UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): February 10, 2000
NATIONAL REHAB PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Nevada
(State or other jurisdiction of incorporation)
000-27159 65-0439467
(Commission File Number) (IRS Employer Identification No.)
2921 NW Sixth Avenue, Miami, Florida 33127
(Address of principal executive offices) (Zip Code)
(305) 573-8882
Registrant's telephone number, including area code:
MAS ACQUISITION XV CORP.
1710 E. Division St.
Evansville, IN 47711
(812) 479-7226
(Former name, address and telephone number)
<PAGE>
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
(a) Pursuant to a Stock Exchange Agreement (the "Exchange Agreement") dated
as of February 10, 2000 between MRC Legal Services Corporation, a California
Corporation, which entity is the controlling shareholder of MAS Acquisition XV
Corp. ("MAS XV"), an Indiana corporation, and National Rehab Properties, Inc., a
Nevada corporation, approximately 96.8% (8,250,000 shares) of the outstanding
shares of common stock of MAS Acquisition XV Corp. were exchanged for 1,000,000
shares of common stock of National Rehab Properties, Inc. ("NRPI" or the
"Company") in a transaction in which NRPI became the parent corporation of MAS
XV.
The Exchange Agreement was adopted by the unanimous consent of the Board of
Directors of MAS XV and approved by the written consent of the shareholders of
MAS XV on January 10, 2000. The Exchange Agreement was adopted by the
unanimous consent of the Board of Directors of NRPI on February 10, 2000.
No approval of the shareholders of NRPI or MAS XV is required under
applicable state corporate law.
Prior to the merger, MAS XV had 8,519,800 shares of common stock
outstanding of which 8,250,000 shares were exchanged for 1,000,000 shares of
common stock of NRPI. By virtue of the exchange, NRPI acquired 96.8% of
the issued and outstanding common stock of MAS XV.
Prior to the effectiveness of the Exchange Agreement, NRPI had an
aggregate of 13,390,379 shares of common stock, par value $.001, issued and
outstanding, and 1,000,000 shares of Class A common stock outstanding, $.001
par value
Upon effectiveness of the acquisition, NRPI had an aggregate of
14,390,379 shares of common stock outstanding and 1,000,000 shares of Class
A common stock outstanding, $.001 par value.
The officers of NRPI continue as officers of NRPI subsequent to the
Exchange Agreement. See "Management" below. The officers, directors, and
by-laws of NRPI will continue without change.
A copy of the Exchange Agreement is attached hereto as an exhibit. The
foregoing description is modified by such reference.
(b) The following table sets forth certain information regarding
beneficial ownership of the common stock and Class A common stock of NRPI as of
September 30, 1999 (prior to the issuance of 1,000,000 shares pursuant to the
Exchange Agreement) by:
* each person or entity known to own beneficially more than 5% of the
common stock or 5% of the Class A common stock;
* each of NRPI's directors;
* each of NRPI's named executive officers; and
* all executive officers and directors of NRPI as a group.
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Name and Address of Amount and Nature of Percent of
Title of Class Beneficial Owner (1) Beneficial Ownership Class
- -------------- -------------------- --------------------- -----------
Common Stock Richard and Pamela
Astrom 285,000 2.0%
11415 NW 123 Lane
Reddick, FL 32686
Class A 0 0.0%
Common Stock
Common Stock Christopher
Astrom 6,010,000 (1) 41.8%
11415 NW 123 Lane
Reddick, FL 32686
Class A Christopher 1,000,000 (2) 100.0%
Common Stock Astrom
11415 NW 123 Lane
Reddick, FL 32686
Common Stock All Officers and Directors
as a Group (2 persons) 6,295,000 43.8%
Class A All Officers and Directors
Common Stock as a Group (2 persons) 1,000,000 100.0%
</TABLE>
(1) Includes options to acquire 6,000,000 shares of common stock at a price
of $.001 per share. Mr. Astrom has executed a promissory note to the Company in
the amount of $20,000 for these options, which were authorized and awarded to
Mr. Christopher Astrom on March 1, 1999 in consideration for waiver of
compensation during 1996 and 1997. There is no expiration date on the option.
(2) Each share of Class A common stock entitles Mr. Astrom to the equivalent
of 20 common share votes in any matter to be voted on by the shareholders of the
Company. The Class A common stock was authorized on June 17, 1999 and 1,000,000
shares issued to Mr. Christopher Astrom on June 17, 1999. The Class A common
stock may not be transferred to anyone other than a family member.
The Company has authorized 40,000,000 shares of $.001 par value common stock,
14,390,379 of which are outstanding at the date of this report. The Company
also has authorized 2,000,000 shared of .0001 par value Class A common, "super
voting shares", with voting rights equivalent to 20 common shares for each Class
A share, 1,000,000 of which are outstanding at the date of this report.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
<PAGE>
(a) The consideration exchanged pursuant to the Exchange Agreement was
negotiated between representatives of the shareholders of MAS XV and the
management of NRPI.
In evaluating NRPI as a candidate for the proposed acquisition, MAS XV
used criteria such as the value of the assets of NRPI, its present stock price
as set forth on the over-the-counter bulletin board, its real estate
development business and other anticipated operations, and NRPI's business
name and reputation. The shareholders of MAS XV determined that the
consideration for the merger was reasonable.
(b) NRPI intends to continue its historical businesses and proposed
businesses as set forth more fully immediately below.
BUSINESS
This Report on Form 8-K contains certain forward-looking statements within the
meaning of the federal securities laws. Actual results could differ materially
from those projected in the forward-looking statements due to a number of
factors, including those set forth under "Risk Factors" and elsewhere in this
Form 8-K.
SUMMARY
NRPI was formed on October 1, 1993. On August 17, 1995, we became a public
company as a result of a merger with an already existing public company.
We specialize in investing in and revitalizing homes in established older
residential neighborhoods in urban areas. Many of these homes have been
abandoned by the middle-class who typically move outward from the inner cities
into the newer suburban developments. We either buy vacant property and build
single family homes or we buy abandoned homes and complete all renovations. Our
purpose is to sell the homes for a profit. Renovated or rebuilt starter homes
were valued at approximately $30,000 in 1981, $45,000 in 1987, $60,000 in 1994,
$70,000 in 1997, and $85,000 in 1999. The years ahead should find properties in
this affordable housing market at the $90,000 range or higher.
Our target market has been fruitful over the past 30 years, regardless of
national inflation or economic stagnation. We believe the real estate market
will continue to provide a reasonable opportunity for our company's future
investments. Based upon the great number of foreclosures and abandoned
properties each year, we have a bountiful supply of lots and dilapidated homes,
which meet our business model criteria.
NRPI has a successful record of identifying and purchasing distressed or
foreclosed properties, completing renovations on those properties rapidly and
inexpensively, and marketing the properties to qualified first-time buyers who
can buy the properties with little or no down payment. We typically sell a
property for $90,000 and produce a profit of $15,000 per sale. The complete
buy-repair or build-resell process for each property takes approximately six
months. The intended result is an annual pre-tax return of approximately $30,000
on a $60,000 investment.
<PAGE>
The United States Department of Housing and Urban Development (HUD) and the
Federal Housing Administration (FHA) support the cities and their residential
neighborhoods with programs designed to work with developers to create low down
payment housing. Being favorable to lower income citizens, these programs are
non-subsidized by the government and carry their own weight in Washington's
bureaucratic environment where charity is often scorned. As a rule, the federal
government favors private ownership over public housing and tenant/renter
situations. The HUD and FHA programs are specifically aimed at the low-income
neighborhoods of America in an attempt to maintain the nation's existing housing
stock which has depreciated and declined due to foreclosure, abandonment and old
age. The Community Reinvestment Act (CRA) requires banks all over the nation to
invest in these neighborhoods. It is up to the private and public sectors to
engage these encouraging and sound programs and make them successful. NRPI takes
advantage of that challenge by revitalizing abandoned urban neighborhoods, and
in so doing, helps hundreds of working-class families realize the American dream
of home ownership.
NRPI's business is real estate and in order to buy real estate for our business
of rehabilitating houses or building houses, construction financing is
necessary. Through the years we have constantly had difficulty in borrowing
money from banks due to lack of cash in the corporate bank account. This is
evidenced by the income for the years 1994 through 1997-- Federal Income Tax
reports were as follows: $61,965 - 1994; $73,886 - 1995; $76,684 - 1996; $20,369
- - 1997; ($344,064) - 1998). In May of 1997, we entered into a line of credit for
$1,500,000 with an investment banking company. The interest rate was between 15%
and 18% per year with an equal amount in placement fees. Additionally, we had to
give the lender 4,000,000 shares of restricted stock. Our board entered into
this agreement due to lack of credit for the rehabilitation of houses. In 1997,
we opened an office in New Orleans, Louisiana because that city has 39,000
declared houses in need of repair. In 1997 and 1998, we completed 25 houses in
New Orleans and, between the points and interest, we lost approximately
$240,000. In 1998, we left New Orleans as it was determined that the excessive
rate of interest being charged for the money borrowed NRPI could not be
profitable. As of December 31, 1998, the inventory of company-owned houses in
New Orleans, houses with the excessively high interest rates, was zero. In
December 1998, we filed a lawsuit against the lender and its president for civil
usury in Dade County Circuit Court. In that lawsuit we are asking for return of
principal, damages and return of the stock issued to the defendants, et al. That
stock (400,000 shares post split) is currently partially held in escrow with the
courts and partially still in restricted form pending the result of the
litigation.
In January, 1999, we completed a reverse split of our stock on a 1 for 10 basis
and raised $557,500 from the sale and/or conversion into common stock of senior
subordinated debentures. In addition, we raised $211,500 from the sale of
restricted stock during the 1999 fiscal year. The reverse split was done in
order to reduce the number of shares outstanding so that it would be possible to
attract investment capital from the sale of our common stock.
Present Operations
<PAGE>
Our offices are located at 2921 NW 6th Avenue, Miami, Florida 33127 and our
telephone number is (305) 573-8882.
Our business is currently based in Miami where we intend to build 100 houses
annually. As a public Company, National Rehab Properties, Inc. is traded
over-the-counter as a bulletin board stock under the symbol NRPI.
In 1999, we purchased 17 building sites in Miami for cash, filed for building
permits and are proceeding forward with construction. A profit of $300,000 is
projected from the completion of these sales. Those houses will be encumbered by
mortgages from a Miami lending institution. The decision to build houses in
Miami was the result of a market study showing a large demand for first time
buyer homes and the large number of vacant lots in the mature residential
neighborhoods NRPI is accustomed to dealing in. Due to our cash position, we
expect to acquire construction financing for the Miami project. The Miami
project of 100 houses is contingent upon construction financing.
NRPI has made a deposit on a 20 acre tract of land with a purchase price of
$280,000 in Vero Beach, Florida. We anticipate improving the land with road and
utilities and platting the land for 100 single family home sites. We believe we
can obtain a land and acquisition loan from a local lending institution for the
cost of construction of improvements to the land. We further anticipate building
the houses with construction financing and reselling the houses in the local
economy. We have funds available to purchase the land without the need to obtain
additional financing. The project, known as "Eagle Trace," is estimated to
create a profit of $3,500,000. This project is contingent upon construction
financing for the land improvements and home construction.
NRPI has signed a letter of intent to purchase an aluminum manufacturing plant
that produces aluminum and glass railings, storm shutters and aluminum windows
for sale in South Florida. In 1998, the aluminum company had $4,600,000 in sales
revenues, however it was not profitable due to lack of cash to finance the sale
of its products awaiting construction draws. NRPI Properties, Inc. may acquire
80% of the company. If this entity is acquired, all financials will be
consolidated with our company. We anticipate acquiring financing for the
aluminum company's receivables through a factoring company. The receivable
financing will be the only debt of the aluminum company. We have the funds for
initial acquisition, however, the receivable financing funds are not yet in
place and therefore the potential profitability of the acquisition target is not
secure. We feel that the supply of users for the target's products is immense
because the acquisition target is one of three companies that are licensed to
build products passing the newest hurricane protection laws. There can be no
assurance that the contemplated acquisition will occur and, if consummated, that
it will provide profitable operations for our business.
<PAGE>
Management's Discussion of Operations
The following is a discussion of the financial condition and results of
operations of our operations for the 12 month period commencing October 1, 1997
until the close of the fiscal year September 30, 1998. The financial condition
information does not include the accounts of NRPI after the close of the fiscal
year ending September 30, 1998, however, the period of 1994 through 1999 is
discussed. We are current in our federal and state tax filings.
We specialize in renovating or rebuilding starter homes. Renovated or rebuilt
starter homes were valued at approximately $30,000 in 1981, $45,000 in 1987,
$60,000 in 1994, $70,000 in 1997, and $85,000 in 1999. The years ahead should
find properties in this affordable housing market at the $90,000 range or
higher. Over the past 30 years, the market we have targeted continues to be
fruitful regardless of national inflation or economic stagnation. We believe the
real estate market will continue to be ripe for our future investments.
Thousands of homes suffer foreclosure and abandonment every year, creating an
abundant supply of lots and dilapidated homes, which fit our investment
criteria.
We have a successful record of identifying and purchasing distressed or
foreclosed properties, completing renovations on those properties rapidly and
inexpensively, and marketing the properties to qualified first-time buyers who
can buy the properties with little or no down payment. We typically sell a
property for $90,000 and produce a profit of $15,000 per sale. The complete
buy-repair or build-resell process for each property takes approximately six
months. The intended result is an annual pre-tax return of approximately $30,000
on a $60,000 investment.
Operational History
Our business involves the real estate industry and in order to buy real estate
for our business of rehabilitating houses or building houses, construction
financing is necessary. Through the years, we have constantly had difficulty in
borrowing money from banks due to lack of cash in the corporate bank account.
This is evidenced by the income of the years 1994 through 1997 as follows:
Federal Income Tax report for the years 1994 though 1997:
$61,965 - 1994;
$73,886 - 1995;
$76,684 - 1996;
$20,369 - 1997;
($344,064) - 1998.
In May of 1997 we obtained a line of credit for $1,500,000 with an investment
banking company. The interest rate was between 15% and 18% per year with an
equal amount in placement fees. Additionally, we had to give the lender
4,000,000 shares of restricted stock. We entered into this agreement due to lack
of credit for the rehabilitation of houses. In 1997 we opened an office in New
<PAGE>
Orleans, Louisiana because that city has 39,000 declared houses in need of
repair. In 1997 and 1998, we completed 25 houses in New Orleans and between the
points and interest we lost approximately $240,000. In 1998, we left New Orleans
as it was determined that, with the excessive rate of interest being charged for
the money borrowed, we could not be profitable. As of December 31, 1998, we had
no more houses in inventory the inventory. In December 1998 we filed a lawsuit
in Dade County Circuit Court against the lender and its president for civil
usury. In that lawsuit we asked for return of principal, damages and return of
the stock issued to the defendants. That stock (400,000 shares post split) is
currently partially held in escrow with the courts and partially still in
restricted form pending the result of the litigation.
In 1997 we wrote off a receivable of $105,000 due to the bankruptcy of the
debtor, an original incorporator of NRPI.
In January, 1999 we completed a reverse split of our common stock on a 1 for 10
basis and proceeded to raise $557,500 from the sale and/or conversion into
common stock of senior subordinated debentures. In addition, the Company raised
$211,500 from the sale of our restricted stock during the 1999 fiscal year. The
reverse split was done in order to reduce the number of shares outstanding so
that it would be possible to attract investment capital through the sale of
common stock.
Overhead
The monthly costs of our corporate offices are estimated to be approximately
$20,000 per month. The monthly expense of $20,000 includes payroll, payroll
taxes, dues and subscriptions, utilities for the corporate offices, health
insurance for the employees, general liability insurance, office supplies,
postage and freight, professional fees for accounting, legal and other
consultants, corporate office rent, repairs and maintenance primarily for office
equipment, telephone expenses and travel and entertainment.
Liquidity and Capital Resources
Prior to our inception as a publicly owned company, we relied primarily upon
loans originated by NRPI's founder, Richard S. Astrom. These loans helped to
finance working capital needs when operations did not provide enough cash flow.
Additionally, we have relied upon bank financing to acquire properties and pay
operational costs. The bank financing has required the personal guarantee of Mr.
Astrom. In the future, we need to acquire additional financing for the company
with the proceeds of mortgage funding or public or private offerings of stock.
However, we currently have sufficient funds to continue operations and new
acquisitions will also supply additional funds to continue operations.
Therefore, any future funding will result from business expansion and/or
improvements to our financial lending structure. Thus, we do not have a schedule
of future funds to be acquired and quantified because it is difficult to
estimate when, or if, business expansion will occur or when, or if, financial
lucrative opportunities will present themselves. If funds are required in the
future they may be generated from stock sales or from the mortgaging of real
estate. The can be no assurance that any such funds will be available on
favorable terms and conditions when the capital is required.
<PAGE>
At the end September 30, 1998, we had $13,754 in the bank and in the quarter
ending December 1998 we showed a profit of $212,792. In the first months of
1999, we raised approximately $557,500 from the sale of our securities. We will
use these monies as well as cash from stock sales for business operations.
Should that cash flow prove insufficient, we expect to take defensive measures,
including slowing construction, acquiring additional mortgage financing and/or
selling additional stock.
Company Background
NRPI was incorporated in Florida in 1993 and completed a reverse merger with a
Nevada corporation in 1994. We believe that the Company has over 1200
stockholders. Our common stock is currently publicly traded on the OTC Bulletin
Board. We finance our real estate projects with first mortgages from banks at
bank rates. With our managerial and financial resources fully developed, we will
strive to be a leader in business and to set an example of how a profitable,
public company can use its assets and resources in conjunction with governmental
agencies to develop and improve local communities.
The real estate market of South Florida is ripe for this type of development.
Thousands of homes and lots go through foreclosure and abandonment yearly and
become available at attractive prices and fit our criteria. These properties can
become the inventory for us to buy and resell, and create profits. We do not
feed off financial failure and economic stagnation but, to the contrary,
encourage economic growth not only by investing in older neighborhoods but by
providing jobs to local contractors.
There is an adequate supply of lots and dilapidated homes available to supply us
with product for resale. The cities are mandated by public policy to maintain
the neighborhoods in a safe, lawful and orderly manner, which includes that
vacant houses be boarded at all times. Owners of vacant houses are notified if
their houses are not lawfully kept, after a short period of time the house is
demolished at the owner's expense and the lot left clear. We look to invest in
these homes either before or after demolition at the appropriate price.
In order for us to buy real estate for our business of rehabilitating houses or
building houses, construction financing is necessary. Through the years we have
constantly had difficulty in borrowing money from banks due to lack of cash in
the corporate bank account. This is evidenced by the income of the years 1994
through 1997. We have, however, improved our capital position through the sale
of our securities and the establishment of new bank financing relationships.
This enables us to increase our potential profitability by increasing the number
of properties we are developing.
In January, 1999, we completed a reverse split of our common stock on a 1 for 10
basis and proceeded to raise approximately $557,500 from the issuance of common
stock issued as a result of conversion of senior subordinated convertible
debentures pursuant to an exemption provided for under Rule 504 of Regulation D.
The reverse split was done in order to reduce the number of shares outstanding
so that it would be possible to attract additional investment capital.
<PAGE>
The Market Environment
The following provides a description of the market environment in which we
currently operate.
