SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10
General Form for Registration of Securities
Pursuant to Section 12(b) or 12(g) of
the Securities Exchange Act of 1934
GTrade.Network Inc.
--------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-4063320
- -------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
3500 Sunrise Highway, Ste. D-109
Great River, NY 11739
---------------------------------
(Address of principal executive offices)
(Zip Code)
Registrant's telephone number, including area code:(516) 859-9750
------------------
Securities to be registered pursuant to Section 12(b) of the Act:
Not Applicable
---------------
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
-------------------------------
(Title of Class)
Exhibit Index is on page 18.
PART I
Foreword
- --------
The information set forth herein is based primarily on historical
information. To the extent that this Registration Statement on Form 10
includes forward-looking statements, such statements involve uncertainty
and risk, and actual results could differ materially from those reflected
in such forward-looking statements. A list of those factors which
management believes could adversely affect the actual results is set forth
in a section immediately following the description of GTrade's Business in
this Part I under the caption "Special Factors to be Considered."
Item 1. Business.
- ------------------
The Company
- -----------
GTrade.Network Inc., a Delaware corporation ("GTrade" or the
"Company"), maintains its principal executive offices at 3500 Sunrise
Highway, Ste. D-109, Great River, NY 11739, and its telephone number is
(516) 859-9750. GTrade's business consists of the acquisition of nascent
companies, the conduct of the business of those companies, and ultimately
the spin-off of its residual interests in such companies to its
shareholders. GTrade conducts its business through its subsidiaries, as
described below.
Background
- ----------
The Company was incorporated in the State of Delaware on March 16,
1993 under the name of Avistar Acquisitions, Inc., and on July 5, 1995 Back
& Neck Corp., an Idaho corporation was merged into the Company. The
Company was engaged in the business of providing chiropractic services from
July 5, 1995 until November 28, 1997, at which time the Company's
chiropractic business was transferred to Dr. Ernest Pecararo in
consideration of $35,000.00 cash and his assumption of all of the
liabilities of the Company then existing.
After November 28, 1997, the Company was a "shell" in search of a
business, and attempted to effect a reverse acquisition first with Psycho
Sports Technologies, Inc. ("Psycho Sports") and then with Naturally New
Zealand Networks, Inc., a Nevada corporation ("Naturally New Zealand").
The attempted acquisition of Psycho Sports was never consummated, and the
acquisition of Naturally New Zealand was rescinded by Naturally New
Zealand. However, the Company has also been known as "Naturally New
Zealand Networks, Inc., a Delaware corporation" and "CrossCountry Holdings
Ltd." The Company assumed the name of "GTrade.Network Inc." on April 20,
1999.
Prior to April 5, 1999, the Company was a "shell" corporation in
search of a business. On April 5, 1999, the Company acquired by License
Agreement the exclusive, worldwide marketing rights for AutoEx Exchange
Server software (the "System"), which had been developed by Automation
Excellence Caribe Ltd. The System allows two parties to transact business
over the internet with state-of-the-art security, and allows for the
guaranteed delivery of product against immediate payment of funds in any of
225 currencies.
2
The Company is now engaged in promoting the System to other companies
which can utilize the System, has acquired two companies engaged in
internet commerce, and is seeking to acquire other companies engaged in
internet commerce or with products that can be effectively marketed on the
internet, and which have a high growth potential.
FleaMan.Com Inc.
- -----------------
On June 2, 1999 GTrade acquired FleaMan.Com Inc., a Nevada corporation
("FleaMan") from Mr. Ralph J. Fasano in consideration of 400,000 shares of
GTrade Common Stock and 100,000 shares of GTrade Series A Preferred Stock
pursuant to an Agreement and Plan of Reorganization dated May 20, 1999 (the
"FleaMan Reorganization Agreement") by and between GTrade and Mr. Fasano.
GTrade was also obligated to infuse $3 Million cash into the operations of
FleaMan. As GTrade was unable to honor its obligation to infuse $3 Million
into FleaMan at closing, and subsequently advanced only $40,000.00 to
FleaMan, the FleaMan Reorganization Agreement was amended on August 11,
1999 to provide for an additional infusion of $200,000.00 by September 10,
1999 and the balance of $2,760,000.00 to be funded by March 10, 2000.
The Series A Preferred Stock provides for the ability of either Mr.
Fasano or GTrade to trigger redemption of the Series A Preferred Stock
after June 30, 2000 whereupon the holder(s) of the Series A Preferred Stock
would receive 70% of the then issued and outstanding shares of FleaMan in
satisfaction of the redemption obligation. In addition, during the
interim, FleaMan retains as a subsidiary 70% of the net profits before
taxes of FleaMan and 30% of the net profits before taxes is to be held by
GTrade for the operations of GTrade as the parent corporation.
Strategy
- ---------
Fleaman's objective is to provide a user-friendly Internet environment
making e-commerce available to the public to post goods and services for
sale utilizing FleaMan's web site "fleaman.com". The strategy is to market
the name "FleaMan.Com" as you would a shopping center, using advertising,
promotions, gimmicks and games of chance to draw e-shoppers to the web
site. If e-shoppers are "hitting" the web site, that is where the e-sellers
will elect to advertise their wares.
Products
- --------
FleaMan's products are the web sites "fleaman.com",
"fleamansgold.com", "fleamans1on1.com" and "fleamanpics.com". Each web
site provides a service to the user or sponsor for a fee.
- -- FleaMan.Com will generate revenue by charging rental, advertising and
sponsorship fees.
- -- FleaMansGold.Com will generate revenue from sponsors.
- -- FleaMans1on1.Com will generate revenue from rental, advertising and
sponsorship fees.
- -- FleaMansPics.Com will provide free image processing to FleaMan.Com
vendors, others will pay a fee for the service.
3
Vendor Relationships
- --------------------
FleaMan, as a start-up company has developing relationships with
various vendors that provide Internet, e-commerce and computer related
services, software and hardware and management expects this to continue in
some areas but not in others as FleaMan will strive to become as self-
servicing through the planned purchase of its own servers. FleaMan plans
to occupy space in the same high-tech building as the parent company which
is already pre-wired for Internet and E-commerce companies, thereby
reducing FleaMan's dependance on outside vendors.
Sales
- -----
FleaMan has plans for an aggressive advertising program that will
target potential and existing e-vendors through a nationwide advertising
campaign which will include mass e-mailing, Internet banners, newspaper and
radio. It is FleaMans goal to attract 10,000 vendors by the end of the
first year of operations. FleaMan has hired an advertising firm to market
its FleaMansGold.Com concept to commercial web sites.
Customer Service
- ----------------
FleaMan will hire and train customer service personnel to help e-
shoppers and vendors who need assistance. Customer service will be provide
primarily through e-mail, though a phone number will be provided upon
request.
International Operations and Sales
- ----------------------------------
The Internet has opened the doors to doing business around the world,
24 hours a day. FleaMan has no current plans to have operations outside the
U.S., but does anticipate that it will derive revenues from all corners of
the globe.
Competition
- -----------
FleaMan.Com will be competing with larger companies with greater
financial resources than it currently has, including, among others,
Amazon.com and Ebay.com. Management believes that the advantages FleaMan
offers to vendors is a lower cost of doing business and the ability of the
vendors to advertise their "store front" within FleaMan's web site.
FleaMansGold.Com has very little competition at this time because of
the unique strategy that it uses to generate "hits" for its sponsors.
Management believes that the success of FleaMansGold.Com will spur others
to try to replicate FleaMansGold.Com's business to try to gain market
share.
FleaMans1on1.Com is entering the auction arena with many others.
FleaMan believes its advantage over the other auction web sites is that
FleaMans1on1.Com allows buyers and sellers to negotiate discreetly through
e-mail without the buyer being influenced by false bids which is a problem
on other auction sites. FleaMan charges a flat fee to post items for sale,
while competitors charge a commission. On expensive items the savings to
sellers could be substantial.
4
NetSafety Corporation USA, Inc.
- -------------------------------
On August 27, 1999 GTrade acquired NetSafety Corporation USA, Inc., a
California corporation ("NetSafety") from Messrs. Jeff A. Fortin, Josh R.
Wise and William T. Albanese, Trustees under a Preferred Stock Trust
Agreement dated August 27, 1999 for the then existing shareholders of
NetSafety in consideration of 100,002 shares of GTrade Series C Preferred
Stock pursuant to an Agreement and Plan of Reorganization dated August 27,
1999 (the "NetSafety Reorganization Agreement") by and between GTrade and
the Trustees. GTrade also issued 170,000 shares of GTrade Common Stock to
NetSafety for its use in funding its operations, with the contemplation
that such shares would be pledged to lenders to secure the funds needed to
operate NetSafety.
The Series C Preferred Stock provides for the ability of either the
Trustees or GTrade to trigger redemption of the Series C Preferred Stock
after August 30, 2000 whereupon the holder(s) of the Series C Preferred
Stock would receive 70% of the then issued and outstanding shares of
NetSafety in satisfaction of the redemption obligation. In addition,
during the interim, NetSafety retains as a subsidiary 70% of the net cash
flow of NetSafety and 30% of the net cash flow is to be held by GTrade for
the operations of GTrade as the parent corporation. Net cash flow is
defined for these purposes as net cash derived from operations, including
payment therefrom of all salaries and bonuses to officers, and specifically
excludes cash derived from financing activities.
Strategy
- --------
Netsafety is a marketing Company that delivers Internet services
through proprietary network servers to customers accessing the Internet.
NetSafety services communicate with the user through network servers called
child, kid, teen and adult networks; by proxy messaging; and Internet
Protocols. With the integration of services NetSafety delivers safe
messaging, safe-portal access, content, SPAM filtering, Email filtering,
Pornography filtering, web-based email, graphic Lockbox, parent
notifications and transitional communities.
NetSafety offers customized Internet Browsers which communicate
through security username and passwords to NetSafety servers. Once a
customer is authorized access to NetSafety servers, all activity during
that session is monitored for customer safety, once the user terminates
access, NetSafety services stop.
Products
- --------
NetSafety's product line Crayon Crawler "White-list" child's Network
(ages 3-7), @kidsafety network (ages 8 to 12), @teensafety network (ages
13-17) and @adultsafety network (ages 18+) are cutting edge technologies,
to include e-mail, filtering, portal, transitional communities, branding,
member chat, safe content, searches, and direct connection to law
enforcement.
5
NetSafety's product line includes safety products for children,
teenagers, and with its server-based and network configurations which
provide its subscribers with peace of mind and safety while on the
Internet, while at the same time allowing NetSafety to meet their interest
with demographically developed marketing, advertising and portal branding,
which will enhance subscribers' interest in the Internet, as well as
develop additional revenue for NetSafety
Vendor Relations
- ----------------
Although NetSafety has established relationships with few suppliers on
which it is currently dependent, there are numerous suppliers of internet
access services and server technologies. However, NetSafety is materially
dependent on its relationships with Log-On Data Corporation and United
Research Laboratories, Inc. for its filtering and database technology in
order to deliver a product which makes the Internet safe for the user.
Sales and Distribution
- ----------------------
NetSafety will distribute its product through three distribution
strategies, i.e. (i) "desktop cop" Web PC systems, (ii) Internet Set-top
boxes, and (iii) OEM channels. Currently NetSafety has an interest in
bundling its NetSafety solution on modem and computer manufacturer products
in the year 2000. In addition, NetSafety is producing a marketing video
which will be aired nationally, every week in 18 markets, three times per
weekend for the entire year.
Customers and Customer Support
- ------------------------------
NetSafety will offer its product in four methods, i.e. (i) Direct
Consumers, who access its services using their own Internet, access point;
(ii) NetSafety access, which will be provided by MindSpring Internet
Services, thereby getting NetSafety's low-cost PC's and STB's at a reduced
price; (iii) Value-added service for any Internet Service provider; and
(iv) in the OEM channel as bundled product, with NetSafety's pre-loaded
solution on our low-cost PC's and STB's for example.
Customer support will be handled through the ISP partners, and
NetSafety will operate a technical/customer support information Website for
its members.
International Operations and Sales
- ----------------------------------
NetSafety, with its Canadian partner View Call Canada, a subsidiary of
Manitoba Telephone Systems, plans on developing and launching a Canadian
operation within six months of the USA launch.
6
Competition
- -----------
NetSafety currently has no direct competition, since it provides no
software to consumers, and all activities of our solution is based on
NetSafety's servers, and is transmitted to its members through NetSafety's
private networks, utilizing the Internet. Although perceived competition
such as NetNanny, N2H2, Cybersitter, to name a few, have filtering aspects,
NetSafety offers a complex package of services, content, filtering, and
monitoring which requires no software, other than an Internet connection,
and a browser. Management takes pride in the fact that NetSafety's
business model to date is not being followed by any of its perceived
competitors. In addition, management believes that NetSafety is the only
"Internet safety solutions provider" on the Internet to have an active
endorsement from law enforcement.
Year 2000 - Y2K
- ----------------
Like other organizations and individuals around the world, the Company
could be adversely affected if the computer systems it uses and those used
by significant third parties (e.g. vendors, customers, third party
administrators, etc.) do not properly process and calculate date-related
information and data. This is commonly known as the "Year 2000 Issue."
Management is assessing its computer systems and business processes and
intends to initiate actions to address the Y2K needs identified.
Management is also assessing the actions being taken by significant third
parties that interface with the Company. At this time management is not
able to determine the impact, including the costs of remediation, of the
"Year 2000 Issue" on the Company.
Employees
- ---------
As of September 30, 1999, GTrade's subsidiaries had three full-time
employees. In addition, Gtrade has retained five persons as consultants to
perform tasks on as "as needed" basis that will eventually be performed by
employees of GTrade, in sales, sales support and marketing functions. None
of GTrade's employees are covered by a collective bargaining agreement.
GTrade considers its relations with its employees and consultants to be
good.
SPECIAL FACTORS TO BE CONSIDERED
---------------------------------
Additional Capital Required and Continued Losses
- -------------------------------------------------
The Company will need to continue to raise capital in the form of
equity and debt in order to continue operations. If the Company is unable
to raise the capital required, it will have a material adverse effect on
the Company's ability to continue to develop its operations. The Company
can not give any assurances that it will be able to raise the capital
required, or that even if available it will be available on terms favorable
to the Company. However, management believes that it will be able to raise
capital to funds continue operations and fund its on-going losses for the
near term.
7
Forward-Looking Information
- ---------------------------
Future operating results may be impacted by a number of factors that
could cause actual results to differ materially from those stated herein,
which reflect management's current expectations. These factors include
worldwide economic and political conditions, industry specific factors, the
Company's ability to maintain access to external financing sources and its
financial liquidity, and the Company's ability to manage expense levels.
This Registration Statement contains certain forward-looking
statements that are based on current expectations. In light of the
important factors that can materially affect results, including those set
forth above and elsewhere in this Registration Statement, the inclusion of
forward-looking information herein should not be regarded as a
representation by the Company or any other person that the objectives or
plans of the Company will be achieved. The Company may encounter
competitive, technological, financial, legal and business challenges making
it more difficult than expected to continue as a going concern; competitive
conditions within the industry may change adversely; demand for the
Company's products and services may weaken; the Company may be unable to
retain existing key management personnel; inventory risks may rise due to
shifts in market demand; the Company's forecasts may not accurately
anticipate market demand; and there may be other material adverse changes
in the Company's operations or business. Certain important presumptions
affecting the forward-looking statements made herein include, but are not
limited to, (i) timely identifying and delivering new products as well as
enhancing existing products, (ii) implementing current acquisition plans
and funding same, (iii) accurately forecasting cash needs, and (iv)
obtaining new sources of external financing prior to the expiration of
existing support arrangements. Assumptions relating to budgeting,
marketing, advertising, product mix and other management decisions are
subjective in many respects and thus susceptible to interpretations and
periodic revisions based on actual experience and business developments,
the impact of which may cause the Company to alter its marketing, cash
expenditures or other budgets, which may in turn affect the Company's
financial position and results of operations.
(This Space Intentionally Left Blank)
Item 2. Financial Information.
- -------------------------------
The following selected consolidated financial data has been derived from
and should be read in conjunction with the audited consolidated financial
statements of GTrade, and the notes thereto, and with "Management's
Discussion and Analysis of Results of Operations and Financial Condition",
included elsewhere herein and incorporated herein by this reference
(dollars in thousands, except per share data).
<TABLE>
<CAPTION>
Nine
Months
Ended Years Ended December 31,
September -------------------------------------------------
30, 1999 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Sales $ -0- $ -0- $ -0- $ -0- $ -0- $ -0-
Income (Loss) Before
Taxes (155,044) (47,777) (100) (100) (61) (30)
Net Income (Loss) (155,044) (47,777) (100) (100) (61) (30)
Earnings (Loss) per
share (.02) -0- -0- -0- -0- -0-
Total Assets 485,799 -0- -0- -0- -0- -0-
Long Term
Obligations 225,000 -0- -0- -0- -0- -0-
Stockholders'
Equity (Deficit) 52,358 -0- -0- -0- -0- -0-
Weighted Average
Shares Outstanding 8,333,578 4,155,800 116,192 5,800 5,800 5,800
</TABLE>
Management's Discussion and Analysis of Results of Operations and Financial
- ---------------------------------------------------------------------------
Condition.
- ----------
In April 1999, the Company acquired a License for the exclusive,
worldwide marketing rights for the AutoEx Exchange Server software from
Automation Excellence Caribe Ltd. Subsequently, the Company acquired
FleaMan and NetSafety in June 1999 and August 1999, respectively.
All assets and companies acquired were in initial or start-up stages
of development. Accordingly, no revenues were realized for the period
ended September 30, 1999.
Costs incurred in the development of a website and software were
capitalized. No depreciation was computed on such items as they have not
been placed in service as of September 30, 1999.
9
Operating costs for the period ended September 30, 1999, such as
selling and promotion costs, payroll and payroll related costs,
professional fees, office and postage, telephone, stock fees, investor
relation fees, and other miscellaneous costs were expensed as incurred,
resulting in a net operating loss of ($155,044).
Common Stock was issued in April 1999 for $100,000, and notes were
issued in September 1999 to secure $225,000 of operating capital. No
interest was accrued on the notes as the notes were issued in late
September 1999, and the amount would be nominal.
The Company has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal Revenue Code of 1986 are met.
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. The Company has, however, accrued $10,000 for income
taxes that may be due at the state level.
At September 30, 1999 the Company had nominal operations and working
capital. The Company must find a source of working capital to continue
operations.
Item 3. Properties.
- --------------------
GTrade's principal offices are located in leased facilities in Great
River, New York, which consists of approximately 1,650 square feet of
office space at a lease rate of $3,000.00 per month on a three year lease
cancelable after 13 months.
FleaMan's principal offices are located in Great River, New York,
which consist of approximately 5,650 square feet of office space at a lease
rate of $9,500.00 per month on a five year lease which expires in 2004.
NetSafety's principal offices are located in leased facilities in
Santa Clara, California, which consist of approximately 400 square feet of
office space at a lease rate of $600.00 per month on a one-year lease which
expires March 31, 1999.
(This Space Intentionally Left Blank)
10
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- ------------------------------------------------------------------------
The following table sets forth, as of September 30, 1999, information
relating to the beneficial ownership of GTrade's Common Stock by (i) each
person known to GTrade to be the beneficial owner of more than five percent
of GTrade's outstanding Common Stock, (ii) each director, (iii) each of the
Named Executive Officers, and (iv) all directors and executive officers as
a group. GTrade knows of no agreements among its shareholders which relate
to voting or investment power over its Common Stock.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership as Percent of
of September 30, 1999 (1) Outstanding
Number of Shares Class of
Name and Address of Beneficial Owner Common Preferred Security (19)
- ------------------------------------ ------------ ------------ -------------
<S> <C> <C> <C>
PanEuro Holdings PLC 3,000,000 28 %
The Dell at Nurthurst
Horsham West, Sussex
RH1 3GLH England
Automation Excellence Caribe Ltd. 2,000,000 19 %
c/o Hanver Trust Company
Henville Bldg., Ste. One
Main Street, Charlestown
Nevis, West Indies
Jeff A. Fortin, Josh R. Wise and 100,002 100 %
William T. Albanese, Trustees Series C
under a Preferred Stock Trust
Agreement dated August27, 1999 (2)
c/o NetSafety Corporation USA, Inc.
967 Poplar Street, Ste. A
Santa Clara, CA 950050
Directors and Officers (3)
- --------------------------
Ralph J. Fasano (4) 400,000 4 %
100,000 100 %
Series A
Sheldon C. Ruggles -0- -0- 0 %
Murray Berger -0- -0- 0 %
All officers and directors as a group 400,000 (4) (5) 4 %
(3 persons) (5) Murray Berger 100,000 100 %
Series A
</TABLE>
* Denotes less than 1%.
(1) Unless otherwise indicated below, the persons and entities named in
the table have sole voting and sole investment power with respect to
all shares beneficially owned, subject to community property laws
where applicable.
11
(2) The Trustees hold legal title to the Series C Preferred Stock issued
for the acquisition of NetSafety Corporation USA, Inc. for the benefit
of 23 minority shareholders plus the interests of the Trustees as
majority shareholders of NetSafety, as their interests appeared prior
to the acquisition by GTrade.
(3) The address for the executive officers and directors and proposed
directors is: 3500 Sunrise Highway, Ste. D-109, Great River, NY 11739.
(4) Mr. Fasano was the sole shareholder of FleaMan.Com Inc. prior to
its acquisition by GTrade. All shares reflected in the name of Mr.
Fasano were acquired in connection with the acquisition of FleaMan by
GTrade.
(5) For purposes of determining the percentage of outstanding Common Stock
held by each person or group set forth in the table, the number of
shares held by a person or group is divided by the number of shares of
GTrade's Common Stock outstanding on September 30, 1999 (10,725,800),
which includes 170,000 shares of GTrade issued to NetSafety for its
use in funding its operations. There are no options or warrants
outstanding for the acquisition of additional shares of the Company.
Percentages of less than 1% are represented by an asterisk.
Item 5. Directors and Executive Officers.
- ------------------------------------------
The following table sets forth certain information regarding the
current directors and officers of Gtrade.
<TABLE>
<CAPTION>
Name Age Position
- ------------------- --- -----------------------------------------------------------
<S> <C> <C>
Ralph J. Fasano 54 President, Chief Executive Officer and a Director
Sheldon C. Ruggles 44 Chief Financial Officer, Secretary/Treasurer and a Director
Murray Berger 69 Director
</TABLE>
Ralph J. Fasano (age 54) became a Director of the Company on June 2,
1999 upon the Company's acquisition of FleaMan.Com Inc., and was appointed
to serve as President and Chief Executive Officer of the Company on October
7, 1999 following the resignation of Mr. Aziz Hirji, who served as
President of the Company from May 21, 1999 until his resignation. Mr.
Fasano also serves as President of FleaMan.Com Inc., one of the Company's
wholly-owned subsidiaries. Mr. Fasano has served as President of Trade
Town, Inc. since 1982. Trade Town, Inc. is engaged in the business of
operating a flea market and jewelry exchange.
Sheldon C. Ruggles (age 44) was appointed to serve as Chief Financial
Officer, Secretary/Treasurer and a Director of the Company on October 7,
1999. Mr. Ruggles has been engaged in the business of a private consultant
in accounting and management since January 1998. From February 1996 to
December 1997 he served as Director of Finance for Gentle Care, Inc., a
firm engaged in the business of home health care. And from 1991 to
February 1996 he served as Controller/Corporate Account Manager for Tru-
Check Computer Systems, Inc. and Computer Outsourcing Services, Inc.,
companies engaged in computer outsourcing.
Murray Berger (age 69) has been engaged for more than the last five
years as the sole proprietor of Document Management Services, transporting
real estate documents and commercial instruments.
12
The officers are elected by the Board of Directors and serve at the
discretion of the Board of Directors.
In addition to the officers and directors of the Company, Mr. Jeff A.
Fortin, President of NetSafety Corporation USA, Inc., one of the Company's
wholly-owned subsidiaries, may be deemed to be a significant employee. Mr.
Fortin, age 42, was appointed Chief Executive Officer of NetSafety on March
31, 1999, and continues to serve in that capacity. Mr. Fortin also serves
as Chief Executive Officer of Surfaway Internet Services, Inc. (an Internet
Services Provider), first appointed to that position on January 1, 1998.
From January 1996 to October 1997 he served as President and Chief
Executive Officer for TGGH Inc, (d.b.a. @bigger.net), (a free-ISP
provider). From June 1988 to December 1995 he was owner and chief
principal of NESTech, an environmental consulting firm specializing in
health and safety issues.
Item 6. Executive Compensation.
- --------------------------------
No officer or director of GTrade has received compensation equal to or
exceeding $100,000 during any of the last five fiscal years; accordingly no
table is furnished to outline the compensation received.
Compensation of Outside Directors
- ---------------------------------
GTrade pays its outside Director, Murray Berger $1,000.00 for each
meeting convened in person by the Board of Directors, and $500.00 for each
telephonic meeting of the Board of Directors, plus expenses incurred to
attend Board meetings. All directors are also eligible to receive stock
and/or stock options as a form of compensation.
Item 7. Certain Relationships and Related Transactions.
- --------------------------------------------------------
Although FleaMan.Com Inc. was acquired from Mr. Ralph J. Fasano, he
was not affiliated with the Company at the time, such that the transaction
was an "arm's-length" transaction.
No other transactions have been enacted with anyone deemed to be an
affiliate of the Company.
Item 8. Legal Proceedings.
- ---------------------------
GTrade might be both a plaintiff and defendant from time-to-time in
lawsuits incidental to its business. However, GTrade is not presently
party to any pending legal proceedings.
(This space intentionally left blank)
13
</Page>
<PAGE>
Item 9. Market Price of and Dividends on the Registrant's Common Equity
- ------------------------------------------------------------------------
and Related Stockholder Matters.
