FOR RENT" at any time within' thirty (30) days before the expiration of this
lease. The right of entry shall likewise exist for the purpose of removing
placards, signs, fixtures, alterations, or additions, which do not conform to
this agreement, or to the rules and regulations of the building.
TWELFTH: Lessee hereby accepts the premises in the condition they are
in at the beginning of this lease and agrees to maintain said premises in the
same condition, order and repair as they are at the commencement of said term,
excepting only reasonable wear and tear arising from the use thereof under this
agreement, and to make good to said lessor immediately upon demand, any damage
to water apparatus, or electric lights or any fixture, appliances or
appurtenances of said premises, or of the building, caused by any act or neglect
of lessee, or of any person or persons in the employ or under the control of the
lessee.
THIRTEENTH: It is expressly agreed and understood by and between the
parties to this agreement, that the landlord shall not be liable for any damage
or injury by water, which may be sustained by the said tenant or other person or
for any other damage or injury resulting from the carelessness, negligence, or
improper conduct on the part of any other tenant or agents, or employees, or by
reason of the breakage, leakage, or obstruction of the water, sewer or soil
pipes, or other leakage in or about the said building.
FOURTEENTH: If the lessee shall become insolvent or if bankruptcy
proceedings shall be begun by or against the lessee, before the end of said term
the lessor is hereby irrevocably authorized at its option, to forthwith cancel
this lease, as for a default. Lessor may elect to accept rent from such
receiver, trustee, or other Judicial officer during the term of their occupancy
in their fiduciary capacity without effecting lessor's rights as contained in
this contract, but no receiver, trustee or other judicial officer shall ever
have any eight, title or interest in or to the above described property by
virtue of this contract.
FIFTEENTH: Lessee hereby waives and renounces for himself and family any
and all homestead and exemption rights he may have now, or hereafter, under or
by virtue of the constitution and laws of the State of Florida, or of any other
State, or of the United States, as against the payment of said rental or any
portion hereof, or any other obligation or damage that may accrue under the
terms of this agreement.
SIXTEENTH: This contract shall bind the lessor and its assigns or
successors, and the heirs, assigns, administrators, legal representatives,
executors or successors as the case may be, of the lessee.
SEVENTEENTH: It Is understood and agreed between the parties hereto
that time is of the essence of this contract and this applies to all terms and
conditions contained herein.
EIGHTEENTH: It Is understood and agreed between the parties hereto that
written notice mailed or delivered to the premises leased hereunder shall
constitute sufficient notice to the lessee and written notice mailed or
delivered to the office of the lessor shall constitute sufficient notice to the
Lessor, to comply with the terms of this contract.
NINETEENTH: The rights of the lessor under the foregoing shall be
cumulative, and failure on the part of the lessor to exercise promptly any
rights given hereunder shall not operate to forfeit an of the said rights.
TWENTIETH: It is further understood and agreed between the parties
hereto that any charges against the lessee by the lessor for services or for
work done on the premises by order of the lessee or otherwise accruing under
this contract shall be considered as rent due and shall be included in any lien
for rent due and unpaid.
TWENTY-FIRST: It is hereby understood and agreed that any signs or
advertising to be used, including awnings, in connection with the premises
leased hereunder shall be first submitted to the lessor for approval before
installation of same.
SEE RIDER ATTACHED HERETO AND MADE A PART HEREOF.
<PAGE>
Lessee: Dynamic Imaging Group, Inc. 3418 North
Ocean Boulevard Fort Lauderdale, FL 33308
Telephone: 954-564-1133
Telefax: 954-565-8894
DATED this ________________ day of _______________________________, 1998.
LESSOR:
----------------------------- (SEAL)
PATRICIA CHERIS
LESSEE:
DYNAMIC IMAGING GROUP, INC.
By: /s/ Roland L. Breton
-----------------------------
Title: President
--------------------------
Authorized Signatory
<PAGE>
IN WITNESS WHEREOF, the parties hereto have hereunto executed this
instrument for the purpose hereto expressed, the day, and year above written.
Signed, sealed and delivered in the presence of:
/s/ (illegible) /s/ Patricia Cheris
- ---------------------------------- -----------------------------(Seal)
PATRICIA CHERIS
- ---------------------------------- -----------------------------(Seal)
As to Lessor Lessor
/s/ (illegible) DYNAMIC IMAGING GROUP, INC
- ---------------------------------- -----------------------------(Seal)
By: /s/ Roland Breton, President
- ---------------------------------- -----------------------------(Seal)
As to Lessor Lessor
STATE OF FLORIDA,
}
County of ________________________________}
Before me, a Notary Public in and for said State and County, personally
came
- --------------------------------------------------------------------------------
to me well known and known to be the person___ named in the foregoing lease, and
acknowledged that ________________ executed the same for the purpose therein
expressed.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the ___________________ day of __________________, 19___.
_________________________________________
My commission expires__________ _________________________________________
Notary Public, State of Florida at Large.
<PAGE>
RIDER TO BUSINESS LEASE BETWEEN PATRICIA CHERIS, AS THE
LESSOR, AND DYNAMIC IMAGING GROUP, INC., AS THE LESSEE, FOR
THE PREMISES LOCATED AT 3418 NORTH OCEAN BOULEVARD, FORT
LAUDERDALE, FLORIDA 33308
*******************************************************
The Lessor and the Lessee agree that the following terms and conditions
shall control over any contrary provision of the Business Lease dated July 15,
1998 to which this Rider is attached:
1. Rent.
(a) The monthly fixed rent, subject to adjustment as provided
in subparagraph (b) below, shall be Three Thousand Three Hundred ($3,300.00)
Dollars per month, plus sales tax, payable in advance. For the period from July
15, 1998 to July 31, 1998, the Lessee shall pay One Thousand Six Hundred Fifty
($1,650.00) Dollars, plus sales tax, representing one-half (1/2) month's rent.