The real estate values of "starter homes" in the United States has kept pace
with inflation for the past 30 years, while values of other areas of the real
estate market have gone through depression-like periods. These starter homes are
found in older established residential neighborhoods. In particular, the
increase of the interest rates to 20% in 1981 and the tax law change of 1986
severely lowered the value of real estate. However, the market that we have
targeted did not feel the same strains produced by the economy. These renovated
"starter homes" were $30,000 in 1981; $45,000 in 1987; $60,000 in 1994; $70,000
in 1997, and $85,000 in 1999.
The homes sold in these neighborhoods are sold with low down payments. The
buyers are usually minorities and/or immigrants and first time homebuyers, not
often educated in the language of home ownership. Since the 1960's, the big
cities of the United States have been abandoned by the middle-class in favor of
the suburbs, leaving the older and smaller dwellings to first-time home buyers.
Economists refer to this market as the "affordable housing" market.
In the past, buyers have filled low cost homes in the Miami market as soon as
they became available. In the 1950's, the market was veterans returning from
World War II and the Korean War. In the 1960's, the influx of Hispanic
immigrants into Miami filled the void left by those people desiring to live in
the suburbs. Throughout the 1970's and 1980's, Haitians, Jamaicans, Cubans,
Nicaraguans, Panamanians, Hondurans, Venezuelans, Mexicans, and Colombians have
made Miami their home. The immigration into this multi-cultural city has not
slowed much into the 1990's. Miami has become a large ethnic blend of many
nationalities. All of these people need places to call home. It is within this
population and older established residential neighborhoods that we have
specialized in selling houses priced less than $90,000.
Nationally, home ownership is only 27% in many of these inter-city areas.
Housing and Urban Development's ("HUD") national housing initiative goal is over
70% home ownership. Our goal is to convert those tenants into homeowners.
HUD and the Federal Housing Administration support the cities and their
residential neighborhoods with low down payment housing programs. These
financing programs are very favorable to lower income citizens. The Community
Reinvestment Act ("CRA") requires banks to invest in these neighborhoods. The
government favors private ownership over public housing and tenant-renter
situations. It is up to the private and public sectors to engage these sound
programs and make them successful. We have taken that challenge by revitalizing
urban neighborhoods and, in so doing, help hundreds of working-class families
realize the American dream of home ownership.
Business Strategies
We have the established the following strategies in fulfilling the first part of
our Business Plan.
<PAGE>
1. (a) Purchase distressed and foreclosed homes for approximately $15,000
that need as much as $35,000 for repairs. The total investment usually
approaches $40,000 - $50,000. We then sell the home for $75,000 - $80,000 within
six months.
(b) Purchase vacant lots for $7,500. We then contract with a building
contractor to build a 1,300 square foot house for $55,000 and sell it for
$90,000 while under construction. Within six months the new home is built, sold
and closed. With adequate funds, hundreds of these homes can be purchased in
many of America's large metropolitan cities.
The HUD programs are specifically aimed at the low income neighborhoods of
America and to maintain the nation's existing housing stock which has
depreciated and declined due to foreclosures, abandonment, and old age.
2. Subdivision development is a new area of the development business into which
we are currently embarking with our initial project in Vero Beach called "Eagle
Trace." This market is known as the retiree market selling to retirees moving
from the northern cities to retire, live close to golf courses, the ocean,
hospitals, and shopping. The buyers are looking for a new home of approximately
1,800 square feet, two car garage, and possibly a pool for approximately
$125,000. The land and subdivision improvements costs us $10,000 per lot and,
with sales at $25,000 per lot, profit of $15,000 per lot are expected. We plan
on developing subdivisions of 70 to 100 homes. Additional profits will be earned
by building the houses in the subdivision and selling the homes. Management
feels that at that size, our risk is limited.
3. Apartment development is believed by management of the Company to be very
lucrative due to demand and high rental prices for new apartments in the South
Florida region. With the financing-mortgage plans available to NRPI, we
anticipate building 50 to 100 unit apartment projects and capture a niche that
is not being developed by many developers in South Florida at this time.
Competition
The market for real estate development and housing construction is highly
competitive and subject to economic changes, regulatory developments and
emerging industry standards. We believe that the principal competitive factors
in its markets are conformance to building standards, reliability, safety, price
and quality of its final product. There can be no assurance that the Company
will compete successfully in the future with respect to these or other factors.
Employees
As of the date of this Form 8K report, substantially all of the activities
of the company are undertaken by its current officers and directors. We have
four employees, including the Company's two officers, at the date of this
report.
FACILITIES
<PAGE>
NRPI currently maintains its executive offices on a rent-free basis
pursuant to a month to month arrangement with Encore Builders, an unrelated firm
which does contract construction work for the Company.
MARKET FOR NRPI's SECURITIES
NRPI has been a non-reporting publicly traded company with certain of
its securities exempt from registration under the Securities Act of 1933
pursuant to Rules 504 of Regulation D and Rule 144 of the General Rules and
Regulations of the Securities and Exchange Commission. NRPI's common stock is
traded on the OTC Bulletin Board ( an electronic trading medium operated
by Nasdaq) under the symbol NRPI. Although NRPI filed a SB-2 Registration
Statement seeking to register certain securities for sale by the Company and
thereby obtain reporting status, that SB-2 Registration Statement was withdrawn.
Consequently, NRPI has not become or otherwise been a reporting company under
the Securities Exchange Act of 1934. The Nasdaq Stock Market has
implemented a change in its rules requiring all companies trading securities
on the OTC Bulletin Board to become reporting companies under the Securities
Exchange Act of 1934. NRPI is required to become a reporting company by the
close of business on February 24, 2000 or no longer be listed on the OTC
Bulletin Board. NRPI effected the stock exchange transaction with MAS XV on
February 10, 2000 and became a successor issuer thereto in order to comply
with the reporting company requirements implemented by the
over-the-counter bulletin board.
The following table sets forth the high and low closing prices for shares of
NRPI common stock for the periods noted, as reported by the National Daily
Quotation Service and the Over-the-Counter Bulletin Board. Quotations reflect
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions. NRPI common stock is listed under the
symbol "NRPI".
CLOSING PRICES
YEAR PERIOD HIGH LOW
----------- ---- ---
1999 First quarter .53 .48
Second quarter .49 .42
Third quarter .25 .22
Fourth quarter .36 .11
1998 First quarter .69 .30
Second quarter .73 .27
Third quarter .70 .31
Fourth quarter .39 .25
The number of beneficial holders of record of NRPI common stock as of the
close of business on February 9, 2000 was approximately 606. Many of the
shares of NRPI's common stock are held in "street name" and consequently
reflect numerous additional beneficial owners whose individual identities
<PAGE>
are unknown to us, which we are advised is approximately 600 as of
February 9, 2000.
At September 30, 1999, NRPI had issued outstanding options to purchase
6,000,000 shares of its .001 par value common stock at an exercise price of
..001. These options are held by Christopher Astrom, a Director, Vice President
and Secretary of the Company.
At February 9, 2000, NRPI had 3,174,955 shares of common stock which
could be sold pursuant to Rule 144. In general, under Rule 144, subject to the
satisfaction of certain other conditions, a person, including one of our
affiliates, who has beneficially owned restricted shares of common stock for at
least one year is entitled to sell, in certain brokerage transactions, within
any three-month period, a number of shares that does not exceed the greater of
1% of the total number of outstanding shares of the same class, or the average
weekly trading volume during the four calendar weeks immediately preceding the
sale. A person who presently is not and who has not been an affiliate for at
least three months immediately preceding the sale and who has beneficially owned
the shares of common stock for at least two years is entitled to sell such
shares under Rule 144 without regard to any of the volume limitations described
above.
CJB Transfer Services, 9800 Mt. Pyramid Court, Suite 400, Englewood, Colorado
80112 is the Company's independent transfer agent.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth the names and ages of the current directors
and executive officers of NRPI who will remain so with the combined entity,
their principal offices and positions and the date each such person became a
director or executive officer. Our executive officers are elected annually by
the Board of Directors. Our directors serve until their successors are
elected. The executive officers serve terms of one year or until their death,
resignation or removal by the Board of Directors. Richard Astrom and
Christopher Astrom are Father and Son. There was no arrangement or
understanding between any executive officer and any other person pursuant
to which any person was selected as an executive officer.
Our directors and executive officers are as follows:
Name Age Positions
- ---- --- ---------
Richard Astrom 52 Chairman, Chief Executive,
President, Director
Christopher Astrom 28 Director; Vice President
and Secretary
<PAGE>
Richard Astrom - Qualifications
Richard Astrom currently serves as President, Chief Executive Officer and
Chairman of the Board of Directors of NRPI. He has extensive experience in the
first-time home buyer's market. Throughout his career in real estate, he has
devoted himself to the needs of people seeking to own a piece of the American
dream. Mr. Astrom is a graduate of the University of Miami with a Bachelor's
degree in Business Administration and a major in Finance. As a certified real
estate broker, he has been active as a salesperson, developer, and real estate
investor since 1969. For more than 25 years, he has specialized in
rehabilitating the existing housing stock of Miami, one of America's largest and
fastest growing cities. He gained invaluable experience outside of the Miami
area by adequately filling the roll of vice president and sales manager of a 200
home retirement community in Ocala, Florida, selling land and home packages. He
was the primary developer of the land, recreation facilities, and housing stock.
He also sold commercial properties and land in the same area, including 40 to
100 acres parcels for horse farms. As founder and president of NRPI, he has
helped make dreams come true for hundreds of South Florida families. He has
directed NRPI through a December 1994 merger with a publicly owned and traded
company. Mr. Astrom has been President of the Company since 1993.
Christopher Astrom - Qualifications
Christopher Astrom currently serves as Vice President, Secretary and Director of
NRPI. Christopher manages all corporate acquisitions. He has experience in the
analysis of market areas and their resale ability. In addition, he has developed
management systems to control costs of acquisition and rehab thereby helping to
ensure our profitability. The spread between purchase and sale is usually the
same thus ensuring approximately $15,000 gross profit per sale. He received his
Bachelor of Arts in Business Administration from the School of Business at the
University of Florida. Mr. Astrom has been employed by the Company since 1995.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following NRPI summary compensation table shows certain compensation
information for services rendered in all employee capacities for the two
fiscal years ended September 30, 1998 and 1999. Other than as set forth
herein, no executive officer's salary and bonus exceeded $100,000 in any of the
applicable years. The following information includes the dollar value of base
salaries, bonus awards, the number of stock options granted and certain other
compensation, if any, whether paid or deferred.
SUMMARY COMPENSATION TABLE
Annual-Compensation Long-Term Compensation Awards Payouts
<TABLE>
<CAPTION>
SECURITIES
OTHER ANNUAL RESTRICTED UNDERLYING LTIP ALL OTHER
NAME AND SALARY BONUS COMPENSATION STOCK AWARDS OPTIONS PAYOUTS COMPENSATION
TITLE YEAR ($) ($) ($) ($) SARS (#) ($)
<S> <C> <C> <C> <C> <C> <C> <C>
Richard Astrom $50,000 0 0 0 0 0 0
(President, CEO) 1999
$50,000 0 0 0 0 0 0
1998
Christopher Astrom $15,000 0 0 120,000 * 6,000** 0 0
(VP, Secretary) 1999
$ 0 0 0 0 0 0 0
1998
</TABLE>
* 1,000,000 shares of Class A Common Stock ** 6,000,000 stock options
at par ($.001)
The officers of the Company, Richard Astrom and Christopher Astrom, also receive
nonemployee compensation in the form of "realtor" commissions for the execution
of real estate transactions. During the fiscal year ended September 30, 1999,
$121,000 was paid out and or accrued to the two officers.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES PERCENT OF TOTAL
UNDERLYING OPTIONS/SAR'S GRANTED
OPTIONS/SAR'S GRANTED TO EMPLOYEES IN FISCAL EXERCISE OF BASE PRICE
NAME (#) YEAR ($/SH) EXPIRATION DATE
<S> <C> <C> <C> <C>
Christopher Astrom 6,000,000 100% 0 perpetual
Richard Astrom 0 0% 0 n/a
</TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED
SECURITIES UNDERLYING $
SHARES ACQUIRED OPTIONS/SARS AT FY-END FY-END VALUE
NAME ON EXERCISE VALUE REALIZED EXERCISABLE/UNEXERCISABLE
<S> <C> <C> <C> <C>
Christopher Astrom 0 0 6,000,000 $1,500,000 *
EXERCISABLE
Richard Astrom 0 0 0 0
</TABLE>
*at estimated market value of $.25 per share
Director Compensation
No fees are paid for director services at the time of this report, however,
reasonable travel and lodging expenses associated with company meetings may be
reimbursed.
Employment Agreements
We have no formalized employment agreements with any employee. All employees,
including the Company's officers work on a month to month basis.
<PAGE>
CERTAIN TRANSACTIONS
Richard Astrom, President, CEO and Director, is the father of Christopher
Astrom, Vice President, Secretary and Director, of NRPI. Richard Astrom and
Christopher Astrom make up the Board of Directors of the Company and control the
activities and actions of the Company.
On March 1, 1999 Christopher Astrom was granted options to acquire 6,000,000
shares of common stock at a price of $.001 per share. Mr. Astrom has executed a
promissory note to the Company in the amount of $20,000 for these options which
were authorized and awarded to Mr. Christopher Astrom by a written consent in
lieu of combined special meeting of Directors and Shareholders held on March 1,
1999. The options were granted to Christopher Astrom in consideration for
waiver of compensation during 1996 and 1997. There is no stated expiration date
on the option.
In April 1999, NRPI sold and issued senior subordinated debentures convertible
into shares of common stock. As of July 31, 1999, restricted common stock
totaling approximately $211,500 was issued and paid for. An additional amount of
approximately $257,500 worth of common stock was issued upon conversion of the
April 1999 debentures, and in August 1999, an additional amount of approximately
$300,000 was received from the debenture conversion. As of the date of this
report, 6,000,000 shares of our common stock have been issued as a result of
conversion of previously issued senior subordinated convertible debentures.
On June 17, 1999, by a written consent in lieu of combined special meeting of
Directors and Shareholders, a new class of common stock, "Class A common stock"
was authorized on June 17, 1999. On that same date, 1,000,000 shares issued to
Mr. Christopher Astrom. Each share of Class A common stock entitles Mr. Astrom
to the equivalent of 20 common share votes in any matter to be voted on by the
shareholders of the Company. The present principal shareholders will maintain
voting control of NRPI based on the issuance of 1,000,000 class A common shares
on June 17, 1999, which entitle the holder thereof (Christopher Astrom) to 20
votes for every Class A share held. The purpose of issuing these shares is to
ensure that current management will maintain control of NRPI despite maintaining
beneficial ownership of less than a majority of the shares of NRPI's common
stock. Furthermore, the disproportionate vote afforded the class A common stock
will prevent or impede potential acquirers from seeking to acquire control of
NRPI, which could have a depressive effect on the price of our common stock. An
additional 1,000,000 of the authorized 2,000,000 shares of Class A common stock
is available for issuance. The Class A common stock is non-transferable except
to a family member.
On February 10, 200 the Company entered into a consulting agreement between the
Company and the following individual professional persons who acted as
consultants to the Company: M. Richard Cutler, Brian A. Lebrecht, Vi Bui, James
Stubler, and Samuel Eisenberg for services involving consultation, advice and
counsel with respect to the negotiation and completion of the stock exchange
between NRPI and MAS XV. In addition to cash compensation, the agreement calls
for issuance of a total of 500,000 shares of NRPI to be issued to the
consultants together with an obligation for the Company to register such shares
on Form S-8 at NRPI's sole expense.
The President of the Company, Richard Astrom owes the Company $302,000 pursuant
to a note which matures September 20, 2000. The note accrues interest at 8% per
annum.
<PAGE>
The officers of the Company, Richard Astrom and Christopher Astrom, receive
additional compensation in the form of commissions for the execution of real
estate transactions. During the fiscal year ended September 30, 1999, $121,000
was paid out and or accrued to the two officers.
<PAGE>
RISK FACTORS
The securities of the Company are speculative and involve a high degree of risk,
including, but not necessarily limited to, the factors affecting future
results described below. The statements which are not historical facts contained
in this report on Form 8-K, including statements containing words such as
"believes," "expects," "intends", "estimates," "anticipates," or similar
expressions, are "forward looking statements" (as defined in the Private
Securities Litigation Reform Act of 1995) that involve risks and
uncertainties including, but not limited to, the factors set forth below.
Management will maintain voting control
Following completion of the acquisition, the present principal shareholders will
maintain voting control of NRPI based on the issuance of 1,000,000 class A
common shares, which entitle the holder thereof to the equivalent of 20 common
share votes in any matter to be voted on by the shareholders of the Company. The
purpose of issuing these shares is to ensure that current management will
maintain control of NRPI despite maintaining beneficial ownership of less than a
majority of the shares of NRPI's common stock. Furthermore, the disproportionate
vote afforded the class A common stock will prevent or impede potential
acquirers from seeking to acquire control of NRPI, which could have a depressive
effect on the price of our common stock
Management controls the Company's funds
Management has broad discretion over how to spend the funds held by the Company.
Although management will endeavor to act in the best interests of the
shareholders, there can be no assurance that the decision to utilize proceeds
will prove profitable to NRPI.
OTC Bulletin Board listing requirements
Under the new rules for continued listing on the Bulletin Board, companies are
required to become and remain fully reporting. Although NRPI intends to complete
all future required filings on a timely basis, there can be no assurance that we
will not be de-listed from the Bulletin Board. If de-listed, the market will
almost certainly reflect a depressive effect on the price of NRPI's common
stock.
Penny stock regulations and requirements for low priced stock
Based upon the price of NRPI's common stock as currently traded on the OTC
Bulletin Board, NRPI may be subject to Rule 15g-9 under the Exchange Act which
imposes additional sales practice requirements on broker-dealers which sell
securities to persons other than established customers and "accredited
investors." For transactions covered by this Rule, a broker-dealer must make a
special suitability determination for the purchaser and have received a
purchasers written consent to the transaction prior to sale. Consequently, the
Rule may adversely affect the ability of the broker-dealers to sell our common
stock and could have a negative effect on the ability of shareholders to sell
common shares of NRPI in the secondary market.
<PAGE>
The Commission adopted regulations which generally define a "penny stock" to be
any non-Nasdaq equity security that has a market price of less than $5.00 per
share, subject to certain exceptions. Since NRPI's securities are currently
subject to the existing rules on penny stock, your ability to liquidate your
shares could be severely diminished.
Stock prices are unpredictable
General market price declines or market volatility in the future could be
negative with respect to the price of our common stock. In recent years, the
stock markets in general, and securities of small capitalization companies in
particular, have experienced extreme price fluctuations in response to such
occurrences as quarterly variations in operating results, changes in earnings
estimates, and announcements concerning strategic relationships and other events
or facts. This pattern of extreme volatility in the stock market, which in many
cases was unrelated to actual operating performance, could cause the price of
NRPI's common stock to go down.
Investor's entire investment could be lost
You should be aware that if we are not successful in the operation of our
current business, or any future acquisition endeavors, your entire investment in
the common stock of NRPI could become worthless. Even if we are successful in
our operations and potential acquisitions, it is not certain that you will
derive a profit from your investment in NRPI.
The Company will need additional funds
NRPI will require substantial additional funding to further its real estate
operations and business objectives. Although management believes that such funds
will become available from sources including cash flow from business operations,
bank loans, factoring or sale of additional stock, it has not formulated any
specific plan for raising additional funds, including sale of additional equity
securities, as of the date of this report. If our capital is insufficient to
conduct our business and if we are unable to obtain needed financing, we will
be unable to pursue our business plan. We have not thoroughly investigated
whether this capital would be available, who would provide it, and on what
terms. If we are unable to raise the capital required to fund our proposed
projects, on acceptable terms, our business may be seriously harmed or even
terminated. It is not certain that we will be able to obtain additional funding
or, if obtained, that the terms of such funding would be favorable. This means
that your shares of common stock could lose much of their value.