- --------------------------------
The following table sets forth the market prices for the shares of
Common Stock of GTrade. The prices are quoted in U.S. Dollars, and reflect
the high ask and low bid prices quoted on the Bulletin Board sponsored by
the National Association of Securities Dealers, Inc. for each calendar
quarter since September 30, 1997.
<TABLE>
<CAPTION>
GTrade Common Stock High Low
--------- ---------
<S> <C> <C>
1997
----
First Quarter N/A N/A
Second Quarter N/A N/A
Third Quarter N/A N/A
Fourth Quarter .30 .10
1998
----
First Quarter 7.50 5.875
Second Quarter 7.00 .3125
Third Quarter 5.625 2.00
Fouth Quarter 9.375 4.50
1999
----
First Quarter 16.125 2.00
Second Quarter 11.00 1.5625
Third Quarter 10.125 6.5625
</TABLE>
On September 30, 1999, the stock of GTrade was last quoted at $9.50
bid and $9.75 asked on the Bulletin Board sponsored by the National
Association of Securities Dealers, Inc. Such prices reflect inter-dealer
prices, without retail mark-up, mark-down or commission, and may not
necessarily represent actual transactions. As of that date GTrade had
approximately 99 shareholders of record.
Item 10. Recent Sales of Unregistered Securities.
- --------------------------------------------------
On April 6, 1999 GTrade issued 4,000,000 shares of its Common Stock to
17 investors for $100,000.00 in reliance on the exemption contained in Rule
504 of Regulation D under the Securities Act of 1933, as amended.
On June 2, 1999 GTrade acquired FleaMan.Com Inc., a Nevada corporation
("FleaMan") from Mr. Ralph J. Fasano in consideration of 400,000 shares of
GTrade Common Stock and 100,000 shares of GTrade Series A Preferred Stock
pursuant to an Agreement and Plan of Reorganization dated May 20, 1999 (the
"FleaMan Reorganization Agreement") by and between GTrade and Mr. Fasano.
The issuance was made in reliance on the exemption contained in Section
4(2) of the Securities Act of 1933, as amended, as a transaction not
involving any public offering.
14
On August 27, 1999 GTrade acquired NetSafety Corporation USA, Inc., a
California corporation ("NetSafety") from Messrs. Jeff A. Fortin, Josh R.
Wise and William T. Albanese, Trustees under a Preferred Stock Trust
Agreement dated August 27, 1999 for the then existing shareholders of
NetSafety in consideration of 100,002 shares of GTrade Series C Preferred
Stock pursuant to an Agreement and Plan of Reorganization dated August 27,
1999 (the "NetSafety Reorganization Agreement") by and between GTrade and
the Trustees. GTrade also issued 170,000 shares of GTrade Common Stock to
NetSafety for its use in funding its operations, with the contemplation
that such shares would be pledged to lenders to secure the funds needed to
operate NetSafety. The issuances were made in reliance on the exemption
contained in Section 4(2) of the Securities Act of 1933, as amended, as a
transaction not involving any public offering.
Item 11. Description of Registrant's Securities to be Registered.
- ------------------------------------------------------------------
The authorized capitalization of the Company consists of 50,000,000
shares of Common Stock, $.001 par value and 700,000 shares of Preferred
Stock, $.05 par value. As of September 30, 1999, the Company had
10,725,800 shares of its Common Stock issued and outstanding, held of
record by 99 shareholders; and 200,002 shares of Preferred Stock issued and
outstanding.
Common Stock
- ------------
The holders of the Company's Common Stock are entitled to one vote per
share on all matters on which the holders of Common Stock are entitled to
vote, and do not have any cumulative voting rights. There are no
preemptive rights, such that the Board of Directors is empowered to issue
additional shares of the Company without regard for the rights of existing
holders to share in any such subsequent issuance. The holders of the
Common Stock are entitled to receive dividends when and as declared by the
Board of Directors out of any funds lawfully available therefor. In the
event of a liquidation, dissolution or winding-up of the Company, holders
of Common Stock are entitled to share equally and ratably in the assets of
the Company, if any, remaining after the payment of all debts and
liabilities of the Company and the liquidation preference(s) of any
outstanding class or series of Preferred Stock. All outstanding shares are
fully-paid and nonassessable. The rights, preferences and privileges of
holders of Common Stock are subject to any series of Preferred Stock which
the Company has issued or which the Company may issue in the future.
Preferred Stock
- ---------------
The Company issued 100,000 shares of its Series A Preferred Stock to
Mr. Ralph J. Fasano upon its acquisition of FleaMan.Com Inc., a Nevada
corporation ("FleaMan"). These shares are redeemable by Mr. Fasano at any
time after June 30, 2000 for 70% of the issued and outstanding shares of
FleaMan; and are entitled to vote with the Common Stock on a share-for-
share basis, i.e. one vote per share, except as otherwise required by law
or to approve any (i) amendment to the Company's Certificate of
Incorporation or By-laws which would adversely affect the preferences,
rights, privileges or powers of, or the restrictions provided for the
benefit of the Series A Preferred Stock, or (ii) reclassify any Common
Stock into shares having any preferences or priority as to dividends or
assets superior to or on a parity with any such preferences or priorities
of the Series A Preferred Stock.
15
The Company issued 100,002 shares of its Series C Preferred Stock to
Messrs. Jeff A. Fortin, Josh R. Wise and William T. Albanese, Trustees
under a Preferred Stock Trust Agreement dated August 27, 1999 Fasano upon
its acquisition of NetSafety Corporation USA, Inc., a California
corporation ("NetSafety"). These shares are redeemable by the Trustees at
any time after August 30, 2000 for 70% of the issued and outstanding shares
of NetSafety; and are entitled to vote with the Common Stock on a share-
for-share basis, i.e. one vote per share, except as otherwise required by
law or to approve any (i) amendment to the Company's Certificate of
Incorporation or By-laws which would adversely affect the preferences,
rights, privileges or powers of, or the restrictions provided for the
benefit of the Series C Preferred Stock, or (ii) reclassify any Common
Stock into shares having any preferences or priority as to dividends or
assets superior to or on a parity with any such preferences or priorities
of the Series C Preferred Stock.
Although the Company approved the issuance of 10,000 shares of Series
B Preferred Stock in connection with the proposed acquisition of I-Jet
Aviation Consultants, Inc., a Nevada corporation ("I-Jet"), such shares
were never issued, as the shareholders of I-Jet rescinded the transaction
for failure of the Company to fund the operations of I-Jet in conformity
with the obligations of the Company contained in that certain Agreement and
Plan of Reorganization dated July 27, 1999 by and between the Company and
the two shareholders of I-Jet.
Item 12. Indemnification of Directors and Officers.
- ----------------------------------------------------
The Company's Certificate of Incorporation requires that directors and
officers be indemnified to the maximum extent permitted by Delaware law.
The General Corporation Law of the State of Delaware (the "Delaware
GCL") provides in general that a director or officer of a corporation (i)
shall be indemnified by the corporation for all expenses of litigation or
other legal proceedings when he is successful on the merits, (ii) may be
indemnified by the corporation for the expenses, judgement, fines and
amounts paid in settlement of such litigation (other than a derivative
suit) even if he is not successful on the merits 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, in the case of a criminal proceeding,
had no reasonable cause to believe his conduct was unlawful), and (iii) may
be indemnified by the corporation for expenses of a derivative suit (a suit
by a stockholder alleging a breach by a director or officer of a duty owed
to the corporation), even if he is not successful on the merits, 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, provided that no such
indemnification may be made in accordance with this clause (iii) if the
director or officer is adjudged liable to the corporation, unless a court
determines that, despite such adjudication but in view of all of the
circumstances, he is entitled to indemnification of such expenses. The
indemnification described in clauses (ii) and (iii) above shall be made
only upon order by a court or a determination by (a) a majority of a quorum
of disinterested directors, (b) under certain circumstances, independent
legal counsel or (c) the stockholders, that indemnification is proper
because the applicable standard of conduct is met. Expenses incurred by a
director or officer in defending an action may be advanced by the
corporation prior to the final disposition of such action upon receipt of
an undertaking by such director or officer to repay such expenses if it is
ultimately determined that he is not entitled to be indemnified in
connection with the proceeding to which the expenses related.
16
The Company's Certificate of Incorporation includes a provision
eliminating, to the fullest extent permitted by Delaware law, director
liability for monetary damages for breaches of fiduciary duty.
The Company may seek directors and officers liability insurance
against the cost of defense, settlement or payment of a judgment under
certain circumstances.
Item 13. Financial Statements and Supplementary Data.
- ------------------------------------------------------
The financial statements, notes thereto, and the report of independent
public accountants thereon are included herein. Supplementary data,
including quarterly financial information, is included following the
financial statements.
Item 14. Changes in and Disagreements with Accountants on Accounting and
- -------------------------------------------------------------------------
Financial Disclosure.
- ---------------------
None
(This Space Intentionally Left Blank)
17
Item 15. Financial Statements and Exhibits.
- ---------------------------------------------
<TABLE>
<CAPTION>
(a) Financial Statements and Schedules
(1) Financial Statements:
<S> <C>
Report of Independent Public Accountants . . . . F-2
Balance Sheets . . . . . . . . . . . . . . . . . F-3
Statements of Operations . . . . . . . . . . . . F-4
Statements of Stockholders' Equity . . . . . . . F-5
Statements of Cash Flows . . . . . . . . . . . . F-6
Notes to Financial Statements. . . . . . . . . . F-8
</TABLE>
(b) Exhibits
The following is a list of Exhibits filed as part of the Registration
Statement:
<TABLE>
<CAPTION>
Exhibit Location or
No. Title of Document Page No. Filing
- -------- ------------------------------------- -------- ------------
<S> <C> <C> <C>
3(i) Articles of Incorporation 43 Original
3(ii) By-laws 67 Original
10.01 License Agreement between Registrant 86 Original
and Automation Excellence Caribe Ltd.
dated April 5, 1999 relating to the
world-wide marketing rights by the
Registrant of the AutoEx Exchange
Server, a computer transaction
software system.
10.02 Agreement and Plan of Reorganization 97 Original
between the Registrant and Ralph J.
Fasano dated May 20, 1999 relating to
the acquisition of FleaMan.Com Inc.,
a Nevada corporation, as amended.
10.03 Agreement and Plan of Reorganization 105 Original
between the Registrant and Messrs.
Philip Andronicos and Dominick Cerisano
relating to the acquisition of I-Jet
Aviation Consultants, Inc., a Nevada
corporation.
10.04 Agreement and Plan of Reorganization 113 Original
between the Registrant and the
Principal Shareholders of NetSafety
Corporation USA, Inc., a California
corporation ("NetSafety"), relating
to the acquisition of NetSafety.
21.01 Subsidiaries of the Registrant 120 Original
27.01 Financial Data Schedule 121 Original
- ------------------------------------------------------
</TABLE>
18
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Great River, State of New York, on the 3rd day of November, 1999.
GTrade.Network Inc.
/S/ Ralph J. Fasano
By: Ralph J. Fasano
President
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons in the capacities
and on the dates indicated.
Signature Title Date
/S/ Ralph J. Fasano President and a Director November 3, 1999
- ------------------- (Principal Executive Officer)
Ralph J. Fasano
/S/ Sheldon C. Ruggles Chief Financial Officer November 3, 1999
- ---------------------- and a Director
Sheldon C. Ruggles
/S/ Murray Berger Director November 3, 1999
- -----------------
Murray Berger
19
GTrade.Network, Inc. And Subsidiaries
Consolidated Financial Statements
For the Nine Months Ended
September 30, 1999
20
GTRADE.NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
<S> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 86,579
-------------
Total Current Assets 86,579
-------------
PROPERTY and EQUIPMENT, net 325,764
-------------
OTHER ASSETS:
Investment in marketing rights of license agreement 2,000
Patents and copyrights 5,774
Loans, officers 23,400
Goodwill 2,282
Security Deposits 40,000
-------------
Total Other Assets 73,456
-------------
TOTAL ASSETS: 485,799
=============
21
GTRADE.NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1999
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 195,800
Accrued expenses and taxes 2,641
Corporation taxes payable 10,000
-------------
Total Current Liabilities 208,441
-------------
LONG-TERM LIABILITIES:
Notes payable 225,000
-------------
Total Long-term liabilities 225,000
-------------
STOCKHOLDERS' EQUITY
Preferred shares 700,000 authorized $.05 par value
200,002 issued and outstanding 10,000
Common shares 50,000,000 authorized $.001 par value
10,555,800 shares issued and outstanding 10,556
Additional paid-in capital 369,165
Retained earnings (deficit) ( 337,363)
-------------
Total Stockholders' Equity 52,358
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 485,799
=============
22
GTRADE.NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
REVENUES: $ 0
-------------
COSTS AND EXPENSES:
Computer related expenses 0
Selling and promotion costs 2,758
General and administrative expenses 142,286
Interest expense, net of interest income 0
-------------
Total Costs and Expenses 145,044
-------------
INCOME (LOSS) BEFORE PROVISION FOR
INCOME TAXES ( 145,044)
PROVISION (BENEFIT) FOR INCOME TAXES 10,000
-------------
NET INCOME (LOSS) ( 155,044)
=============
INCOME (LOSS) PER COMMON SHARE $( 0.02)
=============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 8,333,578
=============
--------------------------------------------
23
GTRADE.NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1999
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) ($ 155,044)
Changes in operating Assets and Liabilities:
Accrued expenses and taxes 2,641
Corporation taxes payable 10,000
-------------
Net cash used in operating activities ( 142,403)
-------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment ( 80,764)
Investment in patents & copyrights ( 5,774)
Increase in officers loans ( 18,000)
-------------
Net cash used in investing activities ( 104,538)
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes 225,000
Proceeds from sale of stock 100,000
-------------
Net cash provided by financing activities 325,000
-------------
Net increase in cash 78,059
Cash, beginning of year 8,520
-------------
Cash, end of period (9/30/99) 86,579
=============
24
GTRADE.NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
JANUARY 19, 1994 TO SEPTEMBER 30, 1999
</TABLE>
<TABLE>
<CAPTION>
Deficit
Common Stock Preferred Stock Paid In Retained
Shares Amount Shares Amount Capital Earnings
----------- -------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance
January 14, 1994
(Reinstatement)
Retroactively Restated 5,800 $ 6 $ -0- $ -0- $134,245 ($134,251)
Contributed Capital 30
Net Loss for Year Ended
December 31, 1994 ( 30)
------------------------------------------------------------
Balance
December 31, 1994 5,800 6 -0- -0- 134,275 ( 134,281)
Contributed Capital 61
Net Loss for Year Ended
December 31, 1995 ( 61)
------------------------------------------------------------
Balance
December 31, 1995 5,800 6 -0- -0- 134,336 ( 134,342)
Net Loss for Year Ended
December 31, 1996 ( 100)
------------------------------------------------------------
Balance
December 31, 1996 5,800 6 -0- -0- 134,336 ( 134,442)
Net Loss for Year Ended
December 31, 1997 ( 100)
------------------------------------------------------------
Balance
December 31, 1997 5,800 6 -0- -0- 134,336 ( 134,542)
</TABLE>
25
GTRADE.NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
JANUARY 19, 1994 TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Deficit
Common Stock Preferred Stock Paid In Retained
Shares Amount Shares Amount Capital Earnings
----------- -------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Shares Issued for
Services at $1.00 Per
Share 40,000 40 39,960
Shares Issued for
Services at $.02 Per
Share 10,000 10 190
Shares Issued for
Services at $.001 Per
Share 3,950,000 3,950
Shares Issued for
Services at $.02 Per
Share 150,000 150 2,850
Contributed Capital 827
Net Loss for Year Ended
December 31, 1998 ( 47,777)
-------------------------------------------------------------
Balance
December 31, 1998 4,155,800 4,156 -0- -0- 178,163 (182,319)
Shares Issued for
License at $.001 Per
Share (4/5/99) 2,000,000 2,000
Sold Shares (4/6/99)
at $.025 Per Share 4,000,000 4,000 96,000
Shares Issued (6/2/99)
for Purchase of
Fleaman.Com at $.001
Per Share 400,000 400
Shares Issued (6/2/99)
for Purchase of
Fleaman.Com at $.05
Per Share 100,000 5,000
Shares Issued (8/26/99)
for Purchase of
NetSafety Corp. at $1.00
Per Share 100,002 5,000 95,002
</TABLE>
26
GTRADE.NETWORK, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
JANUARY 19, 1994 TO SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
Deficit
Common Stock Preferred Stock Paid In Retained
Shares Amount Shares Amount Capital Earnings
----------- -------- --------- -------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Net Loss for nine months
Ended September 30, 1999 (155,044)
-------------------------------------------------------------
Balance
September 30, 1999 10,155,800 10,556 200,002 10,000 369,165 (337,363)
</TABLE>
27
GTRADE.NETWORK, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
Note 1 - Corporate History
- --------------------------
Gtrade.Network, Inc., (the Company), was incorporated in the state of
Delaware on March 16, 1993 under the name of Avistar Acquisitions, Inc. On
July 5, 1995, Back & Neck Corp., and Idaho Corporation was merged into the
Company. The Company was engaged in the business of providing chiropractic
services from July 5, 1995 until November 28, 1997, at which time the
Company's chiropractic business conducted through a wholly-owned subsidiary
Back & Neck Chiropractic Management Corp., (a New Jersey Corporation), was
transferred to Dr. Ernest Pecararo in consideration of $ 35,000 cash and
his assumption of all the liabilities of the Company then existing. After
November 28, 1997, the Company had no assets, no liabilities, and no
business operations and was searching for a business opportunity to
acquire.
On February 11, 1999, the Company amended its Certificate of Incorporation
to (I) change its name from Naturally New Zealand Networks, Inc. To
CrossCountry Holdings Ltd., (ii) increase the number of shares of Common
Stock authorized for issuance from 25,000,000 shares to 50,000,000 shares,
and (iii) authorize the Board of Directors to determine by Board action the
designation powers, preferences and rights of any shares of Preferred Stock
to be issued by the Company.
On April 5, 1999 the Company issued 2,000,000 shares of Common Stock to
secure the exclusive worldwide marketing rights under a License Agreement
from Automation Excellence Caribe Ltd., for the AutoEx Exchange Server
software (the "System"), which allows two parties to transact business over
the Internet with state-of-the-art security, and allows for the guaranteed
delivery of product against immediate payment of funds in any of 225
currencies.
On April 20, 1999, the Company amended its Certificate of Incorporation to
change its name from CrossCountry Holdings, Ltd., to GTrade.Network, Inc.
On June 2, 1999, the Company acquired 100% of the issued and outstanding
shares of FleaMan. Com, Inc. a Nevada corporation, in consideration of
400,000 shares of its Common Stock and 100,000 shares of its Series A
Preferred Stock. Pursuant to the Agreement and Plan of Reorganization
dated May 20, 1999, the Company is committed to infuse $ 3,000,000 of
capital into FleaMan.Com, Inc., and after one year the holder of the
Preferred Stock has the right to redeem the Preferred Stock by requiring
the Company to transfer 70% of the outstanding shares of FleaMan.Com Inc.'s
common stock to such holder, and the Company has the right to effect such a
redemption at its election.
On August 27, 1999, the Company acquired 100% of the issued and outstanding
shares of NetSafety Corporation USA, a California corporation, in
consideration of 100,002 shares of Gtrade Series C Preferred Stock.
28
GTRADE.NETWORK, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
Note 2 - Significant Accounting Policies
- ----------------------------------------
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period
when the goods are shipped to the customer.
C. The Company consider all short term, highly liquid investments that
are readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully diluted Earnings Per Shares shall be shown on stock options and
other convertible issues that may be exercised within ten years of
the financial statement dates.
E. Inventories: Inventories are stated at the lower of cost, determined
by the FIFO method or market.
F. Property and Equipment: Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation is applied
primarily using the straight-line method at various rates calculated
to recover the carrying values of the respective assets over their
estimated useful lives. Leasehold improvements and assets acquired
under capital leases are amortized over the shorter of the lease terms
or the useful life of the respective assets.
G. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual Results could
differ form those estimates.
H. Principles of Consolidation: The consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiaries.
All significant intercompany balances and transactions have been
eliminated.
29
GTRADE.NETWORK, INC. AND SUBSIDIARIES
OTHER SELECTED FINANCIAL INFORMATION
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
<S> <C>
Costs and Expenses
- ------------------
Computer Related Expenses
Website maintenance -0-
Internet service provider -0-
Computer maintenance and supplies -0-
------------
Total Computer Related Expenses -0-
------------
Selling and Promotion Costs
Advertising and promotional -0-
Travel -0-
Meals and entertainment 55
Samples 2,703
Commissions -0-
------------
Total Selling and Promotional Costs 2,758
------------
General and Administrative Expenses:
Payroll, Officers 51,000
Payroll taxes and benefits 3,902
Rent expense -0-
Office and postage 306
Repairs, maintenance and cleaning -0-
Messenger and delivery 727
Telephone 399
Legal fees 51,888
Accounting fees 1,800
Consulting fees 750
Auto expense -0-
Dues and publications 100
Licenses, fees and permits 70
Bank charges 782
Stock transfer, listing and other fees 1,751
Investor relations 2,500
Expenses related to failed venture 25,000
General Expenses 1,311
Depreciation and amortization -0-
------------
Total General and Administrative Expenses 142,286
------------
</TABLE>
30
GTRADE. NETWORK, INC. AND SUBSIDIARIES
OTHER SELECTED FINANCIAL INFORMATION
SEPTEMBER 30, 1999
<TABLE>
<CAPTION>
<S> <C>
Property and Equipment
- ----------------------
Computer equipment and software $ 268,138
Website development 55,626
Office furniture and equipment 2,000
------------
Total property and equipment 325,764
------------
31
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Financial Statements
December 31, 1998 & 1997
/Letterhead/
Schvaneveldt & Company
Certified Public Company
275 East South Temple, Suite #300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell T. Schvaneveldt, C.P.A.
Independent Auditors Report
---------------------------
Board of Directors
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
I have audited the accompanying balance sheets of GTrade.Network, Inc.,
formerly Naturally New Zealand Networks, Inc., formerly Back & Neck
Management Corp., (a development stage company), as of December 31, 1998 &
1997, and the related statements of operations, stockholders' equity, and
cash flows accumulated for the period January 18, 1994 (Reinstatement) to
December 31, 1998, and the years ended December 31, 1998, 1997 and 1996.
These financial statements are the responsibility of the Company's
management. My responsibility is to express an opinion on these financial
statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatements. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and the significant estimates made by management, as well as
evaluating the overall financial statements presentation. I believe that
my audit provides a reasonable basis for my opinion.
In my opinion, the aforementioned financial statements present fairly, in
all material respects, the financial position of GTrade.Network, Inc.,
formerly Naturally New Zealand Networks, Inc., formerly Back & Neck
Management Corp., (a development stage company), as of December 31, 1998
and 1997, and the results of its operations and its cash flows accumulated
for the period January 18, 1994 (Reinstatement) to December 31, 1998, and
the years ended December 31, 1998, 1997 and 1996, in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note #5 to the
financial statements, the Company has an accumulated deficit and a negative
net worth at December 31, 1998 and 1997. These factors raise substantial
doubt about the Company's ability to continue as a going concern.