Thereafter, the monthly fixed rent as provided herein shall be due on the 1st
day of each month for the entire term hereof beginning on August 1, 1998. If
this Lease runs for its full term, then notwithstanding the foregoing provisions
regarding monthly rent due on the 1st of each month, the rent due for the period
from July 1, 2001 through July 14, 2001 shall be One Thousand Six Hundred Fifty
($1,650.00) Dollars, plus CPI increase as provided in paragraph (b) below, plus
sales tax.
(b) Beginning fifteen (15) days after the beginning of the
second year of the term of this Lease (August 1, 1999) and continuing through
the initial term, and thereafter through each renewal year if the Lessee
exercises the option to extend the term of this Lease as provided in paragraph 2
of this Rider, the monthly fixed rent shall be based upon an increase as
determined in accordance with the provisions set forth below:
(i) The parties agree that for the purposes of this
Lease the adjustments to the monthly fixed rent based upon an increase in the
cost of living shall be based upon an increase in the cost of living as
determined for the month of May, 1998 so as to provide the Lessor with adequate
time in which to calculate any increases for the second and subsequent years of
the term of this
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Lease which begin on August lst. As promptly as practical after May 31st of the
initial and each subsequent year of the term of this Lease, the Lessor shall
compute any increase in the cost of living based upon the revised Consumers
Price Index ("CPI") published by the Bureau of Labor Statistics of the United
States Department of Labor.
(ii) In each year in which the CPI for the month of
May shows an increase over the CPI for the month of May, 1998, the Lessee shall
pay to the Lessor such a percentage increase in the fixed rent as is
proportional to the rise in the CPI from its level for May, 1998 to its level
for May in the current year. Each increase shall not be less than three (3%)
percent in any one year and shall not exceed five (5%) percent in any one year.
(iii) The Lessor shall give the Lessee notice of any
such increase within a reasonable time after obtaining the necessary data for
computation. Thereafter, the rent adjustment shall be effective with the payment
due on the following August 1st. For example, if the CPI for the month of May,
1999 shows a five (5%) percent increase over the CPI for the month of May, 1998,
then the adjusted rent based upon said increase shall be paid beginning with the
rent due on August 1, 1999. Thereafter, on each succeeding August lst, the rent
shall be increased based upon the CPI increase, if any, during the preceding one
year period from may to May.
(iv) If, at the time required for the determination
of any increase in rent, the CPI is no longer published or issued, the parties
shall each use such similar index as then generally recognized and accepted for
similar determinations of purchasing power.
2. Term; Option to Renew.
(a) The initial term of this Lease shall be for three (3)
years, beginning July 15, 1998 and continuing until July 14, 2001, unless
earlier terminated as provided in paragraph 3 below.
(b) The Lessor hereby grants to the Lessee the option to renew
and extend the original term for an additional term of three
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<PAGE>
(3) years after the expiration of the present Lease term, provided that the
Lease is then in good standing. The Lessee shall exercise this option to renew
the Lease by giving at least three (3) month's prior written notice to the
Lessor by registered or certified mail, addressed to the Lessor at the place
where the rent is then being paid; provided, however, that all the terms,
covenants and conditions of this Lease shall remain the same except that rent
shall be based upon increases in the CPI over what that index was on May 1,
1998, subject to the limitations otherwise set forth in paragraph l(b) above.
Rent during the extended term shall be paid in equal monthly installments on the
1st of each and every month as previously provided in this Lease except with
regard to the last two weeks of the Lease in which only one-half (1/2) of the
fixed monthly rent for the preceding month shall be due and payable, plus sales
tax.
3. Lessor's Right to Terminate. If, at any time during the term of this
Lease (as extended, if applicable), the Lessor enters into a bona fide contract
to sell the demised premises to a third party, then the Lessor shall have the
option to terminate this Lease by giving at least sixty (60) days prior written
notice to the Lessee by registered or certified mail, addressed to the demised
premises. Immediately upon receipt of said notice, the Lessee shall begin the
process of vacating the demised premises. If the Lessee decides to relocate its
business to another location and such relocation cannot be accomplished within
said sixty (60) day period, then the Lessor grants the Lessee an additional
thirty (30) days in which to vacate the demised premises provided the Lessee is
diligently pursuing relocation. After receipt of the notice herein provided, the
parties agree that the fixed monthly Lease payments shall permanently; provided,
however, that the Lessee shall still be responsible for the payment of all
utilities and to otherwise keep the premises fully insured as hereinafter
provided.
4. Security Deposit. The security deposit required under this Lease
shall be Three Thousand ($3,000.00) Dollars, of which
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<PAGE>
sum the Lessor acknowledges receipt of One Thousand Five Hundred ($1,500.00)
Dollars. On or before September 15, 1998, the Lessee shall post with the Lessor
an additional deposit of one Thousand Five Hundred ($1,500.00) Dollars. The
security deposit shall be held by the Lessor to secure the full and faithful
performance by the Lessee of all of the terms, covenants and conditions of this
Lease. Upon the termination of this Lease and the Lessee delivering possession
of the demised premises in the same condition as originally rented, less
customary wear and tear, and all trash or garbage being removed from the demised
premises, the Lessor will refund to the Lessee the entire security deposit less
any funds which the Lessor may have expended to cure any default by the Lessee
herein, including nonpayment of rent. The security deposit may be commingled by
the Lessee with other funds of the Lessor and the security deposit will not bear
interest.