NRPI may not be successful
NRPI competes in the highly competitive market of real estate development and
housing construction. Our prospects for success will depend on our ability to
successfully market our houses to buyers. As a result, demand and market
acceptance for our houses is subject to a high level of uncertainty. We
<PAGE>
currently have limited financial, personnel and other resources to undertake the
extensive activities that will be necessary to acquire and build houses and
related real estate projects. If we are unable to expand our marketing efforts,
we will not generate substantial additional revenues.
NRPI relies on its management
NRPI is dependent upon the members of management set forth herein. If the
current management is no longer able to provide services to NRPI, our business
will be negatively affected. No member of management is currently serving
under a written employment agreement.
Additional capital financing may affect ability to sell
NRPI's common stock currently trades on the OTC Bulletin Board under the symbol
NRPI. Stocks trading on the OTC Bulletin Board generally attract a smaller
number of market makers and a less active public market and may be subject to
significant volatility. If we raise additional money from the sale of our stock,
the market price could drop and your ability to sell your stock could be
diminished.
Super voting rights granted to current management
Our board of directors can issue "super voting" Class A common stock
without shareholder consent and dilute the voting rights or otherwise
significantly affect the rights of existing shareholders. The present principal
shareholders will maintain voting control of NRPI based on the issuance of
1,000,000 class A common shares on June 17, 1999, which entitle the holder
thereof (Christopher Astrom) to 20 common stock equivalent votes for every Class
A share held. The purpose of issuing these shares is to ensure that current
management will maintain control of NRPI despite maintaining beneficial
ownership of less than a majority of the shares of NRPI's common stock. An
additional 1,000,000 of the authorized 2,000,000 shares of Class A common stock
is available for issuance. The Class A common stock is non-transferable except
to a family member.
Volatile market for NRPI common stock
The market for our common stock is very volatile. Our stock is presently
trading on the OTC bulletin board maintained by Nasdaq under the symbol NRPI.
While in the past there has been limited volume in trading in the public market
for the NRPI common stock, and there can be no assurance that a more
active trading market will develop or be sustained. The market price of the
shares of common stock is likely to be highly volatile and may be
significantly affected by factors such as fluctuations in our operating
results, announcements of technological innovations or new products
and/or services by us or our competitors, governmental regulatory
action, developments with respect to patents or proprietary rights and
general market conditions.
Potential de-listing of common stock
<PAGE>
We may be de-listed from the OTC bulletin board. NASD Eligibility Rule 6530
issued on January 4, 1999, states that issuers who do not make current
filings pursuant to Sections 13 and 15(d) of the Securities Act of 1934 are
ineligible for listing on the OTC bulletin board. Issuers who are not current
with such filings are subject to de-listing according to a phase-in
schedule depending on each issuer's trading symbol as reported on January 4,
1999. Our trading symbol on January 4, 1999 was NRPI. Therefore, under
the phase-in schedule, our common stock is subject to de-listing on February
20, 2000. One month prior to our potential de-listing date, our common stock
had its trading symbol changed to NRPIE.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP
Not applicable
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT
Not applicable.
ITEM 5. OTHER EVENTS
Successor Issuer Election.
Upon execution of the Exchange Agreement and delivery of the NRPI shares to
the shareholders of MAS XV, pursuant to Rule 12g-3(a) of the General Rules and
Regulations of the Securities and Exchange Commission, NRPI became the successor
issuer to MAS XV for reporting purposes under the Securities Exchange Act
of 1934 and elected to report under the Act effective February 10, 2000.
ITEM 6. RESIGNATIONS OF DIRECTORS AND EXECUTIVE OFFICERS
Not applicable.
ITEM 7. FINANCIAL STATEMENTS
The financial statements of NRPI for the fiscal years ending September 30,
1998 and September 30, 1999 are included herein. In addition, pro forma
financial statements reflecting the combined financial statements of MAS
XV and NRPI at September 30, 1999 are included herein.
<PAGE>
NATIONAL REHAB PROPERTIES, INC.
AUDITED FINANCIAL STATEMENTS
SEPTEMBER 30, 1999 AND 1998
NATIONAL REHAB PROPERTIES, INC.
<PAGE>
TABLE OF CONTENTS
PAGE
Independent Auditor's Report 1
Financial Statements
Balance Sheet 2
Statements of Income 3
Statements of Changes in Stockholders' Equity 4
Statements of Cash Flows 5
Notes to Financial Statements 6 - 9
<PAGE>
BAUM & COMPANY, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
1515 UNIVERSITY DRIVE - SUITE 209
CORAL SPRINGS, FLORIDA 33071
(954) 752-1712
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors and Stockholders
National Rehab Properties, Inc.
Miami, Florida
We have audited the accompanying balance sheet of National Rehab Properties,
Inc. of September 30, 1999 and the related statements of income, changes in
stockholders' equity, and cash flows for the years ended September 30, 1999
and September 30, 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.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our 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 National Rehab Properties,
Inc. of September 30, 1999, and the results of its operations, changes in
stockholders' equity and its cash flows for the years ended September 30, 1999
and September 30, 1998 in conformity with generally accepted accounting
principles.
December 13, 1999
Coral Springs, Florida
<PAGE>
NATIONAL REHAB PROPERTIES, INC.
BALANCE SHEET
SEPTEMBER 30, 1999
ASSETS
________
<TABLE>
<CAPTION>
<S> <C>
Current Assets
Cash in bank $ 411,257
Inventory - real estate holdings (Note 2 and 6) 1,216,381
Subscriptions Receivable (Note 7) 500,000
Prepaid expenses 57,000
-----------
Total Current Assets 2,184,638
-----------
Property, Plant & Equipment (Note 4)
(Net of $12,061 accumulated depreciation) 47,435
Other Assets
Investment - land 22,283
Notes Receivable (Net of allowance for bad
debts of $12,000) 12,358
Organizational costs (net of $2,779
Accumulated depreciation) 2,779
Deposits 25,000
Note Receivable - Related Party (Note 5) 302,000
-----------
Total Other Assets 364,420
-----------
Total Assets $2,596,493
===========
</TABLE>
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
<TABLE>
<CAPTION>
<S> <C>
Current Liabilities
Accounts payable and accrued expenses $ 82,203
Notes payable (Note 6) 650,000
Mortgages and debentures payable (Note 7) 947,500
-----------
Total Current Liabilities 1,679,703
-----------
Shareholders' Equity
Common stock, $.001 par value; authorized 40,000,000
Shares; issued and outstanding 9,054,773 9,055
Common stock class a voting, $.001; authorized 2,000,000
shares; issued and outstanding 1,000,000 1,000
Additional paid in capital 1,324,190
Accumulated deficit (417,455)
-----------
Total Shareholders' Equity 925,688
-----------
Total Liabilities and Shareholders' Equity $2,596,493
===========
</TABLE>
See accountants' report and notes to financial statements
<PAGE>
NATIONAL REHAB PROPERTIES, INC.
STATEMENTS OF INCOME
YEARS ENDED SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
----------- -----------
Gross sales $ 374,038 935,744
<PAGE>
Cost of sales 118,368 1,163,556
----------- -----------
Gross profit (loss) 255,670 (227,812)
Operating Expenses:
General & administrative expenses 509,543 69,623
----------- -----------
Net (loss) before other income and expense (253,873) (297,435)
Other Income (expense) (14,124) (48,836)
Interest income 8,488 2,207
----------- -----------
(5,636) (46,629)
----------- -----------
Net (loss) $ (259,509) $ (344,064)
=========== ===========
Weighted average common shares outstanding 3,390,338 977,370
----------- -----------
Weighted average common shares outstanding fully diluted 7,715,338 977,370
----------- -----------
Loss per share $ (.0765) $ (.352)
=========== ===========
Loss per share fully diluted $ (.0336) $ (.352)
=========== ===========
</TABLE>
See accountants' report and notes to financial statements
<PAGE>
NATIONAL REHAB PROPERTIES, INC.
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
Common Stock Class A Common Voting Additional Retained
Earnings/Paid-in Accumulated
#Shares Amount #Shares Amount Capital Deficit
_______ ______ _______ ________ ____________________ ____________
<S> <C> <C> <C> <C> <C> <C>
September 30, 1997 977,370 $ 977 $ -0- $288,267 $ 186,119
Net (Loss) (344,064)
________ ________ ________ __________
September 30, 1998 977,370 977 288,267 (157,946)
Additional shares issued for services
rendered Class A Voting 1,000,000 1,000 119,000
Additional shares issued for services
rendered 3,030,000 3,030 107,970
Additional shares issued for subscription
offering 2,075,004 2,075 209,425
Additional shares issued from debenture
conversion 2,972,399 2,972 599,528
Net(Loss) (259,509)
__________ ______ ___________ ______ ____________ __________
September 30, 1999 10,054,773 $ 9,055 1,000,000 1,000 $1,324,190 $ (417,455)
============ ========= =========== ======== ============ =============
</TABLE>
See accountants' report and notes to financial statements
<PAGE>
NATIONAL REHAB PROPERTIES, INC.
STATEMENT OF CASH FLOWS
SEPTEMBER 30, 1999 AND 1998
<TABLE>
<CAPTION>
<S> <C> <C>
1999 1998
---------- --------
Cash Flows From Operating Activities:
Net income (loss) $ (259,509) $(344,064)
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 10,507 5,199
Loss on sale of asset - 0 - 800
Changes in assets and liabilities
(Increase) decrease in inventory of real estate holdings (545,153) 99,136
(Increase) decrease in prepaid expenses 15,645 (71,569)
Decrease in security deposits 700 (700)
(Increase) decrease in deposits (25,000) 8,400
Decrease in customer deposits (1,350) 1,350
Increase (decrease) accounts payable 82,203 (7,102)
(Decrease) in income tax payable (37,228) - 0 -
---------------- ----------
(759,185) (308,550)
---------------- ----------
Cash Flows From Investing Activities:
Purchases of fixed assets (51,060) (1,059)
Proceeds from sale of fixed assets - 0 - 470
Proceeds from sale of investment land - 0 - 66,850
Reduction of mortgage receivable 29,018 92,297
Writeoff of mortgage receivable 12,000 - 0 -
Increase in note to related party - 0 - (97,841)
Reduction in note to related party 18,091 - 0 -
---------------- ----------
8,049 60,717
---------------- ----------
Cash Flows From Financing Activities:
Proceeds from mortgages payable 605,900 208,962
Repayment of mortgages payable (970,641) (36,492)
Proceeds from debentures 947,500 - 0 -
Proceeds from note payable - related party 20,000 - 0 -
Proceeds from issuance of common stock 1,045,880 80,894
Increase in subscription receivable (500,000)
----------------- ---------
1,148,639 253,364
----------------- ----------
Net Increase in cash 397,503 5 ,531
Cash at beginning of year 13,754 8,223
----------------- ----------
Cash at end of year $ 411,257 $13,754
================== ==========
</TABLE>
See accountants' report and notes to financial statements
<PAGE>
NATIONAL REHAB PROPERTIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANTACCOUNTINGPOLICIES
------------------------------------------
BACKGROUND
- ----------
The Company was originally incorporated in the State of Nevada on October 18,
1971 under the name of Mister Las Vegas, Inc. On December 15, 1994 the Company
merged with a privately owned company, National Rehab Properties, Inc., a
Florida corporation formed on October 1, 1993. The surviving Nevada corporation
changed its name to National Rehab Properties, Inc. and became authorized to
conduct business in the State of Florida on August 17, 1995. The Corporation's
primary objective is to purchase residential properties, renovate the acquired
properties, and hold the refurbished, reconstructed properties for sale, or buy
lots and build houses for resale. National Rehab Properties, Inc.'s accounting
procedures are based on the American Institute of Certified Public Accountants
(AICPA) Audit and Accounting Guide, "Construction Contractor". The Company
intends to sell its inventory in the normal course of doing business.
REAL ESTATE HOLDINGS
- ----------------------
Real estate investments are stated at the lower of cost or market. Acquisition
costs are allocated to respective properties based on appraisals of the various
properties acquired in the acquisition.
INCOME TAXES
- -------------
In February 1992, the Financial Accounting Standards Board issued Statement on
Financial Accounting standards 109 of "Accounting for Income Taxes." Under the
Statement 109, deferred tax assets and liabilities are recognized for the
estimated future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases. The Company has net operating losses (NOL's) of
approximately $ 417,455.
Deferred tax benefit (34% statutory rate) $ 88,233
Valuation allowance 88,233
----------
Net Benefit $ - 0 -
============
Due to the uncertainty of utilizing the NOL and recognizing the deferred tax
benefit, an offsetting valuation allowance has been provided.
REVENUE RECOGNITION
- --------------------
Revenue is recognized under the full accrual method of accounting upon the
completed sale of real property held for development and sale. All costs
incurred directly or indirectly in acquiring and developing the real property
are capitalized.
<PAGE>
NATIONAL REHAB PROPERTIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANTACCOUNTINGPOLICIES (CONTINUED)
------------------------------------------
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 disclosures of
contingent assets and liabilities at the date of the financial statements
statements and the reported amounts of revenues and expenses during the period.
Actual results could differ from those estimates.
CASH AND CASH EQUIVALENTS
- ----------------------------
Cash and cash equivalents include cash on hand, cash in banks, and any highly
liquid investments with a maturity of three months or less at the time of
purchase.
The Company maintains cash and cash equivalent balances at several financial
institutions which are insured by the Federal Deposit Insurance Corporation up
to $100,000. At September 30, 1999 the Company had approximately $400,000 on
deposit.
EARNINGS/LOSS PER SHARE
- -------------------------
Primary earnings per common share are computed by dividing the net income (loss)
by the weighted average number of shares of common stock and common stock
equivalents outstanding during the year. The number of shares used for the
fiscal years ended September 30, 1999 and 1998 were 3,390,338 and 977,370
respectively. Fully diluted shares for the fiscal year ended September 30, 1999
and 1998 were 7,715,338 and 977,370 respectively.
NOTE 2 - INVENTORY
---------
Inventory consists of residential single family homes and duplexes held for
resale, and is valued at the lower of costs or market value. Cost includes
acquisition, renovation and carrying costs specifically identified with each
unit.
NOTE 3 - LONG-TERM RECEIVABLES
----------------------
MORTGAGES RECEIVABLE
- ---------------------
Rehab Properties due to the irregular payment history of these types of
mortgages, the balance has been reclassified as Mortgages receivable of $
12,358, net of an allowance for bad debt of $12,000, are due from persons that
purchased properties from the Company.
<PAGE>
NATIONAL REHAB PROPERTIES, INC.
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
NOTE 4 - PROPERTY & EQUIPMENT
----------------------
Property and equipment are stated at cost. Depreciation is provided over the
estimated useful lives of the respective assets, generally three to five years,
on a straight-line basis.
Transportation Equipment $ 54,680
Office Equipment 4,816
----------
Total 59,496
Less: Accumulated Depreciation (12,061)
----------
Net Fixed Assets $ 47,435
=========
NOTE 5 - RELATED PARTY TRANSACTION
---------------------------
The president of the Company owes $302,000. The note accrues interest at 8% per
annum and is payable on September 20, 2000.
The officers of the Company receive commissions for the execution of real estate
transactions. During the fiscal year ended September 30, 1999, $121,000 was
paid out and or accrued.
(See Note 7 - Capital Transactions)
NOTE 6 - MORTGAGES AND NOTES PAYABLE
------------------------------
MORTGAGE PAYABLE
-----------------
Collateralized note, bearing interest at the greater of 8.25%
or 1.5% over prime lending rate. Payable monthly interest
only, and balloon payment of principal plus unpaid interest
on October 1, 2000. Construction loan not currently
drawn upon. $ 0
MORTGAGE PAYABLE
-----------------
Collateralized note bearing interest at 8% and payable
in full plus accrued interest on June 29, 2000 600,000
NOTE PAYABLE
- -------------
Collateralized note, secured by real estate, due upon sale of
underlying real estate. Includes computed interest of 10%. 30,000
NOTE PAYABLE - RELATED PARTY
--------------------------------
Unsecured note, non-interest bearing, due on demand 20,000
<PAGE>
NOTE 6 - MORTGAGES AND NOTES PAYABLE (Continued)
------------------------------
Total Notes payable 650,000
Total Non-Current Maturities 0
--------
Total Current Maturities $ 650,000
==========
NOTE 7 - CAPITAL TRANSACTIONS
---------------------
During the fiscal year ended September 30, 1999 the following capital
transactions occurred.
A. 1,000,000 Class A voting common shares, valued at $120,000, were issued
to an officer of the Company for services rendered.
2. 3,030,000 common shares, valued at $11,000, were issued for services
rendered. 1,630,000 of these shares were issued to unrelated parties.
1,400,000 of these shares were issued to an officer of the Company. Subsequent
to the year end, the 1,400,000 shares issued to the officer were turned back
into the corporation and canceled.
3. 2,075,004 common shares were sold through a 504(D) offering. The Company
received, net of offering expenses, $211,500.
4. 2,972,399 common shares valued at $602,500 were issued to debenture
holders as part of a conversion provision.
5. On July 30, 1999 the company offered a senior subordinated convertible
debenture. As of the year end the Company raised $947,500. Subsequent to the
year end, the offering was fully funded with the company receiving net proceeds
of $870,000. Also, all of the debenture holders exercised the convertible
provision and 6,000,000 common shares were subsequently issued.