Management's plans in regard to these matters are also discussed in Note
#5. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
/S/ Schvaneveldt & Company
Salt Lake City, Utah
June 24, 1999
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Balance Sheets
December 31, 1998 & 1997
</TABLE>
<TABLE>
<CAPTION>
December December
31, 1998 31, 1997
------------ ------------
<S> <C> <C>
Assets
Current Assets $ -0- $ -0-
- -------------- ------------ ------------
Total Assets $ -0- $ -0-
============ ============
Liabilities & Stockholders' Equity
Current Liabilities
- -------------------
Accounts Payable $ -0- $ 200
Stockholders' Equity
- --------------------
Preferred Shares 700,000 Authorized,
$.05 Par Value; None Issued
Common Shares 25,000,000 Authorized
$0.001 Par Value 4,155,800 Shares and
116,192 Shares Issued and Outstanding
Retroactively Restated 4,156 6
Paid-In Capital 178,163 134,336
Retained Earnings ( 134,251) ( 134,251)
Deficit Accumulated in the Development Stage ( 48,068) ( 291)
------------ ------------
Total Stockholders' Equity -0- ( 200)
------------ ------------
Total Liabilities & Stockholders' Equity $ -0- $ -0-
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Statements of Operations
Accumulated for the Period January 18, 1994 (Reinstatement)
to December 31, 1998
and the Years Ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
Accumulated 1998 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Revenues $ -0- $ -0- $ -0- $ -0-
- -------- ---------- ---------- ---------- ----------
Expenses
- --------
Legal Fees 5,850 5,850 -0- -0-
Consulting Fees 41,300 41,300 -0- -0-
Filing Fees 918 627 100 100
---------- ---------- ---------- ----------
Total Expenses 48,068 47,777 100 100
---------- ---------- ---------- ----------
Net Loss ($ 48,068) ($ 47,777) ($ 100) ($ 100)
========== ========== ========== ==========
Basic Loss Per Share $ (.00) $ (.00) $ (.00)
Weighted Average Shares
Outstanding Retroactively
Restated 415,580 116,192 116,192
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Statements of Stockholders' Equity
January 19, 1994 (Reinstatement) to December 31, 1998
<TABLE>
<CAPTION>
Accumulated
Deficit Deficit in
Common Stock Paid In Retained Development
Shares Amount Capital Earnings Stage
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance, January 14, 1994
(Reinstatement)
Retroactively Restated 5,800 $ 6 $ 134,245 ($134,251) $ -0-
Contributed Capital 30
Net Less for Year Ended
December 31, 1994 ( 30)
--------------------------------------------------------
Balance,
December 31, 1994 5,800 6 134,275 ( 134,251) ( 30)
Contributed Capital 61
Net Loss for Year Ended
December 31, 1995 ( 61)
--------------------------------------------------------
Balance,
December 31, 1995 5,800 6 134,336 ( 134,251) ( 91)
Net Loss for Year Ended
December 31, 1996 ( 100)
--------------------------------------------------------
Balance,
December 31, 1996 5,800 6 134,336 ( 134,251) ( 191)
Net Loss for Year Ended
December 31, 1997 ( 100)
--------------------------------------------------------
Balance,
December 31, 1997 5,800 6 134,336 ( 134,251) ( 291)
Shares Issued for Services
at $1.00 Per Share 40,000 40 39,960
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Statements of Stockholders' Equity -Continued-
January 19, 1994 (Reinstatement) to December 31, 1998
<TABLE>
<CAPTION>
Accumulated
Deficit Deficit in
Common Stock Paid In Retained Development
Shares Amount Capital Earnings Stage
--------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Shares Issued for Services
at $.02 Per Share 10,000 10 190
Shares Issued for Services
at $.001 Per Share 3,950,000 3,950
Shares Issued for Services
at $.02 Per Share 150,000 150 2,850
Contributed Capital 827
Net Loss for Year Ended
December 31, 1998 ( 47,777)
--------------------------------------------------------
Balance,
December 31, 1998 4,155,800 $ 4,156 $ 178,163 ($134,251) ($ 48,068)
========================================================
</TABLE>
The accompanying notes are an integral part of these financial statements
F-6
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Statements of Cash Flows
Accumulated for the Period January 18, 1994 (Reinstatement)
to December 31, 1998
and the Years Ended December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
Accumulated 1998 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities
- ------------------------------------
Operating Activities:
Net Loss ($ 48,068) ($ 47,777) ($ 100) ($ 100)
Non Cash Expenses 47,150 47,150 -0- -0-
Changes in Operating Assets &
Liabilities:
(Decrease) Increase in Accounts
Payable -0- ( 200) 100 100
---------- ---------- ---------- ----------
Net Cash Provided by
Operating Activities ( 918) ( 827) -0- -0-
Cash Flows from Investing Activities $ -0- $ -0- $ -0- $ -0-
- ------------------------------------
Cash Flows from Financing Activities
- ------------------------------------
Contributed Capital 918 827 -0- -0-
---------- ---------- ---------- ----------
Net Cash Provided by
Financing Activities -0- -0- -0- -0-
Increase (Decrease) in Cash -0- -0- -0- -0-
Cash at Beginning of Period -0- -0- -0- -0-
---------- ---------- ---------- ----------
Cash at End of Period $ -0- $ -0- $ -0- $ -0-
========== ========== ========== ==========
Disclosures for Operating Activities
- ------------------------------------
Interest $ -0- $ -0- $ -0- $ -0-
Taxes -0- -0- -0- -0-
</TABLE>
The accompanying notes are an integral part of these financial statements
F-7
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Corporate History
- ---------------------------
GTrade.Network, Inc., (the Company), was incorporated in the state of
Delaware on March 16, 1993 under the name of Avistar Acquisitions, Inc. On
July 5, 1995, Back & Neck Corp., an Idaho Corporation was merged into the
Company. The Company was engaged in the business of providing chiropractic
services from July 5, 1995 until November 28, 1997, at which time the
Company's chiropractic business, conducted through a wholly-owned
subsidiary Back & Neck Chiropractic Management Corp., (a New Jersey
Corporation), was transferred to Dr. Ernest Pecararo in consideration of
$35,000 cash and his assumption of all of the liabilities of the Company
then existing. After November 28, 1997, the Company had no assets, no
liabilities, and no business operations and was searching for a business
opportunity to acquire.
The Company has been considered a development stage company since its
reinstatement in 1994.
NOTE #2 - Significant Accounting Policies
- -----------------------------------------
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period
when the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that
are readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Basic Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options and
other convertible issues that may be exercised within ten years of the
financial statement dates.
E. Inventories: Inventories are stated at the lower of cost, determined
by the FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of
leasehold improvements is depreciated (amortized) over the lesser of
the length of the related assets or the estimated lives of the assets.
Depreciation is computed on the straight line method for reporting
purposes and for tax purposes.
G. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
F-8
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #3 - Stockholders' Equity
- ------------------------------
Common Stock;
On July 14, 1998, the Company amended its Certificate of Incorporation
to authorize 25,000,000 shares of common stock with a par value of $0.001
per share.
Preferred Stock;
The Certificate of Amendment also authorized the Company to issue
700,000 shares of Preferred Stock with a par value of $0.005 per share.
All of the Preferred Shares are designated as "Series A Convertible
Preferred Shares". The Preferred Shares are not entitled to receive
dividends, except as prescribed for the issuance of common shares as
dividends. The Preferred Shares shall have liquidation preferences subject
to the terms under which they were issued. The Preferred Shares, Series A
Shares, shall have conversion rights at any time one year after the date of
issuance into ten fully paid and non-assignable shares of Common Stock.
No preferred shares have been issued under these provisions.
Stock Split;
In November 1997, the Company authorized and executed a one for twenty
reverse split, of its outstanding shares of common stock.
On June 14, 1998, the Company authorized and executed a one for twenty
reverse split, of its outstanding shares of common stock.
Common Shares Issued for Services;
The Company has issued shares as follows for services rendered to the
Company.
<TABLE>
<CAPTION>
Date Pre Split Post Split Value of Services
- ---------------- -------------- ----------- -----------------
<S> <C> <C> <C>
January 20, 1998 3,000,000 150,000 $3,000
March 20, 1998 600,000 30,000 30,000
April 15, 1998 200,000 10,000 10,000
May 15, 1998 200,000 10,000 200
June 19, 1998 N/A 3,850,000 3,850
July 30, 1998 100,000 100
</TABLE>
F-9
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #3 - Stockholders' Equity -Continued-
- ------------------------------------------
Stock Options;
On June 16, 1998, the Company issued Options to acquire 4,000,000
shares of Common Stock, for a price of $0.25 per share. The Options
expired on June 16, 1999 with none having been exercised.
NOTE #4 - Net Operating Loss Carryforward for Income Tax Purposes
- -----------------------------------------------------------------
The Company has incurred losses that can be carried forward to offset
future earnings if conditions of the Internal Revenue Codes are met. These
losses are as follows:
<TABLE>
<CAPTION>
Year of Expiration
Loss Amount Date
-----------------------------------------------
<S> <C> <C>
1994 30 2014
1995 61 2015
1996 100 2016
1997 100 2017
1998 48,777 2018
</TABLE>
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax
assets in future years. Due to the uncertainty as to the utilization of
net operating loss carryforwards an evaluation allowance has been made to
the extent of any tax benefit that net operating losses may generate.
<TABLE>
<CAPTION>
1998 1997 1996
--------- --------- ---------
<S> <C> <C> <C>
Current Tax Asset Value of Net Operating
Loss Carryforwards at Current Prevailing
Federal Tax Rate $ 7,210 $ 44 $ 29
Evaluation Allowance ( 7,210) ( 44) ( 29)
-----------------------------
Net Tax Asset $ -0- $ -0- $ -0-
=============================
Current Income Tax Expense $ -0- $ -0- $ -0-
Deferred Income Tax Benefit -0- -0- -0-
</TABLE>
NOTE #5 - Going Concern
- -----------------------
The Company has no assets and no operations from which it can obtain
working capital. The Company recognizes that it must find a source of
working capital or the Company may not be able to continue its existence.
F-10
</Page>
<PAGE>
GTrade.Network, Inc.
Formerly Naturally New Zealand Networks, Inc.
Formerly Back & Neck Management Corp.
(A Development Stage Company)
Notes to Financial Statements -Continued-
NOTE #6 - Subsequent Events
- ---------------------------
On February 11, 1999, the Company amended its Certificate of Incorporation
to (i) change its name from Naturally New Zealand Networks, Inc., to
CrossCountry Holdings Ltd., (ii) increase the number of shares of Common
Stock authorized for issuance from 25,000,000 shares to 50,000,000 shares,
and (iii) authorize the Board of Directors to determine by Board action the
designation, powers, preferences and rights of any shares of Preferred
Stock to be issued by the Company.
On April 5, 1999, the Company issued 2,000,000 shares of Common Stock to
secure the exclusive, worldwide marketing rights under a License Agreement
from Automation Excellence Caribe Ltd., for the AutoEx Exchange Server
software (the "System"), which allows two parties to transact business over
the Internet with state-of-the-art security, and allows for the guaranteed
delivery of product against immediate payment of funds in any of 225
currencies.
On April 6, 1999, the Company issued 4,000,000 shares of Common Stock for
$100,000.00.
On April 20, 1999, the Company amended its Certificate of Incorporation to
change its name from CrossCountry Holdings, Ltd., to GTrade.Network Inc.
On June 2, 1999, the Company acquired 100% of the issued and outstanding
shares of FleaMan.Com Inc., a Nevada corporation, in consideration of
400,000 shares of its Common Stock and 100,000 shares of its Series A
Preferred Stock. Pursuant to the Agreement and Plan of Reorganization
dated May 20, 1999, the Company is committed to infuse $3,000,000 of
capital into FleaMan.Com Inc., and after one year the holder of the
Preferred Stock has the right to redeem the Preferred Stock by requiring
the Company to transfer 70% of the outstanding shares of FleaMan.Com
Inc.'s, common stock to such holder, and the Company has the right to
effect such a redemption at its election.
F-11
Exhibit 3(i)
CERTIFICATE OF INCORPORATION
OF
AVISTAR ACQUISITIONS, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the
purposes hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware (particularly Chapter 1,
Title 8 of the Delaware Code and the acts amendatory thereof and
supplemental thereto, and known, identified and referred to as the "General
Corporation Law of the State of Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter called the
"corporation") is:
AVISTAR ACQUISITIONS, INC.
SECOND: The address, including street, number, city, and
county, of the registered office of the corporation in the state of
Delaware is 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent; and the name of the registered agent of the corporation in the State
of Delaware is The Prentice-Hall Corporation System, Inc.
THIRD: The purpose of the corporation is to engage in any
lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is One Thousand (1,000), all of
which are without par value. All such shares are of one class and are
shares of Common Stock.
FIFTH: The name and the mailing address of the incorporator
are as follows:
NAME MAILING ADDRESS
---- ---------------
N. S. Truax 32 Loockerman Square, Suite L-100
Dover, Delaware 19901
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or
between this corporation and its stockholders or any class of them, any
court of equitable jurisdiction within the State of Delaware may, on the
application in a summary way of this corporation or of any creditor or
stockholder thereof or on the application of any receiver or receivers
appointed for this corporation under the provisions of section 291 of Title
8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of Section 279 of Title
8 of the Delaware Code order a meeting of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, to be summoned in such manner as the said
court directs. If a majority in number representing three-fourths in value
of the creditors or class of creditors, and/or of the stockholders or class
of stockholders of this corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this corporation as
consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court
to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
EIGHTH: For the management of the business and for the
conduct of the affairs of the corporation, and in further definition,
limitation and regulation of the powers of the corporation and of its
directors and of its stockholders or any class thereof, as the case may be,
it is further provided:
1. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of Directors. The
number of directors which shall constitute the whole Board of Directors
shall be fixed by, or in the manner provided in, the By-Laws. The phrase
"whole Board" and the phrase "total number of directors" shall be deemed to
have the same meaning, to wit, the total number of directors which the
corporation would have if there were no vacancies. No election of
directors need be by written ballot.
2. After the original or other By-Laws of the corporation
have been adopted, amended, or repealed, as the case may be, in accordance
with the provisions of Section 109 of the General Corporation Law of the
State of Delaware, and, after the corporation has received any payment for
any of its stock, the power to adopt, amend, or repeal the By-Laws of the
corporation may be exercised by the Board of Directors of the corporation:
provided, however, that any provision for the classification of directors
of the corporation for staggered terms pursuant to the provisions of
subsection (d) of Section 141 of the General Corporation Law of the State
of Delaware shall be set forth in an initial By-Law or in a By-Law adopted
by the stockholders entitled to vote of the corporation unless provisions
for such classification shall be set forth in this certificate of
incorporation.
3. Whenever the corporation shall be authorized to issue
only one class of stock, each outstanding share shall entitle the holder
thereof to notice of, and the right to vote at, any meeting of
stockholders. Whenever the corporation shall be authorized to issue more
than one class of stock, no outstanding share of any class of stock which
is denied voting power under the provisions of the certificate of
incorporation shall entitle the holder thereof to the right to vote at any
meeting of stockholders except as the provisions of paragraph (2) of
subsection (b) of section
242 of the General Corporation Law of the State of Delaware shall otherwise
require; provided, that no share of any such class which is otherwise
denied voting power shall entitle the holder thereof to vote upon the
increase or decrease in the number of authorized shares of said class.
NINTH: The personal liability of the directors of the
corporation is hereby eliminated to the fullest extent permitted by the
provisions of paragraph (7) of subsection (b) of Section 102 of the General
Corporation Law of the State of Delaware, as the same may be amended and
supplemented.
TENTH: The corporation shall, to the fullest extent permitted
by the provisions of Section 145 of the General Corporation Law of the
State of Delaware, as the same may be amended and supplemented, indemnify
any and all persons whom it shall have power to indemnify under said
section from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to
which those indemnified may be entitled under any By-Law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in
force may be added or inserted in the manner and at the time prescribed by
said laws, and all rights at any time conferred upon the stockholders of
the corporation by this certificate of incorporation are granted subject to
the provisions of this Article ELEVENTH.
Signed on March 16, 1993.
/s/ N.S. Truax
----------------
N. S. Truax
Incorporator
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
AVISTAR ACQUISITIONS, INC.
-----------------------------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
-----------------------------------------------------
The undersigned, President of AVISTAR ACQUISITIONS, INC. (the
"Corporation"), a corporation existing under the laws of the State of
Delaware, does hereby certify as follows:
FIRST: That the Certificate of Incorporation of said Corporation
has been amended as follows by striking out the whole of Article FOURTH
thereof as it now exists and inserting in lieu and instead thereof a new
Article FOURTH, reading as follows:
"FOURTH: The total number of shares of capital stock which the
corporation shall have the authority to issue is five million
(5,000,000) shares of Common Stock, par value $.01 per share."
SECOND: That such amendment has been duly adopted by the written
consent of the sole stockholder entitled to vote in accordance with the
provisions of Section 228 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
this 27th day of June, 1995.
/s/ Ernest Pecoraro
-------------------------
Ernest Pecoraro, President
CERTIFICATE OF MERGER
OF
BACK & NECK CORP.
(an Idaho corporation)
INTO
AVISTAR ACQUISITIONS, INC.
(a Delaware corporation)
Pursuant to Section 252(c) of
the General Corporation Law
AVISTAR ACQUISITIONS, INC. a Delaware corporation, desiring to merge
BACK & NECK CORP., an Idaho corporation, pursuant to the provisions of
Section 252(c) of the General Corporation Law of the State of Delaware,
does hereby certify as follows:
FIRST: The names and state of incorporation of each constituent
corporation are:
Name State of Incorporation
------------------------- -----------------------
Avistar Acquisitions, Inc. Delaware
Back & Neck Corp. Idaho
SECOND: An Agreement and Plan of Merger has been approved,
adopted, certified, executed and acknowledged by each of the constituent
corporations in accordance with Section 252(c) of the General Corporation
Law.
THIRD: The name of the surviving corporation is Avistar
Acquisitions, Inc.
FOURTH: Upon the effective date of the merger, Article FIRST of
the Certification of Incorporation of Avistar Acquisitions, Inc., shall be
amended to read as follows:
"FIRST: The name of the corporation is:
BACK & NECK MANAGEMENT CORP."
FIFTH: An executed copy of the Agreement and Plan of Merger is
on file at the principal place of business of the surviving corporation, 19
Putnam Road, Livingston, NJ 07039, and a copy of the Agreement and Plan of
Merger will be furnished by the surviving corporation, on request and
without cost, to any shareholder of any constituent corporation.
SIXTH: Back & Neck Corp. has authorized capital stock consisting
of 20,000,000 shares of Common Stock, par value of $.001 per share.
IN WITNESS WHEREOF, AVISTAR ACQUISITIONS, INC., has caused this
Certificate to be executed by its President thereunto duly authorized this
28th day of June, 1995.
AVISTAR ACQUISITIONS, INC.
(a Delaware Corporation)
By: /s/ Ernest Pecoraro
--------------------------
Name: Ernest Pecoraro
Title: President
<PAGE>
STATE OF DELAWARE
CERTIFICATE FOR RENEWAL
AND REVIVAL OF CHARTER
BACK & NECK MANAGEMENT CORP., a corporation organized under the laws of
Delaware, the charter of which was voided for non-payment of taxes, now
desires to procure a restoration, renewal and revival of its charter, and
hereby certifies as follows:
1. The name of this corporation is Back and Neck Management
Corp.
2. Its registered office in the State of Delaware is located at
1013 Centre Street, City of Wilmington, Zip Code 19805, County of New
Castle, the name and address of its registered agent is The Prentice-Hall
Corporation System, Inc.
3. The date of filing of the original Certificate of
Incorporation in Delaware was March 16, 1993.
4. The date when restoration, renewal, and revival of the
charter of this company is to commence is the 28th day of February 1998,
same being prior to the date of the expiration of the charter. This
renewal and revival of the charter of this corporation is to be perpetual.
5. This corporation was duly organized and carried on the
business authorized by its charter until the 1st day of March A.D. 1998, at
which time its charter became inoperative and void for non-payment of taxes
and this certificate for renewal and revival is filed by authority of the
duly elected directors of the corporation in accordance with the laws of
the State of Delaware.
IN TESTIMONY WHEREOF, and in compliance with the provisions of
Section 312 of the General Corporation Law of the State of Delaware, as
amended, providing for the renewal, extension and restoration of charters,
Dionne Gomez, the last and acting authorized officer hereunto set her hand
to this certificate this 14th day of July 1998.
By: /s/ Dionne Gomez
------------------------
Authorized Officer
Name: Dionne Gomez
----------------
Print or Type
Title: Secretary
-------------------
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
BACK & NECK MANAGEMENT CORP.
The undersigned, President of Back & Neck Management Corp. (the
"Corporation"), a corporation existing under the laws of the State of
Delaware, does hereby certify as follows:
FIRST: That the Certificate of Incorporation of said Corporation
has been amended as follows by striking out the whole of Article First
thereof as it now exist and inserting in lieu and instead thereof a new
Article First reading as follows:
First: The name of the corporation is: NNZ AMERICA, INC.
SECOND: That such amendment has been duly adopted at a duly
called meeting of the shareholders held June 15, 1998, at which a majority
of the outstanding share of the corporation were present and voted as
follows:
For: 3,000,000 Against: 0
IN WITNESS WHEREOF, the undersigned has executed this Certificate
this 15th day of June, 1998.
/s/ Radd Berrett
Radd Berrett, President
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION OF
NNZ, AMERICA, INC.
NNZ, America, Inc., a corporation organized and existing under the
General Corporation Laws of the State of Delaware (the "Corporation"), does
hereby certify:
FIRST: That the Board of Directors of the Corporation by
unanimous written consent duly adopted resolutions (i) setting forth the
proposed amendment to the Certificate of Incorporation of the Corporation
and (ii) calling for the submission of the proposed amendment to a vote of
the stockholders of the Corporation for their approval and adoption. The
resolution setting forth the proposed amendments is as follows:
"RESOLVED, that the Corporation amend Article FOURTH of its
Certificate of Incorporation to affect a 20-for-1 split of the outstanding
shares of Common Stock and in connection therewith to increase the par
value per share of Common Stock to $.02, and that said Article FOURTH, as
amended, would read as follows:
"FOURTH: (a) The total number of shares of capital stock
which the Corporation shall have authority to issue is Twenty Million
(20,000,000) shares all of which are designated as common stock with a par
value of $.001 per share. Upon the filing of these Articles of Amendment,
every twenty (20) outstanding shares of Common Stock of the Corporation,
$.001 par value per share, shall without any action of the holders thereof,
be reclassified and changed into one share of Common Stock par value of
$.02 per share."
SECOND: That the holders of a majority of the outstanding
shares of common stock of the Corporation, by a written consent in
accordance with Section 228 of the Delaware General Corporation Law, did
duly adopt said amendment as proposed by the Board of Directors.
THIRD: This amendment was duly adopted in accordance with
the provisions of Section 242 of the Delaware General Corporation Laws.
IN WITNESS WHEREOF, the undersigned has caused its corporate
seal to be affixed hereto and this Certificate to be executed by its
President and attested by its Secretary, as of this 18th day of June, 1998.
NNZ AMERICA, INC.
Attest:
/s/ Radd Berrett
/s/Dionne Gomez Radd Berrett, President
Secretary Dionne Gomez
CERTIFICATE OF AMENDMENT
to the
CERTIFICATE OF INCORPORATION
of
NATURALLY NEW ZEALAND NETWORKS, INC.
Naturally New Zealand Networks, Inc., a corporation existing under
the Delaware General Corporation Law (the "Corporation") does hereby
certify the following:
FIRST. The name of the corporation is Naturally New Zealand
Networks, Inc.
SECOND. The Board of Directors of the Corporation by unanimous
written consent duly adopted resolutions pursuant to the provisions of
Section 242 of the Delaware General Corporation Law to (i) change the name
of the Corporation, (ii) increase the number of shares of authorized Common
Stock of the Corporation and (iii) reserve to the Board of Directors the
right to provide for the issuance of the Preferred Stock in series, and by
filing a certificate pursuant to the applicable laws of the State of
Delaware, to establish from time-to-time the number of shares to be
included in each such series, and to fix the designation, powers,
preferences and rights of the shares of each such series and the
qualifications, limitations or restrictions thereof to designate authorized
for issuance. The resolutions setting forth the proposed amendments are as
follows:
"RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by changing the Article numbered FIRST to read as
follows:
FIRST. The name of the corporation is CrossCountry
Holdings Ltd.
FURTHER RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by changing the Article numbered FOURTH to read as
follows:
FOURTH. The total number of shares which the corporation shall
have authority to issue is 50,700,000, of which 50,000,000 shares shall be
Common Stock, $.001 par value ("Common Stock"), and 700,000 shares shall be
Preferred Stock, $.05 par value ("Preferred Stock").
The Board of Directors is authorized, subject to the
limitations prescribed by law and the provisions of this Article FOURTH, to
provide for the issuance of the Preferred Stock in series, and by filing a
certificate pursuant to the applicable laws of the State of Delaware, to
establish from time-to-time the number of shares to be included in each
such series, and to fix the designation, powers, preferences and rights of
the shares of each such series and the qualifications, limitations or
restrictions thereof. The authority of the Board of Directors with respect
to each such series shall include, but not be limited to, the determination
of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series; (b) The dividend rate, if any, on
the shares of that series, whether dividends shall be cumulative, and, if
so, from which date or dates, and the relative priority, if any, of payment
of dividends on shares of that series; (c) Whether that series shall have
voting rights, in addition to the voting rights expressly required by
law, and, if so, the terms of such voting rights; (d) Whether that series
shall have conversion privileges, and, if so, the terms and conditions of
such conversion, including provisions for adjustment of the conversion rate
in such events as the Board of Directors shall determine; (e) Whether or
not the shares of that series shall be redeemable, and, if so, the terms
and conditions of such redemption, including the date or dates upon or
after which they shall be redeemable, and the amount per share payable in
the case of redemption, which amount may vary under different conditions
and at different redemption dates; (f) Whether that series shall have a
sinking fund for the redemption or purchase of shares of that series, and,
if so, the terms and amount of such sinking fund for the redemption or
purchase of shares of that series, and, if so, the terms and amount of such
sinking fund; (g) The rights of the shares of that series in the event of
a voluntary or involuntary liquidation, dissolution or winding up of the
corporation, and the relative rights of priority, if any, of payment of
shares of that series; and (h) Any other relative rights, preferences and
limitations of that series."
THIRD. The foregoing Amendment to the Certificate of
Incorporation of the Corporation was approved and adopted by Consents
received from shareholders holding shares entitling them to exercise at
least a majority of the voting power of the outstanding shares (no greater
proportion of the outstanding shares being required by the provisions of
the Certificate of Incorporation of the Corporation or an amendment
thereof) solicited pursuant to the provisions of Section 228 of the
Delaware General Corporation Law. A total of 4,155,800 shares of Common
Stock were outstanding at the time of the vote evidenced by written
Consents; and no shares of Preferred Stock have been issued by the
Corporation. Accordingly, said amendment was duly adopted in accordance
with the provisions of Section 242 of the Delaware General Corporation Law.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
of Amendment to be signed by Charlene Davis, its President this 10th day of
February, 1999.
Naturally New Zealand Networks, Inc.
/s/ Charlene Davis
Charlene Davis, President
CERTIFICATE OF AMENDMENT
to the
CERTIFICATE OF INCORPORATION
of
CROSSCOUNTRY HOLDINGS LTD.
CrossCountry Holdings Ltd., a corporation existing under the Delaware
General Corporation Law (the "Corporation") does hereby certify the
following:
FIRST. The name of the corporation is CrossCountry Holdings
Ltd.
SECOND. The Board of Directors of the Corporation by unanimous
written consent duly adopted resolutions pursuant to the provisions of
Section 242 of the Delaware General Corporation Law to (i) change the name
of the Corporation and (ii) change the name and address of the registered
agent of the Corporation. The resolutions setting forth the proposed
amendments are as follows:
RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by changing the Article numbered FIRST to read as
follows:
"FIRST: The name of the corporation is GTrade.Network
Inc."
FURTHER RESOLVED, that the Certificate of Incorporation of the
Corporation be amended by changing the Article numbered SECOND to read as
follows:
"SECOND: The name and address of the registered office
of the Corporation in the State of Delaware is the Corporation Trust
Company, 1209 Orange Street, Wilmington, County of New Castle, Delaware.
