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 12(g) of the Securities Exchange Act of 1934
INTERACTIVE MARKETING TECHNOLOGY, INC.
(Name of registrant in its charter)
NEVADA 22-3617931
(State of incorporation) (I.R.S. Employer Identification No.)
3575 Cahuenga Boulevard West, Suite 390
Hollywood, California 90680
(323) 874-4484
(Address and telephone number of principal executive offices and principal
place of business)
Securities registered pursuant to Section 12(b) of the Act:
None
________________
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.001
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Title of each class
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Table of Contents
PART I
Item 1: Description of Business..........................................3
Item 2: Management's Discussion and Analysis or Plan of Operation........9
Item 3: Description of Property..........................................11
Item 4: Security Ownership of Certain Beneficial Owners and Management...11
Item 5: Directors, Executive Officers, Promoters and Control Persons.....12
Item 6: Executive Compensation...........................................12
Item 7: Certain Relationships and Related Transactions...................13
Item 8: Description of Securities........................................13
PART II
Item 1: Market Price and Common Equity of Interactive Marketing
and Other Shareholder Matters....................................13
Item 2: Legal Proceedings................................................14
Item 3: Changes in and Disagreements with Accountants ..................14
Item 4: Recent Sales of Unregistered Securities .........................14
Item 5: Indemnification of Directors and Officers........................15
PART F/S
Index to Financial Statements............................................15
PART III
Item 1: Index to and Description of Exhibits ............................16
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FORWARD LOOKING STATEMENTS
In this registration statement references to "Interactive Marketing,"
"we," "us," and "our" refer to Interactive Marketing Technology, Inc.
This Form 10-SB contains certain forward-looking statements. For this
purpose any statements contained in this Form 10-SB that are not statements of
historical fact may be deemed to be forward-looking statements. Without
limiting the foregoing, words such as "may," "will," "expect," "believe,"
"anticipate," "estimate" or "continue" or comparable terminology are intended
to identify forward-looking statements. These statements by their nature
involve substantial risks and uncertainties, and actual results may differ
materially depending on a variety of factors, many of which are not within
Interactive Marketing's control. These factors include but are not limited to
economic conditions generally and in the industries in which Interactive
Marketing may participate; competition within Interactive Marketing's chosen
industry, including competition from much larger competitors; technological
advances and failure by Interactive Marketing to successfully develop business
relationships.
PART I
ITEM 1: DESCRIPTION OF BUSINESS
Business Development
Interactive Marketing was incorporated in the state of Nevada as Shur De
Cor, Inc. on August 14, 1987. Shur De Cor never began commercial operations.
In April of 1999 Shur De Cor completed a reverse merger with Interactive
Marketing Technology, Inc., a New Jersey corporation ("Interactive New
Jersey"). Interactive New Jersey was formed on April 21, 1998 and was engaged
in the business of direct marketing of consumer products through its wholly
owned subsidiary, IMT's Plumber, Inc., a New Jersey corporation ("IMT's
Plumber"). To effect the merger, Shur De Cor issued 12,404,000 common shares
of restricted stock to the twenty-two shareholders of Interactive New Jersey
in exchange for all of the issued and outstanding stock of Interactive New
Jersey.
Pursuant to the merger agreement, Shur De Cor was the surviving
corporation and changed its name to Interactive Marketing Technology, Inc.,
the directors and officers of Shur De Cor resigned and the management of
Interactive New Jersey filled the vacancies, Interactive Marketing increased
its authorized capital stock from 20,000,000 to 60,000,000 common shares and
the former shareholders of Interactive New Jersey obtained 50% of Interactive
Marketing's total voting power at that time. (See, "Part 1, Item II:
Managements' Discussion & Analysis - Reverse Merger Treatment," below.)
Our short operating history and operating losses raise substantial doubt
about our ability to continue as a going concern. This fact is reported by
our independent auditor Moore Stephens, P.C.
Business
Interactive Marketing is engaged in the direct marketing of proprietary
consumer products in the United States and worldwide. We facilitate the
design and manufacture of products and develop market strategies for such
products. Our goal is to generate awareness of new and better products for
the home and family and initiate consumer brand recognition of our products in
the marketplace. When appropriate, we may contract with well-known
personalities to serve as spokespersons for a product to increase that
product's credibility and marketability. We manage all phases of our direct
marketing programs and retail marketing for the products we sell, including:
* Product selection, testing and development
* Securing all necessary or appropriate rights to the product
* Supervision of the manufacturing process, quality control and packaging
* Production and broadcast of infomercials and commercials
* In-bound telemarketing, order fulfillment and customer service
* Print advertisements
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IMT's Plumber, Inc.
In June 1998 Interactive New Jersey acquired exclusive rights to a
product called The Plumbers Secret. (See, "Principle Products," below). In
November of 1998, Interactive New Jersey, as licensor, entered into an
agreement to assign the exclusive license to a yet to be formed New Jersey
limited liability company which would have Interactive New Jersey's wholly
owned subsidiary as a majority member. The other member of the limited
liability company would be a entity formed by Bob Vila, a popular
home-improvement expert.
On February 4, 1999, the wholly owned subsidiary, IMT's Plumber, Inc., a
New Jersey corporation and the limited liability company, The Plumber's
Secret, L.L.C., a New Jersey limited liability company, were formed. IMT's
Plumber is a 50.01 % member of The Plumber's Secret, L.L.C. with Vila
Enterprises, L.L.C. as the other member. The Plumber's Secret, L.L.C.
operating agreement provides that all day-to-day management decisions of The
Plumber's Secret L.L.C. are to be made by Interactive Marketing.
Product Development
Interactive Marketing searches out independent third parties who have
invented or patented a product that we believe can be marketed to the public
or we may invent or patent a product. We attempt to develop new product ideas
from a variety of sources including inventors, suppliers, trade shows,
industry conferences and strategic alliances with manufacturing and consumer
product companies. Initially, we evaluate the suitability of a product for
television demonstration and explanation, the perceived value of the product
to the consumer, we determine if an adequate supply of the product can be
obtained and estimate the profitability of the product.
Once we conclude that the product will be commercially viable we attempt
to obtain the rights to the product. We then negotiate licensing arrangements
with the third parties that own the patent or the rights to the product.
Generally these licensing arrangements involve a combination of up-front
advances and/or royalties payable based upon sales or profits of the product.
We ordinarily seek exclusive worldwide rights to sell and to use all means of
distribution. However, we may be unsuccessful in obtaining such broad rights
and may acquire only limited rights. We have negotiated an exclusive license
for The Plumbers Secret and are currently negotiating licensing arrangements
for three other products: Putterball, EFL Fishing Lure and Tom House Physical
Fitness. (See, "Recent Developments," below). We also are currently in
preliminary negotiations for at least four additional proprietary products.
Once we have obtained the rights to market a product we may decide to
enhance the product to increase its marketability by changing the product
itself or altering its trade name, packaging, etc. Depending on the product,
we may place an order with a third party vendor to manufacture between 15,000
and 35,000 units. That amount is typically allocated for direct response
television sales only. Prior to marketing a product for domestic retail we
place another order with the manufacturer to cover the anticipated sales to
the retail market. We use this procedure to ensure we and our retailers have
enough lead-time to fill the demands for our products.
During fiscal year 1998 we expended $18,000 for research and development
for proprietary formulation but we have not recorded any research and
development costs during fiscal year 1999. We expect to market products for
home and business related to fitness, nutrition, pet care, health emergency,
golf and fishing.
Sales and Marketing
Once we obtain the rights to market a product, we develop what we believe
will be the most effective marketing strategy. Strategies may include one or
more of the following:
* Direct Response Television (transactional television programming
* known as infomercials)
* Spot Buying (30 seconds to two minute commercial spots)
* Catalogs
* Direct mail
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* Direct Response print ads
* Television home-shopping programs
* Credit card statement inserts
* Membership programs
* Internet marketing
* Retail
* International Marketing
* Print advertising
We attempt to structure a campaign for the product which most closely
suits the product, its potential consumer and the profit margins associated
with the product. We typically require two to eight weeks to develop the best
approach for marketing a product. During this phase, we: (1) Evaluate the
suitability of the product for direct marketing and retail; (2) Evaluate the
perceived value of the product to consumers; (3) Determine whether an adequate
and timely supply of the product can be obtained; and (4) Analyze whether the
estimated profitability of the product satisfies our criteria.
When we decide to bring a product to market, we may arrange for the
production of a direct response television program ("infomercial") that can
provide in-depth demonstration and/or explanations of our product. The
duration of these productions may vary from one to sixty minutes. We attempt
to present the product in an entertaining and informative manner, and may use
a variety of program formats including live talk shows and paid live studio
audience programs. Our infomercials are produced in-house or by independent
production companies with experience in the infomercial field. We expect the
production of an infomercial to take approximately ten (10) days up to three
weeks to complete, at a cost typically ranging from $75,000 to $200,000 per
infomercial. Additional costs may include fees paid to hosts and
spokespersons.
Following completion of the production of an infomercial, we may test the
program in the United States in specific time slots on both national cable
networks and targeted broadcast stations. If an infomercial achieves
acceptable results in the market tests, we generally air it on a rapidly
increasing schedule on cable networks and broadcast channels. Acceptable
results means that we believe we will be able to sell sufficient amounts of
the product to cover the expense of production and of the media time. During
this initial phase, we may modify the creative presentation of the infomercial
and/or the retail pricing, depending upon viewer response. In general, we
expect to air each infomercial domestically at least four to ten months and we
continue such infomercials for longer periods of time to support retail sales.
An important part of our ability to successfully market products is
access to media time. We do not have, and do not presently intend to have
inventories of media time or long-term contracts with suppliers of media time
for the broadcasting of infomercials. We believe that such inventories and
long-term contracts impose a financial burden and risk which we are unwilling
to accept. The lack of such inventories or long-term contracts causes us to
pay for media time at the prevailing rates at the time the infomercial is
aired. However, when a product tests successfully, media time can be
purchased in bulk, which provides a 40-60% cost savings. We have paid
approximately $150,000 for media time for the period from June 1999 through
November 30, 1999.
Our infomercials periodically display an "800" telephone number and our
Web site, www.shopimt.com, on the television screen during the broadcast
which a customer can call or visit to order a product. We contract with
third-party vendors to provide in-bound telemarketing for a fee based
principally on the number of telephone calls answered. In-bound telemarketers
electronically transmit orders to our third-party vendors where the product is
packaged and shipped. In the future we expect the in-bound telemarketer to
promote, "up-sell," complementary and/or additional products related to the
product from which the inquiry is received. Such sales efforts will be
orchestrated by our marketing personnel who will script the sales approaches
for the telemarketing personnel.
We believe that an opportunity exists for the retailing of our consumer
products on the Internet. By directly offering products through our own Web
site, we interact with customers in real-time and are able to frequently
adjust the product mix, pricing and visual presentation. In addition, we can
more easily obtain extensive
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demographic and behavioral data about our customers, provide them with greater
direct marketing opportunities and offer a more personalized shopping
experience. Also, the Internet provides the convenience of home shopping and
24-hour-a-day, seven-days-a-week operation, available to any location, foreign
and domestic, that has access to the Internet. In December of 1999 we agreed
to link our Web site with Bob Vila's Web site, www.BobVila.com which is an
interactive site specializing in home improvements. We also intend to create
links with hundreds of Web sites to promote and sell our products.
Principal Products
The Plumbers Secret. In June 1998, Interactive New Jersey entered into a
licensing agreement with A 2000 USA, Inc., licensor, and Robert and John
Miller, as inventors, for the exclusive right to manufacture and or produce,
advertise, promote, market or sell worldwide The Plumbers Secret. Interactive
Marketing agreed to pay A2000 USA a royalty per unit for a period of one year.
$20,000 was paid to the A 2000 USA upon execution of the agreement and an
additional $30,000 was paid after successful test marketing
The Plumbers Secret is a simple plumbing device that is packaged in its
own plastic toolbox-like carry case and can be used up to twelve times for
clearing any clogged drain in a home. The product retails for $39.95 and has
a shelf life of ten years. The case holds a canister, pistol grip extension,
and three adapters which connect to tubs, sinks, toilets, showers, garbage
disposals and removable and non-removable grates. The pressurized canister
releases a patented non-toxic, non-corrosive enzymatic formula that expands
200 times its mass when introduced to water. The aerosol delivery system
propels the standing water through the clog.
We have produced one and two minute spots with Bob Vila, the former host
of the television series "This Old House", as the spokesperson for The
Plumbers Secret. The infomercial began airing in July of 1999 and was
released as part of Apple Computer's QuickTime 4 digital video and streaming
media at the Macworld Expo/NY '99 show. In August of 1999 The Shopping
Channel in Canada and tSc Direct, an Internet site, agreed to market The
Plumber's Secret on Canadian Home Shopping. The Canadian Home Shopping
Channel is similar to the QVC Network in the United States. The Plumber's
Secret infomercial is broadcast throughout English speaking Canada and on the
tSc Direct Internet site located at www.tsc.ca.
We have also expanded into retail markets with The Plumbers Secret. In
December of 1999 we filled product orders with Bed Bath & Beyond, Inc., QVC
and Kmart Corporation. As of December 31, 1999 there has been approximately
$990,000 in sales of this product. We believe that The Plumbers Secret will
become a common retail product.
Principal Suppliers
Production needs for our products are provided by third party vendors or
in-house. We contact several vendors until we find the combination of quality
manufacturing for a reasonable price. We consistently search for new
suppliers to insure that we and our customers are always assured the best
product. We currently rely on four vendors to supply the parts for The
Plumbers Secret. Accra Pac Group located in Indiana supplies the pressurized
cans filled with the non-toxic formula. Blow Molded Products located in
California supplies the plastic case, cap, handles and adapters. Hawthorne
Rubber located in New Jersey supplies the large flange adaptor. GM Packaging
located in California provides the shipping boxes. We have not entered into
formal long-term written agreements with these suppliers.
We monitor the availability of our products and promptly adjust our
direct marketing campaign if and when a product cannot be adequately supplied.
However, such adjustment may not always be possible in the short term.
Management believes the loss of one or more of these vendors should not result
in a material adverse affect on our operations because we use a secondary
vendor for smaller quantities which allows us to replace the primary vendor
within 30-45 days.
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Distribution
We rely on third parties to distribute our products. Sales from direct
response television and Internet sales are handled by our North American order
fulfillment center, PDS, located in Pacoima, California. This facility
receives merchandise from manufacturers, inspects merchandise for damage or
defects, stores product for later delivery, assembles the product as required,
packages and ships the products and processes customer returns. We use bulk
shippers to deliver products to customers in the United States. In certain
instances, the manufacturer of the product ships orders directly to the
customer.
Each customer is charged a shipping and handling fee, which varies by
product. The majority of customer payments are made by credit card over the
telephone, with the remainder paid by check. No product is shipped C.O.D. and
we will not ship a product until payment has been received and cleared.
In addition to direct response television we rely on our President, Sandy
Lang, Johnny Bench, Leisure Marketing and 20 independent sales representatives
to market our products. We recently entered into an agreement with Leisure
Marketing to market our products. Leisure Marketing has had twenty-five years
experience with direct response television sales. We currently have engaged
fourteen domestic independent distributors who intend to solicit ninety major
retail organizations in the home center, hardware, farm and fleet and
maintenance supply centers. Sales to our independent distributors are at a
fixed price and all sales are final with no guaranteed sales provisions. In
July of 1999 we began development of an international retail and independent
distributor network. We currently have established ten independent
distributors who will begin marketing our products within the next 60 days.
We anticipate that we will engage independent distributors in various foreign
countries around the world to market our products.
Competition
We have been in our market for a short period of time and compete
directly with many other companies, large and small, which generate revenue
from direct marketing, wholesale/retail and Internet commerce activities. We
also compete with consumer products companies and retailers which have
substantially greater financial, marketing and other resources. Some of these
companies presently conduct, or indicate their intent to conduct, direct
response marketing. Products similar to our products may be sold in
department stores, pharmacies, general merchandise stores and through
magazines, newspapers, direct mail advertising catalogs and the Internet.
The Plumbers Secret competes directly with two products available in the
marketplace today that purport to do what our product does. They are called
Power Plumber and Air Force and sell for 30% less than The Plumbers Secret.
We compete with these products by using direct response television advertising
blitzes which provide the customer with the convenience of ordering by phone
or mail and a 100% money-back guarantee. Also, we use a non-corrosive,
non-toxic formula in our product where the others use corrosive chemicals.
Our packaging is constructed of sturdy plastic parts where the other products
use cardboard. Finally, the endorsement of nationally known home improvement
expert, Bob Vila, improves The Plumbers Secret credibility and marketability.
Recent Developments
The following discussions involve forward looking statements regarding
our product developments that involve substantial risks and uncertainties. We
cannot assure that we will be able to finalize licensing agreements for these
products, or that the products will prove to be marketable or successful.
Putterball. In November of 1999 we entered into a letter of intent to
develop and market the Putterball. The Putterball is a putting practice
device fashioned with a steel golf ball-like attachment in place of the normal
putter blade. The device does not tolerate error and assists a player to
learn his or her most productive technique through repetitive use of the
Putterball.
Tom House Physical Fitness. In December of 1999 Interactive Marketing
and Tom House signed a letter of intent to market Dr. House's fitness
products. Tom House is a retired major-league pitcher who has a Ph.D. in
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psychology and he is an consultant, performance analyst and sports
psychologist, and is a trainer of elite athletes. We anticipate that the Tom
House Physical Fitness products will include training equipment that weighs
less than one pound, training tapes and nutritional supplements which will
provide body development necessary for a person's needs whether at home, the
office or while traveling. We anticipate we will shoot the Tom House
infomercial during the first quarter of 2000. The nutritional supplements
have been formulated and we anticipate they will be available in the last
quarter of 2000. We hope to create a continuity package with Tom House where
the customer can call an "800" number and receive answers for any questions
regarding the fitness products.
EFL Fishing Lure. The EFL Fishing Lure is a patented latex plastic in
the shape of a fish developed by actor, Chris Atkins (known for his
performance in Blue Lagoon) and five motion picture special effects people.
When the EFL Fishing Lure is put over a crank bait the bait feels like a fish
and moves like a fish. Chris Atkins will be the spokesman for the EFL Fishing
Lure and we anticipate using many of the recognized pro fishermen along with
celebrities that love to fish as spokespersons. We intend to produce a 30
minute infomercial and will begin production of the product in foreign
countries. We have created a logo and we plan to use a retail package
consisting of a unique type of tackle box with several types of baits and
hooks. We expect the retail price to be $39.95
Trademarks, License and Intellectual Property
We rely upon a combination of licenses, confidentiality agreements and
other contractual covenants to establish and protect development and marketing
rights for our products. We have assigned our exclusive license to
manufacture and or produce, advertise, promote, market or sell worldwide The
Plumber's Secret to the Plumber's Secret L.L.C. We are currently seeking
trademark protection for The Plumbers Secret. We consider trademark
protection to be very important to brand name recognition and independent
distributor and consumer loyalty to our business. We intend to register our
important trademarks in the United States.
Our ability to compete effectively will depend in part on our ability to
maintain exclusive licensing and the aggressive continued development of our
products. We can not assure that our competitors will not independently
develop or obtain products that are substantially equivalent or superior to
our products.
Government Regulations
Various aspects of our business are subject to regulation and ongoing
review by a variety of federal, state, local and foreign government agencies,
including the Federal Trade Commission ("FTC"), the United States Post Office,
the Consumer Products Safety Commission ("CPSC"), the Federal Communications
Commission, ("FCC"), various States' Attorneys General and other state, local
and foreign consumer protection and health agencies. The statutes, rules and
regulations applicable to our operations and to our product are numerous,
complex and subject to change. Our international business, when developed,
will be subject to the laws and regulations in the countries in which we sell
our products including, but not limited to, the various consumer and health
protection laws and regulations in that country where we market our product.
If any significant actions are brought against us or any of our
subsidiaries in connection with a breach of such laws or regulations,
including the imposition of fines or other penalties, or against one of the
entities through which we obtain a significant portion of our media exposure,
we could be materially and adversely affected. There can be no assurance that
changes in the laws and regulations of any state or country which forms a
significant portion of our market will not adversely affect our business or
results of operations.
We collect and remit sales tax in the states where we have a physical
presence, however, certain states in which our only activity is direct
response television and Internet marketing have attempted to require direct
marketers, such as Interactive Marketing, to collect and remit sales tax on
sales to customers residing in such states. A 1995 United States Supreme
Court decision held that Congress could legislate such a change. Thus far,
Congress has taken no action to that effect. We are prepared to collect sales
taxes for other states if laws are passed requiring such collection. We do
not believe that a change in the laws requiring the collection of sales taxes
will have a material adverse effect on our financial condition or results of
operations.
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Employees
Currently we employ six (6) individuals. We think we have good relations
with our employees and none are subject to a collective bargaining agreement.
Reports to Security Holders.
Interactive Marketing has voluntarily elected to file this Form 10-SB
registration statement in order to become a reporting company under the
Securities Exchange Act of 1934, as amended ( the "Exchange Act"). Following
the effective date of this registration statement, we will be required to
comply with the reporting requirements of the Exchange Act. We will file
annual, quarterly and other reports with the Securities and Exchange
Commission ("SEC"). We also will be subject to the proxy solicitation
requirements of the Exchange Act and, accordingly, will furnish an annual
report with audited financial statements to our stockholders. Interested
persons may visit our web site at www.shopimt.com.
Available Information.
Copies of this Registration Statement may be inspected, without charge,
at the SEC's Public Reference Room at 450 Fifth Street N.W., Washington, D.C.
20549 and at the Pacific Regional Office of the SEC located at 5670 Wilshire
Boulevard 11th Floor, Los Angeles, California 90036-3648. The public may
obtain information on the operation of the Public Reference Room by calling
the SEC at 1-800-SEC-0300. Copies of this material also should be available
through the Internet by using the SEC's EDGAR Archive, which is located at
http://www.sec.gov.
ITEM 2: MANAGEMENTS' DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
Overview
Interactive Marketing provides comprehensive marketing services for
proprietary consumer products in both the United States and worldwide.
Operations commenced in August of 1999. Currently management plans to
introduce in the near-term at least five different products which may generate
significant revenues over the next three years. In addition, to date,
management is in the initial stages of signing four additional products which
could enhance our revenues.
We have had no revenues for the fiscal year ended February 28, 1999.
However, we have posted $577,490 in revenues for the nine month period ended
November 30, 1999. We have had a short operating a history and history of
operating losses, but management believes our product lines will provide a
source of future revenues.
Reverse Merger Treatment
In April of 1999 Shur De Cor, a blank check company, merged with
Interactive New Jersey. Shur De Cor, the Nevada corporation, was the
surviving entity following the merger. The reverse merger was completed
pursuant to a stock-for-stock exchange of 12,404,000 shares of the Shur De
Cor's common stock for 100% of the outstanding stock, 2,500 shares, of
Interactive New Jersey. The merger was structured as a tax free
stock-for-stock exchange pursuant to Section 368 (a)(1) (B) of the Internal
Revenue Code, as amended. For accounting purposes, the acquisition is being
treated as an issuance of 6,202,000 shares by Interactive New Jersey for the
$50,000 in assets of Shur De Cor.
Plan of Operations
We did not post revenues for the fiscal years ended 1998 and 1997 and
have experienced cumulative operating losses since our inception of
approximately $700,000 through November 30, 1999, but we started
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generating revenues in August of 1999. Management believes that our current
cash balance at November 30, 1999, of $152,573, along with anticipated
revenues, external debt and equity financing should be adequate to fund our
projected operations and provide for our working capital needs over at least
the next twelve months.
We have monthly lease commitments for our office space of approximately
$5,398. We have no plans to purchase significant equipment or other capital
expenditures. In addition, in the next twelve months, we anticipate research
and development costs for our new products to amount to approximately $7,500.
Further, it is anticipated based upon projected revenues for the new products,
our payroll costs will increase to approximately $150,000 due to employment of
two to three additional employees.
On March 16, 1999, the members of The Plumber's Secret L.L.C. agreed to
amend the operating agreement. The members agreed that the initial capital
contribution by both members would be approximately $100,000 each. IMT's
Plumber has committed to lend The Plumber's Secret L.L.C. up to $150,000.
IMT's Plumber will receive a preferred return on its capital contribution.
Under a service agreement, $100,000 will be paid to Vila Enterprises for
advertising and promoting the product in an infomercial. $100,000 in profits
from The Plumber's Secret L.L.C. will be allocated to Vila Enterprises and
then profits will be distributed to the members according to the terms of the
first operating agreement.
During fiscal year 1999 Interactive New Jersey was a private company
developing a five year plan of products. It had entered into various
agreements to market or purchase some of our current product lines. After our
merger with Interactive New Jersey our management continued the development of
our product lines. Management believes we now have sufficient products to
maintain revenues. Our management is reviewing various product cost bids and
is discussing with major retailers the selling of our products. We also intend
to generate banner stream income from Internet advertisers. We plan to create
a Web site that will become a movie channel with a weekly soap opera and will
be a source of such banner stream income.
We sustained a net loss from operations of $40,680 for the period from
April 21, 1998 (date of inception) through February 28, 1999 compared to a net
loss from operations of approximately $658,000 for the nine months of fiscal
year 1999. To date, management has devoted its efforts primarily to
developing its products, developing its business strategy and raising capital.
We are unaware of any known trends, events or uncertainties that are
reasonably likely to impact revenues from operations.
We may experience significant fluctuations in operating results in future
periods due to a variety of factors, including but not limited to, the
following factors:
* We may need additional financing in order to carry out our business
plan and management cannot assure that we will be successful in
obtaining such financing. Failure to obtain necessary financing
could have a material adverse impact on our operations.
* Sales from our products are unproven and yet to be tested in the
retail environment.
* We must obtain new products and customers at reasonable costs, retain
customers and encourage repeat purchases.
* We need to develop our customer base through multiple marketing
channels, which include the following: (i) Development of an
aggressive marketing campaign using a combination of online and
traditional marketing: (ii) by entering into linking arrangements
with other web sites; and (iii) using direct marketing techniques to
target new and existing customers with personalized communications.
Seasonal Trends
Our market is not seasonal because our products are marketed with a
direct response television media blitz, which is not related to the seasonal
variables.
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ITEM 3: DESCRIPTION OF PROPERTIES
Our principal offices are located in Hollywood, California. The property
is a six story office building made of brick and glass which is in good
condition. We lease approximately 2,500 square feet which includes six
offices, a conference room, kitchen and stock room. This property should be
adequate for the immediate future. Our monthly rent begins at $5,398 and
increases 1.966% over a five year period. This lease will expire in May of
2004.
ITEM 4: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth the beneficial ownership of our
outstanding common stock of; (i) each person or group known by us to own
beneficially more than 5% of our outstanding common stock, (ii) each of our
executive officers, (iii) each of our director's and (iv) all executive
officers and directors as a group. Beneficial ownership is determined in
accordance with the rules of the SEC and generally includes voting or
investment power with respect to securities. Except as indicated by footnote,
the persons named in the table below have sole voting power and investment
power with respect to all shares of common stock shown as beneficial ownership
of those shares. The percentage of beneficial ownership is based on
15,832,000 shares of common stock outstanding as of December 31, 1999
CERTAIN BENEFICIAL OWNERS
Common Stock Beneficially Owned
--------------------------------
Name and Address of Number of Shares of
Beneficial Owners Common Stock Percentage of Class
- ------------------- ------------------- -------------------
Kall Group, Inc. 2,500,000** 15.8%
44 Minebrook Road
Colts Neck, New Jersey 07722
MANAGEMENT
Common Stock Beneficially Owned
-------------------------------
Name and Address of Number of Shares of
Beneficial Owners Common Stock Percentage of Class
- ------------------- ------------------- -------------------
Sandy Lang 3,500,000 22.1%
3575 Cahuenga Boulevard West,
Suite 390
Hollywood, California 90680
Frank A. Leo 2,500,000** 15.8%
44 Minebrook Road
Colts Neck, New Jersey 07722
Johnny Bench 50,000 *
324 Bisops Bridge
Cincinnati, Ohio 45255
All executive officers and
directors as a group 6,050,000 38.2%
* Less than 1%
** Mr. Leo shares voting and investment power of the 2,500,000 common
shares held by Kall Group, Inc.