5. Liability Insurance.
(a) The Lessee shall, at its expense, during the entire term
and extended term hereof, carry and maintain public liability insurance,
commonly known as owner, landlord and tenant insurance, with respect to the
demised premises having coverage limits of not less than $500,000. The Lessee
shall also carry and maintain plate glass insurance in an amount sufficient to
replace the plate glass located on the demised premises. The Lessor will be
named as an additional named insured and loss payee under all insurances
required under this paragraph. Furthermore, all of such policies shall be
written on reliance insurance companies authorized to do business in the State
of Florida by the Florida Department of Insurance. The Lessee will provide proof
of insurance coverage to the Lessor upon each renewal of the Lessee's insurance
policies. All policies shall be noncancellable as to the Lessor without at least
thirty (30) days written notice of cancellation.
(b) If the Lessee extends the term of this Lease for an
additional three (3) year period as provided in paragraph 2 below, then the
Lessee agrees to increase the coverage limits of such liability insurance to
$1,000,000.
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<PAGE>
(c) The Lessee shall, at its option, secure contents coverage
for its personal property located upon the demised premises. The Lessor shall
not be responsible for any damage to the Lessee's personal property located upon
the demised premises.
(d) The Lessor shall, at her option, secure fire, hazard and
windstorm insurance protecting the demised premises.
6. Use of Demised Premises. The Lessee agrees that the demised
premises shall be used only as an office building in which the Lessee may
display products that are manufactured at another location. No manufacturing
will be conducted on the demised premises. Furthermore, the Lessee agrees that
no hazardous substances will be used or stored on the demised premises. The
Lessee agrees to strictly comply with all environmental regulations regarding
the use, storage and disposal of hazardous substances. The Lessee agrees to
fully indemnify, hold harmless and defend the Lessor against any and all adverse
environmental conditions which the Lessee may create, cause to be created or
allow to be created on the demised premises during the term of this Lease and
any renewal hereof.
7. Utilities. The Lessee shall pay for all utilities which it uses in
connection with its occupancy of the demised premises, including electric,
telephone, water, refuse and garbage collection and burglar alarm service. The
Lessee's obligation to pay for such utilities shall begin on July 1, 1998.
Accordingly, the Lessee shall take such steps as are necessary to contact all
utility providers to set up appropriate accounts in the name of the Lessee with
such utility providers and to pay for same.
8. Repairs.
(a) Except as provided in subparagraphs (b) and (c) below, the
Lessee shall be responsible for all maintenance, repairs, service or replacement
to any part or component of the improvement upon the demised premises caused by
the negligence of the Lessee or any of its employees, customers, or anyone else
claiming by, through or under the Lessee and for any other repairs
5
<PAGE>
not caused by the negligence of the Lessee having a cost of repair of One
Hundred ($100.00) Dollars or less.
(b) The Lessor shall be responsible for all structural repairs
or replacements, including repair and replacement of such structural components
as the roof, the air conditioning system and all internal structural
improvements (including plumbing and electric wiring) which have a cost of
repair in excess of One Hundred ($100.00) Dollars.
(c) The Lessor may (but shall not be required to) maintain a
service contract for the air conditioning system in which event any and all
repairs to the air conditioning system will be made by the Lessor's service
provider under the service contract.
(d) The Lessee may (but shall not be required to) provide
exterminating service to the demised premises. If the Lessor provides such
service, the Lessee agrees to make the demised premises accessible to the
exterminating technician.
9. Lessor's Improvements. The Lessor agrees to make the following
improvements to the demised premises:
(a) On or before July 15, 1998, the Lessee shall replace the
carpet on the first floor with commercial grade carpet acceptable to the Lessor
after consulating with the Lessee. Furthermore, the Lessor shall cause the
damaged tile in the first floor reception area to be repaired, replaced or
carpeted-over. All of these improvements shall be at the Lessee's expense.
(b) On or before July 15, 1999, the Lessor shall carpet the
stairway and the second floor of the demised premises with commercial grade
carpet acceptable to the Lessor after consultation with the Lessee.
10. Lessee's Alterations.
(a) The Lessee shall not make any structural alterations to
the demised premises without the Lessor's express written consent.
6
<PAGE>
(b) The Lessee may make non-structural alterations to the
demised premises after consultation with the Lessor and issuance of any required
building permits.
(c) If any mechanic's laborer's or materialman's lien shall at
any time be filed against the demised premises or any part thereof, then within
ten (10) days after the filing thereof, the Lessee shall cause same to be
discharged of record or transferred to a substitute security. A breach of the
provisions of this paragraph shall be considered a material default under this
lease.
(d) The Lessee shall have no power to do any act or make any
contract which would create or be the foundation of any lien, mortgage or other
encumbrance upon the interest of the Lessor in the demised premises.
11. Downstairs Storage. The Lessor and the Lessee agree that the Lessor
may continue to store certain items of her personal property in the downstairs
storage area in which those items are presently stored. The Lessor will
cooperate with the Lessee in arranging the storage of such items of personal
property so as to allow the Lessee to also utilize that space for the storage of
cleaning supplies and personal property of the Lessee.
12. Furniture Removal. The Lessor agrees to remove certain furniture
which the Lessee has deemed to be obsolete. The Lessee will cooperate with such
person or charity as the Lessor may designate to remove the furniture.