The name of the Corporation's registered agent at that address is the
Corporation Trust Company."
IN WITNESS WHEREOF, the Corporation has caused this Certificate
of Amendment to be signed by Charlene Davis, its President this 20th day of
April, 1999.
CrossCountry Holdings Ltd.
/s/ Charlene Davis
Charlene Davis, President
GTrade.Network Inc.
Certificate of Designations
_____________________
Resolution of the Board of Directors
Establishing the Series A Participating Preferred Stock
RESOLVED: That pursuant and subject to the provisions of Article Fourth of
the Certificate of Incorporation of the Corporation, as amended, 100,000
shares of the authorized and unissued Preferred Stock, par value $.05 per
share, of the Corporation be, and hereby are, authorized as a series of
Preferred Stock designated as Series A Participating Preferred Stock (the
"Series A Preferred Stock"), and all shares of said Series A Preferred
Stock shall be identical and subject to the following terms and conditions:
Section 1. Liquidation Rights.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, the holders of
shares of Series A Preferred Stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets or surplus funds of
the Corporation to the holders of Common Stock or any other stock of the
Corporation ranking on liquidation junior to the Series A Preferred Stock
70% of the then issued and outstanding shares of FleaMan.Com Inc., a Nevada
corporation, which is a wholly-owned subsidiary of the Corporation, and no
more. All of the preferential amounts to be paid to the holders of the
Series A Preferred Stock under this Section 1 shall be paid or set apart
for payment before the payment or setting apart for payment of any amount
for, or the distribution of any assets or surplus funds of the Corporation
to, the holders of the Common Stock or any other stock of the Corporation
ranking on liquidation junior to the Series A Preferred Stock in connection
with such liquidation, dissolution or winding-up. If the assets to be
distributed to the holders of the Series A Preferred Stock are insufficient
to permit the payment to such holders of their full preferential amount,
the assets and surplus funds legally available for distribution to such
holders shall be distributed ratably among the holders of the Series A
Preferred Stock in proportion to the full preferential amount each such
holder would otherwise be entitled to receive.
(b) After the payment or setting apart of the full preferential
amounts required to be paid to the holders of Series A Preferred Stock, the
holders of Common Stock or any other stock of the Corporation ranking on
liquidation junior to the Series A Preferred Stock shall be entitled to
receive all remaining assets or surplus funds of the Corporation.
Section 2. Dividends. The holders of the outstanding Series A
Preferred Stock shall be entitled to receive, when and as declared by the
Board of Directors, out of any funds legally available therefor, dividends
on a pari passu basis with the outstanding shares of Common Stock the same
as if the Series A Preferred Stock represented 100,000 shares of the
Corporation's Common Stock.
Section 3. Conversion. The holders of the Series A Preferred Stock
shall have no right to convert the Series A Preferred Stock to Common
Stock.
Section 4. Voting Rights. At all meetings of the stockholders of
the Corporation and in the case of any actions of stockholders in lieu of a
meeting, each share of Series A Preferred Stock shall entitle the holder
thereof the same number of votes that one share of Common Stock is entitled
to vote. Except as provided by law and by the provisions of Section 5
below, the holders of Series A Preferred Stock and Common Stock shall vote
together as a single class.
Section 5. Covenants. The Corporation shall not, without first
obtaining the affirmative vote or written consent of not less than one
hundred percent (100%) of the issued and outstanding shares of Series A
Preferred Stock:
(a) Amend or repeal any provision of, or add any provision to, the
Corporation's Certificate of Incorporation or By-laws if such action would
adversely affect the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Series A Preferred Stock; or
(b) Reclassify any Common Stock into shares having any preferences
or priority as to dividends or assets superior to or on a parity with any
such preferences or priorities of the Series A Preferred Stock.
For purposes of subsection (a) of this Section 5, (i) any amendment of or
addition of provisions to the Corporation's Certificate of Incorporation
increasing the authorized number of shares of the Corporation's Common
Stock, (ii) any such amendment or addition establishing one or more classes
or series of the Corporation's Preferred Stock with respect to which
dividends or amounts payable on any liquidation, dissolution or winding-up
of the Corporation shall be payable on a parity with the Series A Preferred
Stock (notwithstanding that such Preferred Stock may have par values,
dividend rates, redemption prices, amounts payable upon liquidation,
dissolution or winding-up, voting rights and other terms and provisions
varying from those of the Series A Preferred Stock), and (iii) any such
amendment or addition establishing one or more classes or series of stock
ranking junior to the Series A Preferred Stock in respect of dividends or
amounts payable upon any liquidation, dissolution or winding-up of the
Corporation, shall, in each case, not be deemed to adversely affect the
preferences, rights, privileges or powers of, or the restrictions provided
for the benefit of, the Series A Preferred Stock.
Section 6. Optional and Mandatory Redemption. The Corporation may,
at its option, at any time after June 30, 2000, but not prior thereto, upon
60 days prior written notice to the holder(s) of the Series A Preferred
Stock, redeem all (but not less than all) of the then outstanding shares of
Series A Preferred Stock upon conveyance to the holders of the Series A
Preferred Stock of 70% of the then issued and outstanding shares of
FleaMan.Com Inc., a Nevada corporation, which is a wholly-owned subsidiary
of the Corporation, together with any accrued but unpaid dividends payable
on the Series A Preferred Stock, whether or not earned or declared, to and
including the redemption date.
Additionally, the Corporation shall, after June 30, 2000, upon notice
received from the holder(s) of the Series A Preferred Stock, redeem all
(and not less than all) of the then outstanding shares of Series A
Preferred Stock by conveyance to the holders of the Series A Preferred
Stock of 70% of the then issued and outstanding shares of FleaMan.Com Inc.,
a Nevada corporation, which is a wholly-owned subsidiary of the
Corporation, together with any accrued but unpaid dividends payable on the
Series A Preferred Stock, whether or not earned or declared, to and
including the redemption date.
In case of any redemption of shares of the Series A Preferred Stock
pursuant to this Section 6, the holder(s) requesting redemption shall give
the Corporation not less than 60 days' prior written notice by mail,
postage prepaid, which shall be deemed effective only upon the receipt
thereof by the Corporation. The date of receipt shall be deemed to be the
"redemption date" unless the Corporation fails to complete payment, for any
reason, within 60 days from such redemption date; otherwise the "redemption
date" shall be deemed to be the actual date of payment. Payment by the
Corporation of such amounts shall terminate all rights of the redeeming
holder(s) with respect to such shares. Subject to the provisions hereof,
the Board of Directors of the Corporation shall have authority to prescribe
the manner in which Series A Preferred Stock shall be redeemed from
time-to-time. The shares of the Series A Preferred Stock so redeemed shall
be permanently retired, shall no longer be deemed outstanding and shall not
under any circumstances be reissued, and the Corporation may from
time-to-time take such appropriate corporate action as may be necessary to
reduce the authorized Series A Preferred Stock accordingly. Nothing
contained herein shall prevent or restrict the purchase by the Corporation,
from time-to-time either at public or private sale, of the whole or any
part of the Series A Preferred Stock at such price or prices as the
Corporation may determine, subject to the provisions of applicable law.
IN WITNESS WHEREOF, the Corporation has caused this Certificate
of Designations to be signed by Aziz Hirji, its President this 2nd day of
June, 1999.
GTrade.Network Inc.
/s/ Aziz Hirji
Aziz Hirji, President
GTrade.Network Inc.
Statement Establishing and Designating
a Series, and Fixing and Determining the
Relative Rights and Preferences of Series B
Participating Preferred Stock
Pursuant to Action By Consent of Directors of GTrade.Network Inc., a
Delaware corporation, (the "Corporation") taken on the 12th day of August,
1999, the following resolution was duly adopted by the Directors of the
Corporation:
RESOLVED, that the form of Resolution of the Board of Directors
establishing the Series B Participating Preferred Stock which form of
Resolution is attached hereto as Exhibit "A" and incorporated herein by
this reference, shall be and hereby is adopted as a resolution of the Board
of Directors of the Corporation.
This statement is furnished pursuant to Section 151 of the Delaware
General Corporation Law, and upon filing hereof, the Resolution
establishing and designating the Series and fixing and determining the
relative rights and preferences of the Corporation's Series B Participating
Preferred Stock is intended to constitute an amendment of the Certificate
of Incorporation of the Corporation.
The foregoing resolution has not been rescinded or modified by a
subsequent resolution or other action of the Board of Directors, and
remains in full force and effect as of the date hereof.
Dated this 12th day of August, 1999.
/s/ Aziz Hirji
Aziz Hirji, President
EXHIBIT "A"
GTrade.Network Inc.
Certificate of Designations
_____________________
Resolution of the Board of Directors
Establishing the Series B Participating Preferred Stock
RESOLVED: That pursuant and subject to the provisions of Article Fourth of
the Certificate of Incorporation of the Corporation, as amended, 10,000
shares of the authorized and unissued Preferred Stock, par value $.05 per
share, of the Corporation be, and hereby are, authorized as a series of
Preferred Stock designated as Series B Participating Preferred Stock (the
"Series B Preferred Stock"), and all shares of said Series B Preferred
Stock shall be identical and subject to the following terms and conditions:
Section 1. Liquidation Rights.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, the holders of
shares of Series B Preferred Stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets or surplus funds of
the Corporation to the holders of Common Stock or any other stock of the
Corporation ranking on liquidation junior to the Series B Preferred Stock
60% of the then issued and outstanding shares of I-Jet Aviation
Consultants, Inc., a Nevada corporation, which is a wholly-owned subsidiary
of the Corporation, and no more. All of the preferential amounts to be
paid to the holders of the Series B Preferred Stock under this Section 1
shall be paid or set apart for payment before the payment or setting apart
for payment of any amount for, or the distribution of any assets or surplus
funds of the Corporation to, the holders of the Common Stock or any other
stock of the Corporation ranking on liquidation junior to the Series B
Preferred Stock in connection with such liquidation, dissolution or
winding-up. If the assets to be distributed to the holders of the Series B
Preferred Stock are insufficient to permit the payment to such holders of
their full preferential amount, the assets and surplus funds legally
available for distribution to such holders shall be distributed ratably
among the holders of the Series B Preferred Stock in proportion to the full
preferential amount each such holder would otherwise be entitled to
receive.
(b) After the payment or setting apart of the full preferential
amounts required to be paid to the holders of Series B Preferred Stock, the
holders of Common Stock or any other stock of the Corporation ranking on
liquidation junior to the Series B Preferred Stock shall be entitled to
receive all remaining assets or surplus funds of the Corporation.
Section 2. Dividends. The holders of the outstanding Series B
Preferred Stock shall be entitled to receive, when and as declared by the
Board of Directors, out of any funds legally available therefor, dividends
on a pari passu basis with the outstanding shares of Common Stock the
same as if the Series B Preferred Stock represented 10,000 shares of the
Corporation's Common Stock.
Section 3. Conversion. The holders of the Series B Preferred Stock
shall have no right to convert the Series B Preferred Stock to Common
Stock.
Section 4. Voting Rights. At all meetings of the stockholders of
the Corporation and in the case of any actions of stockholders in lieu of a
meeting, each share of Series B Preferred Stock shall entitle the holder
thereof the same number of votes that one share of Common Stock is entitled
to vote. Except as provided by law and by the provisions of Section 5
below, the holders of Series B Preferred Stock and Common Stock shall vote
together as a single class.
Section 5. Covenants. The Corporation shall not, without first
obtaining the affirmative vote or written consent of not less than one
hundred percent (100%) of the issued and outstanding shares of Series B
Preferred Stock:
(a) Amend or repeal any provision of, or add any provision to, the
Corporation's Certificate of Incorporation or By-laws if such action would
adversely affect the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Series B Preferred Stock; or
(b) Reclassify any Common Stock into shares having any
preferences or priority as to dividends or assets superior to or on a
parity with any such preferences or priorities of the Series B Preferred
Stock.
For purposes of subsection (a) of this Section 5, (i) any amendment of or
addition of provisions to the Corporation's Certificate of Incorporation
increasing the authorized number of shares of the Corporation's Common
Stock, (ii) any such amendment or addition establishing one or more classes
or series of the Corporation's Preferred Stock with respect to which
dividends or amounts payable on any liquidation, dissolution or winding-up
of the Corporation shall be payable on a parity with the Series B Preferred
Stock (notwithstanding that such Preferred Stock may have par values,
dividend rates, redemption prices, amounts payable upon liquidation,
dissolution or winding-up, voting rights and other terms and provisions
varying from those of the Series B Preferred Stock), and (iii) any such
amendment or addition establishing one or more classes or series of stock
ranking junior to the Series B Preferred Stock in respect of dividends or
amounts payable upon any liquidation, dissolution or winding-up of the
Corporation, shall, in each case, not be deemed to adversely affect the
preferences, rights, privileges or powers of, or the restrictions provided
for the benefit of, the Series B Preferred Stock.
Section 6. Optional and Mandatory Redemption. The Corporation may,
at its option, at any time after August 30, 2000, but not prior thereto,
upon 60 days prior written notice to the holder(s) of the Series B
Preferred Stock, redeem all (but not less than all) of the then outstanding
shares of Series B Preferred Stock upon conveyance to the holders of the
Series B Preferred Stock of 60% of the then issued and outstanding shares
of I-Jet Aviation Consultants, Inc., a Nevada corporation, which is a
wholly-owned subsidiary of the Corporation, together with any accrued but
unpaid dividends payable on the Series B Preferred Stock, whether or not
earned or declared, to and including the redemption date.
Additionally, the Corporation shall, after August 30, 2000, upon
notice received from the holder(s) of the Series B Preferred Stock, redeem
all (and not less than all) of the then outstanding shares of Series B
Preferred Stock by conveyance to the holders of the Series B Preferred
Stock of 60% of the then issued and outstanding shares of I-Jet Aviation
Consultants, Inc., a Nevada corporation, which is a wholly-owned subsidiary
of the Corporation, together with any accrued but unpaid dividends payable
on the Series B Preferred Stock, whether or not earned or declared, to and
including the redemption date.
In case of any redemption of shares of the Series B Preferred Stock
pursuant to this Section 6, the holder(s) requesting redemption shall give
the Corporation not less than 60 days' prior written notice by mail,
postage prepaid, which shall be deemed effective only upon the receipt
thereof by the Corporation. The date of receipt shall be deemed to be the
"redemption date" unless the Corporation fails to complete payment, for any
reason, within 60 days from such redemption date; otherwise the "redemption
date" shall be deemed to be the actual date of payment. Payment by the
Corporation of such amounts shall terminate all rights of the redeeming
holder(s) with respect to such shares. Subject to the provisions hereof,
the Board of Directors of the Corporation shall have authority to prescribe
the manner in which Series B Preferred Stock shall be redeemed from
time-to-time. The shares of the Series B Preferred Stock so redeemed shall
be permanently retired, shall no longer be deemed outstanding and shall not
under any circumstances be reissued, and the Corporation may from
time-to-time take such appropriate corporate action as may be necessary to
reduce the authorized Series B Preferred Stock accordingly. Nothing
contained herein shall prevent or restrict the purchase by the Corporation,
from time-to-time either at public or private sale, of the whole or any
part of the Series B Preferred Stock at such price or prices as the
Corporation may determine, subject to the provisions of applicable law.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations to be signed by Aziz Hirji, it President, this 12th day of
August, 1999.
GTrade.Network Inc.
/s/ Aziz Hirji
Aziz Hirji, President
GTrade.Network Inc.
Statement Establishing and Designating
a Series, and Fixing and Determining the
Relative Rights and Preferences of Series C
Participating Preferred Stock
Pursuant to Action By Consent of Directors of GTrade.Network Inc., a
Delaware corporation, (the "Corporation") taken on the 27th day of August,
1999, the following resolution was duly adopted by the Directors of the
Corporation:
RESOLVED, that the form of Resolution of the Board of Directors
establishing the Series C Participating Preferred Stock which form of
Resolution is attached hereto as Exhibit "A" and incorporated herein by
this reference, shall be and hereby is adopted as a resolution of the Board
of Directors of the Corporation.
This statement is furnished pursuant to Section 151 of the Delaware
General Corporation Law, and upon filing hereof, the Resolution
establishing and designating the Series and fixing and determining the
relative rights and preferences of the Corporation's Series C Participating
Preferred Stock is intended to constitute an amendment of the Certificate
of Incorporation of the Corporation.
The foregoing resolution has not been rescinded or modified by a
subsequent resolution or other action of the Board of Directors, and
remains in full force and effect as of the date hereof.
Dated this 27th day of August, 1999.
/s/ Aziz Hirji
Aziz Hirji, President
EXHIBIT "A"
GTrade.Network Inc.
Certificate of Designations
_____________________
Resolution of the Board of Directors
Establishing the Series C Participating Preferred Stock
RESOLVED: That pursuant and subject to the provisions of Article Fourth of
the Certificate of Incorporation of the Corporation, as amended, 100,002
shares of the authorized and unissued Preferred Stock, par value $.05 per
share, of the Corporation be, and hereby are, authorized as a series of
Preferred Stock designated as Series C Participating Preferred Stock (the
"Series C Preferred Stock"), and all shares of said Series C Preferred
Stock shall be identical and subject to the following terms and conditions:
Section 1. Liquidation Rights.
(a) In the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the affairs of the Corporation, the holders of
shares of Series C Preferred Stock shall be entitled to receive, prior and
in preference to any distribution of any of the assets or surplus funds of
the Corporation to the holders of Common Stock or any other stock of the
Corporation ranking on liquidation junior to the Series C Preferred Stock
70% of the then issued and outstanding shares of NetSafety Corporation USA,
Inc., a California corporation, which is a wholly-owned subsidiary of the
Corporation, and no more. All of the preferential amounts to be paid to
the holders of the Series C Preferred Stock under this Section 1 shall be
paid or set apart for payment before the payment or setting apart for
payment of any amount for, or the distribution of any assets or surplus
funds of the Corporation to, the holders of the Common Stock or any other
stock of the Corporation ranking on liquidation junior to the Series C
Preferred Stock in connection with such liquidation, dissolution or
winding-up. If the assets to be distributed to the holders of the Series C
Preferred Stock are insufficient to permit the payment to such holders of
their full preferential amount, the assets and surplus funds legally
available for distribution to such holders shall be distributed ratably
among the holders of the Series C Preferred Stock in proportion to the full
preferential amount each such holder would otherwise be entitled to
receive.
(b) After the payment or setting apart of the full preferential
amounts required to be paid to the holders of Series C Preferred Stock, the
holders of Common Stock or any other stock of the Corporation ranking on
liquidation junior to the Series C Preferred Stock shall be entitled to
receive all remaining assets or surplus funds of the Corporation.
Section 2. Dividends. The holders of the outstanding Series C
Preferred Stock shall be entitled to receive, when and as declared by the
Board of Directors, out of any funds legally available therefor, dividends
on a pari passu basis with the outstanding shares of Common Stock the
same as if the Series C Preferred Stock represented 100,002 shares of the
Corporation's Common Stock.
Section 3. Conversion. The holders of the Series C Preferred Stock
shall have no right to convert the Series C Preferred Stock to Common
Stock.
Section 4. Voting Rights. At all meetings of the stockholders of
the Corporation and in the case of any actions of stockholders in lieu of a
meeting, each share of Series C Preferred Stock shall entitle the holder
thereof the same number of votes that one share of Common Stock is entitled
to vote. Except as provided by law and by the provisions of Section 5
below, the holders of Series C Preferred Stock and Common Stock shall vote
together as a single class.
Section 5. Covenants. The Corporation shall not, without first
obtaining the affirmative vote or written consent of not less than one
hundred percent (100%) of the issued and outstanding shares of Series C
Preferred Stock:
(a) Amend or repeal any provision of, or add any provision to, the
Corporation's Certificate of Incorporation or By-laws if such action would
adversely affect the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Series C Preferred Stock; or
(b) Reclassify any Common Stock into shares having any
preferences or priority as to dividends or assets superior to or on a
parity with any such preferences or priorities of the Series C Preferred
Stock.
For purposes of subsection (a) of this Section 5, (i) any amendment of or
addition of provisions to the Corporation's Certificate of Incorporation
increasing the authorized number of shares of the Corporation's Common
Stock, (ii) any such amendment or addition establishing one or more classes
or series of the Corporation's Preferred Stock with respect to which
dividends or amounts payable on any liquidation, dissolution or winding-up
of the Corporation shall be payable on a parity with the Series C Preferred
Stock (notwithstanding that such Preferred Stock may have par values,
dividend rates, redemption prices, amounts payable upon liquidation,
dissolution or winding-up, voting rights and other terms and provisions
varying from those of the Series C Preferred Stock), and (iii) any such
amendment or addition establishing one or more classes or series of stock
ranking junior to the Series C Preferred Stock in respect of dividends or
amounts payable upon any liquidation, dissolution or winding-up of the
Corporation, shall, in each case, not be deemed to adversely affect the
preferences, rights, privileges or powers of, or the restrictions provided
for the benefit of, the Series C Preferred Stock.
Section 6. Optional and Mandatory Redemption. The Corporation may,
at its option, at any time after August 30, 2000, but not prior thereto,
upon 60 days prior written notice to the holder(s) of the Series C
Preferred Stock, redeem all (but not less than all) of the then outstanding
shares of Series C Preferred Stock upon conveyance to the holders of the
Series C Preferred Stock of 70% of the then issued and outstanding shares
of NetSafety Corporation USA, Inc., a California corporation, on an as
issued basis, which is a wholly-owned subsidiary of the Corporation,
together with any accrued but unpaid dividends payable on the Series C
Preferred Stock, whether or not earned or declared, to and including the
redemption date.
Additionally, the Corporation shall, after August 30, 2000, upon
notice received from the holder(s) of the Series C Preferred Stock, redeem
all (and not less than all) of the then outstanding shares of Series C
Preferred Stock by conveyance to the holders of the Series C Preferred
Stock of 70% of the then issued and outstanding shares of NetSafety
Corporation USA, Inc., a California corporation, on an as issued basis,
which is a wholly-owned subsidiary of the Corporation, together with any
accrued but unpaid dividends payable on the Series C Preferred Stock,
whether or not earned or declared, to and including the redemption date.
In case of any redemption of shares of the Series C Preferred Stock
pursuant to this Section 6, the holder(s) requesting redemption shall give
the Corporation not less than 60 days' prior written notice by mail,
postage prepaid, which shall be deemed effective only upon the receipt
thereof by the Corporation. The date of receipt shall be deemed to be the
"redemption date" unless the Corporation fails to complete payment, for any
reason, within 60 days from such redemption date; otherwise the "redemption
date" shall be deemed to be the actual date of payment. Payment by the
Corporation of such amounts shall terminate all rights of the redeeming
holder(s) with respect to such shares. Subject to the provisions hereof,
the Board of Directors of the Corporation shall have authority to prescribe
the manner in which Series C Preferred Stock shall be redeemed from
time-to-time. The shares of the Series C Preferred Stock so redeemed shall
be permanently retired, shall no longer be deemed outstanding and shall not
under any circumstances be reissued, and the Corporation may from
time-to-time take such appropriate corporate action as may be necessary to
reduce the authorized Series C Preferred Stock accordingly. Nothing
contained herein shall prevent or restrict the purchase by the Corporation,
from time-to-time either at public or private sale, of the whole or any
part of the Series C Preferred Stock at such price or prices as the
Corporation may determine, subject to the provisions of applicable law.
Exhibit 3(ii)
BY-LAWS
Of
GTrade.Network Inc.