11
<PAGE>
ITEM 5: DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our directors, executive officers and key employees, and their respective
ages and positions are listed below. Biographical information for each of
those persons is also presented below. Our executive officers are appointed
by our Board of Directors and serve at its discretion. There are no familial
relationships among or between any of our officers or directors.
Directors and Officers
Name Age Position Held
- ------- ----- --------------
Sandy Lang 54 President, Chief Executive Officer,
Director
Frank A. Leo 55 Secretary and Chairman of the Board
John Bench 51 Director
Sandy Lang. Mr. Lang became President and C.O.O. of Interactive New Jersey in
1998. He continues as President of Interactive Marketing, but resigned as the
C.O.O. and was appointed C.E.O. in October of 1999. Mr. Lang has over 25
years of experience in creative media production. From June 1995 until April
1999 he was Chairman of The Board of The Secret, Inc., a company involved in
marketing a golf training program. He served as president of domestic sales
for Epic Films from August 1989 to June of 1995. He has been involved with
syndicated television shows and feature films, televised game shows and
computer graphics for television stations.
Frank Leo. Mr. Leo served as Chairman of the Board and C.E.O. of Interactive
New Jersey beginning in April of 1998. He was appointed Secretary of
Interactive Marketing in April 1999, and then resigned as C.E.O. and was
appointed Chairman of the Board in October 1999. From 1995 to 1998 his
primary income came from personal investments. From 1991 to 1995 he was Vice
President and an executive consultant of Wallace Computer Services. He was
the founder of MGI/Colorforms which provided specialty printing and business
forms. He attended Pace University in New York, New York.
John Bench. Mr. Bench was appointed as our Director in April of 1999. During
the past five years he has derived the majority of his income from his
notoriety as a Hall of Fame baseball player. He also has worked in radio and
television broadcasting related to baseball. During 1997 he was the owner and
C.E.O. of Johnny Bench Golf, Inc., which manufactured and distributed golf
equipment.
ITEM 6: EXECUTIVE COMPENSATION
The following table shows compensation of our executive officers for our
fiscal year 1999.
SUMMARY COMPENSATION TABLE
Annual Compensation
-------------------------------
Name and Principal Position Salary ($) Bonus Other
- --------------------------- -------------- ---------- ---------
Sandy Lang 1999 $ 50,000 $ 0 $ 0
President, CEO
Compensation of Directors
12
<PAGE>
We do not have any standard arrangement for compensation of our directors
for any services provided as director, including services for committee
participation or for special assignments.
Employment Contracts
During fiscal year 1999 we did not enter into formal written employment
agreements with our officers and directors.
ITEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The following information summarizes certain transactions either we
engaged in during the past two years or we propose to engage in involving our
executive officers, directors, 5% stockholders or immediate family members of
such persons:
Frank Leo, our director and Secretary has provided an aggregate of
$194,240 in cash or in property for or on behalf of Interactive Jew Jersey.
He paid legal fees totaling $14,680 and research and development costs of
$18,000 incurred between October 1, 1997 and June 30, 1998 in connection with
the formation of Interactive New Jersey including the licensing agreements,
and applications for patents and trademarks for the product. In January 1999,
he advanced $5,000 to us for working capital purposes. He paid total
licensing fees of $20,000 for the product, The Plumbers Secret, in June and
July of 1998. These payments were treated as a capital contribution. He also
remitted his acquisition of the title and interest in the mailing list of
past, current, and future names whereby his basis of $136,560 was treated as a
capital contribution.
On November 30, 1999 Messrs. Lang and Leo, our officers and directors,
returned 2,177,000 and 3,177,000 common shares, respectively, to the corporate
treasury.
ITEM 8: DESCRIPTION OF SECURITIES
Common Stock
We are authorized to issue 60,000,000 shares of common stock, par value
$.001, of which 15,832,000 were issued and outstanding as of December 31,
1999. All shares of common stock have equal rights and privileges with
respect to voting, liquidation and dividend rights. Each share of common
stock entitles the holder thereof (i) to one non-cumulative vote for each
share held of record of all matters submitted to a vote of the stockholders,
(ii) to participate equally and to receive any and all such dividends as may
be declared by the Board of Directors out of funds legally available; and
(iii) to participate pro rata in any distribution of assets available for
distribution upon liquidation of the Company. Our stockholders have no
preemptive rights to acquire additional shares of common stock or any other
securities.
Preferred Stock
We have not authorized preferred stock.
PART II
ITEM 1: MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
Our common stock is traded over-the-counter and quoted on the OTC NASDAQ
Electronic Bulletin Board under the symbol "IAMK". The following table
represents the range of the high and low bid prices of our stock as reported
by the Nasdaq Trading and Market Services for each fiscal quarter for the last
two fiscal years ending February 28, 1999 and the interim period ended
November 30, 1999. There was no trading activity prior to April 1999. Such
quotations represent
13
<PAGE>
prices between dealers and my not include retail markups, markdowns, or
commissions and may not necessarily represent actual transactions.
Quarter Ended High Low
------------- ------- ---------
May 31, 1999 $ 7.875 $ 0.0625
August 31, 1999 4.0625 2.00
November 30, 1999 2.6875 0.75
We have approximately 43 stockholders of record as of November 30, 1999.
On March 17, 1999, we effected a 2-for-1 forward split of our outstanding
common shares. The discussions in this registration statement regarding our
common shares reflect the forward stock split.
Dividends
We have not declared dividends on our common stock and do not anticipate
paying dividends on our common stock in the foreseeable future.
OTC Bulletin Board Eligibility Rule
In January of 1999, the SEC granted approval of amendments to the NASD
OTC Bulletin Board Eligibility Rule 6530 and 6540. These amendments now
require a company listed on the OTC Bulletin Board to be a reporting company
and current in its reports filed with the SEC. As a result of this rule
change we have voluntarily filed this registration statement in order to
become a fully reporting company and maintain the listing of our common stock
on the OTC Bulletin Board. The rule requires that the SEC come to a position
of no further comment regarding the registration statement before a company is
considered compliant. We cannot assure that the SEC will come to such a
position in regards to this registration statement prior to our phase-in-date
of April 5, 2000. According to the rules, if we are not in compliance at our
phase-in-date our common stock will be removed from the OTC Bulletin Board. If
our listing is removed from the OTC Bulletin Board we intend to move our
listing to the National Quotation Bureau's Pink Sheets. This move to the
"pink sheets" may adversely affect the market, if any, in our stock.
ITEM 2: LEGAL PROCEEDINGS
We are not a party to any legal proceedings or threatened proceedings as
of the date of this filing.
ITEM 3: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Pursuant to the merger agreement, we continue to employ the accounting
survivor, Interactive New Jersey's principal independent accountant, Moore
Stephens, P.C. located in Cranford, New Jersey. For the past two fiscal years
we have not had any disagreements regarding accounting practices, financial
statement disclosure, or auditing scope or procedure with our former
independent accountant, Crouch, Bierwolf and Chisholm, located in Salt Lake
City, Utah; nor have their reports contained an adverse opinion or disclaimer
of opinion.
ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES
The following discussion describes all securities we have sold within the
past three fiscal years without registration:
On December 22, 1998, we issued 60,000 pre-forward shares of common
stock, valued at $600, to James Glavas, our then President, services rendered
on our behalf. The issuance of such shares was exempt from registration under
the Securities Act of 1933 by reason of Sections 3(b) and 4(2) as a private
transaction not involving a public distribution.
14
<PAGE>
On January 26, 1999, we issued 50,000 pre-forward shares of common stock,
valued at $500, to Principal Holdings, Inc. for investment banking services
rendered on our behalf. The issuance of such shares was exempt from
registration under the Securities Act of 1933 by reason of Sections 3(b) and
4(2) as a private transaction not involving a public distribution.
On February 15, 1999, pursuant to Rule 504, we offered 2,000,000 shares
of common stock for an aggregate offering price of $50,000. Sixteen (16)
investors purchased 2,000,000 common shares for the $50,000 aggregate offering
price No underwriting discounts or commissions were paid for this offering.
On April 13, 1999 we sold 285,000 common shares for $949,050 to Stratus
Investco S.A. The issuance of such shares was exempt from registration under
the Securities Act of 1933 by reason of Sections 3(b) and 4(2) as a private
transaction not involving a public distribution.
On November 1, 1999 we sold 295,000 common shares to Finks Consultancy
Limited for $245,000. The issuance of such shares was exempt from
registration under the Securities Act of 1933 by reason of Sections 3(b) and
4(2) as a private transaction not involving a public distribution.
On November 19, 1999 we issued 2,000,000 common shares to Planet
Entertainment Corporation to acquire 5,000 master audio recordings valued at
$1,600,000. The issuance of such shares was exempt from registration under
the Securities Act of 1933 by reason of Sections 3(b) and 4(2) as a private
transaction not involving a public distribution.
In each of the private transactions above, we believe that each purchaser
(i) was aware that the securities had not been registered under federal
securities laws, (ii) acquired the securities for his/her/its own account for
investment purposes of the federal securities laws, (iii) understood that the
securities would need to be indefinitely held unless registered or an
exemption from registration applied to a proposed disposition and (iv) was
aware that the certificate representing the securities would bear a legend
restricting its transfer. We believe that, in light of the foregoing, the
sale of our securities to the respective acquirers did not constitute the sale
of an unregistered security in violation of the federal securities laws and
regulations by reason of the exemptions provided under Sections 3(b) and 4(2) of
the Securities Act, and the rules and regulations promulgated thereunder.
ITEM 5: INDEMNIFICATION OF DIRECTORS AND OFFICERS
Neither our Articles of Incorporation nor our bylaws provide for the
indemnification of a present or former director and officer. However,
pursuant to Nevada Revised Statutes Section 78.750 and 78.751 the corporation
must indemnify a director, officer employee or agent of the corporation who is
successful on the merits or otherwise in defense on any action or suit. Such
indemnification shall include, expenses, including attorney's fees actually or
reasonably incurred by him. Nevada law also provides for discretionary
indemnification for each person who serves as or at the request of the
corporation as an officer or director of the corporation. The corporation may
indemnify such individuals against all costs, expenses and liabilities
incurred in a threatened, pending or completed action, suit or proceeding
brought because such individual is an director or officer of the corporation.
Such individual must have conducted himself in good faith and reasonably
believed that his conduct was in, or not opposed to, the best interests of the
corporation. In a criminal action he must not have had a reasonable cause to
believe his conduct was unlawful.
PART F/S
INDEX TO FINANCIAL STATEMENTS
Interactive Marketing Consolidated Financial Statements November 30, 1999
(unaudited) and February 28, 1999 from inception, April 21, 1998.
Financial Statements of The Plumber's Secret L.L.C., November 30, 1999
(unaudited)
Shur De Cor, Inc. Financial Statements February 28, 1999, December 31, 1998
and 1997.
<PAGE>
INTERACTIVE MARKETING TECHNOLOGY, INC.
__________________________________________________________________
INDEX TO FINANCIAL STATEMENTS
__________________________________________________________________
Interactive Marketing Technology, Inc.:
Report of Independent Auditors..........................................1
Consolidated Balance Sheets as of November 30, 1999
[Unaudited] and February 28, 1999......................................2
Consolidated Statements of Operations for the period
March 1, 1999 through November 30, 1999 [Unaudited],
for the period April 21, 1998 [date of inception]
through February 28, 1999, and for the period April 21, 1998
[date of inception] through November 30, 1999 [Unaudited]..............3
Consolidated Statements of Stockholder's Equity for
the period March 1, 1999 through November 30, 1999
[Unaudited], for the period April 21, 1998 [date of
inception] through February 28, 1999, and for the period
April 21, 1998 [date of inception] through
November 30, 1999 [Unaudited]..........................................4
Consolidated Statements of Cash Flows for the period
March 1, 1999 through November 30, 1999 [Unaudited],
for the period April 21, 1998 [date of inception] through
February 28, 1999, and for the period April 21, 1998
[date of inception] through November 30, 1999 [Unaudited]..............5
Notes to Consolidated Statements.....................................6-9
The Plumber's Secret, L.L.C.:
Balance Sheet as of November 30, 1999 [Unaudited] ...................10
Statement of Operations for the period February 4, 1999 through
November 30, 1999 [Unaudited].........................................11
Notes to Financial Statements..........................................12
<PAGE>
REPORT OF INDEPENDENT AUDITORS
To the Board of Directors and Stockholders
Interactive Marketing Technology, Inc.
We have audited the accompanying consolidated balance sheet of Interactive
Marketing Technology, Inc. [a development stage company] as of February 28,
1999, and the related consolidated statements of operations, stockholders'
equity, and cash flows for the period from April 21, 1998 [date of inception]
through February 28, 1999. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated 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 consolidated financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the
consolidated financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall consolidated financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Interactive Marketing Technology, Inc. [a development stage company] as of
February 28, 1999, and the results of their operations and their cash flows
for the period from April 21, 1998 [date of inception] through February 28,
1999, in conformity with generally accepted accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that Interactive Marketing Technology, Inc. will continue as a going
concern. As discussed in Note 8 to the consolidated financial statements,
Interactive Marketing Technology, Inc. suffered a net loss of $40,680 for the
period April 21, 1998 through February 28, 1999 and had an insufficient cash
balance at February 28, 1999 for future operations that raise substantial
doubt about Interactive Marketing Technology, Inc.'s ability to continue as a
going concern. Management's plans in regard to these matters are described in
Note 8. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
/s/ Moore Stephens, P.C.
MOORE STEPHENS, P.C.
Certified Public Accountants.
Cranford, New Jersey
March 16, 1999
1
<PAGE>
INTERACTIVE MARKETING TECHNOLOGY, INC.
[A DEVELOPMENT STAGE COMPANY]
_________________________________________________________________________
CONSOLIDATED BALANCE SHEETS
_________________________________________________________________________
November 30, February 28,
1999 1999
------------- -------------
[Unaudited]
Assets:
Current Assets:
Cash and Cash Equivalents $ 152,573 $ 5,250
Accounts Receivable 352,800 -
Inventory 198,400 -
Prepaid Expenses 24,899 -
Supplies 15,612 -
------------- -------------
Total Current Assets 744,284 5,250
------------- -------------
Fixed Assets [Net of Depreciation of $5,975] 82,402 -
------------- -------------
Other Assets:
Masters 1,600,000 -
Licensing Fees 20,000 20,000
Customer List [Net of Amortization of $7,952] 128,608 136,560
Security Deposits 10,899 -
Patents 15,000 -
------------- -------------
Total Other Assets 1,774,507 156,560
------------- -------------
Total Assets $ 2,601,193 $ 161,810
============= =============
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts Payable $ 263,325 $ 8,000
Due to Stockholder - 5,000
Accrued Interest Payable 3,125 -
------------- -------------
Total Current Liabilities 266,450 13,000
------------- -------------
Notes Payable - Long-Term 50,000 -
------------- -------------
Stockholders' Equity:
Common Stock, Par $.001, 60,000,000 Shares
Authorized, 15,832,000 and 7,050,000 Shares
Outstanding at November 30, 1999 and
February 28, 1999, Respectively 21,186 12,404
Paid-in Capital 7,362,354 4,577,086
Deficit Accumulated During the Development
Stage (698,797) (40,680)
Treasury Stock - 5,354,000 Shares Common
Stock at Fair Value [12C] (4,400,000) (4,400,000)
------------- -------------
Total Stockholders' Equity 2,284,743 148,810
------------- -------------
Total Liabilities and Stockholders' Equity $ 2,601,193 $ 161,810
============= =============
See Notes to Consolidated Financial Statements.
2
<PAGE>
INTERACTIVE MARKETING TECHNOLOGY, INC.
[A DEVELOPMENT STAGE COMPANY]
_________________________________________________________________________
CONSOLIDATED STATEMENTS OF OPERATIONS
_________________________________________________________________________
For the Period For the Period
April 21,1998 April 21,1998
For the Period [Date of [Date of
March 1, 1999 Inception] Inception]
through through through
November 30, February 28, November 30,
1999 1999 1999
-------------- --------------- --------------
[Unaudited] [Unaudited]
Revenues $ 577,490 $ - $ 577,490
-------------- --------------- --------------
Costs and Expenses:
Cost of Revenues 523,492 - 523,492
Payroll and Related Costs 285,842 - 285,842
Advertising 98,522 - 98,522
Consulting Fees 33,332 - 33,332
General and Administrative Costs 81,013 - 81,013
Travel and Entertainment 112,850 - 112,850
Corporate Taxes and Filing Fees 11,439 - 11,439
Legal and Professional 72,065 22,680 94,745
Research and Development Costs - 18,000 18,000
Depreciation and Amortization 13,927 - 13,927
Interest Expense 3,125 - 3,125
-------------- --------------- -------------
Total Costs and Expenses 1,235,607 40,680 1,276,287
-------------- --------------- -------------
Loss from Operations (658,117) (40,680) (698,797)
-------------- --------------- -------------
Net [Loss] $ (658,117) $ (40,680) $ (698,797)
============== =============== =============
Net [Loss] Per Share $ (.05) $ (.01)
============== ===============
Weighted Average Number of
Shares Outstanding 13,617,001 7,050,000
============== ===============
See Notes to Consolidated Financial Statements.
3
<PAGE>
INTERACTIVE MARKETING TECHNOLOGY, INC.
[A DEVELOPMENT STAGE COMPANY]
___________________________________________________________________________
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
___________________________________________________________________________
<TABLE>
<CAPTION>
Deficit
Accumulated
During the Total
Common Stock Paid-in Development Treasury Stockholders'
Shares Amount Capital Stage Stock Equity
------------- ----------- ------------- ------------- ------------ ----------------
<S> <C> <C> <C> <C> <C> <C>
Shares Issued to Founders 2,500 $ 250 $ - $ - $ - $ 250
Issuance of Common Stock
in Share Exchange [9B] 12,404,000 12,404 (12,404) - - -
Additional Contributions -
April 21, 1998 through
February 28, 1999 - - 189,240 - - 189,240
Recapitalization Adjustment[9B] (2,500) (250) 250 - - -
Net [Loss] for the period
April 21, 1998 through
February 28, 1999 - - - (40,680) - (40,680)
Shares Returned by Two Officers
in November 1999 [12C] (5,354,000) - 4,400,000 - (4,400,000) -
------------- ----------- ------------- ------------- ------------ ----------------
Balance at
February 28, 1999 7,050,000 12,404 4,577,086 (40,680) (4,400,000) 148,810
Acquired Equity of
Shur De Cor [9B] 6,202,000 6,202 (6,202) - - -
Issuance of Common Stock in
April 1999 [12D] 285,000 285 948,765 - - 949,050
Issuance of Common Stock in
November 1999 [12A] 295,000 295 244,705 - - 245,000
Issuance of Common Stock in
November 1999 for Acquisition
of Masters [12B] 2,000,000 2,000 1,598,000 - - 1,600,000
Net [Loss] for the period
March 1, 1999 through
November 30, 1999 [Unaudited] - - - (658,117) - (658,117)
------------- ----------- ------------- ------------- ------------ ----------------
Balance at November 30,
1999 [Unaudited] 15,832,000 $ 21,186 $ 7,362,354 $ (698,797) $(4,400,000) $ 2,284,743
============= =========== ============= ============= ============ ================
See Notes to Consolidated Financial Statements.
4
</TABLE>
[CAPTION]
INTERACTIVE MARKETING TECHNOLOGY, INC.
[A DEVELOPMENT STAGE COMPANY]
________________________________________________________________________
CONSOLIDATED STATEMENTS OF CASH FLOWS
________________________________________________________________________
<TABLE>
<CAPTION>
For the Period For the Period
April 21,1998 April 21,1998
For the Period [Date of [Date of
March 1, 1999 Inception] Inception]
through through through
November 30, February 28, November 30,
1999 1999 1999
-------------- -------------- --------------
[Unaudited] [Unaudited]
<S> <C> <C> <C>
Operating Activities:
Net [Loss] $ (658,117) $ (40,680) $ (698,797)
Adjustments to Reconcile Net [Loss]
to Net Cash [Used for] Operating
Activities:
Depreciation and Amortization 13,927 - 13,927
Legal Fees - 14,680 14,680
Research and Development - 18,000 18,000
Prepaid Expenses and Miscellaneous
Receivable (40,511) - (40,511)
Accounts Payable 255,325 8,000 263,325
Accrued Interest Payable 3,125 - 3,125
Security Deposits (10,899) - (10,899)
Accounts Receivable (352,800) - (352,800)
Inventory (198,400) - (198,400)
-------------- -------------- --------------
Net Cash - Operating Activities (988,350) - (988,350)
-------------- -------------- --------------
Investing Activities:
Patents (15,000) - (15,000)
Fixed Assets (88,377) - (88,377)
-------------- -------------- --------------
Net Cash - Investing Activities (103,377) - (103,377)
-------------- -------------- --------------
Financing Activities:
Proceeds from Common Stock 1,194,050 250 1,194,300
Advances from Stockholder (5,000) 5,000 -
Proceeds from Note Payable 50,000 - 50,000
-------------- -------------- --------------
Net Cash - Financing Activities 1,239,050 5,250 1,244,300
-------------- -------------- --------------
Net Increase in Cash and Cash Equivalents 147,323 5,250 152,573
Cash and Cash Equivalents -
Beginning of Periods 5,250 - -
-------------- -------------- --------------
Cash and Cash Equivalents - End of
Periods $ 152,573 $ 5,250 $ 152,573
============== ============== ==============
Supplemental Disclosures of Cash Flow Information:
Cash paid during the periods for:
Interest $ - $ - $ -
Income Taxes $ - $ - $ -
Supplementary information on Non-Cash Investing and Financing Activities:
During 1998, a stockholder paid a total of $189,240 on behalf of the Company for:
Legal Fees $ 14,680
Research and Development Costs 18,000
Licensing Fees 20,000
Customer Lists 136,560
--------------
$ 189,240
==============
See Notes to Consolidated Financial Statements.
5
</TABLE>
<PAGE>
INTERACTIVE MARKETING TECHNOLOGY, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[Information as of and for the Period March 1, 1999 through November 30, 1999
is Unaudited]
___________________________________________________________________________
[1] Nature of Operations
Interactive Marketing Technology, Inc. ["IMT"] was formed on April 21, 1998,
under the laws of the State of New Jersey, however, operations have not yet
commenced. The Company's wholly-owned subsidiary is IMT's Plumber, Inc.,
which was formed February 4, 1999 [See Note 3]. The Company's principal
business activity is to produce, market, and sell throughout the world a
licensed product called the Plumbers Secret [the "product"] [See Note 3]. The
Company commenced selling the product in August of 1999 and will begin
introducing new products in January of 2000.
[2] Summary of Significant Accounting Policies
Principles of Consolidation - The accompanying consolidated financial
statements include the accounts of the Company and its wholly-owned
subsidiary. Intercompany transactions and balances have been eliminated in
consolidation.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents - The Company considers all highly liquid
investments, with a maturity of three months or less when purchased, to be
cash equivalents. At February 28, 1999 and November 30, 1999, the Company did
not have any cash equivalents.
Research and Development Costs - The Company expenses research and development
costs as incurred. For the period ended February 28, 1999 research and
development costs totaled $18,000 for proprietary formulation.
Net [Loss] Per Share - Net [loss] per share is based on the weighted average
number of shares outstanding, reflecting the shares issued in the transaction
[See Note 9B] and the shares reacquired and reflected in treasury stock [See
Note 12C] as outstanding for all periods presented. FASB issued SFAS No. 128,
"Earnings Per Share," in February 1997. SFAS No. 128 simplifies the earnings
per share ["EPS"] calculations required by Accounting Principles Board ["APB"]
Opinion No. 15, and related interpretations, by replacing the presentation of
primary EPS with a presentation of basic EPS. SFAS No. 128 requires dual
presentation of basic and diluted EPS by entities with complex capital
structures. Basic EPS includes no dilution and is computed by dividing income
available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential
dilution of securities that could share in the earnings of an entity, similar
to the fully diluted EPS of APB Opinion No. 15. SFAS No. 128 is effective for
financial statements issued for periods ending after December 15, 1997,
including interim periods; earlier application is not permitted. The Company
adopted SFAS No. 128. Basic EPS is based on average common shares outstanding
and diluted EPS include the effects of potential common stock, such as,
options and warrants, if dilutive. As of February 28, 1999, the Company had
no potentially dilutive securities that would be included in the computation
of diluted earnings per share. Such dilutive securities if issued could
dilute EPS in future years.
Licensing Fees and Customer Lists - Amortization of intangible assets will
begin when operations commence and be over five years using the straight-line
method.
Fixed Assets - Depreciation began in August of 1999 under the straight-line
method over five years.
6
<PAGE>
INTERACTIVE MARKETING TECHNOLOGY, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #2
[Information as of and for the Period March 1, 1999 through November 30, 1999
is Unaudited]
___________________________________________________________________________
[2] Summary of Significant Accounting Policies [Continued]
Impairment - Certain long-term assets of the Company are reviewed when changes
in circumstances require as to whether their carrying value has become
impaired, pursuant to guidance established in Statement of Financial
Accounting Standards ["SFAS"] No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of." Management
considers assets to be impaired if the carrying value exceeds the future
projected cash flows from related operations [undiscounted and without
interest charges]. If impairment is deemed to exist, the assets will be
written down to fair value. Management also reevaluates the periods of
amortization to determine whether subsequent events and circumstances warrant
revised estimates of useful lives. As of February 28, 1999, management
expects these assets to be fully recoverable.
[3] Operating Agreement
The Company's subsidiary, IMT's Plumber, Inc., entered into an operating
agreement in February of 1999 whereby it has a 50.01% interest in the
Plumber's Secret, LLC and all day-to-day management decisions of the operating
entity are to be made by IMT. IMT shall be entitled to 10% of "net cash flow"
as defined as a management fee. IMT, as licensor, has assigned to the limited
liability company a licensing agreement with A2000 USA, Inc. [See Notes 4 and
5]. The other limited liability partner has the right to abandon its interest
if sales from the product are less than $2,000,000 subsequent to the first
year that the infomercial airs on the product [See Note 9A]
[4] Related Party Transactions
[A] Legal fees totaling $14,680 and research and development costs of $18,000
were incurred between October 1, 1997 and June 30, 1998 in connection with the
formation of the business, the licensing agreements, and applications for
patents and trademarks for the product. These costs were paid for by a
stockholder of the Company and were treated as a capital contribution.
[B] A stockholder of the Company paid total licensing fees for the product,
"Plumbers Secret", of $20,000 in June and July of 1998. These payments were
treated as a capital contribution [See Note 5].
[C] A stockholder of the Company remitted his acquisition of the title and
interest in the mailing list of past, current, and future names whereby his
basis of $136,560 was treated as a capital contribution.
[D] In January 1999, a stockholder advanced $5,000 to the Company for working
capital purposes.
[5] Licensing Agreement
In June 1998, the Company entered into a licensing agreement for the exclusive
right to manufacture and or produce, advertise, promote, market or sell
worldwide the product for a royalty per unit for a period of one year. Upon
execution of agreement, $20,000 was paid to the licensor. An additional
$30,000 is to be paid upon successful test marketing that will be utilized as
a credit to future royalties due the licensor for products sold by the
Company.
[6] Equity and Debt Financing
[A] IMT was authorized to issue 2,500 shares of common stock at no par value.
At February 28, 1999, there were 2,500 shares of common stock issued and
outstanding to the founders and there were no options or warrants outstanding.
The stock subscription receivable of $250 was paid in February of 1999. The
2,500 shares were exchanged for 12,404,000 shares of common stock of Shur De
Cor pursuant to the Share Exchange Agreement dated March 15, 1999 [See Note
9B].
7
<PAGE>
INTERACTIVE MARKETING TECHNOLOGY, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #3
[Information as of and for the Period March 1, 1999 through November 30, 1999
is Unaudited]
____________________________________________________________________________
[7] Significant Risks and Uncertainties
[A] Concentrations of Credit Risk - Cash - Financial instruments which
potentially subject the Company to concentrations of credit risk consists of
cash.
The Company places its cash with high credit quality institutions and is
subject to credit risk to the extent it exceeds federally insured limits. At
February 28, 1999, the Company has no cash subject to such risk. The Company
does not require collateral or other security to support financial instruments
subject to credit risk.