13. Notices. Any notice required under this Lease shall be given in
writing, by registered or certified mail, or by telefax as follows:
Lessor: Ms. Patricia Cheris
2400 Park Lane
Hollywood, Florida 33021
Telephone: 954-989-9532
With a copy to: David S. Romanik, Esq.
Romanik Huss Paoli & Ivers
P.O. Box 1040
Hollywood, FL 33022
Telephone: 954-922-4656
7
LEASE AGREEMENT
This Agreement entered into this 11/19/98 by and between Luisa Certain
and Maria M. Certain, (hereinafter called the "Lessor"), and Dynamic Imaging
Group Inc.
WITNESSETH
That Lessor does hereby lease unto Lessee and Lessee does hereby take
as tenant, that Certain store building space commonly known as 3432 North Ocean
Boulevard, Fort Lauderdale, Broward County, Florida (consisting of 2700 square
feet more or less and three (3) parking spaces immediately adjacent to Lessee's
store) to be used and occupied by Lessee as or other approved business for the
term commencing December 1, 1998 through November 30, 1999. That the agreed
rental from December 1, 1998 Through November 30, 1999 will be at the agreed
rental of Fifteen Hundred Dollars ($1500.00) per month together with all
applicable Florida sales tax. The initial payment being made concurrently with
the execution of this agreement and subsequent payments being due on each
successive month on the first day of each and every month and every month
thereafter through and including. All payments to be made to the Lessor on the
first day of each and every month in advance, without demand, at 81 Bay Colony
Drive, Fort Lauderdale, Florida 33308, or any other place Lessor shall
designate.
The following express stipulations and conditions are made part of this
lease and are Hereby assented by Lessee:
FIRST: Except as hereinafter provided, Lessee shall not assign this
lease, sublet the premises, or any part thereof nor use the same, or any part
thereof, nor permit the same, or any part thereof, to be used for any other
purpose than as above stipulated, nor make any alterations therein, and any
additions thereto, without the written consent of the Lessor and all additions,
fixtures or improvements which may be made by Lessee, except movable office
furniture, shall become the property of Lessor and remain upon the premised as
part thereof, and be surrendered with premises at the termination of this lease.
All partitions for divisions of storage, and office partitions existing at the
commencement of this lease, a sale or transfer of more than fifty (50%) percent
of the corporate stock of the Lessee shall constitute an
1
<PAGE>
SECOND: All personal property placed or moved in the premises above
described shall be at the risk of Lessee or owner thereof, and Lessor shall not
be liable for any damages to said personal property, or to Lessee arising from
the bursting or leaking of water pipes, or from any act of negligence of any
co-tenant or occupants of the building or any other person whomsoever.
THIRD: That Lessee shall promptly execute and continuously comply with
all statutes, ordinances, rules, orders, regulations and requirements of the
Federal, State, and City government and of any and all their departments and
bureaus applicable to said premises, for the correction, prevention, and
abatement of nuisances or other grievances, in, upon, or connected with said
premises during said term; and shall also promptly comply with and execute all
rules, orders and regulations of the Southeastern Underwriters Association for
the prevention of fires, at its own costs and expense.
FOURTH: In the event the premises shall be destroyed or so damaged or
injured by Fire or other casualty not caused by Lessee or its agent during the
term of the Agreement, that the Same shall be rendered untenantable, then Lessor
shall have the right to render said premises tenantable by repairs within one
hundred twenty (120) days therefrom. If said premises are not rendered
tenantable within said time, it shall be optionable within either party hereto
to cancel this lease, and in the event of such cancellation then rent shall be
paid only to date of such fire or casualty. Rent abates during damage period.
FIFTH: The payment of the rent for said premises upon the dates named
and the faithful observance of the Agreement, are the conditions upon which the
Agreement is made and accepted upon any failure on the part of Lessee to comply
with the terms of said Agreement. Lessor shall serve notice of such failure upon
Lessee and shall allow. Lessee fifteen (15) days within which to effect a cure,
except in the case where the failure is a failure to pay rent as defined herein,
for more than five (5) days after same is due, in which event no notice is
required to Lessee. At the option of Lessor, a failure by Lessee to effect a
cure within the prescribed period may work a default of this Lease, and all of
the rights of Lessee hereunder, and thereupon Lessor, their agents or attorney
to enforce this Agreement in Court or to seek any rental payments due, the
Lessor shall be entitled to a reasonable attorney's fee and costs. A late fee is
charged to lessee in the amount of Five (5%) Percent if rent is not paid five
(5) days after the due date.
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<PAGE>
SIXTH: If Lessee shall abandon or vacate said premises before the end
of the term of this Agreement, or shall suffer the rent to be in arrears, or in
the event of any act of default, Lessor may, at its election
a) Terminate and end this Lease; and /or
b) Re-enter upon the demised premises whereupon the term
hereby granted, and at the Lessor's option, all right title and interest under
it shall end and the Lessee shall become a tenant at sufferance; and/or
c) Elect to declare the entire rent for the balance of the
term, or any part thereof, due and payable forthwith, and may proceed to collect
the same either by distress of otherwise, and/or.
d) Take possession of the demised premises and re-let the same
for the account of the Lessee, at such price and upon such terms and for such
duration of time as the Lessor may determine, and receive the rent therefore,
applying the same to the payment of the rent due by these presence, and if the
full rental herein provided shall not be realized by Lessor over and above the
expense to Lessor in such re-letting, the said Lessee shall pay any delinquency.