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
{Auditor's Disk}
<PAGE>
Pro Forma Combined Financial Statements (unaudited)
Pro Forma Financial Statements:
Balance Sheets
Statements of Operations
Notes to Pro Forma Financial Statements
<PAGE>
MAS ACQUISITION XV CORP. (MAS XV)
NATIONAL REHAB PROPERTIES, INC. (NRPI)
PRO FORMA BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
NRPI MAS XV
September 30, September 30,
1999 1999 Adjustments Combined
<S> <C> <C> <C> <C>
ASSETS
Current Assets: $ $ $ $
Cash 411,257 40 411,297
Inventory - Real Estate 1,216,381 0 1,216,381
Subscriptions Receivable 500,000 0 500,000
Prepaid Expenses 57,000 0 57,000
---------- -- ----------
Total Current Assets 2,184,638 40 2,184,678
---------- -- ----------
Property Plant
& Equipment
Net of Depreciation 47,435 47,435
Other Assets:
Notes Receivable
Related Party 302,000 302,000
Investment Land 22,283 22,283
Notes Receivable, net 12,358 12,358
Organizational Costs
Net of amortization 2,779 2,779
Deposits 25,000 25,000
---------- --------
TOTAL ASSETS 2,596,493 40 2,596,533
========== == ==========
</TABLE>
The accompanying notes are an integral part of the pro forma financial
statements
<PAGE>
MAS ACQUISITION XV CORP. (MAS XV)
NATIONAL REHAB PROPERTIES, INC. (NRPI)
PRO FORMA BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
NRPI MAS XV
September 30, September 30,
1999 1999 Adjustments Combined
<S> <C> <C> <C> <C>
Liabilities:
Current Liabilities $ $ $ $
Accounts Payable
and accrued expense 82,203 82,203
Notes Payable 650,000 650,000
Mortgages &
Debentures Payable 947,500 947,500
----------- -----------
Total Current Liabilities 1,679,703 1,679,703
----------- -----------
Shareholders Equity
Common Stock, $.001
Par value; authorized
40,000,000; issued and
outstanding 9,054,773 9,055 10,055
(10,054,773 post transaction)
Common Shares
Class A voting $.001;
Authorized 2,000,000;
Issued and outstanding
1,000,000 1,000 1,000
Additional paid in
Capital 1,324,190 1,324,190
Accumulated Deficit (417,455) (418,415)
----------- -----------
Total Shareholders 916,790 916,830
----------- -----------
Equity
Total Liabilities and
Shareholders Equity 2,596,493 2,596,533
=========== ===========
</TABLE>
The accompanying notes are an integral part of the pro forma financial
statements
<PAGE>
MAS ACQUISITION XV CORP. (MAS XV)
NATIONAL REHAB PROPERTIES, INC. (NRPI)
PRO FORMA STATEMENT OF OPERATION
(Unaudited)
<TABLE>
<CAPTION>
NRPI MAS XV
September 30, September 30,
1999 1999 Adjustments Combined
<S> <C> <C> <C> <C>
Revenues $ $ $ $
Gross Sales 374,038 374,038
Cost of Sales 118,368 118,368
---------- ----------
Gross Profit (loss) 255,670 255,670
Operating Expense
General and
Administrative 509,543 509,543
---------- ----------
Net (Loss) before
other income and
expense (253,873) (253,873)
Interest (expense) (14,124) (14,124)
Interest (income) 8,488 8,488
Net (loss) (259,509) (259,509)
</TABLE>
The accompanying notes are an integral part of the pro forma financial
statements
<PAGE>
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited)
(1) General
On February 10, 2000, NRPI issued 1,000,000 shares of its common stock to
Shareholders of MAS XV pursuant to the acquisition of MAS XV. This business
combination will be accounted for as a purchase.
(2) Pro Forma Information
The pro forma financial statements give effect to the acquisition of MAS XV
by NRPI as if the acquisition had taken place at the beginning of the respective
periods.
<PAGE>
ITEM 8. CHANGE IN FISCAL YEAR
NRPI as the successor issuer has a fiscal year end of September 30, which
fiscal year end will continue for NRPI and be the new fiscal year for MAS XV.
EXHIBITS
1.1. Stock Exchange Agreement between MRC Legal Services Corporation and
National Rehab Properties, Inc., dated as of February 10, 2000.
1.2. Consulting Agreement dated February 10, 2000.
3.1 Articles of Incorporation - National Rehab Properties, Inc. (Florida)
3.2 Articles of Incorporation - National Rehab Properties, Inc. - Nevada
(Mister Las Vegas)
3.3 By-Laws
3.4 Written Consent in Lieu of Combined Special Meeting of Directors and
Shareholders dated June 17, 1999.
3.5 Written Consent in Lieu of Combined Special Meeting of Directors and
Shareholders dated March 1, 1999.
4.1 Specimen Common Stock Certificate
23.1 Consent of Baum & Company, P.A. independent public accountants
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
National Rehab Properties, Inc.
By /s/ Richard Astrom
Chief Executive Officer, Director
Date: February 14, 2000
STOCK EXCHANGE AGREEMENT
Agreement dated as of February 10, 2000 between National Rehab Properties,
Inc., a Nevada corporation ("NRPI"), on the one hand, and MRC Legal Services
Corporation ("MRC" or the "Shareholder").
1. THE ACQUISITION.
1.1 Purchase and Sale Subject to the Terms and Conditions of this
Agreement. At the Closing to be held as provided in Section 2, NRPI shall sell
the NRPI Shares (defined below) to the Shareholder and the Shareholder shall
purchase the NRPI Shares from NRPI, free and clear of all Encumbrances other
than restrictions imposed by Federal and State securities laws.
1.2 Purchase Price. NRPI will exchange 1,000,000 shares of its
restricted common stock (the "NRPI Shares") for 8,250,000 shares of MAS
Acquisition XV Corp. ("MAS XV"), representing approximately 96.8% of the issued
and outstanding common shares of MAS XV (the "MAS XV Shares"). Immediately
after the Closing, the Shareholder will cause MAS XV to complete a reverse stock
split (the "Reverse Stock Split") previously approved by the directors of MAS XV
which will result in the remaining 269,900 shares of MAS XV being cashed out by
the Shareholder at no additional cost to NRPI. Immediately subsequent to the
Reverse Stock Split, NRPI shall be the sole shareholder of MAS XV with 1,000
shares issued and outstanding. The NRPI Shares shall be issued and delivered to
the Shareholder or assigns as set forth in Exhibit "A" hereto.
2. THE CLOSING.
2.1 Place and Time. The closing of the sale and exchange of the NRPI
Shares for the MAS XV Shares (the "Closing") shall take place at Cutler Law
Group, 610 Newport Center Drive, Suite 800, Newport Beach, CA 92660 no later
than the close of business (Orange County California time) on or before February
18, 2000 or at such other place, date and time as the parties may agree in
writing.
2.2 Deliveries by the Shareholders. At the Closing, the Shareholder
shall deliver the following to NRPI:
1. Certificates representing the MAS XV Shares, duly endorsed for transfer
to NRPI and accompanied by appropriate medallion guaranteed stock powers; the
Shareholder shall immediately change those certificates for, and to deliver to
NRPI at the Closing, a certificate representing the MAS XV Shares registered in
the name of NRPI (without any legend or other reference to any Encumbrance other
than appropriate federal securities law limitations).
2. The documents contemplated by Section 3.
<PAGE>
3. All other documents, instruments and writings required by this Agreement
to be delivered by the Shareholder at the Closing and any other documents or
records relating to MAS XV's business reasonably requested by NRPI in
connection with this Agreement.
2.3 Deliveries by NRPI. At the Closing, NRPI shall deliver the
following to the Shareholder:
a. The NRPI Shares for further delivery to the Shareholder or assigns as
contemplated by section 1.
2. The documents contemplated by Section 4.
3. All other documents, instruments and writings required by this Agreement
to be delivered by NRPI at the Closing.
3. CONDITIONS TO NRPI'S OBLIGATIONS.
The obligations of NRPI to effect the Closing shall be subject to the
satisfaction at or prior to the Closing of the following conditions, any one or
more of which may be waived by NRPI:
3.1 No Injunction. There shall not be in effect any injunction, order
or decree of a court of competent jurisdiction that prevents the consummation of
the transactions contemplated by this Agreement, that prohibits NRPI's
acquisition of the MAS XV Shares or the NRPI Shares or that will require any
divestiture as a result of NRPI's acquisition of the MAS XV Shares or that will
require all or any part of the business of NRPI to be held separate and no
litigation or proceedings seeking the issuance of such an injunction, order or
decree or seeking to impose substantial penalties on NRPI or MAS XV if this
Agreement is consummated shall be pending.
3.2 Representations, Warranties and Agreements. (a) The
representations and warranties of the Shareholder set forth in this Agreement
shall be true and complete in all material respects as of the Closing Date as
though made at such time, and (b) the Shareholder shall have performed and
complied in all material respects with the agreements contained in this
Agreement required to be performed and complied with by it at or prior to the
Closing.
3.3 Regulatory Approvals. All licenses, authorizations, consents,
orders and regulatory approvals of Governmental Bodies necessary for the
consummation of NRPI's acquisition of the MAS XV Shares shall have been obtained
and shall be in full force and effect.
3.4 Resignations of Director. Effective on the Closing Date, all of
officers and directors shall have resigned as an officer, director and employee
of MAS XV.
<PAGE>
4. CONDITIONS TO THE SHAREHOLDER'S OBLIGATIONS.
The obligations of the Shareholder to effect the Closing shall be subject
to the satisfaction at or prior to the Closing of the following conditions, any
one or more of which may be waived by the Shareholder:
4.1 No Injunction. There shall not be in effect any injunction, order
or decree of a court of competent jurisdiction that prevents the consummation of
the transactions contemplated by this Agreement, that prohibits NRPI's
acquisition of the MAS XV Shares or the Shareholder's acquisition of the NRPI
Shares or that will require any divestiture as a result of NRPI's acquisition of
the Shares or the Shareholder's acquisition of the NRPI Shares or that will
require all or any part of the business of NRPI or MAS XV to be held separate
and no litigation or proceedings seeking the issuance of such an injunction,
order or decree or seeking to impose substantial penalties on NRPI or MAS XV if
this Agreement is consummated shall be pending.
4.2 Representations, Warranties and Agreements. (a) The
representations and warranties of NRPI set forth in this Agreement shall be true
and complete in all material respects as of the Closing Date as though made at
such time, and (b) NRPI shall have performed and complied in all material
respects with the agreements contained in this Agreement required to be
performed and complied with by it at or prior to the Closing.
4.3 Regulatory Approvals. All licenses, authorizations, consents,
orders and regulatory approvals of Governmental Bodies necessary for the
consummation of NRPI's acquisition of the MAS XV Shares and the Shareholder's
acquisition of the NRPI Shares shall have been obtained and shall be in full
force and effect.
5. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER.
The Shareholder represents and warrants to NRPI that, to the Knowledge of
the Shareholder, and except as set forth in an MAS XV Disclosure Letter:
5.1 Authorization. The Shareholder is a corporation duly organized,
validly existing and in good standing under the laws of the state of California.
This Agreement constitutes a valid and binding obligation of the Shareholder,
enforceable against it in accordance with its terms.
5.2 Capitalization. The authorized capital stock of MAS XV consists of
80,000,000 authorized shares of stock, par value $.001, and 20,000,000 preferred
shares, par value $.001, of which 8,519,900 common shares are presently issued
and outstanding. No shares have been registered under state or federal
securities laws. As of the Closing Date there will not be outstanding any
warrants, options or other agreements on the part of MAS XV obligating MAS XV to
issue any additional shares of common or preferred stock or any of its
securities of any kind.
<PAGE>
5.3 Ownership of MAS XV Shares. The delivery of certificates to NRPI
provided in Section 2.2 will result in NRPI's immediate acquisition of record
and beneficial ownership of the MAS XV Shares, free and clear of all
Encumbrances subject to applicable State and Federal securities laws.
5.4 Consents and Approvals of Governmental Authorities. Except with
respect to applicable State and Federal securities laws, no consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Body is required to be made or obtained by MAS XV or NRPI or any of its
Subsidiaries in connection with the execution, delivery and performance of this
Agreement by MAS XV or the consummation of the sale of the MAS XV Shares to
NRPI.
5.5 Financial Statements. MAS XV has delivered to NRPI the consolidated
balance sheet of MAS XV as at June 30, 1998 and June 30, 1999, and statements
of income and changes in financial position for the fiscal years then ended and
the period from inception to the period then ended, together with the report
thereon of MAS XV's independent accountant (the "MAS XV Financial Statements").
The MAS XV Financial Statements are accurate and complete in accordance with
generally accepted accounting principles. The independent accountants for MAS
XV will furnish any and all work papers required by NRPI and will sign any and
all consent required to be signed to include the financial statements of NRPI in
any subsequent filing by NRPI.
5.6 Litigation. There is no action, suit, inquiry, proceeding or
investigation by or before any court or Governmental Body pending or threatened
in writing against or involving MAS XV which is likely to have a material
adverse effect on the business or financial condition of MAS XV, NRPI and any
of their Subsidiaries, taken as whole, or which would require a payment by MAS
XV in excess of $2,000 in the aggregate or which questions or challenges the
validity of this Agreement. MAS XV is not subject to any judgment, order or
decree that is likely to have a material adverse effect on the business or
financial condition of MAS XV, NRPI or any of their Subsidiaries, taken as a
whole, or which would require a payment by MAS XV in excess of $2,000 in the
aggregate.
5.7 Absence of Certain Changes. Since the date of the MAS XV Financial
Statements, MAS XV has not:
1. suffered the damage or destruction of any of its properties or assets
(whether or not covered by insurance) which is materially adverse to the
business or financial condition of MAS XV or made any disposition of any of its
material properties or assets other than in the ordinary course of business;
2. made any change or amendment in its certificate of incorporation or
by-laws, or other governing instruments;
<PAGE>
3. issued or sold any Equity Securities or other securities, acquired,
directly or indirectly, by redemption or otherwise, any such Equity Securities,
reclassified, split-up or otherwise changed any such Equity Security, or granted
or entered into any options, warrants, calls or commitments of any kind with
respect thereto;
4. organized any new Subsidiary or acquired any Equity Securities of any
Person or any equity or ownership interest in any business;
5. borrowed any funds or incurred, or assumed or become subject to, whether
directly or by way of guarantee or otherwise, any obligation or liability with
respect to any such indebtedness for borrowed money;
6. paid, discharged or satisfied any material claim, liability or obligation
(absolute, accrued, contingent or otherwise), other than in the ordinary course
of business;
7. prepaid any material obligation having a maturity of more than 90 days
from the date such obligation was issued or incurred;
8. canceled any material debts or waived any material claims or rights,
except in the ordinary course of business;
9. disposed of or permitted to lapse any rights to the use of any material
patent or registered trademark or copyright or other intellectual property owned
or used by it;
10. granted any general increase in the compensation of officers or
employees (including any such increase pursuant to any employee benefit plan);
11. purchased or entered into any contract or commitment to purchase any
material quantity of raw materials or supplies, or sold or entered into any
contract or commitment to sell any material quantity of property or assets,
except (i) normal contracts or commitments for the purchase of, and normal
purchases of, raw materials or supplies, made in the ordinary course business,
(ii) normal contracts or commitments for the sale of, and normal sales of,
inventory in the ordinary course of business, and (iii) other contracts,
commitments, purchases or sales in the ordinary course of business;
12. made any capital expenditures or additions to property, plant or
equipment or acquired any other property or assets (other than raw materials and
supplies) at a cost in excess of $100,000 in the aggregate;
13. written off or been required to write off any notes or accounts
receivable in an aggregate amount in excess of $2,000;
14. written down or been required to write down any inventory in an
aggregate amount in excess of $ 2,000;
1.
<PAGE>
15. entered into any collective bargaining or union contract or agreement;
or
16. other than the ordinary course of business, incurred any liability
required by generally accepted accounting principles to be reflected on a
balance sheet and material to the business or financial condition of MAS XV.
5.8 No Material Adverse Change. Since the date of the MAS XV Financial
Statements, there has not been any material adverse change in the business or
financial condition of MAS XV.
5.9 Brokers or Finders. Other than James Stubler and Mark Stevenson,
the Shareholder has not employed any broker or finder or incurred any liability
for any brokerage or finder's fees or commissions or similar payments in
connection with the sale of the MAS XV Shares to NRPI.
6. REPRESENTATIONS AND WARRANTIES OF NRPI.
NRPI represents and warrants to the Shareholder that, to the Knowledge of
NRPI (which limitation shall not apply to Section 6.3). Such representations
and warranties shall survive the Closing for a period of two years.
6.1 Organization of NRPI; Authorization. NRPI is a corporation duly
organized, validly existing and in good standing under the laws of Nevada with
full corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder. The execution, delivery and performance of
this Agreement have been duly authorized by all necessary corporate action of
NRPI and this Agreement constitutes a valid and binding obligation of NRPI;
enforceable against it in accordance with its terms.
6.2 Capitalization. The authorized capital stock of NRPI consists of
40,000,000 shares of common stock, par value $.001 per share, and 2,000,000
shares of Class A common stock, par value $.001 per share, and no shares of
preferred stock. As of the date of this Agreement, NRPI had 9,054,773 shares of
common stock issued and outstanding, 1,000,000 shares of Class A common stock
issued and outstanding and no shares of Preferred Stock issued and outstanding.
As of the Closing Date, all of the issued and outstanding shares of common stock
of NRPI are validly issued, fully paid and non-assessable. The Common Stock of
NRPI is presently listed and trading on the Nasdaq Over-the-Counter Bulletin
Board under the symbol "NRPIE."
6.3 Ownership of NRPI Shares. The delivery of certificates to MAS XV
provided in Section 2.3 will result in the Shareholder or assigns immediate
acquisition of record and beneficial ownership of the NRPI Shares, free and
clear of all Encumbrances other than as required by Federal and State securities
laws.
<PAGE>
6.4 No Conflict as to NRPI and Subsidiaries. Neither the execution and
delivery of this Agreement nor the consummation of the sale of the NRPI Shares
to the Shareholders will (a) violate any provision of the certificate of
incorporation or by-laws (or other governing instrument) of NRPI or any of its
Subsidiaries or (b) violate, or be in conflict with, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or excuse performance by any Person of any of its obligations
under, or cause the acceleration of the maturity of any debt or obligation
pursuant to, or result in the creation or imposition of any Encumbrance upon any
property or assets of NRPI or any of its Subsidiaries under, any material
agreement or commitment to which NRPI or any of its Subsidiaries is a party or
by which any of their respective property or assets is bound, or to which any of
the property or assets of NRPI or any of its Subsidiaries is subject, or (c)
violate any statute or law or any judgment, decree, order, regulation or rule of
any court or other Governmental Body applicable to NRPI or any of its
Subsidiaries except, in the case of violations, conflicts, defaults,
terminations, accelerations or Encumbrances described in clause (b) of this
Section 6.4, for such matters which are not likely to have a material adverse
effect on the business or financial condition of NRPI and its Subsidiaries,
taken as a whole.
6.5 Consents and Approvals of Governmental Authorities. No consent,
approval or authorization of, or declaration, filing or registration with, any
Governmental Body is required to be made or obtained by NRPI or any of either of
their Subsidiaries in connection with the execution, delivery and performance of
this Agreement by NRPI or the consummation of the sale of the NRPI Shares to the
Shareholders.
6.6 Other Consents. No consent of any Person is required to be obtained
by MAS XV or NRPI to the execution, delivery and performance of this Agreement
or the consummation of the sale of the NRPI Shares to the Shareholders,
including, but not limited to, consents from parties to leases or other
agreements or commitments, except for any consent which the failure to obtain
would not be likely to have a material adverse effect on the business and
financial condition of MAS XV or NRPI.
6.7 Financial Statements. Prior to closing, NRPI shall have delivered
to the Shareholder consolidated balance sheets of NRPI and its Subsidiaries as
at September 30, 1998 and September 30, 1999, and statements of income and
changes in financial position for each of the periods then ended, together with
the report thereon of NRPI's independent accountant (the "NRPI Financial
Statements"). Such NRPI Financial Statements and notes fairly present the
consolidated financial condition and results of operations of NRPI and its
Subsidiaries as at the respective dates thereof and for the periods therein
referred to, all in accordance with generally accepted United States accounting
principles consistently applied throughout the periods involved, except as set
forth in the notes thereto, and shall be utilizable in any SEC filing in
compliance with Rule 310 of Regulation S-B promulgated under the Securities Act.
<PAGE>
6.8 Brokers or Finders. Other than M. Richard Cutler, Brian Lebrecht,
Vi Bui, James Stubler and Ari Goldstein, NRPI has not employed any broker or
finder or incurred any liability for any brokerage or finder's fees or
commissions or similar payments in connection with the sale of the NRPI Shares
to the Shareholders.
6.9 Purchase for Investment. NRPI is purchasing the MAS XV Shares
solely for its own account for the purpose of investment and not with a view to,
or for sale in connection with, any distribution of any portion thereof in
violation of any applicable securities law.
7. Access and Reporting; Filings With Governmental Authorities; Other
Covenants.