[8] Going Concern
The accompany financial statements have been prepared in conformity with
generally accepted accounting principles, which contemplates continuation of
the Company as a going concern and realization of assets and settlement of
liabilities and commitments in the normal course of business.
The Company has not recorded any revenues through February 28, 1999. The
inability of the Company to generate cash from operations, considering
currently available funds, creates an uncertainty about the Company's ability
to continue as a going concern. The financial statements do not include any
adjustments that might be necessary if the Company is unable to continue as a
going concern. The Company is exploring equity financing. The continuation
of the Company as a going concern is dependent upon the success of these
plans.
There can be no assurances that management's plans to reduce operating losses
and to obtain additional financing to fund operations will be successful. The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
[9] Subsequent Events
[A] Amended Operating Agreement - On March 16, 1999, the Company entered into
an amendment of the operating agreement for the limited liability company [See
Note 3]. The initial capital contribution by both members will be
approximately $100,000 each. IMT will commit to lending the limited liability
company up to $150,000. IMT will receive a preferred return on its capital
contribution. Under a service agreement, $100,000 will be paid to the other
limited liability member [Vila Enterprises, LLC] for advertising and promoting
the product in an infomercial. In addition, the first $100,000 in profits
from the limited liability company will be allocated to Vila Enterprises and
then profits will be distributed to the members according to the terms of the
first agreement.
[B] Share Exchange Agreement - On March 15, 1999, the Company ["IMT"] entered
into a share exchange agreement with Shur De Cor, Inc. whereby 100% of the
Company's common stock, or 2,500 shares, were exchanged for 12,404,000 shares
of common stock of Shur De Cor, Inc. For accounting purposes, the acquisition
is being treated as an issuance of shares for cash by the Company, with the
Company as the acquirer. Shares of 12,404,000 issued in the acquisition are
shown as outstanding for all periods presented in these financial statements
in the same manner as for a stock split. The acquired equity of Shur De Cor,
Inc. is included in the Company's financial statements at the date of
acquisition. Pro forma information on this transaction is not presented as,
at the date of this transaction, Shur De Cor, Inc. was considered a public
shell and accordingly, the transaction will not be considered a business
combination. On March 24, 1999, Shur De Cor, Inc. changed its name to
Interactive Marketing Technology, Inc. and increase its authorized capital
stock from 20,000,000 to 60,000,000 common shares.
8
<PAGE>
INTERACTIVE MARKETING TECHNOLOGY, INC.
[A DEVELOPMENT STAGE COMPANY]
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Sheet #4
[Information as of and for the Period March 1, 1999 through November 30, 1999
is Unaudited]
_____________________________________________________________________________
[10] New Authoritative Accounting Pronouncements
The Financial Accounting Standard Board ["FASB"] has issued Statement of
Financial Accounting Standards No. 133 ["SFAS No. 133"], "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133 establishes
accounting and reporting standards for derivative instruments, including
certain derivative instruments embedded in other contracts and for hedging
activities. SFAS No. 133 requires that an entity recognize all derivatives as
either assets or liabilities in the statement of financial position and
measure those instruments at fair value. The accounting for changes in the
fair value of a derivative depends on the intended use of the derivative and
how it its designated, for example, gain or losses related to changes in the
fair value of a derivative not designated as a hedging instrument is
recognized in earnings in the period of the change, while certain types of
hedges may be initially reported as a component of other comprehensive income
[outside earnings] until the consummation of the underlying transaction.
SFAS No. 133 is effective for all fiscal quarters of fiscal years beginning
after June 15, 2000. Initial application of SFAS No. 133 should be as of the
beginning of a fiscal quarter; on that date, hedging relationships must be
designated anew and documented pursuant to the provisions of SFAS No. 133.
Earlier application of all of the provisions of SFAS No. 133 is encouraged,
but it is permitted only as of the beginning of any fiscal quarter. SFAS No.
133 is not to be applied retroactively to financial statements of prior
periods.
The Company does not currently have any derivative instruments and is not
currently engaged in any hedging activities.
[11] Unaudited Interim Statements
The financial statements as of November 30, 1999 and for the nine months ended
November 30, 1999 are unaudited; however in the opinion of management all
adjustments [consisting solely of normal recurring adjustments] necessary to
make the interim financial statements not misleading have been made. The
results of the interim period are not necessarily indicative of the results to
be obtained for a full fiscal year.
[12] Subsequent Events [Unaudited]
[A] Equity Financing - In November of 1999, the Company received proceeds of
$245,000 for the issuance of 295,000 shares of the Company's common stock.
[B] Acquisition of Master Recordings - In November of 1999, the Company
purchased 5,000 master audio recordings from an unrelated entity by the
issuance of 2,000,000 shares of the Company's common stock valued at
$1,600,000.
[C] Treasury Stock - In November of 1999, two of the Company's officers and
directors returned a total of 5,354,000 shares of the Company's common stock
for no compensation. The Company recorded this transaction at estimated fair
value of approximately $4,400,000 based upon the issuance of 295,000 shares of
common stock at approximately $.83 per share in November 1999 [See Note 12A].
The effect of this transaction has been reflected retroactively in the
financial statements for all periods presented.
[D] Equity Financing - In April of 1999, the Company received total proceeds
of $949,050 from the sale of 285,000 shares of common stock from two foreign
investors.
[E] Debt Financing - In April 1999, the Company received note proceeds of
$50,000 from a stockholder. The note is due April 2001 with interest at 10%
per annum.
9
<PAGE>
THE PLUMBER'S SECRET, L.L.C.
_________________________________________________________________________
BALANCE SHEET AS OF NOVEMBER 30, 1999.
[UNAUDITED]
_________________________________________________________________________
Assets:
Current Assets:
Cash $ 8,578
Accounts Receivable 352,800
Inventory 198,400
Loan Receivable - Member 150,000
Other Current Assets 14,305
------------
Total Current Assets 724,083
------------
Molds - Net 48,548
------------
Non-Current Assets:
Licensing Fees 20,000
Patents 15,000
Security Deposit 5,500
------------
Total Non-Current Assets 40,500
------------
Total Assets $ 813,131
============
Liabilities and Members' [Deficit] Accumulated During the Development Stage:
Current Liabilities:
Accounts Payable $ 200,356
Loan Payable - Member 150,000
Due to IMT 492,290
------------
Total Current Liabilities 842,646
------------
Members' Equity [Deficit]:
Capital Contribution 200,000
Member's Deficit Accumulated During
the Development Stage (229,515)
------------
Total Members' [Deficit] Accumulated
During the Development Stage (29,515)
------------
Total Liabilities and Members'
[Deficit] Accumulated During the
Development Stage $ 813,131
============
See Notes to Financial Statements.
10
<PAGE>
THE PLUMBER'S SECRET, L.L.C.
_________________________________________________________________________
STATEMENT OF OPERATIONS FOR THE PERIOD FEBRUARY 4, 1999 THROUGH
NOVEMBER 30, 1999.
[UNAUDITED]
_________________________________________________________________________
Revenues $ 556,489
--------------
Costs and Expenses:
Cost of Revenues 458,281
Travel and Entertainment 101,644
Payroll and Related Costs 143,247
Depreciation 3,952
Office Expense 10,641
Advertising 51,099
Insurance 12,440
Professional Fees 4,700
--------------
Total Costs and Expenses 786,004
--------------
Loss from Operations (229,515)
--------------
Net [Loss] $ (229,515)
==============
See Notes to Financial Statements.
11
<PAGE>
THE PLUMBER'S SECRET, L.L.C.
NOTES TO FINANCIAL STATEMENTS
[UNAUDITED]
_____________________________________________________________________________
On February 4, 1999, the Plumber's Secret, L.L.C. [the "Company"] was formed
as a limited liability company in the State of New Jersey.
On March 16, 1999, the Company entered into an operating agreement whereby
both members of the limited liability company agreed to an initial capital
contribution of approximately $100,000 each. The one limited liability
manager, committed to lend the Company up to $150,000, which was paid in July
of 1999, and will receive a preferred return on its initial capital
contribution of $100,020. Under a service agreement, $100,000 will be paid to
the other limited liability member for advertising and promoting the product
in an infomercial. Distribution of cash from operations will be distributed
to the members according to the terms of the operating agreement.
The Company intends to produce, market and sell throughout the world the Surge
Plunge 2000 [the "Product"]. The Company commenced revenues in August of
1999.
Interactive Marketing Technology, Inc. ["IMT"] entered into a licensing
agreement with a licensor and assigned this license agreement, which cost IMT
$20,000 upon execution of the agreement, to the Company. In addition, the
Company will pay a royalty per unit for a period of one year for products sold
to the licensor.
12
<PAGE>
Shur De Cor, Inc.
Financial Statements
February 28, 1999, December 31, 1998 and 1997
<PAGE>
<PAGE>
C O N T E N T S
Independent Auditors' Report..............................3
Balance Sheets .......................................... 4
Statements of Operations ................................ 5
Statements of Stockholders' Equity....................... 6
Statements of Cash Flows ................................ 8
Notes to the Financial Statements ........................9
<PAGE>
CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
Office (801) 363-1175
Fax (801) 363-0615
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
of Shur De Cor, Inc.
We have audited the accompanying balance sheets of Shur De Cor, Inc. (a
development stage company) as of February 28, 1999 and December 31, 1998 and
the related statements of operations, stockholders' equity and cash flows for
the two months ended February 28, 1999 and for the year ended 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 audits. The financial statements of Shur De Cor, Inc.
for the period ended December 31, 1997 and from inception at August 14, 1987
through June 30, 1998 were audited by other auditors whose report dated August
8, 1998, expressed an unqualified opinion on these statements.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statement 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 included assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Shur De Cor, Inc. (a
development stage company) as of February 28, 1999 and December 31, 1998 and
the results of its operations and cash flows for the two months ended February
28, 1999 and for the year ended December 31, 1998 and from inception on August
14, 1987 through February 28, 1999 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has suffered recurring
losses from operations which raises substantial doubt about its ability to
continue as a going concern. Management's plans in regard to these matters
are described in Note 2. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
/s/ Crouch, Bierwolf & Chisholm
Salt Lake City, Utah
March 29, 1999
<PAGE>
Shur De Cor, Inc.
(A Development Stage Company)
Balance Sheets
ASSETS
------
December 31,
February 28, --------------------------
1999 1998 1997
------------- ------------ -------------
Cash (Note 1) $ - $ - $ 2,495
Cash in Escrow (Note 5) 50,000 - -
------------- ------------ -------------
TOTAL ASSETS $ 50,000 $ - $ 2,495
============= ============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES
Accounts payable $ - $ - $ -
------------- ------------ -------------
Total Liabilities - - -
------------- ------------ -------------
STOCKHOLDERS' EQUITY
Common stock, $.001 par value;
20,000,000 shares authorized;
3,101,000, 1,051,000 and 991,000
shares issued and outstanding,
respectively 3,101 1,051 991
Additional paid-in capital 51,960 3,510 2,970
Deficit Accumulated during the
development stage (5,061) (4,561) (1,466)
------------- ------------ -------------
Total Stockholders' Equity 50,000 - 2,495
------------- ------------ -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 50,000 $ - $ -
============= ============ =============
The accompanying notes are an integral part of these financial statements
-4-
<PAGE>
Shur De Cor, Inc.
(A Development Stage Company)
Statements of Operations
<TABLE>
<CAPTION>
Two From
months Inception on
ended For the Years Ended August 14,1987
February 28, December 31, to February 28,
1999 1998 1997 1996 1999
----------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
REVENUES $ - $ - $ - $ - $ -
----------- ---------- ---------- ---------- --------------
EXPENSES
General & Administrative 500 3,095 205 495 5,061
----------- ---------- ---------- ---------- --------------
TOTAL EXPENSES 500 3,095 205 495 5,061
----------- ---------- ---------- ---------- --------------
NET LOSS $ (500) $ (3,095) $ (205) $ (495) $ (5,061)
=========== ========== ========== ========== ==============
LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00) $ (0.00) $ (0.01)
=========== ========== ========== ========== ==============
WEIGHTED AVERAGE SHARES
OUTSTANDING 1,527,724 992,484 991,000 991,000 786,950
=========== ========== ========== ========== ==============
The accompany notes are an integral part of these financial statements.
-5-
</TABLE>
<PAGE>
Shur De Cor, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on August 14, 1987 through February 28, 1999
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
--------------------- Paid-in Development
Shares Amount Capital Stage
------------ --------- ---------- -----------
<S> <C> <C> <C> <C>
Balance at inception on August 14, 1987 - $ - $ - $ -
Issuance of common stock to directors
for cash at $.004 per share 240,000 240 717 -
Issuance of common stock to investors
for cash at $.004 per share 220,000 220 658 -
Net (loss) from inception to
December 31, 1988 - - - (80)
Issuance of common stock to investors
for cash at $.004 per share 260,000 260 777 -
Issuance of common stock to directors
for services at $.004 per share 1,000 1 3 -
Net (loss) for the year ended
December 31, 1989 - - - (3)
Issuance of common stock to directors
for services at $.004 per share 2,000 2 6 -
Net (loss) for the year ended
December 31, 1990 - - - (86)
Net (loss) for the year ended
December 31, 1991 - - - -
Issuance of common stock to directors
for services at $.004 per share 4,000 4 16 -
Net (loss) for the year ended
December 31, 1992 - - - (16)
Issuance of common stock to investors
for cash at $.004 per share 260,000 260 777 -
Issuance of common stock to directors
for services at $.004 per share 4,000 4 16 -
Net (loss) for the year ended
December 31, 1993 - - - (581)
------------ --------- ---------- -----------
Balance - December 31, 1993 991,000 991 2,970 (766)
Net (loss) for the year ended
December 31, 1994 - - - -
------------ --------- ---------- -----------
Balance - December 31, 1994 991,000 991 2,970 (766)
Net (loss) for the year ended
December 31, 1995 - - - -
------------ --------- ---------- -----------
Balance - December 31, 1995 991,000 991 2,970 (766)
Net (loss) for the year ended
December 31, 1996 - - - (495)
------------ --------- ---------- -----------
Balance - December 31, 1996 991,000 991 2,970 (1,261)
Net (loss) for the year ended
December 31, 1997 - - - (205)
------------ --------- ---------- -----------
Balance - December 31, 1997 991,000 991 2,970 (1,466)
Issuance of common stock to
directors for services at $.01
per share 60,000 60 540 -
Net (loss) for the year ended
December 31, 1998 - - - (3,095)
------------ --------- ---------- -----------
Balance - December 31, 1998 1,051,000 1,051 3,510 (4,561)
(continued)
The accompanying notes are an integral part of these financial statements.
-6-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shur De Cor, Inc.
(A Development Stage Company)
Statements of Stockholders' Equity
From Inception on August 14, 1987 through February 28, 1999
Deficit
Accumulated
Common Stock Additional During the
--------------------- Paid-in Development
Shares Amount Capital Stage
------------ --------- ---------- -----------
<S> <C> <C> <C> <C>
Balance - December 31, 1998 1,051,000 $ 1,051 $ 3,510 $ (4,561)
Issuance of common stock for services
at $.01 per share 50,000 50 450 -
Issuance of common stock to investors
for cash at $.025 per share 2,000,000 2,000 48,000 -
Net (loss) for the two month period
ended February 28, 1999 - - - (500)
------------ --------- ---------- -----------
Balance - February 28, 1999 3,101,000 $ 3,101 $ 51,960 $ (5,061)
============ ========= ========== ===========
The accompanying notes are an integral part of these financial statements.
-7-
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shur De Cor, Inc.
(A Development Stage Company)
Statements of Cash Flows
From
Inception on
For the two August 14, 1987
Months ended For the Years Ended Through
February 28, December 31, February 28,
1999 1998 1997 1996 1999
----------- ---------- ---------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $ (500) $ (3,095) $ (205) $ (495) $ (5,061)
Less non-cash items:
Stock issued for services 500 600 - - 1,152
----------- ---------- ---------- ---------- --------------
Net Cash Provided (Used) by
Operating Activities - (2,495) (205) (495) (3,909)
----------- ---------- ---------- ---------- --------------
Cash Flows from Investing Activities
Net Cash Provided (Used) by
Investing Activities - - - - -
----------- ---------- ---------- ---------- --------------
Cash Flows from Financing Activities
Issuance of common stock 50,000 - - - 53,909
----------- ---------- ---------- ---------- --------------
Net Cash Provided (Used) by
Financing Activities - - - - 53,909
----------- ---------- ---------- ---------- --------------
Net Increase/(Decrease) in Cash 50,000 (2,495) (205) (495) -
----------- ---------- ---------- ---------- --------------
Cash and Cash Equivalents at
Beginning of Period - 2,495 2,700 3,195 -
----------- ---------- ---------- ---------- --------------
Cash and Cash Equivalents at
End of Period $ 50,000 $ - $ 2,495 $ 2,700 $ 50,000
=========== ========== ========== ========== ==============
Supplemental Non-Cash Financing Transactions:
Stock issued for services $ 500 $ 600 - $ - $ 1,152
Cash paid for:
Interest $ - $ - $ - $ - $ -
Income taxes $ - $ - $ - $ - $ -
The accompanying notes are an integral part of these financial statements.
-8-
</TABLE>
<PAGE>
Shur De Cor, Inc.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999, December 31, 1998 and 1997
NOTE 1 - Summary Of Significant Accounting Policies
a. Organization
Shur De Cor, Inc. (the Company), was incorporated under the laws of the
State of Nevada on August 14, 1987. The Company is currently seeking new
business opportunities believed to hold a potential profit or to merge with an
existing company. The Company has been inactive since its inception and is
considered a development stage company.
b. Recognition of Revenue
The Company recognizes income and expense on the accrual basis of
accounting.
c. Earnings (Loss) Per Share
The computation of earnings per share of common stock is based on the
weighted average number of shares outstanding at the date of the financial
statements.
d. Cash and Cash Equivalents
The company considers all highly liquid investments with maturities of
three months or less to be cash equivalents.
e. Provision for Income Taxes
No provision for income taxes have been recorded due to net operating
loss carryforwards totaling approximately $5,061 that will be offset against
future taxable income. These NOL carryforwards will begin to expire in the
year 2003. No tax benefit has been reported in the financial statements
because the Company believes there is a 50% or greater chance the carryforward
will expire unused.
Deferred tax asset and the valuation account is as follows at February
28, 1999 December 31, 1998 and 1997:
February 28, December 31,
1999 1998 1997
-------------- -------------- -------------
Deferred tax asset:
NOL carryforward $ 1,721 $ 1,551 $ 499
Valuation allowance (1,721) (1,551) (499)
-------------- -------------- ------------
$ - $ - $ -
============== ============== ============
-9-
<PAGE>
Shur De Cor, Inc.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999, December 31, 1998 and 1997
NOTE 1 - Summary Of Significant Accounting Policies (continued)
f. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statement and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
NOTE 2 - Going Concern
The accompanying financial statements have been prepared assuming that
the company will continue as a going concern. The company has had recurring
operating losses for the past several years and is dependent upon financing to
continue operations. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty. It is management's
plan to find an operating company to merge with, thus creating necessary
operating revenue.
NOTE 3 - Capitalization
On February 19, 1988, the Company issued 240,000 shares of common stock
to directors for $957 in cash.
On October 28, 1988, the Company issued 220,000 shares of common stock
to shareholders for $878 in cash.
On October 27, 1989, the Company issued 1,000 shares of common stock to
past directors for services rendered valued at $4 and 260,000 shares of common
stock issued to shareholders for $1,037 in cash.
On October 26, 1990, the Company issued 2,000 shares of common stock to
past directors for services rendered, valued at $8.
On October 30, 1992, the Company issued 4,000 shares of common stock to
past directors for services rendered, valued at $20.
On February 5, 1993, the Company issued 260,000 shares of common stock
to shareholders for $1,037 in cash.
On October 22, 1993, the Company issued 4,000 shares of common stock to
past directors for services valued at $20.
-10-
<PAGE>
Shur De Cor, Inc.
(A Development Stage Company)
Notes to the Financial Statements
February 28, 1999, December 31, 1998 and 1997
NOTE 3 - Capitalization (continued)
On December 22, 1998, the Company issued 60,000 shares of common stock
to directors for services valued at $600.
On January 26, 1999, the Company issued 50,000 shares of common stock to
individuals for services valued at $500.
On February 15, 1999 the Company issued 2,000,000 shares of common stock
to investors for cash of $50,000.
NOTE 4 - Development Stage Company
The Company is a development stage company as defined in Financial
Accounting Standards Board Statement No. 7. It is concentrating substantially
all of its efforts in raising capital and searching for a business operation
with which to merge, or assets to acquire, in order to generate significant
operations.
NOTE 5 - Cash in Escrow
The Company received $50,000 in connection with a stock issuance in
February 1999. The $50,000 is being held in an escrow account.
NOTE 6 - Subsequent Events
In March, 1999, a 2 for 1 forward stock split was approved, and the
Company entered into a share exchange agreement with Interactive Marketing
Technology, Inc. (Interactive) whereby 12,404,000 shares of the Company's
common stock were exchanged for all 2,500 shares of common stock of
Interactive Marketing Technology, Inc. Subsequent to this reverse
acquisition, the Company changed its name to Interactive Marketing
Technology, Inc. and increased its authorized capital stock from 20,000,000 to
60,000,000 common shares.
Interactive was formed on April 21, 1998 under the laws of the State of
New Jersey and has not yet commenced operations. Interactive holds a license
agreement for exclusive rights to manufacture, produce, advertise and sell a
product called the Plumbers Secret.
-11-
<PAGE>
PART III
ITEM 1: INDEX TO AND DESCRIPTION OF EXHIBITS
Exhibit Number Description
- -------------- ------------
2.1 Articles of Incorporation of Shur De Cor, Inc., dated August
14, 1987.
2.2 Articles of Merger filed April 7, 1999.
2.3 Bylaws of Interactive Marketing
6 Lease Agreement between E.P. Investments and Interactive
Marketing, dated May 10, 1999
8 Agreement and Plan of Merger between Interactive Marketing
and Shur De Cor, Inc., dated March 24, 1999.
16 Letter of agreement from Crouch, Bierwolf & Chisholm, dated
January 13, 2000.
27 Financial Data Schedule
________________________
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, who are duly authorized.
1/4/00
Date _________________. INTERACTIVE MARKETING TECHNOLOGY, INC.
/s/ Sandy Lang
By: __________________________________________
Sandy Lang, President and CEO
<August 14, 1987 Date stamp for the Secretary of State for the
State of Nevada appears here>
ARTICLES OF INCORPORATION
OF
SHUR DE COR, INC.
I. NAME: The name of the corporation is: SHUR DE COR, INC.
II. Principal Office: The location of the principal office of this
corporation within the State of Nevada is located at:
c/o Kay Carter, 1372 Idaho Street, Elko, Nevada 89801
III. Purpose: The purpose for which this corporation is formed is to engage
in any lawful activity.
IV. AUTHORIZATION OF CAPITAL STOCK: The amount of the total authorization of
capital stock of the corporation shall be TWENTY THOUSAND DOLLARS ($20,000),
consisting of twenty million (20,000,000) shares of common stock with a par
value of ONE TENTH OF ONE CENT ($0.00) per share.
V. INCORPORATORS: The name and address of the incorporators signing these
Articles of Incorporation are as follows:
Shuree L. Gates 96 West 6480 South
Murray, Utah 84107
(Initial number of shareholders will be less than three)
VI. DIRECTORS: The governing board of this corporation shall be known as
directors, and the number of directors may from time to time be increased or
decreased in such manner as shall be specified by the By-Laws of the
corporation; provided, however, the number of directors shall not be reduced
to less than one (1).
The name and address of the directors comprising the first Board of Directors
is as follows:
Shurless L. Gates 96 West 6480 South
Murray, Utah 84107
(Initial number of shareholders will be less than three)
The name of and residence address within the State of Nevada of this
Corporation's initial resident agent shall be: Kay Carter, 1372 Idaho Street,
Elko, Nevada 89801.
VII. STOCK NON-ASSESSABLE: The capital stock or holder thereof, after the
amount of the subscription price has been paid in, shall not be subject to any
assessment whatsoever to pay the debts of the corporation.
VIII. TERM OF EXISTENCE: This corporation shall have perpetual existence.
IX. CUMULATIVE VOTING: No cumulative voting shall be permitted in the
election of Directors.
X. PREEMPTIVE RIGHTS: Stockholders shall not be entitled to preemptive
rights.
THE UNDERSIGNED, being the incorporator hereinbefore named for the purpose of
forming a corporation pursuant to the General Corporation Laws of the State of
Nevada, does make and file these Articles of Incorporation, hereby declaring
and certifying the facts stated are true, and accordingly has hereunto set her
name this 31st day of July, 1987.
/s/ Shuree L. Gates
- -------------------
Shuree L. Gates
STATE OF UTAH )
) .ss
COUNTY OF SALT LAKE )
I, Ben Russo, a Notary Public, hereby certify that on the 31st day of
July, 1987, Shuree L. Gates personally appeared bebore me who, being first
duly sworn, severally declared that she is the person who signed the foregoing
document as incorporator and that the statements therein contained are true.
STATE OF UTAH )
) .ss
COUNTY OF SALT LAKE )
DATED this 31st day of July, 1987.
My Commission expires:
2-10-89
/s/ Ben Russo
- ----------------------------------
Notary Public
Residing is Salt Lake County, Utah.
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
APR 07 1999
NO. C 6267-87
/s/ Dean Heller
DEAN HELLER, SECRETARY OF STATE
ARTICLES OF MERGER FOR
SHUR DE COR, INC.,
A NEVADA CORPORATION
Pursuant to the provisions of Section 92A.200 of the Nevada Revised
Statutes, Shur De Cor, Inc., a Nevada corporation (the "Corporation"), hereby
adopts and files the following Articles of Merger as the surviving corporation
to the merger of Interactive Marketing Technology, Inc., a New Jersey
corporation ("IMT"), with and into the Corporation:
FIRST: The name and place of incorporation of each corporation which is
a party to this merger is as follows:
Name Place of Incorporation
Shur De Cor, Inc. Nevada
Interactive Marketing Technology, Inc. New Jersey
SECOND: The Agreement and Plan of Merger (the "Plan") governing the
merger between the Corporation and IMT, has been adopted by the Board of
Directors of the Corporation and IMT.
THIRD: The approval of the shareholders of the Corporation and IMT was
required to effectuate the merger. The number of shares of stock outstanding
in each of the corporations (and the number of votes entitled to be cast) as
of the date of the adoption of the Plan was as follows:
Entity Type of Shares Number of Shares Outstanding
- --------------- -------------- ------------------------------
Shur De Cor, Inc. Common 1,051,000
Interactive Marketing
Technology, Inc. Common 2,500
The number of shares of stock of each corporation which voted for and
against the Plan was as follows:
Entity Type of Shares For Against
- ------------------ -------------- ------ ----------
Shur De Cor, Inc. Common 649,590 0
Interactive Marketing
Technology, Inc. Common 2,500 0
FOURTH: The number of votes cast for the Plan by each voting group
entitled to vote was sufficient for approval of the merger by each such voting
group.
FIFTH: Following the merger Article I and Article IV to the Articles of
Incorporation of the surviving corporation shall be amended as follows:
A. Delete Article I in its entirety and substitute in its place
the following:
ARTICLE I
The name of the Corporation is Interactive Marketing Technology, Inc.
B. Delete Article IV in its entirety and substitute in its place
the following:
ARTICLE IV
The amount of the total authorized capital stock of the Corporation
is 60,000,000 shares of common stock, par value $.001 per share. Each share
of common stock shall have one (1) vote. Such stock may be issued from time
to time without any action by the stockholders for such consideration as may
be fixed from time to time by the Board of Directors, and shares so issued,
the full consideration for which has been paid or delivered, shall be deemed
the full paid up stock, and the holder of such shares shall not be liable for
any further payment thereof. Said stock shall not be subject to assessment to
pay the debts of the Corporation, and no paid-up stock and no stock issued as
fully paid, shall ever be assessed or assessable by the Corporation.
The Corporation is authorized to issue 60,000,000 shares of common
stock, par value $.001 per share.
SIXTH: The complete executed Plan is on file at the registered office
or other place of business of the Corporation.
SEVENTH: A copy of the Plan will be furnished by the Corporation, on
request and without cost, to any shareholder of either corporation which is a
party to the merger.
EIGHTH: The merger will be effective upon the filing of the Articles of
Merger.