SEVENTH: That assuming that Lessee is not in default under the terms of
the lease agreement, Lessee shall have the option to re-lease the premised for a
further period of One year at $1800 Plus all Applicable sales taxes. The option
must be executed by Lessee at least thirty (30) days before initial term of the
lease expires in writing.
EIGHT: Lessee also agrees that they will pay all charges for water,
gas, garbage, electricity, or other illumination.
NINE: Lessee Hereby pledges and assigns to Lessor all the furniture,
fixtures, Goods and chattels of Lessee, which shall be brought or put on said
premises as security for the Payment of the rent herein reserved, and Lessee
agrees that the said lien may be enforced by Distress, foreclosure or otherwise
at the election of Lessor, and does hereby agree to pay Reasonable attorney's
fees, together with all costs and charges thereof incurred or paid by Lessor.
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<PAGE>
TENTH: Lessor, or any of his agents, shall have the right to enter said
premises during all reasonable hours, to examine the same, to make such repairs,
additions, or alterations as may be deemed necessary or to exhibit said
premises, and to put or keep upon the doors or windows thereof a notice "FOR
RENT" at any time within sixty (60) days before the expiration of this lease.
The right of entry shall likewise exist for the purpose of removing placards,
signs, fixtures, alterations, or additions, which do not conform to this
Agreement, or to the rules and regulations of the building.
ELEVENTH: Lessee hereby accepts the premises in the condition they are
in at the beginning of this lease and agrees to maintain said premises in the
same condition, order and repair as they are at the commencement of said term,
including keeping the front of the premises free of all debris, and excepting
only reasonable wear and tear arising from the use thereof under this Agreement;
and Lessee agrees to maintain the area in front of the premises, including the
sidewalk, in a clean condition and swept clear of all debris. Furthermore,
Lessee agrees to make good to Lessor immediately upon demand any damage to water
apparatus, or electric lights or any fixture, appliances or appurtenances of
said premises, or of the building, caused by any act or neglect of Lessee, or of
any person or persons in employ of or under control for the Lessee.
TWELFTH: It is expressly agreed and understood by and between the
parties to this Agreement, that Lessor shall not be liable for any damages or
injury by water, which may be Sustained by Lessee, except where due to lessor,
its customers or other person or for any other damage or injury resulting from
the carelessness, negligence, or improper conduct on the part of any other
tenant or agents, or employees, or by reason of the breakage, leakage, or
obstruction of the water, sewer or said pipes, or other leakage in or about the
said building.
THIRTEENTH: This Contract shall bind Lessor and his executors,
administrators, assigns or successors, and the assigns, legal representatives,
or successors as the case may be, of the Lessee.
FOURTEENTH: It is understood and agreed between the parties hereto that
written notice mailed or delivered to the premises leased hereunder shall
constitute sufficient notice to Lessee and written notice delivered personally
to the Lessor shall constitute sufficient notice to the Lessor to comply with
the terms of this contract.
FIFTEENTH: It is understood and agreed between the parties hereto that
time is of the essence of this contract and this applies to all terms and
conditions contained herein.
SIXTEENTH: The rights of Lessor and Lessee under the foregoing shall be
cumulative and failure on the part of Lessor and Lessee to exercise promptly any
rights given hereunder shall not operate to forfeit any of said rights.
SEVENTEENTH: It is further understood agreed between the parties
hereto that any charges against Lessee by Lessor for services or for work done
on the premises by order of Lessee or otherwise accruing under this contract
shall be considered as rent due and unpaid.
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<PAGE>
EIGHTEENTH: It is hereby understood and agreed that any signs or
advertising to be used, including awnings, in connection with the premises
leased hereunder shall be first submitted to Lesser for his approval before
installation of same. If approved by Lessor, the costs of the signs or
advertising, including awnings, together with the installation, shall be solely
the cost of the Lessee.
NINETEENTH: That lessee shall pay to the Lessor, a security deposit in
the amount of $1590.00 on or before. This payment will be held in an interest
bearing account by Lessor as chosen by Lessor. If the Lease is terminated before
the time of completion, the lessor will keep the deposit.
TWENTIETH: In the event Lessor consents in writing to any improvements
by the Lessee on the premises. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT THE
INTEREST OF THE LESSOR SHALL NOT BE SUBJECT TO LIENS OR IMPROVEMENTS MADE BY THE
LESSEE AND THAT LESSEE SHALL NOTIFY THE CONTRACTOR MAKING ANY SUCH IMPROVEMENTS
OF SAME. If any such lien is place on the premises through services or work done
by or for Lessee, then it will be a material default under the lease unless
Lessor has the lien removed and satisfied within ten (10) days of Lessee's
notification of the lien.
TWENTY-FIRST: That all payments required to be made hereunder shall be
considered rent.
TWENTY-SECOND: lessee shall maintain the roof air-conditioning unit at
their own expense and agrees to have the roof air-conditioning unit checked by a
qualified air-conditioning company at least once every twelve months. Lessee
agrees to pay for any repairs, replacements or maintenance.
TWENTY-THIRD: Lessee also agrees to be responsible for all plumbing
inside the premises and electrical repairs and to maintain their own fixtures
and carpeting at their own cost and expense. Lessee will also pay for its water
supply and plate glass insurance and will also pay for the maintenance in taking
down and putting up storm shutters for this location, if available.
TWENTY-FOUR: That assuming that Lessee is not in default under the
terms of the Lease Agreement, Lessee shall have an option to re-lease the
premises for an additional one (1) year at $1800.00 per month plus all
applicable sales taxes. Said option must be exercised by Lessee at least thirty
(30 ) days before the initial one year term, in writing, to the Lessor at
Lessor's address set forth herein.