ARTICLE I - Identification............................................1
1.1 NAME .................................................1
1.2 REGISTERED OFFICE AND REGISTERED AGENT ...............1
1.3 SEAL..................................................1
1.4 FISCAL YEAR ..........................................1
ARTICLE II - Capital Stock .......................................... 1
2.1 PAYMENT FOR SHARES ...................................1
2.2 CERTIFICATES REPRESENTING SHARES .....................1
2.3 TRANSFER RECORDS .....................................1
2.4 TRANSFER OF STOCK ....................................2
2.5 LOST, STOLEN, OR DESTROYED CERTIFICATES ..............2
2.6 HOLDER ...............................................3
2.7 AGENTS ...............................................3
ARTICLE III - Books and Records ......................................3
3.1 BOOKS AND RECORDS ....................................3
3.2 FINANCIAL STATEMENTS .................................3
ARTICLE IV - By-laws .................................................4
4.1 AMENDMENTS ...........................................4
4.2 BY-LAW PROVISIONS ADDITIONAL
AND SUPPLEMENTAL TO PROVISIONS OF LAW ................4
4.3 BY-LAW PROVISIONS CONTRARY TO
OR INCONSISTENT WITH PROVISIONS OF LAW.............. 4
ARTICLE V - Meeting of Shareholders ................................. 4
5.1 PLACE OF MEETINGS ....................................4
5.2 ANNUAL MEETING .......................................4
5.3 SPECIAL MEETINGS .....................................4
5.4 NOTICE OF MEETINGS--WAIVER ...........................5
5.5 WAIVER OF NOTICE .....................................5
5.6 CLOSING OF TRANSFER BOOKS OR
FIXING OF RECORD DATE............................... 5
5.7 VOTING LIST ......................................... 5
5.8 QUORUM OF SHAREHOLDERS, VOTE .........................6
5.9 VOTING OF SHARES .....................................6
5.10 PROXIES ............................................. 6
5.11 ADJOURNMENTS ........................................ 6
5.12 ACTION WITHOUT A MEETING ............................ 6
5.13 ORDER OF BUSINESS.................................... 7
<PAGE>
ARTICLE VI - The Board of Directors ................................. 7
6.1 NUMBER AND QUALIFICATIONS ............................7
6.2 EXERCISE OF CORPORATE POWER ..........................7
6.3 TERM ................................................ 7
6.4 ELECTIONS ........................................... 7
6.5 VACANCIES ........................................... 7
6.6 PLACE OF MEETINGS ................................... 8
6.7 ANNUAL MEETINGS ..................................... 8
6.8 OTHER MEETINGS ...................................... 8
6.9 QUORUM .............................................. 8
6.10 ACTION WITHOUT A MEETING ............................ 8
6.11 CHAIRMAN ............................................ 8
6.12 REMOVAL............................................. 8
6.13 RESIGNATION ........................................ 9
6.14 LOANS .............................................. 9
6.15 FEES AND COMPENSATION .............................. 9
6.16 PRESUMPTION OF ASSENT .............................. 9
6.17 COMMITTEES ......................................... 9
ARTICLE VII - Officers ............................................. 9
7.1 ELECTION AND QUALIFICATIONS ........................ 9
7.2 TERM OF OFFICE AND COMPENSATION .................... 10
7.3 RESIGNATION ........................................ 10
7.4 REMOVAL AND VACANCIES .............................. 10
7.5 THE PRESIDENT ...................................... 10
7.6 THE VICE PRESIDENT ................................. 11
7.7 THE SECRETARY ...................................... 11
7.8 THE TREASURER ...................................... 11
7.9 GENERAL COUNSEL .................................... 12
7.10 GENERAL MANAGER .................................... 12
7.11 OTHER OFFICERS ..................................... 12
7.12 SALARIES ........................................... 12
7.13 SURETY BONDS ....................................... 12
7.14 TRANSFER OF AUTHORITY .............................. 12
ARTICLE VIII - Indemnification ..................................... 13
8.1 INDEMNIFICATION .................................... 13
8.2 OTHER INDEMNIFICATION .............................. 13
8.3 INSURANCE .......................................... 13
8.4 SETTLEMENT BY CORPORATION .......................... 13
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ARTICLE IX - Special Corporate Acts................................. 14
9.1 CONTRACTS .......................................... 14
9.2 LOANS .............................................. 14
9.3 DEPOSITS ........................................... 14
9.4 CHECKS AND DRAFTS .................................. 14
9.5 BONDS AND DEBENTURES ............................... 14
9.6 SHARES HELD BY THE CORPORATION ..................... 14
CERTIFICATE OF PRESIDENT/SECRETARY ................................... 15
<PAGE>
BY-LAWS
OF
GTrade.Network Inc.
ARTICLE I
Identification
Section 1.1. NAME. The name of the Corporation is GTrade.Network
Inc.
Section 1.2. REGISTERED OFFICE AND REGISTERED AGENT. The address
of the registered office of the Corporation is 32 Loockerman Square, Suite
L-100, Dover, Delaware and the name of the registered agent at this address
is The Prentice-Hall Corporation System, Inc.
Section 1.3. SEAL. The Corporation shall adopt and use a
corporate seal consisting of a circle mounted upon a rubber stamp which
sets forth on its circumference the name of the Corporation and the state
and date of incorporation.
Section 1.4. FISCAL YEAR. The fiscal year of the Corporation
shall end on December 31 of each year, but may be changed by resolution of
the Board of Directors.
ARTICLE II
Capital Stock
Section 2.1. PAYMENT FOR SHARES. The consideration for the
issuance of shares may be paid, in whole or in part, in money, in other
property, tangible or intangible, or in labor or services actually
performed for the Corporation. When payment of the consideration for which
shares are to be issued shall have been received by the Corporation, such
shares shall be deemed to be fully-paid and nonassessable. Neither
promissory notes nor future services shall constitute payment or part
payment for the issuance of shares of the Corporation. In the absence of
fraud in the transaction, the judgment of the Board of Directors as to the
value of the consideration received for shares shall be conclusive. No
certificate shall be issued for any share until the share is fully-paid.
Section 2.2. CERTIFICATES REPRESENTING SHARES. Certificates
representing shares of the Corporation shall be in such form as shall be
determined by the Directors. Such certificates shall be signed by the
President and by the Secretary or by such others officers authorized by law
and by the Directors and sealed with the Seal of the Corporation. Any such
required signature may be made by facsimile provided proper security over
use of such facsimiles is maintained. All certificates for shares shall be
consecutively numbered.
Section 2.3. TRANSFER RECORDS. The Secretary, or if the
Corporation engages an agent, the registrar or transfer agent, shall
maintain records containing the name, address, taxpayer identification
number of each Shareholder plus the certificate number, date of issue and
shares represented by each certificate held by each Shareholder.
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Section 2.4. TRANSFER OF STOCK. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the
Corporation by the holder of record thereof or by his, her or its legal
representative, who shall furnish proper evidence of authority to transfer,
or by his, her or its attorney thereunto authorized by power of attorney
duly executed and filed with the secretary of the Corporation, and on
surrender for cancellation of the certificate for such shares. The person
in whose name shares stand on the books of the Corporation shall be deemed
by the Corporation to be the owner thereof for all purposes. All
certificates surrendered to the Corporation for transfer shall be cancelled
and no new certificate issued in connection therewith unless all of the
following are satisfied:
(a) Endorsement. The surrendered certificate is properly endorsed by
the registered holder or his, her or its duly authorized attorney.
(b) Witnessing. The endorsement or endorsements required as
aforesaid shall be guaranteed or notarized unless the Secretary waives this
requirement in writing.
(c) Adverse Claims. The Corporation has no notice of any adverse
claims or has discharged any duty to inquire into any such claims.
(d) Collection of Taxes. Any applicable law relating to the
collection of taxes imposed on or in connection with shares has been
satisfied.
Section 2.5 LOST, STOLEN, OR DESTROYED CERTIFICATES. The
Corporation shall issue a new stock certificate in the place of any
certificate theretofore issued where the holder of record of the
certificate:
(a) Claim. Makes proof in affidavit form that it has been lost,
destroyed, or wrongfully taken; and
(b) Timely Request. Requests the issuance of a new certificate
before the Corporation has notice that the certificate has been acquired by
a purchaser for value in good faith and without notice of any adverse
claim; and
(c) Bond. Gives a bond in such form, and with such surety or
sureties, with fixed or open penalty, as the Corporation may direct, to
indemnify the Corporation against any claim that may be made on account of
the alleged loss, destruction, or theft of the certificates; and
(d) Other Requirements. Satisfies any other reasonable requirements
imposed by the Corporation not inconsistent with applicable law.
When a certificate has been lost, apparently destroyed, or wrongfully
taken and the holder of record fails to notify the Corporation within a
reasonable time after he, she or it had notice of it, and the Corporation
registers a transfer of the shares represented by this certificate before
receiving such notification, the holder of record is precluded from making
any claim against the Corporation for the transfer or for a new
certificate.
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Section 2.6. HOLDER. The Corporation shall be entitled to treat
the holder of record of any share as the holder in fact thereof, and
accordingly, shall not be bound to recognize any claim to or interest in
such share on the part of any other person whether or not it shall have
express or other notice thereof, except as expressly provided by the laws
of the State of Delaware.
Section 2.7. AGENTS. The Corporation at the election of the Board
of Directors, may engage the services of a stock registrar or transfer
agent to assist the Secretary in issuance of shares and maintenance of
stock records.
ARTICLE III
Books and Records
Section 3.1. BOOKS AND RECORDS. The Corporation shall keep at its
corporate office the following books and records, and any Shareholder of
record, upon written demand stating the purpose thereof, shall have the
right to examine, in person, or by agent or attorney, at any reasonable
time or times, for any property purpose, the same and to make extracts
therefrom:
(a) Copies of its Articles of Incorporation and By-laws as originally
executed and adopted together with all subsequent amendments thereto.
(b) Its minutes of meetings of the Board of Directors and any
committees thereof.
(c) Its minutes of meetings of the Shareholders.
(d) Its records of Shareholders which shall give their names,
addresses and the number and class of the shares held by each.
(e) Its books and records of account.
Section 3.2. FINANCIAL STATEMENTS. Upon the written request of any
Shareholder of the Corporation, the Corporation shall mail to such
Shareholder its most recent annual or quarterly financial statements
showing in reasonable detail its assets and liabilities and the results of
its operations unless the Shareholder has already received the same.
Neither the Corporation nor any Director, officer, employee or agent of the
Corporation shall be liable to the Shareholder or anyone to whom the
Shareholder discloses the financial statement or any information contained
therein for any error or omission therein whether caused without fault, by
negligence or by gross negligence, unless (1) the error or omission is
material, (2) the Director, officer, employee or agent in question knew of
the error or omission and intended for the Shareholder or other person to
rely thereon to his detriment, (3) the Shareholder or other persons did
reasonably rely thereon, and, in addition, and (4) he or she is otherwise
liable under applicable law.
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ARTICLE IV
By-laws
Section 4.1. AMENDMENTS. These By-laws may be altered, amended or
repealed and new By-laws adopted by the Board of Directors as provided in
the Certificate of Incorporation. Any such action shall be subject to
repeal or change by action of the Shareholders, but the alteration,
amendment, repeal, change or new By-law (and the repeal of the old By-law)
shall be valid and effective and no Director, officer, Shareholder,
employee or agent of the Corporation shall incur any liability by reason of
any action taken or omitted in reliance on the same.
Section 4.2. BY-LAW PROVISIONS ADDITIONAL AND SUPPLEMENTAL TO
PROVISIONS OF LAW. All restrictions, limitations, requirements and other
provisions of these By-laws shall be construed, insofar as possible, as
supplemental and additional to all provisions of law applicable to the
subject matter thereof and shall be fully complied with in addition to the
said provisions of law unless such compliance shall be illegal.
Section 4.3. BY-LAW PROVISIONS CONTRARY TO OR INCONSISTENT WITH
PROVISIONS OF LAW. Any article, section, subsection, subdivision,
sentence, clause or phrase of these By-laws which, upon being construed in
the manner provided in Section 4.2 hereof, shall be contrary to or
inconsistent with any applicable provision of law, shall not apply so long
as said provisions of law shall remain in effect, but such result shall not
affect the validity or applicability of any other portions of these
By-laws, it being hereby declared that these By-laws would have been
adopted and each article, section, subsection, subdivision, sentence,
clause or phrase thereof, irrespective of the fact that any one or more
articles, sections, subsections, subdivisions, sentences, clauses or
phrases is or are illegal.
ARTICLE V
Meetings of Shareholders
Section 5.1. PLACE OF MEETINGS. All meetings of the Shareholders,
annual or special, however called, shall be held at the registered office
of the Corporation unless the President or Board of Directors designates
another place. The President or the Board of Directors may designate any
place for any meeting, either within or without the State of Delaware.
Section 5.2. ANNUAL MEETING. The annual meeting of the
Shareholders shall be held at such time as the Board of Directors shall
determine. Failure to hold an annual meeting shall not work a forfeiture
or dissolution of the Corporation.
Section 5.3. SPECIAL MEETINGS. Special meetings of the
Shareholders may be called by the President, the Board of Directors, or the
holders of not less than one-fourth of all the shares entitled to vote at
the meeting.
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Section 5.4. NOTICE OF MEETINGS--WAIVER. Written notice stating
the place, day, and hour of the meeting and, in case of special meeting,
the purpose or purposes for which the meeting is called, shall be delivered
not less than ten (10) nor more than sixty (60) days before the date of the
meeting, either personally or by mail, by or at the direction of the
President, the Secretary, or the officer or persons calling the meeting, to
each registered holder entitled to vote at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States
mail addressed to the registered holder at his address as it appears on the
stock transfer books of the Corporation, with postage on it prepaid.
Section 5.5. WAIVER OF NOTICE. Any Shareholder may waive notice of
any meeting of Shareholders, (however called or noticed, whether or not
called or noticed and whether before, during or after meeting) by signing a
written waiver of notice or a consent to the holding of such meeting, or an
approval of the minutes thereof. Attendance at a meeting, in person or by
proxy, shall constitute waiver of all defects of call or notice regardless
of whether waiver, consent or approval is signed or any objections are
made. All such waivers, consents, or approvals shall be made a part of the
minutes of the meeting.
Section 5.6 FIXING OF RECORD DATE. For the purpose of determining
Shareholders entitled to notice of or to vote at any meeting of
Shareholders or any adjournment thereof, or Shareholders entitled to
receive payment of any dividend, or in order to make a determination of
Shareholders for any other proper purpose, the Directors may fix, in
advance, a date as the record date for any such determination of
Shareholders; such date in any case to be not more than sixty (60) days and
not less than ten (10) days prior to the date on which the particular
action requiring such determination of Shareholders is to be taken. If no
record date is fixed for the determination of Shareholders entitled to
notice of or to vote at a meeting of Shareholders, or Shareholders entitled
to receive payment of a dividend, the day next preceding the date on which
notice of the meeting is mailed or the date on which the resolution of the
Directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of Shareholders. When a
determination of Shareholders entitled to vote at any meeting of
Shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof.
Section 5.7. VOTING LIST. The officer or agent having charge of
the stock transfer books for shares of a Corporation shall make, at least
ten (10) days before each meeting of Shareholders, a complete list of the
Shareholders entitled to vote at such meeting or any adjournment thereof,
arranged in alphabetical order, with the address of and the number of
shares held by each, which list, for a period of ten (10) days prior to the
meeting, shall be kept on file at the office of the Corporation and shall
be subject to the 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 the meeting and shall be subject to the inspection of any
Shareholder during the whole time of the meeting. The original stock
transfer books shall be prima facie evidence as to who are the Shareholders
entitled to examine such list or transfer books or to vote at any meeting
of Shareholders.
Failure to comply with the requirements of this section shall not
affect the validity of any action taken at such meeting.
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Section 5.8. QUORUM OF SHAREHOLDERS, VOTE. A majority of the shares
entitled to vote, represented in person or by proxy, shall constitute a
quorum at a meeting of Shareholders. If a quorum is present, except for
election of Directors which shall be by plurality, the affirmative vote of
the majority of the shares represented at the meeting and entitled to vote
on the subject shall be the act of the Shareholders, unless the vote of a
greater number or voting by classes is required by the laws of the State of
Delaware or the Articles of Incorporation. Shares shall not be counted to
make up a quorum for a meeting if voting of them at the meeting has been
enjoined or for any reason they cannot be lawfully voted at the meeting.
The Shareholders present at a duly called or held meeting at which a quorum
is present may continue to do business until adjournment notwithstanding
the withdrawal of enough Shareholders to leave less than a quorum.
Section 5.9. VOTING OF SHARES. Each outstanding share, regardless
of class, shall be entitled to one vote as to each matter submitted to a
vote at a meeting of Shareholders, except to the extent that the voting
rights of the shares of any class or classes are limited or denied by the
Articles of Incorporation.
The following shares of the Corporation shall not be allowed to vote
or be counted in determining the total number of outstanding shares at any
given time: (a) shares held in treasury; (b) shares held by a subsidiary of
the Corporation, for this purpose a subsidiary shall be any corporation in
which the Corporation holds a majority of the outstanding shares.
Section 5.10. PROXIES. A Shareholder may vote either in person or
by proxy executed in writing by the Shareholder or by his, her or its duly
authorized attorney-in-fact. No proxy shall be valid after three (3) years
from the date of its execution, unless the proxy specifically provides a
longer length of time for which the proxy is to continue in force, which in
no case shall exceed seven (7) years from the date of execution. Any
written consent or proxy, may be revoked by the Shareholder, a transferee
or the Shareholder's personal representative prior to the time that written
consents of the number of shares required to authorize the proposed action
have been filed with the Secretary of the Corporation, but may not do so
thereafter.
Section 5.11. ADJOURNMENTS. Any Shareholder's meeting, whether or
not a quorum is present, may be adjourned from time-to-time by the vote of
a majority of the shares, the holders of which are either present in person
or represented by proxy thereat, but, except as provided in Section 5.12
hereof, in the absence of a quorum no other business may be transacted at
such meeting. When a meeting is adjourned for thirty (30) days or more,
notice of the adjourned meeting shall be given as in the case of an
original special meeting. Save as aforesaid, it shall not be necessary to
give any notice of the time and place of the adjourned meeting or of the
business to be transacted thereat other than by announcement at the meeting
at which such adjournment is taken.
Section 5.12. ACTION WITHOUT A MEETING. Any action required to be
taken at a meeting of the Shareholders of the Corporation, or any action
that may be taken at a meeting of the Shareholders, may be taken without a
meeting if a consent or consents in writing setting forth the action so
taken, shall be signed by the holders of outstanding shares having not less
that the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon
were present and voted and shall be delivered to the Corporation at its
principal place of business. Such consent(s) shall have the same effect as
a vote of Shareholders and may be stated as such in any articles or
document filed with Secretary of State.
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Section 5.13. ORDER OF BUSINESS. The order of business at all
meetings of the Shareholders shall be as follows:
1. Roll call
2. Proof of notice of meeting or waiver of notice
3. Reading of minutes of preceding meeting
4. Reports of officers
5. Reports of committees
6. Election of Directors
7. Unfinished business
8. New Business
ARTICLE VI
The Board of Directors
Section 6.1. NUMBER AND QUALIFICATIONS. The business and affairs of
the Corporation shall be managed by a Board of from one to nine Directors,
as determined from time-to-time by the Board of Directors (by Board
resolution without amendment to these By-laws), which Directors need not be
residents of this state or Shareholders of the Corporation and need have no
other qualifications. The number of Directors may be increased or
decreased to not less than one from time-to-time by amendment of this
section; but no decrease shall have the effect of shortening the term of
any incumbent Director.
Section 6.2. EXERCISE OF CORPORATE POWER. The business and affairs
of the Corporation shall be managed by the Board of Directors.
Section 6.3 TERM. The term of each Director shall begin
immediately on election and shall continue until the date set under these
By-laws for the next annual meeting of the Shareholders. Each Director
shall hold office for the term for which he is elected and until his
successor shall have been elected and qualified.
Section 6.4 ELECTIONS. At each annual meeting the Shareholders
shall elect Directors, provided that if for any reason said annual meeting
or an adjournment thereof is not held or the Directors are not elected
thereat, then the Directors may be elected at any special meeting of the
Shareholders called and held for that purpose.
Section 6.5 VACANCIES. A vacancy or vacancies in the Board of
Directors shall exist in case of the death, resignation or removal of any
Director, or if the authorized number of Directors is increased, or if the
Shareholders fail, at any annual or special meeting at which any Director
is elected, to elect the full authorized number of Directors to be voted
for at the meeting. Also, the Board of Directors may declare vacant the
office of a Director if he or she is found to be of unsound mind by an
order of a court of competent jurisdiction or convicted of a felony or
misdemeanor involving moral turpitude or if, within sixty (60) days after
notice of his election, he does not accept the office either in writing or
by attending a meeting of the Board of Directors. Any vacancy occurring
may be filled by the affirmative vote of a majority of the remaining
Directors (or a sole remaining Director) although less than a quorum. A
Director elected to fill a vacancy shall
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be elected for the unexpired term of his or her predecessor in office, or
if there was no predecessor, until the date set under these By-laws for the
next annual meeting and until his or her successor is elected. Any vacancy
created by reason of the removal of one or more Directors by the
Shareholders may be filled by election of the Shareholders at the meeting
at which the Director or Directors are removed.
Section 6.6. PLACE OF MEETINGS. Meetings of the Board of Directors,
annual, regular, or special, may be held either within or without this
state.
Section 6.7. ANNUAL MEETINGS. The Board of Directors shall meet
each year immediately after the annual meeting of the Shareholders, at the
registered office of the Corporation, for the purpose of organization,
election of officers, and consideration of any other business that may
properly be brought before the meeting. No notice of any kind to either
old or new members of the Board of Directors may provide, by resolution,
the time and place for the holding of additional regular meetings without
other notice than such resolution.
Section 6.8. OTHER MEETINGS. Other meetings of the Board of
Directors may be held upon notice by letter, telegram, cable, delivered for
transmission or mailing not later than during the third day immediately
preceding the day for the meeting, upon the call of the President or
Secretary of the Corporation at any place within or without this state.
Notice of any meeting of the Board of Directors may be waived in writing
signed by the person or persons entitled to the notice, whether before or
after the time of the meeting. Neither the business to be transacted at,
nor the purpose of, any meeting of the Board of Directors need be specified
in the notice or waiver of notice of the meeting. The attendance of a
Director at a meeting shall constitute a waiver of notice of such meeting.
Section 6.9. QUORUM. A majority of the number of Directors fixed by
the By-laws shall constitute a quorum for the transaction of business. The
act of the majority of the Directors present at a meeting at which a quorum
is present shall be the act of the Board of Directors unless the act of a
greater number is required by statute, the Articles of Incorporation, or
the By-laws.
Section 6.10. ACTION WITHOUT A MEETING. Any action that may be
taken at a meeting of the Directors or of a committee, may be taken without
a meeting if a consent in writing, setting forth the action so to be taken,
shall be signed by all of the Directors or all of the members of the
committee, as the case may be.
Section 6.11. CHAIRMAN. The Board of Directors may elect from its
own number a Chairman of the Board, who shall preside at all meetings of
the Board of Directors, and shall perform such other duties as may be
prescribed from time-to-time by the Board of Directors. In the absence of
such an election, the President shall serve as Chairman of the Board.
Section 6.12. REMOVAL. By proper action without a meeting or at a
meeting expressly called for that purpose one or more Directors may be
removed: (a) with or without cause by a vote of a majority of the shares
entitled to vote at an election of Directors; or (b) only for cause by a
vote of a majority of the remaining Directors.
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Section 6.13. RESIGNATION. A Director may resign at any time by
delivering written notification thereof to the President or Secretary of
the Corporation. Resignation shall become effective upon its acceptance by
the Board of Directors; provided, however, that if the Board of Directors
has not acted thereon within ten (10) days from the date of its delivery,
the resignation shall upon the tenth day be deemed accepted.
Section 6.14. LOANS. The Board of Directors shall have the following
power with respect to the lending of funds:
(a) Loans of Funds, Generally. To lend money in furtherance of any
of the purposes of the Corporation; to invest and reinvest the funds of the
Corporation from time-to-time; and to take and hold any property as
security for the payment of funds so loaned or invested.
(b) Loans to Employees and Directors. To lend money and use its
credit to assist any employees of the Corporation or if a subsidiary,
including any such employee who is a Director of the Corporation, if the
Board of Directors decides that such loan or assistance may benefit the
Corporation; but to make no loans or use of its credit to assist its
Directors without authorization in the particular case by the Shareholders.
Section 6.15. FEES AND COMPENSATION. Directors and members of the
committees may receive such compensation, if any, for their service, and
such reimbursement for expenses, as may be fixed or determined by
resolution of the Board. Such compensation so fixed shall be reported to
the Shareholders.
Section 6.16. PRESUMPTION OF ASSENT. A Director of the Corporation
who is present at a meeting of the Board of Directors at which action on
any corporate matter is taken shall be presumed to have assented to the
action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
Secretary before the adjournment thereof or shall forward such dissent by
certified or registered mail to the Secretary of the Corporation
immediately after the adjournment of the meeting. Such right of dissent
shall not apply to a Director who voted in favor of such action.
Section 6.17. COMMITTEES. The Board of Directors by resolution
adopted by the majority of the number of Directors fixed by the By-laws may
designate a committee or committees consisting of not less than two
Directors which committee or committees, to the extent provided in such
resolution, shall have and may exercise all the authority therein provided;
but the designation of such committee or committees and the delegation
thereto of authority shall not operate to relieve the Board of Directors,
or any member thereof, of any responsibility imposed upon him, her or it by
law.
ARTICLE VII
Officers
Section 7.1. ELECTION AND QUALIFICATIONS. The officers of this
Corporation shall consist of a President, one or more Vice Presidents, a
Secretary and a Treasurer, each of whom shall be elected by the Board of
Directors at the meeting of the Board of Directors next following the
annual meeting of the Shareholders (or at any meeting if an office is
vacant) and
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such other officers, and assist officers and agents, as the Board of
Directors shall deem necessary, who shall be elected and shall hold their
offices for such terms as the Board of Directors may prescribe. Any two or
more offices may be held by the same person except those of President and
Secretary (unless there is only one Director and one other person serving
as an "officer" of the Corporation. Any Vice President, Assistant
Treasurer or Assistant Secretary, respectively, may exercise any of the
powers of the President, the Treasurer, or the Secretary, respectively, as
directed by the Board of Directors and shall perform such other duties as
are imposed upon him by the By-laws or the Board of Directors. Election or
appointment of an officer or agent shall not of itself create contract
rights.
Section 7.2. TERM OF OFFICE AND COMPENSATION. The term of office
and salary of each of said officers and the manner and time of the payment
of such salaries shall be fixed and determined by the Board of Directors
and may be altered by said Board from time-to-time at its pleasure.
Section 7.3 RESIGNATION. Any officer may resign at any time by
delivering a written resignation either to the President or to the
Secretary. Unless otherwise specified therein, such resignation shall take
effect upon delivery.
Section 7.4. REMOVAL AND VACANCIES. Any officer of the Corporation
may be removed by the Board of Directors at any meeting whenever in its
judgment the best interests of the Corporation will be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of
the person so removed. If any vacancy occurs in any office of the
Corporation, the Board of Directors may elect a successor to fill such
vacancy for the remainder of the unexpired term and until his successor is
duly chosen and qualified.
Section 7.5. THE PRESIDENT. Subject to the control of the Board of
Directors, the President shall:
(a) be the chief executive officer and shall have active executive
management of the operations of the Corporation;
(b) have power to call and preside at all meetings of Shareholders,
discharge all the duties that devolve upon a presiding officer, and perform
such other duties as the By-laws provide or the Board of Directors may
prescribe;
(c) have full authority to execute powers of attorney appointing other
corporations, partnerships, or individuals the agent of the Corporation;
(d) affix the signatures of the Corporation to all deeds, conveyances,
mortgages, leases, obligations, bonds, certificates and other papers and
instruments in writing which have been authorized by the Board of Directors
or which, in the judgment of the President, should be executed on behalf of
the Corporation and do not require such authorization;
(e) sign certificates for shares of stock of the Corporation; and
(f) have general charge of the property of the Corporation and to
supervise and control all officers, agents and employees of the
Corporation.