7.1 Access Between the date of this Agreement and the Closing Date.
Each of the Shareholder and NRPI shall (a) give to the other and its authorized
representatives reasonable access to all plants, offices, warehouse and other
facilities and properties of MAS XV or NRPI, as the case may be, and to its
books and records, (b) permit the other to make inspections thereof, and (c)
cause its officers and its advisors to furnish the other with such financial and
operating data and other information with respect to the business and properties
of such party and its Subsidiaries and to discuss with such and its authorized
representatives its affairs and those of its Subsidiaries, all as the other may
from time to time reasonably request.
7.2 Regulatory Matters. The Shareholder and NRPI shall (a) file with
applicable regulatory authorities any applications and related documents
required to be filed by them in order to consummate the contemplated transaction
and (b) cooperate with each other as they may reasonably request in connection
with the foregoing.
8. CONDUCT OF MAS XV'S BUSINESS PRIOR TO THE CLOSING. The Shareholder shall
use its best efforts to ensure the following:
8.1 Operation in Ordinary Course. Between the date of this Agreement
and the Closing Date, MAS XV shall cause conduct its businesses in all material
respects in the ordinary course.
8.2 Business Organization. Between the date of this Agreement and the
Closing Date, MAS XV shall (a) preserve substantially intact the business
organization of MAS XV; and (b) preserve in all material respects the present
business relationships and good will of MAS XV.
8.3 Corporate Organization. Between the date of this Agreement and the
Closing Date, MAS XV shall not cause or permit any amendment of its certificate
of incorporation or by-laws (or other governing instrument) and shall not:
1. issue, sell or otherwise dispose of any of its Equity Securities, or
create, sell or otherwise dispose of any options, rights, conversion rights or
other agreements or commitments of any kind relating to the issuance, sale or
disposition of any of its Equity Securities;
1.
<PAGE>
2. create or suffer to be created any Encumbrance thereon, or create, sell
or otherwise dispose of any options, rights, conversion rights or other
agreements or commitments of any kind relating to the sale or disposition of any
Equity Securities;
3. reclassify, split up or otherwise change any of its Equity Securities;
d. be party to any merger, consolidation or other business combination;
4. sell, lease, license or otherwise dispose of any of its properties or
assets (including, but not limited to rights with respect to patents and
registered trademarks and copyrights or other proprietary rights), in an amount
which is material to the business or financial condition of MAS XV except in the
ordinary course of business; or
5. organize any new Subsidiary or acquire any Equity Securities of any
Person or any equity or ownership interest in any business.
8.4 Other Restrictions. Between the date of this Agreement and the
Closing Date, MAS XV shall not:
1. borrow any funds or otherwise become subject to, whether directly or by
way of guarantee or otherwise, any indebtedness for borrowed money;
2. create any material Encumbrance on any of its material properties or
assets;
3. increase in any manner the compensation of any director or officer or
increase in any manner the compensation of any class of employees;
4. create or materially modify any material bonus, deferred compensation,
pension, profit sharing, retirement, insurance, stock purchase, stock option, or
other fringe benefit plan, arrangement or practice or any other employee benefit
plan (as defined in section 3(3) of ERISA);
5. make any capital expenditure or acquire any property or assets;
6. enter into any agreement that materially restricts NRPI, MAS XV or any of
their Subsidiaries from carrying on business;
7. pay, discharge or satisfy any material claim, liability or obligation,
absolute, accrued, contingent or otherwise, other than the payment, discharge or
satisfaction in the ordinary course of business of liabilities or obligations
reflected in the MAS XV Financial Statements or incurred in the ordinary course
of business and consistent with past practice since the date of the MAS XV
Financial Statements; or
8. cancel any material debts or waive any material claims or rights.
9. DEFINITIONS.
As used in this Agreement, the following terms have the meanings specified
or referred to in this Section 9.
9.1 "Business Day" C Any day that is not a Saturday or Sunday or a day
on which banks located in the City of New York are authorized or required to be
closed.
9.2 "Code" C The Internal Revenue Code of 1986, as amended.
<PAGE>
9.3 "Encumbrances" C Any security interest, mortgage, lien, charge,
adverse claim or restriction of any kind, including, but not limited to, any
restriction on the use, voting, transfer, receipt of income or other exercise of
any attributes of ownership, other than a restriction on transfer arising under
Federal or state securities laws.
9.4 "Equity Securities" C See Rule 3aB11B1 under the Securities
Exchange Act of 1934.
9.5 "ERISA" C The Employee Retirement Income Security Act of 1974, as
amended.
9.6 "Governmental Body" C Any domestic or foreign national, state or
municipal or other local government or multi-national body (including, but not
limited to, the European Economic Community), any subdivision, agency,
commission or authority thereof.
9.7 "Knowledge" C Actual knowledge, after reasonable investigation.
9.8 "Person" C Any individual, corporation, partnership, joint venture,
trust, association, unincorporated organization, other entity, or Governmental
Body.
9.9 "Subsidiary" C With respect to any Person, any corporation of which
securities having the power to elect a majority of that corporation's Board of
Directors (other than securities having that power only upon the happening of a
contingency that has not occurred) are held by such Person or one or more of its
Subsidiaries.
10. TERMINATION.
10.1 Termination. This Agreement may be terminated before the Closing
occurs only as follows:
1. By written agreement of the Shareholder and NRPI at any time.
2. By NRPI, by notice to the Shareholders at any time, if one or more of the
conditions specified in Section 3 is not satisfied at the time at which the
Closing (as it may be deferred pursuant to Section 2.1) would otherwise occur or
if satisfaction of such a condition is or becomes impossible.
3. By the Shareholder, by notice to NRPI at any time, if one or more of the
conditions specified in Section 4 is not satisfied at the time at which the
Closing (as it may be deferred pursuant to Section 2.1), would otherwise occur
of if satisfaction of such a condition is or becomes impossible.
4. By either the Shareholders or NRPI, by notice to the other at any time
after February 25, 2000, if the transaction has not been completed.
10.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 10.1, this Agreement shall terminate without any liability or further
obligation of any party to another.
<PAGE>
13. NOTICES. All notices, consents, assignments and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given when (a) delivered by hand, (b) sent by telex or facsimile (with receipt
confirmed), provided that a copy is mailed by registered mail, return receipt
requested, or (c) received by the delivery service (receipt requested), in each
case to the appropriate addresses, telex numbers and facsimile numbers set forth
below (or to such other addresses, telex numbers and facsimile numbers as a
party may designate as to itself by notice to the other parties).
(a) If to NRPI:
2921 NW Sixth Avenue
Miami, FL 33127
Attn: Richard Astrom, President
Facsimile (305) 571-8357
Copy to:
Gordon Dihle, Esq.
2922 Evergreen Parkway
Suite 320
Evergreen, CO 80439
Facsimile (303) 670-1594
(b) If to the Shareholder:
c/o Cutler Law Group
610 Newport Center Drive, Suite 800
Newport Beach, CA 92660
Facsimile No.: (949) 719-1988
Attention: M. Richard Cutler, Esq.
14. MISCELLANEOUS.
14.2 Expenses. Each party shall bear its own expenses incident to the
preparation, negotiation, execution and delivery of this Agreement and the
performance of its obligations hereunder.
14.3 Captions. The captions in this Agreement are for convenience of
reference only and shall not be given any effect in the interpretation of this
agreement.
14.4 No Waiver. The failure of a party to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver or
deprive that party of the right thereafter to insist upon strict adherence to
that term or any other term of this Agreement. Any waiver must be in writing.
14.5 Exclusive Agreement; Amendment. This Agreement supersedes all prior
agreements among the parties with respect to its subject matter with respect
thereto and cannot be changed or terminated orally.
14.6 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be considered an original, but all of which
together shall constitute the same instrument.
<PAGE>
14.7 Governing Law, Venue. This Agreement and (unless otherwise provided)
all amendments hereof and waivers and consents hereunder shall be governed by
the internal law of the State of California, without regard to the conflicts of
law principles thereof. Venue for any cause of action brought to enforce any
part of this Agreement shall be in Orange County, California.
14.8 Binding Effect. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and assigns,
provided that neither party may assign its rights hereunder without the consent
of the other, provided that, after the Closing, no consent of MAS XV or the
Shareholder shall be needed in connection with any merger or consolidation of
NRPI with or into another entity.
<PAGE>
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective offi-cers, hereunto duly authorized, and
entered into as of the date first above written.
NATIONAL REHAB PROPERTIES, INC.
a Nevada corporation
/s/ Richard Astrom
______________________________________________________________
By Richard Astrom, President and Chief Executive Officer
MRC LEGAL SERVICES CORPORATION
/s/ M. Richard Cutler
____________________________________________________
By: M. Richard Cutler, President
<PAGE>
EXHIBIT A
MAS XV SHAREHOLDER AND ASSIGNS
Shareholder NRPI Shares to be Issued
- ----------- ----------------------------
MRC Legal Services LLC 455,000
Brian A. Lebrecht 140,000
Vi Bui 105,000
MAS Capital Inc. 125,000
James Stubler 87,500
Portfolio investment Strategies Corp. 87,500
TOTAL 1,000,000
[Please note that Portfolio investment Strategies Corp. is a lower case "i"]
CONSULTING AGREEMENT
CONSULTING AGREEMENT dated as of February 10, 2000 between NATIONAL REHAB
PROPERTIES, INC., a Nevada corporation, ("NRPI"), on the one hand, and M.
RICHARD CUTLER ("Cutler"), BRIAN A. LEBRECHT ("Lebrecht"), VI BUI ("Bui"),
JAMES STUBLER ("Stubler") and SAMUEL EISENBERG ("Eisenberg", and, together with
Cutler, Lebrecht, Bui and Stubler, the "Consultants"), on the other hand.
WHEREAS:
A. Consultants have agreed to render consulting services with regard to
the negotiation and completion of a stock exchange between NRPI and the majority
shareholder of MAS Acquisition XV Corp., an Indiana corporation (the "MAS XV
Shareholder").
B. In the event NRPI is able to complete the Stock Exchange with the
MAS XV Shareholder, NRPI wishes to compensate Consultants for their consulting
services.
NOW THEREFORE, it is agreed:
1. Cash Compensation. NRPI shall pay by bank wire to Cutler a
------------------
consulting fee of $100,000.00 immediately upon the execution of a stock exchange
agreement with the MAS XV Shareholder.
2. Stock Compensation. NRPI shall pay and cause to be issued to the
-------------------
Consultants a consulting fee of 500,000 shares of common stock of NRPI (the
"Shares") immediately upon the execution of a stock exchange agreement with the
MAS XV Shareholder. Such shares shall be subject to registration by NRPI on
Form S-8, at NRPI's sole expense, within 15 days of NRPI closing on the stock
exchange agreement with the MAS XV Shareholder. Such shares shall be issued as
follows: 260,000 to Cutler, 80,000 to Lebrecht, 60,000 to Bui, 50,000 to Stubler
and 50,000 to Eisenberg.
3. Miscellaneous. This Agreement (i) shall be governed by the laws of
-------------
the State of California; (ii) may be executed in counterparts each of which
shall constitute an original; (iii) shall be binding upon the successors,
representatives, agents, officers and directors of the parties; and (iv) may not
be modified or changed except in a writing signed by all parties.
<PAGE>
This Consulting Agreement has been executed as of the date first above
written.
NATIONAL REHAB PROPERTIES, INC.
/s/ Richard Alstrom
____________________________________________________________________
By: Richard Alstrom, President and Chief Executive Officer
CONSULTANTS
/s/ M. Richard Cutler
____________________________________________________
M. Richard Cutler
/s/ Brian A. Lebrecht
____________________________________________________
Brian A. Lebrecht
/s/ Vi Bui
____________________________________________________
Vi Bui
/s/ James Stubler
____________________________________________________
James Stubler
/s/ Samuel Eisenberg
____________________________________________________
Samuel Eisenberg
Articles of Incorporation
FILED
1993 OCT - 1 AM 7:41
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
ARTICLES OF INCORPORATION
OF
NATIONAL REHAB PROPERTIES INC.
The undersigned incorporator hereby forms a corporation under Chapter 607
of the laws of the State of Florida.
ARTICLE I. NAME
The name of the corporation shall be:
NATIONAL REHAB PROPERTIES INC.
The address of the principal office of this corporation shall be 641 West 68th
Street, Hialeah, Florida 33014, and the mailing address of the corporation shall
be the same.
ARTICLE II. NATURE OF BUSINESS
This corporation may engage or transact in any or all lawful activities or
business permitted under the laws of the United States, the State of Florida or
any other state, country, territory or nation.
ARTICLE III. CAPITAL STOCK
The maximum number of shares of stock that this corporation is authorized
to have outstanding at any one time is 1,000 shares of common stock having no
par value per share.
<PAGE>
ARTICLE IV. REGISTERED AGENT
The street address of the initial registered office of the corporation
shall be 1201 Hays Street, Tallahassee, Florida 32301, and the name of the
initial registered agent of the corporation at that address is Corporation
Service Company.
ARTICLE V. TERM OF EXISTENCE
This corporation is to exist perpetually.
ARTICLE VI. INCORPORATOR
The name and street address of the incorporator to these Articles of
Incorporation:
Brian Courtney
Corporate Agents, Inc.
1201 Hays Street
Tallahassee, Florida 32301
The undersigned incorporator has executed these Articles of Incorporation
this first day of October, 1993.
/S/ BRIAN COURTNEY
Incorporator
<PAGE>
ACCEPTANCE OF REGISTERED AGENT DESIGNATED
IN ARTICLES OF INCORPORATION
Corporation Service Company, a Delaware corporation authorized to transact
business in this State, having a business office identical with the registered
office of the corporation named above, and having been designated as the
Registered Agent in the above and foregoing Articles, is familiar with and
accepts the obligations of the position of Registered Agent under Section
607.0505, Florida Statutes.
By: /S/ BRIAN COURTNEY
Authorized Service Representative
Corporation Service Company
Dated: October 1, 1993
FILED
1993 OCT - 1 AM 7:41
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
<PAGE>
ACTION OF SOLE INCORPORATOR
NATIONAL REHAB PROPERTIES, INC.
The undersigned, without a meeting, being the sole incorporator of the
Corporation, does hereby elect the persons listed below to serve as directors of
the corporation until the first annual meeting of shareholders and until their
successors are elected and qualify:
RICHARD ASTROM
/S/ BRIAN COURTNEY
--------------------
Brian Courtney
Incorporator
Dated:
F I L E D
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
OCT 18 1971
JOHN KOONTZ - SECRETARY OF STATE
/S/ JOHN KOONTZ
NO. 2817-51
1 ARTICLES OF INCORPORATION
2 OF
3 MISTER LAS VEGAS.
4 KNOW ALL MEN BY THESE PRESENTS:
5 That we, the undersigned, have this day voluntarily
6 associated ourselves together for the purpose of forming a
8 hereby state and certify:
9 FIRST: That the name of said corporation shall be as
10 follows: MISTER LAS VEGAS.
11 SECOND: That the purpose and objects for which this
12 corporation is formed to engage in and carry out any lawful
13 activity, subject to expressed limitations, if any.
14 THIRD: That the location of the principal office of
15 this corporation, within the State of Nevada, is Suite 500,
16 302 E. Carson, Las Vegas, Nevada, and that the Resident Agent
17 in charge thereof is THOMAS L. PURSEL, ESQ.
18 FOURTH: That the total authorized capital stock of
19 this corporation is ONE HUNDRED THOUSAND ($100,000) DOLLARS
20 divided into ONE MILLION (1,000,000) shares of common stock of
21 the per value of TEN (10(cent)) CENTS per share.
22 FIFTH: That the capital stock of this corporation
23 shall not be subject to assessment.
24 SIXTH: The members of the governing board shall be
25 styled Directors, and the number of such Board of Directors shall
26 consist of three and the names and addresses of the first board
27 of Directors who will serve as such until their successor are
28 appointed or elected are:
29 WILLARD J. HACHT-Suite 500, 302 E. Carson, Las Vegas, Nevada
30 MILDRED L. HACHT-Suite 500, 302 E. Carson, Las Vegas, Nevada
31 THOMAS L. PURSEL-Suite 500, 302 E. Carson, Las Vegas, Nevada
32
<PAGE>
1 SEVENTH: The name and addresses of each of the incor-
2 porators signing the Articles of Incorporation, are:
3 WILLARD J. HACHT Suite 500, 302 E. Carson
Las Vegas, Nevada
4
THOMAS L. PURSEL Suite 500, 302 E. Carson
5 Las Vegas, Nevada
6 KAREN F. CAESAR Suite 500, 302 E. Carson
Las Vegas, Nevada
7
8 EIGHTH: That this corporation shall have perpetual 9
existence.
10 IN WITNESS WHEREOF, the undersigned incorporators have
11 executed these Articles of Incorporation this 8TH day of
12 September, 1971.
13 /S/ WILLARD J. HACHT
-----------------------
WILLARD J. HACHT
14
/S/ THOMAS L. PURSEL
-----------------------
15 THOMAS L. PURSEL
16 /S/ KAREN F. CAESAR
----------------------
KAREN F. CAESAR
17
18 STATE OF NEVADA )
) SS:
19 COUNTY OF CLARK )
20 On this 8TH day of September, 1971, before me, a
21 Notary Public in and for the County and State, personally
22 appeared WILLARD J. HACHT, THOMAS L. PURSEL, and KAREN F.
23 CAESAR, known to me to be the persons described in and who
24 executed the foregoing Articles of Incorporation, who acknow-
25 ledged to me that they executed the same freely and voluntarily
26 and for the uses and purposes therein mentioned.
27 IN WITNESS WHEREOF, I have hereunto set my hand and
28 affixed my official seal.
29 /S/ JACK J. PURSEL
---------------------
30 SEAL Notary Public - State of Nevada
CLARK COUNTY
31 JACK J. PURSEL
My commission expires Jan. 17, 1975
32
BYLAWS
OF
NATIONAL REHAB PROPERTIES, INC.
ARTICLE I
SHAREHOLDERS
SECTION 1. ANNUAL MEETINGS
(a) The annual meeting of the shareholders of the Corporation, shall be
held at the principal office of the Corporation in the State of Nevada or at
such other place within or without the State of Nevada as may be determined by
the Board of Directors and as may be designated in the notice of such meeting.
The meeting shall be held on the third Tuesday of February of each year or on
such other day as the Board of Directors may specify. If said day is a legal
holiday, the meeting shall be held on the next succeeding business day not a
legal holiday.
(b) Business to be transacted at such meeting shall be the election of
directors to succeed those whose terms are expiring and such other business as
may be properly brought before the meeting.
(c) In the event that the annual meeting, by mistake or otherwise, shall
not be called and held as herein provided, a special meeting may be called as
provided for in Section 2 of this Article I in lieu of and for the purposes of
and with the same effect as the annual meeting.
SECTION 2. SPECIAL MEETINGS
(a) A special meeting of the shareholders of the Corporation may be called
for any purpose or purposes at any time by the President of the Corporation, by
the Board of Directors or by the holders of not less than 10% of the outstanding
capital stock of the Corporation entitled to vote at such meeting.
(b) At any time, upon the written direction of any person or persons
entitled to call a special meeting of the shareholders, it shall be the duty of
the Secretary to send notice of such meeting pursuant to Section 4 of this
Article I. It shall be the responsibility of the person or persons directing the
Secretary to send notice of any special meeting of shareholders to deliver such
direction and a proposed form of notice to the Secretary not less than 15 days
prior to the proposed date of said meeting.
(c) Special meetings of the shareholders of the Corporation shall be held
at such place, within or without the State of Nevada, on such date, and at such
time as shall be specified in the notice of such special meeting.