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<PAGE>
TWENTY-FIVE: Lessee shall procute and maintain in force during the
term of this lease any extension thereof at his expense, public liability
insurance in companies and through brokers approved by Lessor, adequate to
protect against liability for damage claims through public use of or arising out
of accidents occuring in or around the lease premises, in a minimum amount of
Three Hundred Thousand Dollars ($300,000.00) for any one accident, and Three
Hundred Thousand Dollars ($300,000.00) for property damage. Such insurance
policies shall provide coverage for Lessor's contingent liability on such claims
or losses. Certificate of proof of insurance shall be delivered to Lessor for
keeping. Lessee agrees that if such insurance policies are not kept in force
during the entire term of this lease and any extension thereof, Lessor may
procure the necessary insurance and pay the premium therefore, and that such
premium shall be repaid to Lessor as additional rent.
TWENTY-SIX: Lessee agrees that it will take over the maintenance and
minor repairs of tenants portion of the said building, plumbing, putting up and
taking down of storm shutters, walls, and carpeting. Not included in the above
are any roofing repairs or other major structural repairs which will be done by
the Lessor.
The Lessee will save the Lessor harmless from all claims on account of
the leased premises during the term of this lease, and for all costs, expenses
and reasonable attorney's fees in connection therewith resulting from and
occurring by reason of Tenants construction, us or occupancy of the premises.
TWENTY-SEVEN: Lessor will hold the sum of Three Thousand One Hundred
Eighty Dollars ($3180.00) as deposit for first and last months rent. If the
lease is broken before the term is up, the deposit and all monies on hand will
be forfeited to the Lessor.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have hereunto executed this
instrument for the purpose herein expressed, the day and year above written.
Signed, sealed and delivered In the presence of:
/s/ Roland Breton /s/ LUISA CERTAIN
- ------------------------------------ -------------------------
LUISA CERTAIN, LESSOR
- ------------------------------------ /s/ MARIA CERTAIN
-------------------------
MARIA CERTAIN, LESSOR
- ------------------------------------ /s/ Roland Breton
-------------------------
PRESIDENT
- ------------------------------------
LESSEE
- ------------------------------------ Individually As Guarantor
-------------------------
/s/ Howard Storfer
CEO
- ------------------------------------
7
LEASE AGREEMENT
This Agreement entered into this May 1, 1999 by and between Luisa
Certain and Maria M. Certain, (hereinafter called the "Lessor"), and Dynamic
Imaging Group Inc.
WITNESSETH
That Lessor does hereby lease unto Lessee and Lessee does hereby take
as tenant, that certain store building space commonly known as 3428 North Ocean
Boulevard, Fort Lauderdale, Broward County, Florida (consisting of 1375 square
feet more or less and three (3) parking spaces immediately adjacent to Lessee's
store) to be used and occupied by Lessee as Dynamic Imaging Group or other
approved business for the term commencing May 1, 1999 through April 30, 2000.
That the agreed rental from May 1, 1999 through April 30, 2000 will be at the
agreed rental of $1000 per month together with all applicable Florida sales
tax. The initial payment being made concurrently with the execution of this
agreement and subsequent payments being due on each successive month on the
first day of each and every month and every month thereafter through and
including April 1, 2000.
All payments to be made to the Lessor on the first day of each and
every month in advance, without demand, at 81 Bay Colony Drive, Fort Lauderdale,
Florida 33308; or any other place Lessor shall designate.
The following express stipulations and conditions are made part of this
lease and are hereby assented to by Lessee:
FIRST: Except as hereinafter provided, Lessee shall not assign this
lease, sublet the premises, or any part thereof nor use the same, or any part
thereof, nor permit the same, or any part thereof, to be used for any other
purpose than as above stipulated, nor make any alterations therein, and any
additions thereto, without the written consent of lessor and all additions,
fixtures or improvements which may be made by Lessee, except movable office
furniture, shall become the property of Lessor and remain upon the premised as
part thereof, and be surrendered with premises at the termination of this lease.
All partitions for divisions of storage, and office partitions existing at the
commencement of this lease, a sale or transfer of more than fifty (50%) percent
of the corporate stock of the Lessee shall constitute an attempt to assign or
sublet the premises. Consent cannot be unreasonably withheld.
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SECOND: All personal property placed or moved in the premises above
described shall be at the risk of Lessee or owner thereof, and Lessor shall not
be liable for any damages to said personal property, or to Lessee arising from
the bursting or leaking of water pipes, or from any act of negligence of any
co-tenant or occupants of the building or any other person whomsoever.
THIRD: That Lessee shall promptly execute and continuously comply with
all statues, ordinances, rules, orders, regulations and requirements of the
Federal, State, and City government and of any and all their departments and
bureaus applicable to said premises, for the correction, prevention, and
abatement of nuisances or other grievances, in, upon, or connected with said
premises during said term; and shall also promptly comply with and execute all
rules, orders and regulations of the Southeastern Underwriters Association for
the prevention of fires, at its own costs and expense.
FOURTH: In the event the premises shall be destroyed or so damaged or
injured by fire or other casualty not caused by Lessee or its agent during the
term of the Agreement, that the same shall be rendered untenantable, then Lessor
shall have the right to render said premises tenantable by repairs within one
hundred twenty (120) days therefrom. If said premises are not rendered
tenantable within said time, it shall be optionable within either party hereto
to cancel this lease, and in the event of such cancellation then rent shall be
paid only to date of such fire or casualty. Rent abates during damage period.