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Section 7.6 THE VICE PRESIDENT. The Vice President or one of the
Vice Presidents shall perform all duties incumbent upon the President
during the disability of the President, and shall perform such other duties
as the By-laws may provide or the Board of Directors may prescribe.
Section 7.7 THE SECRETARY. The Secretary shall:
(a) attend all meetings of the Shareholders and of the Board of
Directors;
(b) keep, or cause to be kept in a book provided for the purpose, a
true and complete record of the proceedings of these meetings, including
notice thereof given, the names of those present, and the number of shares
present and Shareholders' meetings and the proceedings thereof.
(c) be custodian of the records and the seal of the Corporation and
see that the seal is affixed to all documents, the execution of which on
behalf of the Corporation under its seal is duly authorized.
(d) give all notices and shall perform such other duties as the
By-laws may provide or the Board of Directors may prescribe;
(e) keep a supply of certificates for shares of the Corporation, to
fill in all certificates issued, and to make a proper record of each such
issuance; provided, that so long as the Corporation shall have one or more
duly appointed and acting transfer agents of the shares, or any class or
series of shares, of the Corporation, such duties with respect to such
shares shall be performed by such transfer agent or transfer agents;
(f) transfer upon the share books of the Corporation any and all
shares of the Corporation; provided, that so long as the Corporation shall
have one or more duly appointed and acting transfer agents of the shares,
or any class or series of shares, of the Corporation, such duties with
respect to such shares shall be performed by such transfer agent or
transfer agents, and the method of transfer of each certificate shall be
subject to the reasonable regulations of the transfer agent to which the
certificate is presented for transfer, and also, if the Corporation then
has one or more duly appointed and acting registrars, to the reasonable
regulations of the registrar to which the new certificate is presented for
registration; and provided, further, that no certificate for shares of
stock shall be issued or delivered or, if issued or delivered, shall have
any validity whatsoever until and unless it has been signed or
authenticated.
Section 7.8. THE TREASURER. The Treasurer shall:
(a) keep correct and complete records of account, showing accurately
at all times the financial condition of the Corporation;
(b) be the legal custodian of all moneys, notes, securities, and other
valuables that may from time-to-time come into the possession of the
Corporation;
(c) immediately deposit all funds of the Corporation in some reliable
bank or other depository to be designated by the Board of Directors, and
shall keep this bank account in the name of the Corporation;
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(d) furnish at meetings of the Board of Directors, or whenever
requested, a statement of the financial condition of the Corporation, and
(e) perform such other duties as the By-laws may provide or the Board
of Directors may prescribe.
Section 7.9. GENERAL COUNSEL. The Board of Directors may appoint a
General Counsel who shall advise and represent the Corporation generally in
all legal matters and proceedings, and shall act as counsel to the Board of
Directors and the Executive Committee. The General Counsel may sign and
execute pleadings, powers of attorney pertaining to legal matters, and any
other contracts and documents in the regular course of his duties.
Section 7.10 GENERAL MANAGER. The Board of Directors may employ and
appoint a General Manager who may or may not be one of the officers or
Directors of the Corporation. The General Manager shall be the Chief
Operating Officer of the Corporation and, subject to the directions of the
Board of Directors, shall
(a) have general charge of the business operations of the corporation
and general supervision over its employees and agents;
(b) employ all employees of the Corporation, or delegate such
employment to subordinate officers, or such division chiefs, and shall have
authority to discharge any person so employed;
(c) make a report to the President and Directors quarterly, or more
often if required to do so, setting forth the result of the operations
under his charge, together with suggestions looking to the improvement and
betterment of the condition of the Corporation; and
(d) perform such other duties as the Board of Directors shall require.
Section 7.11. OTHER OFFICERS. Other officers shall perform such
duties and have such powers as may be assigned to them by the Board of
Directors.
Section 7.12. SALARIES. The salaries or other compensation of the
officers of the Corporation shall be fixed from time-to-time by the Board
of Directors, except that the Board of Directors may delegate to any person
or group of persons the power to fix the salaries or other compensation of
any subordinate officers or agents. No officer shall be prevented from
receiving any such salary or compensation by reason of the fact that he is
also a Director of the Corporation.
Section 7.13. SURETY BONDS. In case the Board of Directors shall so
require, any officer or agent of the Corporation shall execute to the
Corporation a bond in such sums and with such surety or sureties as the
Board of Directors may direct, conditioned upon the faithful performance of
his duties to the Corporation, including responsibility for negligence and
for the accounting for all property, monies or securities of the
Corporation which may come into his hands.
Section 7.14 TRANSFER OF AUTHORITY. In case of the absence of any
officer of the Corporation or for any reason that the Board of Directors
may deem sufficient, the Board of Directors may transfer the powers or
duties of that officer to any other officer or to any Director or employee
of the Corporation, provided a majority of the full Board of Directors
concurs.
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ARTICLE VIII
Indemnification
Section 8.1. INDEMNIFICATION. No officer or Director shall be
personally liable for any obligations of the Corporation or for any duties
or obligations arising out of any acts or conduct of said officer or
Director performed for or on behalf of the Corporation. The Corporation
shall and does hereby indemnify and hold harmless each person and his or
her heirs and administrators who shall serve at any time hereafter as a
Director or officer of the Corporation from and against any and all claims,
judgments and liabilities to which such persons shall become subject by
reason of his or her having heretofore or hereafter been a Director or
office of the Corporation, or by reason of any action alleged to have been
heretofore or hereafter taken or omitted to have been taken by him or her
as such Director or officer, and shall reimburse each such person for all
legal and other expenses reasonably incurred by him or her in connection
with any such claim or liability, including power to defend such person
from all suits or claims as provided for under the provisions of the
Delaware General Corporation Law; provided, however, that no such person
shall be indemnified against, or be reimbursed for, any expense incurred in
connection with any claim or liability arising out of his or her own
negligence or willful misconduct. The rights accruing to any person under
the foregoing provisions of this section shall not exclude any other right
to which he or she may lawfully be entitled, nor shall anything herein
contained restrict the right of the Corporation to indemnify or reimburse
such person in any proper case, even though not specifically herein
provided for. The Corporation, its directors, officers, employees and
agents shall be fully protected in taking any action or making any payment,
or in refusing so to do in reliance upon the advice of counsel.
Section 8.2. OTHER INDEMNIFICATION. The indemnification herein
provided shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled under any by-law, agreement, vote
of stockholders or disinterested directors, or otherwise, both as to action
in his or her official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be
a Director, officer or employee, and shall inure to the benefit of the
heirs, executors and administrators of such person.
Section 8.3. INSURANCE. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a Director, officer or
employee 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 or her and incurred by him or her in any
such capacity, or arising out of his or her status as such, whether or not
the Corporation would have the power to indemnify him or her against
liability under the provisions of this section.
Section 8.4. SETTLEMENT BY CORPORATION. The right of any person
to be indemnified shall be subject always to the right of the Corporation
by its Board of Directors, in lieu of such indemnity, to settle any such
claim, action, suit or proceeding at the expense of the Corporation by the
payment of the amount of such settlement and the costs and expenses
incurred in connection therewith.
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ARTICLE IX
Special Corporate Acts
Section 9.1. CONTRACTS. No officer, agent, or employee of the
Corporation shall have power to bind the Corporation by contract or
otherwise unless authorized to do so by these By-laws or by the Board of
Directors. The Board of Directors may authorize any officer or officers,
agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such
authority may be general or confined to specific instances.
Section 9.2. LOANS. No loan nor advance shall be contracted on
behalf of the Corporation, no negotiable paper nor other evidence of its
obligation under any loan or advance shall be issued in its name, and no
property of the Corporation shall be mortgaged, pledged, hypothecated or
transferred as security for the payment of any loan, advance, indebtedness
or liability of the Corporation unless and except as authorized by the
Board of Directors. Any such authorization may be general or confined to
specific instances.
Section 9.3. DEPOSITS. All funds of the Corporation not otherwise
employed shall be deposited from time-to-time to the credit of the
Corporation in such banks, trust companies or other depositories as the
Board of Directors may select, or as may be selected by any officer or
agent authorized to do so by the Board of Directors.
Section 9.4. CHECKS AND DRAFTS. All notes, drafts, acceptances,
checks, endorsements and evidences of indebtedness of the Corporation shall
be signed by such officer or officers or such agent or agents of the
Corporation and in such manner as the Board of Directors from time-to-time
may determine. Endorsements for deposit to the credit of the Corporation
in any of its duly authorized depositories shall be made in such manner as
the Board of Directors from time-to-time may determine.
Section 9.5. BONDS AND DEBENTURES. Every bond or debenture issued
by the Corporation shall be evidenced by an appropriate instrument which
shall be signed by the President or a Vice-president and by the Treasurer
or by the Secretary, and sealed with the seal of the Corporation. The seal
may be facsimile, engraved or printed. Where such bond or debenture is
authenticated with the manual signature of an authorized officer of the
Corporation or other trustee designated by the indenture of trust or other
agreement under which such security is issued, the signature of any of the
Corporation's officers named thereon may be facsimile. In case any officer
who signed, or whose facsimile signature has been used on any such bond or
debenture, shall cease to be an officer of the Corporation for any reason
before the same has been delivered by the Corporation, such bond or
debenture may nevertheless be adopted by the Corporation and issued and
delivered as though the person who signed it or whose facsimile signature
has been used thereon had not ceased to be such officer.
Section 9.6. SHARES HELD BY THE CORPORATION. Shares in other
Corporations standing in the name of this Corporation may be voted or
represented and all rights incident thereto may be exercised on behalf of
this Corporation by any officer of this Corporation authorized so to do by
resolution of the Board of Directors.
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CERTIFICATE OF PRESIDENT/SECRETARY
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned does hereby certify that the undersigned is the
President/Secretary of GTrade.Network Inc., a Corporation duly organized
and existing under and by virtue of the laws of the State of Delaware; that
the above and foregoing By-laws of said Corporation were duly adopted as
such by the Sole Director of the Corporation and ratified by consent of the
majority shareholder of the Corporation on March 11, 1999; and that the
above and foregoing By-laws are now in full force and effect.
DATED this 11th day of May, 1999.
/s/ Charlene Davis
Charlene Davis,
President/Secretary
Exhibit 10.01
LICENSE AGREEMENT
THIS LICENSE AGREEMENT is made this 5th day of April, 1999, by and
between Automation Excellence Caribe Ltd., a Nevis corporation (the
"Owner") and CrossCountry Holdings Ltd., a Delaware corporation (the
"Master Licensor").
W I T N E S S E T H :
WHEREAS, Owner has created AutoEx Exchange Server, a computer
transaction software system (the "System"), that allows two parties to
transact business over the internet with state-of-the-art security (strong
encryption), and which allows for the guaranteed delivery of product
against payment of funds in any available listed currency (the "GlobalTrade
Network"); and
WHEREAS, the System is unique and not likely to be replicated
without the technology and know-how developed by Owner; and
WHEREAS, the System appears to offer great advantages over
presently available computer technology for similar purposes; and
WHEREAS, Owner possesses and controls the technical information,
expertise and know-how for use in connection with the fabrication and
deployment of said System; and
WHEREAS, Master Licensor desires to obtain a license to fabricate,
manufacture, install and possibly sub-license such System and market the
same by sale, license and/or lease of special sites on the internet
("Special Sites").
NOW, THEREFORE, in consideration of the mutual promises and
agreements contained herein, it is hereby agreed as follows:
1. Definitions. The following definitions are applicable in
this Agreement, unless a particular context clearly indicates to the
contrary:
(a) The word "Invention" shall mean and include all source
code(s), revision(s) and versions of same, operating systems, computer
software platforms and computer programs, concepts, designs, formulas and
proprietary information relating to the System, and all techniques and
processes related thereto, including any tools for the manufacture and/or
installation thereof which have been or may be developed in connection with
said Invention by Owner.
(b) The word "Know-How" shall mean and include technical
data, designs, plans, specifications, methods, processes, systems and any
other information and documentation, whether copyrightable or patentable,
or not, relating to the System owned or controlled by Owner which will,
when properly utilized by one skilled in the art, enable Master Licensor to
fabricate, install, market and otherwise exploit the System utilizing the
processes and the concepts encompassed within the definition of "Invention"
as defined above.
<PAGE>
2. License. Subject to the provisions of Paragraph 5 below,
Owner hereby grants to Master Licensor the exclusive, worldwide right and
license to enjoy and exploit the Invention and the related Know-How, by
manufacture, installation, distribution, license, sale or lease, and to
utilize the trademarks, tradenames and promotional concepts devised by
Owner for the commercialization of the Invention. Such License includes
the right to grant sublicenses upon terms consistent with and subordinate
to this Agreement, on such terms and conditions as the Owner may approve in
writing in the sole discretion of the Owner, and provided, however, that
Master Licensor shall continue to pay and guarantee to Owner the same
royalties and license fees for each Invention licensed, sold or leased by
said sublicensees or from the sale thereof, as if the same were
manufactured, installed, licensed, sold and/or leased by Master Licensor
pursuant to the terms of this Agreement. Master Licensor shall be
responsible for the proper reporting and payment of royalties by its
sublicensees, and all such sublicensees shall be responsible directly to
Master Licensor. The License herein granted includes the Invention and
related Know-How, engineering, improvements, copyrights, patents and
copyright and patent applications, if any, and divisional orders relating
to the Invention or any process relating to the production, manufacture,
fabrication or installation thereof, which Owner now owns or controls, or
which Owner may hereafter own or control during the term of this Agreement.
Notwithstanding any interpretation hereof to the contrary, however, the
term "engineering improvements" shall not apply to any patentably distinct
idea or improvement. Any copyrightable or patentable distinct idea or
improvement shall be subject, however, to the provisions of Paragraph 10
below.
Notwithstanding foregoing provisions of this Paragraph 2 to the
contrary, however, Owner is excepting from the exclusive, worldwide rights
herein granted to Master Licensor the rights earlier granted on January 5,
1999 to GlobalTrade Union of Security Dealers PLC for financial
transactions, i.e. brokerage, banking and institutional investor
transactions, which were granted for an initial two-year term expiring on
January 5, 2001, and which is are renewable by GlobalTrade Union of
Security Dealers PLC for an additional twenty years thereafter in five-year
increments of extension.
3. Representations of Owner. The Owner represents that, to the
best of its knowledge, it is the exclusive owner of all rights to the
Invention and the processes for the production, installation and
maintenance thereof, and will own any copyright or patent applications to
be filed thereon, if any, and it has the right to grant the exclusive
license hereby granted; that it has executed no agreement in conflict
herewith, and that except for the license granted on January 5, 1999 to
GlobalTrade Union of Security Dealers PLC, it has not granted to any other
person, firm or corporation, any right, license, shop-right or privilege
that will conflict with this Agreement.
4. Term. This Agreement shall continue for a period of twenty
(20) years after the date hereof, subject to the following conditions:
(a) If the license fees or the royalty payments provided for
herein are not made when due or within thirty (30) days thereafter, and if
any such payments remain in arrears for thirty (30) days after notice from
Owner, or if the Master Licensor defaults in performing any of the other
terms of this Agreement or fails to manufacture and market the Invention
with diligence, and continues in default for a period of sixty (60) days
after written notice thereof from Owner, or if the Master Licensor is
adjudicated bankrupt or insolvent, or enters into a composition or
arrangement with its creditors, or a receiver is appointed for it, or there
is a change
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in the effective control of Master Licensor or its business, then Owner
shall have the right to terminate this Agreement upon giving written notice
to Master Licensor at least fifteen (15) days before the time when such
termination is to take effect, and thereupon the Agreement shall become
void without prejudice to any remedy of the Owner for the recovery of any
money then due to it under this Agreement or in respect to any antecedent
breach of this Agreement without prejudice to any other right of the Owner.
(b) This Agreement may be terminated at any time upon the
mutual consent of Owner and Master Licensor.
(c) Upon termination under subdivisions (a) or (b) of this
Paragraph, Master Licensor shall duly account to Owner and transfer to it
all rights which it may have to the Invention, the Know-How, improvements,
copyrights, patents, inventions, processes, apparatus, data, designs, plans
and specifications granted herein and possession of all of the above which
may have been granted pursuant to the terms of this Agreement including but
not limited to extant sublicenses and royalties and license fees
thereunder.
5. Licensing Fee and Royalties. By executing this Agreement,
the Owner acknowledges receipt from the Master Licensor of 2,000,000 shares
of the Common Stock of Master Licensor.
Master Licensor shall pay to Owner the following consideration for each
year of this Agreement:
(a) A one-time payment of Five Thousand Dollars
(US$5,000.00) upon the creation of each Special Site licensed by Master
Licensor (or any subsequent licensee of Master Licensor) to compensate
Owner for the services of Owner's personnel to customize the Special Site
to the requirements of Master Licensor's licensee plus One Hundred
(US$100.00) per programming hour for any unusual special requirements
requested by Master Licensor or its customer; and
(b) Five Hundred Dollars (US$500.00) per month for each
Special Site licensed by Master Licensor (or any subsequent licensee of
Master Licensor) to compensate Owner for the services of Owner's personnel
to maintain the Special Site to the requirements of Master Licensor's
licensee. (The Special Site shall include the registration and payment of
an Internet Domain Name and a 24/7 Web Hosting Service. It is accepted
that there may also be nominal additional fees payable to Owner to cover
the cost of additional servers or co-located stand-alone servers if, in the
case of an extremely popular site, it is determined in the opinion of the
Master Licensor that such a requirement is desireable); and
(c) A transaction fee of 15% of the transaction fee for each
transaction as established from time-to-time by Master Licensor (or any
subsequent licensee of Master Licensor) on the System, as a royalty for the
use of the System.
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(d) Should Owner not be paid the compensation referred to in
subparagraphs 5(a), 5(b) and 5(c) above, when the same are due and payable,
or if Master Licensor shall fail to manufacture, install and market the
Invention with diligence, Owner shall have the right at any time
thereafter, after thirty (30) days' written notice to declare this
exclusive license to be terminated, whereupon Owner shall have the right to
grant licenses to any other persons or entities on such terms as Owner may
determine.
6. Reports and Payments. Master Licensor shall, at all times,
keep an accurate account of all revenues received within the scope of this
Agreement, shall furnish quarterly written sales reports to Owner within
forty-five (45) days after the each of each calendar quarter, and shall pay
to Owner, with each such report, the amount of earned royalties due for the
period covered by the report. Additionally, Master Licensor shall deliver
to Owner a complete set of audited financial statements each year with
respect to the operations of the Master Licensor within 90 days following
the end of the Master Licensor's fiscal year, which shall be prepared in
accordance with Generally Accepted Accounting Principles ("GAAP") as
applied in the United States of America and in accordance with the
provisions of Regulation S-X under the Securities Exchange Act of 1934, as
amended, and as interpreted by the Securities and Exchange Commission
("SEC"), and reviewed by an independent public accountant acceptable to
Owner.
7. Affirmative Duties of Owner. During the term of this
Agreement, Owner shall have the affirmative duty to perform the following
acts:
(a) Owner shall provide consultation services to Master
Licensor for the establishment of each Special Site at which the System is
to be installed, which shall be installed and will operate at a level
similar to the demonstration system tested and found suitable by the Master
Licensor prior to the execution of this Agreement. Owner also shall be
compensated by Master Licensor for all travel expenses, food and lodging
costs and other incidental expenses that may be incurred by Owner should
travel be required to locations other than the physical location of of the
programmer(s) then being utilized by Owner, for the purpose of providing
consultation services.
(b) Owner shall provide the technical assistance necessary to
maintain each Special Site installed by Owner for Master Licensor or any of
its licensees on a twenty-four (24) hour basis, as the internet is a
worldwide system operating constantly.
(c) Owner shall also disclose to Master Licensor all
information and Know-How which it presently has or may obtain concerning
the System, and the methods of installation for Special Sites.
8. Affirmative Duties of Master Licensor. Master Licensor
shall have the affirmative duty to perform the following acts:
(a) Master Licensor shall properly use and apply the Invention,
the Know-How, designs and installation techniques of Owner, and any other
knowledge or Know-How which may be communicated to Master Licensor by Owner
in connection
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with the Invention and any processes for the production, fabrication or
installation thereof.
(b) During the life of and after the termination of this
Agreement for any reason whatsoever, Master Licensor will not reveal or
disclose any confidential information or data relating to the Invention,
methods of production of the same, or the Know-How or the processes
relating to the production, fabrication or installation of same, to any
third party without the prior written consent of Owner, provided that
Master Licensor may employ agents, contractors or sublicensees for the
design, fabrication, manufacture or installation of Special Sites based
upon the designs, Know-How, processes and work designs of Owner, but
provided that such agents, contractors or sublicensees shall first each
sign a written agreement binding each of them to the same obligations of
nondisclosure as the Master Licensor has under this Agreement. Such
written agreements shall also bind each agent, contractor, and sublicensee
to all of the obligations of this Agreement provided, however, any such
arrangements or agreements shall not in any way affect the duty of the
Master Licensor to pay royalties or otherwise lessen its duties under this
Agreement. Master Licensor assumes the obligation that those of its
employees who are likely, by reason of their employment, to obtain
confidential information relating to the Invention or any process relating
thereto will sign secrecy declarations in which the employees will
undertake not to communicate after termination of their employment any such
information regarding the Invention or any process relating thereto without
the prior written consent of Owner. Such declarations shall also include a
nonemployment-by-a-competitor declaration in a form to be mutually
agreeable to Owner and Master Licensor.
(c) Master Licensor hereby grants to Owner access to and the
right to review Master Licensor's books and records for the purpose of
verifying the number of Special Sites utilizing the System, and the
revenues from the exploitation of the System, and to inspect, at the
Owner's cost, the Master Licensor's facilities at all reasonable business
hours, for the purpose of observing what is being done by the Master
Licensor in connection with the design, production and improvements upon
the Invention or any processes relating thereto for the purpose of keeping
Owner fully informed with respect to any developments in connection
therewith.
(d) Master Licensor shall disclose fully to Owner all results
from testing the installations of the System at the Special Sites using the
Invention and all processes, inventions and improvements relating thereto,
whether or not copyrightable or patentable, which are devised by Master
Licensor or its employees, agents or contractors relating to the Invention
or any process relating thereto.
(e) Master Licensor shall not market or sell any Special Site
installations which utilize the Invention or any processes relating thereto
unless and until such Special Site installations are tested by the Owner,
the Master Licensor or an independent testing laboratory or agency, and
meet the quality standards necessary to compete with products used for
similar purposes in the industry. Master Licensor shall, at its sole cost
and expense, defend Owner and agrees to indemnify and hold harmless the
Owner, its successors and assigns as to any and all claims, demands,
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actions, causes of action, or suits of law or equity of whatsoever kind and
nature by any party or entity, including but not limited to consumers,
dealers, distributors or third parties, arising out of the fitness or
quality or alleged lack thereof of any Special Site installation of the
System by Master Licensor or under its direction.
(f) Master Licensor hereby acknowledges that the Invention and
the Know-How here obtained from Owner under this Agreement are trade
secrets held by Owner, and that the same has not been and likely will not
be subject to applications for copyright or patent. It is a material
portion of the consideration for this Agreement that the Master Licensor
does by these presents acknowledge and agree to hold in secret the
Invention and the Know-How related thereto, and should such Invention or
Know-How become public information as the result of Master Licensor's
failure to hold such information as a trade secret, Master Licensor will be
directly liable to Owner for all damages incurred by Owner as the result of
such breach.
(g) When information is brought to its attention indicating
that others without license may be unlawfully infringing on the rights
granted herein, Master Licensor shall immediately notify Owner of such
fact, and shall immediately commence action, at its own expense, to defend
any copyright or patent rights, trademark rights or trade name rights which
may relate thereto provided, however, nothing herein shall be construed as
to require Master Licensor to commence any such action where it has
received an opinion from qualified counsel to the effect that it has less
than a fifty-fifty chance of succeeding on the merits in connection with
such litigation. Notwithstanding anything contained elsewhere herein to
the contrary, however, if as a result of litigation commenced pursuant to
this subparagraph the trade secret underlying the Invention is held to be
void, voidable or unenforceable such that other firms can and then are
fabricating and marketing the Invention in direct competition with Master
Licensor without the burden of paying royalties to either Master Licensor
or Owner, upon the conclusion of such litigation, Master Licensor shall be
released from any further obligation to pay Owner any royalty, license fee
or other compensation under the terms of Paragraph 5 above.
(h) Master Licensor shall not accept any payment from any
person, firm or corporation for the purpose of inducing Master Licensor to
not exploit and market the Invention and Know-How, nor engage in any course
of conduct which would constitute a violation of the anti-trust laws of the
United States or of the jurisdiction(s) subject of this Agreement. Failure
of Master Licensor to abide this provision shall be grounds for termination
of this Agreement by Owner upon sixty days written notice to Master
Licensor, whereupon Owner shall have the right to grant licenses to any
other persons, firms or corporations on such terms as Owner may determine.
9. Trademarks and Trade Names. Owner may suggest any names,
labels, logotypes and other marks of any type to be used in connection with
the Invention and/or processes relating thereto, and will notify Master
Licensor of the same. Master Licensor hereby agrees to consider the use
of such names, labels, logotypes, symbols or other marks on products and
upon advertising materials or brochures of any type which promote,
advertise or describe any product
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utilizing the Invention or any process relating thereto which is
manufactured, sublicensed, contracted or otherwise produced or sole by
Master Licensor. It is agreed, however, that such name, labels,
logotypes, symbols or other marks will be affixed to products and related
advertising materials utilizing the Invention or any processes relating
thereto only if such products have been tested and meet the quality
standards for similar products employed in the industry.