DATED this 25th day of March 1999.
SHUR DE COR, INC., a Nevada corporation
/s/ James R. Glavas
By_______________________________________
James R. Glavas, President
/s/ Martin L. Smith
By _______________________________________
Martin L. Smart, Secretary/Treasurer
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
On the 25th day of March, 1999, personally appeared before me James R.
Glavas and Martin L. Smart personally known to me or proved to me on the basis
of satisfactory evidence, and who, being by me duly sworn, did say that they
are the President and Secretary/Treasurer of Shur De Cor, Inc., and that said
document was signed by them on behalf of said corporation by authority of its
bylaws, and said James R. Glavas and Martin L. Smart acknowledged to me that
said corporation executed the same.
/s/ John Clayton
___________________________________________
NOTARY PUBLIC
<Notary stamp of
John Clayton appears here>
AMENDED AND RESTATED
BYLAWS
OF
INTERACTIVE MARKETING, INC.
ARTICLE 1. OFFICES
1.1 Business Office. The principal office of the corporation shall be
located at any place either within or outside the State of Nevada as
designated in the corporation's most recent document on file with the Nevada
Secretary of State, Division of Corporations. The corporation may have such
other offices, either within or without the State of Nevada as the board of
directors may designate or as the business of the corporation may require from
time to time.
1.2 Registered Office. The registered office of the corporation shall
be located within the State of Nevada and may be, but need not be, identical
with the principal office. The address of the registered office may be
changed from time to time.
ARTICLE 2. SHAREHOLDERS
2.1 Annual Shareholder Meeting. The annual meeting of the shareholders
shall be held on the 1st day of November, at a date and time to be specified
by the Board of Directors, for the purpose of electing directors and for the
transaction of such other business as may come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday in the State of Nevada,
such meeting shall be held on the next succeeding business day.
2.2 Special Shareholder Meeting. Special meetings of the shareholders,
for any purpose or purposes described in the meeting notice, may be called by
the president, or by the board of directors, and shall be called by the
president at the request of the holders of not less than one-fourth of all
outstanding votes of the corporation entitled to be cast on any issue at the
meeting.
2.3 Place of Shareholder Meeting. The board of directors may designate
any place, either within or without the State of Nevada, as the place of
meeting for any annual or any special meeting of the shareholders, unless by
written consent, which may be in the form of waivers of notice or otherwise,
all shareholders entitled to vote at the meeting designate a different place,
either within or without the State of Nevada, as the place for the holding of
such meeting.
2.4 Notice of Shareholder Meeting. Written notice stating the date,
time, and place of any annual or special shareholder meeting shall be
delivered not less than 10 nor more than 60 days before the date of the
meeting, either personally or by mail, by or at the direction of the
President, the board of directors, or other persons calling the meeting, to
each shareholder of record entitled to vote at such meeting and to any other
shareholder entitled by the Nevada Revised Statutes (the "Statutes") or the
articles of incorporation to receive notice of the meeting. Notice shall be
deemed to be effective at the earlier of: (1) when deposited in the United
States mail, addressed to the shareholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid; (2) on
the date shown on the return receipt if sent by registered or certified mail,
return receipt requested, and the receipt is signed by or on behalf of the
addressee; (3) when received; or (4) 3 days after deposit in the United States
mail, if mailed postpaid and correctly addressed to an address other than that
shown in the corporation's current record of shareholders.
If any shareholder meeting is adjourned to a different date, time or
place, notice need not be given of the new date, time and place, if the new
date, time and place is announced at the meeting before adjournment. But if
the adjournment is for more than 30 days or if a new record date for the
adjourned meeting is or must be fixed, then notice must be given pursuant to
the requirements of the previous paragraph, to those persons who are
shareholders as of the new record date.
2.5 Waiver of Notice. A shareholder may waive any notice required by
the Statutes, the articles of incorporation, or these bylaws, by a writing
signed by the shareholder entitled to the notice, which is delivered to the
corporation (either before or after the date and time stated in the notice)
for inclusion in the minutes or filing with the corporate records.
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 because of lack of
notice or effective notice; and
(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.
2.6 Fixing of Record Date. For the purpose of determining shareholders
of any voting group entitled to notice of or to vote at any meeting of
shareholders, or shareholders entitled to receive payment of any distribution,
or in order to make a determination of shareholders for any other proper
purpose, the board of directors may fix in advance a date as the record date.
Such record date shall not be more than 70 days prior to the date on which the
particular action, requiring such determination of shareholders, is to be
taken. If no record date is so fixed by the board for the determination of
shareholders entitled to notice of, or to vote at a meeting of shareholders,
the record date for determination of such shareholders shall be at the close
of business on the day the first notice is delivered to shareholders. If no
record date is fixed by the board for the determination of shareholders
entitled to receive a distribution, the record date shall be the date the
board authorizes the distribution. With respect to actions taken in writing
without a meeting, the record date shall be the date the first shareholder
signs the consent.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination
shall apply to any adjournment thereof unless the board of directors fixes a
new record date which it must do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
2.7 Shareholder List. After fixing a record date for a shareholder
meeting, the corporation shall prepare a list of the names of its shareholders
entitled to be given notice of the meeting. The shareholder list must be
available for inspection by any shareholder, beginning on the earlier of 10
days before the meeting for which the list was prepared or 2 business days
after notice of the meeting is given for which the list was prepared and
continuing through the meeting, and any adjournment thereof. The list shall
be available at the corporation's principal office or at a place identified in
the meeting notice in the city where the meeting is to be held.
2.8 Shareholder Quorum and Voting Requirements.
2.8.1 Quorum. Except as otherwise required by the Statutes or the
articles of incorporation, a majority of the outstanding shares of the
corporation, represented by person or by proxy, shall constitute a quorum at
each meeting of the shareholders. If a quorum exists, action on a matter,
other than the election of directors, is approved if the votes cast favoring
the action exceed the votes cast opposing the action, unless the articles of
incorporation or the Statutes require a greater number of affirmative votes.
2.8.2 Voting of Shares. Unless otherwise provided in the articles
of incorporation or these bylaws, each outstanding share, regardless of class,
is entitled to one vote upon each matter submitted to a vote at a meeting of
shareholders.
2.9 Quorum and Voting requirements of Voting Groups. If the articles of
incorporation or the Statutes provide for voting by a single voting group on a
matter, action on that matter is taken when voted upon by that voting group.
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.
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 Statutes provide
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.
If the articles of incorporation or the Statutes provide 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. 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.
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 Statutes require a greater number of
affirmative votes.
2.10 Greater Quorum or Voting Requirements. The articles of
incorporation may provide for a greater quorum or voting requirement for
shareholders, or voting groups of shareholders, than is provided for by these
bylaws. An amendment to the articles of incorporation that adds, changes, or
deletes a greater quorum or voting requirement for shareholders 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 requirement then in effect
or proposed to be adopted, whichever is greater.
2.11 Proxies. At all meetings of shareholders, a shareholder may vote
in person or by proxy which is executed in writing by the shareholder or which
is executed by his duly authorized attorney-in-fact. Such proxy shall be
filed with the Secretary of the corporation or other person authorized to
tabulate votes before or at the time of the meeting. No proxy shall be valid
after 11 months from the date of its execution unless otherwise provided in
the proxy. All proxies are revocable unless they meet specific requirements
of irrevocability set forth in the Statutes. The death or incapacity of a
voter does not invalidate a proxy unless the corporation is put on notice. A
transferee for value who receives shares subject to an irrevocable proxy, can
revoke the proxy if he had no notice of the proxy.
2.12 Corporation's Acceptance of Votes.
2.12.1 If the name signed on a vote, consent, waiver, proxy
appointment, or proxy appointment revocation corresponds to the name of a
shareholder, the corporation, if acting in good faith, is entitled to accept
the vote, consent, waiver, proxy appointment, or proxy appointment revocation
and give it effect as the act of the shareholder.
2.12.2 If the name signed on a vote, consent, waiver, proxy
appointment, or proxy appointment revocation does not correspond to the name
of a shareholder, the corporation, if acting in good faith, is nevertheless
entitled to accept the vote, consent, waiver, proxy appointment, or proxy
appointment revocation and give it effect as the act of the shareholder if:
(a) the shareholder is an entity as defined in the Statutes
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, 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,
proxy appointment or proxy appointment revocation;
(c) the name signed purports to be that of a receiver or
trustee in bankruptcy 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, proxy appointment, or proxy appointment
revocation; or
(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, proxy appointment or proxy appointment
revocation; or
(e) two or more persons are the shareholder as co-tenants 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
co-tenants or fiduciaries.
2.12.3 If shares are registered in the names of two or more
persons, whether fiduciaries, members of a partnership, co-tenants, husband
and wife as community property, voting trustees, persons entitled to vote
under a shareholder voting agreement or otherwise, or if two or more persons
(including proxy holders) have the same fiduciary relationship respecting the
same shares, unless the secretary of the corporation or other officer or agent
entitled to tabulate votes is given written notice to the contrary and is
furnished with a copy of the instrument or order appointing them or creating
the relationship wherein it is so provided, their acts with respect to voting
shall have the following effect:
(a) if only one votes, such act binds all;
(b) if more than one votes, the act of the majority so voting
bind all;
(c) if more than one votes, but the vote is evenly split on
any particular matter, each fraction may vote the securities in question
proportionately.
If the instrument so filed or the registration of the shares shows that
any tenancy is held in unequal interests, a majority or even split for
the purpose of this Section shall be a majority or even split in
interest.
2.12.4 The corporation is entitled to reject a vote, consent,
waiver, proxy appointment or proxy appointment revocation 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.
2.12.5 The corporation and its officer or agent who accepts or
rejects a vote, consent, waiver, proxy appointment or proxy appointment
revocation 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.
2.12.6 Corporate action based on the acceptance or rejection of a
vote, consent, waiver, proxy appointment or proxy appointment revocation under
this Section is valid unless a court of competent jurisdiction determines
otherwise.
2.13 Action by Shareholders Without a Meeting.
2.13.1 Written Consent. Any action required or permitted to be
taken at a meeting of the shareholders may be taken without a meeting and
without prior notice if one or more consents in writing, setting forth the
action so taken, shall be signed by the holders of outstanding shares having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shareholders entitled to vote
with respect to the subject matter thereof were present and voted. Action
taken under this Section has the same effect as action taken at a duly called
and convened meeting of shareholders and may be described as such in any
document.
2.13.2 Post-Consent Notice. Unless the written consents of all
shareholders entitled to vote have been obtained, notice of any shareholder
approval without a meeting shall be given at least ten days before the
consummation of the action authorized by such approval to (i) those
shareholders entitled to vote who did not consent in writing, and (ii) those
shareholders not entitled to vote. Any such notice must be accompanied by the
same material that is required under the Statutes to be sent in a notice of
meeting at which the proposed action would have been submitted to the
shareholders for action.
2.13.3 Effective Date and Revocation of Consents. No action taken
pursuant to this Section shall be effective unless all written consents
necessary to support the action are received by the corporation within a
sixty-day period and not revoked. Such action is effective as of the date the
last written consent is received necessary to effect the action, unless all of
the written consents specify an earlier or later date as the effective date of
the action. Any shareholder giving a written consent pursuant to this Section
may revoke the consent by a signed writing describing the action and stating
that the consent is revoked, provided that such writing is received by the
corporation prior to the effective date of the action.
2.13.4 Unanimous Consent for Election of Directors.
Notwithstanding subsection (a), directors may not be elected by written
consent unless such consent is unanimous by all shares entitled to vote for
the election of directors.
2.14 Voting for Directors. Unless otherwise provided in the articles of
incorporation, every shareholder entitled to vote for the election of
directors has the right to cast, in person or by proxy, all of the votes to
which the shareholder's shares are entitled for as many persons as there are
directors to be elected and for whom election such shareholder has the right
to vote. 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.
ARTICLE 3. BOARD OF DIRECTORS
3.1 General Powers. Unless the articles of incorporation have dispensed
with or limited the authority of the board of directors by describing who will
perform some or all of the duties of a board of directors, all corporate
powers shall be exercised by or under the authority, and the business and
affairs of the corporation shall be managed under the direction, of the board
of directors.
3.2 Number, Tenure and Qualification of Directions. The authorized
number of directors shall be three (3); provided, however, that if the
corporation has less than three shareholders entitled to vote for the election
of directors, the board of directors may consist of a number of individuals
equal to or greater than the number of those shareholders. The current number
of directors shall be within the limit specified above, as determined (or as
amended form time to time) by a resolution adopted by either the shareholders
or the directors. Each director shall hold office until the next annual
meeting of shareholders or until the director's earlier death, resignation, or
removal. However, if his term expires, he shall continue to serve until his
successor shall have been elected and qualified, or until there is a decrease
in the number of directors. Directors do not need to be residents of Nevada
or shareholders of the corporation.
3.3 Regular Meetings of the Board of Directors. A regular meeting of
the board of directors shall be held without other notice than this bylaw
immediately after, and at the same place as, the annual meeting of
shareholders, for the purpose of appointing officers and transacting such
other business as may come before the meeting. The board of directors may
provide, by resolution, the time and place for the holding of additional
regular meetings without other notice than such resolution.
3.4 Special Meetings of the Board of Directors. Special meetings of the
board of directors may be called by or at the request of the president or any
director. The person authorized to call special meetings of the board of
directors may fix any place as the place for holding any special meeting of
the board of directors.
3.5 Notice of, and Waiver of Notice for, Special Director Meeting.
Unless the articles of incorporation provide for a longer or shorter period,
notice of the date, time, and place of any special director meeting shall be
given at least two days previously thereto either orally or in writing. Any
director may waive notice of any meeting. Except as provided in the next
sentence, the waiver must be in writing and signed by the director entitled to
the notice. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting
for the express purpose of objecting to the transaction of any business and at
the beginning of the meeting (or promptly upon his arrival) objects to holding
the meeting or transacting business at the meeting, and does not thereafter
vote for or assent to action taken at the meeting. Unless required by the
articles of incorporation, neither the business to be transacted at, nor the
purpose of, any special meeting of the board of directors need be specified in
the notice or waiver of notice of such meeting.
3.6 Director Quorum and Voting.
3.6.1 Quorum. A majority of the number of directors prescribed by
resolution shall constitute a quorum for the transaction of business at any
meeting of the board of directors unless the articles of incorporation require
a greater percentage.
Unless the articles of incorporation provide otherwise, any or all
directors may 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.
A director 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: (1) the director objects at the
beginning of the meeting (or promptly upon his arrival) to holding or
transacting business at the meeting and does not thereafter vote for or assent
to any action taken at the meeting; and (2) the director contemporaneously
requests his dissent or abstention as to any specific action be entered in the
minutes of the meeting; or (3) the director causes written notice of his
dissent or abstention as to any specific action be received by the presiding
officer of the meeting before its adjournment or to the corporation
immediately after adjournment of the meeting. The right of dissent or
abstention is not available to a director who votes in favor of the action
taken.
3.7 Director Action Without a Meeting. Any action required or permitted
to be taken by the board of directors at a meeting may be taken without a
meeting if all the directors consent to such action in writing. Action taken
by consent is effective when the last director signs the consent, unless,
prior to such time, any director has revoked a consent by a signed writing
received by the corporation, or unless the consent specifies a different
effective date. A signed consent has the effect of a meeting vote and may be
described as such in any document.
3.8 Resignation of Directors. A director may resign at any time by
giving a written notice of resignation to the corporation. Such resignation
is effective when the notice is received by the corporation, unless the notice
specifies a later effective date.
3.9 Removal of Directors. The shareholders may remove one or more
directors at a meeting called for that purpose if notice has been given that a
purpose of the meeting is such removal. The removal may be with or without
cause unless the articles of incorporation provide that directors may only be
removed with cause. If a director is elected by a voting group of
shareholders, only the shareholders of that voting group may participate in
the vote to remove him. A director may be removed only if the number of votes
cast to remove him exceeds the number of votes cast not to remove him.
3.10 Board of Director Vacancies. Unless the articles of incorporation
provide otherwise, if a vacancy occurs on the board of directors, including a
vacancy resulting from an increase in the number of directors, the
shareholders may fill the vacancy. During such time that the shareholders
fail or are unable to fill such vacancies then and until the shareholders act:
(a) the board of directors may fill the vacancy; or
(b) if the board of directors remaining in office constitute
fewer than a quorum of the board, they may fill the vacancy by the affirmative
vote of a majority of all the directors remaining in office.
If the vacant office was held by a director elected by a voting group of
shareholders:
(a) if there are one or more directors elected by the same
voting group, only such directors are entitled to vote to fill the vacancy if
it is filled by the directors; and
(b) only the holders of shares of that voting group are
entitled to vote to fill the vacancy if it is filled by the shareholders.
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.
3.11 Director Compensation. By resolution of the board of directors,
each director may be paid his expenses, if any, of attendance at each meeting
of the board of directors and may be paid a stated salary as director or a
fixed sum for attendance at each meeting of the board of directors or both.
No such payment shall preclude any director from serving the corporation in
any other capacity and receiving compensation therefor.
3.12 Director Committees.
3.12.1 Creation of Committees. Unless the article sof
incorporation provide otherwise, the board of directors may create one or more
committees and appoint members of the board of directors to serve on them.
Each committee must have one or more members, who shall serve at the pleasure
of the board of directors.
3.12.2 Selection of Members. The creation of a committee and
appointment of members to it must be approved by the greater of (1) a majority
of all the directors in office when the action is taken or (2) the number of
directors required by the articles of incorporation to take such action.
3.12.3 Required Procedures. Those Sections of this Article 3 which
govern meetings, actions without meetings, notice and waiver of notice, quorum
and voting requirements of the board of directors, apply to committees and
their members.
3.12.4 Authority. Unless limited by the article sof incorporation,
each committee may exercise those aspects of the authority of the board of
directors which the board of directors confers upon such committee in the
resolution creating the committee. Provided, however, a committee may not:
(a) authorize distributions;
(b) approve or propose to shareholders action that the
Statutes require be approved by shareholders;
(c) fill vacancies on the board of directors or on any of its
committees;
(d) amend the articles of incorporation pursuant to the
authority of directors to do so;
(e) adopt, amend or repeal bylaws;
(f) approve a plan of merger not requiring shareholder
approval;
(g) authorize or approve reacquisition of shares, except
according to a formula or method prescribed by the board of directors; or
(h) authorize or approve the issuance or sale or contract for
sale of shares or determine the designation and relative rights, preference,s
and limitations of a class or series of shares, except that the board of
directors may authorize a committee (or an officer) to do so within limits
specifically prescribed by the board of directors.
ARTICLE 4. OFFICERS
4.1 Number of Officers. The officers of the corporation shall be a
president, a secretary and a treasurer, each of whom shall be appointed by the
board of directors. Such other officers and assistant officers as may be
deemed necessary, including any vice presidents, may also be appointed by the
board of directors. If specifically authorized by the board of directors, an
officer may appoint one or more officers or assistant officers. The same
individual may simultaneously hold more than one office in the corporation.
4.2 Appointment and Term of Office. The officers of the corporation
shall be appointed by the board of directors for a term as determined by the
board of directors. If no term is specified, they shall hold office until the
first meeting of the directors held after the next annual meeting of
shareholders. If the appointment of officers shall not be made at such
meeting, such appointment shall be made as soon thereafter as is convenient.
Each officer shall hold office until his successor shall have been duly
appointed and shall have qualified until his death, or until he shall resign
or is removed.
The designation of a specified term does not grant to the officer any
contract rights, and the board may remove the officer at any time prior to the
termination of such term.
4.3 Removal of Officers. Any officer or agent may be removed by the
board of directors at any time, with or without cause. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Appointment of an officer or agent shall not of itself create contract rights.
4.4 Resignation of Officers. Any officer may resign at any time,
subject to any rights or obligations under any existing contracts between the
officers and the corporation, by giving notice to the president or board of
directors. An officer's resignation shall take effect at the time specified
therein, and the acceptance of such resignation shall not be necessary to make
it effective.
4.5 President. Unless the board of directors has designated the
chairman of the board as chief executive officer, the president shall be the
chief executive officer of the corporation and, subject to the control of the
board of directors, shall in general supervise and control all of the business
and affairs of the corporation. Unless there is a chairman of the board, the
president shall, when present, preside at all meetings of the shareholders and
of the board of directors. The president may sign, with the secretary or any
other proper officer of the corporation thereunder authorized by the board of
directors, certificates for shares of the corporation and deeds, mortgages,
bonds, contracts, or other instruments which the board of directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the board f directors or by these
bylaws to some other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of president and such other duties as may be
prescribed by the board of directors from time to time.
4.6 Vice Presidents. If appointed, in the absence of the president or
in the event of his death, inability or refusal to act, the vice president (or
in the event there be more than one vice president, the vice presidents in the
order designate at the time of their election, or in the absence of any
designation, then in the order of their appointment) shall perform the duties
of the president, and when so acting, shall have all the powers of, and be
subject to, all the restrictions upon the president.
4.7 Secretary. The secretary shall: (a) keep the minutes of the
proceedings of the shareholders, the board of directors, and any committees of
the board in one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these bylaws or as
required by law; (c) be custodian of the corporate records; (d) when requested
or required, authenticate any records of the corporation; (e) keep a register
of the post office address of each shareholder which shall be furnished to the
secretary by such shareholder; (f) sign with the president, or a vice
president, certificates for shares of the corporation, the issuance of which
shall have been authorized by resolution of the board of directors; (g) have
general charge of the stock transfer books of the corporation; and (h) in
general perform all duties incident to the office of secretary and such other
duties as from time to time may be assigned by the president or by the board
of directors. Assistant secretaries, if any, shall have the same duties and
powers, subject to the supervision of the secretary.
4.8 Treasurer. The treasurer shall: (a) have charge and custody of and
be responsible for all funds and securities of the corporation; (b) receive
and give receipts for monies due and payable to the corporation from any
source whatsoever, and deposit all such moneys in the name of the corporation
in such bank, trust companies, or other depositaries as shall be selected by
the board of directors; and (c) in general perform all of the duties incident
to the office of treasurer and such other duties as from time to time may be
assigned by the president or by the board of directors. If required by the
board of directors, the treasurer shall give a bond for the faithful discharge
of his or her duties in such sum and with such surety or sureties as the board
of directors shall determine. Assistant treasurers, if any, shall have the
same powers and duties, subject to the supervision of the treasurer.
4.9 Salaries. The salaries of the officers shall be fixed from time to
time by the board of directors.
ARTICLE 5. INDEMNIFICATION OF DIRECTORS,
OFFICERS, AGENTS, AND EMPLOYEES
5.1 Indemnification of Directors. Unless otherwise provided in the
articles of incorporation, the corporation shall indemnify any individual made
a party to a proceeding because the individual is or was a director of the
corporation, against liability incurred in the proceeding, but only if such
indemnification is both (i) determined permissible and (ii) authorized, as
such are defined in subsection (a) of this Section 5.1.
5.1.1 Determination of Authorization. The corporation shall not
indemnify a director under this Section unless:
(a) a determination has been made in accordance with the
procedures set forth in the Statutes that the director met the standard of
conduct set forth in subsection (b) below, and
(b) payment has been authorized in accordance with the
procedures set forth in the Statutes based on a conclusion that the expenses
are reasonable, the corporation has the financial ability to make the payment,
and the financial resources of the corporation should be devoted to this use
rather than some other use by the corporation.
5.1.2 Standard of Conduct. The individual shall demonstrate that:
(a) he or she conducted himself in good faith; and
(b) he or she reasonably believed:
(i) in the case of conduct in his official capacity with
the corporation, that his conduct was in its best interests;
(ii) in all other cases, that his conduct was at least
not opposed to its best interests; and
(iii) in the case of any criminal proceeding, he or she
had no reasonable cause to believe his conduct was unlawful.
5.1.3 Indemnification in Derivative Actions Limited.
Indemnification permitted under this Section in connection with a proceeding
by or in the right of the corporation is limited to reasonable expenses
incurred in connection with the proceeding.
5.1.4 Limitation on Indemnification. The corporation shall not
indemnify a director under this Section of Article 5:
(a) in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation; or
(b) in connection with any other proceeding charging improper
personal benefit to the director, whether or not involving action in his or
her official capacity, in which he or she was adjudged liable on the basis
that personal benefit was improperly received by the director.
5.2 Advance of Expenses for Directors. If a determination is made
following the procedures of the Statutes, that the director has met the
following requirements, and if an authorization of payment is made following
the procedures and standards set forth in the Statutes, then unless otherwise
provided in the articles of incorporation, the corporation shall pay for or
reimburse the reasonable expenses incurred by a director who is a party to a
proceeding in advance of final disposition of the proceeding, if:
(a) the director furnishes the corporation a written
affirmation of his good faith belief that he has met the standard of conduct
described in this section;
(b) the director furnishes the corporation a written
undertaking, executed personally or on his behalf, to repay the advance if it
is ultimately determined that he did not meet the standard of conduct;
(c) a determination is made that the facts then known to those
making the determination would not preclude indemnification under this Section
or the Statutes.
5.3 Indemnification of Officers, Agents and Employees Who Are Not
Directors. Unless otherwise provided in the articles of incorporation, the
board of directors may indemnify and advance expenses to any officer,
employee, or agent of the corporation, who is not a director of the
corporation, to the same extent as to a director, or to any greater extent
consistent with public policy, as determined by the general or specific
actions of the board of directors.
5.4 Insurance. By action of the board of directors, notwithstanding any
interest of the directors in such action, the corporation may purchase and
maintain insurance on behalf of a person who is or was a director, officer,
employee, fiduciary or agent of the corporation, against any liability
asserted against or incurred by such person in that capacity or arising from
such person's status as a director, officer, employee, fiduciary, or agent,
whether or not the corporation would have the power to indemnify such person
under the applicable provisions of the Statutes.
ARTICLE 6. STOCK
6.1 Issuance of Shares. The issuance or sale by the corporation of any
shares of its authorized capital stock of any class, including treasury
shares, shall be made only upon authorization by the board of directors,
unless otherwise provided by statute. The board of directors may authorize
the issuance of shares for consideration consisting of any tangible or
intangible property or benefit to the corporation, including cash, promissory
notes, services performed, contracts or arrangements for services to be
performed, or other securities of the corporation. Shares shall be issued for
such consideration expressed in dollars as shall be fixed from time to time by
the board of directors.
6.2 Certificates for Shares.
6.2.1 Content. Certificates representing shares of the corporation
shall at minimum, state on their face the name of the issuing corporation and
that it is formed under the laws of the State of Nevada; the name of the
person to whom issued; and the number and class of shares and the designation
of the series, if any, the certificate represents; and be in such form as
determined by the board of directors. Such certificates shall be signed
(either manually or by facsimile) by the president or a vice president and by
the secretary or an assistant secretary and may be sealed with a corporate
seal or a facsimile thereof. Each certificate for shares shall be
consecutively numbered or otherwise identified.
6.2.2 Legend as to Class or Series. If the corporation is
authorized to issue 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 this information on request in writing and without charge.
6.2.3 Shareholder List. The name and address of the person to whom
the shares represented thereby are issued, with the number of shares and date
of issue, shall be entered on the stock transfer books of the corporation.
6.2.4 Transferring Shares. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for a like number of shares shall have
been surrendered and canceled, except that in cash of a lost, destroyed, or
mutilated certificate, a new one may be issued therefor upon such terms and
indemnity to the corporation as the board of directors may prescribe.
6.3 Shares Without Certificates.
6.3.1 Issuing Shares Without Certificates. Unless the articles of
incorporation provide otherwise, the board of directors may authorize the
issue of some or all 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.
6.3.2 Information Statement Required. Within a reasonable time
after the issue or transfer of shares without certificates, the corporation
shall send the shareholder a written statement containing, at a minimum, the
information required by the Statutes.
6.4 Registration of the Transfer of Shares. Registration of the
transfer of shares of the corporation shall be made only on the stock transfer
books of the corporation. In order to register a transfer, the record owner
shall surrender the shares to the corporation for cancellation, properly
endorsed by the appropriate person or persons with reasonable assurances that
the endorsements are genuine and effective. Unless the corporation has
established a procedure by which a beneficial owner of shares held by a
nominee is to be recognized by the corporation as the owner, the person in
whose name shares stand in the books of the corporation shall be deemed by the
corporation to be the owner thereof for all purposes.