FIFTH: The payment of the rent for said premises upon the dates named
and the faithful observance of the Agreement, are the conditions upon which the
Agreement is made and accepted upon any failure on the part of Lessee to
comply with the terms of said Agreement. Lessor shall serve notice of such
failure upon Lessee and shall allow Lessee fifteen (15) days within which to
effect a cure, except in the case where the failure is a failure to pay rent as
defined herein, for more than five (5) days after same is due, in which event no
notice is required to Lessee. At the option of Lessor, a failure by Lessee to
effect a cure within the prescribed period may work a default of this Lease, and
all of the rights of Lessee hereunder, and thereupon Lessor, their agents or
attorney to enforce this Agreement in Court or to seek any rental payments due,
the Lessor shall be entitled to a reasonable attorney's fee and costs. A late
fee is charged to lessee in the amount of Five (5%) Percent if rent is not paid
five (5) days after the due date.
2
<PAGE>
SIXTH: If Lessee shall abandon or vacate said premises before the end
of the term of this Agreement, or shall suffer the rent to be in arrears, or in
the event of any act of default, Lessor may, at its election
a) Terminate and end this Lease; and/or
b) Re-enter upon the demised premises whereupon the term
hereby granted, and at the Lessor's option, all right title and interest under
it shall end and the Lessee shall become a tenant at sufferance; and/or
c) Elect to declare the entire rent for the balance of the
term, or any part thereof, due and payable forthwith, and may proceed to collect
the same either by distress of otherwise; and/or
d) Take possession of the demised premises and re-let the same
for the account of the Lessee, at such price and upon such terms and for such
duration of time as the Lessor may determine, and receive the rent therefore,
applying the same to the payment of the rent due by these presence, and if the
full rental herein provided shall not be realized by Lessor over and above the
expense to Lessor in such re-letting, the said Lessee shall pay any delinquency.
SEVENTH: That assuming that Lessee is not in default under the terms of
the lease agreement, Lessee shall have the option to re-lease the premised for a
further period of One year at terms to be renegotiated The option must be
executed by Lessee at least thirty (30) days before initial term of the lease
expires in writing.
EIGHT: Lessee also agrees that they will pay all charges for water,
gas, garbage, electricity, or other illumination.
NINE: Lessee Hereby pledges and assigns to Lessor all the furniture,
fixtures, goods and chattels of Lessee, which shall be brought or put on said
premises as security for the payment of the rent herein reserved, and Lessee
agrees that the said lien may be enforced by distress, foreclosure or otherwise
at the election of Lessor, and does hereby agree to pay reasonable attorney's
fees, together with all costs and charges thereof incurred or paid by Lessor.
3
<PAGE>
TENTH: Lessor, or any of his agents, shall have the right to enter
said premises during all reasonable hours, to examine the same, to make such
repairs, additions, or alterations as may be deemed necessary or to exhibit said
premises, and to put or keep upon the doors or windows thereof a notice "FOR
RENT" at any time within sixty (60) days before the expiration of this lease.
The right of entry shall likewise exist for the purpose of removing placards,
signs, fixtures, alterations, or additions, which do not conform to this
Agreement, or to the rules and regulations of the building.
ELEVENTH: Lessee hereby accepts the premises in the condition they are
in at the beginning of this lease and agrees to maintain said premises in the
same condition, order and repair as they are at the commencement of said term,
including keeping the front of the premises free of all debris, and excepting
only reasonable wear and tear arising from the use thereof under this Agreement;
and Lessee agrees to maintain the area in front of the premises, including the
sidewalk, in a clean condition and swept clear of all debris. Furthermore,
Lessee agrees to make good to Lessor immediately upon demand any damage to water
apparatus, or electric lights or any fixture, appliances or appurtenances of
said premises, or of the building, caused by any act or neglect of Lessee, or of
any person or persons in employ of or under control of the Lessee.
TWELFTH: It is expressly agreed and understood by an between the
parties to this Agreement, that Lessor shall not be liable for any damages or
injury by water, which may be sustained by Lessee, except where due to lessor,
its customers or other person or for any other damage or injury resulting from
the carelessness, negligence, or improper conduct on the part of any other
tenant or agents, or employees, or by reason of the breakage, leakage, or
obstruction of the water, sewer or said pipes, or other leakage in or about the
said building.
THIRTEENTH: This Contract shall bind Lessor and his executors,
administrators, assigns or successors, and the assigns, legal representatives,
or successors as the case may be, of the Lessee.
FOURTEENTH: It is understood and agreed between the parties hereto that
written notice mailed or delivered to the premises leased hereunder shall
constitute sufficient notice to Lessee and written notice delivered personally
to the lessor shall constitute sufficient notice to the Lessor to comply with
the terms of this contract.
FIFTEENTH: It is understood and agreed between the parties hereto that
time is of the essence of this contract and this applies to all terms and
conditions contained herein.
SIXTEENTH: The rights of Lessor and Lessee under the foregoing shall be
cumulative and failure on the part of Lessor and Lessee to exercise promptly any
rights given hereunder shall not operate to forfeit any of said rights.
SEVENTEENTH: It is further understood and agreed between the parties
hereto that any charges against Lessee by Lessor for services or for work done
on the premises by order of Lessee or otherwise accruing under this contract
shall be considered as rent due and unpaid.
4
<PAGE>
EIGHTEENTH: It is hereby understood and agreed that any signs or
advertising to be used, including awnings, in connection with the premises
leased hereunder shall be first submitted to Lessor for his approval before
installation of same. If approved by Lessor, the costs of the signs or
advertising, including awnings, together with the installation, shall be solely
the cost of the Lessee.