SECTION 3. ADJOURNMENT
(a) When the annual meeting is convened, or when any special meeting is
convened, the presiding officer may adjourn it for such period of time as may be
reasonably necessary to reconvene the meeting at another place and time.
(b) The presiding officer shall have the power to adjourn any meeting of
the Shareholders for any proper purpose, including, but not limited to, lack of
a quorum, securing a more adequate meeting place, electing officials to count
and tabulate votes, reviewing any shareholder proposals or passing upon any
challenge which may properly come before the meetings.
<PAGE>
(c) When a meeting is adjourned to another time or place, it shall not be
necessary to give any notice of the adjourned meeting if the time and place to
which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting. If,
however, after the adjournment the Board fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given in
compliance with Section 4(a) of this Article I to each shareholder of record on
the new record date entitled to vote at such meeting.
SECTION 4. NOTICE OF MEETINGS, PURPOSE OF MEETING, WAIVER
(a) Each shareholder of record entitled to vote at any meeting shall be
given in person, or by first class mail, postage prepaid, written notice of such
meeting which, in the case of a special meeting, shall set forth the purpose(s)
for which the meeting is called, not less than 10 or more than 60 days before
the date of such meeting. If mailed, such notice is to be sent to the
shareholder's address as it appears on the stock transfer books of the
Corporation, unless the shareholder shall be requested of the Secretary in
writing at least 15 days prior to the distribution of any required notice that
any notice intended for him or her be sent to some other address, in which case
the notice may be sent to the address so designated. Notwithstanding any such
request by a shareholder, notice sent to a shareholder's address as it appears
on the stock transfer books of this Corporation as of the record date shall be
deemed properly given. Any notice of a meeting sent by United States mail shall
be deemed delivered when deposited with proper postage thereon with the United
States Postal Service or in any mail receptacle under its control.
(b) A shareholder waives notice of any meeting by attendance, either in
person or by proxy, at such meeting or by waiving notice in writing either
before, during or after such meeting. Attendance at a meeting for the express
purpose of objecting that the meeting was not lawfully called or convened,
however, will not constitute a waiver of notice by a shareholder who states at
the beginning of the meeting, his or her objection that the meeting is not
lawfully called or convened.
(c) A waiver of notice signed by all shareholders entitled to vote at a
meeting of shareholders may also be used for any other proper purpose including,
but not limited to, designating any place within or without the State of Nevada
as the place for holding such a meeting.
(d) Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of shareholders need be specified in any written
waiver of notice.
SECTION 5. CLOSING OF TRANSFER BOOKS, RECORD DATE,
SHAREHOLDERS' LIST
(a) In order to determine the holders of record of the capital stock of the
Corporation who are entitled to notice of meetings, to vote a meeting or
adjournment thereof, or to receive payment of any dividend, or for any other
purpose, the Board of Directors may fix a date not more than 60 days prior to
the date set for any of the above-mentioned activities for such determination of
shareholders.
(b) If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least 10 days immediately
preceding such meeting.
<PAGE>
(c) In lieu of closing the stock transfer books, the Board of Directors may
fix in advance a date as the date for any such determination of shareholders,
such date in any case to be not more than 60 days prior to the date on which the
particular action, requiring such determination of shareholders, is to be taken.
(d) If the stock transfer books are not closed and no record date is fixed
for the determination of shareholders entitled to notice or to vote at a meeting
of shareholders, or to receive payment of a dividend, the date on which notice
of the meeting is mailed or the date on which the resolution of the Board of
Directors declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders.
(e) 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 under this Section for the adjourned meeting.
(f) The officer or agent having charge of the stock transfer books of the
Corporation shall make, as of a date at least 10 days before each meeting of
shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, with the address of each shareholder and the
number and class and series, if any, of shares held by each shareholder. Such
list shall be kept on file at the registered office of the Corporation, at the
principal place of business of the Corporation or at the office of the transfer
agent or registrar of the Corporation for a period of 10 days prior to such
meeting and shall be available for inspection by any shareholder at any time
during usual business hours. Such list shall also be produced and kept open at
the time and place of any meeting of shareholders and shall be subject to
inspection by any shareholder at any time during the meeting.
(g) The original stock transfer books shall be prima facie evidence as to
the shareholders entitled to examine such list or stock transfer books or to
vote any meeting of shareholders.
(h) If the requirements of Section 5(f) of this Article I have not been
substantially complied with, then, on the demand of any shareholder in person or
by proxy, the meeting shall be adjourned until such requirements are complied
with.
(i) If no demand pursuant to Section 5(h) of this Article I is made,
failure to comply with the requirements of this Section shall not affect the
validity of any action taken at such meeting.
(j) Section 5(g) of this Article I shall be operative only at such time(s)
as the Corporation shall have 6 or more shareholders.
SECTION 6. QUORUM
At any meeting of the shareholders of the Corporation, the presence, in
person or by proxy, of shareholders owning a majority of the issued and
outstanding shares of the capital stock of the Corporation entitled to vote
thereat shall be necessary to constitute a quorum for the transaction of any
business. If a quorum is present, the vote of a majority of the shares
represented at such meeting and entitled to vote on the subject matter shall be
the act of the shareholders. If there shall not be quorum at any meeting of the
shareholders of the Corporation, then the holders of a majority of the shares of
the capital stock of the Corporation who shall be present at such meeting, in
person or by proxy, may adjourn such meeting from time to time until holders of
all of the shares of the capital stock shall attend. At any such adjourned
<PAGE>
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted at the meeting as originally scheduled.
SECTION 7. PRESIDING OFFICER, ORDER OF BUSINESS
(a) Meetings of the shareholders shall be presided over by the Chairman of
the Board, or, if he or she is not present or there is no Chairman of the Board,
by the President or, if he or she is not present, by the senior Vice President
present or, if neither the Chairman of the Board, the President, nor a Vice
President is present, the meeting shall be presided over by a chairman to be
chosen by a plurality of the shareholders entitled to vote at the meeting who
are present, in person or by proxy. The presiding officer of any meeting of the
shareholders may delegate his or her duties and obligations as the presiding
officer as he or she sees fit.
(b) The Secretary of the Corporation, or, in his or her absence, an
Assistant Secretary shall act as Secretary of every meeting of shareholders, but
if neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall choose any person present to act as secretary of
the meeting.
(c) The order of business shall be as follows:
1. Call of meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous shareholders'
meeting or a waiver thereof.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Regular and miscellaneous business.
8. Special matters.
9. Adjournment.
(d) Notwithstanding the provisions of Section 7(c) of this Article I, the
order and topics of business to be transacted at any meeting shall be determined
by the presiding officer of the meeting in his or her sole discretion. In no
event shall any variation in the order of business or additions and deletions
from the order of business as specified in Section 7(c) of this Article I
invalidate any actions properly taken at any meeting.
SECTION 8. VOTING
(a) Unless otherwise provided for in the Articles of Incorporation, each
shareholder shall be entitled, at each meeting and upon each proposal to be
voted upon, to one vote for each share of voting stock recorded in his name on
the books of the Corporation on the record date fixed as provided for in Section
5 of this Article I.
(b) The presiding officer at any meeting of the shareholders shall have the
power to determine the method and means of voting when any matter is to be voted
upon. The method and means of voting may include, but shall not be limited to,
vote by ballot, vote by hand or vote by voice. No method of voting may be
adopted, however, which fails to take account of any shareholder`s right to vote
by proxy as provided for in Section 10 of this Article I. In no event may nay
method of voting be adopted which would prejudice the outcome of the vote.
<PAGE>
SECTION 9. ACTION WITHOUT MEETING
(a) Any action required to be taken at any annual or special meeting of
shareholders of the Corporation, or any action which may be taken at any annual
or special meeting of such shareholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of a majority of the
Corporation's outstanding stock.
(b) In the event that the action to which the shareholders consent is such
as would have required the filing of a certificate under Nevada corporate law is
such action had been voted on by shareholders at a meeting thereof, the
certificate filed under such other section shall state that written consent has
been given in accordance with the provisions of Section 9 of this Article I.
(c) If shareholder action is taken by written consent in lieu of meeting
signed by less than all of the Corporation's shareholders, then all non
participating shareholders shall be provided with written notice of the action
taken within 10 days after the date of the written instrument taking such
action.
(d) No action by written consent in lieu of meeting shall be valid if it is
in contravention of applicable proxy or informational rules adopted pursuant to
the Securities Exchange Act of 1934, as amended, including, without limitation,
the requirements of Section 14 thereof.
SECTION 10. PROXIES
(a) Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting, or his or her duly authorized
attorney-in-fact, may authorize another person or persons to act for him or her
by proxy.
(b) Every proxy must be signed by the shareholder or his or her
attorney-in-fact. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the shareholder executing it, except as otherwise
provided in this Section 10.
(c) The authority of the holder of a proxy to act shall not be revoked by
the incompetence or death of the shareholder who executed the proxy unless,
before the authority is exercised, written notice of any adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
(d) Except when other provisions shall have been made by written agreement
between the parties, the record holder of shares held as pledges or otherwise as
security or which belong to another, shall issue to the pledgor or to such owner
of such shares, upon demand therefor and payment of necessary expenses thereof,
a proxy to vote or take other action thereon.
(e) A proxy which states that it is irrevocable is irrevocable when it is
held by any of the following or a nominee of any of the following: (i) a
pledgee; (ii) a person who has purchased or agreed to purchase the shares: (iii)
a creditor or creditors of the Corporation who extend or continue to extend
credit to the Corporation in consideration of the proxy, if the proxy states
that it was given in consideration of such extension or continuation of credit,
the amount thereof, and the name of the person extending or continuing credit;
(iv) a person who has contracted to perform services as an officer of the
Corporation, if a proxy is required by the contract of employment, if the proxy
states that
<PAGE>
it was given in consideration of such contract of employment and states the name
of the employee and the period of employment contracted for; and (v) a person
designated by or under an agreement as provided in Article XI hereof.
(f) Notwithstanding a provision in a proxy stating that it is irrevocable,
the proxy becomes revocable after the pledge is redeemed, the debt of the
Corporation is paid, the period of employment provided for in the contract of
employment has terminated, or the agreement under Article XI hereof has
terminated and, in a case provided for in Section 10(e) (iii) or Section 10(e)
(iv) of this Article I, becomes revocable three years after the date of the
proxy or at the end of the period, if any, specified therein, whichever period
is less, unless the period of irrevocability of the proxy as provided in this
Section 10. This Section 10(f) does not affect the duration of a proxy under
Section 10(b) of this Article I.
(g) A proxy may be revoked, notwithstanding a provision making it
irrevocable, by a purchaser of shares without knowledge of the existence of the
provisions unless the existence of the proxy and its irrevocability is noted
conspicuously on the face or back of the certificate representing such shares.
(h) If a proxy for the same shares confers authority upon two or more
persons and does not otherwise provide, a majority of such persons present at
the meeting, or if only one is present then that one, may exercise all the
powers conferred by the proxy. if the proxy holders present at the meeting are
equally divided as to the right and manner of voting in any particular case, the
voting of such shares shall be prorated.
(i) If a proxy expressly so provides, any proxy holder may appoint in
writing a substitute to act in his or her place.
(j) Notwithstanding anything in the Bylaws to the contrary, no proxy shall
be valid if it was obtained in violation of any applicable requirements of
Section 14 of the Securities Exchange Act of 1934, as amended, or the Rules and
Regulations promulgated thereunder.
SECTION 11. VOTING OF SHARES BY SHAREHOLDERS
(a) Shares standing in the name of another corporation, domestic or
foreign, may be voted by the officer, agent, or proxy designated by the bylaws
of the corporate shareholder; or, in the absence of any applicable bylaw, by
such person as the board of directors of the corporate shareholder may
designate. Proof of such designation may be made by presentation of a certified
copy of the bylaws or other instrument of the corporate shareholder. In the
absence of any such designation, or in case of conflicting designation by the
corporate shareholder, the chairman of the board, president, any vice president,
secretary and treasurer of the corporate shareholder, in that order, shall be
presumed to possess authority to vote such shares.
(b) Shares held by an administrator, executor, guardian or conservator may
be voted by him or her, either in person or by proxy, without a transfer of such
shares into his or her name. Shares standing in the name of a trustee may be
voted as shares held by him or her without a transfer of such shares into his
name.
(c) Shares standing in the name of a receiver may be voted by such
receiver. Shares held by or under the control of a receiver but not standing in
the name of such receiver, may be voted by such receiver without the transfer
thereof into his name if authority to do so is contained in an appropriate order
of the court by which such receiver was appointed.
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(d) A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee.
(e) Shares of the capital stock of the Corporation belonging to the
Corporation or held by it in a fiduciary capacity shall not be voted, directly
or indirectly, at any meeting, and shall not be counted in determining the total
number of outstanding shares.
ARTICLE II
DIRECTORS
SECTION 1. BOARD OF DIRECTORS, EXERCISE OF CORPORATE POWERS
(a) All corporate powers shall be exercised by or under the authority of,
and the business and affairs of the Corporation shall be managed under the
direction of, the Board of Directors except as may be otherwise provided in the
Articles of Incorporation or in Shareholder's Agreement. If any such provision
is made in the Articles of Incorporation or in Shareholder's Agreement, the
powers and duties conferred or imposed upon the Board of Directors shall be
exercised or performed to such extent and by such person or persons as shall be
provided in the Articles of Incorporation or Shareholders' Agreement.
(b) Directors need not be residents of this state or shareholders of the
Corporation unless the Articles of Incorporation so require.
(c) The Board of Directors shall have authority to fix the compensation of
directors unless otherwise provided in the Articles of Incorporation.
(d) A director shall perform his or her duties as a director, including his
or her duties as a member of any committee of the Board upon which he may serve,
in good faith, in a manner he or she reasonably believes to be in the best
interests of the Corporation, and with such care as an ordinarily prudent person
in a like position would use under similar circumstances.
(e) In performing his or her duties, a director shall be entitled to rely
on information, opinions, reports or statements, including financial statements
and other financial data, in each case prepared or presented by: (i) one or more
officers or employees of the Corporation whom the director reasonably believes
to be reliable and competent in the matters presented; (ii) legal counsel,
public accountants or other persons as to matters which the director reasonably
believes to be within such persons' professional or expert competence; or (iii)
a committee of the Board upon which he or she does not serve, duly designated in
accordance with a provision of the Articles of Incorporation or these By-Laws,
as to matters within its designated authority, which committee the director
reasonably believes to merit confidence.
(f) A director shall not be considered to be acting in good faith if he or
she has knowledge concerning the matter in question that would cause such
reliance described in Section 1(e) of this Article II to be unwarranted.
(g) A person who performs his or her duties in compliance with Section 1 of
this Article II shall have no liability by reason of being or having been a
director of the Corporation.
(h) A director of the Corporation who is present at a meeting of the Board
of Directors at which action on any corporate matter is taken shall be presumed
to have assented to the action taken unless he or she votes against such action
or abstains from voting in respect thereto because of an asserted conflict of
interest.
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SECTION 2. NUMBER, ELECTION, CLASSIFICATION OF DIRECTORS, VACANCIES
(a) The Board of Directors of this Corporation shall consist of not less
than one director. The Board shall have authority, from time to time, to
increase the number of directors or to decrease it to not less than one member,
provided that no decrease in the number of directors shall deprive a serving
director of the right to serve throughout the term of his or her election.
(b) Each person named in the Articles of Incorporation as a member of the
initial Board of Directors shall serve until his or her successor shall have
been elected and qualified or until his or her earlier resignation, removal from
office, or death.
(c) At the first annual meeting of shareholders and at each annual meeting
thereafter, the shareholders shall elect directors to hold office until the next
succeeding annual meeting, except in case of the classification of director as
permitted by Nevada corporate law. Each Director shall hold office for the term
for which he or she is elected and until his or her successor shall have been
elected and qualified or until his or her earlier resignation, removal from
office, or death.
(d) The shareholders, by amendment to these Bylaws, may provide that the
directors be divided into not more than four classes, as nearly equal in number
as possible, whose terms of office shall respectively expire at different times,
but no such term shall continue longer than four years, and at least one fourth
of the directors shall be elected annually. If Directors are classified and the
number of directors is thereafter changed, any increase or decrease in
directorship shall be so apportioned among the classes as to make all classes as
nearly equal in number as possible.
(e) Any vacancy occurring in the Board of Directors, including any vacancy
created by reason of an increase in the number of directors, may be filled only
by the Board of Directors. A director elected to fill a vacancy shall hold
office only until the next election of directors by the shareholders.
SECTION 3. REMOVAL OF DIRECTORS
At a meeting of shareholders called expressly for that purpose, directors
may be removed in the manner provided in this Section 3. Any director or the
entire Board of Directors may be removed, with or without cause, by the vote of
the holders of two-thirds of the shares then entitled to vote at an election of
directors.
SECTION 4. DIRECTOR QUORUM AND VOTING
(a) A majority of the directors fixed in the manner provided in these
Bylaws shall constitute a quorum for the transaction of business.
(b) A majority of the members of an Executive Committee or other committee
shall constitute a quorum for the transaction of business at any meeting of such
Executive Committee or other committee.
(c) The act of a majority of the directors present at a Board meeting at
which a quorum is present shall be the act of the Board of Directors.
(d) The act of a majority of the members of an Executive Committee present
at an Executive Committee meeting at which a quorum is present shall be the act
of the Executive Committee.
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(e) The act of a majority of the members of any other committee present at
a committee meeting at which a quorum is present shall be the act of the
committee.
(f) Directors may, if not contrary to applicable law, vote either in person
or by proxy, provided that the proxy holder must be either another director, an
officer or a shareholder of the Corporation; however, any director who elects to
vote by proxy more than three times during any single fiscal year shall, unless
otherwise determined by the Board of Directors, be automatically removed as a
director.
SECTION 5. DIRECTOR CONFLICTS OF INTEREST
(a) No contract or other transaction between this Corporation and one or
more of its director or any other corporation, firm, association or entity in
which one or more of its directors are Directors or officers or are financially
interested shall be either void or voidable because of such relationship or
interest or because such director or directors are present at the meeting of the
Board of Directors or a committee thereof which authorizes, approves or ratifies
such contract or transaction or because their votes are counted for such
purpose, if:
(i) The fact of such relationship or interest is disclosed or
known to the Board of Directors or committee which authorizes, approves or
ratifies the contract or transaction by a vote or consent sufficient for the
purpose without counting the votes or consents of such interested directors; or
(ii) The fact of such relationship or interest is disclosed or
known to the shareholders entitled to vote and they authorize, approve or ratify
such contract or transaction by vote or written consent; or
(iii) The contract or transaction is fair and reasonable as to
the Corporation at the time it is authorized by the Board, a committee, or the
shareholders.
(b) Interested directors, whether or not voting, may be counted in
determining the presence of a quorum at a meeting of the Board of Directors or a
committee thereof which authorizes, approves or ratifies such contract or
transaction.