6.5 Restrictions on Transfer or Registration of Shares. The board of
directors or shareholders may impose restrictions on the transfer or
registration of transfer of shares (including any security convertible into,
or carrying a right to subscribe for or acquire shares). A restriction does
not affect shares issued before the restriction was adopted unless the holders
of the shares are parties to the restriction agreement or voted in favor of or
otherwise consented to the restriction.
A restriction on the transfer or registration of transfer of shares may
be authorized:
(a) to maintain the corporation's status when it is dependent
on the number or identity of its shareholders;
(b) to preserve entitlements, benefits or exemptions under
federal or local laws; and
(c) for any other reasonable purpose.
A restriction on the transfer or registration of transfer of shares may:
(a) obligate the shareholder first to offer the corporation or
other persons (separately, consecutively or simultaneously) an opportunity to
acquire the restricted shares;
(b) obligate the corporation or other persons (separately,
consecutively or simultaneously) to acquire the restricted shares;
(c) require as a condition to such transfer or registration,
that any one or more persons, including the holders of any of its shares,
approve the transfer or registration if the requirement is not manifestly
unreasonable; or
(d) prohibit the transfer or the registration of transfer of
the restricted shares to designated persons or classes of persons, if the
prohibition is not manifestly unreasonable.
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 its existence is noted
conspicuously on the front or back of the certificate or is contained in the
information statement required by this Article 6 with regard to shares issued
without certificates. Unless so noted, a restriction is not enforceable
against a person without knowledge of the restriction.
6.6 Corporation's Acquisition of Shares. The corporation may acquire
its own shares and the shares so acquired constitute authorized but unissued
shares.
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, which amendment may
be adopted by the shareholders or the board of directors without shareholder
action. The articles of amendment must be delivered to the Secretary of State
and must set forth:
(a) the name of the corporation;
(b) the reduction in the number of authorized shares, itemized
by class and series;
(c) the total number of authorized shares, itemized by class
and series, remaining after reduction of the shares; and
(d) a statement that the amendment was adopted by the board of
directors without shareholder action and that shareholder action was not
required.
ARTICLE 7. DISTRIBUTIONS
7.1 Distributions to Shareholders. The board of directors may
authorize, and the corporation may make, distributions to the shareholders of
the corporation subject to any restriction sin the corporation's articles of
incorporation and in the Statutes.
7.2 Unclaimed Distributions. If the corporation has mailed three
successive distributions to a shareholder at the shareholder's address as
shown on the corporation's current record of shareholders and the
distributions have been returned as undeliverable, no further attempt to
deliver distributions to the shareholder need be made until another address
for the shareholder is made known to the corporation, at which time all
distributions accumulated by reason of this Section, except as otherwise
provided by law, be mailed to the shareholder at such other address.
ARTICLE 8. MISCELLANEOUS
8.1 Inspection of Records by Shareholders and Directors. A shareholder
or director of a corporation is entitled to inspect and copy, during regular
business hours at the corporation's principal office, any of the records of
the corporation required to be maintained by the corporation under the
Statutes, if such person gives the corporation written notice of the demand at
least five business days before the date on which such a person wishes to
inspect and copy. The scope of such inspection right shall be as provided
under the Statutes.
8.2 Corporate Seal. The board of directors may provide a corporate seal
which may be circular in form and have inscribed thereon any designation
including the name of the corporation, the state of incorporation, and the
words "Corporate Seal."
8.3 Amendments. The corporation's board of directors may amend or
repeal the corporation's bylaws at any time unless:
(a) the articles of incorporation or the Statutes reserve this
power exclusively to the shareholders in whole or part; or
(b) the shareholders in adopting, amending, or repealing a
particular bylaw provide expressly that the board of directors may not amend
or repeal that bylaw; or
(c) the bylaw either establishes, amends, or deletes, a
greater shareholder quorum or voting requirement.
Any amendment which changes the voting or quorum requirement for the
board 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 are greater.
8.4 Fiscal Year. The fiscal year of the corporation shall be
established by the board of directors.
DATED as of this 7th day of January, 2000.
/s/ Sandy Lang
__________________________________________
President
PROFESSIONAL OFFICE SPACE
LEASE AGREEMENT
Dated: May 10, 1999
Name of Tenant Interactive Marketing Technology, Inc., a New Jersey
Corporation
Article Subject Page
1 Fundamental Lease Provisions 1
2 Premises 2
3 Term 2
4 Rent 3
5 Security Deposit 7
6 Acceptance 8
7 Use 8
8 Assignment & Subletting 8
9 Alterations, Improvements & Fixtures 10
10 Utilities & Janitorial Services 11
11 Maintenance 12
12 Rights of Landlord 12
13 Liability of Parties 13
14 Insurance 14
15 Destruction or Damage 14
16 Taking by Public Authority 15
17 Use of Building Name 16
18 Subordination & Estoppel Certificate 16
19 Ethics 16
20 Rules & Regulations 16
21 Default 17
22 Payment of Tenant's obligations by Landlord 18
23 Voluntary Surrender or Other Termination 19
24 Abandonment of Personal Property 19
25 Tenancy After Lease Term Expires 19
26 Notices 19
27 Guaranty 19
28 Relocation of Tenant 20
29 Automobile Parking 20
30 Miscellaneous Provision 21
Exhibit A Floor Plan 23
Exhibit B Rules & Regulations 24
Exhibit C Parking 28
Exhibit C-1 Parking Rules & Regulations 29
Guaranty 31
Exhibit E Building Standard Tenant Improvements 37
PROFESSIONAL OFFICE SPACE
LEASE AGREEMENT
This Lease ("Lease") is made and executed this 10th day of May, 1999 , by
and between E.P. Investments a California Limited Partnership ("Landlord"), by
and through COMMERCIAL MANAGEMENT SERVICES as its agent, and Interactive
Marketing Technology, Inc.
("Tenant"), who agree as follows:
1. Fundamental Lease Provisions:
A. Tenant's Trade Name Interactive Marketing Technology
B. Premises: Suite 390/ Third Level consisting of 2,210
Usable square Feet and 2,511 Rentable Square feet. Building:
The Centrum, 3575 Cahuenga Blvd. West, Los Angeles, California
90068, consisting of 127,727 Rentable Square Feet.
C. (1) Lease Term: Five (5) Years
(2) Commencement Date: Sept. 15, 1999
(3) Delivery Date: Sept. 15, 1999
D. Minimum Monthly Rent: $ 5,398.65
E. Rent Payable to: E.P. INVESTMENTS
3575 Cahuenge Blvd, West
Los Angeles, California
F. Tenant's Escalation Percentage: 1.966 %
G. Security Deposit: $ 5,398.65
H. Use of Premises: General Office Use
I. Address for Notice:
To Landlord: E.P. INVESTMENTS
3575 Cahuenga Blvd. West
Los Angeles, CA 90068
To Tenant: I. M. T
3575 Cahuenga Blvd. West #390
Los Angeles, CA 90068
J. Relocation: Tenant may not be relocated XXXXXXXXXXXXXXXXXXXXXX
during the lease term.
2. Premises.
In consideration of the Tenant's agreement to pay the rent, and the
covenants and conditions herein contained, Landlord hereby leases to Tenant
and Tenant hereby hires from Landlord for the lease term or terms hereinafter
provided and upon the terms and conditions set forth herein, that certain real
property identified in fundamental lease provision "B" which is more
specifically described in Exhibit "A" attached hereto and incorporated herein
by this reference ("Premises"), which are located in the office building
described in fundamental lease provision "B" ("Building"). The usable square
feet in the Premises as set forth in fundamental lease provision "B" shall be
determined in accordance with BOMA (Building Owners and Managers Association)
standards, and shall not include common areas and patios ("Usable Square
Feet"). The parties acknowledge that any plans of the Building or Premises
shown to Tenant or attached as Exhibits to this Lease shall not be deemed a
representation by Landlord that the Building or Premises shall be constructed
as indicated thereon. Landlord may exchange such plans in its sole discretion
and, except for an adjustment in rent and other monetary items determined on
the basis of the number of square feet in the Premises or in the Building
pursuant to this Lease, which shall be determined on the basis of the actual
number of square feet in the event the actual number differs from the number
used int establishing the rent or other monetary item at the time of execution
of this Lease, any change in such plans shall not affect the enforceability of
this Lease or any provision hereof.
3. Term.
3.1 In General, Commencement. The term of this Lease is set
forth in fundamental lease provision "C(1)". In the event construction of
Landlord Improvements (as defined in Schedule "A" of the Construction Addendum
to Professional office Space Lease Agreement attached hereto and incorporated
by reference herein, if applicable, ("Construction Addendum")) are complete at
the time of execution of this Lease, the "Commencement Date" shall be the date
set forth in fundamental lease provision "C(2)". In the event construction of
Landlord Improvements is not complete at the time of execution of this Lease,
the Commencement date shall be the date set forth in the Construction
Addendum. The projected date for tender of possession of the Premises to
Tenant shall be the date set forth in fundamental lease provision "C(3)"
("Delivery Date").
3.2 Delay. In the event Landlord is unable to deliver to Tenant
possession of the Premises on the Delivery Date, Landlord shall not be liable
for any damage caused thereby and this Lease shall not be void or voidable,
provided that possession is tendered to Tenant within one hundred eighty (180)
days after the Delivery Date, or, if such failure to tender possession is
caused by circumstances beyond the reasonable control of Landlord, including
in such circumstances strikes, lockouts, fires, floods, acts of God, war,
civil disorder or government regulations, within thirty (30) days plus a
number of days equal to the duration of the delay caused by circumstances
beyond Landlord's reasonable control. Circumstances beyond the reasonable
control of Landlord, however, shall not excuse delay in excess of the actual
delay so occasioned. In the event of late delivery of the Premises, the term
of this Lease shall be extended by the length of such delay in delivering
possession and the liability of Tenant for rent shall be postponed until such
time as Landlord has tendered possession of the Premises to Tenant, In the
event that Landlord has not tendered possession to Tenant within said one
hundred eighty (180) days in addition to any period in which such delay is
excused as set forth herein, this Lease shall be voidable at the option of
either party upon written notice to the other party.
3.3 Early Possession. If Tenant with Landlord's consent takes
possession of the Premises prior to the Commencement Date, other than for
construction of Tenant improvements as provided in the construction Addendum,
Tenant shall be subject to all the covenants and conditions hereof, and shall
pay rent at the monthly rate prescribed for the first month of the term,
prorated on the basis of a thirty (30) day month, for the period beginning
with the taking of possession and ending with the Commencement Date.
3.4 Failure to Take Possession. Tenant's inability or failure
to take possession of the Premises when delivered by Landlord shall not delay
the commencement of this Lease or Tenant's obligation to pay rent.
4. Rent.
4.1 Minimum monthly Rent. Tenant shall pay to Landlord minimum
monthly rent in the amount stated in fundamental lease provision "D" ("Minimum
Monthly Rent"), payable on the first day of each and every calendar month
during the term hereof, commencing on the Commencement Date. If this Lease
shall commence on a day other than the first day of a calendar month, or
terminate on other than the last day of a calendar month, the rent and
Additional Rent as hereinafter defined, payable for the first month in which
the Lease term commences or terminates shall be prorated accordingly. All
rent shall be paid in lawful money of the United States of America without
deduction or offset, prior notice or demand, and it is payable to and at the
address set forth in fundamental lease provision "E".
4.2 Minimum Monthly Rent Adjustment.
4.2.1 The term "lease year", for purposes of the adjustment of
rent, is defined to mean the first full twelve (12) calendar months of the
Lese term as the first lease year, the period between the date of expiration
of the first lease year and December 31 of the calendar year in which it
occurs as the second lease year, and thereafter each successive calendar year
during the term of this Lease.
4.2.2 At the commencement of each lease year, subsequent to the
first lease year, Tenant's minimum monthly rent shall be increased by three
percent (3%).
4.2.5 Adjustments to the rent payable by Tenant made pursuant
to this Section 4.2 shall be in addition to the Additional Rent pursuant to
Section 4.3 hereof.
4.3 Additional Rent.
4.3.1 For purposes of this Section 4.3:
(a) The "Base Year" shall be the calendar year during
which the term of the Lease commences.
(b) "Operating Costs" shall mean the total of all
expenses incurred by Landlord, utilizing the accrual method of accounting, in
connection with the management, operation, maintenance and repair of the
Premises salaries and other labor costs including taxes, insurance, retirement
and other employee benefits incurred with respect to persons employed by
Landlord; (ii) fees, charges and other costs including management fees,
consulting fees, legal fees and accounting fees, of (a) independent
contractors engaged by Landlord; (b) Landlord; or (c) any affiliate of
Landlord, not including any portion of such fees, charges and costs of
Landlord or any affiliate of Landlord in excess of prevailing rates; (iii) the
cost of all utilities (except such costs being paid directly by Tenant
hereunder), fuel, supplies, equipment, maintenance and service contracts in
connection therewith; (iv) the cost of repairs and general contracts in
connection therewith (iv) the cost of repairs and general maintenance of the
Building; (v) all risk insurance, including loss of rental income insurance
and liability insurance, fidelity bonds, and any insurance required under any
loan secured by the property of which the Premises are part; and (vi) such
other expenses as are customarily included in the cost of managing, operating,
maintaining and repairing office buildings similar to the Building.
(c) "Real Property Taxes" shall mean all taxes,
assessments and charges levied upon or with respect to the Building, the land
Taxes shall include, without limitation, any tax, fee or excise on rents, on
the square footage of the Premises, on the act of entering into this Lease, on
the occupancy of Tenant, on account of the rent hereunder of the business of
renting space now or hereafter levied or assessed against Landlord by the
United States of America, the State of California or any political
subdivision, public corporation, district or other political or public entity
and shall also include any other tax, fee or excise, however described, which
may be levied or assessed in lieu of, -as a substitute for, in whole or in
part, or as an addition to, any other Real Property Taxes. Real Property
Taxes shall not include income, franchise, transfer, inheritance or capital
stock taxes, unless such taxes are levied or assessed against Landlord in lieu
of, as a substitute for, in whole or in part, or as an addition to, any other
tax which would otherwise constitute a Real Property Tax. Real Property Taxes
shall also include reasonable legal fees, costs and disbursements incurred in
connection with proceedings for the reduction of such Real Property Taxes.
(d) "Base Year Loan" shall mean any loan or loans
secured by the property of which the Premises are a part prior to the
commencement of this Lease, however, in the event a "take-out" loan or
permanent loan has not been obtained prior to the commencement of this Lease,
the first such loan or loans so obtained shall be deemed to be the Base Year
Loan.
(e) "Increased Interest" shall mean the interest rate
paid in connection with any loan or loans (including the Base Year Loan) and
any refinancing of loans or additional loans secured by the property of which
the Premises are a part in excess of the interest rate charged in connection
with the Base Year Loan at the later of either the Commencement Date or the
date the Base Year Loan was funded, multiplied by the original principal
amount of the Base Year Loan. The "interest rate" for purposes of Increased
Interest shall be deemed to include any points or other fees and charges in
connection with any such loan or loans, amortized over the lesser of ten (10)
years or term of such loan or loans.
(f) "Capital Improvements" shall mean any equipment,
device or other improvement acquired after commencement of the term of this
Lease in the operation, maintenance and repair of the Building excluding
replacement of structural members of the Building.
(g) "Expensed Capital Improvement" shall mean any
Capital Improvement the actual cost of which (individually and not in the
aggregate) is less than Twenty-Five Thousand Dollars ($25,000).
(h) "Capitalized Cost of Capital Improvement" shall
mean an amount determined by multiplying the actual cost of each Capital
Improvement (excluding Expensed Capital Improvements) acquired by Landlord by
the constant annual percentage required to fully amortize such cost over the
useful life of the Capital Improvement (as reasonably estimated by Landlord at
the time of acquisition), including interest at the greater of the maximum
rate at which parties may legally contract at the time of such acquisition or
the rate payable by Landlord if it financed the acquisition.
(i) "Comparison Year" shall mean the calendar year
following the Base Year as the first Comparison Year, and thereafter each
successive calendar year during the term of this Lease and continuing through
any extended term hereof.
(j) Rentable Square Feet of the Building" shall mean
the Usable Square Feet in the Building plus the number of square feet in the
interior common areas of the Building, excluding patios and parking areas.
The Rentable Square Feet of the Building is set forth in fundamental lease
provision "B". "Rentable Square Feet of the Premises" shall meal the Usable
Square Feet of the Premises, plus the number of square feet derived by
multiplying the number of square feet in the interior common area, excluding
patios and parking areas, of the floor on which the Premises are located, by a
fraction, the numerator of which is the Usable Square Feet of the Premises and
the denominator of which is the total Usable Square Feet of the Premises and
the denominator of which is the total Usable Square Feet of the floor on which
the Premises are located. The Rentable Square Feet of the Premises is set
forth in fundamental lease provision "B".
(k) "Tenant's Escalation Percentage" shall be
determined by dividing the total Rentable Square Feet of the Premises by
ninety-five percent (95%) of the total Rentable Square Feet of the Building,
which percentage is set forth in fundamental lease provision "F".
(l) "Additional Rent" shall mean the amount of the
increase in rent payable monthly during any Comparison Year pursuant to
Sections 4.3.2 and 4.3.3.
4.3.2 If in any Comparison Year, Operating Costs or Real
Property Taxes are higher than the Operating Costs or Real Property Taxes for
the Base Year, or there is Increased Interest, the rent payable by Tenant
during such Comparison Year (and any subsequent period until further
adjustment pursuant to this Section 4.3) shall be increased by the amount of
such increase in Operating Costs or Real Property Taxes, or the amount of
Increased Interest, multiplied by Tenant's Escalation Percentage.
4.3.3 In any Comparison year during the term of this Lease
which falls within the useful life of a Capital Improvement, the rent payable
by Tenant for such year shall be increased by the amount of the Capitalized
Cost of the Capital improvement multiplied by Tenant's Escalation Percentage.
In addition to the foregoing, the rent payable by Tenant for each Comparison
Year shall be increased by the actual cost of all Expensed Capital
Improvements incurred by Landlord during such year multiplied by Tenant's
Escalation Percentage.
4.3.4 Prior to the commencement of each comparison Year,
Landlord shall have the right to furnish to Tenant a statement of Landlord's
reasonable estimate of the average monthly Operating Costs, Real Estate Taxes,
Increased Interest to be incurred or expected to be incurred during the
Comparison Year and showing the amount of Additional Rent, if any, payable by
Tenant each month during the Comparison Year pursuant to Sections 4.3.2 and
4.3.3 on the basis of such estimate. Commencing on the first day of the
Comparison Year and continuing on each monthly rent payment date thereafter
until further adjustment pursuant to this Section 4.3.4, Tenant shall pay to
Landlord the amount of the Additional Rent. Landlord shall have the right, in
Landlord's discretion, to reasonably revise its current estimate from time to
time during the Comparison Year to reflect actual or reasonably anticipated
increases in Expensed Capital Improvements, and Increased Interests, and
Tenant's monthly Additional Rent payments shall be further adjusted in
accordance with the revised estimate commencing on the first monthly rent
payment date following Tenant's receipt of such revised estimate. With
reasonable promptness after the expiration of each Comparison Year, Landlord
shall furnish to Tenant a final statement showing the actual Operating Costs,
Real Estate Taxes, Capitalized Cost of Capital Improvements, Expensed Capital
Improvements and Increased Interest for the Comparison Year which has just
ended. On the earlier of ten (10) days after the receipt of said statement by
Tenant or the next monthly rental payment date, Tenant shall, in case of an
underpayment, pay to Landlord an amount equal to such underpayment. Landlord
shall, in case of an overpayment, credit the next monthly rental payment or
payments of Tenant with an amount equal to such overpayment, Notwithstanding
the foregoing, Landlord may elect to require Tenant to pay all Additional Rent
for any Comparison Year upon the expiration thereof. If during the Base year
or any Comparison Year upon the expiration thereof. (95%) of the total
Useable Square Feet in the Building are Leased, the Operating Costs and Real
Property Taxes for such year shall be deemed to be the amount of operating
costs and Real Property Taxes which, based on Landlord's reasonable estimate,
would have been incurred if ninety-five percent (95%) of the Usable Square
Feet of the Building, the Real Property Taxes for the base Year shall be
deemed to be the amount of Real Property Taxes which, based on Landlord's
reasonable estimate, would have been incurred if the Building has been
assessed at its full value.
4.4 Late Charge. Tenant hereby acknowledges that late payment
by Tenant to Landlord of rent, including Additional Rent payable in accordance
with this Section 4.3 hereof and all other costs to be paid by Tenant in
accordance with this Lease, will cause Landlord to incur costs not
contemplated in agreeing to the monetary and other terms of this Lease, the
exact amount of which are presently anticipated to be extremely difficult to
ascertain. Such costs may include processing and accounting charges and late
charges which may be imposes on Landlord by the terms of any mortgage or deed
of trust covering the Property and other expenses of a similar or dissimilar
nature. Accordingly, if an installment of rent, including Additional Rent,
shall not be received by Landlord within five (5) days after such amount shall
be due, Tenant shall pay to Landlord a late charge equal to six percent (6%)
of such overdue amount. The parties hereby agree that such late charge
represents a fair and reasonable estimate of the costs Landlord will incur by
reason of late payment by Tenant. Acceptance of such late charge by Landlord
shall in no event constitute a waiver of Tenants default with respect to such
overdue amount which Tenant acknowledges will have occurred when the payment
is not made at the time it is due, nor shall the acceptance prevent Landlord
from exercising any of the other remedies granted hereunder. By initialing
where indicated below, each of Landlord and Tenant acknowledges its awareness
of and express agreement to the foregoing:
Landlord Tenant
___________________________ _________________________
___________________________ _________________________
In the event an installment of rent or Additional Rent is not paid
within thirty (30) days after such installment is due, the amount unpaid shall
bear interest at the maximum rate at which the parties may legally contract
commencing upon the thirty-first (31st) day after such installment is due.
5. Security Deposit.
5.1 In General. Upon execution of this Lease, Tenant shall
deposit with Landlord the sum specified in fundamental lease provision "G"
which sum shall be held by Landlord as security ("Security Deposit"). The
purpose for which all or any portion of the Security Deposit may be used by
Landlord in its discretion, are (a) to remedy any defaults by Tenant in the
payment of rent or any other sum payable by Tenant, (b) to repair damages to
the Premises caused by Tenant, and (c) to otherwise be used to remedy any
default by Tenant in the performance of all of the provisions, covenants and
conditions of this Lease to be kept and performed by Tenant during the term
hereof, during any extension thereof, or during the period subsequent to the
execution of this Lease but prior to the Commencement Date.
5.2 Method of Application. If at any time during the term of
this Lease, Tenant defaults in the payment of rent or other sums payable by
it, causes damage to the Premises, or otherwise fails to keep and perform all
of the provisions, covenants and conditions of this Lease to be kept and
performed by Tenant ("Tenant Breaches"), Landlord at its option, may;
(a) Utilize all or any part of the Security Deposit for
payment of any cost, expenses or damages incurred or sustained by Landlord or
for payment of rent or other sums which may be due or which may be payable by
the Tenant as a result of the Tenant Breaches (but Landlord shall not be
required to do so); or
(b) Retain the Security Deposit, or any part thereof, until
this Lease is terminated, and at such time utilize said sum or so much thereof
as may be necessary to compensate Landlord for all costs, expenses or, damages
incurred or sustained by Landlord as a result of the Tenant Breaches or for
any unpaid rent due from Tenant.
If Landlord elects to exercise the option described in
subsection (a) above, Tenant shall, within ten (10) days after written demand
therefor, deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount The parties agree that the provisions
of this Section 5 shall not operate as a limitation upon the amount of damage
to which Landlord is entitled by virtue of any default by Tenant or failure by
Tenant to perform all of the provisions, covenants and conditions of this
Lease.
5.3 Extent of Landlord's Obligations. Any remaining portion of
the Security Deposit shall be returned within two (2) weeks of the termination
of this Lease. Landlord shall not be required to pay Tenant interest on the
Security Deposit. Landlord's obligations with respect to the Security Deposit
are those of a debtor and not trustee. Landlord shall have the right to
commingle the Security Deposit with Landlord's general and other funds.
5.4 Security Interest. To secure the performance by Tenant
of all Tenant's obligations under this Lease, Tenant hereby grants to Landlord
a security interest in all equipment, furniture and other goods now owned
hereafter acquired by Tenant which are used or located on the Premises. Upon
request by Landlord, Tenant shall execute such financing statements,
continuation statements and amendments as Landlord may request.
6. Acceptance.
Tenant's taking possession of the Premises shall be a conclusive
acknowledgment on Tenant's part that the Premises are in good and tenantable
condition. Upon the termination of this Lease, Tenant shall deliver the
Premises to Landlord in the condition in which the Premises existed at the
commencement of the term hereof, subject to the provisions of Section 9
hereof, reasonable wear and tear excepted.
7. Use.
7.1 In General. The Premises shall be used only for the
purposes set forth in fundamental lease provision "H". Tenant shall not use
the Premises for any other purpose without the prior written consent of
Landlord. Tenant's use of the Premises shall comply with all applicable
federal, state and municipal laws, ordinances, and regulations. Tenant shall
not use the Premises in any manner that constitutes waste, nuisance, or
unreasonable disturbances to other teats of the Building. Tenant shall not
use the Premises for cooking, sleeping or lodging.
7.2 Effect on Insurance. Tenant shall not perform or permit any
act that is reasonably likely to cause cancellation of any insurance covering
the Premises or the Building, or an increase in the premium rates for such
insurance. In the event that Tenant performs or commits any act the effect of
which is to raise the premium rates for such insurance, Tenant shall pay the
Landlord the amount of the additional premium.
7.3 Suitability of Premises.
By execution of this Lease, Tenant acknowledges that it has
determined, by its inspection and investigation of the Premises and not as a
result of any representation made by Landlord or Landlord's agent, that the
Premises are suitable for its intended use, as set forth in fundamental lease
provision "H". Without limiting the generality of the foregoing, Tenant
acknowledges that it has determined that the Premises (including, without
limitation, the electrical supply and air conditioning) are suitable for any
computers or other equipment which Tenant may use in the Premises. Tenant
agrees that in the event that the Premises are not suitable for it's intended
use or for it's computers or other equipment, Landlord shall not have any
responsibility therefor and Tenant shall not be excused from it's obligations
hereunder by reason thereof.
8. Assignment and Subletting.
8.1 Restriction. Tenant shall not assign, transfer, mortgage,
pledge, hypothecate or encumber this Lease, or any interest therein, and shall
not sublet the Premises or any part thereof, or any right or privilege
appurtenant thereto, or suffer any other person (the invitees, agents and
servants of the Tenant excepted) to occupy or use the Premises, or any portion
thereof, or agree to any of the foregoing, without in each case first
obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld. Furthermore, neither this Lease nor any interest
therein shall be assignable as to the interest of Tenant by operation or law,
without the written consent of Landlord. Any such assignment, transfer,
encumbrance, sublease or occupation of, or use of the Premises by any other
person without such consent shall be void. Any consent to any assignment,
transfer, encumbrance, sublease or occupation or use of the Premises by any
other person which may be given by Landlord shall not constitute a waiver by
Landlord of the provisions of this Section 8 or a release of Tenant from the
full performance by it of the covenants herein contained.
8.2 Procedure. If Tenant desires at any time to assign this
Lease or sublet all or any portion of the Premises, Tenant shall first notify
Landlord of its desire to do so and shall submit in writing to Landlord (a)
the name of the proposed sub-tenant or assignee, (b) the nature of the
proposed sub-tenant's or assignees business to be carried on in the Premises,
(c) the terms and conditions of the proposed sublease or assignment and (d)
such financial information as Landlord may reasonably request concerning the
proposed sub-tenant or assignee. At any time within thirty (30) days after
Landlord's receipt of the information specified above, Landlord may by written
notice to Tenant elect to (i) if Tenant desires to sublease, cause the
Premises to be subleased to the Landlord itself, (ii) if Tenant desires to
assign, take an assignment of the Lease itself, (iii) consent to the sublease
or assignment, (iv) consent to the sublease on the condition that Tenant pay
to Landlord the excess of the rental, however characterized, payable by the
subtenant over the rental payable for the subleased portion of the Premises by
Tenant hereunder; or (v) disapprove of the sublease or assignment. In the
event Landlord elects to sublease from Tenant as described in (i) above, the
rent payable by Landlord shall be the lower of that set forth in Tenant's
notice or the rent payable by Tenant under this Lease for the Usable Square
Feet of the Premises sublet at the time of the sublease. If Landlord consents
to the sublease or assignment within the thrity (30) day period, Tenant may
thereafter within sixty (60) days after Landlord's consent, but not later than
the expiration of said sixty (60) days, enter into such assignment or sublease
of the Premises or a portion thereof upon the terms and conditions set forth
in the information furnished by Tenant to landlord. Landlord's consent to one
assignment or sublease shall not be deemed to be a consent to any subsequent
assignment or sublease or use of the Premises by any other person.