NINETEENTH: That lessee shall pay to the Lessor, a security deposit in
the amount of $1000. 00 on or before May 1, 1999 This payment will be held in
an interest bearing account by Lessor as chosen by Lessor. If the Lease is
terminated before the time of completion, the lessor will keep the deposit.
TWENTIETH: In the event Lessor consents in writing to any improvements
by the Lessee on the premises. IT IS EXPRESSLY UNDERSTOOD AND AGREED THAT THE
INTEREST OF THE LESSOR SHALL NOT BE SUBJECT TO LIENS OR IMPROVEMENTS MADE BY
THE LESSEE AND THAT LESSEE SHALL NOTIFY THE CONTRACTOR MAKING ANY SUCH
IMPROVEMENTS OF SAME. If any such lien is place on the premises through services
or work done by or for Lessee, then it will be a material default under the
lease unless Lessor has the lien removed and satisfied within ten (1O) days of
Lessee's notification of the lien.
TWENTY-FIRST: That all payments required to be made hereunder shall be
considered rent.
TWENTY-SECOND: Lessee shall maintain the roof air-conditioning unit at
their own expense and agrees to have the roof air-conditioning unit checked by a
qualified airconditioning company at least once every twelve months. Lessee
agrees to pay for any repairs, replacements or maintenance.
TWENTY-THIRD: Lessee also agrees to be responsible for all plumbing
inside the premises and electrical repairs and to maintain their own fixtures
and carpeting at their own cost and expense. Lessee will also pay for its
water supply and plate glass insurance, and will also pay for the maintenance in
taking down and putting up storm shutters for this location, if available.
TWENTY-FOUR: That assuming that Lessee is not in default under the
terms of the Lease Agreement, Lessee shall have an option to renegotiates the
lease for an additional one term. Said option must be exercised by Lessee at
least ninety (90) days before the initial one year term, in writing, to the
Lessor at Lessor's address set forth herein.
5
<PAGE>
TWENTY-FIVE: Lessee shall procure and maintain in force during the term
of this lease any extension thereof, at his expense, public liability insurance
in companies and through brokers approved by Lessor, adequate to protect against
liability for damage claims through public use of or arising out of accidents
occurring in or around the lease premises, in a minimum amount of Three Hundred
Thousand Dollars ($300,000.00) for any one accident, and Three Hundred Thousand
Dollars ($300,000.00) for property damage. Such insurance policies shall provide
coverage for Lessor's contingent liability on such claims or losses. Certificate
of proof of insurance shall be delivered to Lessor for keeping. Lessee agrees to
obtain a written obligation from the insurers to notify Lessor in writing at
least thirty (30) days prior to cancellation, modification or refusal to renew
any such policies. Lessee agrees that if' such insurance policies are not kept
in force during the entire term of this lease and any extension thereof, Lessor
may procure the necessary insurance and pay the premium therefore, and that such
premium shall be repaid to Lessor as additional rent.
TWENTY-SIX: Lessee agrees that it will take over the maintenance and
minor repairs of tenants portion of the said building, plumbing, putting up and
taking down of storm shutters, walls, and carpeting. Not included in the above
are any roofing repairs or other major structural repairs which will be done by
the lessor.
The Lessee will save the Lessor harmless from all claims on account of
the leased premises during the term of this lease, and for all costs, expenses
and reasonable attorney's fees in connection therewith resulting from and
occurring by reason of Tenants construction, us or occupancy of the premises.
TWENTY-SEVEN: Lessor will hold the sum of One Thousand Dollars
($1000.00) as a security deposit. If the lease is broken before the term is up,
the deposit and all monies on hand will be forfeited to the Lessor.
TWENTY-EIGHT: Lessee acknowledges he has received two (2) MEDCO Keys,
which lessee shall return to lessor at end of lease agreement.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have hereunto executed this
instrument for the purpose herein expressed, the day and year above written.
Signed, sealed and delivered
in the presence of
/s/ Carl Marzole /s/ LUISA CERTAIN
- ----------------------- ----------------------------
LUISA CERTAIN, LESSOR
/s/ MARIA CERTAIN
- ----------------------- ----------------------------
MARIA CERTAIN, LESSOR
/s/ Roland Breton
- ----------------------- ----------------------------
LESSEE
President
- ----------------------- ----------------------------
Individually As Guarantor
/s/ Roland Breton
- ----------------------- ----------------------------
7
As of June 18, 1999, the registrant's only subsidiary is Dynamic
Imaging Group, Inc., a Colarado corporation.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM DYNAMIC IMAGING GROUP, INC. FINANCIAL STATEMENTS FOR THE THREE MONTH MARCH
31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 44,350
<SECURITIES> 0
<RECEIVABLES> 39,547
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 125,198
<PP&E> 119,908
<DEPRECIATION> 1,560
<TOTAL-ASSETS> 246,696
<CURRENT-LIABILITIES> 126,413
<BONDS> 0
0
0
<COMMON> 5,550
<OTHER-SE> 114,733
<TOTAL-LIABILITY-AND-EQUITY> 246,696
<SALES> 71,007
<TOTAL-REVENUES> 71,007
<CGS> 39,893
<TOTAL-COSTS> 39,893
<OTHER-EXPENSES> 190,775
<LOSS-PROVISION> (159,661)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (159,661)
<INCOME-TAX> 0
<INCOME-CONTINUING> (159,661)
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (159,661)
<EPS-BASIC> (0.03)
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</TABLE>