SECTION 6. EXECUTIVE AND OTHER COMMITTEES, DESIGNATION, AUTHORITY
(a) The Board of Directors, by resolution adopted by the full Board of
Directors, may designate from among its directors an Executive Committee and one
or more other committees each of which, to the extent provided in such
resolution or in the Articles of Incorporation or these Bylaws, shall have and
may exercise all the authority of the Board of Directors, except that no such
committee shall have the authority to : (i) approve or recommend to shareholders
actions or proposals required by Nevada corporate law to be approved by
shareholders; (ii) designate candidates for the office of director for purposes
of proxy solicitation or otherwise; (iii) fill vacancies on the Board of
Directors or any committee thereof; (iv) amend these Bylaws; (v) authorize or
approve the reacquisition of shares unless pursuant to a general formula or
method specified by the Board of Directors; or (vi) authorize or approve the
issuance or sale of, or any contract to issue or sell, shares or designate the
terms of a series of a class of shares, unless the Board of Directors, having
acted regarding general authorization for the issuance or sale of shares, or any
contract therefor, and, in the case of a series, the designation thereof has
specified a general formula or method by resolution or by adoption of a stock
option or other plan,
<PAGE>
authorized a committee to fix the terms upon which such shares may be issued or
sold, including, without limitation, the price, the rate or manner of payment of
dividends, provisions for redemption, sinking fund, conversion, and voting or
preferential rights, and provisions for other features of a class of shares, or
a series of a class of shares, with full power in such committee to adopt any
final resolution setting forth all the terms of a series for filing with the
Department of State under Nevada corporate law.
(b) The Board, by resolution adopted in accordance with Section 6(a) of
this Article II, may designate one or more directors as alternate members of any
such committee, who may act in the place and stead of any absent member or
members at any meeting of such committee.
(c) Neither the designation of any such committee, the delegation thereto
of authority, nor action by such committee pursuant to such authority shall
alone constitute compliance by a member of the Board of Directors, not a member
of the committee in question, with his responsibility to act in good faith, in
manner he reasonably believes to be in the best interests of the Corporation,
and with such care as an ordinarily prudent person in a like position would use
under similar circumstances.
SECTION 7. PLACE, TIME, NOTICE AND CALL OF DIRECTORS' MEETING.
(a) Meetings of the Board of Directors, regular or special, may be held
either within or without the State of Nevada.
(b) A regular meeting of the Board of Directors of the Corporation shall be
held for the election of officers of the Corporation and for the transaction of
such other business as may come before such meeting as promptly as practicable
after the annual meeting of the shareholders of this Corporation without the
necessity of notice other than this Bylaw. Other regular meetings of the Board
of Directors of the Corporation may be held at such places as the Board of
Directors of the Corporation may from time to time resolve without notice other
than such resolution. Special meetings of the Board of Directors may be held at
any time upon call of the Chairman of the Board of Directors or a majority of
the Directors of the Corporation, at such time and at such place as shall be
specified in the call thereof. Notice of any special meeting of the Board of
Directors must be given at least two days prior thereto, if by written notice
delivered personally; or at least five days prior thereto, if mailed; or at
least two days prior thereto, if by telegram; or at least two days prior
thereto, if by telephone. If such notice is given by mail, such notice shall be
deemed to have been delivered when deposited with the United States Postal
Service addressed to the business address of such Director with postage thereon
prepaid. If notice be given by telegram, such notice shall be deemed delivered
when the telegram is delivered to the telegraph company. If notice is given by
telephone, such notice shall be deemed delivered when the call is completed.
(c) Notice of a meeting of the Board of Directors need not be given to any
Director who signs a waiver of notice either before or after the meeting.
Attendance of a Director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a Director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
(d) Neither the business to be transacted at, nor the purpose of, any
regular of special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
<PAGE>
(e) A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the Directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
Directors.
(f) Members of the Board of Directors may participate in a meeting of such
Board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
SECTION 8. ACTION BY DIRECTORS WITHOUT A MEETING
(a) Any action required by Nevada corporate law to be taken at a meeting of
the Directors of the Corporation, or any action which may be taken at a meeting
of the Directors or a committee thereof, may be taken without a meeting if a
consent in writing, setting forth the action so to be taken, signed by all of
the Directors, or all of the members of the committee, as the case may be, and
is filed in the minutes of the proceedings of the Board or of the committee.
Such consent shall have the same effect as a unanimous vote.
(b) If not contrary to applicable law, directors may take action as the
Board of Directors or committees thereof through a written consent to action
signed by a number of directors sufficient to have carried a vote of the Board
of Directors or committee thereof with all members present and voting; provided,
that all directors not joining in such written instrument shall be deemed for
all purposes to have cast dissenting votes, and that all directors not parties
to such instrument shall receive written notice of all action taken through such
instrument within three days after such instrument shall have been subscribed by
the requisite number of directors required for such action.
SECTION 9. COMPENSATION
The Directors and members of the Executive and any other committee of the
Board of Directors shall be entitled to such reasonable compensation for their
services and on such basis as shall be fixed from time to time by resolution of
the Board of Directors. The Board of Directors and members of any committee of
that Board of Directors shall be entitled to reimbursement for any reasonable
expenses incurred in attending any Board or committee meeting. Any Director
receiving compensation under this Section shall not be prevented from serving
the Corporation in any other capacity and shall not be prohibited from receiving
reasonable compensation for such other services.
SECTION 10. RESIGNATION
Any Director of the Corporation may resign at any time by providing the
Board of Directors with written notice indicating the Director's intention to
resign and the effective date thereof.
<PAGE>
ARTICLE III
OFFICERS
SECTION 1. ELECTION, NUMBER, TERMS OF OFFICE
(a) The officers of the Corporation shall consist of a Chairman of the
Board, a Chief Executive officer, a President, a Chief Operating Officer, a
Chief Financial Officer, one or more Vice-Presidents, a Secretary and a
Treasurer, each of whom shall be elected by the Board of Directors at such time
and in such manner as may be prescribed by these Bylaws. Such other officers and
assistance officers and agents as may be deemed necessary may be elected or
appointed by the Board of Directors. The officers of the Corporation shall be
hereinafter collectively referred to as the "Officers."
(b) All officers and agents, as between themselves and the Corporation,
shall have such authority and perform such duties in the management of the
Corporation as are provided in these Bylaws, or as may be determined by
resolution of the Board of Directors not inconsistent with these Bylaws.
(c) Any two or more offices may be held by the same person, except for the
offices of President and Secretary.
(d) A failure to elect a Chairman of the Board, Chief Executive Officer,
President, Chief Operating Officer, Chief Financial Officer, a Vice President, a
Secretary or a Treasurer shall not affect the existence of the Corporation.
SECTION 2. REMOVAL
An officer of the Corporation shall hold office until the election and
qualification of his successor; however, any Officer of the Corporation may be
removed from office by the Board of Directors whenever in its judgment the best
interests of the Corporation will be served thereby. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer shall not of itself create any contract
right to employment or compensation.
SECTION 3. VACANCIES
Any vacancy in any office from any cause may be filled for the unexpired
portion of the term of such office by the Board of Directors.
SECTION 4. POWERS AND DUTIES
(a) The Chairman of the Board of Directors shall preside over meetings of
the Board of Directors and the Shareholders. Unless a separate Chief Executive
Officer is elected, the Chairman shall exercise the powers hereafter granted to
that office. Unless a Chairman of the Board is specifically elected, the
President shall be deemed to be the Chairman of the Board.
(b) The Chief Executive Officer shall be the principal officer of the
Corporation to whom all other officers shall be subordinate. In the event no
Chief Executive Officer is separately elected, such office shall be assumed by
the Chairman of the Board, and if no such office has been filled, by the
President. Except where by law the signature of the President is required or
unless the Board of Directors shall rule otherwise, the Chief Executive Officer
shall possess the same power as the President to sign all certificates,
contracts and other instruments of the Corporation which may be authorized by
the Board of Directors.
<PAGE>
(c) The Chief Operating Officer of the Corporation shall be responsible for
management of the day to day affairs of the Corporation, subject to compliance
with the directions of the Board of Directors and of the Chief Executive
Officer. He shall be responsible for the general day-to-day supervision of the
business and affairs of the Corporation. He shall sign or countersign all
certificates, contracts or other instruments of the Corporation as authorized by
the Board of Directors. He may, but need not, be a member of the Board of
Directors.
(d) Unless otherwise provided by specific resolution of the Board of
Directors, the President shall be the Chief Operating Officer of the
Corporation. In the absence of a separately elected or available Chief Executive
Officer or Chairman of the Board, the President shall be the Chief Executive
Officer of the Corporation and shall preside at all meetings of the shareholders
and the Board of Directors. He shall make reports to the Board of Directors. The
Board of Directors will at all times retain the power to expressly delegate the
duties of the President to any other Officer of the Corporation.
(e) The Chief Financial Officer shall be responsible for coordinating all
financial aspects of the Corporation's operations, including strategic financial
planning, supervision of the Corporation's Treasurer, Comptroller and outside
auditors. In the event an Audit Committee of the Board of Directors is
designated and serving, he shall be responsible for keeping such committee fully
and timely informed of all matters under its jurisdiction. In addition, the
Chief Financial Officer shall be responsible for overseeing preparation and
filing of all reports of the Corporation's activities required to be filed,
either periodically or on a special basis with the United States Internal
revenue Service and Securities and Exchange Commission and other federal and
state governmental agencies.
(f) The Vice President(s), if any, in the order designated by the Board of
Directors, shall exercise the functions of the President in the event of the
absence, disability, death, or refusal to act of the President. During the time
that any Vice President is properly exercising the functions of the President,
such Vice President shall have all the powers of and be subject to all
restrictions upon the President. Each Vice President shall have such other
duties as are assigned to him from time to time by the Board of Directors or by
the President of the Corporation.
(g) The Secretary of the Corporation shall keep the minutes of the meetings
of the shareholders of the Corporation, and, unless provided otherwise by the
Chairman at any meeting of the Board of Directors, the Secretary shall keep the
minutes of the meetings of the Board of Directors of the Corporation. The
Secretary shall be the custodian of the minute books of the Corporation and such
other books and records of the Corporation as the Board of Directors of the
Corporation may direct. The Secretary of the Corporation shall have the general
responsibility for maintaining the stock transfer books of the Corporation, or
of supervising the maintenance of the stock transfer books of the Corporation by
the transfer agent, if any, of the Corporation. The Secretary shall be the
custodian of the corporate seal of the Corporation and shall affix the corporate
seal of the Corporation on contracts and other instruments as the Board of
Directors may direct. The Secretary shall perform such other duties as are
assigned to him from time by the Board of Directors or the President of the
Corporation.
(h) The Treasurer of the Corporation shall be directly subordinate to the
Chief Financial Officer. In the absence of a Chief Financial Officer, such
office shall be filled by the Treasurer. The Treasurer shall have custody of all
funds and securities owned by the Corporation. The Treasurer shall cause to be
<PAGE>
entered regularly in the proper books of account of the Corporation full and
accurate accounts of the receipts and disbursements of the Corporation. The
Treasurer of the Corporation shall render a statement of the cash, financial and
other accounts of the Corporation whenever he is directed to render such a
statement by the Board of Directors or by the President of the Corporation. The
Treasurer shall at all reasonable times make available the Corporation's books
and financial accounts to any Director of the Corporation during normal business
hours. The Treasurer shall perform all other acts incident to the Office of
Treasurer of the Corporation, and he shall have such other duties as are
assigned to him from time to time by the Board of Directors or the President of
the Corporation.
(i) Other subordinate or assistant officers appointed by the Board of
Directors or by the President, if such authority is delegated to him by the
Board of Directors, shall exercise such powers and perform such duties as may be
delegated to them by the Board of Directors, the Chief Executive Officer or by
the President, as the case may be.
(j) In case of the absence or disability of any Officer of the Corporation
and of any person authorized to act in his place during such period of absence
or disability, the Board of Directors may from time to time delegate the powers
and duties of such Officer or any Director or any other person whom it may
select.
SECTION 5. SALARIES
The salaries of all Officers of the Corporation shall, except as otherwise
determined or required by an agreement entered into among all the shareholders
of the Corporation, be fixed by the Board of Directors. No Officer shall be
ineligible to receive such salary by reason of the fact that he is also a
Director of the Corporation and receiving compensation therefor.
ARTICLE IV
LOANS TO EMPLOYEES AND OFFICERS,
GUARANTEE OF OBLIGATIONS OF EMPLOYEES AND OFFICERS
This Corporation may lend money to, guarantee any obligation of, or
otherwise assist any Officer or other employee of the Corporation or of a
subsidiary, including any Officer or employee who is a Director of the
Corporation or of a subsidiary, whenever, in the judgment of the Directors, such
loan, guarantee or assistance may reasonably be expected to benefit the
Corporation. The loan, guarantee or other assistance may be with or without
interest, and may be unsecured, or secured in such manner as the Board of
Directors shall approve including, without limitation, a pledge of shares of
stock of the Corporation. Nothing in this Articles shall be deemed to deny,
limit or restrict the powers of guarantee or warranty of this Corporation at
common law or under any statute.
ARTICLE V
STOCK CERTIFICATES, VOTING TRUSTS, TRANSFERS
SECTION 1. CERTIFICATES REPRESENTING SHARES
(a) Every holder of shares of this Corporation shall be entitled to one or
more certificates, representing all shares to which he is entitled and such
certificates shall be signed by the Chairman, Chief Executive Officer, the
President or a Vice President and the Secretary or an Assistant Secretary of the
Corporation and may be sealed with the seal of the Corporation or a facsimile
<PAGE>
thereof. The signatures of the Chairman, the Chief Executive Officer, the
President or Vice President and the Secretary or Assistant Secretary may be
facsimiles if the certificate is manually signed on behalf of a transfer agent
or a registrar, other than the Corporation itself or an employee of the
Corporation. In case any Officer who signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such Officer before
such certificate is issued, it may be issued by the Corporation with the same
effect as if it were executed by the appropriate Officer at the date of its
issuance.
(b) Every certificate representing shares issued by this Corporation shall,
if shares are divided into one or more classes or series with differing rights,
state that the Corporation will furnish to any shareholder upon request and
without charge a full statement of: (i) the designations, preferences,
limitations, and relative rights of the shares of each class or series
authorized to be issued, and (ii) the variations in the relative rights and
preferences between the shares of each such series, if the Corporation is
authorized to issue any preferred or special class in series and so far as the
same have been fixed and determined, and the authority of the Board of Directors
to fix and determine, the relative rights and preferences of subsequent series.
(c) Every certificate representing shares which are restricted as to sale,
disposition or other transfer (including restrictions based on federal or state
securities and other laws) shall state that such shares are restricted as to
transfer and shall set forth or fairly summarize upon the certificate, or shall
state that the Corporation will furnish to any shareholder upon request and
without charge a full statement of, such restrictions.
(d) Each certificate representing shares shall state upon the face thereof:
(i) the name of the Corporation; (ii) that the Corporation is organized under
the laws of the State of Nevada; (iii) the name of the person or persons to whom
issued; (iv) the number and class of shares, and the designation of the series,
if any, which such certificate represents; and (v) the par value of each share
represented by such certificate, or a statement that the shares are without par
value.
(e) No certificate shall be issued for any shares until they are fully paid
for.
SECTION 2. TRANSFER BOOKS
The Corporation shall keep at its registered office or principal place of
business or in the office of its transfer agent or registrar, a book (or books
where more than one kind, class, or series of stock is outstanding) to be known
as the Stock Book, containing the names, alphabetically arranged, addresses and
Social Security numbers of every shareholder and the number of shares each kind,
class or series of stock held of record. Where the Stock Book is kept in the
office of the transfer agent, the Corporation shall keep at its office in the
State of Nevada copies of the stock lists prepared from said Stock Book and sent
to it from time to time by said transfer agent. The Stock Book or stock lists
shall show the current status of the ownership of shares of the Corporation
provided that, if the transfer agent of the Corporation be located elsewhere, a
reasonable time shall be allowed for transit or mail.
<PAGE>
SECTION 3. TRANSFER OF SHARES
(a) The name(s) and address(es) of the person(s) to whom shares of stock of
this Corporation are issued, shall be entered on the Stock Transfer Books of the
Corporation, with the number of shares and date of issue.
(b) Transfer of shares of the Corporation shall be made on the Stock
Transfer Books of the Corporation by the Secretary or the transfer agent,
subject to compliance with any restrictions specified on such certificate, only
when the holder of record thereof or the legal representative of such holder of
record or the attorney-in-fact of such holder of record, authorized by power of
attorney duly executed and filed with the Secretary or transfer agent of the
Corporation, shall surrender the Certificate representing such shares for
cancellation. Lost, destroyed or stolen Stock Certificates shall be replaced
pursuant to Section 5 of this Article V.
(c) The person or persons in whose names shares stand on the books of the
Corporation shall be deemed by the Corporation to be the owner of such shares
for all purposes, except as otherwise provided pursuant to Sections 10 and 11 of
Article I, or Section 4 of Article V.
(d) Shares of the Corporation capital stock shall be freely transferable
without the required Board of Directors' consent, unless such consent
requirement has been imposed pursuant to a binding written contract subscribed
to by the holder or his or her predecessor in interest.
SECTION 4. VOTING TRUSTS
(a) Any number of shareholders of the Corporation may create a voting trust
for the purpose of conferring upon a trustee or trustees the right to vote or
otherwise represent their shares, for a period not to exceed ten years, by: (i)
entering into a written voting trust agreement specifying the terms and
conditions of the voting trust; (ii) depositing a counterpart of the agreement
with the Corporation at its registered office; and (iii) transferring their
shares to such trustee or trustees for the purposes of this Agreement. Prior to
the recording of the agreement, the shareholder concerned shall render the stock
certificate(s) described therein to the Corporate Secretary who shall note on
each certificate:
"This Certificate is subject to the provisions of a voting
trust agreement dated ____________________, recorded in Minute
Book ________________, of the Corporation.
Secretary"
(b) Upon the transfer of such shares, voting trust certificates shall be
issued by the trustee or trustees to the shareholders who transfer their shares
in trust. Such trustee or trustees shall keep a record of the holders of voting
trust certificates evidencing a beneficial interest in the voting trust, giving
the names and addresses of all such holders and the number and class or the
shares in respect of which the voting trust certificates held by each are
issued, and shall deposit a copy of such record with the Corporation at its
registered office.
(c) The counterpart of the voting trust agreement and the copy of such
record so deposited with the Corporation shall be subject to the same right of
examination by a shareholder of the Corporation, in person or by agent or
attorney, as are the books and records of the Corporation, and such counterpart
<PAGE>
and such copy of such record shall be subject to examination by any holder of
record of voting trust certificates either in person or by agent or attorney, at
any reasonable time for any proper purpose.
(d) At any time before the expiration of a voting trust agreement as
originally fixed or as extended one or more times under this Section 4(d), one
or more holders of voting trust certificates may, by agreement in writing,
extend the duration of such voting trust agreement, nominating the same or
substitute trustees, for an additional period not exceeding 10 years. Such
extension agreement shall not affect the rights or obligations or persons not
parties to the agreement, and such persons shall be entitled to remove their
shares from the trust and promptly to have their stock certificates reissued
upon the expiration of the original term of the voting trust agreement. The
extension agreement shall in every respect comply with and be subject to all the
provisions of this Section 4, applicable to the original voting trust agreement
except that the 10 year maximum period of duration shall commence on the date of
adoption of the extension agreement.
(e) The trustees under the terms of the agreements entered into under the
provisions of this Section 4, shall not acquire the legal title to the shares
but shall be vested only with the legal right and title to the voting power
which is incident to the ownership of the shares.
(f) Notwithstanding generally applicable prohibitions against a
corporation's voting of treasury stock, if the Corporation is the trustee under
a voting trust, it shall have full authority to vote such shares in accordance
with the terms of the voting trust agreement, even if such agreement vests
absolute and unfettered voting discretion in the trustee and notwithstanding
that the voting trust was created at the prompting or direction of the
Corporation, its officers or directors.