8.3 Effect. Each permitted assignee, transferee or, sublessee,
other than Landlord, shall assume and be deemed to have assumed this Lease and
shall be and remain liable jointly and severally with Tenant for the payment
of the rent and for the due performance or satisfaction of all of the
provisions, covenants, conditions and agreements herein contained on Tenant's
part to be performed or satisfied. No permitted assignment shall be binding
on Landlord unless such assignee or Tenant shall deliver to landlord a
counterpart of such assignment and an instrument in recordable from which
contains a covenant of assumption by the assignee, but the failure or refusal
of the assignee to execute such instrument of assumption shall not release or
discharge the assignee from its liability as set forth above.
8.4 Partnership Tenant. If Tenant is a partnership, a transfer
of any interest of a general partner, a withdraws of any general partner from
the partnership, or the dissolution of the partnership, shall be deemed to be
an assignment of this Lease.
8.5 Corporate Tenant If Tenant is a corporation, any
dissolution, merger or other reorganization of Tenant or sale or other
transfer of a percentage of capital stock of Tenant which results in a change
of controlling persons, or the sale or other transfer of substantially all of
the assets of Tenant, shall be deemed to be an assignment of this Lease.
9. Alterations, Improvements and Fixtures.
9.1 In General. Tenant shall not make or allow any alterations,
additions or improvements to the Premises or any part thereof without the
prior written consent of Landlord, which consent shall not be unreasonably
withheld provided that such alterations, additions or improvements do not
affect the structure of the Building, any area outside of the Premises or any
other tenants in the Building.
9.2 Conditional Consent. Landlord may impose as a condition to
consent such requirements as Landlord in its sole discretion may deem
necessary or desirable, including without limitation, the right to approve the
plans and specifications for any work, the right to require security for the
full payment of the costs of any work and the right to impose requirements as
to the manner in which or the time or times at which work may be performed.
Even without any express reservation of right or imposition of conditions,
Landlord shall have the right to approve the contractor or contractors who
shall perform any alterations, repairs, additions or improvements in, to or
about the Premises and to post notices of non-responsibility and similar
notices which it deems to be appropriate.
9.3 Work; Liens. Tenant shall cause all work performed on the
Premises to be performed in a first-class, workmanlike manner and in
compliance with all applicable federal, state and municipal laws, ordinances
and regulations. Tenant shall keep the Premises free from any liens arising
out of any work performed on, or material furnished to, the Premises, or
arising from any other obligation incurred by Tenant. Tenant shall be
obligated to, and Landlord reserves the right to, post and maintain on the
Premises at any time such notices as shall in the reasonable judgement of
Landlord be necessary to protect Landlord against liability for all such liens
or actions. Tenant shall indemnify and hold harmless Landlord and the
Premises from all loss, costs, expenses and liability in connection with any
such lien or the performance of such work or the furnishing of such materials,
or any failure by Tenant to comply with the provisionsof this Section 9. The
foregoing indemnity shall survive the prior expiration or termination of this
lease.
9.4 Title to Improvements, Removal. Any alterations,
additions or improvements of any kind to the Premises or any part thereof,
except Tenant's furniture, counters, appliances, shelving and movable trade
fixtures, shall at once become part of the realty and belong to Landlord and
shall be surrendered with the Premises, as a part thereof, at the end of the
term hereof; provided however, that Landlord may, by written notice to Tenant,
require Tenant to remove any alterations, additions, fixtures or other
improvements made by Tenant, and to repair any damage to the Premises caused
by such removal, all at Tenant's sole expense. Any articles of personal
property, including business and trade fixtures, not attached to or build into
the Premises, which were installed by Tenant at its sole expense, shall be and
remain the property of the Tenant and may be removed by Tenant at any time
during the term of this Lease as long as Tenant is not in default hereunder
and provided that Tenant repairs any damage to the Premises or the Building
caused by such removal. The rent payable pursuant to Section 4 hereof and all
other costs payable by Tenant pursuant to this Lease shall constitute to be
payable by Tenant as set forth herein so long as any repair or restoration is
not completed to the reasonable satisfaction of Landlord, regardless of prior
expiration or termination of this Lease.
10. Utilities and Janitorial services.
10.1 Landlord. Subject to Tenant's timely payment of the rent
specified in Section 4 and provided that Tenant is not otherwise in default
hereunder, Landlord shall furnish to the Premises water, heat, air
conditioning and electricity required in Landlord's judgement for the
comfortable use and occupancy of the Premises, together with janitorial
services, during the time set forth in the Rules and Regulations promulgated
from time to time by Landlord with respect to the Building ("Rules and
Regulations"). The costs and expenses incurred by Landlord with respect to
utilities and janitorial services shall be deemed to be Operating Costs as
defined in Section 4.3.1(b) hereof.
10.2 Tenant. Tenant shall pay prior to delinquency, all charges
for materials, services and utilities not expressly required to be paid by
Landlord by the terms of this Lease, which may be furnished or used in, on or
about the Premises during the term hereof
10.3 No Unauthorized Use. Tenant, without the prior written
consent of Landlord shall not use any apparatus or device in the Premises,
including without limitation, electronic data processing machines, punch chard
machines and machines using current in excess of 110 volts which will in any
way increase the amount of electricity, air conditioning, heat or water which
would otherwise be furnished or supplied under this Section 10 for the
intended use of the Premises; and Tenant will not connect with electric
current, except through existing electrical outlets in the Premises, or water
pipes, any apparatus or device which uses electric current or water.
10.4 Excess and Additional Use. If Tenant shall require
water, electricity, heating or cooling in excess of that which would otherwise
be furnished or supplied for the intended use of the Premises, Tenant shall
first secure the written consent of Landlord for the use thereof, which
consent Landlord may refuse in its absolute discretion. Landlord may impose a
reasonable charge for such excess use. Landlord may cause a water meter or
electric current meter to be installed in the Premises, so as to measure the
amount of water and electric current consumed for any such excess use. The
cost of such meters and installation, maintenance and repair thereof, the cost
of any such excess utility use as shown by the meter or a otherwise reasonably
determined by Landlord, the cost of any new or additional utility
installations, including but not limited to wiring and plumbing, resulting
from such excess utility use, shall be at the expense of and paid by Tenant
promptly upon demand by Landlord. Whenever heat generating machines or
equipment are used in the Premises which affect the temperature otherwise
maintained by the air conditioning, system, Landlord reserves the right to
install supplementary air conditioning units in the Premises. The cost
thereof, including the cost of installation, operation and maintenance, shall
be paid by Tenant to Landlord upon demand by landlord. If suitable
temperatures can be maintained by the existing air conditioning system, the
cost of any excess use thereof as reasonably determined by Landlord shall be
paid to landlord upon demand. Landlord may impose a reasonable additional
charge for the usage of any additional or unusual janitorial services required
because of any non-building standard improvements in the Premises, the
carelessness of Tenant, the nature of Tenant's business and the removal of any
refuse and rubbish from the Premises except for discarded material placed in
wastepaper baskets and left for emptying as an incident to Tenant's normal
cleaning of the Premises. Any amounts to be paid by Tenant under this Section
10.4 shall be paid in advance unless otherwise agreed to in writing by
Landlord.
10.5 Failure to Provide. Landlord shall not be liable for any
failure to furnish any utilities or janitorial services when such failure is
caused by accidents, breakage, repairs, strikes, lockouts, other labor
disputes or any other conditions beyond Landlord's reasonable control,
including but not limited to any governmental energy conservation program, and
Tenant shall not be entitled to any damages nor shall such failure relieve
Tenant of the obligation to pay the full rent or constitute a constructive or
other eviction of Tenant. In the event any governmental entity imposes
mandatory or involuntary controls or guidelines on Landlord or the Building or
any part thereof, relating to the use or conservation of energy, water, gas,
oil or electricity or in the event Landlord is required to make alterations to
the Building in order to comply with mandatory or voluntary control or
guidelines, Landlord may, in its sole discretion, comply with such mandatory
or voluntary controls or guidelines or make such alterations to the Building.
Such compliance in the making of such alterations shall in no event entitle
Tenant to any damages, release Tenant from the obligation to pay the full rent
or constitute a constructive or other eviction of Tenant. In addition, any
such alteration shall be deemed to be Capital Improvements as defined in
Section 4.3 of this Lease.
11. Maintenance.
During the period of Tenant's occupancy, Tenant at its sole
cost and expense agrees to maintain the Premises in condition appropriate for
high shall commercial office space. Maintenance shall include cleaning (other
than the standard cleaning provided by Landlord's janitorial service pursuant
to Section 10.1 hereof) repair and replacement of any and all improvements,
fixtures, equipment and decorations within or on the area measured in
determining the Usable Square Feet of the Premises.
12. Rights of Landlord.
12.1 Reservation of Rights. The Landlord reserves the
following rights:
(a) To change the name of the Building without notice
or liability to the Tenant and to enjoy the exclusive use of such name;
(b) To place signs on the Building;
(c) To designate all sources furnishing graphics, sign
painting or lettering, vending machines of any kind and toilet supplies used
on the Premises and to restrict access to the Building by any vendors or
suppliers who cause damage to, or interfere with the peaceful use of, the
Building;
(d To have pass keys to the Premises and computer
access cards for the elevators, parking area and Premises;
(e) To grant to anyone the exclusive right to conduct
any particular business or undertaking in the Building; and
(f) To enter the Premises at any reasonable time for
inspection, to supply any service to be provided by Landlord hereunder, to
submit the Premises to prospective purchasers or tenants, to post notices of
non-responsibility, to affix and display "For Rent" signs, and to make
repairs, alterations, additions or improvements to the Premises or the
Building.
12.2 Common Areas. Without limiting the generality of the
provisions of Section 12.1. Landlord shall have the right to remove, alter,
improve or rebuild the public areas of the Building. In connection with
making repairs, alterations, additions or improvements under the terms of
Section 12, the Landlord shall have the right of access through the Premises
as well as the right to take into and upon and through such Premises or any
other part of the Building, all materials that may be required to make such
repairs, alterations, additions or improvements, and the right in the course
of such work to close, entrances, doors, corridors, elevators or other
Building facilities or temporarily to abate the operations of such facilities
without such acts being deemed to be or to cause a constructive or other
eviction of Tenant, so long as the business of Tenant shall not be interfered
with unreasonably.
12.3 Release. Provided that Landlord exercises any right
set forth in this Section 12 in good faith, Landlords shall not be liable to
Tenant for any expense, injury, loss or damage resulting from such exercise,
all claims against the Landlord for any and all such liability being hereby
expressly released by Tenant; Landlord shall be without liability for damages
to Tenant's property business or person and without liability to Tenant by
reason of interference with the business of Tenant or inconvenience or
annoyance to Tenant or the customers of Tenant; the rent reserved herein shall
not abate while the Landlord's rights under this Section 12 are exercised, and
Tenant shall not be entitled to any set-off or counterclaim for damages of any
kind against Landlord by reason thereof, all such claims being hereby
expressly released by Tenant.
12.4 Emergency Entry. Landlord shall have the right to use any
and all means which Landlord may deem proper to open any of the doors in,
upon, and about the Premises, excluding Tenant's vaults and safes, in any
emergency in order to obtain entry to the Premises. Any entry to the Premises
obtained by Landlord by any of said means shall not be construed or deemed to
be a forcible or unlawful entry into, or a detainer of, the Premises, or an
eviction of Tenant from the Premises or any portion thereof.
13. Liability of Parties
13.1 Release of Landlord. Landlord shall not be liable to
Tenant and Tenant hereby waives all claims against Landlord for any entry into
the Premises, or for damage to any person or property in or about the Premises
or the approaches, entrances, streets, sidewalks or corridors thereto, by or
from any cause whatsoever, including without limitation, damage caused by any
defect in the Building or Premises, or by water leakage of any character from
the roof, walls, basement or other portion of the Premises or the Building, or
caused by gas, fire, oil, electricity or any cause whatsoever in, on, or about
the Premises or the building or any part thereof. Tenant shall immediately
notify Landlord in writing of any defective condition in or about the
Premises, Landlord shall not be liable and Tenant hereby waives all claims for
damages that may be caused by Landlord in re-entering and taking possession of
the Premises as herein provided.
13.2 No Liability for Third Party Unauthorized or Criminal Acts.
Landlord shall not be liable to Tenant, and Tenant hereby waived any claim
against Landlord for any unauthorized entry into the Premises, or for damage
to any person or property in or about the Premises or the approaches,
entrances, streets, sidewalks or corridors thereto, by or from any
unauthorized or criminal acts of third parties, regardless of any breakdown,
malfunction or insufficiency of the security measures, practices or equipment
provided by Landlord. Tenant shall immediately notify Landlord in writing of
any breakdown or malfunction of the security measures, practices or equipment
provided by Landlord as to which Tenant has knowledge.
13.3 Indemnity. Tenant shall indemnify and hold Landlord
harmless from and defend Landlord with counsel satisfactory to Landlord
against any and all claims or liabilities for any injury or damage to any
person or property whatsoever, occurring in, on or about the Premises or any
part thereof, or occurring in, on or about any facilities (including, without
limitation, elevators, stairways, passageways or hallways), the use of which
Tenant may have in conjunction with other tenants of the Building, when such
injury or damage shall be caused in part or in whole by the neglect, fault or
omission of any duty with respect to the same by Tenant, its agents, servants,
employees or invitees.
14. Insurance.
14.1 Liability Insurance. Tenant shall maintain, at all
times during the term hereof and at its cost, Workmen's Compensation Insurance
and Bodily Injury Liability and Property Damage Liability Insurance adequate
to protect Landlord and Landlord's managing agents against liability for
injury to or death of any such person in connection with the use, operation or
condition of the Premises. Such insurance at all times shall be in an amount
of not less than One Million Dollars ($1,000,000.00) for injuries to persons
in one accident, not less than Five Hundred Thousand Dollars ($500,000.00) for
injuries to persons in one accident, not less than Five Hundred Thousand
($500,000.00) with respect to damage to property. Not more frequently than
once each two (2) years, if, in the opinion of Landlord, the minimum required
amount of public liability and property damage insurance coverage at that time
is not adequate, Tenant shall increase the insurance coverage as required by
Landlord.
14.2 Personal Property. Tenant shall at all times during the
term hereof maintain in effect policies of insurance covering its leasehold
improvements (including any alterations, additions or improvements as may be
made by Tenant), trade fixtures, merchandise and other personal property from
time to time in or on the Premises, in an amount not less than one hundred
percent (100%) of their actual replacement cost, providing protection against
all risks covered by standard form of "Fire and Extended Coverage Insurance",
together with insurance against vandalism and malicious mischief. Tenant
shall also maintain business interruption insurance at Tenant's sole cost and
expense.
14.3 In General. All insurance required to be carried by
Tenant shall be issued by responsible insurance companies, qualified to do
business in the State of California and reasonably acceptable to Landlord.
Each policy shall name Landlord and Commercial Management Services, Inc., as
it's agent as additional insureds and copies of all policies or certificates
evidencing the existence and amounts of said insurance shall be delivered to
Landlord by Tenant upon request. If Tenant fails to adhere to the requirements
of this Section 14, Landlord may but shall not be required to order such
insurance and charge the cost thereof to Tenant, which amount shall be payable
by Tenant upon demand. Any policy may be carried under so-called "blanket
coverage" form of insurance policies, provided, however, that Landlord shall
be named as an additional insured thereunder as its interest may appear and
that the coverage afforded Landlord will not be reduced or diminished by
reason of such blanket policy of insurance (with an endorsement to that effect
provided to landlord) and provided further that the requirements set forth
herein are otherwise satisfied. The obligations of Tenant under this Lease
shall continue in full force and effect notwithstanding (1) any failure if
Tenant fails to maintain an insurance policy required to be maintained by it
under this Lease, or (2) in the event that Tenant, with Landlord's prior
written consent, elects to self insure in lieu of maintaining an insurance
policy required under this Lease.
14.4 Waiver of Lability, Subrogation. Landlord and Tenant each
hereby waive any and all rights of recovery against the officers, employees,
agents and representatives of such other party for loss of or damage to such
waiving party or its property or the property of others under its control,
arising from any cause insured against under any policy of insurance required
to be carried by such waiving party. Tenant shall obtain and furnish to
Landlord evidence of the waiver by Tenant's insurance carriers of any right of
subrogation against Landlord.
15. Destruction or Damage.
15.1 Landlord Repairs. In the event the Premises or the
Building are damaged or destroyed by fire or other casualty covered by
insurance, Landlord shall repair such damage subject to the limitations
contained in this Section 15, provided that if said damage was caused by the
fault or neglect of Tenant, any costs of repair in excess of the insurance
proceeds available to Landlord for such repair shall be paid by Tenant.
Landlord shall not be obligated to proceed with any such repairs until Tenant
has deposited with Landlord its share of the cost of repair.
15.2 Effect. Notwithstanding any destruction or damage, this
Lease shall remain in full force and effect and Tenant shall continue to pay
the rent and all other costs payable by Tenant hereunder. The provisions of
Section 1932 and 1933, Subdivision 4 of the California Civil Code, any
amendments thereto and any other law which may hereinafter become in force
during the term of this lease which authorizes the termination of the Lease
upon the partial or complete destruction of the Premises are hereby waived by
Tenant.
15.3 Option to Terminate. Notwithstanding anything to the
contrary contained in sections 15.1 and 15.2 above, if the Premises or the
Building are damaged or destroyed and (a) the repair or restoration thereof,
in Landlord's opinion, cannot be completed within ninety (90) days of
commencement of repair or restoration; or (b) the repair or restoration is not
covered by insurance, or the estimated cost thereof exceeds the insurance
proceeds available for repair or restoration plus any amount which Tenant is
obligated or elects to pay for such repair or restoration; or (c) the
estimated cost of repair or restoration exceeds twenty five percent (25%) of
the full replacement cost of the Premises or the Building; or (d) Landlord
determines to rebuild the Premises or the Building in a substantially
different structural or architectural form than existed before the damage or
destruction, Landlord shall have the option to either terminate this Lease or
to repair or restore the Premises or the Building. In the event that Landlord
elects to terminate this Lease, the Landlord shall give notice to Tenant any
time within sixty (60) days after such damage, terminating this Lease as of
the date specified in such notice, which date shall not be less than thirty
(30) nor more than sixty (60) days after the giving of such notice. In the
event such notice is given, this Lease shall expire and all interest of Tenant
in the Premises shall terminate on the date specified in the notice and the
rent shall be paid up to the date of termination. Landlord shall refund to
Tenant the rent theretofore paid for any period of time subsequent to such
date.
15.4 Extent of Restoration. In the event Landlord is obligated
to, or elects to, repair or restore the Premises, Landlord shall be obligated
to repair or restore only such portions of the subject Premises which were
originally provided by Landlord at Landlord's expense, not including those
portions for which Landlord provided Tenant an improvement allowance. The
repair and restoration of any of Tenant's improvements or any property of
Tenant which was not provided at Landlord's expense, including tenant
improvements for which Landlord provided Tenant an improvement allowance,
shall be the obligation of Tenant. In no event shall Tenant be entitled to
any compensation for damage or loss of the use of all or any part of the
Premises or any inconvenience or annoyance occasioned by any such damage,
destruction, repair or restoration.
16. Taking By Public Authority.
If all or any part of the Premises or the Building shall be taken or
appropriated by any public or quasi-public authority under the power of
eminent domain, or transferred in avoidance of such taking or appropriation,
Landlord shall have the right, at its option, to terminate this Lease, and
shall have the right to receive any award or payment made in connection with
such public or quasi-public use or purpose, and Tenant shall have no claim
against Landlord for the value of any unexpired term of this Lease. If a part
of the Premises shall be so taken or appropriated and Landlord does not elect
to terminate this Lease, the rental thereafter to be paid shall be reduced in
an amount which Landlord reasonably deems to be equitable, taking into
consideration the relative value of the portion taken as compared to the
portion remaining.
17. Use of Building Name.
Tenant shall not be allowed to use the name of the Building in which
the Premises are located, or words to the same effect (except as Tenant's
address), in connection with any business carried on in the Premises without
the written consent of Landlord.
18. Subordination and Estoppel of Certificates.
18.1 Subordination. This Lease shall be or automatically
become subject and subordinate at all times to all ground or underlying leases
which now exist or may hereafter be executed affecting the Building or any
part thereof, and to the lien of any mortgages or deeds of trust in any amount
or amounts whatsoever now or hereafter placed on or against the Building or
any part thereof or on or against Landlord's interest or estate therein or on
or against any ground or underlying lease without the necessity of having
further instruments executed by Tenant to effectuate such subordination or of
paying additional consideration therefor. Upon the request of Landlord,
Tenant will execute any further written instrument necessary to subordinate or
to provide evidence of the subordination of its rights hereunder to any such
underlying leases or liens. In the event of termination of any such
underlying lease or foreclosure of any such mortgage or deed of trust, Tenant
shall, at the request of the successor in interest to Landlord, attorn to such
successor in interest, and at the request of such successor in interest enter
into an new lease for the balance of the term hereof then remaining on the
same terms and conditions as are contained in this Lease.
18.2 Estoppel Certificates. Tenant agrees, at any time, and
from time to time, upon not less than fifteen (15) days prior notice by
Landlord, to execute, acknowledge and deliver to Landlord, a statement in
writing certifying that this Lease is unmodified and in full force and effect
(or if there have been modifications, that the same is in full force and
effect as modified and stating the modifications), and the dates to which the
rent, Additional Rent and other charges have been paid, and stating whether or
not to the best knowledge of the signer of such certificate, Landlord is in
default in performance of any covenant, agreement, term, provision or
condition contained in this Lease and, if so, specifying each such default of
which the signer may have knowledge, it being intended that any such statement
delivered pursuant hereto may be relied upon by any prospective purchaser or
lessee of the Building or any part thereof, any mortgagee or prospective
mortgagee thereof, any prospective assignee of any mortgage thereof or any
other party who may reasonably rely on the statement. Tenant also agrees to
execute and deliver from time to time such estoppel certificates as any
institutional lender or other third party may require or request with respect
to this Lease.
19. Ethics.
If the Tenant is a member of any profession, he agrees to abide by
the code of ethics of the association recognized as representing that
particular profession in the County of Los Angeles, the State of California.
20. Rules and Regulations.
Tenant shall faithfully observe and comply with the Rules and
Regulations set forth in Exhibit "B" which is attached hereto and by this
reference incorporated herein. The Rules and Regulations may be amended or
modified at any time within the sole discretion of Landlord, in which event
Landlord shall provide to Tenant a copy of the Rules and Regulations as
amended or modified. Landlord shall not be responsible to Tenant for the
nonperformance or nonobservance by any other tenant or occupant of the
Building of any of the Rules and Regulations.
21. Default
21.1 Events of Default. Any of the following events shall
constitute a default under this Lease by Tenant:
(a) Failure by Tenant to make any payment of rent or other
payment required by this Lease when the same is due;
(b) Failure by Tenant to accept possession of the Premises
upon tender thereof by Landlord or other acts by TenAnt which give the
Landlord cause to reasonably believe that Tenant will not accept possession of
the Premises when tendered by Landlord and commence payment of rent;
(c) The vacating or abandoning of the Premises by Tenant;
(d) Any attempted conveyance, assignment, mortgage or
subletting of this Lease or of the Premises of any part thereof, or agreement
to do, permit or suffer any of the same, without the prior written consent of
Landlord;
(e) The making by Tenant of any general arrangement for the
benefit of creditors; the filing by or against Tenant of a petition to have
Tenant adjudged a bankrupt or a petition for reorganization or arrangement
under any law relating to bankruptcy (unless, in the case of a petition filed
against Tenant, the same is dismissed within sixty (60) days; the appointment
of a trustee or receiver to take possession of substantially all of Tenant's
assets located at the Premises or of Tenant's interest in this Lease unless
possession is restored to Tenant within thirty (30) days; or the attachment,
execution or other judicial seizure of substantially all of Tenant's assets
located at the Premises or of Tenant's interest in this Lease, where such
seizure is not discharged within thirty (30) days;
(f) The failure by Tenant to observe or perform any
covenant, condition, or provision in this lease not already specifically
mentioned in this Section 21.1, where such failure continues for thirty (30)
days after written notice from Landlord notifying Tenant of such failure;
provided, however, that if the nature of Tenant's failure is such that more
than thirty (30) days are reasonably required for its cure, then Tenant shall
not be in default if it begins such cure within the thirty (30) day period
described above and thereafter diligently prosecutes such cure to completion.
21.2 Remedies. In the event of any default by Tenant,
Landlord may promptly or at any time thereafter, upon notice and demand and
without limiting Landlord in the exercise of any other right or remedy which
Landlord may have by reason of such default or breach:
(a) Terminate Tenant's right to possession of the Premises
by any lawful means, in which case this Lease shall terminate and Tenant shall
immediately surrender possession of the Premises to Landlord. In such event,
Landlord shall be entitled to recover from Tenant:
(i) The worth at the time of award of the unpaid rent
which has been earned at the time of termination;
(ii) The worth at the time of award of the amount by
which the unpaid rent which would have been earned after termination
until the time of the award exceeds the amount of such rental loss that
Tenant proves could have been reasonably avoided;
(iii) The worth at the time of award of the amount by
which the unpaid rent for the balance of the term after the time of award
exceeds the amount of such rental loss the Tenant proves could reasonably
be avoided; and
(iv) Any other amount necessary to compensate Landlord
for all detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom, including, but not limited to, the
cost of recovering possession of the Premises, expenses of reletting
(including advertising), brokerage commissions and fees, costs of putting the
Premises in good order, condition and repair, including necessary
renovation and alteration of the Premises, reasonable attorney's fees,
court costs, all costs for maintaining the Premises, all costs incurred
in the appointment of and performance by a receiver to protect the Premises
or Landlord's interest under the Lease, and any other reasonable cost.
The "worth at the time of award" of the amounts referred to in
subsections (i) and (ii) above shall be computed by allowing interest at the
legal rate. The worth at the time of aware" of the amount referred to in
subsection (iii) above shall be computed by discounting such amount at one (1)
percentage point above the discount rate of the Federal Reserve Bank of San
Francisco at the time of award.
(b) Pursue any other remedy now or hereafter available to
Landlord under the laws or judicial decisions of the State of California,
including, without limitation, the remedy provided in California Civil Code
Section 1951.4, and laws amendatory to said Section, to continue this Lease in
effect and enforce all rights and remedies under the Lease, including the
right to recover rent as it becomes due, even though the Tenant has breached
the Lease and abandoned the Premises or failed to take possession of the
Premises upon tender thereof by Landlord. In the event Tenant fails to take
possession of the Premises and commence payment of rent, Landlord shall have
all of the rights and be entitled to recover from Tenant all of the damages
described in this Paragraph 21.
21.3 Termination of Concessions. In the event of any default
by Tenant, then, without notice and without limiting Landlord in the exercise
of any other right or remedy, Landlord may terminate any free rent, rent
reduction, free storage space, free utilities, free parking, or any other
free, reduced rate or other concession previously granted by or agreed to by
Landlord. Thereafter, the rent for the Premises shall be at the rate set
forth herein without reference to such free rent or rent reduction, and all
storage space, utilities, parking and other facilities and services shall be
at Landlord's then regular rates, payable in advance.