10. Improvements. After the termination of this Agreement,
Master Licensor shall grant to Owner a nonexclusive, worldwide,
royalty-free license to use any and all copyrights, patents, technical
information and Know-How relating to alterations or improvements in the
Invention or any processes relating thereto which copyrights, patents,
information and Know-How Master Licensor obtained through activities
performed by Master Licensor or its employees, agents, contractors or
sublicensees during the term of this Agreement.
11. Miscellaneous Provisions. The following provisions are
also integral parts of this Agreement:
(a) This Agreement shall be binding upon and shall inure to
the benefit of the successors, assigns, personal representatives, heirs and
legatees of the respective parties hereto, and to any entities resulting
from their reorganizations, consolidations or mergers.
(b) The headings used in this Agreement are inserted for
reference purposes only and shall not be deemed to limit or affect in any
way the meaning or interpretation of any of the terms or provisions of this
Agreement.
(c) This Agreement constitutes the entire understanding and
agreement between the parties and supersedes all prior agreements,
representations or understandings between the parties relating to the
subject matter hereof. All subsequent agreements relating to the subject
matter hereof are hereby merged into this instrument.
(d) This Agreement may be signed upon any number of
counterparts with the same effect as if the signature to any counterpart
were upon the same instrument.
(e) The provisions of this Agreement are severable, and,
should any provisions hereof be void, voidable, unenforceable or invalid,
such void, voidable, unenforceable or invalid provision shall not affect
any other portion or provisions of this Agreement.
(f) Any waiver by either party hereto of any breach of any
kind or character whatsoever by the other party, whether such waiver be
direct or implied, shall not be construed as a continuing waiver of or
consent to any subsequent breach of this Agreement on the part of the other
party.
(g) The several rights and remedies herein expressly
reserved to each of the parties shall be construed as cumulative; and none
of them shall be exclusive of (or in lieu of limitation of) any other
right, remedy or priority allowed by law.
7
<PAGE>
(h) This Agreement may not be modified except by an
instrument in writing signed by the parties hereto.
(i) The parties agree that time is of the essence in the
performing of all duties herein.
(j) This Agreement shall be interpreted, construed and
enforced according to the laws of Nevis, West Indies.
(k) In the event any action or proceeding is brought by
either party under this Agreement, the prevailing party shall be entitled
to recover attorneys' fees and costs in such amount as the court may
adjudge reasonable.
(l) This Agreement and the rights and obligations herein may
be assigned by either party hereto without the consent of the other party,
except that Owner may not assign the obligations of Owner under Paragraph 7
or any other obligations of Owner which require the unique services of
Owner's personnel.
(m) All notices, demands and request required or permitted
to be given hereunder shall be in writing and shall be deemed duly given if
delivered or if mailed by registered or certified mail,l postage prepaid,
addressed to the following:
If to Owner, to: Automation Excellence Caribe Ltd.
Barclay's Building, Main Street
Office Suite Number 1
Charlestown, Nevis, West Indies
FAX No.: (529) 884-7062
If to Master Licensor, to: CrossCountry Holdings Ltd.
c/o The Ridge Group
660 Newport Center Drive, Ste. 780
Newport Beach, CA 92660
FAX No.: (949) 718-0989
Either party shall have the right to specify in writing, in the manner
above provided, another address to which subsequent notices to such party
shall be given. Any notice given hereunder shall be deemed to have been
given as of the date sent by facsimile ("FAX") or delivered or mailed.
8
<PAGE>
IN WITNESS WHEREOF, the Owner and the Master Licensor have caused
this Agreement to be executed as of the day and year first above written.
OWNER: MASTER LICENSOR:
Automation Excellence Caribe Ltd., CrossCountry Holdings Ltd.,
a Nevis corporation a Delaware corporation
/s/ Scott Wilson /s/ Charlene Davis
----------------------- --------------------------
Scott Wilson, Charlene Davis,
President President
Exhibit 10.02
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is dated
as of May 20, 1999 by and between GTrade.Network Inc., a Delaware
corporation ("GTrade") and Ralph J. Fasano, the sole shareholder
("Shareholder") of FleaMan.Com Inc., a Nevada corporation ("FleaMan").
1. Plan of Reorganization. The Shareholder is the owner of all
10,000 issued and outstanding shares (the "FleaMan Shares") of Common Stock
of FleaMan. It is the intention of the parties hereto that the FleaMan
Shares shall be conveyed to GTrade in exchange for 400,000 shares of GTrade
Common Stock, $.001 par value and 100,000 shares of GTrade Series A
Preferred Stock, $.05 par value (the "GTrade Shares"), which are
authorized, but have not yet been issued by GTrade. The terms of the
GTrade Series A Preferred Stock are encompassed within Appendix I hereto.
On the Closing Date, as hereinafter defined, the Shareholder will deliver
the FleaMan Shares to GTrade and GTrade will deliver to the Shareholder
certificates representing the GTrade Shares in the names and amounts set
forth on Exhibits "A" and "B", free and clear of all claims, liens, and
encumbrances. On the Closing Date, FleaMan will be a wholly-owned
subsidiary of GTrade.
The GTrade Shares shall be issued in certificates in form and
substance satisfactory to counsel for GTrade. The Shareholder represents
and warrants that he will receive and hold the GTrade Shares for investment
and not with a view to the distribution thereof, and that he understands
that the GTrade Shares to be received by him will bear a legend
acknowledging that such shares are "restricted securities" as that term is
defined in Rule 144 promulgated by the Securities and Exchange Commission
("Rule 144") pursuant to the Securities Act of 1933 (the "Act"). The
Shareholder understands and agrees that the GTrade Shares may not be
publicly offered or sold by him for a period of one year from the Closing
Date and thereafter may be publicly offered or sold by him only pursuant to
(a) Rule 144 or some other exemption from registration under the federal
securities laws, as determined by counsel to GTrade or (b) a Registration
Statement which has been declared effective by the Securities and Exchange
Commission. There can be no assurance that GTrade will then satisfy the
requirements for such a sale pursuant to Rule 144, and GTrade has not, nor
will it have, any obligation to the Shareholder whatsoever to file a
Registration Statement covering the GTrade Shares. The Shareholder further
agrees that the transfer agent for the Common Stock of GTrade will be
instructed to place a "stop transfer" order against all of the GTrade
Shares to be issued to the Shareholder hereunder prohibiting the transfer
of the GTrade Shares on the books and records of GTrade until the
conditions set forth above have been satisfied.
2. Delivery of Shares. On the Closing Date, the Shareholder will
deliver certificates for the FleaMan Shares, duly endorsed, so as to make
GTrade the sole owner thereof, free and clear of all claims, liens and
encumbrances; and on such Closing Date delivery of the certificates
representing the GTrade Shares will be made to the Shareholder as set forth
above. Delivery will be made at such place as may be determined by the
parties.
3. Representations of Shareholder. The Shareholder represents and
warrants as follows:
(a)As of the Closing Date, Shareholder will be the sole owner of the
FleaMan Shares appearing of record in his name; such FleaMan shares will
be free from claims, liens or other encumbrances; and, Shareholder will
have the unqualified right to transfer such FleaMan Shares;
<PAGE>
(b) The FleaMan Shares constitute duly and validly issued shares of
FleaMan, and are fully-paid and nonassessable;
(c) FleaMan has not conducted any operations since its
incorporation on April 29, 1999, and its sole asset consists of an internet
website identified as "fleaman.com," which was received from the
Shareholder in consideration of the issuance to Shareholder of the FleaMan
Shares.
(d) Since incorporation on April 29, 1999 and on the Closing Date,
there will not be any material adverse changes in the financial position of
FleaMan;
(e) FleaMan is not and as of the Closing Date will not be involved
in any pending litigation or governmental investigation or proceeding not
disclosed in writing to GTrade, and to the knowledge of the Shareholder no
litigation or governmental investigation or proceeding is threatened
against FleaMan;
(f) As of the Closing Date, FleaMan will be in good standing as a
Nevada corporation;
(g) The authorized capital stock of FleaMan consists of 25,000,000
shares of Common Stock, $.001 par value per share; as of the Closing Date
10,000 shares of FleaMan Common Stock will be issued and outstanding, all
of which shares will be validly issued, fully-paid and nonassessable and
there is not, and as of the Closing Date there will not be, outstanding any
warrants, options or other agreements on the part of FleaMan obligating
FleaMan to issue any additional shares of its Common Stock or any of its
securities of any kind;
(h) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate any
provision of the Articles of Incorporation or By-laws of FleaMan; will
violate, conflict with or result in the breach or termination of or
otherwise any contracting party the right to terminate or constitute a
default under the terms of any agreement or instrument to which FleaMan is
a party or by which any of its property or assets may be bound; or result
in the creation of any lien, charge or encumbrance upon the properties or
assets of FleaMan; violate any judgment, order, injunction, decree or award
against or binding upon FleaMan or upon its securities, property or
business;
(i) Except as set forth on Exhibit "C" (if required) hereto FleaMan
is not now nor prior to the Closing Date will it become (without the
consent of GTrade) a party to or be bound by any written or oral; (i)
contract not made in the ordinary course of business; (ii) employment,
advisory or consulting contract; (iii) contract with any labor or trade
union or association; (iv) bonus, pension, profit-sharing, retirement,
stock purchase, hospitalization insurance or any other plan providing for
employee benefits; (v) lease with respect to any property, real, personal
or mixed, whether as lessor or lessee; (vi) continuing contract for the
future purchase of material supplies, equipment or services in excess of
$1,000 per contract; or (vii) single contract for expenditures or
commitment for expenditures in excess of $10,000 or extending beyond
December 31, 1999.
4. Representations of GTrade. GTrade represents and warrants to
Shareholder as follows:
(a) GTrade is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
<PAGE>
(b) GTrade has all requisite power and authority to carry on its
business as presently conducted, to enter into this Agreement and to
perform its obligations under this Agreement. The consummation of the
transactions contemplated by this Agreement will not violate, nor be in
conflict with, any provision of GTrade's Certificate of Incorporation,
By-laws, or any agreement or instrument to which GTrade is a party or is
bound, or any judgment, decree, order, statute, rule or regulation
applicable to GTrade.
(c) GTrade's execution, delivery, and performance of this Agreement
and the transactions contemplated hereby have been duly and validly
authorized by all action, corporate, shareholder, and otherwise, required
under GTrade's Certificate of Incorporation or By-laws, or under the
Delaware General Corporation Law, or under any other statute, ruling, law,
or agreement affecting the business operations of GTrade.
(d) This Agreement has been duly executed and delivered on behalf
of GTrade, and at the Closing all documents and instruments required
hereunder to be executed and delivered by GTrade shall have been duly
executed and delivered. This Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of
GTrade enforceable in accordance with their terms.
(e) GTrade presently has U.S.$50,000.00 cash which is not subject
to any claim, lien, encumbrance or offset, and GTrade will continue to have
such cash amounts through the Closing Date.
(f) The total authorized capitalization of GTrade consists of
50,000,000 shares of Common Stock, $.001 par value and 700,000 shares of
Preferred Stock, $.05 par value. The number of shares of each category to
be outstanding on the Closing Date before the issuance of the GTrade Shares
to the Shareholder is as follows:
Common Stock 10,155,800.06
Common Stock Options 4,000,000(1)
Preferred Stock -0-
_______________________
(1) Outstanding options for 4,000,000 are exercisable at $.25/share through
June 16, 1999.
(g) As of the Closing Date, the GTrade Shares to be delivered to
the Shareholder will constitute valid and legally issued, fully-paid and
nonassessable shares of GTrade, and will be legally equivalent in all
respects to the Common Stock of GTrade issued and outstanding as of the
date hereof.
(h) The Officer and Director of GTrade are set forth on Exhibit
"D"; GTrade has taken all necessary corporate action to authorize the
execution of this Agreement and the issuance of the GTrade Shares
contemplated hereby and the officer of GTrade is duly authorized to execute
this Agreement;
(i) Since December 31, 1997 there have not been and prior to the
Closing Date there will not be any material changes in the financial
position of GTrade except those otherwise disclosed to the Shareholder.
(j) GTrade is not involved in any pending litigation or
governmental investigation or proceeding, except as disclosed to the
Shareholder;
<PAGE>
(k) As of the Closing Date GTrade will be in good standing as a
Delaware Corporation.
(l) GTrade shall make available to FleaMan, as its subsidiary,
U.S.$3,000,000.00 over a period of four (4) months following the Closing
Date, as, when and reasonably required to implement the business plan of
FleaMan and otherwise expand such business.
5. Prohibited Acts. GTrade agrees not to do any of the following
things prior to the Closing Date, and the Shareholder agrees that prior to
the Closing Date he will not request or permit FleaMan to do any of the
following things:
(a) Declare or pay any dividends or other distributions on its
stock or purchase or redeem any of its stock;
(b) Issue any stock or other securities, including any rights or
options to purchase or otherwise acquire any of its stock, or issue any
notes or other evidences of indebtedness not in the usual course of
business; or
(c) Make capital expenditures in excess of an aggregate of
Twenty-Five Thousand Dollars ($25,000).
6. Delivery of Records. The Shareholder agrees that on or before
the Closing Date he will cause to be delivered to GTrade such corporate
records or other documents of FleaMan as GTrade may reasonably request.
7. Resignation of Officer of GTrade. The officer of GTrade will
submit her resignation at closing, whereupon Shareholder shall become the
interim President and a Director of GTrade, and John D. Shearer shall be
appointed to serve as Secretary/Treasurer of GTrade.
8. Conditions to the Obligations of GTrade and the Shareholder.
(a) The obligations of GTrade to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before
the Closing Date of the following further conditions; (i) each of the
representations and warranties of the Shareholder contained in this
Agreement or in any written statement exhibit, financial statement or
schedule or other document delivered pursuant hereto or in connection with
the transactions contemplated hereby shall be true in all respects as the
Closing Date as if then made (except to the extent waived hereunder or as
affected by the transactions contemplated hereby); (ii) the Shareholder
shall have performed and complied with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by
him prior to or at the Closing Date and GTrade shall have been furnished
with a certificate of the President of FleaMan dated the Closing Date
certifying in such detail as GTrade may reasonably request to the
fulfillment of such conditions; (iii) all documents and proceedings of the
Shareholder and FleaMan in connection with the transactions contemplated
hereby shall have been approved as to firm and substance by GTrade and its
counsel, Raymond L. Ridge, whose approval will not unreasonably be
withheld.
(b) The obligations of the Shareholder to consummate the
transactions contemplated by this Agreement are subject to the fulfillment,
at or before the Closing Date of the following further conditions; (i) each
of the representations and warranties of GTrade contained in this Agreement
or in any written statement exhibit, financial statement or schedule or
other
<PAGE>
document delivered pursuant hereto or in connection with the transactions
contemplated hereby shall be true in all respects as the Closing Date as if
then made (except to the extent waived hereunder or as affected by the
transactions contemplated hereby); (ii) GTrade shall have performed and
complied with all covenants, agreements and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date and the Shareholder shall have been furnished with a certificate of
the President/Secretary of GTrade dated the Closing Date certifying in such
detail as the Shareholder may reasonably request to the fulfillment of such
conditions; (iii) all documents and proceedings of GTrade in connection
with the transactions contemplated hereby shall have been approved as to
form and substance by the Shareholder.
(c) All of the representations and warranties of the Shareholder
contained in this Agreement or any exhibit thereto shall have been
acknowledged by FleaMan. All of the representations and warranties of
GTrade and the Shareholder shall be true in all material respects on the
Closing Date as if then made. All such representations and warranties
shall survive the Closing Date of this transaction.
9. Notices. Any notice which any of the parties hereto may desire
to serve upon any of the other parties hereto shall be in writing and shall
be conclusively deemed to have been received by the party at its address by
FAX, or, if mailed, postage prepaid, United States mail, registered, return
receipt requested, to the following address:
If to the Shareholder:
Ralph J. Fasano
3041 Hempstead Turnpike
Levitttown, NY 11756
If to GTrade:
GTrade.Network Inc.
c/o The Ridge Group
660 Newport Center Drive, Ste. 780
Newport Beach, CA 92660
10. Successors. This Agreement shall be binding upon and inure to
the benefit of the heirs, personal representatives and successors and
assigns of the parties.
11. Closing Date. The Closing Date shall be June 1, 1999 at 1:00
p.m., or such later date as to which the parties shall agree.
12. Choice of Law. This Agreement shall be construed and enforced
in accordance with the laws of the State of Nevada. Any action arising out
of or under this Agreement shall be brought in the Courts of the State of
Nevada, Clark County.
13. Counterparts. This Agreement may be signed in one or more
counterparts, all of which taken together shall constitute an entire
agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
GTrade.Network Inc. FleaMan.Com Inc.
BY:/s/ Charlene Davis BY:/s/ Ralph J. Fasano
---------------------- ----------------------
Charlene Davis, President Ralph J. Fasano,
President
<PAGE>
Exhibit "D"
GTrade.Network Inc.
Officer and Director
Name and Address Signature
Murray Berger, Director
40 Knightsbridge Road, Apt. 3E
Great Neck, NY 11021
(516) 829-9085 (Phone/FAX)
_____________________________
Charlene Davis, President
71 Somerset Road
Rocky Point, NY 11778
(516) 744-0190
_____________________________
<PAGE>
FIRST AMENDMENT TO
AGREEMENT AND PLAN OF REORGANIZATION
This first amendment ("First Amendment") to that Agreement and Plan of
Reorganization dated May 20, 1999 ("Agreement") is made this 11th day of
August, 1999 by and between GTrade.Network Inc., a Delaware corporation
("GTrade") and Ralph J. Fasano, formerly the sole shareholder
("Shareholder") of FleaMan.Com Inc., a Nevada corporation ("FleaMan").
WHEREAS, GTrade and the Shareholder are desirous of amending the
Agreement in certain respects as hereinafter provided.
NOW THEREFORE, in consideration of the mutual covenants and conditions
set forth below, and for over good and valuable consideration, the receipt
and sufficiency of which are acknowledged, it is hereby agreed as follows:
1. The following paragraph shall be added to the Agreement:
14. Miscellaneous.
a. The provisions of paragraph 4(1) shall be deemed modified to
reflect that the contribution of $3,000,000.00 referred to therein shall be
made as follows:
GTrade has heretofore advanced $40,000.00 to FleaMan, and will
advance an additional $100,000.00 to FleaMan by 5:00 p.m. on August 12,
1999; and another $100,000.00 on September 10, 1999. On or before September
10, 1999, GTrade and Shareholder shall jointly review the business plan for
FleaMan and jointly decide on the time schedule for funding the balance of
the $2,760.000.00. In no event, shall the finding of said balance be later
than March 10, 2000. All prior and future advances of the $3,000,000.00
commitment shall be utilized by FleaMan in pursuit of the business plan
adopted for FleaMan as the same may be amended from time-to-time way the
consent of GTrade, and no part of such contribution shall be removed from
FleaMan once contributed.
b. Should GTrade for any reason fail to fund the balance of the
$3,000,000.00 commitment referred to paragraph 4(1) of the Agreement, upon
the dates set forth in subparagraph (a) above (and after the failure to
cure such non-payment within three days from the due date) Fasano shall
have the right to (i) terminate the Agreement, (ii) retrieve from GTrade
100% of the issued and outstanding shares of FleaMan.Com Inc., and (iii)
FleaMan.Com Inc. shall retain all monies theretofore advanced as liquidated
damages for the Shareholder's efforts in attempting to make its business
successful, and GTrade shall thereafter have no further obligations to
Shareholder or FleaMan. In such event, both GTrade and Fasano agree to
immediately cause the return of any stock in GTrade or FleaMan.Com Inc.
issued to the other pursuant to and in accordance with the Agreement.
c. Shareholder acknowledges that GTrade is the owner of 100% of the
issued and outstanding shares of FleaMan.Com Inc. effective as of June 2,
1999, the effective Closing Date under the Agreement. GTrade confirms and
acknowledges that Fasano is the owner of 400,000 shares of its common
stock, and 100,000 shares of its Series A preferred stock, effective as of
June 2, 1999, the effective Closing Date under the Agreement. The parties
agree to promptly issue stock certificates evidencing ownership in
accordance with the above.
<PAGE>
d. Each party represents to the other that the execution of this
First Amendment to the Agreement has been duly authorized by all necessary
corporate action required by law, and that this First Amendment to the
Agreement is fully enforceable in accordance with its provisions.
e. This First Amendment may be executed in any number of
counterparts, which together shall constitute one arid the same instrument.
Delivery of an executed counterpart of this First Amendment by
telefacsimile shall be equally as effective as delivery of a manually
executed counterpart of this First Amendment. Any party delivering an
executed counterpart of this First Amendment by telefacsimile shall also
deliver a manually executed counterpart of this First Amendment, but the
failure to deliver a manually executed counterpart shall not affect the
validity, enforceability, and binding effect of this First Amendment.
15. Except as expressly set forth herein, the parties ratify and
reaffirm each and every provision of the Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to the Agreement as of the date first above written.
GTrade.Network Inc.
By:/s/ Aziz Hirji
--------------------------
Aziz Hirji, President
FleaMan.Com Inc.
By:/s/ Ralph J. Fasano
--------------------------
Ralph J. Fasano, President
Exhibit 10.03
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is
dated as of July 27, 1999 by and between GTrade.Network Inc., a Delaware
corporation ("GTrade") and Philip Andronicos and Dominick Cerisano, the
sole shareholder ("Shareholders") of I-Jet Aviation Consultants, Inc., a
Nevada corporation ("I-Jet").
1. Plan of Reorganization. The Shareholders are the owners
of all 20,000 issued and outstanding shares (the "I-Jet Shares") of Common
Stock of I-Jet. It is the intention of the parties hereto that the I-Jet
Shares shall be conveyed to GTrade in exchange for 10,000 shares of GTrade
Series B Preferred Stock, $.05 par value (the "GTrade Shares"), which are
authorized, but have not yet been issued by GTrade. The terms of the
GTrade Series B Preferred Stock are encompassed within Appendix I hereto.
On the Closing Date, as hereinafter defined, the Shareholders will deliver
the I-Jet Shares to GTrade and GTrade will deliver to the Shareholders
certificates representing the GTrade Shares in the names and amounts set
forth on Exhibits "A" and "B", free and clear of all claims, liens, and
encumbrances. On the Closing Date, I-Jet will be a wholly-owned subsidiary
of GTrade.
The GTrade Shares shall be issued in certificates in form and
substance satisfactory to counsel for GTrade. Each of the Shareholders
represents and warrants that he will receive and hold the GTrade Shares for
investment and not with a view to the distribution thereof, and that he
understands that the GTrade Shares to be received by him will bear a legend
acknowledging that such shares are "restricted securities" as that term is
defined in Rule 144 promulgated by the Securities and Exchange Commission
("Rule 144") pursuant to the Securities Act of 1933 (the "Act"). Each of
the Shareholders understands and agrees that the GTrade Shares may not be
publicly offered or sold by him for a period of one year from the Closing
Date and thereafter may be publicly offered or sold by him only pursuant to
(a) Rule 144 or some other exemption from registration under the federal
securities laws, as determined by counsel to GTrade or (b) a Registration
Statement which has been declared effective by the Securities and Exchange
Commission. There can be no assurance that GTrade will then satisfy the
requirements for such a sale pursuant to Rule 144, and GTrade has not, nor
will it have, any obligation to the Shareholders whatsoever to file a
Registration Statement covering the GTrade Shares. Each of the
Shareholders further agrees that the transfer agent for the Common Stock of
GTrade will be instructed to place a "stop transfer" order against all of
the GTrade Shares to be issued to the Shareholders hereunder prohibiting
the transfer of the GTrade Shares on the books and records of GTrade until
the conditions set forth above have been satisfied.
2. Delivery of Shares. On the Closing Date, the
Shareholders will deliver certificates for the I-Jet Shares, duly endorsed,
so as to make GTrade the sole owner thereof, free and clear of all claims,
liens and encumbrances; and on such Closing Date delivery of the
certificates representing the GTrade Shares will be made to the
Shareholders as set forth above. Delivery will be made at such place as
may be determined by the parties.
<PAGE>
3. Representations of Shareholders. Each of the
Shareholders represents and warrants as follows:
(a) As of the Closing Date, Shareholders will be the sole
owners of the I-Jet Shares appearing of record in their respective names;
such I-Jet shares will be free from claims, liens or other encumbrances;
and, Shareholders will have the unqualified right to transfer such I-Jet
Shares;
(b) The I-Jet Shares constitute duly and validly issued
shares of I-Jet, and are fully-paid and nonassessable;
(c) I-Jet has not conducted any operations since its
incorporation on July 26, 1999, and its sole assets consist of cash, office
equipment and a client portfolio, which was received from the Shareholders
in consideration of the issuance to Shareholders of the I-Jet Shares.