SECTION 5. LOST, DESTROYED, OR STOLEN CERTIFICATES
No Certificate representing shares of stock in the Corporation shall be
issued in place of any Certificate alleged to have been lost, destroyed, or
stolen except on production of evidence, satisfactory to the Board of Directors,
of such loss, destruction or theft, and, if the Board of Directors so requires,
upon the furnishing of an indemnity bond in such amount (but not to exceed twice
the fair market value of the shares represented by the Certificate) and with
such terms and with such surety as the Board of Directors may, in its
discretion, require.
ARTICLE VI
BOOKS AND RECORDS
(a) The Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders, Board of
Directors and committees of Directors.
(b) Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
(c) Any person who shall have been a holder of record of shares, or the
holder of record of voting trust certificates for, at least five percent of the
outstanding shares of any class or series of the Corporation, upon written
demand stating the purpose thereof, shall; subject to the qualifications
contained in subsection (d) hereof, have the right to examine, in person or by
agent or attorney, at any reasonable time or times, for any purpose, its
relevant books
<PAGE>
and records of account, minutes and records of shareholders and to make extracts
therefrom.
(d) No shareholder who within two years has sold or offered for sale any
list of shareholders or of holders of voting trust certificates for shares of
this Corporation or any other corporation; has aided or abetted any person in
procuring any list of shareholders or of holders of voting trust certificates
for any such purpose; or has improperly used any information secured through any
prior examination of the books and records of account, minutes, or record of
shareholders or of holders of voting trust certificates for shares of the
Corporation of any other corporation; shall be entitled to examine the documents
and records of the Corporation as provided in Section (c) of this Article VI. No
shareholder who does not act in good faith or for a proper purpose in making his
demand shall be entitled to examine the documents and records of the Corporation
as provided in Section (c) of this Article VI.
(e) Unless modified by resolution of the Shareholders, this Corporation
shall prepare not later than four months after the close of each fiscal year:
(i) A balance sheet showing in reasonable detail the financial
conditions of the Corporation as of the date of the close of its fiscal year.
(ii) A Profit and Loss statement showing the results of its
operation during its fiscal year.
(f) Upon the written request of any shareholder or holder of voting trust
certificates for shares of the Corporation, the Corporation shall mail to such
shareholder or holder of voting trust certificates a copy of its most recent
balance sheet and profit and loss statement.
(g) Such balance sheets and profit and loss statements shall be filed and
kept for at least five years in the registered office of the Corporation in the
State of Nevada and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates, in person or by agent.
ARTICLE VII
DIVIDENDS
The Board of Directors of the Corporation may, from time to time, declare,
and the Corporation may pay dividends on its own shares, except when the
Corporation is insolvent or when the payment thereof would render the
Corporation insolvent, subject to the following provisions:
(a) Dividends in cash or property may be declared and paid, except as
otherwise provided in this Article VII, only out of the unreserved and
unrestricted earned surplus of the Corporation or out of capital surplus,
however arising, but each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share paid
from such capital surplus shall be disclosed to the shareholders receiving the
same concurrently with the distribution.
(b) If the Corporation shall engage in the business of exploiting natural
resources or other wasting assets and if the Articles of Incorporation so
provide, dividends may be declared and paid in cash out of depletion or similar
reserves, but each such dividend shall be identified as distribution of such
reserves and the amount per share paid from such reserves shall be disclosed to
the shareholders receiving the same concurrently with the distribution thereof.
<PAGE>
(c) Dividends may be declared and paid in the Corporation's treasury
shares.
(d) Dividends may be declared and paid in the Corporation's authorized but
unissued shares, out of any unreserved and unrestricted surplus of the
Corporation, upon the following conditions:
(i) If a dividend is payable in the Corporations' own shares
having a par value, such shares shall be issued at not less than the par value
thereof and there shall be transferred to stated capital at the time such
dividend is paid an amount of surplus equal to the aggregate par value of the
shares to be issued as a dividend.
(ii) If a dividend is payable in the Corporations' own shares
without par value, such shares shall be issued at a stated value fixed by the
Board of Directors by resolution adopted at the time such dividend is declared,
and there shall be transferred to stated capital at the time such dividend is
paid an amount of surplus equal to the aggregate stated value so fixed and the
amount per share so transferred to stated capital shall be disclosed to the
shareholders receiving such dividend concurrently with the payment thereof.
(e) No dividend payable in shares of any class shall be paid to the holders
of shares of any other class unless the Articles of Incorporation so provide or
such payment is authorized by the affirmative vote or the written consent of the
holders of at least a majority of the outstanding shares of the class which the
payment is to be made.
(f) A split or division of the issued shares of any class into a greater
number of shares of the same class without increasing the stated capital of the
Corporation shall not be construed to be a stock dividend within the meaning of
this Article VII.
ARTICLE VIII
SEAL
The Board of Directors shall adopt a Corporate Seal which shall be circular
in form and shall have inscribed thereon the name of the Corporation, the state
of incorporation and the year of incorporation.
ARTICLE IX
INDEMNIFICATION
This Corporation may, in its discretion, indemnify any director, officer,
employee, or agent in the following circumstances and in the following manner:
(a) The Corporation may indemnify any person who was or is a part, or is
threatened to be made a party to any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or investigative
(other than an action by, or in the right of, the Corporation) by reason of the
fact that he is or was a director, officer, employee, or agent of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys' fees
at all trial and appellate levels), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding, including any appeal thereof, if he acted in good
faith and in a manner he reasonably believed to be in, or not opposed to, the
best interests of the Corporation and, with respect to any criminal action or
<PAGE>
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit, or proceeding by judgment, order, settlement,
conviction or upon a plea of nolo contendere or its equivalent shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonable believed to be in, or not opposed to, the best
interests of the Corporation or, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The Corporation may indemnify any person who was or is a party, or is
threatened to be made a party to any threatened, pending, or completed action or
suit by or in the right of the Corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee, or agent of
the Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, or agent of the Corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust, or
other enterprise against expenses (including attorneys' fees at all trial and
appellate levels), actually and reasonable incurred by him in connection with
the defense of settlement of such action or suit, including any appeal thereof,
if he acted in good faith and in a manner he reasonably believed to be in, or
not opposed to, the best interest of the Corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation unless, and only to
the extent that, the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is rarely and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
(c) To the extent that a Director, Officer, employee, or agent of the
Corporation has been successful on the merits or otherwise in defense of any
action, suit, or proceeding referred to in Sections (a) or (b) of this Article
IX, or in defense of any claim, issue, or matter therein, shall be indemnified
against expenses (including attorneys' fees at trial and appellate levels)
actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under Sections (a) or (b) of this Article IX,
unless pursuant to a determination by a court, shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee, or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
Sections (a) or (b) or this Article IX. Such determination shall initially be
made by the Board of Directors by a majority vote of a quorum consisting of
Directors who were not parties to such action, suit, or proceeding. If the Board
of Directors shall, for any reason, decline to make such a determination, then
such determination shall be made by the shareholders by a majority vote of a
quorum consisting of shareholders who were not parties to such action, suit or
proceeding; provided, however, that a determination made by the Board of
Directors pursuant to this Section may be appealed to the shareholders by the
party seeking indemnification or any party entitled to call a special meeting of
the shareholders pursuant to Section 2 of Article I and, in such case, the
determination made by the majority vote of a quorum consisting of shareholders
who were not parties to such action, suit, or proceeding shall prevail over a
contrary determination of the Board of Directors pursuant to this Section.
(e) Expenses (including attorneys' fees at all trial and appellate levels)
incurred in defending a civil or criminal action, suit or proceeding may be paid
by the Corporation in advance of the final disposition of such action, suit or
proceeding upon a preliminary determination following one of the procedures set
forth in this Article IX, that a Director, Officer, employee or
<PAGE>
agent met the applicable standard of conduct set forth in this Article IX, and
upon receipt of an undertaking by or on behalf of the director, officer,
employee or agent to repay such amount, unless it shall ultimately be determined
that he is entitled to be indemnified by the Corporation as authorized in this
section.
(f) The Corporation may make any other or further indemnification, except
an indemnification against gross negligence or willful misconduct, under any
agreement, vote of shareholders or disinterested Directors or otherwise, both as
to action in the indemnified party's official capacity and as to action in
another capacity while holding such office.
(g) Indemnification as provided in this Article IX may continue as to a
person who has ceased to be a director, officer, employee or agent and may inure
to the benefit of the heirs, executors and administrators of such a person upon
a proper determination initially made by the Board of Directors by a majority
vote of a quorum consisting of Directors who were not parties to such action,
suit, or proceeding. If the Board of Directors shall, for any reason, decline to
make such a determination, then such determination may be made by the
shareholders by a majority vote of a quorum consisting of shareholders who were
not parties to such action, suit or proceeding; provided, however, that a
determination made by the Board of Directors pursuant to this Section may be
appealed to the shareholders by the party seeking indemnification or his
representative or by any party entitled to call a special meeting of the
shareholders pursuant to Section 2 or Article I and in such case, the
determination made by the majority vote of quorum consisting of shareholders who
were not parties to such action, suit, or proceeding shall prevail over a
contrary determination of the Board of Directors pursuant to this Section (g).
(h) The Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against any liability asserted against him and incurred by him
in any such capacity or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability under
the provisions of this Article IX.
(i) If any expenses or other amounts are paid by way of indemnification,
otherwise than by court order or action by the shareholders or by an insurance
carrier pursuant to insurance maintained by the Corporation, the Corporation
shall, not later than the time of delivery to shareholders or written notice of
the next annual meeting of shareholders unless such meeting is held within three
months from the date of such payment, and, in any event, within 15 months from
the date of such payment, deliver either personally or by mail to each
shareholder of record at the time entitled to vote for the election of Directors
a statement specifying the persons paid, the amount paid, and the nature and
status at the time of such payment of the litigation of threatened litigation.
(j) This Article IX shall be interpreted to permit indemnification to the
fullest extent permitted by law. If any part of this Article shall be found to
be invalid or ineffective in any action, suit of proceeding, the validity and
effect of the remaining part thereof shall not be affected. The provisions of
this Article IX shall be applicable to all actions, claims, suits, or
proceedings made or commenced after the adoption hereof, whether arising from
acts or omissions to act occurring before or after its adoption.
<PAGE>
ARTICLE X
AMENDMENT OF BYLAWS
The Board of Directors shall have the power to amend, alter, or repeal
these Bylaws, and to adopt new Bylaws.
ARTICLE XI
FISCAL YEAR
The Fiscal Year of this Corporation shall be determined by the Board of
Directors.
ARTICLE XII
MEDICAL REIMBURSEMENT
SECTION 1. BENEFITS
The Corporation may, subject to approval of the Board of Directors
reimburse all employees for expenses incurred by themselves and their
dependents, as defined in Section 152 of the Internal Revenue Code of 1954, as
amended (the "IRC"), for medical care, as defined in IRC Section 213(e) or any
successor section thereto, subject to the conditions and limitations hereinafter
set forth.
It is the intention of the Corporation that the benefits payable to
employees hereunder will be excluded from their gross income pursuant IRC
Section 105 or any successor section thereto.
SECTION 2. EMPLOYEES DEFINED
The term "employees" as used in this medical expense plan is hereby defined
to include all individuals employed by the corporation except the following:
(a) Employees who have not completed three months of service as is provided
in IRC Section 105(h)(3) (b)(i), or any successor section thereto;
(b) Employees who have not attained the age of 25 years;
(c) Employees who are part-time or seasonal as is defined in IRC Section
105(h)(3)(B)(iii) or any successor section thereto;
(d) Employees who are included in a unit of employees covered by an
agreement between employee representatives and one or more employers found to be
a collective bargaining agreement; where accident and health benefits were the
subject of good faith bargaining between such employee representatives and such
employer(s) as is defined in IRC Section 105(h)(3)(B)(iv) or any successor
section thereto;
(e) Employees who are nonresident aliens and who receive no earned income
from the employer which constitutes income from sources within the United States
as is further defined in IRC Section 105(h)(5)(B)(v) or any successor section
thereto.
SECTION 3. LIMITATIONS
(a) The Corporation will reimburse any employee no more than $5,000.00 in
any fiscal year for medical care expenses;
<PAGE>
(b) Reimbursement or payment provided under this plan will be made by the
Corporation only in the event and to the extent that such reimbursement or
payment is not provided under any insurance policy(ies), whether owned by the
Corporation or the employee, or under any other health and accident or wage
continuation plan;
(c) In the event that there is such an insurance policy or plan in effect
providing for reimbursement in whole or in part, then to the extent of the
coverage under such policy or plan, the Corporation will be relieved of any and
all liability hereunder.
SECTION 4. SUBMISSION OF PROOF
Any employee applying for reimbursement under this plan will submit to the
Corporation, at least quarterly, all bills for medical care, including premium
notices for accident or health insurance, for verification by the Corporation
prior to payment. Failure to comply herewith, may at the discretion of the Board
of Directors, terminate such employee's right to said reimbursement.
SECTION 5. DISCONTINUATION
This plan will be subject to termination at any time by vote of the Board
of Directors; provided, however, that medical care expenses incurred prior to
such termination will be reimbursed or paid in accordance with the terms of this
plan.
SECTION 6. DETERMINATION
The Chief Executive Officer will determine all questions arising from the
administration and interpretation of the Plan except where reimbursement is
claimed by the President. In such case determination will be made by the Board
of Directors.
* * * * * *
The Undersigned, being the duly elected and acting secretary of the Corporation,
hereby certifies that the foregoing constitute the validly adopted and true
Bylaws of the Corporation, as of the date set forth below.
Dated: _________________ _____________________________
Secretary
(Corporate Seal)
WRITTEN CONSENT IN LIEU OF COMBINED
SPECIAL MEETING OF DIRECTORS AND SHAREHOLDERS
The Undersigned, being all of the currently serving directors. the holders of a
majority of the authorized, issued and outstanding voting capital stock of
National Rehab Properties, Inc. (the "Corporation"). A corporation organized and
operating under the Nevada General Corporation Act, Chapter 78, Nevada Revised
Statutes ("Act"), pursuant to the permissive provisions thereof and in
compliance with the requirements of the Corporation's Articles of Incorporation
and Bylaws, hereby take the following actions and adopt the following
resolutions:
WITNESSETH:
RESOLVED, that the Corporation is hereby authorized to amend its Articles of
Incorporation to authorize the creation of a new class of stock known as Class A
common stock. The Corporation is authorized to issue 2,000,000 shares of .000l
par value Class A Common Stock. Each share of C shall be entitled to 20 votes
for each share held, however, shall not be convertible into the Corporation's
common stock at any time; and
RESOLVED, that the Corporation is hereby authorized to issue l,000,000 shares of
Class A Common Stock to Christopher Astrom, the Corporation's vice-president for
four years of past compensation. Mr. Astrom shall pay $.0001 per share with
the understanding that the shares may never be traded or converted into common
stock. Such Class A shares may be transferred only to family member.
DONE, effective this 17th day of June, 1999.
Signed, Sealed and Delivered
In Our Presence Directors:
By: s/s Richard Astrom, Director
By: s/s Christopher Astrom, Director
Shareholders:
By: s/s Richard Astrom, Shareholder
By: s/s Pamela Astrom, Shareholder
By: s/s Christopher Astrom, Shareholder
By: s/s Mark Astrom, Shareholder
By: s/s Rebecca Astrom, Shareholder
By: s/s Adam Barnett, Shareholder
By: s/s Christopher Astrom, Shareholder
By: s/s Growth International, LTD, Shareholder
By: s/s
WRITTEN CONSENT IN LIEU OF COMBINED
SPECIAL MEETING OF DIRECTORS AND SHAREHOLDERS
THE UNDERSIGNED, being all of the currently serving directors, the holder's, of
a majority of the authorized, issued and outstanding voting capital stock of
National Rehab Properties, Inc. (the "Corporation"). A corporation organized and
operating under the Nevada General Corporation Act, Chapter 78, Nevada Revised
Statutes ("Act"), pursuant to the permissive provisions thereof, and in
compliance with the requirements of the Corporation's Articles of Incorporation
and Bylaws, hereby take the following actions and adopt the following
resolutions:
WITNESSETH:
RESOLVED, that the Corporation hereby authorizes the sale of 6,000,000 options
to acquire the same number of shares of its common stock at a price of .00l per
share to Christopher Astrom for $20,000 payable pursuant to the terms of a
promissory note. The options have been granted for four years of service
provided to the Corporation for no salary; and be it further
I
RESOLVED, that the Company's officers and directors be, and they are hereby
authorized and
empowered and directed to take all actions necessary, desirable or expedient to
effect the foregoing.
DONE, effective this lst Day of March, 1999.
Signed, Sealed and Delivered
In Our Presence Directors:
By: s/s Richard Astrom, Director
By: s/s Christopher Astrom, Director
Shareholders:
By: s/s Richard Astrom, Shareholder
By: s/s Christopher Astrom, Shareholder
By: s/s Pamela Astrom, Shareholder
By: s/s Mark Astrom, Shareholder
By: s/s Rebecca Astrom, Shareholder
By: s/s Growth International, LTD, Shareholder
By: s/s
Specimen Common Stock Certificate
[SPECIMEN]
NOT VALID UNLESS COUNTERSIGNED BY TRANSFER AGENT
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
CUSIP NO.
NUMBER SHARES
------ ------
National Rehab Properties, Inc.
40,000,000 SHARES AUTHORIZED
PAR VALUE: $.001
THIS CERTIFIES THAT
IS THE RECORD HOLDER OF
NATIONAL REHAB PROPERTIES, INC
TRANSFERABLE ON THE BOOKS OF THE CORPORATION IN PERSON BY DULY AUTHORIZED
ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. THIS CERTIFICATE
IS NOT VALID UNTIL COUNTERSIGNED BY THE TRANSFER AGENT AND REGISTRAR AND
REGISTERED BY THE REGISTRAR.
WITNESS THE FACSIMILE SEAL OF THE CORPORATION AND THE FACSIMILE SIGNATURES OF
ITS DULY AUTHORIZED OFFICERS.
Dated:
- ------------------ [CORPORATE ---------------
Secretary SEAL] President
Countersigned & Registered: CJB TRANSFER SERVICES,
460 Inverness Dr. So.
Ste 200
Englewood, CO 80112
303-486-5873
By ___________________________
Authorized Signature
<PAGE>
NOTICE: Signature must be guaranteed by a firm which is a member of a
registered national stock exchange, or by a bank (other than a
saving bank) or a trust company. The following abbreviations,
when used in the inscription on the face of this certificate,
shall be construed as though they were written out in full
according to the applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
Custodian
(Cust) (Minor)
TEN ENT - as tenants by the entireties under
Uniform Gifts to Minors
JT TEN - as joint tenants with right of Act
survivorship and not as tenants
(State)
in common
Additional abbreviations may also be used though not in the above list.
For Value Received, __________, hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(Please print or typewrite name and address including zip code of assignee)
_________________________________________________________________________ Shares
of the capital stock represented by the within certificate, and do hereby
irrevocably constitute and appoint
_______________________________________________________________________ Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated ________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH
THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR
ANY CHANGE WHATEVER
INDEPENDENT AUDITOR'S REPORT
To The Board of Directors of National Rehab Properties, Inc.
We hereby consent to the use in this Form 8-K of our report dated December 13,
1999 relating to the financial statements of National Rehab Properties, Inc.
/s/ Baum & Company, P.A.
__________________________________
BAUM & COMPANY, P.A.
Coral Springs, Florida
February 16, 2000