22. Payment of Tenant's Obligations by Landlord.
All covenants and agreements to be performed by Tenant under any of
the terms of this Lease shall be performed by Tenant at Tenant's sole cost and
expense and without any abatement of rent. If Tenant shall fail to pay any
sum of money, other than rent, required to be paid by it hereunder or shall
fail to perform any other act on its part to be performed hereunder, and such
failure shall continue beyond any applicable grace period set forth in this
Lease, Landlord may, without waiving or releasing Tenant from any obligations
of Tenant, make any such payment or perform any such other act on Tenant's
part. All sums so paid by Landlord and all necessary incidental costs
together with interest thereon at the maximum rate for which parties may
legally contract from the date of such payment by Landlord shall be payable to
Landlord on demand and Tenant covenants to pay any such sums. Landlord shall
have (in addition to any other right or remedy of Landlord) the same rights
and remedies in the event of the nonpayment thereof by tenant as in the case
of default by Tenant in the payment of the rent.
23. Voluntary Surrender or Other Termination.
The voluntary or other surrender of this Lease by Tenant, or a
mutual cancellation thereof, shall not work a merger, and shall, at the option
of Landlord, terminate all or any existing subleases or subtenancies, or may,
at the option of Landlord, operate as an assignment to it of any or all such
subleases or subtenancies. Tenant shall, at lease ninety (90) days before the
last day of the term hereof, give to Landlord a written notice of his
intention to surrender the Premises on that date, but nothing contained herein
shall be construed as an extension of the term hereof or as consent of
Landlord to any holding over by Tenant.
24. Abandonment of Personal Property
In the event of termination of this Lease in any manner whatsoever,
Tenant shall forthwith remove Tenant's goods and effects and those of any
other persons claiming under Tenant, unless Landlord exercises his option to
have any subleases or subtenancies assigned to him, and quit and deliver the
Premises to the Landlord peaceably and quietly. Goods and effects not removed
by Tenant after termination of this Lease (or within forty-eight [481 hours
after a termination by reason of Tenant's default), shall be considered
abandoned. Landlord shall give Tenant notice of right to reclaim abandoned
property pursuant to California Civil Code Section 1980 et seq. and may
thereafter dispose of the same as it deems expedient, including storage in a
public warehouse or elsewhere at the cost and for the account of Tenant, but
Tenant shall promptly upon demand reimburse Landlord for any expenses incurred
by Landlord in connection therewith. Tenant hereby grants to Landlord a
security interest in said abandoned property in the event it si not reclaimed
within the statutory period, to secure the payment of rent and other amounts
payable by Tenant under this Lease, and in the event any amounts are due and
unpaid after the abandonment of the property and the period in which Tenant may
reclaim has expired, Landlord may dispose of the property in any commercially
reasonable manner in order to recover the amounts so due and unpaid.
25. Tenancy After Lease Term expires.
If, the Landlord's consent, Tenant holds possession of the Premises
after the term of this Lease, Tenant shall become a tenant from month to month
upon the terms herein specified but at a monthly rental equivalent to the
rental paid by Tenant at the expiration of the term of this Lease increased
pursuant to the terms of this Lease, payable in advance on or before the fist
day of each month. Tenant shall continue in possession until such tenancy
shall be terminated by Landlord, or until Tenant shall have given to Landlord
a written notice of his intention to terminate the tenancy at lease one (1)
month prior to the date of termination. If Tenant hlods over without the
consent of Landlord, Tenant hereby agrees to pay Landlord reasonable rent in
an amount at least equal to the highest Minimum Monthly Rent per Usable Square
Foot charged to any other tenant in the Building and Additional Rent based
upon Tenant's Rentable Square Feet during the period in which Tenant holds
over.
26. Notices.
Any and all notices or demands required or permitted herein shall be
in writing served either personally or by certified mail, return receipt
requested, at the addresses provided in fundamental lease provision "I" for
the party. If served personally, service shall be conclusively deemed made at
the time of such service. If served by certified mail, service shall be
conclusively deemed made forty-eight (48) hours after the deposit thereof in
the United States mail, postage prepaid. Either party may specify a different
address for notice purposes by giving written notice of its change of address
according to the terms of this Section 26.
29. Automobile Parking.
So long as Tenant is not in default, Tenant shall have a
non-exclusive right, in common with other tenants of the Building, and their
respective officers, employees, customers and invitees, to use the parking
spaces on the parking area, subject to availability, Tenant's compliance with
rules and regulations which Landlord may impose from time to time governing
use of the parking area, and the payment of such charge or fee as Landlord may
from time to time impose. Landlord may offer Tenant and its employees the
right, in common with other tenants of the Building and subject to
availability, to rent unreserved and undesignated parking spaces or reserved
and designated parking spaces in the parking area on a monthly basis, at
monthly rates and upon such other terms and conditions as Landlord may from
time to time establish. In the event Landlord shall grant Tenant exclusive
parking privileges, the area to be reserved to Tenant and the number of spaces
shall be as set forth in Exhibit "C" attached hereto and incorporated herein
by reference. Landlord reserves the right to impose such rules and
regulations, including methods of identification and controls, as may be
reasonably necessary in Landlord's discretion, for the efficient
administration of the parking areas on behalf of all tenants of the Building
and their respective officers, employees, customers and invitees. Landlord
reserves the right, but not the obligation, to cause the parking areas to be
operated by parking attendants who may be either Landlord's employees or
employees of an independent parking lot concessionaire, with the right to
provide valet or attendant parking or such other controls as may be reasonably
necessary for the efficient administration of the parking areas. The rules and
regulations governing use of the parking area in effect upon execution of this
Lease and until modified, amended or supplemented by Landlord, are attached
hereto as Exhibit "C-I" and incorporated herein by reference.
30 Miscellaneous Provisions.
(a) Landlord and Tenant hereby agree, acknowledge and intend that
time is of the essence with respect to this Lease and each of its provisions.
In connection with such agreement and acknowledgment, Landlord and Tenant each
intend to and hereby waive the benefit of public policy and any and all law,
statutory and common, against forfeiture.
(b) The waiver by landlord or Tenant of any term, covenant or
condition contained herein shall not be deemed to be a waiver of such term,
covenant or condition on any prior or subsequent breach of the same or any
other term, covenant or condition contained herein. The subsequent acceptance
of rent by Landlord shall not be deemed to be a waiver of any preceding breach
by Tenant of any term, covenant or condition of this Lease, other than the
failure of Tenant to pay the particular rental so accepted, regardless of
Landlord's knowledge of such preceding breach at the time of acceptance of
such rent.
(c) If any action or proceeding is brought by either party
against the other under this Lease and Landlord is the prevailing party, or if
the Landlord necessarily intervenes in or becomes a party to any action or
actions arising out of this Lease, then the Tenant shall pay to Landlord
reasonable attorney's fees and costs incurred by Landlord in such actions or
proceedings. If Tenant is the prevailing party in any litigation against
Landlord under this Lease, Landlord shall pay to Tenant its reasonable
attorney's fees and costs.
(d) This Lease constitutes the entire agreement between the
parties, and supersedes any prior agreements or understandings between them.
The provisions of this Lease may not be modified in any way except by written
agreement signed by both parties.
(e) This Lease shall be subject to and construed in accordance
with the laws of the State of California.
(f) Except as expressly otherwise provided in this Lease, all of
the provisions of this Lease shall bind and inure to the benefit of the
parties hereto and to their heirs, successors, representatives, executors,
administrators, transferees and assigns.
(g) Tenant represents that it has authority to execute this
Lease. If Tenant is a partnership or corporation, it agrees to deliver to
Landlord upon request satisfactory evidence of the authority of the person
executing the same if it is a partnership of a certified copy of a resolution
duly adopted, authorizing the execution of this Lease by the person executing
the same if it is a corporation.
(h) Each party agrees without additional consideration to
execute such other and further documents, and to perform such other and
further acts, as may be necessary or proper in order to consummate the
transaction contemplated by this Last.
(i) If any term or provision of this Lease, or the application
thereof to any person or circumstance or circumstance, shall be invalid or
unenforceable to any extent, the remainder of this Lease or the application of
such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Lease shall be valid and shall be enforceable
to the fullest extent permitted by law.
(j) In the event of a transfer of Landlord's interest in this
Lease, Landlord shall be relieved of any obligations hereunder accruing from
or after the date of such transfer and the assignee shall succeed to all of
the rights and obligations of Landlord hereunder. For purposes hereof,
"transfer" shall include successive transfers to successive assignees, both
voluntary and involuntary. No such transfer shall serve to release Landlord
from any liability incurred hereunder prior to such transfer.
LANDLORD: E.P. Investments, a California
Limited Partnership
By: EP CENTRUM, INC., General Partner
/s/ Herbert A. Lampert
By: ____________________________________
HERBERT A. LAMPERT, President
TENANT: I. M. T., a New Jersey Corporation
/s/ Sandy Lang
By: _____________________________________
Sandy Lang - President / COO
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER ("Plan") is made this 24th day of March
1999, among Shur De Cor, Inc., a Nevada corporation ("Shur De Cor");
Interactive Marketing Technology, Inc., a New Jersey corporation, any and all
of its subsidiaries and fictitious names (hereinafter collectively referred to
as "IMT") and its shareholders (hereinafter "Shareholders").
Shur De Cor wishes to acquire one hundred percent (100%) of the issued
and outstanding stock of IMT for and in exchange for stock of Shur De Cor, in
statutory merger intending to qualify as a tax-free exchange pursuant to Section
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended. The parties
intend for this Plan to represent the terms and conditions of such tax-free
reorganization, which Plan the parties hereby adopt.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, IT IS AGREED:
Section 1
Terms of Exchange
1.1 Number of Shares. Upon the execution hereof, the holders of all the
issued and outstanding stock of IMT agree to assign, transfer, and deliver to
Shur De Cor, free and clear of all liens, pledges, encumbrances, charges,
restrictions or known claims of any kind, nature or description, all of their
shares of IMT stock, and Shur De Cor agrees to acquire such shares on the date
thereof, or as soon as practicable thereafter, by issuing and delivering in
exchange therefore solely common shares of Shur De Cor's stock, par value
$0.001, in the aggregate of 12,404,000 shares, of the then issued and
outstanding shares of Shur De Cor subject to the provisions of this Plan.
Subsequent to the date hereof, the Shareholders shall, upon the surrender of
the IMT certificates representing their respective beneficial and record
ownership one hundred percent (100%) of the issued and outstanding shares of
IMT to Shur De Cor, as soon as practicable hereafter, and further provided an
exemption from the registration provisions of Section 5 of the Securities Act
of 1933 is available for the issuance thereof, the Shareholders shall be
entitled to receive a certificate(s) evidencing shares of the exchanged Shur
De Cor stock as provided for herein. Upon the consummation of the transaction
contemplated herein, Shur De Cor shall merge with IMT and become the surviving
corporation.
1.2 Anti-Dilution. For all relevant purposes of this Plan, the number
of Shur De Cor shares to be issued and delivered pursuant to this Plan shall
be appropriately adjusted to take into account any stock split, stock
dividend, reverse stock split, recapitalization, or similar change in Shur De
Cor common stock, which may occur between the date of the execution of this
Plan and the date of the delivery of such shares.
1.3 Delivery of Certificates. The Shareholders shall transfer to Shur
De Cor at the closing provided for in Section 2 (the "Closing") the shares of
common stock of IMT listed opposite their respective names on Exhibit A hereto
(the "IMT shares") in exchange for shares of the common stock of Shur De Cor
as outlined above in Section 1.1 hereof (the "Shur De Cor Stock"). All of
such shares of Shur De Cor stock shall be issued at the closing to the
Shareholders, in the numbers shown opposite their respective names in Exhibit
"A." The transfer of IMT shares by the Shareholders shall be effected by the
delivery to Shur De Cor at the Closing of certificates representing the
transferred shares endorsed in blank or accompanied by stock powers executed
in blank, with all signatures guaranteed by a national bank and with all
necessary transfer taxes and other revenue stamps affixed and acquired at the
Shareholders' expense.
1.4 Further Assurances. Subsequent to the execution hereof, and from
time to time thereafter, the Shareholders shall execute such additional
instruments and take such other action as Shur De Cor may request in order to
more effectively sell, transfer and assign clear title and ownership in the
IMT shares to Shur De Cor.
Section 2
Closing
2.1 Closing. The Closing contemplated by Section 1.3 shall be held at
the law offices of Daniel W. Jackson, Esq. on or before March 1, 1999 or at
such other time or place as may be mutually agreed upon in writing by the
parties. The Closing may also be accomplished by wire, express mail or other
courier service, conference telephone communications or as otherwise agreed by
the respective parties or their duly authorized representatives. In any
event, the closing of the transactions contemplated by this Plan shall be
effected as soon as practicable after all of the conditions contained herein
have been satisfied.
2.2 Closing Events. At the Closing, each of the respective parties
hereto shall execute, acknowledge and deliver (or shall cause to be executed,
acknowledged, and delivered) any agreements, resolutions, rulings, or other
instruments required by this Plan to be so delivered at or prior to Closing,
together with such other items as may be reasonably requested by the parties
hereto and their respective legal counsel in order to effectuate or evidence
the transaction contemplated hereby.
2.3 Mediation Arbitration. If a dispute arises out of or relates to
this Plan, or the breach thereof, and if said dispute cannot be settled
through direct discussions, the parties agree to first endeavor to settle the
dispute in an amicable manner by mediation under the Commercial Mediation
Rules of the American Arbitration Association, before resorting to
arbitration. Thereafter, any unresolved controversy or claim arising out of
or relating this Plan, or breach thereof, shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, and judgment upon the Award rendered by the arbitrator(s) may be
entered in any court having jurisdiction thereof.
Section 3
Representations, Warranties and Covenants of Shur De Cor
Shur De Cor represents and warrants to, and covenants with, the
Shareholders and IMT as follows:
3.1 Corporate Status. Shur De Cor is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada.
Shur De Cor has full corporate power and is duly authorized, qualified,
franchised, and licensed under all applicable laws, regulations, ordinances,
and orders of public authorities to own all of its properties and assets and
to carry on its business on all material respects as it is now being
conducted, and there is no jurisdiction in which the character and location of
the assets owned by it, or the nature of the business transacted by it,
requires qualification. Included in the Shur De Cor schedules (defined below)
are complete and correct copies of its Articles of Incorporation and Bylaws as
in effect on the date hereof. The execution and delivery of this Plan does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of Shur De Cor's Articles of Incorporation or Bylaws.
Shur De Cor has taken all action required by law, its Articles of
Incorporation, its Bylaws, or otherwise, to authorize the execution and
delivery of this Plan.
3.2 Capitalization. The authorized capital stock of Shur De Cor as of
the date hereof consists of 20,000,000 common shares, par value $0.001. The
common shares of Shur De Cor issued and outstanding are fully paid,
non-assessable shares. There are no outstanding options, warrants,
obligations convertible into shares of stock, or calls or any understanding,
agreements, commitments, contracts or promises with respect to the issuance of
Shur De Cor's common stock or with regard to any options, warrants or other
contractual rights to acquire any of Shur De Cor's authorized but unissued
common shares.
3.3 Financial Statements.
(a) Shur De Cor hereby warrants and covenants to IMT that the
audited financial statements for the period ended June 30, 1998 and for the
year ended December 31, 1997, fairly and accurately represent the financial
condition of Shur De Cor and that no material change has occurred in the
financial condition of Shur De Cor.
(b) Shur De Cor hereby warrants and represents that the audited
financial statements for the periods set forth in subparagraph (a), supra,
fairly and accurately represent the financial condition of Shur De Cor as
submitted heretofore to IMT for examination and review.
3.4 Conduct of Business. Shur De Cor will use its best efforts to
maintain and preserve its business organization, employee relationships and
goodwill intact, and will not, without the prior written consent of IMT, enter
into any material commitments except in the ordinary course of business.
Shur De Cor will conduct itself in the following manner pending the
Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Articles of Incorporation or Bylaws of Shur De Cor. Except as
contemplated in Sections 3.14 and 3.15 of this Plan.
(b) Capitalization, etc. Shur De Cor will not make any change in
its authorized or issued shares of any class, declare or pay any dividend or
other distribution, or issue, encumber, purchase or otherwise acquire any of
its shares of any class. Except as contemplated in Sections 3.14 and 3.15 of
this Plan.
3.5 Options, Warrants and Rights. Shur De Cor has no options, warrants
or stock appreciation rights related to the authorized but unissued Shur De
Cor common stock. There are no existing options, warrants, calls, or
commitments of any character relating to the authorized and unissued Shur De
Cor common stock, except options, warrants, calls, or commitments, if any, to
which Shur De Cor is not a party and by which it is not bound.
3.6 Title to Property. Shur De Cor has good and marketable title to all
of its properties and assets, real and personal, proprietary or otherwise, as
will be reflected in the balance sheets of Shur De Cor, and the properties and
assets of Shur De Cor are subject to no mortgage, pledge, lien or encumbrance,
unless as otherwise disclosed in its financial statements.
3.7 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of Shur De Cor, threatened by or against or
effecting Shur De Cor at law or in equity, or before any governmental agency
or instrumentality, domestic or foreign, or before any arbitrator of any kind;
Shur De Cor does not have any knowledge of any default on its part with
respect to any judgment, order, writ, injunction, decree, warrant, rule, or
regulation of any court, arbitrator, or governmental agency or
instrumentality.
3.8 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, Shur De Cor and its present management will (i)
give to the Shareholders and IMT, or their duly authorized representatives,
full access, during normal business hours, to all of its books, records,
contracts and other corporate documents and properties so that the
Shareholders and IMT, or their duly authorized representatives, may inspect
them; and (ii) furnish such information concerning the properties and affairs
of Shur De Cor as the Shareholders and IMT, or their duly authorized
representatives, may reasonably request. Any such request to inspect Shur De
Cor's books shall be directed to Shur De Cor's counsel, Daniel W. Jackson, at
the address set forth herein under Section 10.4 Notices.
3.9 Confidentiality. Until the Closing (and thereafter if there is no
Closing), Shur De Cor and its representatives will keep confidential any
information which they obtain from the Shareholders or from IMT concerning its
properties, assets and the proposed business operations of IMT. If the terms
and conditions of this Plan imposed on the parties hereto are not consummated
on or before 5:00 p.m. MST on March 1, 1999 or otherwise waived or extended in
writing to a date mutually agreeable to the parties hereto, Shur De Cor will
return to IMT all written matter with regard to IMT obtained in connection
with the negotiations or consummation of this Plan.
3.10 Conflict with Other Instruments. The transactions contemplated by
this Plan will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or other
material agreements or instrument to which Shur De Cor was or is a party, or
to which any of its assets or operations are subject, and will not conflict
with any provision of the Articles of Incorporation or Bylaws of Shur De Cor.
3.11 Corporate Authority. Shur De Cor has full corporate power and
authority to enter into this Plan and to carry out its obligations hereunder
and will deliver to the Shareholders and IMT, or their respective
representatives, at the Closing, a certified copy of resolutions of its Board
of Directors authorizing execution of this Plan by its officers and
performance thereunder.
3.12 Consent of Shareholders. Shur De Cor hereby warrants and
represents that the Shareholders of Shur De Cor, being the owners of a
majority of the issued and outstanding stock of the Corporation consented in
writing to the authorization to execute this Agreement and Plan of
Reorganization as between Shur De Cor and IMT pursuant to a stock-for-stock
transaction in which Shur De Cor would acquire one hundred percent of the
issued and outstanding shares of IMT in exchange for the issuance of a total
of 12,404,000 common shares of Shur De Cor and thereby IMT shall merge with
and into Shur De Cor.
3.13 Resignation of Directors. Upon the Closing, the current directors
of Shur De Cor shall submit their resignations.
3.14 Name of the Corporation. At the Closing, the Board of Directors of
Shur De Cor will adopt a resolution to change the name of Shur De Cor to
Interactive Marketing Technology, Inc.
3.15 Authorized Capital. At the Closing, the Board of Directors of Shur
De Cor will adopt a resolution to increase the authorized capital stock of the
Shur De Cor from 20,000,000 common shares to 60,000,000.
3.16 Special Covenants and Representations Regarding the Exchanged Shur
De Cor Stock. The consummation of this Plan and the transactions herein
contemplated include the issuance of the exchanged Shur De Cor shares to the
Shareholders, which constitutes an offer and sale of securities under the
Securities Act of 1933, as amended, and applicable states' securities laws.
Such transaction shall be consummated in reliance on exemptions from the
registration and prospectus requirements of such statutes which depend
interlace on the circumstances under which the Shareholders acquire such
securities. In connection with the reliance upon exemptions from the
registration and prospectus delivery requirements for such transactions, at
the Closing, Shareholders shall cause to be delivered to Shur De Cor a
Letter(s) of Investment Intent in the form attached hereto as Exhibit B and
incorporated herein by reference.
3.17 Undisclosed or Contingent Liabilities. Shur De Cor hereby
represents and warrants that it has no undisclosed or contingent liabilities
which have not been disclosed to IMT in writing or in this Agreement or in any
Exhibit attached hereto.
3.18 Information. The information concerning Shur De Cor set forth in
this Plan, and the Shur De Cor schedules attached hereto, are complete and
accurate in all material respects and do not contain, or will not contain,
when delivered, any untrue statement or a material fact or omit to state a
material fact the omission of which would be misleading to IMT in connection
with this Plan.
3.19 Title and Related Matters. Shur De Cor has good and marketable
title to all of its properties, interests in properties, and assets, real and
personal, which are reflected, or will be reflected, in the Shur De Cor
balance sheets, free and clear of any and all liens and encumbrances.
3.20 Contracts or Agreements. Shur De Cor is not bound by any material
contracts, agreements or obligations which it has not already disclosed to IMT
in writing or in this Agreement or in any Exhibit attached hereto.
3.21 Governmental Authorizations. Shur De Cor has all licenses,
franchises, permits and other government authorizations that are legally
required to enable it to conduct its business in all material respects as
conducted on the date hereof.
3.22 Compliance with Laws and Regulations. Shur De Cor has complied
with all applicable statutes and regulations of any federal, state, or other
applicable jurisdiction or agency thereof, except to the extent that
noncompliance would not materially and adversely effect the business,
operations, properties, assets, or condition of Shur De Cor or except to the
extent that noncompliance would not result in the occurrence of any material
liability, not otherwise disclosed to IMT.
3.23 Approval of Plan. The Board of Directors of Shur De Cor has
authorized the execution and delivery of this Plan by Shur De Cor and have
approved the Plan and the transactions contemplated hereby. Shur De Cor has
full power, authority, and legal right to enter into this Plan and to
consummate the transactions contemplated hereby.
3.24 Investment Intent. Shur De Cor is acquiring the IMT shares to be
transferred to it under this Plan for the purpose of merging with IMT and not
with a view to the sale or distribution thereof, and Shur De Cor shall cancel
the IMT shares upon the completion of the merger.
3.25 Unregistered Shares and Access to Information. Shur De Cor
understands that the offer and sale of the IMT shares have not been registered
with or reviewed by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, or with or by any state securities law
administrator, and no federal, state securities law administrator has reviewed
or approved any disclosure or other material concerning IMT or the IMT shares.
Shur De Cor has been provided with and reviewed all information concerning
IMT, the IMT shares as it has considered necessary or appropriate as a prudent
and knowledgeable investor to enable it to make an informed investment
decision concerning the IMT shares. Shur De Cor has made an investigation as
to the merits and risks of its acquisition of the IMT Shares and has had the
opportunity to ask questions of, and has received satisfactory answers from,
the officers and directors of IMT concerning IMT, the IMT shares and related
matters, and has had an opportunity to obtain additional information necessary
to verify the accuracy of such information and to evaluate the merits and
risks of the proposed acquisition of the IMT shares.
3.26 Obligations. Shur De Cor is not aware of any outstanding
obligations to any of its employees or consultants as of the Closing.
3.27 Shur De Cor Schedules. Shur De Cor has delivered to IMT the
following items listed below, hereafter referred to as the "Shur De Cor
Schedules", which is hereby incorporated by reference and made a part hereof.
A certification executed by a duly authorized officer of Shur De Cor on or
about the date within the Plan is executed to certify that the Shur De Cor
Schedules are true and correct.
(a) Copy of Articles of Incorporation, as amended, and Bylaws;
(b) Financial statements;
(c) Shareholder list;
(d) Resolution of Directors approving Plan;
(e) Consent of Shareholders approving Plan;
(f) Opinion of counsel as required under Section 6.4 of the Plan;
(g) Officers' Certificate as required under Section 6.2 of the
Plan;
(h) Certificate of Good Standing.
Section 4
Representations, Warranties and Covenants of IMT
IMT represents and warrants to, and covenants with, the Shareholders and
Shur De Cor as follows:
4.1 Corporate Status. IMT is a corporation duly organized, validly
existing and in good standing under the laws of the State of New Jersey
incorporated on April 21, 1998. IMT has full corporate power and is duly
authorized, qualified, franchised, and licensed under all applicable laws,
regulations, ordinances, and orders of public authorities to own all of its
properties and assets and to carry on its business on all material respects as
it is now being conducted, and there is no jurisdiction in which the character
and location of the assets owned by it, or the nature of the business
transacted by it, requires qualification. Included in the IMT schedules
(defined below) are complete and correct copies of its Articles of
Incorporation and Bylaws as in effect on the date hereof. The execution and
delivery of this Plan does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of IMT's Articles of
Incorporation or Bylaws. IMT has taken all action required by law, its
Articles of Incorporation, its Bylaws, or otherwise, to authorize the
execution and delivery of this Plan.
4.2 Capitalization. The authorized capital stock of IMT as of the date
hereof consists of 2,500 common shares. As of the date hereof all common
shares of IMT issued and outstanding are fully paid, non-assessable shares.
There are no outstanding options, warrants, obligations convertible into
shares of stock, or calls or any understanding, agreements, commitments,
contracts or promises with respect to the issuance of IMT's common stock or
with regard to any options, warrants or other contractual rights to acquire
any of IMT's authorized but unissued common shares.
4.3 Conduct of Business. IMT will use its best efforts to maintain and
preserve its business organization, employee relationships and goodwill
intact, and will not, without the prior written consent of Shur De Cor, enter
into any material commitments except in the ordinary course of business.
IMT agrees that IMT will conduct itself in the following manner pending
the Closing:
(a) Certificate of Incorporation and Bylaws. No change will be
made in the Certificate of Incorporation or Bylaws of IMT.
(b) Capitalization, etc. IMT will not make any change in its
authorized or issued shares of any class, declare or pay any dividend or other
distribution, or issue, encumber, purchase or otherwise acquire any of its
shares of any class.
4.4 Title to Property. IMT has good and marketable title to all of its
properties and assets, real and personal, proprietary or otherwise, as will be
reflected in the balance sheets of IMT, and the properties and assets of IMT
are subject to no mortgage, pledge, lien or encumbrance, unless as otherwise
disclosed in its financial statements.
4.5 Litigation. There are no material actions, suits, or proceedings,
pending, or, to the best knowledge of IMT, threatened by or against or
effecting IMT at law or in equity, or before any governmental agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind;
IMT does not have any knowledge of any default on its part with respect to any
judgment, order, writ, injunction, decree, warrant, rule, or regulation of any
court, arbitrator, or governmental agency or instrumentality.
4.6 Books and Records. From the date hereof, and for any reasonable
period subsequent thereto, IMT and its present management will (i) give to
Shur De Cor, or their duly authorized representatives, full access, during
normal business hours, to all of its books, records, contracts and other
corporate documents and properties so that Shur De Cor, or their duly
authorized representatives, may inspect them; and (ii) furnish such
information concerning the properties and affairs of IMT as the Shareholders
and IMT, or their duly authorized representatives, may reasonably request.
Any such request to inspect IMT's books shall be directed to IMT's
representative, at the address set forth herein under Section 10.4 Notices.
4.7 Confidentiality. Until the Closing (and thereafter if there is no
Closing), IMT and its representatives will keep confidential any information
which they obtain from the Shareholders or from IMT concerning its properties,
assets and the proposed business operations of IMT. If the terms and
conditions of this Plan imposed on the parties hereto are not consummated on
or before 5:00 p.m. MST on March 1, 1999 or otherwise waived or extended in
writing to a date mutually agreeable to the parties hereto, IMT will return to
Shur De Cor all written matter with regard to Shur De Cor obtained in
connection with the negotiations or consummation of this Plan.
4.8 Investment Intent. The Shareholders represent and covenant that
they are acquiring the unregistered and restricted common shares of Shur De
Cor to be delivered to them under this Plan for investment purposes and not
with a view to the subsequent sale or distribution thereof, and as agreed,
supra, the Shareholders, their successors and assigns agree to execute and
deliver to Shur De Cor on the date of Closing or no later than the date on
which the restricted shares are issued and delivered to the Shareholders,
their assigns, or designees, an Investment Letter similar in form to that
attached hereto as Exhibit B.