(d) Since incorporation on July 26, 1999 and on the Closing
Date, there will not be any material adverse changes in the financial
position of I-Jet;
(e) I-Jet is not and as of the Closing Date will not be
involved in any pending litigation or governmental investigation or
proceeding not disclosed in writing to GTrade, and to the knowledge of the
Shareholders no litigation or governmental investigation or proceeding is
threatened against I-Jet;
(f) As of the Closing Date, I-Jet will be in good standing
as a Nevada corporation;
(g) The authorized capital stock of I-Jet consists of
25,000,000 shares of Common Stock, $.001 par value per share; as of the
Closing Date 20,000 shares of I-Jet Common Stock will be issued and
outstanding, all of which shares will be validly issued, fully-paid and
nonassessable and there is not, and as of the Closing Date there will not
be, outstanding any warrants, options or other agreements on the part of
I-Jet obligating I-Jet to issue any additional shares of its Common Stock
or any of its securities of any kind;
(h) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate any
provision of the Articles of Incorporation or By-laws of I-Jet; will
violate, conflict with or result in the breach or termination of or
otherwise any contracting party the right to terminate or constitute a
default under the terms of any agreement or instrument to which I-Jet is a
party or by which any of its property or assets may be bound; or result in
the creation of any lien, charge or encumbrance upon the properties or
assets of I-Jet; violate any judgment, order, injunction, decree or award
against or binding upon I-Jet or upon its securities, property or business;
(i) Except as set forth on Exhibit "C" (if required) hereto
I-Jet is not now nor prior to the Closing Date will it become (without the
consent of GTrade) a party to or be bound by any written or oral; (i)
contract not made in the ordinary course of business; (ii) employment,
advisory or consulting contract; (iii) contract with any labor or trade
union or association; (iv) bonus, pension, profit-sharing, retirement,
stock purchase, hospitalization insurance or any other plan providing for
employee benefits; (v) lease with respect to any property, real, personal
or mixed, whether as lessor or lessee; (vi) continuing contract for the
future purchase of material supplies, equipment or services in excess of
$1,000 per contract; or (vii) single contract for expenditures or
commitment for expenditures in excess of $10,000 or extending beyond
December 31, 1999.
<PAGE>
(j) Each of the Shareholders acknowledges that from the
Closing Date until August 30, 2000, the net cash flow of I-Jet will be held
60% at the I-Jet level as a subsidiary of GTrade, and 40% will be
transferred to GTrade for use in its operations. Net cash flow is defined
as net cash derived from operations, including payment therefrom of all
salaries and bonuses to officers.
4. Representations of GTrade. GTrade represents and
warrants to Shareholders as follows:
(a) GTrade is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) GTrade has all requisite power and authority to carry
on its business as presently conducted, to enter into this Agreement and to
perform its obligations under this Agreement. The consummation of the
transactions contemplated by this Agreement will not violate, nor be in
conflict with, any provision of GTrade's Certificate of Incorporation,
By-laws, or any agreement or instrument to which GTrade is a party or is
bound, or any judgment, decree, order, statute, rule or regulation
applicable to GTrade.
(c) GTrade's execution, delivery, and performance of this
Agreement and the transactions contemplated hereby have been duly and
validly authorized by all action, corporate, shareholder, and otherwise,
required under GTrade's Certificate of Incorporation or By-laws, or under
the Delaware General Corporation Law, or under any other statute, ruling,
law, or agreement affecting the business operations of GTrade.
(d) This Agreement has been duly executed and delivered on
behalf of GTrade, and at the Closing all documents and instruments required
hereunder to be executed and delivered by GTrade shall have been duly
executed and delivered. This Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of
GTrade enforceable in accordance with their terms.
(e) The total authorized capitalization of GTrade consists
of 50,000,000 shares of Common Stock, $.001 par value and 700,000 shares of
Preferred Stock, $.05 par value. The number of shares of each category to
be outstanding on the Closing Date before the issuance of the GTrade Shares
to the Shareholders is as follows:
Common Stock 10,555,800.06
Preferred Stock 100,000
(f) As of the Closing Date, the GTrade Shares to be
delivered to the Shareholders will constitute valid and legally issued,
fully-paid and nonassessable shares of GTrade.
(g) The Officers and Directors of GTrade are set forth on
Exhibit "D"; GTrade has taken all necessary corporate action to authorize
the execution of this Agreement and the issuance of the GTrade Shares
contemplated hereby and the officer of GTrade is duly authorized to execute
this Agreement;
(h) Since December 31, 1998 there have not been and prior
to the Closing Date there will not be any material changes in the financial
position of GTrade except those otherwise disclosed to the Shareholders.
<PAGE>
(i) GTrade is not involved in any pending litigation or
governmental investigation or proceeding, except as disclosed to the
Shareholders;
(j) As of the Closing Date GTrade will be in good standing
as a Delaware Corporation.
(k) GTrade shall make available to I-Jet, as its
subsidiary, U.S.$100,000.00 cash at Closing and a U.S.$3,000,000 Revolving
Line of Credit with which I-Jet can implement the business plan of I-Jet
and otherwise expand such business.
5. Prohibited Acts. GTrade agrees not to do any of the
following things prior to the Closing Date, and each of the Shareholders
agrees that prior to the Closing Date he will not request or permit I-Jet
to do any of the following things:
(a) Declare or pay any dividends or other distributions on
its stock or purchase or redeem any of its stock;
(b) Issue any stock or other securities, including any
rights or options to purchase or otherwise acquire any of its stock, or
issue any notes or other evidences of indebtedness not in the usual course
of business; or
(c) Make capital expenditures in excess of an aggregate of
Twenty-Five Thousand Dollars ($25,000).
6. Delivery of Records. Each of the Shareholders agrees
that on or before the Closing Date he will cause to be delivered to GTrade
such corporate records or other documents of I-Jet as GTrade may reasonably
request.
7. Conditions to the Obligations of GTrade and the
Shareholders.
(a) The obligations of GTrade to consummate the
transactions contemplated by this Agreement are subject to the fulfillment,
at or before the Closing Date of the following further conditions; (i) each
of the representations and warranties of the Shareholders contained in this
Agreement or in any written statement exhibit, financial statement or
schedule or other document delivered pursuant hereto or in connection with
the transactions contemplated hereby shall be true in all respects as the
Closing Date as if then made (except to the extent waived hereunder or as
affected by the transactions contemplated hereby); (ii) the Shareholders
shall have performed and complied with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by
him prior to or at the Closing Date and GTrade shall have been furnished
with a certificate of the President of I-Jet dated the Closing Date
certifying in such detail as GTrade may reasonably request to the
fulfillment of such conditions; (iii) all documents and proceedings of the
Shareholders and I-Jet in connection with the transactions contemplated
hereby shall have been approved as to firm and substance by GTrade and its
counsel, Raymond L. Ridge, whose approval will not unreasonably be
withheld.
(b) The obligations of the Shareholders to consummate the
transactions contemplated by this Agreement are subject to the fulfillment,
at or before the Closing Date of the following further conditions; (i) each
of the representations and warranties of GTrade contained in this Agreement
or in any written statement exhibit, financial statement or schedule or
other document delivered pursuant hereto or in connection with the
transactions contemplated hereby
<PAGE>
shall be true in all respects as the Closing Date as if then made (except
to the extent waived hereunder or as affected by the transactions
contemplated hereby); (ii) GTrade shall have performed and complied with
all covenants, agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing Date and the
Shareholders shall have been furnished with a certificate of the
President/Secretary of GTrade dated the Closing Date certifying in such
detail as the Shareholders may reasonably request to the fulfillment of
such conditions; (iii) all documents and proceedings of GTrade in
connection with the transactions contemplated hereby shall have been
approved as to form and substance by the Shareholders.
(c) All of the representations and warranties of the
Shareholders contained in this Agreement or any exhibit thereto shall have
been acknowledged by I-Jet. All of the representations and warranties of
GTrade and the Shareholders shall be true in all material respects on the
Closing Date as if then made. All such representations and warranties
shall survive the Closing Date of this transaction.
8. Notices. Any notice which any of the parties hereto may
desire to serve upon any of the other parties hereto shall be in writing
and shall be conclusively deemed to have been received by the party at its
address by FAX, or, if mailed, postage prepaid, United States mail,
registered, return receipt requested, to the following address:
If to the Shareholders:
Philip Andronicos and Dominick Cerisano
Westchester County Airport
Hangar 6
White Plains, NY 10604
If to GTrade:
GTrade.Network Inc.
570 Lexington Ave., 45 Flr.
New York, NY 10022
9. Successors. This Agreement shall be binding upon and
inure to the benefit of the heirs, personal representatives and successors
and assigns of the parties.
10. Closing Date. The Closing Date shall be August 13, 1999
at 1:00 p.m., or such later date as to which the parties shall agree.
11. Choice of Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of Nevada. Any action
arising out of or under this Agreement shall be brought in the Courts of
the State of Nevada, Clark County.
12. Counterparts. This Agreement may be signed in one or
more counterparts, all of which taken together shall constitute an entire
agreement.
(This Space Intentionally Left Blank)
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
GTrade.Network Inc. Shareholders
BY:/s/ Aziz Hirji /s/ Philip Andronicos
------------------------ -------------------------
Aziz Hirji, President Philip Andronicos
/s/ Dominick Cerisano
-------------------------
Dominick Cerisano
<PAGE>
Exhibit "D"
GTrade.Network Inc.
Officers and Directors
Name and Address Signature
- ---------------- -----------
Aziz Hirji, Director & President
570 Lexington Ave., 45th Flr.
New York, NY 10022 _____________________________
(212) 751-7282
(212) 355-7026 (FAX)
John D. Shearer, Secretary/Treasurer & Director
c/o Keith Webb & Co.
1902 Debarry Ave
Orange Park, FL 32073 _____________________________
Murray Berger, Director
40 Knightsbridge Road, Apt. 3E
Great Neck, NY 11021 _____________________________
Exhibit 10.04
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement") is
dated as of August 27, 1999 by and between GTrade.Network Inc., a Delaware
corporation ("GTrade") and Jeff A. Fortin, Josh R. Wise and William T.
Albanese (the "Principal Shareholders") of NetSafety Corporation USA, Inc.,
a California corporation ("NetSafety"). The Principal Shareholders are
acting on their own behalf, and as "Trustees" for the minority shareholders
of NetSafety pursuant to a Preferred Stock Trust Agreement dated as of
August 27, 1999 (the "Trust Agreement"), attached hereto as Exhibit "A,"
which is incorporated herein by this reference. References hereinafter to
"Principal Shareholders" shall also include within it the capacity of
"Trustee" for the minority shareholders ("Minority Shareholders") of
NetSafety under the Trust Agreement, except as may otherwise be
distinguished therefrom in the context of the subject matter.
1. Plan of Reorganization. The Principal Shareholders are
the owners of 8,080,000 shares of the 10,002,000 issued and outstanding
shares (the "NetSafety Shares") of Common Stock of NetSafety; and hold
1,922,000 NetSafety Shares in their capacity as "Trustees" under the Trust
Agreement for the Minority Shareholders. It is the intention of the
parties hereto that the NetSafety Shares shall be conveyed to GTrade in
exchange for 100,002 shares of GTrade Series C Preferred Stock, $.05 par
value (the "GTrade Shares"), which are authorized, but have not yet been
issued by GTrade. The terms of the GTrade Series C Preferred Stock are
encompassed within Appendix I hereto. On the Closing Date, as hereinafter
defined, the Principal Shareholders will deliver all the NetSafety Shares
to GTrade and GTrade will deliver to the Principal Shareholders
certificates representing the GTrade Shares, free and clear of all claims,
liens, and encumbrances. On the Closing Date, NetSafety will be a
wholly-owned subsidiary of GTrade.
The GTrade Shares shall be issued in certificates in form and
substance satisfactory to counsel for GTrade. Each of the Principal
Shareholders represents and warrants that he will receive and hold the
GTrade Shares for investment and not with a view to the distribution
thereof, and that he understands that the GTrade Shares to be received by
him will bear a legend acknowledging that such shares are "restricted
securities" as that term is defined in Rule 144 promulgated by the
Securities and Exchange Commission ("Rule 144") pursuant to the Securities
Act of 1933 (the "Act"). Each of the Principal Shareholders understands
and agrees that the GTrade Shares may not be publicly offered or sold by
him for a period of one year from the Closing Date and thereafter may be
publicly offered or sold by him only pursuant to (a) Rule 144 or some other
exemption from registration under the federal securities laws, as
determined by counsel to GTrade or (b) a Registration Statement which has
been declared effective by the Securities and Exchange Commission. There
can be no assurance that GTrade will then satisfy the requirements for such
a sale pursuant to Rule 144, and GTrade has not, nor will it have, any
obligation to either the Principal Shareholders or the Minority
Shareholders whatsoever to file a Registration Statement covering the
GTrade Shares. Each of the Principal Shareholders further agrees that the
transfer agent for the Common Stock of GTrade will be instructed to place a
"stop transfer" order against all of the GTrade Shares to be issued to the
Principal Shareholders hereunder prohibiting the transfer of the GTrade
Shares on the books and records of GTrade until the conditions set forth
above have been satisfied.
<PAGE>
2. Delivery of Shares. On the Closing Date, the Principal
Shareholders will deliver certificates for the NetSafety Shares, duly
endorsed, so as to make GTrade the sole owner thereof, free and clear of
all claims, liens and encumbrances; and on such Closing Date delivery of
the certificates representing the GTrade Shares will be made to the
Principal Shareholders as set forth above. Delivery will be made at such
place as may be determined by the parties.
3. Representations of Shareholders. Each of the Principal
Shareholders represents and warrants as follows:
(a) As of the Closing Date, the Principal Shareholders will
be the sole owners of the NetSafety Shares appearing of record in his name;
such NetSafety shares will be free from claims, liens or other
encumbrances; and the Principal Shareholders will have the unqualified
right to transfer such NetSafety Shares, including the shares attributable
to the Minority Shareholders, to GTrade, free from claims, liens or other
encumbrances;
(b) The NetSafety Shares constitute duly and validly issued
shares of NetSafety, and are fully-paid and nonassessable;
(c) NetSafety was incorporated on March 31, 1999 in the State
of California, and has been pursuing the development of "KidSafety.Net," a
system to screen objectionable materials on the internet from access to
children. Unaudited financial statements of NetSafety are attached hereto
as Exhibit "B," and incorporated herein by this reference (the "Interim
Period Financials"), and include a Balance Sheet, Statement of Operations,
Statement of Stockholder's Equity, and Statement of Cash Flows, for the
period from inception to June 30, 1999. All such financial statements have
been prepared in conformity with generally accepted accounting principles,
consistently applied, and present fairly the financial condition of
NetSafety as at the date(s) indicated thereon and the results of its
operations for the period(s) ended thereon. At August 27, 1999, NetSafety
had no material liabilities, contingent or otherwise, not reflected or
reserved against it in its audited Balance Sheet and Statement of
Operations for the period ended June 30, 1999. The date of August 27, 1999
is hereinafter sometimes referred to as the Warranty Date with respect to
NetSafety.
(d) Since March 31, 1999 and on the Closing Date, there will
not be any material adverse changes in the financial position of NetSafety
not reflected in the Interim Period Financials;
(e) NetSafety is not and as of the Closing Date will not be
involved in any pending litigation or governmental investigation or
proceeding not disclosed in writing to GTrade, and to the knowledge of the
Principal Shareholders no litigation or governmental investigation or
proceeding is threatened against NetSafety;
(f) As of the Closing Date, NetSafety will be in good
standing as a California corporation;
(g) The authorized capital stock of NetSafety consists of
15,000,000 shares of Common Stock; as of the Closing Date 10,002,000 shares
of NetSafety Common Stock will be issued and outstanding, all of which
shares will be validly issued, fully-paid and nonassessable and there is
not, and as of the Closing Date there will not be, outstanding any
warrants, options or other agreements on the part of NetSafety obligating
NetSafety to issue any additional shares of its Common Stock or any of its
securities of any kind;
<PAGE>
(h) Neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will violate any
provision of the Articles of Incorporation or By-laws of NetSafety; will
violate, conflict with or result in the breach or termination of or
otherwise any contracting party the right to terminate or constitute a
default under the terms of any agreement or instrument to which NetSafety
is a party or by which any of its property or assets may be bound; or
result in the creation of any lien, charge or encumbrance upon the
properties or assets of NetSafety; violate any judgment, order, injunction,
decree or award against or binding upon NetSafety or upon its securities,
property or business;
(i) Except as set forth on Exhibit "C" (if required) hereto
NetSafety is not now nor prior to the Closing Date will it become (without
the consent of GTrade) a party to or be bound by any written or oral; (i)
contract not made in the ordinary course of business; (ii) employment,
advisory or consulting contract; (iii) contract with any labor or trade
union or association; (iv) bonus, pension, profit-sharing, retirement,
stock purchase, hospitalization insurance or any other plan providing for
employee benefits; (v) lease with respect to any property, real, personal
or mixed, whether as lessor or lessee; (vi) continuing contract for the
future purchase of material supplies, equipment or services in excess of
$25,000 per contract; or (vii) single contract for expenditures or
commitment for expenditures in excess of $100,000 or extending beyond
December 31, 1999.
(j) Each of the Principal Shareholders acknowledges that
from the Closing Date until August 30, 2000, the net cash flow of NetSafety
will be held 70% at the NetSafety level as a subsidiary of GTrade, and 30%
will be transferred to GTrade for use in its operations after GTrade has
infused an aggregate of U.S.$250,000.00 into NetSafety. Net cash flow is
defined as net cash derived from operations, including payment therefrom of
all salaries and bonuses to officers, and specifically excludes cash
derived from financing activities.
(k) Each of the Principal Shareholders will take such
action(s) as are required to appoint the President of GTrade, or such other
nominee as GTrade might designate, to serve on the Board of Directors of
NetSafety through September 1, 2000.
4. Representations of GTrade. GTrade represents and
warrants to the Principal Shareholders as follows:
(a) GTrade is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(b) GTrade has all requisite power and authority to carry
on its business as presently conducted, to enter into this Agreement and to
perform its obligations under this Agreement. The consummation of the
transactions contemplated by this Agreement will not violate, nor be in
conflict with, any provision of GTrade's Certificate of Incorporation,
By-laws, or any agreement or instrument to which GTrade is a party or is
bound, or any judgment, decree, order, statute, rule or regulation
applicable to GTrade.
(c) GTrade's execution, delivery, and performance of this
Agreement and the transactions contemplated hereby have been duly and
validly authorized by all action, corporate, shareholder, and otherwise,
required under GTrade's Certificate of Incorporation or By-laws, or under
the Delaware General Corporation Law, or under any other statute, ruling,
law, or agreement affecting the business operations of GTrade.
<PAGE>
(d) This Agreement has been duly executed and delivered on
behalf of GTrade, and at the Closing all documents and instruments required
hereunder to be executed and delivered by GTrade shall have been duly
executed and delivered. This Agreement does, and such documents and
instruments shall, constitute legal, valid and binding obligations of
GTrade enforceable in accordance with their terms.
(e) The total authorized capitalization of GTrade consists
of 50,000,000 shares of Common Stock, $.001 par value and 700,000 shares of
Preferred Stock, $.05 par value. The number of shares of each category to
be outstanding on the Closing Date before the issuance of the GTrade Shares
to the Shareholders is as follows:
Common Stock 10,555,800.06
Preferred Stock 110,000
(f) As of the Closing Date, the GTrade Shares to be
delivered to the Principal Shareholders will constitute valid and legally
issued, fully-paid and nonassessable shares of GTrade.
(g) The Officers and Directors of GTrade are set forth on
Exhibit "D"; GTrade has taken all necessary corporate action to authorize
the execution of this Agreement and the issuance of the GTrade Shares
contemplated hereby and the officer of GTrade is duly authorized to execute
this Agreement;
(h) Since December 31, 1998 there have not been and prior
to the Closing Date there will not be any material changes in the financial
position of GTrade except those otherwise disclosed to the Principal
Shareholders.
(i) GTrade is not involved in any pending litigation or
governmental investigation or proceeding, except as disclosed to the
Principal Shareholders;
(j) As of the Closing Date GTrade will be in good standing
as a Delaware Corporation.
(k) GTrade shall make available to NetSafety, as its
subsidiary, 170,000 shares of restricted GTrade Common Stock for use by
NetSafety in its financing activities with the understanding that 120,000
of such shares shall be returned to GTrade on August 30, 2000 or cash equal
to the fair market value for that number of shares of GTrade Common Stock
on that date shall be paid to GTrade.
(l) At Closing, GTrade will grant to the Principal
Shareholders an irrevocable proxy, coupled with an interest to vote all
NetSafety shares held by GTrade for a period of one year, subject, however,
to the Principal Shareholders appointing to the Board of Directors of
NetSafety for a like period one person selected by GTrade to represent the
interests of GTrade in the operations of NetSafety.
5. Prohibited Acts. GTrade agrees not to do any of the
following things prior to the Closing Date, and each of the Shareholders
agrees that prior to the Closing Date he will not request or permit
NetSafety to do any of the following things:
(a) Declare or pay any dividends or other distributions on
its stock or purchase or redeem any of its stock;
<PAGE>
(b) Issue any stock or other securities, including any
rights or options to purchase or otherwise acquire any of its stock, or
issue any notes or other evidences of indebtedness not in the usual course
of business; or
(c) Make capital expenditures in excess of an aggregate of
Two Hundred Fifty Thousand Dollars ($250,000).
6. Delivery of Records. Each of the Principal Shareholders
agrees that on or before the Closing Date he will cause to be delivered to
GTrade such corporate records or other documents of NetSafety as GTrade may
reasonably request.
7. Conditions to the Obligations of GTrade and the
Shareholders.
(a) The obligations of GTrade to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or before
the Closing Date of the following further conditions; (i) each of the
representations and warranties of the Principal Shareholders contained in
this Agreement or in any written statement exhibit, financial statement or
schedule or other document delivered pursuant hereto or in connection with
the transactions contemplated hereby shall be true in all respects as the
Closing Date as if then made (except to the extent waived hereunder or as
affected by the transactions contemplated hereby); (ii) each of the
Principal Shareholders shall have performed and complied with all
covenants, agreements and conditions required by this Agreement to be
performed or complied with by him prior to or at the Closing Date and
GTrade shall have been furnished with a certificate of the President of
NetSafety dated the Closing Date certifying in such detail as GTrade may
reasonably request to the fulfillment of such conditions; (iii) all
documents and proceedings of the Shareholders and NetSafety in connection
with the transactions contemplated hereby shall have been approved as to
form and substance by GTrade and its counsel, Raymond L. Ridge, whose
approval will not unreasonably be withheld.
(b) The obligations of the Principal Shareholders to
consummate the transactions contemplated by this Agreement are subject to
the fulfillment, at or before the Closing Date of the following further
conditions; (i) each of the representations and warranties of GTrade
contained in this Agreement or in any written statement exhibit, financial
statement or schedule or other document delivered pursuant hereto or in
connection with the transactions contemplated hereby shall be true in all
respects as the Closing Date as if then made (except to the extent waived
hereunder or as affected by the transactions contemplated hereby); (ii)
GTrade shall have performed and complied with all covenants, agreements and
conditions required by this Agreement to be performed or complied with by
it prior to or at the Closing Date and the Principal Shareholders shall
have been furnished with a certificate of the President/Secretary of GTrade
dated the Closing Date certifying in such detail as the Principal
Shareholders may reasonably request to the fulfillment of such conditions;
(iii) all documents and proceedings of GTrade in connection with the
transactions contemplated hereby shall have been approved as to form and
substance by the Principal Shareholders.
(c) All of the representations and warranties of the
Shareholders contained in this Agreement or any exhibit thereto shall have
been acknowledged by NetSafety. All of the representations and warranties
of GTrade and the Principal Shareholders shall be true in all material
respects on the Closing Date as if then made. All such representations and
warranties shall survive the Closing Date of this transaction.
<PAGE>
8. Notices. Any notice which any of the parties hereto may
desire to serve upon any of the other parties hereto shall be in writing
and shall be conclusively deemed to have been received by the party at its
address by FAX, or, if mailed, postage prepaid, United States mail,
registered, return receipt requested, to the following address:
If to the Principal Shareholders:
Jeff A. Fortin
c/o NetSafety Corporation USA, Inc.
976 Poplar Street, Ste. A
Santa Clara, CA 95050
(408) 247-9637 (FAX)
If to GTrade:
GTrade.Network Inc.
570 Lexington Ave., 45 Flr.
New York, NY 10022
(212) 355-7026 (FAX)
9. Successors. This Agreement shall be binding upon and
inure to the benefit of the heirs, personal representatives and successors
and assigns of the parties.
10. Closing Date. The Closing Date shall be August 27, 1999
at 1:00 p.m., or such later date as to which the parties shall agree.
11. Choice of Law. This Agreement shall be construed and
enforced in accordance with the laws of the State of New York. Any action
arising out of or under this Agreement shall be brought in the Courts of
the State of New York.
12. Counterparts. This Agreement may be signed in one or
more counterparts, all of which taken together shall constitute an entire
agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
GTrade.Network Inc. Principal Shareholders
BY:/s/ Aziz Hirji /s/ Jeff A. Fortin
------------------------- -------------------------
Aziz Hirji, President Jeff A. Fortin
/s/ Josh R. Wise
------------------------
Josh R. Wise
/s/ William T. Albanese
-------------------------
William T. Albanese
<PAGE>
Exhibit "D"
GTrade.Network Inc.
Officers and Directors
Name and Address Signature
- ----------------- -----------
Aziz Hirji, Director & President
570 Lexington Ave., 45th Flr.
New York, NY 10022 _____________________________
(212) 751-7282
(212) 355-7026 (FAX)
John D. Shearer, Secretary/Treasurer & Director
c/o Keith Webb & Co.
1902 Debarry Ave
Orange Park, FL 32073 _____________________________
Murray Berger, Director
40 Knightsbridge Road, Apt. 3E
Great Neck, NY 11021 _____________________________
Ralph J. Fasano
2 Arbutus Path
Belle Terre, NY 11777 _____________________________
Exhibit 21.01
REGISTRATION STATEMENT ON FORM 10
Registration No. ______________
GTrade.Network Inc.
Subsidiaries
The following sets forth pertinent information regarding the subsidiaries
of the Registrant:
1. FleaMan.Com Inc., a Nevada corporation d/b/a "fleaman.com"
2. NetSafety Corporation USA, Inc., a California corporation
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<TOTAL-COSTS> 0
<OTHER-EXPENSES> 47,777
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<INCOME-PRETAX> (47,777)
<INCOME-TAX> 0
<INCOME-CONTINUING> (47,777)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (44,777)
<EPS-BASIC> (.00)
<EPS-DILUTED> .00
</TABLE>