4.9 Unregistered Shares and Access to Information. IMT and the
Shareholders understand that the offer and sale of Shur De Cor shares to be
exchanged for the IMT shares have not been registered with or reviewed by the
securities and Exchange Commission under the Securities Act of 1933, as
amended, or with or by any state securities law administrator, and no federal
or state securities law administrator has reviewed or approved any disclosure
or other material facts concerning Shur De Cor or Shur De Cor stock. IMT and
the Shareholders have been provided with and reviewed all information
concerning Shur De Cor and Shur De Cor shares, to be exchanged for the IMT
shares as they have considered necessary or appropriate as prudent and
knowledgeable investors to enable them to make informed investment decisions
concerning the Shur De Cor shares, to be exchanged for the IMT shares. IMT
and the Shareholders have made an investigation as to the merits and risks of
their acquisition of the Shur De Cor shares, to be exchanged for the IMT
shares and have had the opportunity to ask questions of, and have received
satisfactory answers from, the officers and directors of Shur De Cor
concerning Shur De Cor shares to be exchanged for the IMT shares and related
matters, and have had an opportunity to obtain additional information
necessary to verify the accuracy of such information and to evaluate the
merits and risks of the proposed acquisition of the Shur De Cor shares to be
exchanged for the IMT shares.
4.10 Title to Shares. The Shareholders are the beneficial and record
owners, free and clear of any liens and encumbrances, of whatever kind or
nature, of all of the shares of IMT of whatever class or series, which the
Shareholders have contracted to exchange.
4.11 Contracts.
(a) Set forth in the IMT Schedules are copies or descriptions of
all material contracts which written or oral, all agreements, franchises,
licenses, or other commitments to which IMT is a party or by which IMT or its
properties are bound.
(b) Except as may be set forth in the IMT Schedules, IMT is not a
party to any contract, agreement, corporate restriction, or subject to any
judgment, order, writ, injunction, decree, or award, which materially and
adversely effect the business, operations, properties, assets, or conditions
of IMT.
(c) Except as set forth in the IMT Schedules, IMT is not a party to
any material oral or written (i) contract for employment of any officer which
is not terminable on 30 days (or less) notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance, or any other retirement plan
of arrangement covered by Title IV of the Employee Retirement Income Security
Act, as amended, or otherwise covered; (iii) agreement providing for the sale,
assignment or transfer of any of its rights, assets or properties, whether
tangible or intangible, except sales of its property in the ordinary course of
business with a value of less than $2,000; or (iv) waiver of any right of any
value which in the aggregate is extraordinary or material concerning the
assets or properties scheduled by IMT, except for adequate value and pursuant
to contract. IMT has not entered into any material transaction which is not
listed in the IMT Schedules or reflected in the IMT financial statements.
4.12 Material Contract Defaults. IMT is not in default in any material
respect under the terms of any contract, agreement, lease or other commitment
which is material to the business, operations, properties or assets, or
condition of IMT, and there is no event of default or event which, with notice
of lapse of time or both, would constitute a default in any material respect
under any such contract, agreement, lease, or other commitment in respect of
which IMT has not taken adequate steps to prevent such default from occurring,
or otherwise compromised, reached a satisfaction of, or provided for
extensions of time in which to perform under any one or more contract
obligations, among others.
4.13 Conflict with Other Instruments. The consummation of the within
transactions will not result in the breach of any term or provision of, or
constitute a default under any indenture, mortgage, deed of trust, or other
material agreement or instrument to which IMT was or is a party, or to which
any of its assets or operations are subject, and will not conflict with any
provision of the Articles of Incorporation or Bylaws of IMT.
4.14 Governmental Authorizations. IMT is in good standing in the State
of New Jersey. Except for compliance with federal and state securities laws,
no authorization, approval, consent or order of, or registration, declaration,
or filing with, any court or other governmental body is required in connection
with the execution and delivery by IMT of this Plan and the consummation by
IMT of the transactions contemplated hereby.
4.15 Compliance with Laws and Regulations. IMT has complied with all
applicable statutes and regulations of any federal, state, or other applicable
jurisdiction or agency thereof, except to the extent that noncompliance would
not materially and adversely effect the business, operations, properties,
assets, or condition of IMT or except to the extent that noncompliance would
not result in the occurrence of any material liability, not otherwise
disclosed to Shur De Cor.
4.16 Approval of Plan. The Board of Directors of IMT have authorized
the execution and delivery of this Plan by IMT and have approved the Plan and
the transactions contemplated hereby. IMT has full power, authority, and
legal right to enter into this Plan and to consummate the transactions
contemplated hereby.
4.17 Information. The information concerning IMT set forth in this
Plan, and the IMT Schedules attached hereto, are complete and accurate in all
material respects and do not contain, or will not contain, when delivered, any
untrue statement or a material fact or omit to state a material fact the
omission of which would be misleading to Shur De Cor in connection with this
Plan.
4.18 IMT Schedules. IMT has delivered to Shur De Cor the following
items listed below, hereafter referred to as the "IMT Schedules", which is
hereby incorporated by reference and made a part hereof. A certification
executed by a duly authorized officer of IMT on or about the date within the
Plan is executed to certify that the IMT Schedules are true and correct.
(a) Copy of Articles of Incorporation and Bylaws;
(b) Financial Statements;
(c) A schedule setting forth the shareholders, together with the
number of shares owned beneficially or of record by each (also attached as
Exhibit A);
(d) Resolutions of Board of Directors approving Plan;
(e) Consent of Shareholders approving Plan;
(f) A list of key employees, including current compensation,
with notation as to job description and whether or not such employee is
subject to written contract, and if subject to a contract or employment
agreement, a copy of the same;
(g) A schedule showing the name and location of each bank or
other institution with which IMT has an account and the names of the
authorized persons to draw thereon or having access thereto;
(h) A schedule setting forth all material contracts;
(i) Officers' Certificate as required by Section 7.2 of the
Plan;
(j) Certificate of Good Standing
Section 5
Special Covenants
5.1 IMT Information Incorporated in Shur De Cor's Reports. IMT
represents and warrants to Shur De Cor that all the information furnished
under this Plan shall be true and correct in all material respects and that
there is no omission of any material fact required to make the information
stated not misleading. IMT agrees to indemnify and hold Shur De Cor harmless,
including each of its Directors and Officers, and each person, if any, who
controls such party, under any applicable law from and against any and all
losses, claims, damages, expenses or liabilities to which any of them may
become subject under applicable law, or reimburse them for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such actions, whether or not resulting in liability, insofar as
such losses, claims, damages, expenses, liabilities or actions arise out of or
are based on any untrue statement, alleged untrue statement, or omission of a
material fact contained in such information delivered hereunder.
5.2 Shur De Cor Information Incorporated in IMT's Reports. Shur De Cor
represents and warrants to IMT that all the information furnished under this
Plan shall be true and correct in all material respects and that there is no
omission of any material fact required to make the information stated not
misleading. The current officers and directors of Shur De Cor agree to
indemnify and hold IMT harmless, including each of its Directors and Officers,
and each person, if any, who controls such party, under any applicable law
from and against any and all losses, claims, damages, expenses or liabilities
to which any of them may become subject under applicable law, or reimburse
them for any legal or other expenses reasonably incurred by them in connection
with investigating or defending any such actions, whether or not resulting in
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions arise out of or are based on any untrue statement, alleged untrue
statement, or omission of a material fact contained in such information
delivered hereunder.
5.3 Special Covenants and Representations Regarding the Exchanged Shur
De Cor Stock. The consummation of this Plan and the transactions herein
contemplated, including the issuance of the Shur De Cor shares in exchange for
one hundred percent (100%) of the issued and outstanding shares of IMT to the
Shareholders constitutes the offer and sale of securities under the Securities
Act and the applicable state statutes, which depend, inter alia, on the
circumstances under which the Shareholders acquire such securities. Shur De
Cor intends to rely on the exemption of the registration provision of Section
5 of the Securities Act as provided for under Section 4.2 of the Securities
Act of 1933, which states "transactions not involving a public offering",
among others. Each Shareholder upon submission of his IMT shares and the
receipt of the Shur De Cor shares exchanged therefor, shall execute and
deliver to Shur De Cor a letter of investment intent to indicate, among other
representations, that the Shareholder is exchanging the IMT shares for Shur De
Cor shares for investment purposes and not with a view to the subsequent
distribution thereof. A proposed Investment Letter is attached hereto as
Exhibit B and incorporated herein by reference for the general use by the
Shareholders, as they may determine.
5.4 Action Prior to Closing. Upon the execution hereof until the
Closing date, and the completion of the consolidated audited financials,
(a) IMT and Shur De Cor will (i) perform all of its obligations
under material contracts, leases, insurance policies and/or documents relating
to its assets and business; (ii) use its best efforts to maintain and preserve
its business organization intact, to retain its key employees, and to maintain
its relationship with existing potential customers and clients; and (iii)
fully comply with and perform in all material respects all duties and
obligations imposed on it by all federal and state laws and all rules,
regulations, and orders imposed by all federal or state governmental
authorities.
(b) Neither IMT nor Shur De Cor will (i) make any change in its
Articles of Incorporation or Bylaws except and unless as contemplated pursuant
to Section 3 of this Plan; (ii) enter into or amend any contract, agreement,
or other instrument of the types described in the parties' schedules, except
that a party may enter into or amend any contract or other instrument in the
ordinary course of business involving the sale of goods or services, provided
that such contract does not involve obligations in excess of $10,000.
Section 6
Conditions Precedent to Obligations of
IMT and the Shareholders
All obligations of IMT and the Shareholders under this Plan are subject
to the satisfaction, on or before the Closing date, except as otherwise
provided for herein, or waived or extended in writing by the parties hereto,
of the following conditions:
6.1 Accuracy of Representations. The representations and warranties
made by Shur De Cor in this Plan were true when made and shall be true as of
the Closing date (except for changes therein permitted by this Plan) with the
same force and effect as if such representations and warranties were made at
and as of the Closing date; and, Shur De Cor shall have performed and complied
with all aspects of this Agreement, unless waived or extended in writing by
the parties hereto. IMT shall have been furnished with a certificate, signed
by a duly authorized executive officer of Shur De Cor and dated the Closing
date, to the foregoing effect.
6.2 Officers' Certificate. IMT and the Shareholders shall have been
furnished with a certificate dated the Closing date and signed by a duly
authorized executive officer of Shur De Cor, to the effect that no litigation,
proceeding, investigation, claim, demand or inquiry is pending, or to the best
knowledge of Shur De Cor, threatened, which might result in an action to
enjoin or prevent the consummation of the transactions contemplated by this
Plan, or which might result in any material adverse change in the assets,
properties, business, or operations of Shur De Cor, and that this Agreement
has been complied with in all material respects.
6.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the financial condition,
business or operations of Shur De Cor, nor shall any event have occurred
which, with lapse of time or the giving of notice or both, may cause or create
any material adverse change in the financial condition, business or operations
of Shur De Cor, except as otherwise disclosed to IMT.
6.4 Opinion of Counsel of Shur De Cor. Shur De Cor shall furnish to IMT
and the Shareholders an opinion dated as of the Closing date and in form and
substance satisfactory to IMT and the Shareholders to the effect that:
(a) Shur De Cor is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Nevada, and with all
requisite corporate power to perform its obligations under this Plan.
(b) The business of Shur De Cor, as presently conducted, including,
upon the consummation hereof, the ownership of all of the issued and
outstanding shares of IMT, does not require it to register it to do business
as a foreign corporation on any jurisdiction other than under the jurisdiction
of its Articles of Incorporation or Bylaws and Shur De Cor has complied to the
best of its knowledge in all material respects with all the laws, regulations,
licensing requirements and orders applicable to its business activities and
has filed with the proper authorities, including the Department of Commerce,
Division of Corporations, and Secretary of State for the State of Nevada, all
statements and reports required to be filed.
(c) The authorized and outstanding capital stock of Shur De Cor as
set forth in Section 3.2 above, and all issued and outstanding shares have
been duly and validly authorized and issued and are fully paid and
non-assessable.
(d) There are no material claims, suits or other legal proceedings
pending or threatened against Shur De Cor of any court or before or by any
governmental body which might materially effect the business of Shur De Cor or
the financial condition of Shur De Cor as a whole and no such claims, suits or
legal proceedings are contemplated by governmental authorities against Shur De
Cor.
(e) To the best knowledge of such counsel, the consummation of the
transactions contemplated by this Plan will not violate or contravene the
provisions of the Certificate of Incorporation or Bylaws of Shur De Cor, or
any contract, agreement, indenture, mortgage, or order by which Shur De Cor is
bound.
(f) This Plan constitutes a legal, valid and binding obligation of
Shur De Cor enforceable in accordance with its terms, subject to the effect of
any bankruptcy, insolvency, reorganization, moratorium, or similar law
effecting creditors' rights generally and general principles of equity
(regardless of whether such principles are considered in a proceeding in
equity or law).
(g) The execution and delivery of this Plan and the consummation of
the transactions contemplated hereby have been ratified by a majority of the
Shareholders of Shur De Cor and have been duly authorized by its Board of
Directors.
(h) Shur De Cor has not, nor will it undertake any action, the
result of which would endanger the tax-free nature of the Plan.
6.5 Good Standing. IMT shall have received a Certificate of Good
Standing from the State of Nevada, dated within sixty (60) days prior to
Closing, but in no event later than ten days subsequent to the execution
hereof certifying that Shur De Cor is in good standing as a corporation in the
State of Nevada.
6.6 Other Items. IMT and the Shareholders shall have received such
further documents, certifications or instruments relating to the transactions
contemplated hereby as IMT and the Shareholders may reasonably request.
Section 7
Conditions Precedent to Obligations of Shur De Cor
All obligations of Shur De Cor under this Plan are subject, at its
option, to the fulfillment, before the Closing, of each of the following
conditions:
7.1 Accuracy of Representations. The representations and warranties
made by IMT and the Shareholders under this Plan were true when made and shall
be true as of the Closing date (except for changes therein permitted by this
Plan) with the same force and effect as if such representations and warranties
were made at and as of the Closing date; and, Shur De Cor shall have performed
and complied with all aspects of this Agreement, unless waived or extended in
writing by the parties hereto. Shur De Cor shall have been furnished with a
certificate, signed by a duly authorized executive officer of IMT and dated
the Closing date, to the foregoing effect.
7.2 Officers' Certificate. Shur De Cor shall have been furnished with a
certificate dated the Closing date and signed by a duly authorized executive
officer of IMT, to the effect that no litigation, proceeding, investigation,
claim, deed, or inquiry is pending, or to the best knowledge of IMT,
threatened, which might result in an action to enjoin or prevent the
consummation of the transactions contemplated by this Plan, or which might
result in any material adverse change in the assets, properties, business, or
operations of IMT, and that this Agreement has been complied with in all
material respects.
7.3 No Material Adverse Change. Prior to the Closing date, there shall
have not occurred any material adverse change in the financial condition,
business or operations of Shur De Cor, nor shall any event have occurred
which, with lapse of time or the giving of notice or both, may cause or create
any material adverse change in the financial condition, business or operations
of IMT, except as otherwise disclosed to Shur De Cor.
7.4 Good Standing. Shur De Cor shall have received a Certificate of
Good Standing from the State of New Jersey, dated within sixty (60) days prior
to Closing, but in no event later than ten days subsequent to the execution
hereof certifying that IMT is in good standing as a corporation in the State
of New Jersey.
7.5 Dissenters' Rights Waived. Shareholders representing at one hundred
percent (100%) of the issued and outstanding shares of IMT, and each of them,
have agreed and hereby waive any dissenters' rights, if any, under the laws of
the State of New Jersey in regards to any objection to this Plan as outlined
herein and otherwise consent to and agree and authorize the execution and
consummation of the within Plan in accordance to the terms and conditions of
this Plan by the management of IMT.
7.6 Other Items. Shur De Cor shall have received such further
documents, certifications or instruments relating to the transactions
contemplated hereby as Shur De Cor may reasonably request.
7.7 Execution of Investment Letter. The Shareholders shall have
executed and delivered copies of Exhibit B to Shur De Cor.
Section 8
Termination
8.1 Termination by IMT or the Shareholders. This Plan may be terminated
at any time prior to the Closing date by action of IMT or the Shareholders, if
Shur De Cor shall fail to comply in any material respect with any of the
covenants or agreements contained in this Plan, or if any of its
representations and warranties contained herein shall be inaccurate in any
material respect.
8.2 Termination by Shur De Cor. This Plan may be terminated at any time
prior to the Closing date by action of Shur De Cor if IMT shall fail to comply
in any material respect with any of the covenants or agreements contained in
this Plan, or if any of its representations or warranties contained herein
shall be inaccurate in any material respect.
8.3 Termination by Mutual Consent
(a) This Plan may be terminated at any time prior to the Closing
date by mutual consent of Shur De Cor, expressed by action of its Board of
Directors, IMT or the Shareholders.
(b) If this Plan is terminated pursuant to Section 8, this Plan
shall be of no further force and effect and no obligation, right or liability
shall arise hereunder. Each party shall bare its own costs in connection
herewith.
Section 9
Shareholders' Representative
The Shareholders hereby irrevocably designate and appoint Frank A. Leo,
as their agent and attorney in fact (the "Shareholders' Representative") with
full power and authority until the Closing to execute, deliver and receive on
their behalf all notices, requests and other communications hereunder; to fix
and alter on their behalf the date, time and place of the Closing; to waive,
amend or modify any provisions of this Plan and to take such other action on
their behalf in connection with this Plan, the Closing and the transactions
contemplated hereby as such agent deems appropriate; provided, however, that
no such waiver, amendment or modification may be made if it would decrease the
number of shares to be issued to the Shareholders under Section 1 hereof or
increase the extent of their obligation to Shur De Cor hereunder, unless
agreed in writing by the Shareholders.
Section 10
General Provisions
10.1 Further Assurances. At any time, and from time to time, after the
Closing date, each party will execute such additional instruments and take
such action as may be reasonably requested by the other party to confirm or
perfect title to any property transferred hereunder or otherwise to carry out
the intent and purposes of the Plan.
10.2 Payments of Costs and Fees. Shur De Cor and IMT shall each bear
their own costs and expenses, including any legal and accounting fees in
connection with the negotiation, execution and consummation of the Plan.
10.3 Press Release and Shareholders' Communications. On the date of
Closing, or as soon thereafter as practicable, IMT and the Shareholders shall
cause to have promptly prepared and disseminated a IMT release concerning the
execution and consummation of the Plan, such press release and communication
to be released promptly and within the time required by the laws, rules and
regulations as promulgated by the United States Securities and Exchange
Commission, and concomitant therewith to cause to be prepared a full and
complete letter to Shur De Cor's shareholders which shall contain information
required by Regulation 240.14f-1 as promulgated under Section 14(f) as
mandated under the Securities and Exchange Act of 1934, as amended.
10.4 Notices. All notices and other communications required or
permitted hereunder shall be sufficiently given if personally delivered, sent
by registered mail, or certified mail, return receipt requested, postage
prepaid, or by facsimile transmission addressed to the following parties
hereto or at such other addresses as follows:
If to Shur De Cor: Shur De Cor, Inc.
525 South 300 East
Salt Lake City, Utah 84111
With a copy to: Daniel W. Jackson
525 South 300 East
Salt Lake City, New Jersey 84111
If to IMT: Interactive Marketing Technology, Inc.
5567 Reseda Blvd., Suite 118,
Tarzana, California 91356
With a copy to: Frank A. Leo
44 Minebrook Road
Colts Neck, New Jersey 07702
or at such other addresses as shall be furnished in writing by any party in
the manner for giving notices hereunder, and any such notice or communication
shall be deemed to have been given as of the date so delivered, mailed, sent
by facsimile transmission, or telegraphed.
10.5 Entire Agreement. This Plan represents the entire agreement
between the parties relating to the subject matter hereof, including any
previous letters of intent, understandings, or agreements between Shur De Cor,
IMT and the Shareholders with respect to the subject matter hereof, all of
which are hereby merged into this Plan, which alone fully and completely
expresses the agreement of the parties relating to the subject matter hereof.
Excepting the foregoing agreement, there are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
10.6 Governing Law. This Plan shall be governed by and construed and
enforced in accordance with the laws of the State of Nevada, except to the
extent preempted by federal law, in which event (and to that extent only)
federal law shall govern.
10.7 Tax Treatment. The transaction contemplated by this Plan is
intended to qualify as a "tax-free" reorganization under the provisions of
Section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended. IMT
and Shur De Cor acknowledge, however, that each are being represented by their
own tax advisors in connection with this transaction, and neither has made any
representations or warranties to the other with respect to treatment of such
transaction or any part or effect thereof under applicable tax laws,
regulations or interpretations; and no attorney's opinion or tax revenue
ruling has been obtained with respect to the tax consequences of the
transactions contemplated by the within Plan.
10.8 Attorney Fees. In the event that any party prevails in any action
or suit to enforce this Plan, or secure relief from any default hereunder or
breach hereof, the nonprevailing party or parties shall reimburse the
prevailing party or parties for all costs, including reasonable attorney fees,
incurred in connection therewith.
10.9 Amendment of Waiver. Every right and remedy provided herein shall
be cumulative with every other right and remedy, whether conferred herein, at
law or in equity, and may be enforced concurrently or separately, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, therefore, or
thereafter occurring or existing. Any time prior to the expiration of thirty
(30) days from the date hereof, this Plan may be amended by a writing signed
by all parties hereto, with respect to any of the terms contained herein, and
any term or condition of this Plan may be waived or the time for performance
thereof may be extended by a writing signed by the party or parties for whose
benefit the provision is intended.
10.10 Counterparts. This Plan may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be
an original, and all of which together shall constitute one and the same
instruments.
10.11 Headings. The section and subsection headings in this Plan are
inserted for convenience only and shall not effect in any way the meaning or
interpretation of the Plan.
10.12 Parties in Interest. Except as may be otherwise expressly
provided herein, all terms and provisions of this Plan shall be binding upon
and inure to the benefit of the parties hereto and their respective heirs,
beneficiaries, personal and legal representatives, and assigns.
IN WITNESS WHEREOF, the parties have executed this Plan and Agreement of
Reorganization effective the day and year first set forth above.
SHUR DE COR, INC.
Attest:
/s/ James R. Glavas
By: _____________________________________________
Its President
INTERACTIVE MARKETING TECHNOLOGY, INC.
Attest:
/s/ Sandy Lang
By: _____________________________________________
Its President
SHAREHOLDERS:
Attest:
/s/ Margie Melendez /s/ Sandy Lang
_____________________ By:____________________________________________
Sandy Lang
Attest:
/s/ Margie Melendez /s/ Martin Goldrod
___________________ By: __________________________________________
Martin Goldrod
Attest:
/s/ signature illegible /s/ John Bench
_____________________ By: ___________________________________________
John Bench
Attest:
/s/ signature illegible /s/ Fred Davis
_____________________ By: ___________________________________________
Fred Davis
Attest:
/s/ Doreen Cioni /s/ James M. Piro
_____________________ By: ___________________________________________
James M. Piro
Attest:
/s/ signature illegible /s/ Jack Mariucci
_____________________ By: ___________________________________________
Jack Mariucci
Attest:
/s/ Kathleen Emory /s/ Steve Emory
_____________________ By: ___________________________________________
Steve Emory
Attest:
/s/ Frances C. Hopf /s/ Michael Hopf
_____________________ By: _____________________________________________
Michael Hopf
Attest:
/s/ signature illegible /s/ Jeff Strumeirer
_____________________ By: ____________________________________________
Jeff Strumeirer
Attest:
/s/ Pauline Dorsey /s/ Michael Dorsey
_____________________ By:_____________________________________________
Michael Dorsey
Attest:
/s/ signature illegible /s/ Marjorie R. Melendez
_____________________ By: ______________________________________________
Marjorie Melendez
Attest:
/s/ Margie Melendez /s/ Margaret Fiore
_____________________ By: _____________________________________________
Margaret Fiore
Attest:
/s/ signature illegible /s/ Joseph Turchyn
_____________________ By: ______________________________________________
Joseph Turchyn
Attest:
/s/ signature illegible /s/ James R. Bolton
_____________________ By: _____________________________________________
James R. Bolton
Attest:
/s/ signature illegible /s/ Jennifer K. Bolton
_____________________ By: ______________________________________________
Jennifer K. Bolton
Attest:
/s/ signature illegible /s/ Patricia Bolton
_____________________ By: _____________________________________________
Patricia Bolton
Attest:
/s/ signature illegible /s/ Richard E. Bolton
_____________________ By: ______________________________________________
Richard E. Bolton
Attest:
/s/ Gloria Phisah /s/ Ron Feiner
____________________ By: _____________________________________________
Ron Feiner
Attest:
/s/ Zita White /s/ Barry Werner
_____________________ By: ______________________________________________
Barry Weiner
Attest:
/s/ Margie Melendez /s/ Michael Ferrone
_____________________ By: _____________________________________________
Michael Ferrone
Attest:
/s/ signature illegible /s/ Ron Perlman
_____________________ By: ______________________________________________
Ron Perlman
Attest: The Kall Group, Inc.
/s/ Richard Bolton /s/ Frank A. Leo
______________________ By:_____________________________________________
Schedule (e)
KEY EMPLOYEES OF INTERACTIVE MARKETING TECHNOLOGY, INC.
Name Annual Salary
Frank Leo No compensation at this time.
Sandy Lang No compensation at this time.
Schedule (f)
NAME AND LOCATION OF INTERACTIVE MARKETING TECHNOLOGY, INC.'S
BANK ACCOUNT AND AUTHORIZED SIGNATORIES
First Union National Bank
34 Artisan Way
Colts Neck, New Jersey 07722
Authorized Signatories: Frank A. Leo
Sandy Lang
SHAREHOLDERS OF INTERACTIVE MARKETING TECHNOLOGY, INC.
Name Shares
The Kall Group, Inc. 1,142.5
Sandy Lang 1,142.5
Martin Goldrod 10
John Bench 10
Fred Davis 10
James M. Piro 5
Jack Mariucci 25
Steve Emory 20
Michael Hopf 10
Jeff Strumeirer 10
Michael Dorsey 2
Marjorie Melendez 2
Margaret Fiore 1
Joseph Turchyn 40
James R. Bolton 10
Jennifer K. Bolton 10
Patricia Bolton 10
Richard E. Bolton 10
Ron Feiner 5
Barry Weiner 5
Michael Ferrone 10
Ron Perlman 10
TOTAL 2,500
EXHIBIT A
Name Shares of IMT Shares of Shur De Cor
- ----------------- -------------- ---------------------
The Kall Group, Inc. 1,142.5 5,677,000
Sandy Lang 1,142.5 5,677,000
Martin Goldrod 10 50,000
John Bench 10 50,000
Fred Davis 10 50,000
James M. Piro 5 25,000
Jack Mariucci 25 125,000
Steve Emory 20 100,000
Michael Hopf 10 50,000
Jeff Strumeirer 10 25,000
Michael Dorsey 2 10,000
Marjorie Melendez 2 10,000
Margaret Fiore 1 5,000
Joseph Turchyn 40 200,000
James R. Bolton 10 50,000
Jennifer K. Bolton 10 50,000
Patricia Bolton 10 50,000
Richard E. Bolton 10 50,000
Ron Feiner 5 25,000
Barry Weiner 5 25,000
Michael Ferrone 10 50,000
Ron Perlman 10 50,000
Total 12,404,000
CROUCH, BIERWOLF & CHISHOLM
Certified Public Accountants
50 West Broadway, Suite 1130
Salt Lake City, Utah 84101
Office (801) 363-1175
Fax (801) 363-0615
January 13, 2000
Securities and Exchange Commission
Washington, DC 20549
Dear SEC,
Crouch, Bierwolf & Chisholm agrees with the following statements as
contained in the filing of Form 10 for Shur de Cor, Inc.:
For the past two fiscal years we have not had any disagreements regarding
accounting practices, financial statement disclosure, or auditing scope or
procedure with our former independent accountant, Crouch, Bierwolf & Chisholm;
nor have their reports contained an adverse opinion or disclaimer of opinion.
Sincerely,
/s/ Crouch, Bierwolf & Chisholm
Crouch, Bierwolf & Chisholm
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